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Delaware
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20-1616267
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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3011 N. First Street
San Jose, California
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95134
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Class
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Outstanding as of November 4, 2013
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Common stock, $0.001 par value
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46,105,067
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Page
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September 30, 2013
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December 31, 2012
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||||
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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74,266
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$
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78,283
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Short-term investments
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250
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—
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Accounts receivable, net of allowance for doubtful accounts of $0 as of September 30, 2013 and $170 as of December 31, 2012
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9,565
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7,294
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Accounts receivable, due from related parties
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817
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1,036
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Inventory, current portion
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1,782
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1,631
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Prepaid expenses and other current assets
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1,161
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1,361
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Total current assets
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87,841
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89,605
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Inventory, net of current portion
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5,096
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3,160
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Property and equipment, net
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27,380
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24,058
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Intangible assets, net
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7,311
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6,671
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Other assets
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164
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191
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Total assets
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$
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127,792
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$
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123,685
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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3,780
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$
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971
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Accrued liabilities
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5,102
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3,386
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Accrued compensation and employee benefits
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3,742
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3,397
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Deferred revenue
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1,446
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2,301
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Related party deferred revenue
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1,262
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829
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Note payable
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25,000
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26,514
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Total current liabilities
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40,332
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37,398
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Deferred rent, net of current portion
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304
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624
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Other long-term liabilities
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—
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146
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Total liabilities
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40,636
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38,168
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Commitments and contingencies (note 5)
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Stockholders’ equity:
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Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued and outstanding as of September 30, 2013 and December 31, 2012
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—
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—
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Common stock, par value $0.001 per share—200,000,000 shares authorized; 45,926,545 and 44,046,970 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively
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46
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44
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Additional paid-in capital
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192,816
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186,778
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Accumulated deficit
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(105,706
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)
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(101,305
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)
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Total stockholders’ equity
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87,156
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85,517
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Total liabilities and stockholders’ equity
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$
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127,792
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$
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123,685
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2013
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2012
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2013
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2012
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Revenue:
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||||
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Collaborative development program and services revenue
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$
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11,156
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$
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12,481
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$
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34,858
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$
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35,836
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Product revenue
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2,748
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|
760
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5,852
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3,495
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||||
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Licensing and royalty revenue
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3,844
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3,248
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11,079
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10,053
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||||
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Total revenue
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17,748
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16,489
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51,789
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49,384
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||||
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Cost of revenue:
|
|
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|
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|
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||||
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Cost of collaborative development program and services revenue
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7,545
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6,595
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21,283
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20,031
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||||
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Cost of product revenue
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1,452
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|
554
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2,585
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1,635
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||||
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Cost of licensing and royalty revenue
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67
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55
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|
|
179
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|
|
200
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||||
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Total cost of revenue
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9,064
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7,204
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24,047
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21,866
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Gross profit
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8,684
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9,285
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27,742
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27,518
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Operating expenses:
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Research and development
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6,107
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5,174
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17,727
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16,002
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Sales and marketing
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1,544
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|
1,322
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4,759
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3,834
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||||
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General and administrative
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3,008
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2,650
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9,042
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8,190
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Total operating expenses
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10,659
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9,146
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31,528
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28,026
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||||
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(Loss) income from operations
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(1,975
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)
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139
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(3,786
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)
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(508
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)
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||||
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Other income (expense):
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Interest expense, net
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(168
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)
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(255
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)
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(649
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)
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(754
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)
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||||
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Other (expense) income, net
|
(2
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)
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|
10
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|
66
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|
16
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||||
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Total other income (expense), net
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(170
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)
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|
(245
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)
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|
(583
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)
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(738
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)
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||||
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Loss before provision for income taxes
|
(2,145
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)
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|
(106
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)
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|
(4,369
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)
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|
(1,246
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)
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||||
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Provision for income taxes
|
26
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|
|
6
|
|
|
32
|
|
|
12
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||||
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Net loss
|
$
|
(2,171
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)
|
|
$
|
(112
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)
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|
$
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(4,401
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)
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|
$
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(1,258
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)
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Net loss per share of common stock, basic and diluted
|
$
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(0.05
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)
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|
$
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(0.00
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)
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$
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(0.10
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)
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$
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(0.03
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)
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Weighted-average number of shares used in computing net loss per share of common stock, basic and diluted
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45,191,514
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43,278,588
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44,657,529
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42,725,466
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||||
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Three Months Ended September 30,
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|
Nine Months Ended September 30,
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||||||||||||
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2013
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|
2012
|
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2013
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|
2012
|
||||||||
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Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||
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Collaborative development program and services revenue
|
$
|
1,792
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|
|
$
|
3,529
|
|
|
$
|
5,604
|
|
|
$
|
9,277
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|
|
Product revenue
|
—
|
|
|
760
|
|
|
—
|
|
|
2,139
|
|
||||
|
Licensing and royalty revenue
|
1,358
|
|
|
1,768
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|
|
4,082
|
|
|
5,332
|
|
||||
|
Total revenue
|
$
|
3,150
|
|
|
$
|
6,057
|
|
|
$
|
9,686
|
|
|
$
|
16,748
|
|
|
Cost of Revenue:
|
|
|
|
|
|
|
|
|
|
||||||
|
Cost of collaborative development program and services revenue
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
40
|
|
|
Total cost of revenue
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
40
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Loss for the period
|
$
|
(2,171
|
)
|
|
$
|
(112
|
)
|
|
$
|
(4,401
|
)
|
|
$
|
(1,258
|
)
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
Comprehensive loss for the period, net of income tax
|
$
|
(2,171
|
)
|
|
$
|
(112
|
)
|
|
$
|
(4,401
|
)
|
|
$
|
(1,258
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2013
|
|
2012
|
||||
|
Cash flows from operating activities:
|
|
|
|
|
|
||
|
Net loss
|
$
|
(4,401
|
)
|
|
$
|
(1,258
|
)
|
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||
|
Depreciation and amortization
|
6,951
|
|
|
5,865
|
|
||
|
Stock-based compensation
|
4,088
|
|
|
2,687
|
|
||
|
Impairment of long-lived assets
|
—
|
|
|
949
|
|
||
|
Loss on disposal of property and equipment
|
9
|
|
|
—
|
|
||
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
|
Prepaid expenses and other assets
|
244
|
|
|
912
|
|
||
|
Inventory
|
(1,694
|
)
|
|
(1,233
|
)
|
||
|
Accounts receivable
|
(2,052
|
)
|
|
5,526
|
|
||
|
Accounts payable
|
2,057
|
|
|
(364
|
)
|
||
|
Accrued and other liabilities
|
1,199
|
|
|
(580
|
)
|
||
|
Deferred revenue
|
(855
|
)
|
|
(1,313
|
)
|
||
|
Related party deferred revenue
|
433
|
|
|
(8,401
|
)
|
||
|
Net cash provided by operating activities
|
5,979
|
|
|
2,790
|
|
||
|
Cash flows from investing activities:
|
|
|
|
|
|
||
|
Purchase of short-term investments
|
(1,001
|
)
|
|
(2,201
|
)
|
||
|
Redemption of short-term investments
|
751
|
|
|
500
|
|
||
|
Purchase of property and equipment
|
(9,054
|
)
|
|
(3,760
|
)
|
||
|
Purchased and capitalized intangible assets
|
(1,113
|
)
|
|
(776
|
)
|
||
|
Net cash used in investing activities
|
(10,417
|
)
|
|
(6,237
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
|
|
||
|
Proceeds from debt
|
25,000
|
|
|
—
|
|
||
|
Payment of debt
|
(26,514
|
)
|
|
(573
|
)
|
||
|
Proceeds from exercise of common stock options
|
1,935
|
|
|
1,733
|
|
||
|
Net cash provided by financing activities
|
421
|
|
|
1,160
|
|
||
|
Net decrease in cash and cash equivalents
|
(4,017
|
)
|
|
(2,287
|
)
|
||
|
Cash and cash equivalents at beginning of period
|
78,283
|
|
|
81,002
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
74,266
|
|
|
$
|
78,715
|
|
|
|
|
|
|
||||
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|||
|
Cash paid for interest
|
$
|
618
|
|
|
$
|
927
|
|
|
Cash paid for income taxes, net of refunds received
|
$
|
8
|
|
|
$
|
42
|
|
|
Noncash investing activities:
|
|
|
|
||||
|
Transfer of property and equipment to inventory
|
$
|
393
|
|
|
$
|
—
|
|
|
|
Revenue
|
|
Accounts Receivable
|
||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
As of
|
|
As of
|
||||||||||
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||
|
Customer A
|
12
|
%
|
|
30
|
%
|
|
12
|
%
|
|
27
|
%
|
|
*
|
|
|
*
|
|
|
Customer B
|
11
|
%
|
|
27
|
%
|
|
18
|
%
|
|
29
|
%
|
|
14
|
%
|
|
25
|
%
|
|
Customer C (1)
|
*
|
|
|
14
|
%
|
|
12
|
%
|
|
14
|
%
|
|
—
|
%
|
|
*
|
|
|
Customer D
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
12
|
%
|
|
Customer E
|
*
|
|
|
*
|
|
|
14
|
%
|
|
*
|
|
|
*
|
|
|
40
|
%
|
|
Customer F (1)
|
18
|
%
|
|
—
|
%
|
|
*
|
|
|
—
|
%
|
|
24
|
%
|
|
—
|
%
|
|
Customer G
|
*
|
|
|
—
|
%
|
|
*
|
|
|
*
|
|
|
*
|
|
|
*
|
|
|
Customer H
|
15
|
%
|
|
—
|
%
|
|
*
|
|
|
—
|
%
|
|
31
|
%
|
|
—
|
%
|
|
|
|
|
|
As of September 30, 2013
|
||||||||||||||
|
|
Fair Value
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||
|
Assets:
|
|
|
|
|
|
|
|
||||||||
|
Money market funds
|
$
|
63,518
|
|
|
$
|
63,518
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Certificates of deposit
|
250
|
|
|
—
|
|
|
250
|
|
|
—
|
|
||||
|
Total assets measured at fair value
|
$
|
63,768
|
|
|
$
|
63,518
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
|
As of December 31, 2012
|
||||||||||||||
|
|
Fair Value
|
|
Level I
|
|
Level II
|
|
Level III
|
||||||||
|
Assets:
|
|
|
|
|
|
|
|
||||||||
|
Money market funds
|
$
|
70,488
|
|
|
$
|
70,488
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total assets measured at fair value
|
$
|
70,488
|
|
|
$
|
70,488
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
As of
|
|
As of
|
||||
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
Lab equipment and machinery
|
$
|
47,371
|
|
|
$
|
38,667
|
|
|
Leasehold improvements
|
4,073
|
|
|
2,873
|
|
||
|
Computer equipment and software
|
3,499
|
|
|
3,467
|
|
||
|
Furniture and fixtures
|
176
|
|
|
160
|
|
||
|
Construction in progress
|
5,454
|
|
|
5,964
|
|
||
|
Total property and equipment
|
60,573
|
|
|
51,131
|
|
||
|
Less accumulated depreciation
|
(33,193
|
)
|
|
(27,073
|
)
|
||
|
Property and equipment, net
|
$
|
27,380
|
|
|
$
|
24,058
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Depreciation expense
|
$
|
2,249
|
|
|
$
|
1,868
|
|
|
$
|
6,493
|
|
|
$
|
5,433
|
|
|
|
As of
|
|
As of
|
||||
|
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
Patents issued
|
$
|
4,517
|
|
|
$
|
3,932
|
|
|
Patents pending
|
3,899
|
|
|
3,386
|
|
||
|
Trademarks
|
40
|
|
|
40
|
|
||
|
Total intangible assets
|
8,456
|
|
|
7,358
|
|
||
|
Less patent amortization
|
(1,145
|
)
|
|
(687
|
)
|
||
|
Intangible assets, net
|
$
|
7,311
|
|
|
$
|
6,671
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Amortization expense
|
$
|
156
|
|
|
$
|
145
|
|
|
$
|
458
|
|
|
$
|
432
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Rent expense
|
$
|
324
|
|
|
$
|
324
|
|
|
$
|
972
|
|
|
$
|
972
|
|
|
|
Three Months Ended September 30, 2013
|
|
Nine Months Ended September 30, 2013
|
||||||||||||||||||||
|
|
Principal
|
|
Interest
|
|
Total
|
|
Principal
|
|
Interest
|
|
Total
|
||||||||||||
|
Symyx payments
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,516
|
|
|
$
|
437
|
|
|
$
|
26,953
|
|
|
|
Three Months Ended September 30, 2013
|
|
Nine Months Ended September 30, 2013
|
||||||||||||||||||||
|
|
Principal
|
|
Interest
|
|
Total
|
|
Principal
|
|
Interest
|
|
Total
|
||||||||||||
|
SVB payments
|
$
|
—
|
|
|
$
|
176
|
|
|
$
|
176
|
|
|
$
|
—
|
|
|
$
|
178
|
|
|
$
|
178
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
September 30,
|
|
September 30,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
|
Expected term (in years)
|
6.0
|
|
|
6.0
|
|
|
6.0
|
|
|
6.0
|
|
|
Risk-free interest rate
|
1.7
|
%
|
|
0.9
|
%
|
|
1.2
|
%
|
|
1.2
|
%
|
|
Expected volatility
|
59
|
%
|
|
60
|
%
|
|
60
|
%
|
|
60
|
%
|
|
Expected dividend rate
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Cost of revenue
|
$
|
379
|
|
|
$
|
250
|
|
|
$
|
1,151
|
|
|
$
|
780
|
|
|
Research and development
|
285
|
|
|
212
|
|
|
969
|
|
|
642
|
|
||||
|
Sales and marketing
|
302
|
|
|
199
|
|
|
859
|
|
|
550
|
|
||||
|
General and administrative
|
358
|
|
|
272
|
|
|
1,109
|
|
|
715
|
|
||||
|
Total stock-based compensation
|
$
|
1,324
|
|
|
$
|
933
|
|
|
$
|
4,088
|
|
|
$
|
2,687
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 30,
|
|
September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Stock options
|
$
|
943
|
|
|
$
|
851
|
|
|
$
|
2,911
|
|
|
$
|
2,489
|
|
|
Restricted stock awards and restricted stock units (RSUs)
|
381
|
|
|
82
|
|
|
1,177
|
|
|
198
|
|
||||
|
Total stock-based compensation
|
$
|
1,324
|
|
|
$
|
933
|
|
|
$
|
4,088
|
|
|
$
|
2,687
|
|
|
|
Unrecognized
Compensation Expense |
|
Weighted-
Average Period (in years) |
||
|
Stock options
|
$
|
6,953
|
|
|
2.6
|
|
RSUs
|
$
|
4,269
|
|
|
3.1
|
|
|
Nine Months Ended
|
|
Nine Months Ended
|
||||||||||
|
|
September 30, 2013
|
|
September 30, 2012
|
||||||||||
|
|
Shares Granted
|
|
Weighted-
Average Grant Date Fair Value |
|
Shares Granted
|
|
Weighted-
Average Grant Date Fair Value |
||||||
|
Stock options
|
1,132,970
|
|
|
$
|
4.72
|
|
|
1,192,679
|
|
|
$
|
4.57
|
|
|
RSUs
|
699,000
|
|
|
$
|
8.97
|
|
|
274,070
|
|
|
$
|
6.48
|
|
|
|
September 30, 2013
|
|
December 31, 2012
|
||
|
Number of stock options outstanding
|
6,451,590
|
|
|
7,426,417
|
|
|
Number of RSUs outstanding
|
778,924
|
|
|
254,863
|
|
|
Shares available for future grant
|
5,798,815
|
|
|
5,001,956
|
|
|
Number of warrants outstanding
|
912,368
|
|
|
912,368
|
|
|
Total shares reserved
|
13,941,697
|
|
|
13,595,604
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Net loss attributable to common stockholders
|
$
|
(2,171
|
)
|
|
$
|
(112
|
)
|
|
$
|
(4,401
|
)
|
|
$
|
(1,258
|
)
|
|
Shares used in computing net loss per share of common stock, basic and diluted
|
45,191,514
|
|
|
43,278,588
|
|
|
44,657,529
|
|
|
42,725,466
|
|
||||
|
Net loss per share of common stock, basic and diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.03
|
)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
|
Stock options to purchase common stock
|
6,451,590
|
|
|
7,763,639
|
|
|
6,451,590
|
|
|
7,763,639
|
|
|
RSUs
|
778,924
|
|
|
256,513
|
|
|
778,924
|
|
|
256,513
|
|
|
Common stock subject to repurchase
|
—
|
|
|
7,500
|
|
|
—
|
|
|
7,500
|
|
|
Common stock warrants
|
912,368
|
|
|
912,368
|
|
|
912,368
|
|
|
912,368
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Related party revenue
|
$
|
1,030
|
|
|
$
|
1,050
|
|
|
$
|
3,347
|
|
|
$
|
3,439
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
Related party revenue
|
$
|
2,120
|
|
|
$
|
5,007
|
|
|
$
|
6,339
|
|
|
$
|
13,309
|
|
|
Related cost of revenue
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
40
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
United States
|
$
|
10,172
|
|
|
$
|
12,889
|
|
|
$
|
35,016
|
|
|
$
|
37,288
|
|
|
Japan
|
3,694
|
|
|
3,321
|
|
|
11,501
|
|
|
10,203
|
|
||||
|
APAC other
|
1,071
|
|
|
243
|
|
|
2,352
|
|
|
1,795
|
|
||||
|
Europe and Middle East
|
2,811
|
|
|
36
|
|
|
2,920
|
|
|
98
|
|
||||
|
Total
|
$
|
17,748
|
|
|
$
|
16,489
|
|
|
$
|
51,789
|
|
|
$
|
49,384
|
|
|
•
|
Overview
. Discussion of our business and overall analysis of financial and other highlights affecting the Company in order to provide context for the remainder of MD&A.
|
|
•
|
Strategy
. Our overall strategy.
|
|
•
|
Basis of Presentation
. A summary of the primary elements of our financial results.
|
|
•
|
Critical Accounting Estimates
. Accounting estimates that we believe are most important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.
|
|
•
|
Results of Operations
. An analysis of our financial results comparing the
three and nine months ended September 30, 2013
to the
three and nine months ended September 30, 2012
.
|
|
•
|
Liquidity and Capital Resources
. An analysis of changes in our balance sheets and cash flows, and discussion of our financial condition and potential sources of liquidity.
|
|
•
|
CDP and services revenue -
CDP revenue may include payments for full time equivalent employees, milestone payments, subscription payments for dedicated and shared workflow tools used in the CDP and reimbursed payments for consumables and outside services from third parties. Individual CDPs typically range from one to three years. Services revenue outside of CDPs is substantially comprised of support and maintenance fees and extended warranty agreements. CDP and services revenue is recognized in a manner consistent with activities performed.
|
|
•
|
Product revenue -
Product revenue consists of sales of our workflow hardware and embedded software. In support of our business strategy, we selectively sell our proprietary tools to increase opportunities for CDPs and licensing fees and royalties. As our other revenue streams increase we expect our product revenue to decrease as a percentage of our overall revenue. Product revenue has been recognized upon shipment since January 1, 2011. Product sales that originated prior to January 1, 2011 were generally recognized on a straight-line basis over the maintenance period once delivery occurred (title and risk of loss passed to the customer), and customer acceptance, if required, was achieved.
|
|
•
|
Licensing and royalty revenue -
Licensing and royalty revenue consists of licensing fees and royalties for granting our customers rights to our proprietary technology and IP. Specifically, this includes licensing the HPC capabilities of our workflows, licensing our informatics and analysis software, and licensing fees and royalties on products that incorporate technology developed through our CDPs. In certain instances, minimum license fees and royalties may be guaranteed by customer contracts and are recognized as revenue ratably over the related periods. In the last three years, licensing and royalty revenue has generally been the fastest growing element of our revenue. Over the long term, we expect licensing and royalty revenue to be an increasing and significant component of our revenue.
|
|
•
|
Cost of CDP and services revenue -
Our cost of CDP and services revenue is primarily comprised of salaries and other personnel-related expenses (including stock-based compensation) for our collaborative research and development scientists, engineers and development fab process operations employees. Additionally, our cost of revenue includes costs of wafers, targets, materials, program-related supplies, third-party professional fees and depreciation of equipment used in CDPs.
|
|
•
|
Cost of product revenue -
Our cost of product revenue primarily includes our cost of products sold and will fluctuate based on the type of product and configuration sold. Cost of product revenue has been recognized upon product shipment since January 1, 2011. For product sales that originated prior to January 1, 2011, our cost of product revenue was recognized in a similar manner as the corresponding product revenue and was generally recognized on a straight-line basis over the maintenance period. The variability in cost of product revenue as a percentage of revenue is related to the quantity and configuration of products sold during the period and the corresponding maintenance period over which product revenue and cost of product revenue is being recognized.
|
|
•
|
Cost of licensing and royalty revenue -
Our cost of licensing and royalty revenue is primarily comprised of the amortization of acquired patents and licensing obligations.
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
|
2013
|
|
2012
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
(in thousands)
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
||||||||||||||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Collaborative development program and services revenue
|
$
|
11,156
|
|
|
$
|
12,481
|
|
|
$
|
(1,325
|
)
|
|
(11
|
)%
|
|
$
|
34,858
|
|
|
$
|
35,836
|
|
|
$
|
(978
|
)
|
|
(3
|
)%
|
|
Product revenue
|
2,748
|
|
|
760
|
|
|
1,988
|
|
|
262
|
%
|
|
5,852
|
|
|
3,495
|
|
|
2,357
|
|
|
67
|
%
|
||||||
|
Licensing and royalty revenue
|
3,844
|
|
|
3,248
|
|
|
596
|
|
|
18
|
%
|
|
11,079
|
|
|
10,053
|
|
|
1,026
|
|
|
10
|
%
|
||||||
|
Total revenue
|
17,748
|
|
|
16,489
|
|
|
1,259
|
|
|
8
|
%
|
|
51,789
|
|
|
49,384
|
|
|
2,405
|
|
|
5
|
%
|
||||||
|
Cost of revenue:
|
9,064
|
|
|
7,204
|
|
|
1,860
|
|
|
26
|
%
|
|
24,047
|
|
|
21,866
|
|
|
2,181
|
|
|
10
|
%
|
||||||
|
Gross profit
|
8,684
|
|
|
9,285
|
|
|
(601
|
)
|
|
(6
|
)%
|
|
27,742
|
|
|
27,518
|
|
|
224
|
|
|
1
|
%
|
||||||
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Research and development
|
6,107
|
|
|
5,174
|
|
|
933
|
|
|
18
|
%
|
|
17,727
|
|
|
16,002
|
|
|
1,725
|
|
|
11
|
%
|
||||||
|
Sales and marketing
|
1,544
|
|
|
1,322
|
|
|
222
|
|
|
17
|
%
|
|
4,759
|
|
|
3,834
|
|
|
925
|
|
|
24
|
%
|
||||||
|
General and administrative
|
3,008
|
|
|
2,650
|
|
|
358
|
|
|
14
|
%
|
|
9,042
|
|
|
8,190
|
|
|
852
|
|
|
10
|
%
|
||||||
|
Total operating expenses
|
10,659
|
|
|
9,146
|
|
|
1,513
|
|
|
17
|
%
|
|
31,528
|
|
|
28,026
|
|
|
3,502
|
|
|
12
|
%
|
||||||
|
(Loss) income from operations
|
(1,975
|
)
|
|
139
|
|
|
(2,114
|
)
|
|
|
|
(3,786
|
)
|
|
(508
|
)
|
|
(3,278
|
)
|
|
|
||||||||
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Interest expense, net
|
(168
|
)
|
|
(255
|
)
|
|
87
|
|
|
|
|
(649
|
)
|
|
(754
|
)
|
|
105
|
|
|
|
||||||||
|
Other (expense) income, net
|
(2
|
)
|
|
10
|
|
|
(12
|
)
|
|
|
|
66
|
|
|
16
|
|
|
50
|
|
|
|
||||||||
|
Total other income (expense), net
|
(170
|
)
|
|
(245
|
)
|
|
75
|
|
|
|
|
(583
|
)
|
|
(738
|
)
|
|
155
|
|
|
|
||||||||
|
Loss before provision for income taxes
|
(2,145
|
)
|
|
(106
|
)
|
|
(2,039
|
)
|
|
|
|
(4,369
|
)
|
|
(1,246
|
)
|
|
(3,123
|
)
|
|
|
||||||||
|
Provision for income taxes
|
26
|
|
|
6
|
|
|
20
|
|
|
|
|
32
|
|
|
12
|
|
|
20
|
|
|
|
||||||||
|
Net loss
|
$
|
(2,171
|
)
|
|
$
|
(112
|
)
|
|
$
|
(2,059
|
)
|
|
|
|
$
|
(4,401
|
)
|
|
$
|
(1,258
|
)
|
|
$
|
(3,143
|
)
|
|
|
||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
|
Revenues
|
|
% of Revenues
|
|
Revenues
|
|
% of Revenues
|
|
Revenues
|
|
% of Revenues
|
|
Revenues
|
|
% of Revenues
|
||||||||||||
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||
|
United States
|
$
|
10,172
|
|
|
57
|
%
|
|
$
|
12,889
|
|
|
79
|
%
|
|
$
|
35,016
|
|
|
67
|
%
|
|
$
|
37,288
|
|
|
75
|
%
|
|
Japan
|
3,694
|
|
|
21
|
%
|
|
3,321
|
|
|
20
|
%
|
|
11,501
|
|
|
22
|
%
|
|
10,203
|
|
|
21
|
%
|
||||
|
APAC other
|
1,071
|
|
|
6
|
%
|
|
243
|
|
|
1
|
%
|
|
2,352
|
|
|
5
|
%
|
|
1,795
|
|
|
4
|
%
|
||||
|
Europe and Middle East
|
2,811
|
|
|
16
|
%
|
|
36
|
|
|
—
|
%
|
|
2,920
|
|
|
6
|
%
|
|
98
|
|
|
—
|
%
|
||||
|
Total
|
$
|
17,748
|
|
|
100
|
%
|
|
$
|
16,489
|
|
|
100
|
%
|
|
$
|
51,789
|
|
|
100
|
%
|
|
$
|
49,384
|
|
|
100
|
%
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2013
|
|
2012
|
||||
|
Net cash provided by operating activities
|
$
|
5,979
|
|
|
$
|
2,790
|
|
|
Net cash used in investing activities
|
$
|
(10,417
|
)
|
|
$
|
(6,237
|
)
|
|
Net cash provided by financing activities
|
$
|
421
|
|
|
$
|
1,160
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less Than
One Year |
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More Than
5 Years |
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
|
Operating lease obligations
|
$
|
2,851
|
|
|
$
|
416
|
|
|
$
|
2,435
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Credit facility
|
25,000
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Contractual interest payments on credit facility
|
172
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Purchase obligations(1)
|
2,793
|
|
|
2,793
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Total
|
$
|
30,816
|
|
|
$
|
28,381
|
|
|
$
|
2,435
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
▪
|
our dependence on a limited number of customers;
|
|
▪
|
the length of our sales cycles for CDPs, which makes it difficult to predict the timing of new or expanded CDPs;
|
|
▪
|
the length of our development cycles for CDPs, which makes it difficult to predict the timeframe in which technology developed under CDPs will be available for commercialization;
|
|
▪
|
fluctuations in the volume and prices of products manufactured and sold by our customers that use or incorporate technology developed under our CDPs ("CDP Products") and that generate licensing and royalty revenue for us;
|
|
▪
|
our revenue mix, which may vary from quarter to quarter as (i) we enter into new CDPs and related customer arrangements; (ii) existing CDPs, particularly for significant customers, are completed, extended, or undergo a change in scope; (iii) licensing arrangements take effect; (iv) we enter into product sale transactions and/or (v) we enter into IP sale transactions;
|
|
▪
|
the highly cyclical nature of and price volatility in the semiconductor industry;
|
|
▪
|
the financial stability of any of our customers;
|
|
▪
|
the timing and extent to which we enter into new CDPs or complete, extend the duration, expand the scope or reduce the duration or scope of existing CDPs;
|
|
▪
|
one-time offsets to revenue associated with the vesting of contingent warrants issued to two of our customers that are currently outstanding;
|
|
▪
|
non-cash charges relating to stock-based compensation, amortization of intangible assets and impairment expenses related to inventory and long-lived assets;
|
|
▪
|
any involvement in significant litigation, and in particular intellectual property litigation;
|
|
▪
|
any payments resulting from our intellectual property indemnification policies and obligations;
|
|
•
|
any need for significant additional capital to finance our business;
|
|
•
|
any delay in shipments caused by shortages of components used or incorporated in products sold into the market, design errors, manufacturing problems, or difficulties or delays gaining required export licenses for such products;
|
|
•
|
warranty claims, product recalls and product liability for our HPC tools and for CDP Products; and
|
|
•
|
business interruptions such as earthquakes and other natural disasters.
|
|
•
|
We may be unable to achieve broad customer acceptance of our HPC platform and approach as an alternative to conventional research and development activities.
|
|
•
|
We may be unable to successfully collaborate with all of our customers to achieve the technological innovations sought by our customers.
|
|
•
|
Our customers may not be successful in commercializing products that use or incorporate technology and IP developed under our CDPs with them.
|
|
•
|
Existing and potential customers may be resistant to paying license and royalty fees; and we may face challenges in monitoring and enforcing royalty agreements with existing customers.
|
|
•
|
the limited number of customers that are appropriate sales targets for our platform and that are willing to enter into licensing agreements with us;
|
|
•
|
our ability to enter into CDPs with customers who are or will become market leaders in larger, growing market segments;
|
|
•
|
our customers' budgetary constraints and internal review procedures that must be completed to begin collaboration with us, including but not limited to those customers whose R&D expenditure and product purchasing decisions are impacted by potential delays in or cancellation of funding by governmental agencies; and
|
|
•
|
the significant cultural transition required for a customer's internal R&D team to embrace us as a collaborative partner.
|
|
•
|
improve our R&D efforts;
|
|
•
|
improve our sales, marketing and customer support programs;
|
|
•
|
enhance our operational and financial control systems;
|
|
•
|
expand, train and manage our employee base and promptly replace departing employees with key skills; and
|
|
•
|
effectively address new issues related to our growth as they arise.
|
|
•
|
fluctuations in our financial results or outlook, or those of our customers or of companies perceived to be similar to us;
|
|
•
|
changes in estimates of our financial results or recommendations by securities analysts;
|
|
•
|
changes in market valuations of similar companies;
|
|
•
|
changes in our capital structure, such as future issuances of securities or the incurring of debt;
|
|
•
|
announcements by us or our competitors of significant contracts, acquisitions or strategic alliances; and
|
|
•
|
litigation involving us, our general industry or both;
|
|
•
|
additions or departures of key personnel;
|
|
•
|
regulatory developments in the U.S., countries in Asia, and/or other foreign countries;
|
|
•
|
investors' general perception of us; and
|
|
•
|
general economic and political conditions in the US and globally, such as recessions, interest rate changes and international currency fluctuations.
|
|
•
|
staggered board of directors;
|
|
•
|
authorizing the board to issue, without stockholder approval, preferred stock with rights senior to those of our common stock;
|
|
•
|
authorizing the board to amend our bylaws and to fill board vacancies until the next annual meeting of the stockholders;
|
|
•
|
prohibiting stockholder action by written consent;
|
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers;
|
|
•
|
eliminating the ability of our stockholders to call special meetings; and
|
|
•
|
requiring advance notification of stockholder nominations and proposals.
|
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|
Filed
|
||||
|
Number
|
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Herewith
|
|
2.1
|
|
Asset Purchase Agreement by and between Intermolecular, Inc. and Symyx Technologies, Inc. dated as of July 28, 2011 (1)
|
|
S-1/A
|
|
09/09/11
|
|
2.1
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Intermolecular, Inc.
|
|
10-K
|
|
03/16/12
|
|
3.1
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Intermolecular, Inc.
|
|
10-K
|
|
03/16/12
|
|
3.2
|
|
|
|
4.1
|
|
Specimen Common Stock Certificate
|
|
S-1/A
|
|
11/07/11
|
|
4.1
|
|
|
|
4.2
|
|
Warrant to purchase shares of common stock issued to Timane S.a.r.l. dated June 20, 2008
|
|
S-1
|
|
07/29/11
|
|
4.2
|
|
|
|
4.3
|
|
Form of warrant to purchase shares of common stock issued to Toshiba Corporation and SanDisk Corporation dated March 15, 2010
|
|
S-1/A
|
|
10/26/11
|
|
4.3
|
|
|
|
4.4
|
|
Fourth Amended and Restated Investor Rights Agreement dated as of March 4, 2011, by and among Intermolecular, Inc. and certain stockholders named therein, as amended by Amendment No. 1 to Fourth Amended and Restated Investor Rights Agreement dated as of June 14, 2011
|
|
S-1
|
|
07/29/11
|
|
10.1
|
|
|
|
4.5
|
|
Secured Promissory Note, issued by the Company to Symyx Technologies, Inc. on November 23, 2011
|
|
10-K
|
|
03/16/12
|
|
4.5
|
|
|
|
10.28
|
|
Equipment Supply and Technology Licensing Agreement for the Dry Equipment effective September 29, 2013, by and between Ulyanovsk Center for Technology Transfer of the Russian Federation and Intermolecular Inc.
|
|
|
|
|
|
|
|
X
|
|
10.29
|
|
Equipment Supply and Technology Licensing Agreement for the Wet Equipment effective September 29, 2013, by and between Ulyanovsk Center for Technology Transfer of the Russian Federation and Intermolecular Inc.
|
|
|
|
|
|
|
|
X
|
|
10.30
|
|
Joint Development Program Agreement effective September 29, 2013, by and between Ulyanovsk Center for Technology Transfer of the Russian Federation and Intermolecular Inc.
|
|
|
|
|
|
|
|
X
|
|
10.31
|
|
First amendment to the Lease Agreement between SBC&D Co. and Intermolecular, Inc., dated as of October 16, 2013.
|
|
|
|
06/03/13
|
|
10.1
|
|
X
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
|
|
X
|
|
101.INS*
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
X
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
X
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
INTERMOLECULAR, INC.
|
|
|
|
|
(Registrant)
|
|
|
Date: November 7, 2013
|
|
By:
|
/s/ C. Richard Neely, Jr.
|
|
|
|
|
C. Richard Neely, Jr.
|
|
|
|
|
Chief Financial Officer
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
Equipment Supply and Technology
Licensing Contract
No. US/87799546/00001
|
|
|
September, 29 th 2013
San Jose, California, United States
|
|
|
The present equipment supply and technology licensing contract (hereinafter referred to as the “Contract”) is concluded between
Limited
Liability Company Ulyanovsk Center for Technology Transfer
a Russian Federation corporation doing business at 67 Krymova St., Ulyanovsk, Russia, 432071, hereinafter referred to as the "
Buyer
", on the one part,
and
Intermolecular, Inc.
, a Delaware, USA corporation doing business at 3011 North First St., San Jose, CA 95134, USA, hereinafter referred to as the "
Seller
",
and
Limited liability Company
“
Russkie Tehnoparki
” a Russian Federation corporation doing business at 1 Sirenevyi bulv., c.c. Troitsk, Moscow, Russia, 142191 hereinafter referred to as the "
Customer’s Engineer
",
(the Seller and the Buyer, as well as the Project Company, as defined below, in case of transfer of the Equipment to such Company in accordance with the Contract, jointly referred to as the “Parties” and individually referred to as the “Party”)
in accordance with the Minutes of open request for proposals No. 1/У-ЭС (the open tender for the right of concluding a contract dated September 03rd, 2013) for supply of Complex R&D equipment, consisting of two Combinatorial R&D Platforms:
-
one vacuum cluster tool (AP-30) with two combinatorial PVD chambers (P-30) («Dry» equipment),
-
one combinatorial wet process tool (F-20) including one informatics server with software (S-80) («Wet» equipment),
|
|
|
concluded this Contract regarding Dry equipment as follows:
|
|
|
1.
Subject of contract
|
|
|
1.1
Seller has developed proprietary Equipment (as more fully defined in Section 1.6.10 below) and Informatics Software (as more fully defined in Section 1.6.18 below) to enable research, design, experimentation, development and commercialization in the area of and with the use of HPC Technology (as more fully defined in Section 1.6.17 below).
|
|
|
1.2
Seller is in the business of selling Equipment and licensing HPC Technology.
|
|
|
1.3
Buyer is engaged in the research, design, development and commercialization of materials, manufacturing processes, and technologies in the Field as more fully defined in Section 1.6.11 below.
|
|
|
1.4
Buyer desires to purchase from Seller and Seller desires to sell to Buyer Equipment and associated licenses to HPC Technology and Informatics Software from Seller. Customer’s Engineer exercises control for compliance by the Seller of its obligations under the Contract.
|
|
|
1
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
1.5
Annexes
|
|
|
The following annexes are hereby incorporated into the Contract:
|
|
|
1.5.1.
Pricing Sheet
|
|
|
1.5.2.
Сombinatorial R&D Platform description
|
|
|
1.5.3.
Delivery Schedule
|
|
|
1.5.4.
Payment Schedule
|
|
|
1.5.5.
Acceptance Criteria
|
|
|
1.5.6.
Seller Maintenance and Support Services
|
|
|
1.5.7.
Installation and Facility Requirements
|
|
|
1.5.8.
Documents at Sign-Off
|
|
|
1.5.9.
HPC Technology
|
|
|
1.5.10.
Acceptance completion act
|
|
|
1.5.11.
Start-up Act
|
|
|
1.6
Definitions
|
|
|
The following definitions are hereby incorporated into the Contract:
|
|
|
1.6.1.
Acceptance Criteria shall have the meaning set forth in Annex 1.5.5.
|
|
|
1.6.2.
Affiliate means a corporation, company or other entity now or hereafter, directly or indirectly, owned or controlled by, or owning or controlling, or under common control with Buyer or Seller respectively, but such corporation, company or other entity shall be deemed to be a Affiliate only so long as such ownership or control exists. For purposes of this definition "control" of a corporation, company or other entity shall mean -
|
|
|
i.
to have more than fifty percent (50%) of the voting rights or of the outstanding shares or securities representing the right to vote for either the election of the board of directors or a similar managing authority, or a supervisory board, or
|
|
|
ii.
if there do not exist outstanding shares or securities as may be the case in a partnership, joint venture or unincorporated association, to have more than fifty percent (50%) of the ownership interest representing the right to make decisions for such entity.
|
|
|
|
|
|
1.6.3.
Background Technology of a Party means Intellectual Property Rights and Know-How,
|
|
|
i.
that is owned, acquired, or licensed by the Party at any time during the term of this Contract; and
|
|
|
ii.
that is not created within the scope of this Contract.
|
|
|
1.6.4.
Buyer Site means Buyer’s facilities located at Ulyanovsk, Russia, or a replacement location subsequently agreed to by the Parties in writing. All special requirements for Buyer Site are specified by the Parties in Annex 1.5.7.
|
|
|
1.6.5.
THIS SECTION INTENTIONALLY LEFT BLANK.
|
|
|
1.6.6.
Confidential Information means any non-public information disclosed by one Party to the other in connection with this Contract and as further defined in Section 12.
|
|
|
1.6.7.
Contract Price is defined in Section 2.
|
|
|
1.6.8.
Dry Equipment means the Equipment.
|
|
|
1.6.9.
Effective Date means the later of the dates next to the signatures of the Parties below.
|
|
|
1.6.10.
Equipment means the equipment described in Annex 1.5.2. Equipment does not include software described in Annex 1.5.2.
|
|
|
2
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
1.6.11.
Field means the field of glass coatings, photovoltaics, power electronics and displays.
|
|
|
1.6.12.
HPC Derivatives means any and all improvements, derivatives and modifications of HPC Technology developed by either Party or both Parties as a direct result of using the Combinatorial R&D Platform pursuant to the Contract. HPC Derivatives shall not include any rights whatsoever in the Background Technology of Buyer.
|
|
|
1.6.13.
HPC-Enabled Informatics Software means Informatics Software that enables Equipment to use HPC Technology. Use of HPC-Enabled Informatics Software by Buyer requires an HPC License, in addition to a license to use the Informatics Software.
|
|
|
1.6.14.
Non-HPC-Enabled Informatics Software means Informatics Software and other software that in combination operates Equipment without enabling it to use HPC Technology.
|
|
|
1.6.15.
HPC Mode means the mode of using the Equipment which requires use of HPC-Enabled Informatics Software and an HPC License.
|
|
|
1.6.16.
HPC License means the license as set forth in Section 17.1
|
|
|
1.6.17.
HPC Technology means Intellectual Property Rights and Know-How related to techniques, methodologies, processes, test vehicles, synthetic procedures, technology, systems, or combination thereof used for the simultaneous parallel or rapid serial
|
|
|
1. design,
|
|
|
2. synthesis,
|
|
|
3. processing,
|
|
|
4. process sequencing,
|
|
|
5. process integration,
|
|
|
6. device integration,
|
|
|
7. analysis, or
|
|
|
8. characterization,
|
|
|
of two (2) more compounds, compositions, mixtures, processes, or synthesis conditions, or the structures derived from such as a result of using either alone or in combination the Equipment and Informatics Software.
The structure and definition of assets contained in the HPC Technology is provided in Annex 1.5.9. If any of such assets are not patented in the territory of Russian Federation, the Buyer shall under the present Contract be deemed to have only received a license to the Know-How representing such assets.
After the Seller has been granted patents, allowed in the territory of Russian Federation the Parties shall perform certain license agreements in accordance with Russian legislation providing for the rights of use of such inventions as prescribed by the present Contract.
If any information provided to Buyer by Seller is not Intellectual Property Rights or Know-How, then Buyer shall be deemed to have been granted the rights to use relevant design projects, scientific research results and documentation without a license.
The Know-How representing HPC Technology consists of methods and systems to perform combinatorial processing using Atomic Layer Deposition systems and Physical Vapor Deposition (commonly known as dry systems) and fluids based systems (commonly known as wet systems).
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1.6.18.
Informatics Software means software in the form of machine readable, object code, and related documentation, together with any Informatics Updates, if any, that may be provided by Seller to Buyer. Informatics Software may consist of either HPC-Enabled Informatics Software or Non-HPC-Enabled Informatics Software.
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1.6.19.
Informatics Improvements means improvements, additions, or modifications to the Informatics Software developed and released by Seller to add features, support additional Equipment or support new uses or applications of the Equipment. Seller will periodically offer Informatics Improvements for license to Buyer.
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[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
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1.6.20.
Informatics Updates means error corrections, bug fixes or workarounds to the Informatics Software that are developed and released by Seller solely to ensure that the Informatics Software performs in accordance with the Specifications, along with any improvements to the Informatics Software that may be developed and release by Seller from time to time and which it makes available to customers at no charge. Seller shall make Informatics Updates available to Buyer at no charge. Informatics Updates do not include Informatics Improvements.
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1.6.21.
Intellectual Property Rights means allowed and enforceable on the territory of Russian Federation Statutory Rights in and to any and all of the following -
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i.
patents and patent applications claiming any inventions or discoveries made, developed, conceived, or reduced to practice, including all divisions, substitutions, continuations, continuation-in-part applications, and reissues, re-examinations and extensions thereof,
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ii.
copyrights,
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iii.
trademarks, service marks, trade names, trade dress, domain names and similar rights,
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iv.
mask work rights, and
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v.
Any other moral, intellectual or other proprietary rights of any kind now known or hereafter recognized in any jurisdiction in the world.
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1.6.22.
Know-how means any know-how, technology, trade secrets, information (including inventions eligible for statutory protection), software (including source code), circuitry, circuit designs, design descriptions, specifications, formulas, processes, process conditions, materials, material stacks, structures, architectures, specifications for the procurement of parts and drawings, whether in tangible or intangible form and all other experience, drafts, ideas, concepts and business information, rights to which objects are allowed and enforceable on the territory of the Russian Federation.
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i.
Know-How does not include Intellectual Property Rights, however Know-How shall include without limitation copyrights or intellectual property rights (other than Intellectual Property Rights) that are not Statutory Rights.
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1.6.23.
License Fees shall have the meaning as defined in Section 2.4.
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1.6.24.
Pricing Sheet means the price as set forth in Annex 1.5.1
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1.6.25.
Seller Site means Seller’s facilities located at the following address: 3011 North First Street, San Jose, CA, USA.
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1.6.26.
Sign-Off means satisfaction and signing of the Acceptance Criteria and completion of the activities set forth in Section 4.12. Parties shall perform such activities upon satisfaction and signing of the Acceptance Criteria to confirm the transfer of title and license of rights, incl. performing of Acceptance completion act (Annex 1.5.10.) stating transfer of title.
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1.6.27. Specifications
means
the specifications listed in Annex 1.5.2 for:
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i. Equipment,
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ii. Informatics Software.
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1.6.28. Statutory Rights means rights that come into force in the Russian Federation by (i) application to or registration with a governmental entity, and (ii) approval of such application or registration by such entity.
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1.6.29. Support means the maintenance and support services as described in Annex 1.5.6.
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1.6.30. Term shall have the meaning defined in Section 15.1.
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1.6.31. Third Party means a party other than Seller, Buyer, Customer’s Engineer or their Affiliates.
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1.6.32. THIS SECTION INTENTIONALLY LEFT BLANK.
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1.6.33. Wet Equipment means the equipment described in Annex 1.5.2 of the Equipment Supply and Technology Licensing Contract for Wet Equipment to be signed by the Parties concurrently with this Contract.
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1.6.34. Dry Combinatorial R&D Platform means the Combinatorial R&D Platform referred to in the Preamble of the Contract, which comprises one or more of the following items provided such items are described in the Pricing Sheet:
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i. Equipment;
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ii. HPC License;
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iii. Informatics Software License.
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2.
Contract price
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2.1 Purchase of Software means license.
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Any software provided to Buyer under this Contract is licensed, not sold, to Buyer and any reference to the “sale” or “purchase” of software shall be deemed to mean “license.”
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2.2 Purchase
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Subject to the terms and conditions set forth in this Contract including but not limited to the licenses set forth in Section 17 and the payments set forth in Section 2.4 and Section 2.5, and the training referenced in Section 2.8, Buyer hereby agrees to purchase the Dry Combinatorial R&D Platform from Seller and Seller hereby agrees to sell the Dry Combinatorial R&D Platform to Buyer.
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2.3 The price of the Equipment and Services shall be in USD (United Stated Dollars), USD shall be the Contract currency. Payment currency is USD, payments shall be in USD.
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2.4
License and Equipment Fees.
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Buyer shall pay Seller the fees for the HPC License, the Informatics Software License and the Equipment in accordance with the Pricing Sheet. In the event Buyer does not make the payments due to Seller when due in accordance with Annex 1.5.4, Seller shall have the right but not the obligation to terminate the licenses granted to Buyer in Sections 17.1 and 17.2. Seller shall inform Buyer of such termination and no later than [***] after receiving such notice, Buyer shall cease use of the Equipment in HPC Mode.
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2.5
Support fees
Buyer shall pay Seller the fees for the Support in accordance with the Pricing Sheet.
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2.6 Pricing Sheet
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The Pricing Sheet is hereby incorporated by reference into this Contract. Seller will invoice Buyer in accordance with the terms of the Pricing Sheet, Payment Schedule and the Contract. The Pricing Sheet together with this Contract shall constitute the complete agreement regarding the purchase of the Dry Combinatorial R&D Platform.
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2.6.1. Notwithstanding the foregoing, nothing contained in any invoice shall in any way modify the terms and conditions of this Contract, or add any additional terms or conditions.
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2.6.2. The Pricing Sheet shall be subject to the terms and conditions of this Contract. In the event of a conflict between the terms of the Pricing Sheet and the terms of this Contract, the terms of this Contract shall control.
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2.7 Upon the complete satisfaction of payment to Seller by Buyer, in accordance with Section 3 and Annex 1.5.4, Buyer ownership interest in and title to the Equipment shall be free and clear of any and all encumbrances.
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2.7.1. Except as provided in Section 17.5.1, in the event Buyer wishes to transfer ownership of the Dry Equipment to a Third Party, Buyer shall first offer the Dry Equipment for sale back to Seller at the fair market value of the Dry Equipment. Seller shall have [***] from the date of such offer to agree to purchase the Dry Equipment. If Seller does not exercise its right to purchase the Equipment within [***] from the date of the offer, Buyer is entitled to sell the Equipment to a Third Party.
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2.7.2. In the event of a foreclosure of Buyer’s assets by a Third Party (hereinafter “Foreclosing Party”) to which Buyer’s assets have been pledged subject to a pre-existing loan agreement between Buyer and the Foreclosing Party, Seller shall not have any first right to purchase the Dry Equipment, provided that any such sale pursuant to a foreclosure shall be limited to the sale of the hardware included in the Equipment and not any software or associated licenses. The purchaser of the Dry Equipment pursuant to this Section 2.7.1. shall request such licenses from Seller. Upon receiving such request Seller shall grant such licenses to such purchaser at Seller’s then-prevailing standard prices for such licenses.
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2.8. Training
Seller agrees to provide training to certain UCTT personnel in accordance with the terms of Section 2.1 of the JDP Agreement between UCTT and IMI to be signed concurrently herewith. Said terms of said Section 2.1 are incorporated herein by reference. For the avoidance of doubt, notwithstanding the inclusion of this Section 2.1 in this Contract and in the JDP Agreement and in any other agreement, Seller shall provide such training only once. Seller’s satisfaction of this obligation under either one of the agreements shall be deemed to satisfy Seller’s obligation under all agreements.
At the Buyer’s request the Seller will provide additional training to the personnel pointed by the Buyer under terms and conditions agreed by the Parties separately and for an additional fee based on Seller’s then prevailing standard rates for such training.
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[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
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3.
Terms of payment
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3.1
Payment Method
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All payments hereunder shall be made in U.S. dollars by Buyer and in accordance with the Payment Schedule in Annex 1.5.4.
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3.2
Late payments
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All payments not paid when due shall bear simple interest at a rate of [***] per month or the highest rate allowed by law, whichever is less.
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3.3
Taxes
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3.3.1 Seller shall be responsible for the payment of the [***]related to the sale [***]that is owed within the [***].
3.3.2 Except as provided in Section 3.3.1, payments due to Seller are exclusive of all present and future taxes, duties, levies and other charges by any name (including any interest, penalties or additions thereto) imposed by any foreign, federal, state, local or other taxing authorities (including, without limitation, export, sales, use, excise and value-added taxes) on or with respect to the transactions or payments under this Contract.
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3.4
Records; Inspection
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3.4.1. Buyer shall keep complete, true and accurate books of account and records on its own behalf for the purpose of determining the amounts payable under this Contract. Such books and records shall be kept at Buyer for at least [***] following the end of the calendar quarter to which they pertain.
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3.4.2. Such records will be open for inspection during such [***] period by an independent auditor reasonably acceptable to Buyer, solely for the purpose of verifying amounts payable to Seller hereunder. Such inspections may be made no more than once each calendar year, at reasonable times and on reasonable notice.
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3.4.3. Inspections conducted under this Section 3.4 shall be at the expense of Seller, unless a variation or error producing an increase exceeding [***]percent ([***]%) of the amounts payable for any period covered by the inspection is established and confirmed in the course of any such inspection, whereupon all reasonable costs relating to the inspection for such period and any unpaid amounts that are discovered will be paid promptly by Buyer. Each Party agrees to hold in confidence pursuant to Section 8 all information concerning payments and reports, and all information learned in the course of any audit or inspection, except to the extent necessary for that Party to reveal such information in order to enforce its rights under this Contract or if disclosure is required by law.
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4.
Terms and Conditions of Equipment Supply
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4.1 Seller will install the Equipment for Sign-Off at the Seller Site. The Acceptance Criteria shall be applied in accordance with Section 4.12.
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4.2. Upon Sign-Off, the Dry Equipment shall remain installed at the Seller Site for a period of [***] (“Period”). Upon the expiration of the Period, and no later than [***] days thereafter, Seller will prepare the Dry Equipment for shipment to the Buyer Site. Buyer will, at its own expense, arrange for the shipment of the Dry Equipment to Buyer Site. Seller will take measures for the safety and integrity of the Equipment while the Equipment is at the Seller Site (which measures shall be similar to the measures Seller takes for the safety and integrity of its own equipment) and shall be responsible for packaging of the Equipment in accordance with Section 4.10.
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4.3 In the event Buyer has not shipped the Equipment to Buyer Site within [***] days after the end of the Period (“Extended Period”), Buyer shall pay Seller [***] as a storage charge for Seller having stored the Equipment for each additional month beyond the Extended Period that Buyer has not shipped the Equipment, Such payments shall be due and payable to Seller [***] days after expiration of each such additional month.
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4.4 Delivery of the Dry Equipment shall be deemed to have occurred upon Sign-Off. During the period that the Dry Equipment remains at Seller Site in accordance with Section 4.2, the Dry Equipment should be clearly marked as the sole property of Buyer while it is at Seller's facility, and Seller will not grant any third party any right, title or interest (such as a chattel mortgage or security interest) in or to any of the Equipment while it is located at Seller's facility.
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4.5 Buyer, and not Seller, shall be solely responsible for (i) the shipment and transportation of Equipment from Seller Site to Russia, (ii) for receiving the Equipment, (iii) for ensuring that the Equipment clears customs and (iv) for insuring the Equipment against any risks during any of the foregoing.
Seller agrees to furnish Buyer with such documentation and information about the Equipment, as Buyer may reasonably request, in order to comply with Russian customs and import requirements, for entry of the equipment into Russia.
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[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
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[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
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6.4.1. •The Seller’s name and address;
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6.4.2. • The Buyer’s name and address;
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6.4.3. • The final delivery address;
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6.4.4. • Contract Number;
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6.4.5. • Number of the package lot, in accordance with the packing list;
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6.4.6. • Gross and net weight;
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6.4.7. • Packaging dimensions;
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6.4.8. • Name of the equipment;
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6.4.9. • Special requirements (if any).
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7.
Acceptance And Support Services
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7.1 Dry
Combinatorial R&D Platform Assembly
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Seller shall complete the assembly and configuration of the Dry Combinatorial R&D Platform and make it available for Buyer’s Sign-Off at the Seller Site provided during the process of assembly and configuration, Buyer cooperates with Seller as reasonably requested by Seller.
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7.2
Buyer Acceptance
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7.2.1. Upon completion of assembly and configuration of the Dry Combinatorial R&D Platform, Seller will provide Buyer with a written notice that the Dry Combinatorial R&D Platform is available for Sign-Off.
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7.2.2. Seller shall demonstrate to Buyer that the Dry Combinatorial R&D Platform satisfies the acceptance criteria set forth in Annex 1.5.5 (“Acceptance Criteria”) and allow Buyer to conduct tests to ensure compliance with the Acceptance Criteria.
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7.2.3. This demonstration and testing shall take place at the Seller Site (Buyer agrees to attend at its own expense) and shall commence no later than [***] days following the written notice from Seller to Buyer.
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7.2.4. Upon completion of said demonstration and testing, Buyer will either (i) confirm in writing that acceptance of the Dry Combinatorial R&D Platform has occurred in compliance with Section 4.12, and Buyer shall make the payment associated therewith as set forth in the Pricing Sheet (“Buyer Acceptance”), [***].
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7.3
Support
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Subject to the terms and conditions set forth in this Contract including but not limited to the licenses set forth in Section 17 and the payments set forth in Sections 2.4 and 2.5, Seller agrees to provide Support to the Buyer. Any support or services other than the Support, including services not covered by a warranty or pursuant to pre-paid maintenance, will be provided at Seller’s then-current rates (plus reasonable travel expenses and other out-of-pocket expenses, if any) pursuant to a statement of work signed by the Parties.
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8.
Warranty; Limitation of Liability
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8.1 By Seller
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Seller represents and warrants that:
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8.1.1. It has the right and authority to enter into this Contract, and to fully perform its obligations hereunder; and
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8.1.2. This Contract is a legal and valid obligation binding upon it and enforceable in accordance with its terms.
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8.1.3. The title to the Dry Equipment conveyed to Buyer by Seller shall be good, and the Dry Equipment shall be delivered free from any security interest or other lien or encumbrance to any Third Party.
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8.1.4. The Dry Equipment is fit for the purpose of performing combinatorial processing.
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8.1.5. That as of the Effective Date, to the best of the Seller’s knowledge, the Dry Equipment and Buyer’s ownership, use and possession of the Dry Equipment in the manner as instructed by and in accordance with the documentation and manuals provide herewith and appended as Annex 1.5.7 and 1.5.8 does not infringe any patent, copyright, trademark or trade secret rights of a Third Party issued prior to the Effective Date.
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8.1.6 The Dry Equipment, the HPC License and the Informatics Software License provided by the Seller to the Buyer hereunder are altogether sufficient for the use of the Equipment in the HPC Mode in the Field.
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8.1.7. The Seller has obtained all necessary licenses, permissions and authorizations required for the export of the Equipment and the provision of the HPC-License and Informatics Software License to the Buyer or the Project Company, as well as for providing Training on the Equipment to the personnel of the Buyer or the Project Company (as the case may be).
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8
33
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[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
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8.2 By Buyer
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Buyer represents and warrants that:
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8.2.1. It has the right and authority to enter into this Contract, and to fully perform its obligations hereunder; and
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8.2.2. This Contract is a legal and valid obligation binding upon it and enforceable in accordance with its terms.
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8.3 Warranty on the hardware included in the Equipment
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Seller warrants to Buyer that for a period of [***] (“Warranty Period”) from Sign-Off, the hardware comprising the Equipment (“Hardware”) will be free from defects in materials and workmanship and shall conform in all material respects to its specifications.
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If, during the Warranty Period, the Hardware does not meet the warranty specified above, Seller shall, at its option, repair or replace at no cost to Buyer any defective or nonconforming component of the Hardware in accordance with Annex 1.5.6. The foregoing represents Buyer’s sole remedy for breach of the warranty on the Hardware.
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The warranty set forth in this section shall apply only to the Seller supplied components of the Hardware and will specifically excludes consumables and any components to be provided by Buyer.
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8.4 Warranty on the software included in the Equipment
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Seller will warrant to Buyer that for a period of [***] (“Warranty Period”) from Sign Off, the software included in the Equipment (“Software”) will conform in all material aspects to its specifications.
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Seller will correct any nonconformities reported to Seller in writing or in electronic form during the Warranty Period in accordance with Annex 1.5.6. The foregoing represents Buyer’s sole remedy for breach of the warranty for the Software.
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8.5 Exclusions
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The warranties and remedies set forth in Sections 8.3 and 8.4 will be void as to the following:
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8.5.1. any Hardware or Software that has been damaged, modified, or altered (other than by Seller or approved by Seller)
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8.5.2. any Hardware or Software that has been subjected to physical, electrical or other environmental abuse or misuse, including improper storage or conditions not in accordance with Seller’s specifications,
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8.5.3. any damage or non-conformities, in whole or in part, arising from use of the Hardware or Software with any other hardware, software, firmware, devices, or other products not provided by Seller or chemicals not recommended or approved for use by Seller.
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8.6 Disclaimer
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Except as provided above for the Hardware and the Software,
Seller does not otherwise warrant the Equipment and does not warrant that operation of the Equipment will be uninterrupted or error free.
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Seller specifically disclaims any representation, warranty or guarantee that the use of the Hardware or Software, will be successful, in whole or in part. It is understood that the failure of Buyer to successfully develop or commercialize technology shall not constitute a breach of any representation or warranty or other obligation under this Contract.
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Except as otherwise expressly set forth above, seller makes no representations and extends no warranties or conditions of any kind, either express or implied with respect to any information disclosed hereunder, any activities conducted hereunder or any deliverables provided hereunder, and hereby expressly disclaim any warranties of merchantability, or fitness for a particular purpose or validity of any technology, patented or unpatented, or non-infringement of the intellectual property rights of third parties.
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9.
Limitation of Liability
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9.1 To the maximum extent permitted by applicable law, and except for any breach of any confidentiality obligation under this contract, in no event shall either party or its affiliates be liable to the other party, its affiliates or to any third party claiming through or under the other party hereto, for any lost profits, lost revenue, loss of data, equipment downtime or for any special, consequential, indirect or incidental damages, however caused and under any theory of liability (including contract, strict liability, negligence or other legal or equitable theory) arising in any way out of this contract, whether or not such party has been advised of the possibility of such damages.
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9.2 Except for a breach of a confidentiality obligation, in no event shall either party’s cumulative liability to the other under this contract exceed the amounts received by such party from the other party in the past [***] preceding the claim.
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9
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[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
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9.2.1. The limitation of liability described above in Section 9.2 does not apply to any loss or damage to the Dry Equipment that is solely attributable to and solely caused by the gross negligence or willful act of the Seller or Seller’s personnel. For the avoidance of doubt, if Buyer or Buyer personnel are jointly or severally responsible for such loss or damage, then Seller’s liability for such loss or damage that is attributable to Seller shall be subject to the limitation of liability described above in Section 9.2.
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9.3 The Parties acknowledge and agree that the foregoing limitations of liability are an essential element of this agreement and that in their absence the terms of this agreement would be substantially different.
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10.
Force Majeure
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Neither Party shall lose any rights hereunder or be liable to the other Party for damages or losses (except for payment obligations then owing) on account of failure of performance by the defaulting Party if the failure is occasioned by war, strike, fire, act of God, earthquake, flood, lockout, embargo, act of terrorism, governmental acts or orders, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the non-performing Party and such Party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a Party be required to settle any labor dispute or disturbance.
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11.
Dispute Resolution
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11.1 All disputes between the Parties in connection with or arising out of this Contract shall first be discussed in good faith between the Parties in order to try to find an amicable solution.
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11.2 If no solution can be found to settle the dispute, then such dispute shall be finally settled by arbitration in accordance with the default rules and procedures of American Arbitration Association (“AAA”) sitting in New York City, NY, USA and conducted in English.
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11.3 Within 30 days of notice that a Party wants to submit a dispute to arbitration, the Parties shall each select one independent arbitrator and will attempt to mutually agree upon a third independent arbitrator. Each arbitrator will have expertise in the thin film technology industry and will not be an employee, affiliate or contractor for either Party.
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11.4 If the Parties are unable to agree on the third arbitrator within fifteen (15) days, the two arbitrators shall select the third arbitrator within thirty (30) days.
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11.5 If the amount in dispute is less than [***], then the Parties shall agree upon a single arbitrator meeting the above conditions within thirty (30) days of the notice of arbitration or such arbitrator shall be chosen by AAA if the Parties cannot agree.
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11.6 The arbitrators shall determine what discovery will be permitted consistent with the goal of limiting the costs and time for such a proceeding. The Parties and arbitrators shall use all reasonable efforts to complete any arbitration subject to this Section within six (6) months from the selection of arbitrators.
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11.7 The Parties agree that any award of damages shall not include punitive, special, consequential, or indirect damages except as specifically allowed in this Contract and shall comply with the limitation of liability provisions set forth herein.
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11.8 The arbitrators’ decision shall be in a detailed writing setting forth the reasons for their decision and shall be provided concurrently to each Party.
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11.9 The arbitration award shall be final and binding on the Parties.
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11.10 Unless otherwise agreed to by the Parties, each Party shall pay one-half of the arbitration fees and expenses and shall bear all of its own expenses in connection with the arbitration.
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11.11 Notwithstanding any of the foregoing, either Party shall have the right to seek, at its own cost and expenses, preliminary and temporary injunctive relief pending resolution of the dispute via arbitration.
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11.12 The United Nations Convention on the International Sale of Goods applies unless otherwise expressly stated in this Contract.
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12.
Confidential Information
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12.1 The Parties acknowledge that they may receive information from the other Party which may be considered confidential and proprietary. The receiving Party agrees to avoid any un-authorized disclosure, dissemination, or use of such information that, if disclosed in writing, is identified and marked as confidential (or with words of similar meaning) at the time of its disclosure (or that, if disclosed verbally, is designated as confidential at the time of disclosure and is summarized and identified as confidential in a writing delivered to the receiving Party within thirty (30) days after the disclosure) or that are observed during a visit of the manufacturing facilities of one of the Parties and such information would appear to a reasonable person as confidential information ("Confidential Information"). Both parties agree that this Contract is the Confidential Information of both Parties.
|
|
|
10
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
12.2 The receiving Party will use the Confidential Information solely for the purpose of performing its rights and obligations under the Contract. For the avoidance of doubt, if Buyer transfers the Dry Equipment to Project Company in accordance with Section 17.5.1, Buyer shall have the right to transfer Confidential Information to Project Company, provided that upon the completion of such transfer Buyer shall no longer have any rights to use such Confidential Information.
|
|
|
12.3 The receiving Party will not disclose Confidential Information to a Third Party without the prior written consent of the disclosing Party. The receiving Party will protect such information from un-authorized disclosure, use or dissemination with at least the same degree of care as the receiving Party exercises to protect its own information of similar type and importance, but in no event less than reasonable care. Notwithstanding the foregoing, the receiving Party may disclose the Confidential Information to its authorized representatives (e.g. directors, employees, officers, professional advisors and agents) having a need to know and who have signed confidentiality agreements or are otherwise bound by confidentiality obligations at least as restrictive as those contained herein.
|
|
|
12.4 The obligations of confidentiality and protection required by this Section will survive the expiration, termination, or cancellation of this Contract for a period of five years thereafter.
|
|
|
12.5 The obligation of confidentiality will not apply, or will cease to apply, to any information that: (a) was known to the receiving Party prior to its receipt of Confidential Information under this Contract; (b) is or becomes publicly available without breach of this Contract by the receiving Party; (c) is received from a Third Party without an obligation of confidentiality to the disclosing Party; or (d) is developed independently by employees of the receiving Party not having access to such information.
|
|
|
12.6 Notwithstanding anything to the contrary in this Section 8, each Party shall be permitted to lawfully disclose Confidential Information of the other Party to any governmental agency to the extent such disclosure is required by law (including but not limited to the SEC, USPTO, and pursuant to a subpoena); provided, however that before making such disclosure, the Party about to make such disclosure shall seek the highest level of protection available and give the other Party an adequate opportunity to interpose an objection or take action to assure confidential handling of such information.
|
|
|
13.
Miscellaneous
|
|
|
13.1
Amendment
|
|
|
No change or modification in the terms hereof, in a manner not expressly provided in this Contract shall be binding unless reduced to writing and duly executed by the Parties in the same manner as the execution of this Contract. Any attempt to so change or modify the terms of this Contract shall be considered void and of no effect.
|
|
|
13.2
No Implied License
|
|
|
Only the licenses granted pursuant to the express terms of this Contract shall be of any legal force or effect. No other license rights shall be created by implication, estoppel or otherwise. Each Party reserves all rights not expressly granted to the other Party under this Contract.
|
|
|
13.3 Assignment
|
|
|
13.3.1. Neither Party shall assign or transfer this Contract either voluntarily or by operation of law, in whole or in part, without the prior written consent of the other Party.
|
|
|
13.3.2. Any attempt to assign without such consent shall be void and of no effect.
|
|
|
13.3.3. Notwithstanding the foregoing, either Party may assign this Contract with the prior written consent of the other Party (which consent will not be unreasonably withheld), to an Affiliate and the terms of the Contract shall continue in effect without modification after such assignment.
|
|
|
13.4
Drafting
|
|
|
In interpreting and applying the terms and provisions of this Contract, the Parties acknowledge that its lawyers reviewed and participated in the drafting and agree that no presumption shall exist or be implied against the Party that drafted such terms and provisions.
|
|
|
13.5
Governing Law
|
|
|
This Contract shall be governed by and construed in accordance with the laws of the State of California in the United States, without regard to its conflicts of law principles.
|
|
|
13.6
Venue
|
|
|
All disputes between the Parties in connection to this Contract shall be addressed in accordance with Section 11. If no solution can be found to settle the dispute, then the dispute will be submitted to a court of competent jurisdiction in the county of Santa Clara, CA, USA.
|
|
|
13.7
Independent Contractors
|
|
|
11
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
The relationship of the Parties is that of independent contractors. Neither Party shall be deemed to be an agent, partner, joint venturer or legal representative of the other for any purpose as a result of this Contract or the transactions contemplated thereby. Personnel supplied by either Party are not the other Party's employees or agents and such supplying Party assumes responsibility for their acts or omissions, The supplying Party shall be solely responsible for the payment of compensation of such Party's employees or agents assigned to perform services hereunder and such employees or agents shall be informed that they are not entitled to any employee benefits of the other Party. Neither Party shall be responsible for paying worker's compensation, disability benefits, and unemployment insurance or for withholding and paying employment taxes for any employee or agent of the other Party.
|
|
|
13.8
Notices
|
|
|
13.8.1. Unless otherwise agreed to by the Parties, the communications required or permitted to be given or made under this Contract shall be made in writing, via personal delivery, registered mail, facsimile transmission (with written confirmation copy by registered first-class mail), addressed to the appropriate Party at the address indicated below and a copy to the receiving Party’s legal department.
|
|
|
13.8.2. All communications made pursuant to this section shall be deemed made or given on the date of such personal delivery, mailing or transmission.
|
|
|
13.8.3. If to Buyer:
Ulyanovsk Center for Technology Transfer
67 Krymova St.,
Ulyanovsk,
Russia, 432071
|
|
|
|
|
|
13.8.4. With a copy to:
|
|
|
Limited liability Company “Russkie Tehnoparki”
1 Sirenevyi bulv., c.c. Troitsk, Moscow,
Russia, 142191
|
|
|
13.8.5. If to Seller:
|
|
|
Intermolecular Inc.
|
|
|
3011 North First St.
|
|
|
San Jose
|
|
|
CA 95134
|
|
|
|
|
|
13.8.6. With a copy to:
|
|
|
Intermolecular Inc.
|
|
|
Attention: General Counsel
|
|
|
3011 North First St.
|
|
|
San Jose
|
|
|
CA 95134
|
|
|
|
|
|
|
|
|
13.8.7. The Parties may change the name and address to which communications should be sent under this section by providing prior written notice to the other Party.
|
|
|
13.9
Captions
|
|
|
The captions to the several sections hereof are not part of this Contract, but are included merely for convenience of reference and shall not affect its meaning or interpretation. As used in this Contract, the word "including" means "including without limitation”.
|
|
|
13.10
Counterparts
|
|
|
This Contract may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
|
|
|
13.11
Signatures by Electronic Mail or Facsimile
|
|
|
The delivery by electronic mail or facsimile of the signatures of the Parties shall be deemed valid and binding as if they were originally made.
|
|
|
12
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
13.12
Copies
|
|
|
A scanned or photocopied version of this Contract shall be deemed to be an original and shall have the full force and effect of an original document.
|
|
|
13.13
Non-waiver
|
|
|
The failure of either Party at any instance to require performance of any provision hereof by the other Party shall not be deemed a waiver and thereafter shall not deprive that Party of its full right to require such performance of that provision at another instance. Any waiver must be in writing executed by the waiving Party.
|
|
|
13.14
Severability
|
|
|
If any term, provision, covenant or condition of this Contract is held by a court of competent jurisdiction to be illegal, invalid, void or unenforceable, the remainder of the terms, provisions, covenants or conditions shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The Contract shall continue in full force and effect to the fullest extent permitted by law without said provision or with said provision being modified and narrowly tailored to achieve the original intent of the Parties.
|
|
|
13.15
Third Party Beneficiaries
|
|
|
Except as expressly provided in this Contract, there are no third party beneficiaries expressly or impliedly intended under this Contract.
|
|
|
13.16
Integration
|
|
|
This Contract, together with all Annexes hereto, constitutes the entire agreement and understanding of the Parties relating to the subject matter hereof and supersedes all prior negotiations and understandings between the Parties, both oral and written, regarding such subject matter.
|
|
|
13.17
Representation by Legal Counsel
|
|
|
Each Party hereto represents that it has been represented by legal counsel in connection with this Contract and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Contract, the Parties agree that no presumption shall exist or be implied against the Party that drafted such terms and provisions.
|
|
|
13.18. Governing Language
|
|
|
This Contract has been executed by the parties in counterpart originals, one in the English language and one in the Russian language. Notwithstanding the foregoing, the parties agree that in the event of controversy between the parties regarding the interpretation or application of the terms of this Contract, the English language version of the Contract will be controlling. All communications and notices to be made or given pursuant to this Contract shall be in the English language.
|
|
|
14.
Addresses and Banking Details of the Parties
|
|
|
14.1 Seller
|
|
|
14.1.1. All payments due to Seller under this Contract shall be made by bank wire transfer as follows:
|
|
|
|
|
|
Domestic Wire Instructions:
|
|
|
Route all wires via FEDWIRE to the following ABA number
|
|
|
To: [***]
|
|
|
Routing and Transit #: [***]
|
|
|
For Credit of: Intermolecular, Inc.
|
|
|
Credit Account Number: [***]
|
|
|
By Order of: [name of sender]International Wire Instructions:
Instruct the paying financial institution to advise their US correspondent to pay as follows:
Pay to: [***]Routing & Transit:[***]Swift Code: [***]For Credit of: Intermolecular, Inc. [***]Final Credit Account#:[***]By Order of: [Name of Sender]
|
|
|
15.
Term and Termination
|
|
|
15.1
Term
|
|
|
This Contract shall be effective as of the Effective Date. The term of this Contract shall commence on the Effective Date, and, unless terminated earlier as provided in this Section15.1, shall continue in full force and effect until the termination of all HPC Licenses and HPC-Enabled Informatics Software Licenses granted under this Contract (the "Term").
|
|
|
13
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
15.2
Termination for Breach
|
|
|
Either Party may terminate this Contract if the other Party has materially breached or defaulted in the performance of any of its material obligations, and such default has continued for ninety (90) calendar days after written notice was provided to the breaching Party by the non-breaching Party.
|
|
|
Termination will be effective at the end of the ninety (90) day period unless the breach has been cured before the expiration of the ninety (90) day period.
|
|
|
15.3
Effect of Termination
|
|
|
15.3.1.
Accrued Rights and Obligations
|
|
|
Termination of this Contract for any reason shall not release either Party from any liability or obligation that, at the time of termination, has already accrued to the other Party or that is attributable to a period prior to termination, nor shall it preclude either Party from pursuing any rights and remedies it may have at law or in equity with respect to any breach of this Contract.
|
|
|
15.3.2.
Termination of Licenses
|
|
|
All licenses granted under the Contract (including the HPC Licenses and HPC-Enabled Informatics Software Licenses) shall terminate upon termination of the Contract. For the avoidance of doubt, upon termination, Buyer shall have no right to use the Dry Combinatorial R&D Platform in HPC Mode. However, Buyer shall continue to have the right to use the Dry Combinatorial R&D Platform in non-HPC Mode.
|
|
|
|
|
|
15.4
Survival
|
|
|
Sections 1, 2, 4, 7, 8, 9, 10, 11, 12 and 13 shall survive the expiration or termination of this Contract for any reason.
|
|
|
16.
Ownership OF Intellectual Property Rights and Know-How
|
|
|
16.1
HPC Technology
|
|
|
16.1.1. Seller shall own all right, title, and interest in and to the HPC Technology and HPC Derivatives.
|
|
|
16.1.2. Buyer hereby agrees to assign to Seller, all of Buyer’s right, title and interest in and to any HPC Technology and PC Technology and HPC Derivatives that are developed during the term of this Contract.
|
|
|
16.1.3.
All
Intellectual Property Rights and Know-How rights arising out of the sole activities of Buyer’s personnel conducted for Buyer’s customers or for Buyer’s internal development programs with the use of Dry Combinatorial R&D Platform
shall be owned by Buyer.
|
|
|
16.1.4.
All
Intellectual Property Rights and Know-How rights arising out of the sole activities of Seller’s personnel conducted for Seller’s customers or for Seller’s internal development programs with the use of Dry Combinatorial R&D Platform
shall be owned by Seller.
|
|
|
16.1.5.
All
Intellectual Property Rights and Know-How rights arising out of the joint activities of Seller’s personnel and Buyer’s personnel with the use of Dry Combinatorial R&D Platform
shall be jointly owned by Buyer and Seller.
|
|
|
|
|
|
17.
LICENSES
|
|
|
17.1
HPC License
|
|
|
Subject to the terms and conditions of this Contract including the payments in Sections 2.4 and 2.5, Seller hereby grants to Buyer a non-exclusive, non-transferable, license, under Seller’s rights in HPC Technology (without the right to sublicense) to use the Equipment solely for the purpose of developing and commercializing materials in the Field.
|
|
|
17.2
License Grant for Informatics Software
|
|
|
17.2.1. Subject to the terms and conditions of this Contract including the payments in Sections 2.4 and 2.5, Seller hereby grants to Buyer a non-exclusive, non-transferable, license, under Seller’s rights in Informatics Software (without the right to sublicense) to use the HPC-Enabled Informatics Software with the Equipment. The aforementioned license (hereinafter “HPC-Enabled Informatics Software License”) shall only be for the sole purpose of developing and commercializing materials and products incorporating such materials, both in the Field.
|
|
|
17.2.2. Buyer shall have no right to use HPC Technology under this Contract unless it purchases HPC-Enabled Informatics Software and purchases an HPC License.
|
|
|
14
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
17.2.3. Further, Buyer’s license to use HPC Technology shall only be for operation of the Equipment for which it has purchased HPC-Enabled Informatics Software, and only for the license term for such software and the HPC License.
|
|
|
17.3
Term of License
|
|
|
The term of the HPC License and the Informatics Software license granted by Seller to Buyer shall be for a period of [***] starting from Sign-Off. Subject to Buyer’s payment of the renewal fees in accordance with the payment terms of this Contract (including Annex 1.5.6), the term of the HPC License shall automatically renew for the [***]for which the [***].
|
|
|
17.4
Limited scope of license for use of Third Parties
|
|
|
The scope of the HPC License and the Informatics Software license granted by Seller to Buyer hereunder does not include the right to use the Dry Combinatorial R&D Platform on behalf of or for the benefit of Third Parties, except where the intended purpose of such activities is the qualification or sale by Buyer or one or more of its partners of a resulting materials and products incorporating such materials, both in the Field.
|
|
|
17.5
No Transfer to or use by Third Party of Equipment in HPC Mode
|
|
|
Except as stated in Section 17.5.1 below, Buyer agrees not to sell, lease, or otherwise dispose of (“
Transfer
”) the Equipment sold hereunder, or allow access to any Third Party to use the Equipment in HPC Mode (“
Access
”) without explicit written approval by Seller, which Seller may grant in its sole discretion and subject to Seller entering into a license agreement, if necessary under the circumstances, with such Third Party. Buyer can Transfer the Equipment for [***] and agrees to inform any such Third Party purchaser that the Equipment cannot be used to perform HPC Technology without appropriate licenses from Seller.
|
|
|
17.5.1. Buyer shall have the right to Transfer the Equipment sold hereunder to [***] a company [***] and hereinafter referred to as Project Company provided Project Company, in addition to Buyer, agrees to assume all of Buyer’s obligations related to the Equipment except for the obligation to pay for the Equipment, and provided, pursuant to such Transfer, Buyer no longer has any rights in such Equipment. For the avoidance of doubt, at no time shall both Buyer and Project Company have simultaneous ownership, use or possession of the Equipment. In the event of such transfer,
(i) Project Company shall, [***] acquire Buyer’s rights (including all associated licenses) to use the Equipment in HPC Mode and to use HPC-Enabled Informatics Software and HPC Technology granted to Buyer by Seller under this Contract;
(ii) Seller shall fulfill all of Seller’s obligations related to the Equipment (such as Installation, start-up and adjustment, Training, warranty, maintenance and support obligations etc.) for Project Company [***], provided such obligations have not been fulfilled by Seller for Buyer;
(iii) Buyer remains a Party to be charged under this Contract.
|
|
|
17.6
Software is licensed and not owned
|
|
|
Buyer shall not be an owner of any copies of the Informatics Software or any documentation delivered to Buyer, but Buyer is licensed pursuant to this Contract to use any of the Informatics Software and documentation specified in Pricing Sheet.
|
|
|
17.7
Informatics Software is owned by Seller
|
|
|
Buyer acknowledges that the features and the graphical user interface of the Informatics Software (“
User Interface
”), including, without limitation, icons, menus and screen designs, screen layouts, and command and screen sequence, are the Confidential Information of Seller or its licensors, and are subject to the terms and conditions of this Contract with regards to Confidentiality . Buyer agrees that it will not create software programs incorporating the Confidential Information of the User Interface. Nevertheless, if Buyer creates one or more data loaders for metrology and/or testing equipment that it wishes to integrate into the Dry Combinatorial R&D Platform, Seller will work with Buyer on a time and materials basis (subject to the mutual prior written agreement of the Parties) to facilitate the use of said data loader(s) with the User Interface. Buyer further acknowledges that Seller or its licensors have asserted copyright ownership over the User Interface.
|
|
|
15
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
17.8 Buyer agrees that it will not itself, and will not through any parent, subsidiary, Affiliate, agent, or other Third Party, directly or indirectly, do any of the following:
|
|
|
17.8.1. reproduce, distribute, copy, sell, create derivative works of, lease, license, or sublicense the Informatics Software or any component of either, or any documentation delivered to it pursuant to this Contract;
|
|
|
17.8.2. use the Informatics Software in connection with any equipment other than the Equipment and test & characterization equipment used in connection with the Equipment;
|
|
|
17.8.3. attempt, or permit any Third Party, to reverse engineer, disassemble, decrypt, decompile, or otherwise attempt to derive source code from the Informatics Software;
|
|
|
17.8.4. use any Informatics Software in connection with any time-sharing or other multi-user network or service bureau.
|
|
|
17.9 Subject to payment by Buyer of the amounts set forth in the applicable Pricing Sheet and during any period in which Buyer makes the payments as set forth in Section 2.5, Seller will provide to Buyer the Support in accordance with Annex 1.5.6. Seller will provide Informatics Updates and improvements (provided such improvements are generally made available to all other licensees) at no additional charge.
|
|
|
17.10
Legend.
All copies of the Informatics Software shall include Seller’s copyright, trademarks, patent numbers, and other proprietary notices in the manner in which such notices were placed by Seller on such Informatics Software. Further, Seller may label the Equipment with a permanent non-erasable identification label including but not limited to Seller’s name, Seller’s model number, a sequential serial number in Seller’s standard format, date of manufacture, location manufactured, and specification version to which the Equipment was manufactured. Buyer shall not remove, obscure, or alter Seller’s copyright notices, trademarks, patent numbers, or other proprietary rights notices affixed to or contained within the Informatics Software or the Equipment.
|
|
|
17.11 THIS SECTION INTENTIONALLY LEFT BLANK
|
|
|
18.
Compliance with Laws.
|
|
|
The Parties shall comply with all laws, rules or ordinances of the United States and any applicable state or other governmental agency while performing under this Contract.
|
|
|
18.1 Compliance with Securities Laws. Buyer agrees that certain of the information provided by Seller to Buyer hereunder may be “material, nonpublic information” for purposes of federal or state securities laws, the awareness of which prohibits Seller and its employees, contractors, representatives and agents from (i) buying or selling Seller’s securities (stock, options, etc.) (i.e., “insider trading”) and (ii) passing information to anyone who may buy or sell Seller’s securities (i.e., “tipping”), until after the information has been disclosed to the public and absorbed by the market. Without limiting any of Buyer’s other obligations under this Contract, Buyer will comply with all federal and state securities laws prohibiting insider trading and tipping, and shall immediately notify Seller in the event of any insider trading or tipping by Buyer or its employees, contractors, representatives or agents of which it becomes aware.
|
|
|
18.2 In accordance with the requirements of the Foreign Corrupt Practices Act of the United States (15 U.S.C. § 78dd-1 and 2) (“FCPA”), each Party agrees and warrants that it shall not make, offer, promise or authorize any payment, loan, gift, donation or other giving of money or things of value, directly or indirectly, whether through itself, its affiliates, partners, officers, employees, agents or representatives, whether in cash or kind, and whether pursuant to a written agreement, to or for the use of any government official, any political party or official thereof or any candidate for political office, for the purpose of influencing or inducing any official act or decision in order to further the activities contemplated by this Contract, including obtaining or retaining any government approval or funding related to such activities.
|
|
|
|
|
|
IN WITNESS WHEREOF
, the parties hereto have caused this Contract to be executed by their duly authorized representatives:
|
|
|
|
|
|
“Buyer”
|
|
|
Ulyanovsk Center for Technology Transfer Ltd.
|
|
|
Date: September 29, 2013
|
|
|
Name: /s/Andrey Redkin
|
|
|
(Print): Andrey Redkin
|
|
|
Title: CEO
|
|
|
|
|
|
“Seller”
|
|
|
16
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
Intermolecular, Inc
|
|
|
Date: September 29, 2013
|
|
|
Name: /s/David E. Lazovsky
|
|
|
(Print): David E. Lazovsky
|
|
|
Title: President and CEO
|
|
|
|
|
|
“Customer’s Engineer”
|
|
|
Limited liability Company “Russkie Tehnoparki”
|
|
|
Date: September 29, 2013
|
|
|
Name: /s/Konstantin B. Popov
|
|
|
(Print): Konstantin B. Popov
|
|
|
Title: CEO
|
|
|
|
|
|
17
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Product
|
Manufacturer, country of origin
|
Unit of measure
|
Qty. in units of measure
|
Unit price
|
Total price
|
|
1.
|
Tempus™ AP-30M
|
Intermolecular, USA
|
Unit
|
[***]
|
[***]
|
[***]
|
|
2.
|
Tempus™ P-30
|
Intermolecular, USA
|
Unit
|
[***]
|
[***]
|
[***]
|
|
3.
|
HPC & Informatics License*
|
Intermolecular, USA
|
Year
|
[***]
|
[***]
|
[***]
|
|
4.
|
Maintenance & Support*
|
Intermolecular, USA
|
Year
|
[***]
|
[***]
|
[***]
|
|
TOTAL
|
х
|
х
|
Х
|
[***]
|
||
|
18
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Expense item
|
Cost
(indicate currency)
|
|
1
.
|
Price of product
(total in table-1)
|
[***]
|
|
2.
|
Price of customs clearance of cargo (
in case if foreign equipment is offered
)
|
[***]
|
|
3.
|
Price of insurance for maintaining Dry Equipment at Seller Site to be paid directly to insurance carrier by Seller on Buyer’s behalf (including the Seller’s fee for acting as an agent for obtainment of the insurance)
|
[***]
|
|
4.
|
Price of additional services, including:
|
|
|
4.1
|
Installation, start-up and adjustment
|
[***]
|
|
4.2
|
Training
|
[***]
|
|
4.3
|
Usage of Seller Site space, electricity, water and other required utilities at Seller Site in accordance with 4.2
|
[***]
|
|
4.4
|
All permits required for the Dry Equipment to be installed in San Jose, CA (if applicable)
|
[***]
|
|
|
TOTAL (1 + 2 + 3 + 4)
|
[***]
|
|
19
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Name of delivered equipment and specification
|
Configuration
|
Quantity
|
|
1.
|
Tempus™ AP-30
|
||
|
1.1.
|
[***]
|
[***]
|
[***]
|
|
1.2.
|
[***]
|
[***]
|
|
|
1.3
|
[***]
|
[***]
|
[***]
|
|
1.4
|
[***]
|
[***]
|
[***]
|
|
1.5
|
[***]
|
[***]
|
|
|
2.
|
Tempus™ P-30
|
|
|
|
2.1.
|
[***]
|
[***]
|
[***]
|
|
2.2.
|
[***]
|
[***]
|
|
|
2.3.
|
[***]
|
[***]
|
|
|
2.4.
|
[***]
|
[***]
|
|
|
2.5
|
[***]
|
[***]
|
|
|
2.6
|
[***]
|
[***]
|
|
|
2.7
|
[***]
|
[***]
|
|
|
2.8
|
[***]
|
[***]
|
|
|
2.9
|
[***]
|
[***]
|
|
|
2.10
|
[***]
|
[***]
|
|
|
2.11
|
[***]
|
[***]
|
|
|
2.12
|
[***]
|
[***]
|
[***]
|
|
2.13
|
[***]
|
[***]
|
[***]
|
|
2.14
|
[***]
|
[***]
|
|
|
2.15
|
[***]
|
[***]
|
|
|
2.16
|
[***]
|
[***]
|
[***]
|
|
2.17
|
[***]
|
[***]
|
[***]
|
|
20
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
21
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Stage
|
AP-30 and two P-30s
|
||||
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
||
|
1.1
|
[***]
|
[***]
|
|
|
|
|
|
1.2
|
[***]
|
|
[***]
|
|
|
|
|
1.3
|
[***]
|
|
|
[***]
|
|
|
|
1.4
|
[***]
|
|
|
|
[***]
|
|
|
1.5
|
[***]
|
|
|
|
|
[***]
|
|
22
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Stage
|
Stage number in Delivery schedule
|
Payment term
|
Payment amount*
|
|
1.
|
Sign-Off of AP-30 and two P-30s at Seller Site in San Jose, CA, USA
|
1.2
|
Payment due [***]from [***]
|
[***]
|
|
2.
|
Sign-Off of AP-30 and two P-30s at Seller Site in San Jose, CA, USA
|
1.2
|
Payment due [***]from [***]
|
[***]
|
|
TOTAL
(total sum considering all obligatory payments)
|
х
|
х
|
[***]
|
|
|
23
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
ANNEX 1.5.5
|
|
|
|
|
|
|
|
Acceptance Criteria
|
|
|
|
|
|
|
|
The acceptance criteria are described in the following documents which are incorporated herein by reference:
|
|
|
|
1. Procedure Ti Standard Acceptance P-30 [***]
|
|
|
|
2. Procedure Standard Acceptance AP-30 [***]
|
|
|
|
24
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
ANNEX 1.5.6
|
|
|
Seller Maintenance and Support Services
|
|
|
|
|
|
This Annex describes the maintenance and support services that Seller will provide with respect to the Dry Combinatorial R&D Platform.
|
|
|
Term and renewal of services
|
|
|
Seller will provide maintenance and support services set forth herein for the Dry Combinatorial R&D Platform. Such services will commence upon Sign-Off and continue for a period of [***] thereafter (the “Initial Term”).
|
|
|
|
|
|
Seller will continue to provide said services during any additional term during which Buyer renews maintenance and support services (“Renewal Term”) in accordance with the procedure set forth below.
|
|
|
|
|
|
Not less than [***] prior to the conclusion of the Initial Term, Seller shall send Buyer written notice of the date that the Initial Term is scheduled to expire, together with an invoice for HPC & Informatics License fees (“License Fees”) and maintenance & support
fees (‘Support Fees”) for the first year beyond the Initial Term (the “First Renewal Term”) at USD [***] For the License Fees and USD [***] for the Support Fees (for a combined total of [***]), which invoice shall be payable within [***].
|
|
|
|
|
|
The fees for HPC & Informatics License and Maintenance & Support (“License-Support”) are included in the pricing in Annex 1.5.1 for a period of [***] from Sign-Off (the “Initial Term”). The parties agree to enter into good faith discussions for pricing of the License-Support fees beyond the First Renewal Term, where such pricing shall take into account the fair market value of the License-Support fees.
|
|
|
|
|
|
Seller will advise Buyer in advance when Seller believes that maintenance and support services fall outside of the range of supported services (“Non-Covered Services”) and will provide Buyer with a description of such Non-Covered Services and any applicable charges. All charges by Seller shall be at Seller’s then-current rates.
|
|
|
|
|
|
Response Times
|
|
|
|
|
|
Seller customer service may be initiated by calling 1-408 582-5700 or such other number or email provided to Buyer for that purpose. Seller will use its best judgment to determine the priority level of each error reported by Buyer and shall inform Buyer of any change and the basis thereof. Seller shall provide and maintain for Buyer contact and escalation procedures for Buyer personnel to reach an appropriate Seller employee as follows:
|
|
|
|
|
|
In the event of a call reporting an error, Seller will acknowledge the Buyer call within the next business day of Buyer contacting Seller, followed by initial assessment and an error resolution plan within [***] days of the assessment. Seller will use commercially reasonable efforts to schedule and execute error resolution activities in a timely fashion and in accordance with the error resolution plan. Provided that Seller’s activities under the error resolution plan are not related to activities outside Seller’s control (e.g. shipping delays, long-lead design and parts procurement), Seller will make commercially reasonable efforts to execute the plan within a period of [***]. In the event Seller’s activities under the error resolution plan are related to activities outside Seller’s control (e.g. shipping delays, long-lead design and parts procurement), Seller shall notify Buyer accordingly.
|
|
|
|
|
|
Maintenance and Support Services
|
|
|
|
|
|
A. Informatics Hardware and Equipment Support
|
|
|
|
|
|
During the Initial Term and any Renewal Term, provided Seller receives the reasonable requested cooperation from Buyer, Seller will do the following:
|
|
|
|
|
|
25
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
(a)
Remedial maintenance will be provided by Seller during normal working hours. Buyer will provide [***] access to the Hardware as needed to perform any services hereunder.
|
|
|
|
|
|
(b)
During the Warranty Period (as defined in Section 8.3), Seller will[***] maintain the Hardware in accordance with the warranty set forth in the Contract, including replace or repair (collectively “Remedy”) parts as deemed necessary by Seller. After the end of the Warranty Period (provided Buyer extends the maintenance and support services to be provided under this Annex beyond the Initial Term), Seller will Remedy parts at Buyer’s expense. In either of the foregoing, Seller will pay for the labor and services required to Remedy the parts (but will not pay for the parts beyond the Warranty Period). Buyer shall inform Seller if any replaced parts may be contaminated with hazardous or toxic materials. All parts may be furnished on an exchange basis and may be new or refurbished spares. Replaced parts removed from the Hardware will, at Seller’s sole option, become the property of Seller. All [***] items, including but not limited to [***] are excluded from coverage hereunder. Cost of [***]and [***], including [***] are to be covered by Buyer. Buyer is responsible for maintenance, and cost, of support equipment which are not listed in the Sign-Off.
|
|
|
|
|
|
(c)
Seller shall not be responsible for maintenance and support services under the contract based on damage caused by (i) Equipment operation outside of specified hardware limits and process conditions,
(ii) adjustments, repairs or replacement parts required because of operator-caused error or repeated misuse of Hardware;
(iii) a non-conformity arising from or after relocation of the Hardware without prior written approval of Seller, which shall not be unreasonably withheld, unless Buyer can demonstrate by clear and convincing evidence that the relocation did not cause the non-conformity, in whole or in part, or (iv) damages covered arising out of force majeure. All repairs required by such excluded damage will be subject to an additional charge, as agreed in advance in writing by Seller and Buyer.
|
|
|
|
|
|
B. Software Support
|
|
|
|
|
|
During the Initial Term and during any Renewal Term, Seller shall use commercially reasonable efforts to do the following:
|
|
|
|
|
|
(a) Remedial maintenance will be provided by Seller during normal working hours. Buyer will provide full and free access to the Software as needed to perform any services hereunder.
|
|
|
(b) During the Warranty Period (as defined in Section 8.3), Seller will maintain the Software in accordance with the warranty set forth in the Contract. Buyer will provide VPN site-to-site Internet access to the data network located at the Seller Facility to improve Seller’s ability to support Buyer.
|
|
|
|
|
|
c) Seller is not required to support or maintain any version of the Software except its then-current, commercially released version, and the version that immediately preceded that version. For such immediately preceding software version, Seller shall use commercially reasonable efforts to provide error-fixing updates, but shall have no obligation to provide upgrades that improve the functionality of that software version.
|
|
|
|
|
|
(d) Seller is not obligated to provide, free of charge services, additional services, outside of the range of normal support services, such as debugging problems in non-Seller-supported software or products, or in combinations of supported and non-supported software or products where the problem occurs in products or software not supplied by Seller,
|
|
|
26
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
1.
|
AP-30 Facility Requirements
|
|
2.
|
P-30 Facility Requirements
|
|
27
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
ANNEX 1.5.8
|
|
|
|
|
|
Documents at Sign-Off
|
|
|
|
|
|
|
|
|
Operation Manuals:
|
|
|
|
|
|
1. Manual, Installation and Plan Maintenance, AP-30[***]
|
|
|
2. Manual, User, Brooks Automation, M2[***]
|
|
|
3. P-30, Manual, Installation, Operation, [***]
|
|
|
4. P-30, Manual, Maintenance[***]
|
|
|
5. P-30, Manual, Safety[***]
|
|
|
6. P-30, Manual, User[***]
|
|
|
7. Procedure, Blowout, Teardown, Shipping, P-30[***]
|
|
|
8. Procedure, Decontamination, P-30[***]
|
|
|
|
|
|
Certificates:
|
|
|
|
|
|
None from Seller
|
|
|
|
|
|
28
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
1.
|
R&D Workflow management
: [***]
|
|
2.
|
Data loading framework:
[***]
|
|
3.
|
Collaboration forum:
[***]
|
|
4.
|
Analysis
: [***]
|
|
5.
|
Data search & export:
[***]
|
|
6.
|
Visual Data analysis
: [***]
|
|
7.
|
R&D data warehouse:
[***]
|
|
29
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
Annex 1.5.10
Acceptance completion act
|
|
|
|
No. __
|
|
|
|
|
|
|
|
September ___ , 2013
|
|
|
|
|
|
|
|
The present Acceptance completion act (hereinafter referred to as the “Act”) is concluded between
Limited Liability Company Ulyanovsk Center for Technology Transfer,
a Russian Federation corporation doing business at 67 Krymova St., Ulyanovsk, Russia, 432071, hereinafter referred to as the "Buyer", on the one part,
and
Intermolecular, Inc
., a Delaware, USA corporation doing business at 3011 North First St., San Jose, CA 95134, USA, hereinafter referred to as the "Seller",
and
Limited liability Company
“
Russkie Tehnoparki
” a Russian Federation corporation doing business at 1 Sirenevyi bulv., c.c. Troitsk, Moscow, Russia, 142191 hereinafter referred to as the "
Customer’s Engineer
",
(jointly referred to as the “Parties” and individually referred to as the “Party”) as follows:.
|
|
|
|
|
|
|
|
1. All Parties entered into the Equipment Supply and Technology Licensing Contract, __th, 2013 (hereinafter the “Contract”).
|
|
|
|
2. All Parties acknowledge that prior to the execution of this Act the Parties have performed the examination of the installation of the Equipment by the Acceptance Commission in accordance with the Contract and that the results of such examination are satisfactory to all Parties. The Parties further acknowledge that since the date of this Act the Buyer has been granted the license to use the Seller’s Technology (including Know-How) as stated in the Contract and that title and risk of loss in the Equipment has transferred to the Buyer.
|
|
|
|
|
|
|
|
3. The Buyer recognizes that the Equipment satisfies the Acceptance Criteria specified in the Contract, and therefore recognizes the execution of the Contract by the Seller as full and appropriate.
|
|
|
|
|
|
|
|
4. Further to the Contract, this Act is a basis for the submission of an invoice for a part of the Contract price in accordance with the Payment Schedule.
|
|
|
|
|
|
|
|
5. Each Party has received its equally enforceable original copies of the Contract and Annexes thereto that have been signed by each Party.
|
|
|
|
|
|
|
|
6. The present Act is executed in three original counterparts in English and Russian. All capitalized terms used in this Act shall have the same meaning as in the Contract, unless otherwise expressly stated herein.
|
|
|
|
|
|
|
|
|
|
|
|
IN WITNESS WHEREOF
, the parties hereto have caused this Act to be executed by their duly authorized representatives:
|
|
|
|
|
|
|
|
“Buyer”
|
|
|
|
30
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
Ulyanovsk Center for Technology Transfer Ltd.
|
|
|
|
Date:
|
|
|
|
Name:
|
|
|
|
(Print)
|
|
|
|
Title:
|
|
|
|
|
|
|
|
“Seller”
|
|
|
|
Intermolecular, Inc
|
|
|
|
Date:
|
|
|
|
Name:
|
|
|
|
(Print)
|
|
|
|
Title:
|
|
|
|
|
|
|
|
“Customer’s Engineer”
|
|
|
|
Limited liability Company “Russkie Tehnoparki”
|
|
|
|
Date:
|
|
|
|
Name:
|
|
|
|
(Print)
|
|
|
|
Title:
|
|
|
|
|
|
|
|
31
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
Annex 1.5.11
Start-up Act
|
|
|
|
No. __
|
|
|
|
|
|
|
|
September ___ , 2013
|
|
|
|
|
|
|
|
The present Start-up (hereinafter referred to as the “Act”) is concluded between
|
|
|
|
Limited Liability Company Ulyanovsk Center for Technology Transfer,
a Russian Federation corporation doing business at 67 Krymova St., Ulyanovsk, Russia, 432071, hereinafter referred to as the "Buyer", on the one part,
|
|
|
|
and
Intermolecular, Inc
., a Delaware, USA corporation doing business at 3011 North First St., San Jose, CA 95134, USA, hereinafter referred to as the "Seller",
|
|
|
|
and
Limited liability Company
“
Russkie Tehnoparki
” a Russian Federation corporation doing business at 1 Sirenevyi bulv., c.c. Troitsk, Moscow, Russia, 142191 hereinafter referred to as the "
Customer’s Engineer
",
|
|
|
|
(jointly referred to as the “Parties” and individually referred to as the “Party”) as follows:.
|
|
|
|
|
|
|
|
1. All Parties entered into the Equipment Supply and Technology Licensing Contract, __th, 2013 (hereinafter the “Contract”).
|
|
|
|
|
|
|
|
2. Hereby the Parties confirm that the Dry Equipment has been properly installed, started-up and adjusted at Buyer Site and that the Dry Equipment conforms with the Specifications and that training obligations are duly performed by the Seller.
|
|
|
|
|
|
|
|
3. Each Party has received its equally enforceable original copies of the Contract and Annexes thereto that have been signed by each Party.
|
|
|
|
|
|
|
|
4. The present Act is executed in three original counterparts in English and Russian. All capitalized terms used in this Act shall have the same meaning as in the Contract, unless otherwise expressly stated herein.
|
|
|
|
|
|
|
|
|
|
|
|
IN WITNESS WHEREOF
, the parties hereto have caused this Act to be executed by their duly authorized representatives:
|
|
|
|
|
|
|
|
“Buyer”
|
|
|
|
Ulyanovsk Center for Technology Transfer Ltd.
|
|
|
|
Date:
|
|
|
|
Name:
|
|
|
|
(Print)
|
|
|
|
Title:
|
|
|
|
|
|
|
|
“Seller”
|
|
|
|
Intermolecular, Inc
|
|
|
|
Date:
|
|
|
|
Name:
|
|
|
|
32
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
(Print)
|
|
|
|
Title:
|
|
|
|
|
|
|
|
“Customer’s Engineer”
|
|
|
|
Limited liability Company “Russkie Tehnoparki”
|
|
|
|
Date:
|
|
|
|
Name:
|
|
|
|
(Print)
|
|
|
|
Title:
|
|
|
|
|
|
|
|
33
33
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
•
|
one vacuum cluster tool (AP-30) with two combinatorial PVD chambers (P-30) («Dry» equipment),
|
|
•
|
one combinatorial wet process tool (F-20) including one informatics server with software (S-80) («Wet» equipment),
|
|
1
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
2
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
3
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
4
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
5
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
6
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
7
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
8
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
9
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
10
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
11
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
12
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
13
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
14
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
15
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
16
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
17
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
18
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Product
|
Manufacturer, country of origin
|
Unit of measure
|
Qty. in units of measure
|
Unit price
|
Total price
|
|
1.
|
Tempus™ F-20
|
Intermolecular, USA
|
Unit
|
[***]
|
[***]
|
[***]
|
|
2.
|
Tempus™ S-80
|
Intermolecular, USA
|
Unit
|
[***]
|
[***]
|
[***]
|
|
3.
|
HPC & Informatics License*
|
Intermolecular, USA
|
Year
|
[***]
|
[***]
|
[***]
|
|
4.
|
Maintenance & Support*
|
Intermolecular, USA
|
Year
|
[***]
|
[***]
|
[***]
|
|
TOTAL
|
х
|
х
|
Х
|
[***]
|
||
|
19
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Expense item
|
Cost
(indicate currency)
|
|
1.
|
Price of product
(total in table-1)
|
[***]
|
|
2.
|
Price of customs clearance of import cargo (
in case if foreign equipment is offered
)
|
[***]
|
|
3.
|
Price of customs clearance of export cargo
|
[***]
|
|
4.
|
Price of transport expenses of Wet Equipment ([***] per Incoterms 2010) to the customs inspection at the destination point in Ulyanovsk, the Russian Federation. (including insurance for shipment of Wet Equipment)
|
[***]
|
|
5.
|
Price of additional services, including:
|
|
|
5.1
|
Installation, start-up and adjustment
|
[***]
|
|
5.2
|
Training at Seller Site
|
[***]
|
|
|
TOTAL (1 + 2 + 3 + 4+5)
|
[***]
|
|
20
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
A.
|
Hardware Description
|
|
S/N
|
Name of delivered equipment and specification
|
Configuration
|
Quantity
|
|
1.
|
Tempus™ F-20
|
|
|
|
1.1
|
[***]
|
•
[***]
|
[***]
|
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
1.2
|
[***]
|
•
[***]
|
[***]
|
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
1.3
|
[***]
|
•
[***]
|
[***]
|
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
•
|
|
||
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
1.4
|
[***]
|
•
[***]
|
[***]
|
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
21
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
1.5
|
[***]
|
•
[***]
|
[***]
|
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
•
[***]
|
[***]
|
||
|
1.6
|
[***]
|
[***]
|
[***]
|
|
1.7
|
[***]
|
[***]
|
[***]
|
|
1.8
|
[***]
|
[***]
|
[***]
|
|
1.9
|
[***]
|
[***]
|
[***]
|
|
1.10
|
[***]
|
[***]
|
[***]
|
|
1.11
|
[***]
|
[***]
|
[***]
|
|
1.12
|
[***]
|
[***]
|
[***]
|
|
1.13
|
[***]
|
[***]
|
[***]
|
|
1.14
|
[***]
|
[***]
|
[***]
|
|
2.
|
Tempus™ S-80
|
|
|
|
2.1
|
[***]
|
[***]
|
[***]
|
|
2.2
|
[***]
|
[***]
|
|
|
2.3
|
[***]
|
[***]
|
|
|
2.4
|
[***]
|
[***]
|
|
|
2.5
|
[***]
|
[***]
|
|
|
2.6
|
[***]
|
[***]
|
|
|
2.7
|
[***]
|
[***]
|
|
|
2.8
|
[***]
|
[***]
|
|
|
2.9
|
[***]
|
[***]
|
[***]
|
|
2.10
|
[***]
|
[***]
|
[***]
|
|
2.11
|
[***]
|
[***]
|
[***]
|
|
2.12
|
[***]
|
[***]
|
[***]
|
|
2.13
|
[***]
|
[***]
|
[***]
|
|
2.14
|
[***]
|
[***]
|
[***]
|
|
22
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
2.15
|
[***]
|
[***]
|
[***]
|
|
2.16
|
[***]
|
[***]
|
[***]
|
|
2.17
|
[***]
|
[***]
|
[***]
|
|
B.
|
Operational characteristics of equipment
|
|
•
|
Manual, Installation, F-20 System [***]
|
|
C.
|
Software Description
|
|
•
|
Workflow manager (web & mobile app)
|
|
•
|
R&D Database
|
|
•
|
Data loader framework
|
|
•
|
Data search & export module
|
|
•
|
Analysis – Electrical Distribution, Spectra, Defect Distribution, Process Distribution, Sample Map, Image gallery
|
|
•
|
Collaboration forum
|
|
•
|
Administrator module to control user access privileges
|
|
23
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Stage
|
|
|
|
|
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
||
|
1.1
|
[***]
|
[***]
|
|
|
|
|
|
1.2
|
[***]
|
|
[***]
|
|
|
|
|
1.3
|
[***]
|
|
|
[***]
|
|
|
|
1.4.
|
[***]
|
|
|
|
[***]
|
|
|
1.5.
|
[***]
|
|
|
|
|
[***]
|
|
24
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
S/N
|
Stage
|
Stage number in Delivery schedule
|
Payment term
|
Payment amount*
|
|
1.
|
Wet Equipment arrives for customs inspection at the destination point in Ulyanovsk, the Russian Federation
|
End of 1.4
|
Payment due [***] [***] days from invoice
|
[***]
|
|
TOTAL
(total sum considering all obligatory payments)
|
х
|
х
|
[***]
|
|
|
25
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
1.
|
Procedure Standard Acceptance F-20 [***]
|
|
2.
|
Procedure, Standard Acceptance, S-80, [***]
|
|
26
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
27
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
(a)
|
Remedial maintenance will be provided by Seller during normal working hours. Buyer will provide [***] access to the Hardware as needed to perform any services hereunder.
|
|
(b)
|
During the Warranty Period (as defined in Section 8.3), Seller will[***] maintain the Hardware in accordance with the warranty set forth in the Contract, including replace or repair (collectively “Remedy”) parts as deemed necessary by Seller. After the end of the Warranty Period (provided Buyer extends the maintenance and support services to be provided under this Annex beyond the Initial Term), Seller will Remedy parts at Buyer’s expense. In either of the foregoing, Seller will pay for the labor and services required to Remedy the parts (but will not pay for the parts beyond the Warranty Period). Buyer shall inform Seller if any replaced parts may be contaminated with hazardous or toxic materials. All parts may be furnished on an exchange basis and may be new or refurbished spares. Replaced parts removed from the Hardware will, at Seller’s sole option, become the property of Seller. All [***] items, including but not limited to [***] are excluded from coverage hereunder. Cost of [***]and [***], including [***] are to be covered by Buyer. Buyer is responsible for maintenance, and cost, of support equipment which are not listed in the Sign-Off.
|
|
(c)
|
Seller shall not be responsible for maintenance and support services under the contract based on damage caused by (i) Equipment operation outside of specified hardware limits and process conditions, (ii) adjustments, repairs or replacement parts required because of operator-caused error or repeated misuse of Hardware; (iii) a non-conformity arising from or after relocation of the Hardware without prior written approval of Seller, which shall not be unreasonably withheld, unless Buyer can demonstrate by clear and convincing evidence that the relocation did not cause the non-conformity, in whole or in part, or (iv) damages covered arising out of force majeure. All repairs required by such excluded damage will be subject to an additional charge, as agreed in advance in writing by Seller and Buyer.
|
|
(d)
|
Seller is not obligated to provide, free of charge services, additional services, outside of the range of normal support services, such as debugging problems in non-Seller-supported software or products,
|
|
28
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
29
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
1.
|
F-20 Facility Requirements
|
|
2.
|
S-80 Facility Requirements
|
|
30
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
31
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
32
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
33
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
34
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
35
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
36
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
37
38
|
|
|
|
[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
|
||
|
Confidential Information
|
|
Equipment Supply & Technology Licensing Contract
|
|
38
38
|
|
|
|
1.
|
UCTT is engaged in, among other things, research, design, experimentation, development and commercialization of materials, manufacturing processes, and technologies in the Field as more fully defined in Section 1.12 below.
|
|
2.
|
IMI is engaged in, among other things, research, design, experimentation, development and commercialization in the area of and using HPC Technology as more fully defined in Section 1.13 below.
|
|
3.
|
UCTT purchased certain equipment (“Wet Equipment”) from IMI under a Wet Equipment Supply and Technology Licensing Contract.
|
|
4.
|
UCTT purchased certain equipment (“Dry Equipment”) from IMI under a Dry Equipment Supply and Technology Licensing Contract.
|
|
5.
|
UCTT wishes to engage in this joint development program with IMI in which joint development teams from IMI and UCTT will utilize IMI facilities, Dry Equipment, Wet Equipment and Informatics software to speed technology development and dramatically reduce time to market new, high-value products.
|
|
1.
|
DEFINITIONS
|
|
1.1
|
Affiliate
means a corporation, company or other entity now or hereafter, directly or indirectly, owned or controlled by UCTT or IMI respectively, but such corporation, company or other entity shall be deemed to be an Affiliate only so long as such ownership or control exists. For purposes of this definition "control" of a corporation, company or other entity shall mean -
|
|
a.
|
to have more than fifty percent (50%) of the voting rights or of the outstanding shares or securities representing the right to vote for either the election of the board of directors or a similar managing authority, or a supervisory board, or
|
|
b.
|
if there do not exist outstanding shares or securities as may be the case in a partnership, joint venture or unincorporated association, to have more than fifty percent (50%) of the ownership interest representing the right to make decisions for such entity.
|
|
1.2
|
Background Technology
of a party means Intellectual Property Rights and Know-How
|
|
a.
|
that is owned by the party at any time during the Term; and
|
|
b.
|
that was developed prior to the Effective Date.
|
|
1.4
|
Business Development Committee
shall the meaning given to it in Section 6.
|
|
1.5
|
CDP
means an engagement between UCTT as provider of technology and/or services and IMI or Third Party as customer and recipient of such technology and/or services (regardless of whether or not UCTT is paid for such engagement) in which UCTT will use HPC Technology (including Dry Equipment and Wet Equipment) in the Field in any way to test, screen, develop or evaluate technologies or intellectual property pertaining to the deposition, cleaning, stripping, etching, or patterning of chemistries, thin films, coatings or other materials on a stand-alone basis or in integrated devices.
|
|
1.6
|
CDP Agreement
means an agreement for a CDP.
|
|
1.7
|
CDP Licenses
shall have the meaning given to it in Section 7.2.
|
|
1.8
|
CDP License Fees
shall have the meaning given to it in Section 8.1b.
|
|
1.9
|
CDP Services
shall have the meaning given to it in Section 7.2.
|
|
1.10
|
CDP Service Fees
shall have the meaning given to it in Section 8.1a.
|
|
1.11
|
Confidential Information
means information as defined in Section 12.
|
|
1.12
|
Field
means the field of glass coatings, photovoltaics, power electronics and display.
|
|
1.13
|
HPC Technology
means Intellectual Property Rights and Know-How related to techniques, methodologies, processes, test vehicles, synthetic procedures, technologies, systems, tools, tool configurations, tool designs or combination thereof, used for the simultaneous parallel or rapid serial design, discovery, synthesis, processing, process sequencing, process integration, device integration, analysis, or characterization of two (2) or more compounds, compositions, mixtures, processes, or conditions, or the structures derived from such.
|
|
1.14
|
IMI Projects
means projects, engagements or activities conducted by IMI for IMI’s customers or for IMI’s internal development programs.
|
|
1.15
|
IMI Site
means San Jose, CA, USA.
|
|
1.16
|
IMI Technical Contribution to CDP IP
shall have the meaning given to it in Section 7.4.
|
|
1.17
|
Intellectual Property Rights
means Statutory Rights in and to any and all of the following -
|
|
a.
|
U.S. and foreign patents and patent applications claiming any inventions or discoveries made, developed, conceived, or reduced to practice, including all divisions, substitutions, continuations, continuation-in-part applications, and reissues, re-examinations and extensions thereof,
|
|
b.
|
U.S. and foreign copyrights,
|
|
c.
|
U.S. and foreign trademarks, service marks, trade names, trade dress, domain names and similar rights,
|
|
d.
|
U.S. and foreign mask work rights, and
|
|
a.
|
Any other moral, intellectual or other proprietary rights of any kind now known or hereafter recognized in any jurisdiction in the world.
|
|
1.18
|
JDP
means the joint development program as more fully described in this Agreement.
|
|
1.19
|
JDP Technology
means the technology developed during and as a result of UCTT Engineers working on IMI Projects.
|
|
1.20
|
Know-how
means any know-how, technology, trade secrets, information (including inventions eligible for statutory protection), software (including source code), circuitry, circuit designs, design descriptions, specifications, formulas, processes, process conditions, materials, material stacks, structures, architectures, specifications for the procurement of parts and drawings, whether in tangible or intangible form and all other experience, drafts, ideas, concepts and business information.
|
|
a.
|
Know-How does not include Intellectual Property Rights, however Know-How shall include without limitation copyrights or intellectual property rights (other than Intellectual Property Rights) that are not Statutory Rights.
|
|
1.21
|
Licensing Royalty Profits
shall have the meaning given to it in Section 8.3.
|
|
1.22
|
Outside Third Party
means a Third Party
|
|
a.
|
whose
principal offices are located outside the Russian Federation; or
|
|
b.
|
a majority of whose assets are located outside the Russian Federation ; or
|
|
c.
|
that is Controlled by a corporation, company or other entity as of the Effective Date whose
principal offices are located outside the Russian Federation
or
a majority of whose assets are located outside the Russian Federation, but such Third Party shall be deemed to be an Outside Third Party for only so long as such Control exists. For purposes of this Section 1.22, "Control" shall mean -
|
|
i.
|
to directly or indirectly have more than [***]percent ([***]%) of the voting rights or of the outstanding shares or securities representing the right to vote for either the election of the board of directors or a similar managing authority, or a supervisory board, or
|
|
ii.
|
if there do not exist outstanding shares or securities as may be the case in a partnership, joint venture or unincorporated association, to directly or indirectly have more than [***]percent ([***]%) of the ownership interest representing the right to make decisions for such Third Party.
|
|
1.23
|
Service Net Profits
shall have the meaning given to it in Section 8.2.
|
|
1.24
|
Sign-Off
shall have the meaning given to it in the Dry Equipment Supply and Technology Licensing Contract.
|
|
1.25
|
Statutory Rights
means rights that come into force by the process of the following steps -
|
|
a.
|
Application to or registration with a governmental entity; and
|
|
b.
|
Approval of such application or registration by such entity.
|
|
1.26
|
Term
shall have the meaning defined in Section 15.1.
|
|
1.27
|
Third Party
means a party other than IMI or UCTT or their Affiliates.
|
|
1.28
|
Tool Stay Period
means the period
|
|
a.
|
Starting on the Sign-Off date, and
|
|
b.
|
Ending [***] thereafter.
|
|
1.29
|
Tools mean
the Dry Equipment and an IMI-owned functional equivalent of the Wet Equipment, either alone or in combination, as applicable.
|
|
1.30
|
Training Period
means the period
|
|
a.
|
Starting on the Sign-Off date, and
|
|
b.
|
Ending [***] thereafter.
|
|
1.31
|
UCTT Engineers
means up to a maximum of [***] UCTT engineering personnel who will be provided training by IMI in accordance with Section 2.1.
|
|
1.32
|
UCTT Projects
means projects, engagements or activities conducted under a CDP.
|
|
1.33
|
UCTT Site
means Ulyanovsk, Russian Federation.
|
|
2.
|
IMI ACTIVITIES
|
|
2.1
|
Training
|
|
a.
|
During the Training Period, IMI will provide training for UCTT Engineers at IMI Site. In the event UCTT Engineers are not able to be physically present at the IMI Site for such training (e.g. due to a delay in the processing of their visa permits), IMI and UCTT will arrange for a mutually agreeable means and medium for remotely training the UCTT Engineers until such time when the UCTT Engineers are able to be physically present at IMI Site.
|
|
b.
|
The training will include the following activities:
|
|
i.
|
The UCTT Engineers will be trained on IMI Projects and UCTT Projects.
|
|
ii.
|
With respect to the Tools, IMI will provide UCTT Engineers training on:
|
|
A.
|
Use of the Tools.
|
|
B.
|
Designing experiments on the Tools.
|
|
C.
|
Designing workflows on the Tools.
|
|
D.
|
Use Informatics to program the Tools.
|
|
iii.
|
With respect to HPC Technology, IMI will provide UCTT Engineers training on:
|
|
A.
|
Combinatorial techniques.
|
|
B.
|
Combinatorial methodologies.
|
|
C.
|
Combinatorial processes.
|
|
D.
|
Test vehicles for combinatorial processing.
|
|
E.
|
Configurations of combinatorial systems.
|
|
F.
|
Screening, discovery, synthesis and processing of materials.
|
|
G.
|
Screening, discovery and identification of process conditions for device manufacturing.
|
|
H.
|
Process sequencing.
|
|
I.
|
Process integration.
|
|
J.
|
Device integration.
|
|
K.
|
Analysis and characterization of combinatorial data.
|
|
iv.
|
In the event IMI, in its sole discretion, believes that the training may involve dissemination of information that requires an export license or a deemed export license, IMI shall only provide such training after such licenses are obtained.
|
|
2.2
|
Expense
|
|
a.
|
During the Training Period and subject to Section 11.1, IMI, and not UCTT, will pay for the costs associated with operating the Dry Equipment.
|
|
b.
|
During the Training Period, IMI will reimburse UCTT for UCTT’s expenses related to the training of the UCTT Engineers. Such expenses may include the salaries, room and board for the UCTT Engineers (collectively “Expenses”). In accordance with the foregoing, UCTT shall invoice IMI for the Expenses on the first day of each [***]for the first [***]in [***] equal amounts of [***] each and IMI shall make all approved payments no later than [***] days after invoicing.
|
|
i.
|
Notwithstanding the foregoing, IMI’s obligation to reimburse Expenses to UCTT shall be limited to a total of [***]. UCTT, and not IMI, shall be responsible for any Expenses that exceed [***].
|
|
c.
|
Except as set forth in this Section 2.2, UCTT and IMI will each bear their own respective costs associated with the JDP.
|
|
2.3
|
Facilities and Workspace
|
|
a.
|
IMI will provide adequate facilities and workspace for UCTT Engineers at IMI Site and additional resources as are necessary to support IMI’s obligations to provide training to UCTT Engineers pursuant to Section 2.1. Such additional resources include access to clean room facilities, badge access, land-line phone connections, Internet access, and cubicle or office space for such UCTT Engineers.
|
|
b.
|
The UCTT Engineers shall complete IMI’s standard confidentiality and safety training prior to receiving access to IMI Site.
|
|
c.
|
In connection with use of the Tools, IMI will also provide the UCTT Engineers access to the metrology tools.
|
|
2.4
|
Assist UCTT in signing CDP Agreement
|
|
a.
|
Effective after Sign-Off, IMI will make commercially reasonable efforts to sub-contract to UCTT a portion of the activities under its current customer engagements for [***], at the sole discretion of IMI and subject to the approval of such current customer. Subject to such discretion and such approval,
|
|
i.
|
The detailed process, steps and timeline for such sub-contracting will be proposed by IMI and agreed upon with UCTT.
|
|
ii.
|
UCTT agrees to assist IMI including providing IMI with an understanding of the cost structure of R&D services at UCTT Site.
|
|
iii.
|
The minimum gross margin for these engagements (between customer and IMI) prior to such sub-contracting will be [***]than [***].
|
|
b.
|
IMI will assist UCTT to sign one or more CDP Agreements.
|
|
c.
|
If, within [***] of the Sign-Off, UCTT is unable to sign CDP Agreements for which [***] is [***] and where the cumulative revenue that UCTT can receive under all such CDP Agreements is at least [***], IMI agrees to pay UCTT up to a maximum of [***] in the following manner:
|
|
i.
|
If, [***] from the Sign-Off (“First Date”), the cumulative revenue that UCTT can receive under all CDP Agreements signed by UCTT on or prior to the First Date (“First Revenue”), is less than [***], IMI will make a payment to UCTT (“First Payment”) in the amount computed as follows -
|
|
ii.
|
If, [***] from the Sign-Off (“Second Date”), the cumulative revenue that UCTT can receive under all CDP Agreements signed by UCTT on or prior to the Second Date (“Second Revenue”), is less than [***], IMI will make a payment to UCTT (“Second Payment”) in the amount computed as follows -
|
|
iii.
|
If, [***] from the Sign-Off (“Third Date”), the cumulative revenue that UCTT can receive under all CDP Agreements signed by UCTT on or prior to the Third Date (“Third Revenue”), is less than [***], IMI will make a payment to UCTT (“Third Payment”) in the amount computed as follows -
|
|
iv.
|
If, [***] from the Sign-Off (“Fourth Date”), the cumulative revenue that UCTT can receive under all CDP Agreements signed by UCTT on or prior to the Fourth Date (“Fourth Revenue”), is less than [***], IMI will make a payment to UCTT (“Fourth Payment”) in the amount computed as follows -
|
|
d.
|
The First Payment, Second Payment, Third Payment and Fourth Payment will be non-refundable. For the avoidance of doubt, the total cumulative payments from IMI to UCTT under this Section 2.4c shall not exceed [***].
|
|
e.
|
Making payments in accordance with Section 2.4c does not release IMI from its obligation to make commercially reasonable efforts to sub-contract to UCTT a portion of the activities under its current customer engagements for [***] as it provided in Section 2.4a.
|
|
f.
|
UCTT shall make commercially reasonable efforts in signing CDP Agreements where Business Brought By is IMI (“IMI CDPs”) and shall not give preference to signing CDP Agreements where Business Brought By is UCTT (“UCTT CDPs”). The decision to sign an IMI CDP shall be solely based on the [***] and [***] that UCTT may obtain from such CDP. In determining whether or not to sign IMI CDPs, UCTT shall not take into account the [***]. Additionally, in determining whether or not to sign IMI CDPs, UCTT shall not take into account the [***] to be provided to [***].
|
|
g.
|
If, during the period beginning upon Sign-Off and ending [***] thereafter, UCTT does not sign an IMI CDP for reasons not solely based on the [***] and [***] that UCTT could have obtained from such CDP, then the parties shall agree to discuss in good faith a [***] IMI’s obligations under Section 2.4c.
|
|
2.5
|
IMI rights but not obligations
|
|
a.
|
Within [***] from the Effective Date and at IMI’s sole discretion, the parties agree to discuss in good faith the opportunity for IMI to [***] at the [***] no more than [***] of the [***] of [***], a company [***] and hereinafter referred to as Project Company, on a [***] basis. Notwithstanding the foregoing, nothing in this Agreement obligates IMI to make such [***].
|
|
b.
|
The parties agree that IMI shall have the right but not the obligation to propose candidates for election to [***] of Project Company’s Board of Directors.
|
|
3.
|
IMI Projects on DRY EQUIPMENT
|
|
3.1
|
CDP Agreement
|
|
a.
|
Upon the signing of a CDP Agreement, the Dry Equipment will be used for UCTT Projects.
|
|
3.2
|
During the Tool Stay Period
|
|
a.
|
In addition to being used for UCTT Projects, the parties agree that during the Tool Stay Period, IMI will use the Tools for IMI Projects at the IMI Site to satisfy IMI’s obligations to provide training to UCTT Engineers pursuant to Section 2.1.
|
|
4.
|
UCTT ACTIVITIES
|
|
4.1
|
Personnel
|
|
a.
|
During the Tool Stay Period, UCTT will ensure that no less than [***] UCTT Engineers (“Minimum Engineers”) are present at IMI Site and are available for supporting the UCTT Projects to satisfy UCTT’s obligations to its CDP customers and for IMI Projects to satisfy IMI’s obligations to provide training to UCTT Engineers pursuant to Section 2.1.
|
|
i.
|
IMI will provide advisory services to UCTT to ensure that UCTT Engineers assigned by UCTT have the appropriate technical competency and are suitable candidates for training.
|
|
ii.
|
In the event, UCTT is unable to provide the Minimum Engineers during the Tool Stay Period, the parties agree to discuss in good faith other alternatives as appropriate remedies to address the shortfall. Such remedies will include but will not be necessarily limited to one or more of the following:
|
|
A.
|
Possible transfer of CDP activity to UCTT Site.
|
|
B.
|
Possible hiring campaign to recruit additional personnel. or
|
|
C.
|
Possible reduction in either the First Payment that may be owed by IMI to UCTT pursuant to Section 2.4c.i, Second Payment that may be owed by IMI to UCTT pursuant to Section 2.4c.ii, Third Payment that may be owed by IMI to UCTT pursuant to Section 2.4c.iii or Fourth Payment that may be owed by IMI to UCTT pursuant to Section 2.4c.iv.
|
|
b.
|
UCTT will ensure that the UCTT Engineers execute all required documents in order for IMI to comply with IMI’s confidentiality obligations under any IMI Projects.
|
|
5.
|
ACTIVITIES BY BOTH PARTIES
|
|
5.1
|
Project Managers
|
|
5.2
|
Dispute Escalation Process
|
|
a.
|
Project Managers
|
|
i.
|
Upon receipt of notice the Project Managers will promptly discuss a corrective action plan in person or by telephone and will attempt in good faith to agree to a mutually acceptable corrective action plan.
|
|
ii.
|
If the Project Managers cannot agree upon a corrective action plan within ten (10) days of receipt of notice, the issue will be escalated to senior management at the respective parties.
|
|
b.
|
Senior Management Representatives
|
|
i.
|
The respective senior management representatives will promptly discuss the issue in person or by telephone and the parties will attempt in good faith to resolve the issue for a period of (10) days.
|
|
ii.
|
If the issue is not resolved by mutual agreement within the second ten (10) day period, the issue will be escalated to senior most individual at the respective parties.
|
|
c.
|
Senior most individual
|
|
i.
|
The respective senior most individual will promptly discuss the issue in person or by telephone and the parties will attempt in good faith to resolve the issue for a period of (10) days.
|
|
ii.
|
If the issue is not resolved by mutual agreement within the third ten (10) day period, the parties may resort to remedies available in this Agreement or at law.
|
|
5.3
|
Progress Reports; Meetings
|
|
5.4
|
Development Records
|
|
5.5
|
Obligation to notify
|
|
a.
|
With respect to an Outside Third Party that is on the Category A List, UCTT is free to engage with such Outside Third Party for the purpose of signing a CDP without IMI’s prior consent.
|
|
i.
|
In the event UCTT has established communications with an Outside Third Party with the good faith intent for UCTT to sign a CDP with such Outside Third Party, UCTT shall notify IMI in writing of such communications.
|
|
ii.
|
In the event IMI has established communications with an Outside Third Party with the good faith intent for IMI to sign a CDP with such Outside Third Party, IMI shall notify UCTT in writing of such communications.
|
|
iii.
|
In the event a party (“First Party”) has established communications with an Outside Third Party with the good faith intent for the First Party to sign a CDP with such Outside Third Party and as of the date of establishing of such communications the First Party has not received the other party’s written notification of establishing communication with such Outside Third Party in accordance with 5.5 (a) (i) or 5.5 (a) (ii), as the case may be,, then for the purpose of Section 7.3b, the First Contacting Party shall be the First Party.
|
|
iv.
|
Each party purporting to be the First Contacting Party under this section shall provide written documents (including but not limited to email records) to support its assertion that it is the First Contacting Party.
|
|
v.
|
Notwithstanding the foregoing, in order to maximize the chances of signing such CDP with such Outside Third Party, the parties may agree in good faith to amend the foregoing (including amending the identification of First Contacting Party and/or its impact on Section 7.3b) and discuss priorities and strategies in advance of establishing such communications.
|
|
b.
|
With respect to an Outside Third Party that is on the Category B List, UCTT shall not communicate with such Outside Third Party for the purpose of engaging in a CDP with such Outside Third Party without IMI’s prior written consent. If UCTT has received such IMI written consent, then for the purpose of Section 7.3b, the First Contacting Party shall be UCTT.
|
|
c.
|
With respect to an Outside Third Party that is on the Category C List, UCTT shall not communicate with such Outside Third Party for the purpose of engaging in a CDP with such Outside Third Party.
|
|
d.
|
For a period of 5 years from the Effective Date, IMI cannot sign a JDP in the field of glass coatings with a third party where such JDP will be similar in structure to this JDP, without UCTT’s prior consent. In the event IMI has established communications with a Third Party with the good faith intent for IMI to sign an agreement similar in structure to this JDP with such Third
|
|
6.
|
BUSINESS DEVELOPMENT COMMITTEE
|
|
6.1
|
Membership
|
|
a.
|
The parties shall form and operate a committee for managing the JDP (hereinafter the “Business Development Committee”).
|
|
b.
|
The Business Development Committee shall consist of four (4) members. UCTT shall appoint two (2) members of the Business Development Committee and IMI shall appoint two (2) members. Each party may designate a third member such that each party may have an alternate or substitute member available at any given time, but only two (2) such members of each party shall vote in meetings of the Business Development Committee. At any time upon written notice to the other party, a party may at its sole discretion replace any member(s) of the Business Development Committee that such party has appointed.
|
|
c.
|
No later than thirty (30) days from the Effective Date, IMI will identify by name three (3) IMI members of the Business Development Committee.
|
|
d.
|
No later than thirty (30) days from the Effective Date, UCTT will identify by name three (3) UCTT members of the Business Development Committee.
|
|
6.2
|
Meetings
|
|
a.
|
The Business Development Committee shall meet at least once per month for a period of not less than [***] from Sign-Off, which meetings may be conducted telephonically, except as may be otherwise agreed by mutual consent.
|
|
6.3
|
Non-binding and advisory role
|
|
a.
|
The Business Development Committee shall generally review and on an advisory and non-binding basis, provide guidance and recommendations to the parties with respect to the activities of the parties under the JDP. Such guidance and recommendations may include one or more of the following:
|
|
i.
|
Evaluate business opportunities
|
|
ii.
|
Determine slot schedule of the Dry Equipment and Wet Equipment.
|
|
iii.
|
Resolve any issues related to profit sharing for each opportunity.
|
|
7.
|
CDP
|
|
7.1
|
CDP Activities
|
|
a.
|
Providing R&D services to and creation of IP for its customers. Such customers may include but are not limited to domestic, international, government, research institutions and newly formed ventures
|
|
b.
|
Conducting internal R&D activities.
|
|
c.
|
Sale or licensing of the IP created as a result of internal R&D;
|
|
d.
|
Creation of joint ventures with third parties (Start Ups) based on the IP created as a result of internal R&D.
|
|
7.2
|
CDP Services and CDP Licenses
|
|
7.2
|
Business Brought By
|
|
a.
|
If the Third Party is not an Outside Third Party, then for such CDP, Business Brought By shall be defined as UCTT.
|
|
b.
|
If the Third Party is an Outside Third Party, and, UCTT was established to be the First Contacting Party (as defined in Sections 5.5.a and 5.5b), then for such CDP, Business Brought By shall be defined as UCTT.
|
|
c.
|
If the Third Party is an Outside Third Party other than as defined in Section 7.3b, then for such CDP, Business Brought By shall be defined as IMI.
|
|
7.4
|
IMI Technical Contribution to CDP IP
|
|
a.
|
If pursuant to or in preparation of the CDP or as a condition of Third Party signing the CDP Agreement, IMI has signed a separate agreement with UCTT or the Third Party, under which IMI will provide services to either UCTT or the Third Party as part of the CDP activities or as part of the performance of the CDP Agreement, then for such CDP, IMI Technical Contribution to CDP IP shall be defined as Yes.
|
|
b.
|
If pursuant to or in preparation of the CDP or as a condition of Third Party signing the CDP Agreement, IMI has signed a separate agreement with UCTT or the Third Party, under which IMI will grant a license to UCTT or Third Party under IMI’s Intellectual Property Rights or under IMI’s Know-How rights, to enable UCTT or Third Party to conduct CDP activities as part of the performance of the CDP Agreement, then for such CDP, IMI Technical Contribution to CDP IP shall be defined as Yes. Notwithstanding the foregoing, if the aforementioned separate agreement is only between IMI and UCTT (and not between IMI and a Third Party) and such separate agreement is either the Dry Equipment Supply and Technology Licensing Contract or Wet Equipment Supply and Technology Licensing Contract (but no other agreement), then IMI Technical Contribution to CDP IP shall be defined as No.
|
|
c.
|
If IMI does not provide any services or grant a license under its Intellectual Property Rights or Know-How rights to either UCTT or Third Party, then for such CDP, IMI Technical Contribution to CDP IP shall be defined as No.
|
|
8.
|
REVENUE SHARING FROM CDP
|
|
8.1
|
As part of the CDP activities,
|
|
a.
|
In exchange for providing CDP Services to a Third Party, UCTT will receive consideration from such Third Party (“CDP Service Fees”).
|
|
b.
|
In exchange for granting CDP Licenses to a Third Party, UCTT will receive consideration from such Third Party (“CDP License Fees”).
|
|
8.2
|
Service Net Profits shall mean the CDP Service Fees less the following -
|
|
a.
|
[***] separately stated on the invoice sent by UCTT to Third Party for payment of CDP Service Fees.
|
|
b.
|
UCTT’s [***] of [***] associated with the CDP, determined by UCTT’s customary accounting procedures.
|
|
c.
|
UCTT’s other costs [***]associated with the CDP. For the avoidance of doubt, [***] associated with the CDP [***] shall be considered costs. However [***] expenses and [***] expenses shall not be considered costs under this section.
|
|
8.3
|
Licensing Royalty Profits shall mean the CDP License Fees less the following -
|
|
a.
|
[***] separately stated on the invoice sent by UCTT to Third Party for payment of CDP License Fees.
|
|
8.4
|
UCTT pricing of Services or Licenses
|
|
a.
|
UCTT shall charge commercially reasonable prices for CDP Service Fees and CDP License Fees. The pricing shall reflect what such CDP Services or CDP Licenses of similar kind and quality, sold in similar quantities, should be offered in a competitive marketplace.
|
|
b.
|
UCTT shall make commercially reasonable efforts to not provide CDP Services or grant CDP Licenses in exchange for [***]. In the event UCTT wishes to provide CDP Services or grant CDP Licenses in exchange for [***], UCTT and IMI will discuss in good faith an [***]for the purpose of computing IMI’s commensurate share of the Service Net Profits and Licensing Royalty Profits contemplated in this Agreement.
|
|
8.5
|
Profit Sharing
|
|
a.
|
Profit Sharing - UCTT shall pay to IMI a percentage of the Service Net Profits and Licensing Royalty Profits depending on whether the Business Brought By is IMI or UCTT and whether IMI Contribution is Yes or No.
|
|
Business Brought By
|
IMI Technical Contribution to CDP IP
|
Profit Sharing
(% of Service Net Profits and Licensing Royalty Profits to be paid by UCTT to IMI)
|
|
|
|
|
|
IMI
|
Yes
|
[***]
|
|
No
|
[***]
|
|
|
UCTT
|
Yes
|
[***]
|
|
No
|
[***]
|
|
|
b.
|
Notwithstanding Section 8.5a, for revenue that UCTT can receive under all CDP Agreements within [***] of the Sign-Off for which Business Brought By is IMI and provided the cumulative total of such revenue from all such CDP Agreements is less than [***] (“Initial Revenue”), the percentage of Service Net Profits (derived from the CDP Service Fees portion of the Initial Revenue) to be paid by UCTT to IMI shall be [***] regardless of whether the IMI Technical Contribution to CDP IP is Yes or No.
|
|
c.
|
Alternative Structure - Notwithstanding Section 8.5a and Section 8.5b, on a CDP-by-CDP basis, the parties may enter into good faith discussions to agree to use an alternative structure for providing compensation to IMI when Business Brought By is IMI and/or IMI Contribution of IP is Yes. Such alternative structures may include, but are not necessarily limited to, a [***] structure.
|
|
8.6
|
Payment and Reporting
|
|
a.
|
No later than [***] after the end of each calendar [***] period for the [***] and after the end of each [***] thereafter (such [***] or [***] hereinafter referred to as “Period”), UCTT shall,
|
|
i.
|
A detailed written report, describing the following:
|
|
A.
|
All sales of CDP Services and CDP Licenses, broken down by specific CDP, made by UCTT during the preceding Period.
|
|
B.
|
All CDP Service Fees and Licensing Fees received by UCTT during the preceding Period together with an identification of each CDP customer and a description of any special licensing or other arrangements made with such customer.
|
|
C.
|
An itemized list of all allowable adjustments used in computing Service Net Profits and Licensing Royalty Profits.
|
|
ii.
|
UCTT’s payment for IMI’s share of Service Net Profits and Licensing Royalty Profits as computed in accordance with Section 8.5a. For the avoidance of doubt, UCTT shall provide a detailed written report to IMI in accordance with item (i) above, even if UCTT’s payment for a particular Period are zero.
|
|
8.7
|
Audit
|
|
a.
|
UCTT shall keep full, clear, complete, true and accurate records with respect to the CDP Services and CDP Licenses and the associated CDP Service Fees and CDP License Fees. Such books and records shall be kept in the English language and in compliance with international accounting principles as issued by the International Accounting Standards Board. Such books and records shall be kept at UCTT for at least three (3) years following the end of the calendar quarter to which they pertain. As more fully described in this Section, IMI shall have the right through its accredited representatives to examine and audit at reasonable times all such records and such other records and accounts as may under recognized accounting practices contain information bearing upon the amount of Service Net Profits and Licensing Royalty Profits due to IMI hereunder.
|
|
b.
|
Prompt adjustment shall be made by UCTT to compensate for any errors or omissions disclosed by such examination or audit.
|
|
c.
|
Inspections conducted under this Section shall be at the expense of IMI, unless a variation or error producing an increase exceeding [***] percent ([***]%) of the amounts payable for any period covered by the inspection is established and confirmed in the course of any such inspection, whereupon all reasonable costs relating to the inspection for such period and any unpaid amounts that are discovered will be paid promptly by UCTT.
|
|
d.
|
At IMI’s request, UCTT will permit an independent auditor and technical consultant selected by IMI and reasonably acceptable to UCTT, to examine during ordinary business hours no more than once each calendar year such records and other documents as may be necessary to verify or determine CDP Service Fees, CDP License Fees and other payments paid or payable under this Agreement.
|
|
e.
|
On reasonable notice (provided that IMI shall give UCTT at least 7 calendar days prior written notice of its election to inspect such records)and during regular business hours, IMI or its authorized representative shall each have the right to inspect and copy the books of accounts, records and other relevant documentation of UCTT or of any Affiliate of UCTT insofar as they relate to the CDP Services or CDP Licenses, in order to ascertain or verify the amount of Service Net Profits and Licensing Royalty Profits due to IMI hereunder, and the accuracy of the information provided to IMI in the aforementioned reports.
|
|
f.
|
The audit shall be conducted at the location(s) where such books and records are normally kept, IMI shall also have the right, not more than once each calendar year, to audit UCTT's books and financial records for the purpose of verifying full payment by UCTT of its payment obligations hereunder.
|
|
g.
|
Such audits shall be conducted during normal business hours and shall not unreasonably interfere with UCTT's conduct of its business. Upon ten (10) days written notice and not more
|
|
h.
|
Upon a request by IMI, UCTT shall permit IMI'S auditors to have access during normal business hours to UCTT'S records regarding the reports required to be made under this Agreement, in order to verify the correctness of or necessity for any payment or report by UCTT, as said auditor deems necessary. IMI agrees that such auditors shall not disclose to IMI any information other than information relating solely to correctness of or necessity for the reports and payments made hereunder. If UCTT refuses IMI'S auditors access to UCTT'S records, then upon request of IMI, UCTT shall permit an independent certified public accountant, selected by IMI and approved by UCTT to have access during normal business hours to UCTT'S records under the terms set forth for IMI'S auditors in this paragraph. In the event that an independent certified public accountant is necessary because of UCTT'S refusal of access then UCTT shall bear the cost of such independent certified public accountant.
|
|
9.
|
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS AND KNOW-HOW
|
|
9.1
|
Background Technology
|
|
9.2
|
IMI Projects
|
|
a.
|
IMI shall own all Intellectual Property Rights and Know-How rights arising out of the activities of UCTT Engineers on IMI Projects (“IMI Projects IP”).
|
|
b.
|
UCTT hereby assigns, and agrees to assign to IMI in the future when any such IMI Projects IP is first fixed in a tangible medium or reduced to practice, as applicable, all of its right, title and interest in and to any IMI Projects IP.
|
|
c.
|
UCTT agrees to execute all papers, including patent applications, invention assignments and copyright assignments, and otherwise agrees to assist IMI, as reasonably required and at IMI’s reasonable expense, to perfect in IMI the rights, title and other interests in IMI Projects IP.
|
|
9.3
|
HPC Technology
|
|
a.
|
Without limiting the foregoing sections between the parties, IMI shall own all right, title, and interest in and to the HPC Technology and all improvements, derivatives and modifications thereof developed by either party or both parties during the course of the Agreement ("HPC Derivatives").
|
|
b.
|
UCTT hereby assigns, and agrees to assign to IMI in the future when any such HPC Derivatives are first fixed in a tangible medium or reduced to practice, as applicable, all of its right, title and interest in and to any HPC Derivatives.
|
|
c.
|
UCTT agrees to execute all papers, including patent applications, invention assignments and copyright assignments, and otherwise agrees to assist IMI, as reasonably required and at IMI’s reasonable expense, to perfect in IMI the rights, title and other interests in HPC Derivatives.
|
|
9.4
|
UCTT Projects
|
|
a.
|
All
Intellectual Property Rights and Know-How rights arising out of the sole activities of UCTT personnel (and not IMI personnel) on UCTT Projects
shall be owned by UCTT.
|
|
b.
|
All
Intellectual Property Rights and Know-How rights arising out of the sole activities of IMI personnel (and not UCTT personnel) on UCTT Projects
shall be owned by IMI. IMI will grant UCTT a non-exclusive royalty-free, worldwide, perpetual license under such rights to practice such rights in the Field.
|
|
c.
|
All
Intellectual Property Rights and Know-How rights arising out of the joint activities of UCTT and IMI personnel on UCTT Projects
shall be owned jointly by UCTT and IMI.
Each party shall have an equal, undivided 50% interest in any jointly owned Intellectual Property Rights and Know-How rights.
|
|
10.
|
INTELLECTUAL PROPERTY PROTECTION
|
|
10.1
|
IMI controls prosecution
|
|
a.
|
IMI shall have the sole right, but not the obligation, to apply for, seek issuance of, and maintain in the United States and in foreign countries the patent rights associated with the JDP Technology that is solely owned by IMI or jointly owned by IMI and UCTT.
|
|
b.
|
All costs associated with such activity shall be paid by the owner of the Intellectual Property Rights and Know-How rights.
|
|
c.
|
The prosecution, filing and maintenance of all patent rights and applications are the within the sole discretion and responsibility of IMI. All decisions with respect to prosecution of the above patent rights are reserved to IMI.
|
|
d.
|
The parties agree to mutually develop a process for assisting each other in such activities.
|
|
10.2
|
Patent Prosecution
|
|
a.
|
IMI shall have the first right to prepare, file, prosecute and maintain, at its own expense and in consultation with UCTT, patent applications and patents claiming JDP Technology, and to conduct any interferences, re-examinations, reissues, oppositions or requests for patent term extension or governmental equivalents thereto.
|
|
b.
|
In the event that IMI does not file, prosecute or maintain any such patent or patent application (including the failure to do so in the Russian Federation) or undertake such other activities described above, then UCTT shall have the right to assume such activities at its own expense but without affecting the ownership and license provisions set forth in Section 9.
|
|
10.3
|
Cooperation
|
|
a.
|
Each party agrees to execute all papers, including patent applications and invention assignments, and otherwise agrees to assist the other party, as reasonably required and at the other party’s reasonable expense, to perfect the rights, title and other interests in JDP Technology.
|
|
b.
|
IMI and UCTT shall both use reasonable efforts to keep the other fully informed as to the status of patent matters with respect to JDP Technology.
|
|
c.
|
IMI and UCTT shall each reasonably cooperate with and assist the other at its own expense in connection with such activities, at the other party's request. The Project Managers will (a) facilitate communication between the parties regarding patents and patent applications with respect to JDP Technology, (b) discuss and provide input on patent strategy with respect to JDP Technology, and (c) review applications and other substantive papers with respect to JDP Technology prior to filing with the patent office.
|
|
11.
|
PAYMENTS
|
|
11.1
|
Expenses
|
|
a.
|
[***], such as [***] and [***],
|
|
b.
|
[***] and [***] not [***] by [***],
|
|
c.
|
reasonable travel and lodging expenses for IMI personnel performing activities at UCTT Site, and
|
|
d.
|
subject to UCTT's prior written approval not to be unreasonably withheld, any other out-of-pocket costs to support the JDP activities.
|
|
11.2
|
Payment Method
|
|
a.
|
All payments hereunder shall be made in U.S. dollars by UCTT or one of its U.S. Affiliates.
|
|
b.
|
All payments due to IMI under this Agreement shall be made by bank wire transfer as follows:
|
|
11.3
|
Late payments
|
|
11.4
|
Taxes
|
|
12.
|
CONFIDENTIAL INFORMATION
|
|
12.1
|
The parties acknowledge that they may receive information from the other party which may be considered confidential and proprietary. The receiving party agrees to maintain in strict confidence such information that, if disclosed in writing, is identified and marked as confidential (or with words of similar meaning) at the time of its disclosure (or that, if disclosed verbally, is designated as confidential at the time of disclosure and is summarized and identified as confidential in a writing delivered to the receiving party within thirty (30) days after the disclosure) or that would appear to a reasonable person as confidential information ("Confidential Information").
|
|
12.2
|
The receiving party will use the Confidential Information solely for the purpose of performing its rights and obligations under the Agreement.
|
|
12.3
|
The receiving party will not disclose Confidential Information to a Third Party without the prior written consent of the disclosing party. The receiving party will protect such information from disclosure to others with at least the same degree of care as the receiving party exercises to protect its own information of similar type and importance, but in no event less than reasonable care.
|
|
12.4
|
The obligations of confidentiality and protection required by this Section will survive the expiration, termination, or cancellation of this Agreement for a period of five years thereafter.
|
|
12.5
|
The obligation of confidentiality will not apply, or will cease to apply, to any information that: (a) was known to the receiving party prior to its receipt of Confidential Information under this Agreement; (b) is or becomes publicly available without breach of this Agreement; (c) is received from a third party without an obligation of confidentiality to the disclosing party or (d) is developed independently by employees of the receiving party not having access to such information, or (e) is required by law to be disclosed by the receiving party.
|
|
13.
|
WARRANTY; LIMITATION OF LIABILITY
|
|
13.1
|
By IMI
|
|
a.
|
It has the right and authority to enter into this Agreement, and to fully perform its obligations hereunder; and
|
|
b.
|
This Agreement is a legal and valid obligation binding upon it and enforceable in accordance with its terms.
|
|
13.2
|
By UCTT
|
|
a.
|
It has the right and authority to enter into this Agreement, and to fully perform its obligations hereunder; and
|
|
b.
|
This Agreement is a legal and valid obligation binding upon it and enforceable in accordance with its terms.
|
|
13.3
|
Disclaimer
|
|
14.
|
LIMITATION OF LIABILITY
|
|
14.1
|
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT FOR ANY BREACH OF ANY PAYMENT OR CONFIDENTIALITY OBLIGATION UNDER THIS AGREEMENT AND ANY PERSONAL INJURY OR HARM SUFFERED BY THE EMPLOYEES OF A PARTY AND ANY PROPERTY DAMAGE SUFFERED OR INCURRED BY A PARTY DUE TO THE GROSS NEGLIGENCE OF WILLFUL ACT OF THE OTHER PARTY, IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY, ITS AFFILIATES OR TO ANY THIRD PARTY CLAIMING THROUGH OR UNDER THE OTHER PARTY HERETO, FOR ANY LOST PROFITS, LOSS OF DATA, EQUIPMEN'T DOWNTIME OR FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
|
|
14.2
|
EXCEPT FOR BREACHES OF ANY PAYMENT AND CONFIDENTIALITY OBLIGATIONS, IN NO EVENT WILL EITHER PARTY’S LIABILITY TO THE OTHER UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID BY SUCH PARTY TO THE OTHER PARTY IN THE [***] PRECEDING THE CLAIM.
|
|
14.3
|
IN ADDITION, COMPANY ACKNOWLEDGES AND AGREES THAT AS BETWEEN THE PARTIES, IMI SHALL NOT BE LIABLE FOR ANY PRODUCT LIABILITY CLAIMS RESULTING FROM THE MANUFACTURE, SALE OR USE OF ANY PRODUCTS DEVELOPED AS A RESULT OF JDP ACTIVITIES THAT UCTT or THIRD PARTY USES, MAKES OR SELLS.
|
|
14.4
|
The parties acknowledge and agree that the foregoing limitations of liability are an essential element of this agreement and that in their absence the terms of this agreement would be substantially different.
|
|
15.
|
TERM AND TERMINATION
|
|
15.1
|
Term
|
|
a.
|
The term of this Agreement shall commence on the Effective Date, and, unless terminated earlier as provided in this Section 15.2, shall continue indefinitely thereafter (the "Term").
|
|
15.2
|
Termination for Breach
|
|
a.
|
Either party may terminate this Agreement if the other party has materially breached or defaulted in the performance of any of its material obligations, and such default has continued for sixty (60) days after written notice was provided to the breaching party by the non-breaching party.
|
|
b.
|
Termination will be effective at the end of the sixty (60) day period unless the breach has been cured before the expiration of such sixty (60) day period.
|
|
15.3
|
Effect of Termination
|
|
a.
|
Accrued Rights and Obligations
|
|
b.
|
Termination of Licenses
|
|
c.
|
Termination of Projects
|
|
15.4
|
Survival
|
|
16.
|
MISCELLANEOUS
|
|
16.1
|
Amendment
|
|
16.2
|
No Implied License
|
|
16.3
|
Assignment
|
|
a.
|
Neither party shall assign or transfer this Agreement either voluntarily or by operation of law, in whole or in part, without the prior written consent of the other party.
|
|
b.
|
Any attempt to assign without such consent shall be void and of no effect.
|
|
c.
|
Notwithstanding the foregoing, UCTT may assign this Agreement without such consent, to the Project Company, and the terms of the Agreement shall continue in effect without modification after such assignment. Furthermore, IMI may assign this Agreement without such consent to a successor in interest to its business, whether by merger, acquisition, consolidation, change of control, reorganization or sale of substantially all of its assets.
|
|
16.4
|
Drafting
|
|
16.5
|
Governing Law
|
|
16.6
|
Venue
|
|
16.7
|
Dispute Resolution
|
|
a.
|
If no solution can be found to settle the dispute, then such dispute shall be finally settled by arbitration in accordance with the default rules and procedures of American Arbitration Association sitting in New York City, NY, USA and conducted in English.
|
|
b.
|
Within 30 days of notice that a party wants to submit a dispute to arbitration, the parties shall each select one independent arbitrator and will attempt to mutually agree upon a third independent arbitrator. Each arbitrator will have expertise in the thin film technology industry and will not be an employee, affiliate or contractor for either party.
|
|
c.
|
If the parties are unable to agree on the third arbitrator within fifteen (15) days, the two arbitrators shall select the third arbitrator within thirty (30) days.
|
|
d.
|
If the amount in dispute is less than [***], then the parties shall agree upon a single arbitrator meeting the above conditions within thirty (30) days of the notice of arbitration or such arbitrator shall be chosen by AAA if the parties cannot agree.
|
|
e.
|
The arbitrators shall determine what discovery will be permitted consistent with the goal of limiting the costs and time for such a proceeding. The parties and arbitrators shall use all reasonable efforts to complete any arbitration subject to this Section within six (6) months from the selection of arbitrators.
|
|
f.
|
The parties agree that any award of damages shall not include punitive, special, consequential, or indirect damages except as specifically allowed in this Agreement and shall comply with the limitation of liability provisions set forth herein.
|
|
g.
|
The arbitrators’ decision shall be in a detailed writing setting forth the reasons for their decision and shall be provided concurrently to each party.
|
|
h.
|
The arbitration award shall be final and binding on the parties.
|
|
i.
|
Unless otherwise agreed to by the parties, each party shall pay one-half of the arbitration fees and expenses and shall bear all of its own expenses in connection with the arbitration.
|
|
j.
|
Notwithstanding any of the foregoing, either party shall have the right to seek, at its own cost and expenses, preliminary and temporary injunctive relief pending resolution of the dispute via arbitration.
|
|
k.
|
The parties expressly disclaim the application of the United Nations Convention on the International Sale of Goods to this Agreement.
|
|
16.8
|
Independent Contractors
|
|
16.9
|
Compliance with Laws
|
|
16.10
|
Notices
|
|
a.
|
Unless otherwise agreed to by the parties, the communications required or permitted to be given or made under this Agreement shall be made in writing, via personal delivery, registered mail, facsimile transmission (with written confirmation copy by registered first-class mail), addressed to the appropriate party at the address indicated below and a copy to the receiving party’s legal department.
|
|
b.
|
All communications made pursuant to this section shall be deemed made or given on the date of such personal delivery, mailing or transmission.
|
|
c.
|
If to UCTT:
|
|
d.
|
If to IMI:
|
|
e.
|
The Parties may change the name and address to which communications should be sent under this section by providing prior written notice to the other party.
|
|
16.11
|
Captions
|
|
16.12
|
Counterparts
|
|
16.13
|
Signatures by Electronic Mail or Facsimile
|
|
16.14
|
Copies
|
|
16.15
|
Non-waiver
|
|
16.16
|
Severability
|
|
16.17
|
Publicity; Disclosure of Agreement
|
|
a.
|
Neither party shall publicize nor disclose the terms of this Agreement without the prior written consen
t
of the other party, except -
|
|
i.
|
to the extent required by law, to governmental entities under each the applicable laws and regulations (including without limitation in a Form 8-K to the United States Securities and Exchange Commission and to the Russian patent and intellectual property agency, Rospatent), or
|
|
ii.
|
to such party's attorneys, accountants, advisors, investors and financing sources and their advisors and others on a need to know basis under circumstances that reasonably ensure the confidentiality thereof, or
|
|
iii.
|
in connection with the enforcement of this Agreement or rights under this Agreement, or
|
|
iv.
|
in connection with a merger, acquisition, financing transaction or proposed merger, acquisition or financing transaction.
|
|
b.
|
Notwithstanding the foregoing,
|
|
i.
|
no later than thirty (30) days after the Effective Date, the parties will agree to a joint press release,
|
|
ii.
|
IMI may mention UCTT on its web site, and
|
|
iii.
|
UCTT will provide a testimonial to IMI (subject to mutual agreement of the parties) for use on IMI’s web site.
|
|
16.18
|
Force Majeure
|
|
16.19
|
Third Party Beneficiaries
|
|
16.20
|
Integration
|
|
16.21
|
Representation by Legal Counsel
|
|
16.22
|
Compliance with Laws
|
|
a.
|
Each party agrees that certain of the information provided by one party to another hereunder may be “material, nonpublic information” for purposes of U.S. federal or state securities laws, the awareness of which prohibits UCTT and its employees, contractors, representatives and agents from (i) buying or selling IMI’s securities (stock, options, etc.) (i.e., “insider trading”) and (ii) passing information to anyone who may buy or sell IMI’s securities (i.e., “tipping”), until after the information has been disclosed to the public and absorbed by the market. Without limiting any of UCTT’s other obligations under this Agreement, UCTT will comply with all federal and state securities laws prohibiting insider trading and tipping, and shall immediately notify IMI in the event of any insider trading or tipping by UCTT or its employees, contractors, representatives or agents of which it becomes aware.
|
|
b.
|
In accordance with the requirements of the Foreign Corrupt Practices Act of the United States (15 U.S.C. § 78dd-1 and 2) (“FCPA”), each party agrees and warrants that it shall not make, offer, promise or authorize any payment, loan, gift, donation or other giving of money or things of value, directly or indirectly, whether through itself, its affiliates, partners, officers, employees, agents or representatives, whether in cash or kind, and whether pursuant to a written agreement, to or for the use of any government official, any political party or official thereof or any candidate for political office, for the purpose of influencing or inducing any official act or decision in order to further the activities contemplated by this Agreement, including obtaining or retaining any government approval or funding related to such activities. Each party represents and warrants that it will strictly comply with the FCPA, and agrees that if it violates the FCPA in the course of performing the activities enumerated in this Agreement, the non-violating party may immediately upon notice to the violating party terminate this Agreement.
|
|
16.23
|
Governing Language
|
|
Field of Glass Coatings
|
Field of Photovoltaics
|
Field of Power Electronics
|
Field of Display
|
|
•
[***]
|
•
[***]
|
•
[***]
|
•
[***]
|
|
a)
|
any Outside Third Party in the Field with <$50M revenue in the year prior to the year in which UCTT first engages with such Outside Third Party,
|
|
Field of Glass Coatings
|
Field of Photovoltaics
|
Field of Power Electronics
|
Field of Display
|
|
• [***]
|
[***]
|
[***]
|
[***]
|
|
Field of Glass Coatings
|
Field of Photovoltaics
|
Field of Power Electronics
|
Field of Display
|
|
• [***]
|
[***]
|
[***]
|
[***]
|
|
Period
|
Monthly Basic Rent
|
|
Effective Date - Initial End Date
|
$0.00
|
|
Day Following Initial End Date - 2/28/15
|
$142,397
|
|
3/1/15 - 2/28/16
|
$147,226
|
|
3/1/16 - 2/28/17
|
$195,853
|
|
3/1/17 - 2/28/18
|
$200,749
|
|
3/1/18 - 2/28/19
|
$205,768
|
|
3/1/19 - 2/28/20
|
$210,912
|
|
3/1/20 - 2/28/21
|
$216,185
|
|
3/1/21 - 2/28/22
|
$221,590
|
|
3/1/22 - 2/28/23
|
$227,130
|
|
3/1/23 - 2/28/24
|
$232,808
|
|
3/1/24 - 2/28/25
|
$238,628
|
|
3/1/25 - Termination Date
|
$244,593
|
|
LANDLORD:
|
|
TENANT:
|
|
S B C & D CO., INC.,
a California corporation
By: /s/ Mark Regoli
Name: Mark Regoli
Title: EVP
Dated:October 16, 2013
|
|
INTERMOLECULAR, INC.,
a Delaware corporation
By: /s/ David E. Lazovsky
Name: David E. Lazovsky
Title: President and CEO
Dated:October 11, 2013
|
|
|
May 12, 2010
|
|
|
FURNITURE INVENTORY
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item
|
Location
|
Manufactuer
|
Category
|
Description
|
Qty.
|
Condition and/or Comments
|
|
|
|
|
|
|
|
|
|
1
|
3011 N.1st St.
|
Various
|
Chairs
|
Task chairs
|
225
|
Most old, but useable
|
|
2
|
3011 N.1st St.
|
Various
|
Chairs
|
Side (sled based) chairs
|
85
|
Most old, but useable
|
|
3
|
3011 N.1st St.
|
Various
|
Desks
|
Office sets, metal desk with table and/or credenza
|
68
|
Most old, but useable
|
|
4
|
3011 N.1st St.
|
Unknown
|
Desks
|
Maple wood office set, desk, credenza, cabinet, file cabinet, bookcase, table and chairs.
|
1
|
Most old, but useable
|
|
5
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
10 ft laminate table & two chairs
|
1
|
Most old, but useable
|
|
6
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
8 ft laminate table, credenza & 4 chairs
|
1
|
Most old, but useable
|
|
7
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
14 ft laminate table & 13 chairs
|
1
|
Most old, but useable
|
|
8
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
6 ft laminate table & 5 chairs
|
1
|
Most old, but useable
|
|
9
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
8 ft laminate table, credenza, podium & 75 chairs
|
1
|
Most old, but useable
|
|
10
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
12 ft. laminate table, credenza & 9 chairs
|
1
|
Most old, but useable
|
|
11
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
10 ft laminate table, credenza & 6 chairs
|
1
|
Most old, but useable
|
|
12
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
14 ft laminate table, credenza & 3 chairs
|
1
|
Most old, but useable
|
|
13
|
3011 N.1st St.
|
Unknown
|
Conf Rm set
|
12 ft laminate table, credenza & 12 chairs
|
1
|
Most old, but useable
|
|
14
|
3011 N.1st St.
|
Various
|
File cabinet
|
2 drawer lateral file cabinet
|
14
|
Most old, but useable
|
|
15
|
3011 N.1st St.
|
Various
|
File cabinet
|
3 drawer lateral file cabinet
|
18
|
Most old, but useable
|
|
16
|
3011 N.1st St.
|
Various
|
File cabinet
|
4 drawer lateral file cabinet
|
35
|
Most old, but useable
|
|
17
|
3011 N.1st St.
|
Various
|
Storage cab
|
18" x 36" x 72" metal storage cabinet
|
9
|
Most old, but useable
|
|
18
|
3011 N.1st St.
|
Various
|
Bookcase
|
15" x 36" x various metal bookcases
|
42
|
Most old, but useable
|
|
19
|
3011 N.1st St.
|
Unknown
|
Whiteboard
|
Printable white board, mtd on walls
|
3
|
Most old, but useable
|
|
20
|
3011 N.1st St.
|
Unknown
|
Screen
|
Electric screens, installed in ceiling
|
3
|
Most old, but useable
|
|
21
|
3011 N.1st St.
|
Unknown
|
Breakroom
|
54" round laminate tables
|
9
|
Most old, but useable
|
|
22
|
3011 N.1st St.
|
Unknown
|
Breakroom
|
Plastic stacking chairs, metal frames
|
75
|
Most old, but useable
|
|
23
|
3011 N.1st St.
|
Unknown
|
Breakroom
|
48" square laminate tables
|
6
|
Most old, but useable
|
|
24
|
3011 N.1st St.
|
Am. Seating
|
Cubicles
|
8' x 8' cubes
|
178
|
Most old, but useable
|
|
25
|
3011 N.1st St.
|
Am. Seating
|
Cubicles
|
8' x 12' cubes
|
14
|
Most old, but useable
|
|
26
|
3011 N.1st St.
|
Am. Seating
|
Cubicles
|
8' x 16' cubes
|
8
|
Most old, but useable
|
|
27
|
3011 N.1st St.
|
Herman Miller
|
Cubicles
|
8' x 8' cubes
|
22
|
Most old, but useable
|
|
28
|
3011 N.1st St.
|
|
|
|
|
|
|
29
|
3011 N.1st St.
|
|
|
|
|
|
|
Date: November 7, 2013
|
|
/s/ DAVID E. LAZOVSKY
|
|
|
|
David E. Lazovsky
President and Chief Executive Officer
|
|
Date: November 7, 2013
|
|
/s/ C. RICHARD NEELY, JR.
|
|
|
|
C. Richard Neely, Jr.
Chief Financial Officer
|
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
•
|
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
|
/s/ DAVID E. LAZOVSKY
|
|
||
|
|
|
Name:
|
|
David E. Lazovsky
|
|
|
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
•
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
•
|
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
|
/s/ C. RICHARD NEELY, JR.
|
|
||
|
|
|
Name:
|
|
C. Richard Neely, Jr.
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
|