Exhibit 10.5

 

Termination Agreement of Contract Manufacturing Agreement - Lithography Laser

 

This Termination Agreement of the Contract Manufacturing Agreement is entered
into as of March 3, 2003, by and between Cymer, Inc., a Nevada corporation
(“CYMER USA”), with offices at 16750 Via Del Campo Ct., San Diego, CA 92127,
Cymer Japan, Inc., a Japanese corporation and a wholly-owned subsidiary of CYMER
USA (“CJI”) with offices at 4-17-8 Minamiyawata, Ichikawa-shi, Chiba 272-0023,
Japan, and Seiko Instruments Inc., a Japanese corporation (“SII”), with offices
at 8, Nakase 1-chome, Mihama-ku, Chiba 261-8507, Japan.

 

WHEREAS, CYMER USA and SII entered into a Contract Manufacturing Agreement as of
August 28, 1992 and Addendum No.1 to the Agreement on February 1, 1996 and
Addendum No.2 to the Agreement on February 21, 2000 (all hereinafter the
“Agreement”). SII, CYMER USA and CJI desire to terminate the Agreement on March
31, 2003, and have agreed, on the terms and conditions set forth in this
Termination Agreement, to terminate the Agreement as of March 31, 2003 by mutual
agreement.

 

NOW THEREFORE, in consideration of the premises, and mutual covenants contained
herein, the parties agree as follows:

 

1.     TERMINATION OF THE AGREEMENT

The parties acknowledge, confirm and agree that:

 

1) as of March 31, 2003(“Termination Date”) the Agreement shall be terminated by
mutual agreement and, except as may be specifically provided herein, the
Agreement, shall be of no further force and effect thereafter; and

2) except as may be specifically provided herein, each party hereby, for itself
and for its past and future agents, officers, directors, employees,
shareholders, independent contractors, and partners, and their respective
successors, predecessors, heirs and assigns, releases fully and forever after
the Termination Date, the other parties and their past and future agents,
officers, directors, employees, shareholders, independent contractors, and
partners, and their respective successors, predecessors, heirs and assigns, from
any and all claims, demands, causes of action, obligations, damages, or
liabilities of any nature whatsoever, known or unknown, suspected or
unsuspected, whether fixed or contingent, concealed or hidden, which now exist
or may hereafter exist, arising out of or in connection with the Agreement, the
Addendum No.1 and the Addendum No.2.

 

2.     Each party expressly acknowledges and agrees, that its rights and
obligations pursuant to Sections 7-10, 11.4, 12-17 and 19-23 of the Agreement
shall survive the termination of the Agreement, provided, however, that Section
7.2 and Section 11.4 shall survive after amendment as follows:

 

2.1.  The first paragraph of Section 7.2 of the Agreement shall be deleted in
its entirety and

 

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restated to read as follows;

Except as may be specifically provided in the second paragraph of Section 7.2,
SII shall be released from any warranty obligations arising out of or in
connection with any defects in material and workmanship (“Defects”) of the
Products after the termination of the Agreement, including, but not limited to,
in case such Defects are attributable to SII, and CYMER USA and CJI agree to
release, fully and forever after termination of the Agreement, SII and its past
and future agents, officers, directors, employees, shareholders, independent
contractors, and partners, and their respective successors, predecessors, heirs
and assigns, from any and all claims, demands, causes of action, obligations,
damages, or liabilities of any nature whatsoever, known or unknown, suspected or
unsuspected, whether fixed or contingent, concealed or hidden, which now exist
or may hereafter exist, arising out of or in connection with such Defects.

 

2.2.  Section 11.4 shall be deleted in its entirety and restated to read as
follows;

11.4 Return of Materials. Upon termination or expiration of this Agreement, SII
shall within forty five (45) days of such termination or expiration (a) return
to CYMER all parts, modules and subsystems held in inventory for which SII will
be compensated at cost, and all drawings, plans, designs, tooling, equipment,
Test Equipment, descriptions of processes, and all other materials related to
Technical information or Specifications as well as all materials deemed
confidential under this Agreement, or otherwise supplied to SII under this
agreement, including without limitation all tangible embodiments of the
information with respect to the CYMER Products, and all copies thereof, and
notes and documentation related thereto, if any, at CYMER’s expenses, including
without limitation, the expense of packing and transportation and (b) certify in
writing as to the compliance of this section. Notwithstanding the foregoing, SII
may keep the copies of shipment records, assembly procedure manuals, assembly
check sheets, test procedure manuals, test check sheets and other materials in
order to correspond to a product liability Claim against SII. SII shall submit
to CYMER the list of such copies. SII shall keep these copies as confidential
information for ten (10) years pursuant to Section 10.

 

3.     GOVERNING LAW

The validity, construction, and performance of this Termination Agreement and
the legal relations among the parties to this Agreement shall be governed by and
construed in accordance with the laws of Japan, without reference to its
principles of conflicts of laws or statutory rules of arbitration. All disputes,
controversies or differences which may arise between the parties, out of or in
relation to or in connection with this Termination Agreement, or for the breach
thereof, shall be settled by negotiation in good faith between the parties as
promptly as possible. If such disputes, controversies or differences are not
settled amicably, within sixty (60) days of written notice, either party may
proceed to initiate an arbitration. The arbitration shall be held in Honolulu,
Hawaii under the commercial rules and auspices of the Asia/Pacific Center for
the Resolution of International Business Disputes (the ‘‘Center), by which each
party is hereby bound. Under such arbitration there shall be

 

 

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three arbitrators. Each party, within thirty (30) days after initiation of the
arbitration, shall appoint one arbitrator and instruct them, respectively, to
select together the third arbitrator; but if they cannot select the third
arbitrator within sixty (60) days after initiation of the arbitration, then the
Center may appoint the third arbitrator in accordance with its rules. The
arbitrators shall apply Japanese law to the merits of any disputes or claim,
without reference to rules of conflicts of law. The arbitral proceedings and all
pleadings and written evidence shall be in the English l language.  Any written
evidence originally in a language other than English shall be submitted in
English translation accompanied by the original or a true copy thereof. The
award rendered by the arbitrator shall be final and binding upon the parties and
may be enforced in any court of competent jurisdiction.

 

4.     ENTIRE AGREEMENT

The parties expressly acknowledge that they have read this Termination Agreement
and understand its provisions. The parties further agree and acknowledge that
they understand that this Termination Agreement constitutes the entire agreement
between them with respect to the subject matter of this Termination Agreement,
and that it supersedes all prior proposals, agreements, negotiations,
representations, writings, and all other communications, whether written or
oral, between them with regard to the subject matter of this Termination
Agreement. No modification of waiver of any provision of this Termination
Agreement shall be effective unless it is in writing and signed by each party.
This Termination Agreement may be executed in two or more counterparts, each of
which will be deemed an original and all of which shall constitute one document.

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this ANNULLING AGREEMENT to
be executed by their authorized representatives.

 

 

CYMER, INC.;

SEIKO INSTRUMENTS INC.;

a Nevada corporation

a Japanese corporation

 

 

 

 

By:

 /s/ Pascal Didier

 

By:

/s/ Hiroyuki Funamoto

 

Name

: Pascal Didier

Name

: Hiroyuki Funamoto

Title

: President

Title

: Division Manager

 

 

CYMER JAPAN, INC.;

 

a Japanese Corporation

 

 

 

 

 

By:

 /s/ Pascal Didier

 

 

Name

: Pascal Didier

 

Title

: Representative Director

 

 

 

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