**Exhibit 10.1**

 

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***** Text Omitted and Filed Separately Pursuantto a Confidential Treatment Request Under 17 C.F.R. §§ 200.80(b)(4) and240.24b-2(b)(1)**

 

**EXECUTION COPY**

 

 

**JOINT VENTURE AGREEMENT**

 

**Of**

 

**TCZ GMBH,**

 

**dated as of July 15, 2005**

 

**among**

 

**TCZ GMBH,**

 

**CYMER, INC.,**

 

**CARL ZEISS SMT AG**

 

**and**

 

**CARL ZEISS LASER OPTICSBETEILIGUNGSGESELLSCHAFT MBH**

 

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**TABLE OF CONTENTS**

 
| ** **                                                        | **PAGE** |
|-------------------------------------------------------------------|----------|
|                                                              |     |
| ARTICLE 1  DEFINITIONS                                       |     |
|                                                              |     |
| Section 1.01.  *Definitions*                                 | 2        |
|                                                              |     |
| ARTICLE 2  FORMATION OF THE COMPANY                          |     |
|                                                              |     |
| Section 2.01.  *Formation of the Company*                    | 7        |
| Section 2.02.  *Execution of Agreements by Company*          | 7        |
| Section 2.03.  *Execution of Agreements by Zeiss SMT*        | 8        |
| Section 2.04.  *Representations And Warranties*              | 8        |
|                                                              |     |
| ARTICLE 3  PURPOSES OF THE COMPANY                           |     |
|                                                              |     |
| Section 3.01.  *Name*                                        | 9        |
| Section 3.02.  *Purpose*                                     | 9        |
| Section 3.03.  *Place of Business of the Company*            | 10       |
| Section 3.04.  *Registered Office; Registered Agent*         | 10       |
| Section 3.05.  *Duration of the Company*                     | 10       |
| Section 3.06.  *Title to Company Property*                   | 10       |
| Section 3.07.  *Limited Liability*                           | 10       |
|                                                              |     |
| ARTICLE 4  PERCENTAGE INTERESTS; CAPITAL CONTRIBUTIONS       |     |
|                                                              |     |
| Section 4.01.  *Percentage Interests; Capital Contributions* | 10       |
| Section 4.02.  *Funding Commitments*                         | 10       |
| Section 4.03.  *Other Matters*                               | 12       |
|                                                              |     |
| ARTICLE 5  DISTRIBUTIONS                                     |     |
|                                                              |     |
| Section 5.01.  *Distributions*                               | 12       |
| Section 5.02.  *Member’s Right to Require Distribution* | 12       |
| Section 5.03.  *Amounts Withheld*                            | 12       |
| Section 5.04.  *Dissolution*                                 | 13       |

 

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| Section 5.05.  *No Distributions in Violation of Law*             | 13     |
|------------------------------------------------------------------------|--------|
|                                                                   |   |
| ARTICLE 6  CORPORATE GOVERNANCE                                   |   |
|                                                                   |   |
| Section 6.01.  *Members Meeting and Committee of Representatives* | 13     |
| Section 6.02.  *Officers*                                         | 14     |
| Section 6.03.  *Business Plan*                                    | 15     |
| Section 6.04.  *Company Actions Requiring Consent of Members*     | 17     |
| Section 6.05.  *Meetings of Committee of Representatives*         | 19     |
| Section 6.06.  *Decision by Consent*                              | 20     |
| Section 6.07.  *Telephonic Meetings*                              | 20     |
| Section 6.08.  *Swiss Legal Implementation*                       | 20     |
| Section 6.09.  *Nature of Obligations among Members*              | 21     |
|                                                                   |   |
| ARTICLE 7  ACCOUNTING AND TAX MATTERS                             |   |
|                                                                   |   |
| Section 7.01.  *Fiscal Year/Independent Auditors*                 | 21     |
| Section 7.02.  *Books and Records*                                | 21     |
| Section 7.03.  *Financial Reports*                                | 22     |
| Section 7.04.  *Tax Matters*                                      | 22     |
|                                                                   |   |
| ARTICLE 8  CERTAIN COVENANTS                                      |   |
|                                                                   |   |
| Section 8.01.  *Press Release*                                    | 23     |
| Section 8.02.  *Non-Competition*                                  | 23     |
|                                                                   |   |
| ARTICLE 9  EXCULPATION AND INDEMNIFICATION                        |   |
|                                                                   |   |
| Section 9.01. *Exculpation and  Indemnification*                  | 23     |
|                                                                   |   |
|                                                                   |   |
| ARTICLE 10  DISPOSITION OF INTERESTS                              |   |
|                                                                   |   |
| Section 10.01. *General*                                          | 24     |
| Section 10.02. *Non-affiliate Transfers*                          | 25     |
| Section 10.03. *Recognition of Transfers*                         | 26     |
|                                                                   |   |
| ARTICLE 11  TERMINATION, DISSOLUTION AND LIQUIDATION              |   |
|                                                                   |   |
| Section 11.01. *Term*                                             | 26     |
| Section 11.02. *Triggering Events*                                | 26     |

 

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| Section 11.03. *Breach under this  Agreement or Event of Default under Supply Agreements* | 28     |
|------------------------------------------------------------------------------------------------|--------|
| Section 11.04. *Change of Control*                                                        | 28     |
| Section 11.05. *Liquidating Events*                                                       | 29     |
| Section 11.06. *Winding Up*                                                               | 30     |
| Section 11.07. *Rights of Members;  Resignation*                                          | 31     |
| Section 11.08. *Waiver of Partition*                                                      | 31     |
|                                                                                           |   |
| ARTICLE 12  MISCELLANEOUS                                                                 |   |
|                                                                                           |   |
| Section 12.01. *Notices*                                                                  | 31     |
| Section 12.02. *Amendments; No Waivers*                                                   | 32     |
| Section 12.03. *Expenses*                                                                 | 32     |
| Section 12.04. *Zeiss SMT*[. . . *** . . .]                                               | 33     |
| Section 12.05. *Successors and Assigns*                                                   | 33     |
| Section 12.06. *Headings*                                                                 | 33     |
| Section 12.07. *Entire Agreement*                                                         | 33     |
| Section 12.08. *Governing Law*                                                            | 33     |
| Section 12.09. *Waiver of Jury Trial*                                                     | 33     |
| Section 12.10. *Dispute Resolution;  Arbitration*                                         | 33     |
| Section 12.11. *Counterparts;  Effectiveness*                                             | 34     |
| Section 12.12. *Severability*                                                             | 34     |
| Section 12.13. *Further Assurances;  Swiss Corporate Documents*                           | 34     |
|                                                                                           |   |
| Exhibits                                                                                       |   |
| Exhibit A—Form of Intellectual Property Agreement                               |   |
| Exhibit B—Form of Contribution Agreement                                        |   |
| Exhibit C—Form of Supply Agreement                                              |   |
| Exhibit D—Form of Confidentiality Agreement                                     |   |
| Exhibit E—Examples of Incremental Legal and Administrative Costs                     |   |
| Exhibit F—Swiss Corporate Legal Implementation Timetable                             |   |
| Exhibit G—Articles of Association (*Statuten*)  (English version)                    |   |
| Exhibit H—Form of Swiss Trust Agreement                                         |   |
| Exhibit I—IMT IP Side Letter                                                         |   |
|                                                                                           |   |
| Schedules                                                                                      |   |
| Schedule A—Business Plan                                                             |   |

 

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*******                ****CONFIDENTIAL TREATMENT REQUESTED UNDER 17C.F.R. §§ 200.80(b)(4) AND****240.24b-2(b)(1)**

 

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**JOINT VENTURE AGREEMENT**

 

**OF**

 

**TCZ GMBH**

 

JOINT VENTUREAGREEMENT of TCZ GmbH, a limited liability company organized under the laws ofSwitzerland (the “**Company**”),dated as of July 15, 2005 among, initially, Carl Zeiss SMT AG, a stockcorporation organized under the laws of Germany (“**Zeiss****SMT**”), CarlZeiss Laser Optics Beteiligungsgesellschaft mbH, a limited liability companyorganized under the laws of Germany and an indirect wholly-owned subsidiary ofSMT (“**Zeiss LOB**”), and Cymer, Inc., aNevada corporation (“**Cymer**”) and, followingits registration in the commercial register, the Company.  Capitalized terms used herein but not definedwhen used have the meanings assigned to such terms in Article 1.

 

**RECITALS**

 

1.             Cymer and Zeiss LOB intend to formthe Company as a joint venture to develop, integrate, market, sell and supporttools employing a beam generated by an excimer laser to induce crystallizationfor Low Temperature Poly-Silicon (LTPS) processing (the “**Products**”)for the manufacture of flat panel displays, including LCDs, LCD SOGs and OLEDs,to engage in related application development and to search for other businessopportunities for process tools for the manufacture of flat panel displays.

 

2.             It is intended that the Company andthe Members or their Affiliates will enter into an Intellectual PropertyAgreement substantially in the form attached hereto as Exhibit A (the “**Intellectual Property Agreement**”) and each of the otherJoint Venture Documents (as defined below).

 

3.             Cymer and Zeiss LOB wish to enterinto this Joint Venture Agreement to govern the affairs of the Company and setforth their respective rights, obligations and understandings with respect tothe Company.

 

4.             Zeiss SMT wishes to [. . . *** . . .] of Zeiss LOB underthis Agreement.

 

NOW,THEREFORE, the parties hereto agree as follows:

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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ARTICLE 1DEFINITIONS

 

Section 1.01*.  Definitions. *(a) As used herein, thefollowing terms have the following meanings:

 

“**Administrative Services Agreements**” means (i) theAdministrative Services Agreement to be entered into between Cymer and theCompany, in a form to be mutually agreed by Cymer and Zeiss LOB not later thanthe Closing, as amended, supplemented or otherwise modified from time to time,and (ii) the Administrative Services Agreement to be entered into betweenZeiss LOB or its Affiliate and the Company, in a form to be mutually agreed byCymer and Zeiss LOB not later than the Closing, as amended, supplemented orotherwise modified from time to time.

 

“**Affiliate**” means, with respect to any Person, any otherPerson directly or indirectly controlling, controlled by or under commoncontrol with such Person.  As usedherein, “**control**” (and the derivative terms “**controlling**” and “**controlled**”)means the direct or indirect ownership of more than fifty percent (50%) of theequity securities or other ownership interests and voting rights of, and thepossession, direct or indirect, of the power to direct or cause the directionof the management and policies of a person, whether through the ownership ofvoting securities, by contract or otherwise. No party or its Affiliates shall by reason of this Agreement be deemedto be an affiliate of the other party or its Affiliates.  The term “**affiliated**”shall have a corresponding meaning. Notwithstanding the foregoing definition, when used with respect toZeiss SMT or Zeiss LOB, the term “**Affiliate**”shall exclusively mean (a) Zeiss SMT and any Person under the control ofZeiss SMT and (b) IMT and any Person under the control of IMT.  Notwithstanding the foregoing definition, forpurposes of this Agreement, the Company and its subsidiaries shall not beconsidered an Affiliate of either Member.

 

“**Agreement**” means this Joint Venture Agreement, as amended,supplemented or otherwise modified from time to time.

 

“**Area of Responsibility**” means each area of the R&DEffort in which one Member or the Company has primary responsibility fordirecting and carrying out research, as specified from time to time in the thencurrent Business Plan.

 

“**Budget Year**” means the period commencing on the date of thisAgreement and ending on December 31, 2005 and each successive one-yearperiod thereafter.

 

“**Capital Call Notice**” means a written request delivered bythe Company to each Member from time to time requesting that each Memberprovide funds to the Company.  Suchnotice shall specify in reasonable detail (i) the amount being

 

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requested, (ii) theCompany’s anticipated use of funds and the timing of such use, and (iii) wiretransfer instructions.

 

“**Confidentiality Agreement**” means the ConfidentialityAgreement to be entered into among Cymer, Zeiss SMT, IMT and the Company at theClosing, substantially in the form attached hereto as Exhibit D, asamended, supplemented or otherwise modified from time to time.  It is intended that the Company will become aparty to the Confidentiality Agreement following its formation.

 

“**Contribution Agreement**” means the Contribution Agreement tobe entered into between Cymer and the Company at the Closing substantially inthe form attached hereto as Exhibit B, as amended, supplemented orotherwise modified from time to time.

 

“**Cymer Supply Agreement**” means the Supply Agreement to be enteredinto between Cymer and the Company at the Closing, substantially in the formattached hereto as Exhibit C, as amended, supplemented or otherwisemodified from time to time.

 

“**Deliverable**” means work product or deliverables of any typeto be developed or delivered by a Member during the course of a Project.

 

“**Facilities Agreements**” means (i) the Facilities LicenseAgreement to be entered into between the Company and Cymer relating to use bythe Company of certain facilities in the United States, in a form to bemutually agreed by Cymer and Zeiss LOB not later than the Closing, as amended,supplemented or otherwise modified from time to time, and (ii) theFacilities License Agreement to be entered into between the Company or itsAffiliate and an Affiliate of Cymer relating to use by the Company or itsAffiliates of certain facilities in Korea and Taiwan, in a form to be mutuallyagreed by Cymer and Zeiss LOB not later than the Closing, as amended,supplemented or otherwise modified from time to time.

 

“**GAAP**” means United States generally accepted accountingprinciples, consistently applied.

 

“**IMT**” means Carl Zeiss IndustrielleMesstechnik GmbH.

 

“**IMT IP Side Letter**” means the side letter to theIntellectual Property Agreement executed by IMT by or at the Closing,substantially in the form attached hereto as Exhibit I.

 

 “**Intellectual Property**”means any or all of the following: (i) works of authorship, including,without limitation, computer programs, algorithms, routines, source code andexecutable code, whether embodied in software, firmware or otherwise,documentation, designs, files, records and data, (ii) inventions (whetheror not patentable), improvements, and technology, (iii) proprietary andconfidential information, including, without limitation, technical

 

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data andcustomer and supplier lists, trade secrets, know-how and techniques, (iv) databases,data compilations and collections and technical data, (v) logos, tradenames, trade dress, trademarks and service marks, (vi) domain names, webaddresses and sites, (vii) tools, methods, processes, devices, prototypes,schematics and test methodologies, and (viii) any and all instantiationsof the foregoing in any form and embodied in any media.

 

“**Intellectual Property Rights**” means any or all of thefollowing and all rights in, arising out of, or associated therewith, whetherarising from statute or common law: (i) all United States and foreignpatents and utility models and applications therefor and all reissues,divisions, re-examinations, renewals, extensions, provisionals, continuationsand continuations-in-part thereof, and equivalent or similar rights anywhere inthe world in inventions and discoveries, including, without limitation,invention disclosures, (ii) all trade secrets and other rights in know-howand confidential or proprietary information, (iii) all copyrights,copyright registrations and applications therefor and all other rightscorresponding thereto throughout the world, (iv) all industrial designsand any registrations and applications therefor throughout the world, (v) allrights in World Wide Web addresses and domain names and applications andregistrations therefor, all trade names, logos, common law trademarks andservice marks, trademark and service mark registrations and applicationstherefor and all goodwill associated therewith throughout the world, and (vi) anysimilar, corresponding or equivalent rights to any of the foregoing throughoutthe world.

 

“**Interest**” means, with respect to any Member, the aggregateshares (*Gesellschaftsanteile*) in the Companyheld by such Member.

 

“**Joint Venture Documents**” means, collectively, thisAgreement, the Contribution Agreement, the Intellectual Property Agreement, theTrademark License Agreement, the Supply Agreements, the R&D ServicesAgreements, the Administrative Services Agreements, the Facilities Agreementsand the Confidentiality Agreement.

 

“**Member**” means Cymer, Zeiss LOB or any other Person who, atsuch time, is admitted to the Company as a Member in accordance with the termsof this Agreement, each in its capacity as a shareholder of the Company.

 

“**Member Parent**” means, with respect to any Member, (i) in the case of Cymer or anyMember that is an Affiliate of Cymer, Cymer, Inc., (ii) in the caseof Zeiss LOB or any Member that is an Affiliate of Zeiss SMT, Carl Zeiss SMT AGand (iii) in the case of any Member that is not an Affiliate of eitherCymer or Zeiss SMT, the ultimate parent company of such Member.

 

“**Net Income**” shall mean, for any period, the Company’s netincome as determined under GAAP.

 

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“**Percentage Interest**” means, with respect to any Member, suchMember’s Percentage Interest as set forth in Section 4.01.

 

“**Person**” means an individual, corporation, partnership,association, trust, limited liability company or any other entity ororganization, including a government or political subdivision or an agency orinstrumentality thereof.

 

“**R&D Effort**” means research and development undertaken byeither Member reasonably related to the Business.

 

“**R&D Services Agreements**” means (i) any R&DServices Agreement to be entered into between Cymer and the Company (or theirrespective Affiliates), substantially in a form to be mutually agreed by Cymerand Zeiss LOB not later than the Closing, as amended, supplemented, orotherwise modified from time to time, and (ii) any R&D ServicesAgreement to be entered into between Zeiss LOB and the Company (or theirrespective Affiliates), substantially in a form to be mutually agreed by Cymerand Zeiss LOB not later than the Closing, as amended, supplemented, orotherwise modified from time to time.

 

“**Supplier**” means, with respect to any Supply Agreement, thePerson identified as the Supplier in such Supply Agreement, including anytransferee of all or substantially all of the assets of a Supplier that hasassumed such Supply Agreement in accordance therewith.

 

“**Supply Agreements**” means the Cymer Supply Agreement and theZeiss Supply Agreement.

 

“**Trademark License Agreement**” means the License Agreement tobe entered into between the Company and Carl Zeiss AG, substantially in a formto be mutually agreed by Cymer and Zeiss LOB at the Closing, as amended,supplemented or otherwise modified from time to time.

 

“**THL**” means the Swiss Federal Tax Harmonized Law, as amendedfrom time to time.

 

“**Transfer**” means any direct or indirect sale, assignment,disposition, exchange, mortgage, pledge or grant of a security interest in,foreclosure or any other transfer of any portion of, or economic or votinginterest in, an Interest, but shall not include any sale, assignment,disposition, exchange, mortgage, pledge or grant of a security interest in,foreclosure or any other transfer of any capital stock of a Member Parent.  A “Transfer” shall also include any sale,assignment or other transfer by a Member Parent of any direct or indirectinterest in the Member that is its Affiliate. When used as a verb, the term “Transfer” refers to entering into anytransaction or series of transactions that results in a “Transfer.”

 

“**Work Plan**” means a mutually agreed written schedule settingforth a description of a Project to be performed under this Agreement.

 

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“**Zeiss Supply Agreement**” means the Supply Agreement to beentered into between Zeiss LOB (or its Affiliate) and the Company at theClosing, substantially in the form attached hereto as Exhibit C, asamended, supplemented or otherwise modified from time to time.

 

(b)           Each of the followingadditional terms is defined in the Section set forth opposite such term:

 
| **Term**                                     | ** ** | **Section** |
|----------------------------------------------|------------|-------------|
| Annual Maximum Required Funding Contribution |       | 4.02(a)     |
| Business                                     |       | 3.02        |
| Business Plan                                |       | 6.03(a)     |
| Chief Executive Officer                      |       | 6.01(a)     |
| Committee of Representatives                 |       | 6.01(a)     |
| Closing                                      |       | 2.01        |
| Company                                      |       | Preamble    |
| Fiscal Year                                  |       | 7.01        |
| Gate Reviews                                 |       | 6.03(a)     |
| Intellectual Property Agreement              |       | Recital 3   |
| Liquidating Event                            |       | 11.05       |
| Liquidator                                   |       | 11.06       |
| Major Customer                               |       | 11.04(a)    |
| Members Meeting                              |       | 6.01(a)     |
| Non-Affiliate Transfer                       |       | 10.02(a)    |
| Non-Compete Period                           |       | 11.02(b)    |
| Non-Transferring Member                      |       | 10.02(a)    |
| Non-Triggering Party                         |       | 11.02(a)    |
| Other FPD Business Opportunities             |       | 3.02        |
| Permitted Transferee                         |       | 10.01(a)    |
| Product                                      |       | Recital 1   |
| Project                                      |       | 6.03(a)     |
| Proposed Transferee                          |       | 10.02(a)    |
| Representative                               |       | 6.01(a)     |
| Required Funding Contributions               |       | 4.02(a)     |
| Swiss Corporate Documents                    |       | 12.13       |
| Swiss Trustee                                |       | 6.08        |
| Swiss Trust Agreement                        |       | 6.08        |
| Transferring Member                          |       | 10.02(a)    |
| Triggering Event                             |       | 11.02(a)    |
| Triggering Party                             |       | 11.02(a)    |
| Triggering Separation                        |       | 11.04(b)    |

 

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ARTICLE 2FORMATION OF THE COMPANY

 

Section 2.01*.  Formation of the Company.* (a) As soon as reasonably practicablefollowing the execution of this Agreement, Cymer and Zeiss LOB will contributethe initial capitalization of the Company of CHF 20,000.00****asset forth in Section 4.02(a) and take such other steps to form theCompany as a Swiss limited liability company (*Gesellschaftmit beschränkter Haftung*) in accordance with the Swiss corporatelegal implementation timetable attached as Exhibit F.  At the closing, which shall take place on adate to be mutually agreed between Cymer and Zeiss LOB consistent, to theextent reasonably practicable, with said timetable (the “**Closing**”),the following cash and property contributions (the “**CapitalContributions**”) will be made:

 

(i)    Each Member shall make the required fundingcontributions set forth in Section 4.02(a)(i).

 

(ii)   Cymer shall contribute, assign, transfer,convey and deliver to the Company all of Cymer’s right, title and interest inand to the Contributed Intellectual Property (as defined in the ContributionAgreement) on the terms and subject to the conditions set forth therein.

 

(b)           As soon asreasonably practicable after Closing, the Company shall use $[. . . *** . . .] of the requiredfunding contribution to finance the purchase by the Company or its subsidiaryof a demonstration Product, of which $[... . *** . . .] will be payable to Cymer and $[. . . *** . . .] will be payable to Zeiss LOB.

 

(c)           The Company shallhave Articles of Association (*Statuten*)substantially in the form attached hereto as Exhibit G, subject to suchmodifications as may be required by the commercial register of the Canton ofZug as part of the registration process.

 

(d)           Cymer’s obligationsat Closing hereunder shall be subject to the condition that the IMT IP SideLetter shall have been executed and delivered by IMT at or prior to theClosing.

 

Section 2.02*.  Execution of Agreements byCompany. *At the Closing,promptly following the Company’s registration in the commercial register of theCanton of Zug, the Members (i) will cause the Company to become a party tothis Agreement by executing and delivering counterparts hereof and (ii) shallexecute and deliver, in the case of Cymer to the extent it is a party thereto,and shall cause the Company to execute and deliver, (A) counterparts ofthe Intellectual Property

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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Agreement and Trademark License Agreement, (B) counterparts ofeach Supply Agreement and (C) each other Joint Venture Document that theMembers shall mutually agree shall be executed at the Closing.

 

Section 2.03*.  Execution of Agreements byZeiss SMT. *At the Closing,promptly following the Company’s registration in the commercial register, ZeissSMT (i) shall execute and deliver counterparts of (A) theIntellectual Property Agreement and (B) the Confidentiality Agreement andthe IMT IP Side Letter, each as executed by IMT, (ii) shall cause CarlZeiss Laser Optics GmbH to execute and deliver counterparts of the Zeiss SupplyAgreement and (iii) shall cause any other Joint Venture Document which theparties have agreed shall be executed and delivered at Closing to be executedand delivered by any of its Affiliates that is a party thereto.

 

Section 2.04*.  Representations AndWarranties. *(a) Cymerhereby represents and warrants that as of the date hereof (i) it is acorporation duly organized, validly existing and in good standing under thelaws of the State of Nevada, (ii) it has the requisite power and authorityto execute and deliver this Agreement and the other Joint Venture Documents andto fully perform its obligations hereunder and thereunder, (iii) theexecution, delivery and performance of this Agreement and the other JointVenture Documents have been duly authorized on the part of Cymer, (iv) itis not party to or affected by contractual or other legal obligations thatwould in any material respect interfere with its full performance of thisAgreement or the other Joint Venture Documents, (v) Cymer owns theContributed Intellectual Property (as defined in the Contribution Agreement)free and clear of any encumbrances (including any license other than anyExisting Cross-Licenses), to the Company, as set forth in the ContributionAgreement, and (vi) the individuals executing this Agreement on behalf ofCymer have the authority to do so.

 

(b)           Zeiss LOB herebyrepresents and warrants that (i) it is a limited liability company dulyorganized, validly existing and in good standing under the laws of Germany, (ii) ithas the requisite power and authority to execute and deliver this Agreement andthe other Joint Venture Documents and to fully perform its obligationshereunder and thereunder, (iii) the execution, delivery and performance ofthis Agreement and the other Joint Venture Documents have been duly authorizedon the part of Zeiss LOB, (iv) it is not party to or affected bycontractual or other legal obligations that would in any material respectinterfere with its full performance of this Agreement or the other JointVenture Documents, and (v) the individuals executing this Agreement onbehalf of Zeiss LOB have the authority to do so.

 

(c)           Zeiss SMT herebyrepresents and warrants that (i) it is a stock corporation duly organized,validly existing and in good standing under the laws of Germany, (ii) ithas the requisite power and authority to execute and deliver this Agreement andthe other Joint Venture Documents to which it is a party and

 

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to fullyperform its obligations hereunder and thereunder, (iii) the execution,delivery and performance of this Agreement and the other Joint VentureDocuments to which it is a party have been duly authorized on the part of ZeissSMT, (iv) it is not party to or affected by contractual or other legalobligations that would in any material respect interfere with its fullperformance of this Agreement or the other Joint Venture Documents to which itis a party, (v) the individuals executing this Agreement on behalf ofZeiss SMT have the authority to do so, and (vi) all right, title andinterest in and to Foreground Technology (as defined in the IntellectualProperty Agreement) conceived or reduced to practice by IMT or any Person underthe control of IMT will be owned by SMT and that, upon execution and deliveryof the IMT IP Side Letter by IMT, SMT will obtain all rights from IMT to fullyperform its obligations under the Intellectual Property Agreement.

 

(d)           Notwithstanding anyother provision contained in this Agreement, the Company shall be authorized toexecute, deliver and perform this Agreement and the other Joint VentureDocuments to which it is a party and all documents, agreements, certificates,or statements contemplated thereby or related thereto, each in the formattached hereto, or in the case of the Administrative Services Agreements, theFacilities License Agreements and the R&D Services Agreements, in the formmutually agreed by Cymer and Zeiss LOB at or before Closing, exclusive of anyfuture amendments, without any further act, vote or approval of any Member orany other Person.

 

ARTICLE 3PURPOSES OF THE COMPANY

 

Section 3.01*.  Name.*The name ofthe Company shall be “TCZ GmbH”.  Thebusiness of the Company shall be conducted under such name or names as theMembers Meeting may from time to time determine in accordance with theprovisions hereof based upon decisions taken by the Committee of Representatives.

 

Section 3.02*.  Purpose. *The purpose of the Company is todevelop, market, sell, integrate and service the Products and to engage inrelated application development based on the Products (the “**Business**”), and to search for other business opportunitiesfor process tools for the manufacture of flat panel displays, and to takeactions reasonably related thereto, in each case as set forth in greater detailin the Business Plan as in effect from time to time. If the Company identifiesbusiness opportunities for process tools for the manufacture of flat paneldisplays other than the Products and applications based on the Products (“**Other FPD Business Opportunities**”), the Company shall bringsuch Other FPD Business Opportunities to the attention of the Members, and theMembers will discuss in good faith whether or not to expand the scope of theBusiness of the Company to pursue such Other FPD Business Opportunities.  For the avoidance of the doubt, the “Business”shall not include the development, marketing, selling,

 

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integration orservices of tools other than the Products, unless the Members so agree andamend this Agreement to expand the definition of the Business accordingly.

 

Section 3.03*.  Place of Business of theCompany. *The principal placeof business of the Company shall be located at such address as may bedesignated by the Members Meeting from time to time based upon decisions takenby the Committee of Representatives.

 

Section 3.04*.  Registered Office; RegisteredAgent. *The address of theregistered office of the Company in Switzerland shall be as determined by theMembers and set forth in the Commercial Register.

 

Section 3.05*.  Duration of the Company. *The Company shall continue untilits termination in accordance with the provisions of Article 11.

 

Section 3.06*.  Title to CompanyProperty. *All property of theCompany, whether real or personal, tangible or intangible, shall be deemed tobe owned by the Company as an entity, and no Member, in its capacity as such,shall have any direct ownership interest in such property, except upontermination of the Company as set forth in Article 11.

 

Section 3.07*.  Limited Liability. *Except as required by mandatorySwiss law, the debts, obligations and liabilities of the Company, whetherarising in contract, tort or otherwise, shall be solely the debts, obligationsand liabilities of the Company, and no Member shall be obligated personally forany such debt, obligation or liability of the Company solely by reason of beinga Member.

 

ARTICLE 4PERCENTAGE INTERESTS; CAPITAL CONTRIBUTIONS

 

Section 4.01*.  Percentage Interests; CapitalContributions. *(a) Thenames and Percentage Interests of the Members shall be as follows:

 
| **Name**  | ** ** | **Percentage Interest** | ** ** |
|-----------|------------|-------------------------|------------|
| Cymer     |       | 60                      | %          |
| Zeiss LOB |       | 40                      | %          |

 

(b)           The PercentageInterests shall not be subject to adjustment unless agreed by the Members,except as otherwise provided in Sections 6.03(c)(iii) or 11.03.

 

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(c)           Other than theMembers’ initial capital contributions, their Required Funding Contributions,and Zeiss LOB’s obligations pursuant to Section 12.03 below, no additionalfunding or capital contribution of the Members shall be required, except as theMembers may unanimously agree.

 

Section 4.02*.  Funding Commitments. *(a) As soon as reasonablypracticable after execution of this Agreement, each of the Members shallcontribute their proportionate share of the Company’s nominal capital of CHF20,000.00 based on their Percentage Interest for purposes of the formation ofthe Company in accordance with Exhibit F. The Members from time to time shall be obligated to provide funds to theCompany, as provided in this Section 4.02, up to the amount specified in Section 4.02(a)(iii),which each such Member shall make by way of a contribution of capital, in allcases, by wire transfer of immediately available funds.

 

(i)    At the Closing, Cymer shall contribute$14,170,000.00 in cash and Zeiss LOB shall contribute $[. . . *** . . .] in cash in respect of their required fundingcontributions for 2005, and Cymer shall contribute any property to becontributed pursuant to the Contribution Agreement.

 

(ii)   The amount and timing of subsequent requiredfunding contributions under this Section 4.02 (“**RequiredFunding Contributions**”) shall be determined by the Chief ExecutiveOfficer consistent with the then current Business Plan as in effect from timeto time, subject to the provisions of Section 4.02(a)(iii).  Each Member shall make each such fundingcontribution within ten business days of receipt of a Capital Call Notice fromthe Company.

 

(iii)  No Member shall be required to contribute tothe Company an amount for any Budget Year that exceeds its proportionate share(determined on the basis of its Percentage Interest) of the annual maximumrequired funding contribution amount (the “**Annual Maximum RequiredFunding Contribution**”) for such Budget Year (which shall cover theCompany’s expected funding requirements for the period ending 15 months afterthe beginning of such Budget Year), set forth for such Budget Year in the thencurrent Business Plan as may be in effect from time to time, or, absent anupdated Business Plan containing an Annual Maximum Required FundingContribution for such Budget Year, the amount determined as provided in Section 6.03(c).

 

(b)           If a Member fails tocontribute its required portion of any Required Funding Contribution as andwhen required by this Agreement, the Company shall then notify the Members inwriting of such default, specifying the default in reasonable detail, and ifthe defaulting Member shall not have cured such default within ten businessdays after receipt of such default notice, such failure shall be deemed amaterial breach of this Agreement and in addition to, and without

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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prejudice to,any and all other remedies, the non-defaulting Member may treat such default asa “Triggering Event” pursuant to Section 11.02(a), except that thenon-defaulting Member shall be treated as the Non-Triggering Party and thedefaulting Member shall be treated as the Triggering Party thereunder.  The foregoing shall be exercisable by writtennotice from non-defaulting Member to the defaulting Member, given within 30days after receipt of the default notice.

 

Section 4.03*.  Other Matters. *(a) Except as otherwiseprovided in this Agreement, no Member shall demand or receive a return of itscapital contributions or resign from the Company without the consent of theother Member.  Under circumstancesrequiring a return of any capital contributions, no Member shall have the rightto receive property other than cash, except as may be specifically providedherein.

 

(b)           No Member shallreceive any interest, salary or drawing with respect to its capitalcontributions or for services rendered on behalf of the Company or otherwise inits capacity as a Member, except as otherwise contemplated by this Agreement.

 

ARTICLE 5DISTRIBUTIONS

 

Section 5.01*.  Distributions. *After the date of Closing, when,if and as determined by the Members Meeting or required by a Member pursuant toSection 5.02, the Company shall make available the Net Income of the Companyfor distribution to the Members (or to any Affiliate of a Member designated bysuch Member) in proportion to their Percentage Interests, and each Memberagrees to vote its shares in favor of such a distribution; *provided*that Intellectual Property Rights owned or licensed by the Company shall bedistributed only in accordance with the Intellectual Property Agreement orotherwise upon termination and dissolution of the Company in accordance with Article 11.  With respect to the amount to which each Memberis entitled pursuant to the preceding sentence, such Member may elect, at itssole option, to (i) receive such amount in cash or, if so determined bythe Members Meeting, property or (ii) treat such amount as part of suchMember’s funding contribution for purposes of satisfying its Required FundingContribution.

 

Section 5.02*.  Member’s Right to RequireDistribution. *Either Membershall have the right to require the Members Meeting to make a distribution ofthe Net Income of the Company to the Members under Section 5.01, *provided* that the Company will have sufficient availablefunds on hand after the distribution to meet 110% of its reasonably foreseeableworking capital requirements during the 18 months following the date of suchdistribution based on the more conservative of the (a) the financialprojections in the then current Business Plan or (b) the most recentfinancial projections approved by the Members Meeting.

 

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Section 5.03*.  Amounts Withheld. *The Company is authorized towithhold from distributions to the Members and to pay over to any federal,cantonal, communal or foreign government any amounts which it reasonablydetermines may be required to be so withheld pursuant to the THL or any provisionsof any other federal, cantonal, communal or foreign law.  All amounts withheld pursuant to the THL orany provision of any federal, cantonal, communal or foreign tax law withrespect to any distribution to any Member shall be treated as amounts distributedto such Member pursuant to this Article for all purposes under thisAgreement.

 

Section 5.04*.  Dissolution. *Upon dissolution and winding up ofthe Company, the Company shall make distributions in accordance with Article 11.

 

Section 5.05*.  No Distributions in Violationof Law. *Notwithstanding anyother provision contained in this Agreement, the Company shall not be requiredto make a distribution to any Member to the extent that such distribution wouldviolate mandatory Swiss law.

 

ARTICLE 6CORPORATE GOVERNANCE

 

Section 6.01*.  Members Meeting and Committeeof Representatives. *(a) Exceptas otherwise provided in this Agreement, the business and affairs of theCompany shall be managed by the Chief Executive Officer (the “**Chief Executive Officer**”) under the supervision of themeeting of all the Members of the Company (the “**MembersMeeting**”), as specified in this Agreement.  The actions set forth in Section 6.01(c) belowmay not be taken by the Company without the approval of a group of individualsacting as representatives of the Members (the “**Committee ofRepresentatives**”).  On thebasis of such approval, any action so approved shall be presented by theCommittee of Representatives to the Members Meeting.

 

(b)           Except as otherwiseprovided in Section 10.02(b), Section 11.03 and Section 11.04,the Committee of Representatives shall consist of four individuals (each a “**Representative**”).  Twoof such Representatives shall be designated by Cymer and two suchRepresentatives shall be designated by Zeiss LOB.  Each Representative (i) shall holdoffice until a successor shall have been duly designated or if earlier, suchRepresentative’s death, resignation or removal and (ii) except asotherwise provided in Section 11.03, may be removed only by the Memberhaving designated such Representative.

 

(c)           In addition to theactions requiring consent of the Members pursuant to Section 6.04 below,the following actions may not be taken by the Company or by the Chief ExecutiveOfficer acting on behalf of the Company without

 

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obtaining theapproval of the Members Meeting acting on the recommendation of the Committeeof Representatives as set forth herein:

 

(i)    adoption or amendment of a Business Plan andthe product development process as described in Section 6.03(a)(iii);

 

(ii)   entering into or making any loans or advancesto, guarantees for the benefit of, or investments by the Company, in excess of$100,000, other than trade credit in the ordinary course of business and investmentsin cash or cash equivalents in accordance with an investment policy adopted bythe Members Meeting;

 

(iii)  entering into any agreement or commitment (orseries of related agreements or commitments) outside the ordinary course ofbusiness involving an aggregate value of more than $100,000 per year;

 

(iv)  entering into any transaction with any Memberor Affiliate of any Member other than the transactions contemplated hereby andby the other Joint Venture Documents for which a final form has been agreed;

 

(v)   any acquisition or disposition (in a singletransaction or a series of related transactions) of any assets, business oroperations outside the ordinary course of business in an aggregate value ofmore than $100,000;

 

(vi)  subject to the terms of the IntellectualProperty Agreement, licensing the Company’s Intellectual Property outside theordinary course of business or commencing or settling any litigation or claiminvolving the Company’s Intellectual Property; or

 

(vii) commencing or settling any material litigationor claim.

 

Section 6.02*.  Officers. *(a) The Company will bemanaged by the Chief Executive Officer, who will act as “*Geschäftsführer*”under applicable Swiss law, in accordance with the Company’s then currentBusiness Plan as in effect from time to time. Without limiting the generality of the foregoing, the Chief ExecutiveOfficer will be responsible for managing the following activities of theCompany, in accordance with the Company’s then current Business Plan as ineffect from time to time: (i) sales and marketing, (ii) applicationdevelopment, (iii) supply management, (iv) service and support to theCompany’s customers, (v) systems integration, (vi) businessdevelopment and (vii) accounting, finance, and general and administrativefunctions.  The Chief Executive Officermay delegate any of such authority to the other officers of the Company.  The other officers of the Company may includeone or more vice presidents or other officers as the Chief Executive Officermay in his or her discretion determine. One person may hold the offices and perform the duties of any two ormore of said offices.

 

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All of the officers of the Company shall report to the Chief ExecutiveOfficer of the Company.

 

(b)           The Member with thegreater Percentage Interest shall have the right to appoint the Chief ExecutiveOfficer of the Company, *provided* thatsuch appointment shall be subject to the approval of the other Member, whichapproval shall not be unreasonably withheld or delayed.  The Chief Executive Officer may be removed atany time by the Members Meeting.

 

(c)           The officers of theCompany (other than the Chief Executive Officer) shall be appointed by theChief Executive Officer to hold office for such term as the Chief ExecutiveOfficer may determine; provided that such appointment shall be subject to theapproval of the Members Meeting, which approval shall not be unreasonablywithheld or delayed.  Each such officershall hold office until his or her successor is appointed, or until the earlierof his or her death, resignation or removal, and may be removed with or withoutcause at any time by the Chief Executive Officer.  The remuneration of each such officer shallbe approved by the Members Meeting.  EachMember may suggest one or more candidates for such other officers, whichsuggestions the Chief Executive Officer shall consider in good faith, and, ifthe Chief Executive Officer rejects such suggestions, the Chief ExecutiveOfficer shall, if so requested, explain his or her reasons for therejection.  Each Member shall, if sorequested by the Chief Executive Officer, reasonably assist the Chief ExecutiveOfficer in locating candidates for positions with the Company within the ranksof the Member’s employees and in recruiting such candidates to join theCompany.

 

(d)           Unless mutuallyagreed by the Members, commencing no later than ninety (90) days after theClosing, each officer of the Company (including the Chief Executive Officer),and each other employee of the Company that has been transferred to the Companyfrom either Cymer or Zeiss SMT or their respective Affiliates, shall be afull-time employee of the Company and devote 100% of such person’s fullprofessional and business-related time to the Company.  Unless mutually agreed by the Members, noofficer of the Company shall be permitted to participate in any compensationprogram of either Member, *provided* thatnothing in this provision shall prohibit any officer from retaining andexercising any stock options granted to such officer prior to becoming anofficer of the Company or participating in any health and welfare benefitsplans of a Member provided to the officer pursuant to an AdministrativeServices Agreement.

 

Section 6.03*.  Business Plan. *(a) The Company will besubject to and managed in accordance with a Business Plan (the “**Business Plan**”) which will cover a rolling period of [. . . *** . . .] Budget Years andwill be revised annually.  The Company’sinitial Business Plan for the partial year [. . . *** . . .] and years [. . . *** . . .] is identified in Schedule A hereto.  Such initial Business Plan will remain ineffect until modified or superseded by the Members Meeting in accordance withthe terms hereof.  The Business Plan willinclude, without limitation:

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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(i)    the long-term objectives of the Company inlight of its then current strategic, competitive and technology position, theProduct roadmap and the broad Areas of Responsibility of each Member;

 

(ii)   a schedule or timetable with adescription of all milestones (including technical milestones, businessmilestones and financial milestones) and/or Deliverable due dates;

 

(iii)  a schedule of “**Gate Reviews**”to be held by the Members Meeting in accordance with a product developmentprocess, which shall be prepared by the Chief Executive Officer of the Companyand approved by the Members Meeting, during which Gate Reviews the MembersMeeting will determine whether milestones and/or Deliverable due dates havebeen met or achieved;

 

(iv)  a Work Plan for the Members, the Suppliers andthe Company with respect to each distinct area of inquiry (each such area, a “**Project**”) containing with respect to such Project (1) theidentity of the project managers for the Project and/or the manner in whichthey will be selected; (2) a description of any performance, status andoperational reports to be generated during the Project; (3) qualitycriteria for assessing the performance of the Suppliers and the Company, as thecase may be, during such Project including, but not limited to, performancecriteria for milestones, classifications of the severity of errors or failures,and response processes for the correction of any such errors or failures; and (4) anyother terms and conditions agreed upon by the Members with respect to aProject;

 

(v)   a Work Plan for the Company with respect toits Area of Responsibility with respect to each Project;

 

(vi)  financial projections (including projectedbalance sheet, income statement and cash flow, as well as projected AnnualMaximum Required Funding Contributions) for each of the [. . . *** . . .] Budget Years covered by the Business Plan;

 

(vii) the Annual Maximum Required FundingContribution for the next Budget Year, which shall cover the Company’s expectedfunding requirements for the period ending [. . . *** . . .] months after the beginning of such BudgetYear); and

 

(viii)                performance metrics for theCompany for the next Budget Year for use in assessing the performance of theChief Executive Officer.

 

(b)           With respect to eachBudget Year after [. . . *** . . .] theChief Executive Officer will develop and present to the Members no later than [. . . *** . . .] of

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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each year aproposed revised and updated Business Plan that has been rolled forward foranother year.  For the avoidance ofdoubt, unless a new Business Plan is approved by the Members Meeting, theCompany will be subject to and managed in accordance with the then currentBusiness Plan as in effect from time to time.

 

(c)           During any BudgetYear for which the Members Meeting has not approved a revised Business Plan by [. . . *** . . .], the Annual MaximumRequired Funding Contribution for such Budget Year shall be established asfollows:

 

(i)    Each Member shall not later than [. . . *** . . .] notify the ChiefExecutive Officer and the other Member in writing of its proposal for theAnnual Maximum Required Funding Contribution for such Budget Year; *provided* that neither Member’s proposal may be [. . . *** . . .] than [. . . *** . . .]% or [. . . *** . . .] than [. . . *** . . .]% of the [. . . *** . . .] of (A) the [. . . *** . . .] for such [. . . *** . . .] as specified in the[. . . *** . . .] by the [. . . *** . . .], or (B) the [. . . *** . . .] as specified in the[. . . *** . . .] proposed bythe [. . . *** . . .].

 

(ii)   The issue shall be immediately escalated forexpedited resolution by the Chairman of the Board (or equivalent officer) ofeach Member as provided in Section 12.10(a).

 

(iii)  If the matter is not resolved by [. . . *** . . .] of any year, thenthe Member proposing the [. . . *** ... .] Annual Maximum Required Funding Contribution for such Budget Yearshall have the option, at its election, by notice given no later than [. . . *** . . .] of the followingyear either (A) to establish the [... . *** . . .] amount as the Annual Maximum Required FundingContribution for such Budget Year and to agree to pay, as an additional capitalcontribution to the Company, the difference between the amounts last proposedby each Member, and upon such payment the paying Member’s Percentage Interestshall be increased to a percentage equal to the [. . . *** . . .] of (x) the [. . . *** . . .] of the [... . *** . . .] by the [. . .*** . . .] since [. . . *** . ...] the Company (including pursuant to [. . . *** . . .]), [... . *** . . .] by (y) the [. ... *** . . .] of the [. . . ***.. . .] by [. . . *** . . .] (includingpursuant to [. . . *** . . .])since [. . . *** . . .] theCompany, and the [. . . *** . . .] PercentageInterest shall be [. . . *** . . .] accordingly),or (B) to establish the Annual Maximum Required Funding Contribution forsuch Budget Year as an amount equal to [... . *** . . .] of the amounts proposed by each Member.

 

Section 6.04*.  Company Actions RequiringConsent of Members. *Inaddition to the actions requiring consent of the Members acting on the recommendationof the Committee of Representatives pursuant to Section 6.01(c),

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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the following actions may not be taken by the Company or by the ChiefExecutive Officer unless approved by all Members pursuant to a decision orresolution of the Members Meeting:

 

(a)           any amendment of this Agreement, anyother Joint Venture Document or the Company’s Articles of Association;

 

(b)           issuance of any new shares oradmission of any new Members (and each Member agrees to grant such consent foradmission of a Permitted Transferee);

 

(c)           redemption or repurchase of anyshares;

 

(d)           authorizing or committing the Companyto a change in the scope of the Business;

 

(e)           taking any actions in respect of thedissolution or liquidation or winding-up of the Company (except as permittedpursuant to Section 11.05(c)) or the filing or acquiescing to the filingof a petition in respect of the Company under bankruptcy or insolvency laws, orthe making of any assignment for the benefit of creditors;

 

(f)            any merger, consolidation,reorganization (including conversion) or other business combination involvingthe Company or any of its Affiliates (other than of a wholly owned Affiliatewith or into another wholly owned Affiliate) or any acquisition of the Companyor any of its Affiliates by another entity by means of any transaction orseries of related transactions or the sale of all or substantially all of theassets of the Company;

 

(g)           appointment and removal of the ChiefExecutive Officer and of the Swiss Trustees;

 

(h)           approval of the Company’s annualfinancial statements and any corporate resolutions regarding the use of netprofit for distributions;

 

(i)            any discharge of the Chief ExecutiveOfficer and/or of the Swiss Trustees from liability pursuant to applicableSwiss corporate law;

 

(j)            division of any shares of theCompany; or

 

(k)           commencing any litigation or filingany claims in Swiss court against the Chief Executive Officer or any of theSwiss Trustees or a Member for damages resulting from the Company’s formationor management.

 

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Section 6.05*.  Meetings of Committee ofRepresentatives. *(a) *Regular Meetings*.  TheCommittee of Representatives shall hold regular meetings at least quarterly,rotating between a location in the United States determined by Cymer and alocation in Germany determined by Zeiss LOB, or such other location asdetermined by the Committee of Representatives. Written notice of each meeting shall state the place, date and hour ofsuch meetings, and include an agenda of matters to be considered at themeeting.  Notice shall be given in themanner prescribed herein not fewer than seven days nor more than 60 days beforethe date thereof.

 

(b)           *SpecialMeetings*.  In addition, anyRepresentative may, on at least five business days prior written notice to theother Representatives, call a special meeting of the Committee ofRepresentatives, specifying in reasonable detail in such notice the purpose ofsuch meeting.

 

(c)           *Quorum*.  The presence of three Representatives shallconstitute a quorum for the transaction of business at a duly noticed meetingof the Committee of Representatives.  Ifa quorum shall fail to be present for such a meeting, then any Representativemay provide a supplemental notice to the other Representatives reschedulingsuch meeting at least 48 hours after such supplemental notice.  For the avoidance of doubt, a quorum shall berequired at such rescheduled meeting.

 

(d)           *Objections*.  Attendance of a Representative at a meetingshall constitute a waiver of notice of such meeting, except if suchRepresentative attends the meeting for the express purpose of objecting, at thebeginning of the meeting, to the transaction of business at such meetingbecause the meeting has not been validly called, noticed or convened.

 

(e)           *Chair ofMeeting*.  Prior to eachmeeting, one of the Representatives shall be designated as lead Representativeto serve as chair of the meeting.  Thelead Representative shall rotate from meeting to meeting between aRepresentative designated by Zeiss LOB and a Representative designated byCymer.

 

(f)            *Taking Decisions*. Except where this Agreement specifically provides otherwise, anydecision taken at a meeting of the Committee of Representatives must beapproved as follows: (i) if the Committee of Representatives consists offour Representatives and Cymer and Zeiss LOB are each entitled to designate twoRepresentatives, the decision shall require the consent of [. . . *** . . .] Representatives; (ii) ifthe Committee of Representatives is increased to five Representatives pursuantto Section 10.02 of this Agreement, the decisions shall require only theconsent of the Representatives of the Member having a [. . . *** . . .] of the Percentage Interests; and (iii) ifone Member is entitled to designate all the Representatives pursuant to Section 11.03,the decisions shall require [. . . ***.. . .] the consent of the Representatives of that Member.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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(g)           *Expenses*.  Each Member shall pay all reasonable traveland other expenses of the Representatives designated by such Member inconnection with participating in meetings of the Committee of Representatives.

 

Section 6.06*.  Decision by Consent. *Any decision required or permittedto be taken by the Committee of Representatives or Members Meeting, either at ameeting or otherwise, may be taken without a meeting if all Representatives orMembers consent thereto in writing.  Anysuch decision of the Committee of Representatives, taken without a meeting,must be confirmed in writing by all Representatives.  Any such decision of the Members Meeting,taken without a meeting, shall be confirmed in writing by all the Members.

 

Section 6.07*.  Telephonic Meetings. *Representatives may participate ina meeting of the Committee of Representatives by means of conference telephoneor similar communications equipment by means of which all persons participatingin the meeting can hear each other, and such participation in a meeting shallconstitute presence in person at the meeting.

 

Section 6.08.  *Swiss LegalImplementation. *(a) TheMembers undertake to participate in Members Meetings and to exercise theirvoting rights with regard to and in strict compliance with the provisions ofthis Agreement.  With respect to anyaction reserved for and approved by the Committee of Representatives pursuantto Section 6.01(c), the Members undertake to and shall use their votingrights in Members Meetings in such way as to ensure that the decisions taken bythe Committee of Representatives are approved.

 

(b)           For the purposes ofimplementing the corporate governance structure set forth in the otherprovisions of this Article 6 in a manner consistent with applicable Swisscorporate law, the Company shall have in addition to the Chief ExecutiveOfficer, two additional “*Geschäftsführer*”,each one designated by each of the Members and each being a Swiss resident(each a “**Swiss Trustee**”)

 

(c)           The Swiss Trusteesshall exercise their powers as *Geschäftsführer*each in accordance with a trust agreement (the “**Swiss TrustAgreement**”), substantially in the form attached hereto as Exhibit H,to be entered into among the Swiss Trustees and the Members, which agreementsshall provide, among other things, that the Swiss Trustees shall only act onjoint instructions from both Members. The Swiss Trustees shall be granted power to sign for the Company onlyjointly by two and not individually, such power to be exercised solely inaccordance with the Swiss Trust Agreement, which power shall be entered intothe commercial register.

 

(d)           The Chief ExecutiveOfficer shall exercise his powers as *Geschäftsführer*so as to vote for, ratify, give full effect to and facilitate, and not tohinder or contravene, any decision or action taken by the Members Meeting in

 

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accordancewith the other provisions of this Agreement. The Chief Executive Officer shall be granted power to sign for theCompany individually, such power to be exercised solely in accordance with thisSection 6.08(d) and the other provisions of this Agreement, whichpower shall be entered into the commercial register.  This Section 6.08(d) shall notconfer on the Chief Executive Officer any power or authority not otherwiseconferred on such officer in accordance with the other provisions of thisAgreement.

 

(e)           It is understood andagreed that this Section 6.08 is intended to implement the corporategovernance structure set forth in the other provisions of this Article 6 ina manner consistent with applicable Swiss corporate law.  Accordingly, this Section 6.08 shall notrequire, authorize or permit the Chief Executive Officer, or the Swiss Trusteesto take any decision or action not otherwise authorized, permitted or requiredunder the other provisions of this Article 6.  To the extent any decision or action to betaken in accordance with the other provisions of this Article 6 cannot beimplemented effectively pursuant to this Section 6.08 in a mannerconsistent with applicable Swiss corporate law, the Members hereby agree toamend this Section 6.08 as may be reasonably necessary for suchimplementation.

 

Section 6.09*.  Nature of Obligations amongMembers. *Except as otherwiseprovided in this Agreement or by written agreement among the Members, noRepresentative shall have any authority to act for or assume any obligation orresponsibility on behalf of any Member or the Company, and no Member shall haveany authority to act for or assume any obligation or responsibility on behalfof any other Member or the Company.

 

ARTICLE 7ACCOUNTING AND TAX MATTERS

 

Section 7.01*.  Fiscal Year/IndependentAuditors. *The fiscal year ofthe Company (the “**Fiscal Year**”)shall end on December 31st of each year. The Members Meeting shall select the Company’s independent auditors,which shall be a recognized international accounting firm based upon decisionstaken by the Committee of Representatives.

 

Section 7.02*.  Books and Records. *(a) The Company shall keep,including through bookkeeping services rendered pursuant to the AdministrativeServices Agreement, adequate books and records at its principal office.  Such books and records shall include acurrent list of the full name and last known business, residence or mailingaddress of each Member, originals of this Agreement, and any amendments thereto(and any signed powers of attorney pursuant to which any such document wasexecuted), a copy of the Company’s federal, cantonal, communal and other taxreturns and reports, if any, and annual financial statements of the Company,for the [. . . *** . . .] ([. . . *** . . .]) most recent [. . . *** . . .], and minutes of

 

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proceedings of the Members Meeting. The Company’s books of account and business records shall be filed andpreserved for a period of at least [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] orsuch longer period as required by law.

 

(b)           The Company shallpermit each Member and its officers, agents and representatives, uponreasonable advance notice and during normal business hours and such other timesas any such Member may reasonably request, to: (i) visit and inspect any of the properties of the Company; (ii) examinethe corporate and financial records of the Company and make copies thereof orextracts therefrom, and (iii) discuss the affairs, finances, and accountsof the Company with the Representatives, officers, employees, and independentaccountants of the Company.  In addition,the Company shall require its independent accountants to make available to theMembers copies of all reports, investigations and work papers prepared by suchaccountants during the course of any audit of the Company or otherwise, *provided* that the Members may be required to enter into thestandard form of agreement customarily required by such independent accountantsas a condition to access to such material. Any Member may, at its own expense, request and obtain a separate auditof the Company’s books by its own accountant, *provided*that such separate audit is not made more frequently than [. . . *** . . .] in each Fiscal Yearand that at least [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] prior writtennotice of such request is given to the Chief Executive Officer.  The Chief Executive Officer shall cause theCompany’s officers and employees to cooperate with such Member’s accountant inthe execution and preparation of such audit, including providing customarycertifications to such Member’s accountant.

 

Section 7.03*.  Financial Reports. *(a) The Company, at itsexpense, shall provide or cause to be provided to each Member, no later thanthirty days after the close of each of the first three quarters of the Company’sFiscal Year, and no later than ninety days after the end of each such FiscalYear, a financial report of the business and operations of the Company preparedin accordance with GAAP consistently applied, relating to such period, whichreport shall include (i)  a balance sheet as at the end of such period, (ii) astatement of income (loss) containing actual operating performance vs. budgetedoperating performance for the current period and the year-to-date, and (iii) acash flows statement (including sources and uses of funds) for the currentperiod and the year-to-date, and in each case a comparison of the period thenended with the corresponding period in the Fiscal Year immediately precedingsuch periods, which, in the case of the report furnished after the close of theFiscal Year, shall be audited by the Company’s independent certified publicaccountants, and which, in the case of the reports furnished after each of thefirst three quarters of the Company’s Fiscal Year, shall be unaudited and shallnot include any notes thereto.  Inaddition, the quarterly financial statements shall be accompanied by (x) astatement of changes in Members’ equity containing a detail of CapitalContributions, distributions and income/loss allocations for each of theMembers and in total, for the current period and the year-to-date, and (y) ananalysis, in reasonable detail, of the variance between the Company’s operatingresults and the corresponding amounts

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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in the then current annual Budget. The quarterly financial reports may in each case be subject to normalyear-end adjustments.  In addition, theMembers shall be entitled to any other financial information, including monthlymanagement reports in the form produced by the Company, that the Members mayreasonably request.

 

Section 7.04*.  Tax Matters. *The Company and its Affiliatesshall abide by the tax law and regulations in each jurisdiction in which itoperates and shall cooperate with the Members to provide documents andinformation that either Member may need to file its own tax returns in anyjurisdiction.

 

ARTICLE 8CERTAIN COVENANTS

 

Section 8.01*.  Press Release. *Upon the Closing or such othertime as may be mutually agreed, Cymer and Zeiss SMT shall issue a mutuallyagreed joint press release, announcing the formation of the Company and theircollaboration under this Agreement.

 

Section 8.02.*  Non-Competition. *In order to ensure the requisitelevel of dedication to enable the Company to offer the most competitiveproducts in the marketplace, until such time as a Member ceases to be, directlyor through an Affiliate, a Member of the Company (at which time such Member andits Affiliates may become subject to the non-compete covenant set forth in Section 11.02(b))or the Company is dissolved, neither such Member nor any of its Affiliatesshall engage, either directly or indirectly, as a principal for its own accountor solely or jointly with others, or as a stockholder in any corporation orjoint stock association, in any business engaged in the Business (other thanthe Company or as contemplated by the Joint Venture Documents).  For the avoidance of doubt, without limitingthe generality of the foregoing covenant, it is acknowledged and agreed thatuntil such time as a Member ceases to be, directly or through an Affiliate, aMember of the Company (at which time such Member and its Affiliates may becomesubject to the non-compete covenant set forth in Section 11.02(b)) or theCompany is dissolved, neither such Member nor any of its Affiliates shallknowingly supply services, products or components for use in products orservices competitive with the Business or the Products of the Company; *provided*, however, that if neither IMT nor any Person underits control continues to act as supplier of Stages (as defined in the SupplyAgreement) or other products to the Supplier or an Affiliate of the Supplierunder the Zeiss Supply Agreement, IMT and any Person under its control shallcease to be subject to the foregoing covenant [. . . *** . . .] after the date IMT and any person under itscontrol ceased to act as a supplier.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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ARTICLE 9EXCULPATION AND INDEMNIFICATION

 

Section 9.01*.  Exculpation andIndemnification. *Each Memberagrees that it shall vote its shares in the Company and take all othernecessary action in its capacity as a shareholder of the Company (including, tothe extent permissible pursuant to applicable law, causing the Company to calla special meeting of Members) to provide for (a) the elimination of theliability of each Representative on the Committee of Representatives to themaximum extent permitted by applicable law (and each Member hereby irrevocablywaives any right to pursue and agrees to vote its shares and take all othernecessary action in its capacity as a shareholder of the Company not to pursueany such eliminated liability) and (b) indemnification of eachRepresentative on the Committee of Representatives for acts on behalf of theCompany, if any, to the maximum extent permitted by applicable law.

 

ARTICLE 10DISPOSITION OF INTERESTS

 

Section 10.01*.  General. *(a) No Member may Transferall or any part of its Interest, and no Member Parent may Transfer its director indirect interest in a Member that is its Affiliate (each a “Transfer of anInterest”), without the consent of the other Member, except that no consentshall be required for (and the non-Transferring Member shall give any consentthat may be required under mandatory Swiss company law to effect) the direct orindirect Transfer by the Member of the entirety of a Member’s Interest or by aMember Parent of the entirety of its interest in a Member that is its Affiliateto

 

(i)    any Affiliate of such Member; or

 

(ii)   with respect to any Transfer [. . . *** . . .], any other Personif (x) such other Person is not a competitor of the other Member or MemberParent and (y) the aggregate purchases by the Company and its Affiliates ofProducts containing Core Components (as such terms are defined in the SupplyAgreement between the relevant Member or its Affiliate and the Company) fromthe relevant Member or its Affiliate under the Supply Agreement during the lastfour fiscal quarters of the Company for which financial statements areavailable accounted for not more than [... . *** . . .]% of the Company’s aggregate cost of (A) the bill ofmaterials for goods sold and (B) system integration during the same period(each of the transferees referred to in clauses (i) and (ii) above a “**Permitted Transferee**”); and no Permitted Transferee mayTransfer any or all of its Interest, except the entirety of its Interest toanother Permitted Transferee.  In the eventa Member transfers its Interest to an Affiliate, such Affiliate shall, unlessotherwise agreed by the other Member, assume

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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all of the transferring Member’s obligationsunder this Agreement and such Member hereby agrees to irrevocably andunconditionally guarantee to the Company and the other Member the timelypayment and performance by such Affiliate of such Member’s obligationsthereunder for so long as such transferee remains an Affiliate of thetransferring Member.

 

(b)           Any Transfer of anInterest that is not made in compliance with the provisions of this Agreementshall be void, and the Company shall not recognize any such Transfer.  Any purported or attempted transfer of anyInterest that is not made in compliance with the provisions of this Agreementshall constitute a material breach of this Agreement.  Notwithstanding anything else containedherein, no Transfer shall be made except in compliance with applicable law.

 

(c)           For the avoidance ofdoubt, the provisions of this Article 10 shall not apply to any Transferof any direct or indirect interest in a Member that could be deemed to occur asa result of a change of control involving the relevant Member Parent.

 

Section 10.02*.  Non-affiliate Transfers. *(a) Prior to any Transfer ofan Interest permitted under Section 10.01(a)(ii) above, the Member orMember Parent, as the case may be, who proposes to Transfer its Interest (the “**Transferring Member**”) (such transferee, the “**Proposed Transferee**” and such transfer, a “**Non-Affiliate Transfer**”) shall give the other Member (the “**Non-Transferring Member**”) written notice of its intention,describing the Proposed Transferee, the price and the terms and conditions ofthe proposed Transfer.  TheNon-Transferring Member shall have a right [. . . *** . . .] to purchase the Transferring Member’s Interestat [. . . *** . . .] and upon [. . . *** . . .] by the ProposedTransferee.  The Non-Transferring Membershall have thirty (30) days from the receipt of such notice to agree topurchase the Transferring Member’s Interest by giving written notice to theTransferring Member.  If theNon-Transferring Member fails to exercise its right [. . . *** . . .] under this Section 10.02(a), theTransferring Member shall have thirty (30) days thereafter to sell its Interestto the Proposed Transferee at a price and upon terms and conditions [. . . *** . . .] to the ProposedTransferee than specified in the Transferring Member’s notice to theNon-Transferring Member of the proposed Transfer.  If the Transferring Member does not sell itsInterest to the Proposed Transferee during such thirty (30) day period, theTransferring Member shall not thereafter Transfer its Interest, without firstoffering such Interest to the Non-Transferring Member in the manner providedabove.

 

(b)           Following theconsummation of a Transfer of an Interest either (x) to a Proposed Transfereepursuant to a Non-Affiliate Transfer or (y) to the Non-Transferring Member uponthe exercise of such Member’s right [... . *** . . .] pursuant to Section 10.02(a) above:

 

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(i)    the Transferring Member and its Affiliatesshall be subject to the non-compete covenant set forth in Section 11.02(b) asif the Transferring Member were the Triggering Party; *provided*that the Non-Compete Period shall begin on the date of the [. . . *** . . .] of the Transfer andend on the [. . . *** . . .] ofthe [. . . *** . . .] of such [. . . *** . . .] or the [. . . *** . . .] of the [. . . *** . . .]; and

 

(ii)   (A)  the Representatives of theTransferring Member shall be automatically removed from the Committee ofRepresentatives and (B) if the Transferring Member is [. . . *** . . .] or its Affiliate, (1) the size of theCommittee of Representatives shall be increased to five Representatives, (2) eachMember shall be entitled to designate a number of Representatives that is inproportion to its Percentage Interest (three Representatives for a 60%Percentage Interest, two Representatives for a 40% Percentage Interest) and (3) actionsby or decisions of the Committee of Representatives shall no longer require [. . . *** . . .] pursuant to Section 6.05(f),but only approval by [. . . *** . . .]of the Representatives participating at a duly convened meeting at whicha quorum is present (in person or by proxy).

 

Section 10.03*.  Recognition of Transfers. *(a)  Prior to any Transfer ofits Interest as permitted by this Article 10, the Member transferring suchInterest shall give written notice of such Transfer to the other Member and tothe Company.  Upon receipt of such writtennotice, the Company shall notify the transferee of the transfer restrictionscontained in this Agreement.

 

(b)           No transferee shallbe admitted to the Company as a Member unless the Transfer was permittedhereby.  Subject to the foregoing, eachsuch transferee, as a condition to its admission as a Member, shall execute anddeliver to the Company such instruments, in form and substance satisfactory tothe Members, as the Members shall reasonably deem necessary or desirable toconfirm the agreement of such transferee to be bound by all the terms andprovisions of this Agreement (as it may be amended in connection with theadmission of such transferee as a Member). The Members agree to amend this Agreement to the extent necessary toreflect the transfer and admission of the new Member and to continue theCompany without dissolution.  Uponexecution of such instruments, the transferee shall be admitted to the Companyas a Member.  Immediately following theadmission of the transferee to the Company as a Member, the Member who hasthereby transferred all of its Interest shall cease to be a Member of theCompany.  The transferee, as a Member ofthe Company, and the other Member are hereby authorized to, and shall, continuethe business of the Company without dissolution.

 

(c)           Any transferee who is admitted to theCompany as a Member shall succeed to the rights and powers (includingdistribution preferences), and be

 

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subject to therestrictions and liabilities, of the transferor Member to the extent of theInterest transferred.

 

ARTICLE 11TERMINATION, DISSOLUTION AND LIQUIDATION

 

Section 11.01*.  Term. *The term of the Company shallcontinue until the Company is dissolved pursuant to this Article.

 

Section 11.02*.  Triggering Events. *(a) Within the first 15 daysof each [. . . *** . . .] (beginningin [. . . *** . . .]) eitherMember (such Member, the “**Triggering Party**”)may, for convenience, notify the other Member (the “**Non-TriggeringParty**”) in writing of its election to treat such notice as a “**Triggering Event**.”

 

Upon notice ofa Triggering Event, the Non-Triggering Party will notify the Triggering Partyin writing within 15 days of the Non-Triggering Party’s exercise of one of thefollowing options:

 

(i)    purchase the Triggering Party’s Interest ata [. . . *** . . .] ([. . . *** . . .]); *provided* that the Triggering Party shall remain liable forany Required Funding Contributions for the Fiscal Year in which the TriggeringEvent occurs, pro-rated for the period from the beginning of such Fiscal Yearto the Triggering Event, and *provided further*that the Triggering Party shall be entitled to receive, in addition to the cashpurchase price, any royalties if and as payable to it pursuant to theIntellectual Property Agreement; or

 

(ii)   dissolve and commence winding up of theCompany pursuant to Section 11.05(c).

 

Upon receiptby the Triggering Party, such notice shall be final and irrevocable, unlessotherwise agreed by the Triggering Party.

 

(b)           If theNon-Triggering Party has exercised its option (i) pursuant to Section 11.02(a),then effective from the consummation of the purchase of the Triggering Party’sInterest by the Non-Triggering Party, the Triggering Party and its Affiliatesshall not for a period beginning on the date of such [. . . *** . . .] and ending on the [. . . *** . . .] of the [... . *** . . .] of such [. . .*** . . .] or the [. . . *** ... .] of the [. . . *** . . .] (the“**Non-Compete Period**”) engage, eitherdirectly or indirectly, as a principal for its own account or solely or jointlywith others, or as a stockholder in any corporation or joint stock association,in any business engaged in the Business (other than the Company).  For the avoidance of doubt, without limitingthe foregoing covenant, it is acknowledged and agreed that

 

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neither theTriggering Party nor any of its Affiliates shall knowingly supply services,products or components for use in products or services competitive with theBusiness or the Products of the Company during the Non-Compete Period (other thanto the Company and its Affiliates and the Non-Triggering Party).

 

(c)           If theNon-Triggering Party exercises its option (ii) pursuant to Section 11.02(a),(A) the Intellectual Property Rights of the Company shall be distributedto the Members as joint owners of an equal undivided interest therein with noduty to account to the other party and (B) each Member shall be entitledto receive, as soon as possible and in any event within 30 days after theexercise of such option by the Non-Triggering Party, copies of source code,documentation and other materials as may be necessary to continue to developthe Products.

 

Section 11.03*.  Breach under this Agreement orEvent of Default under Supply Agreements.* If a material breach of this Agreement,including without limitation any failure by a Member to pay its RequiredFunding Contributions when due, or an Event of Default (as defined in theSupply Agreements) on the part of the Supplier that is an Affiliate of suchMember occurs and remains unremedied for a period of 30 days following noticethereof from the non-defaulting Member and is continuing, in addition to, andwithout prejudice to, any and all other remedies, the non-defaulting Membermay, at its option, either (A) treat such default as a “Triggering Event”pursuant to Section 11.02(a) except that the non-defaulting Membershall be treated as the Non-Triggering Party and the defaulting Member shall betreated as the Triggering Party thereunder or (B) remove the twoRepresentatives on the Committee of Representatives designated by thedefaulting Member and designate two Representatives selected by thenon-defaulting Member in its sole discretion to replace such removedRepresentatives to serve until such time as the material breach or Event ofDefault has been remedied by the defaulting Member.  In addition to replacement of such removedRepresentatives, if the breach is non-payment of a Required FundingContribution, then without limiting the non-defaulting Member’s other rightsunder this Agreement, (A) the non-defaulting Member shall have the right,in its sole discretion, to pay the defaulting Member’s Required FundingContribution and (B) the non-defaulting Member’s Percentage Interest shallbe increased to a percentage equal to the quotient of (x) the sum of thecumulative contributions paid by the non-defaulting Member since inception ofthe Company (including pursuant to this Section 11.03), divided by (y) thesum of the cumulative contributions paid by both Members (including pursuant tothis Section 11.03) since inception of the Company, and the other Member’sPercentage Interest shall be reduced accordingly; *provided*that if the material breach by the defaulting Member is willful, occurs at anytime [. . . *** . . .] andremains unremedied for a period of 30 days following notice thereof from thenon-defaulting Member and is continuing, in addition to, and without prejudiceto, any and all other remedies (including pursuant to the first part of this Section 11.03),the non- defaulting Member may treat such breach as a “Triggering Event”pursuant to Section 11.02(a) except that the willfully defaultingMember shall be

 

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treated as the Triggering Party thereunder and *provided*that the purchase price for the willfully defaulting Member’s Interest shall be$[. . . *** . . .], and *provided further* that the willfully defaulting Member shallremain liable for its share of all Required Funding Contributions for theFiscal Year in which the breach occurs.

 

Section 11.04*.  Change of Control. *(a) *Change of Control at ParentLevel. *If, through atransaction or series of transactions, a Member Parent of a Member is acquiredby, or comes otherwise under the control of, a competitor or Major Customer ofthe other Member Parent, the other Member may treat such event as a “TriggeringEvent” pursuant to Section 11.02(a), except that such other Member shallbe treated as the Non-Triggering Party and the Member whose Member Parent isaffected by such event shall be treated as the Triggering Partythereunder.  As used in this Section 11.04,“**Major Customer**” means, with respect toany Member Parent from time to time, a customer that (i) accounts for inexcess of [. . . *** . . .]% ofthe consolidated revenues of such Member Parent during the preceding twelve(12) months for which financial statements are available or (ii) is ofmaterial strategic significance to the future development of the consolidatedbusiness of such Member Parent due to an expected share of such Member Parent’sconsolidated revenues in excess of [... . *** . . .]% during any twelve (12) month period within the next [. . . *** . . .] based upon theprojected revenues in such Member Parent’s then current business plan, in eachcase as shall have been certified to the other Member Parent by the chiefexecutive officer of such Member Parent prior to any relevant transaction.

 

(b)           *Supplier andCompany Interest No Longer Affiliates. *If,as a result of a transaction or series of transactions other than a Transfer ofan Interest to a Permitted Transferee pursuant to Section 10.01(a), aSupplier ceases to be an Affiliate of a Member without becoming an Affiliate ofa Person that, as a result of such transaction or series of transactions, Article 10,becomes a Member or an Affiliate of a Member, then the Member that was not anAffiliate of such Supplier immediately prior to such transaction or series oftransactions may treat such event (a “**TriggeringSeparation**”) as a “TriggeringEvent” pursuant to Section 11.02(a), except that such Member shall betreated as the Non-Triggering Party and the other Member shall be treated asthe Triggering Party thereunder.

 

(c)           *Joint Transfer of Supplier and Company Interest*.  Notwithstanding any other provision of this Article 11or Article 10, any Transfer of an Interest by a Member or Member Parent,in a transaction or series of transactions, that does not result in aTriggering Separation shall be permitted at all times, whether or not to aPermitted Transferee, as long as the transferee is not a competitor or MajorCustomer of the Member Parent of the other Member, subject to compliance withthis Section 11.04(c).  Inconnection with any Transfer permitted under this Section 11.04(c), (x)the other Member shall have a [. . .*** . . .] with respect to the Interest and interest in or assets of theSupplier to be Transferred, and any other assets to be transferred as part ofsuch transaction or series of transactions, such right to be exercised in themanner set forth in Section 10.02(a),

 

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(y) thetransferring Member or Member Parent, as the case may be, and its Affiliatesshall be subject to the non-compete covenant set forth in Section 11.02(b) asif the transferring Member were the Triggering Party; *provided*that the Non-Compete Period shall begin on the date of the [. . . *** . . .] of the Transfer andend on the [. . . *** . . .] ofthe [. . . *** . . .] of such [. . . *** . . .] or the [. . . *** . . .] of the [. . . *** . . .], and (z) if as aresult of such Transfer Member and the Supplier are no longer Affiliates of [. . . *** . . .], the composition ofthe Committee of Representatives shall be modified as set forth in Section 10.02(b)(ii).  The provisions of this Section 11.04(c) shallnot apply to any Transfer of any direct or indirect interest in a Member thatcould be deemed to occur as a result of a change of control involving therelevant Member Parent.

 

Section 11.05*.  Liquidating Events. *The Company shall dissolve (andeach Member agrees to vote its shares in favor such dissolution) and commencewinding up upon the first to occur of any of the following events (each a “**Liquidating Event**”):

 

(a)       upon the unanimous written agreement ofthe Members to dissolve and wind up the Company;

 

(b)      any time there are no Members of theCompany unless the Company is continued in accordance with applicable law;

 

(c)       upon the exercise of the Non-TriggeringParty of its option (ii) upon notice of a Triggering Event in accordancewith Section 11.02(a); or

 

(d)      the entry of a decree of judicialdissolution pursuant to applicable law.

 

Section 11.06*.  Winding Up. *Upon the occurrence of aLiquidating Event, the Company shall continue solely for the purposes ofwinding up its affairs in an orderly manner, distributing its IntellectualProperty Rights, liquidating its assets, and satisfying the claims of itscreditors and Members, and no Member shall take any action that is inconsistentwith, or not necessary to or appropriate for, the winding up of the Company’sbusiness and affairs; *provided* thatall covenants contained in this Agreement and obligations provided for in thisAgreement shall continue to be fully binding upon the Members until such timeas the assets or property or the proceeds from the sale thereof has beendistributed pursuant to this Article and the Company has terminated.  The Member with the greater PercentageInterest, or in the case of a Liquidating Event pursuant to Section 11.05(c),the Non-Triggering Party, shall be responsible for overseeing the winding up ofthe Company.  Such party (the “**Liquidator**”) shall take full account of the Company’s assetsand liabilities, and except as otherwise required by law, the Company’s affairsshall be wound up in an orderly manner in accordance with the followingprocedures:

 

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(a)           (A) the Intellectual PropertyRights of the Company shall be distributed to the Members as joint owners of anequal undivided interest therein with no duty to account to the other party and(B) each Member shall be entitled to receive, as soon as possible and inany event within 30 days after the Liquidating Event, copies of source code,documentation and other materials as may be necessary to continue to developthe Products.

 

(b)           To the extent that the Liquidatordetermines that any or all of the assets of the Company (other than theIntellectual Property Rights provided for in Section 11.06(a) above)shall be sold, such assets shall be sold as promptly as possible, but in abusiness-like manner so as not to involve undue sacrifice, and the proceedsthereof shall be used first to satisfy any liabilities of the Company and thenshall be distributed to the Members in accordance with their Percentage Interests.

 

Section 11.07*.  Rights of Members;Resignation. *(a)  Exceptas otherwise provided in this Agreement, each Member shall look solely to theassets of the Company for the return of its capital contributions and shallhave no right or power to demand or receive property other than cash from theCompany.

 

(b)           No Member shallresign from the Company prior to the dissolution and winding up of the Companyin accordance with this Agreement.

 

Section 11.08*.  Waiver of Partition. *Each Member hereby irrevocablywaives any and all rights that it may have pursuant to Swiss law to maintain anaction for partition of any of the Company’s property, or to compel a salethereof.

 

ARTICLE 12MISCELLANEOUS

 

Section 12.01*.  Notices. *All notices, requests and other communicationsto any party or to the Company shall be in writing (including facsimile orsimilar writing) and shall be given:

 

if to theCompany, to such address as the Company shall notify the other parties heretoas soon as possible after its formation;

 

if to Cymer,to:

 

Cymer, Inc.

17075 Thornmint Court

San Diego, CA 92127-1712 USA

Attn:  Chief Financial OfficerFax No.: (858) 385-6090

 

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with a copyto:

 

Cooley Godward LLP

Five Palo Alto Square

3000 El Camino RealPalo Alto, CA 94306-2155 USA

Attn: Gary H. MooreFax No.: (650) 849-7400

 

if to ZeissLOB, to:

 

Carl Zeiss Laser Optics Beteiligungsgesellschaft mbH

Carl-Zeiss-Strasse 22

73447 Oberkochen, Germany

Attention: Axel Jaeger

Facsimile No: [. . . *** . ...]

Telephone No.: [. . . *** . ...]

 

if to ZeissSMT, to:

 

Carl Zeiss SMT AG

Carl-Zeiss-Strasse 22

73447 Oberkochen, Germany

Attention: Dr. Hermann Gerlinger

Facsimile No: 011-49-7364-208100

Telephone No.: [. . . *** . ...]

 

with a copyto:

 

Davis Polk & Wardwell

99 Gresham Street

London EC2V 7NG

Attention: John W. Banes

Facsimile No: 011-44-20-7418-1055Telephone No.: 011-44-20-7418-1317

 

or to suchother address or facsimile number as any such party may hereafter specify forthe purpose by notice to the other parties. Each such notice, request or other communication shall be effective whenreceived at the address specified in this Section, or such other address orfacsimile number as such party may hereafter specify for the purpose by noticeto the other parties hereto.  All suchnotices, requests and other communications shall be deemed received on the dateof receipt by the recipient thereof if received prior to 5:00 p.m. in theplace of receipt and such day is a business day in the place of receipt.  Otherwise, any such

 

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notice,request or communication shall be deemed not to have been received until thenext succeeding business day in the place of receipt.

 

Section 12.02*.  Amendments; No Waivers. *(a) Any provision of thisAgreement may be amended or waived if, and only if, such amendment or waiver isin writing and signed, in the case of an amendment, by each Member, or in thecase of a waiver, by the Member against whom the waiver is to be effective.

 

(b)           No failure or delayby any party in exercising any right, power or privilege hereunder shalloperate as a waiver thereof nor shall any single or partial exercise thereofpreclude any other or further exercise thereof or the exercise of any otherright, power or privilege.  The rightsand remedies herein provided shall be cumulative and not exclusive of anyrights or remedies provided by law.

 

Section 12.03*.  Expenses. *All costs and expenses incurred bythe parties hereto in connection with this Agreement shall be paid by the partyincurring such cost or expense, except that any incremental legal oradministrative costs or expenses incurred by Cymer or the Company resultingfrom legal organization of the Company in Switzerland and described in moredetail in Exhibit E shall be paid by Zeiss LOB.

 

Section 12.04*.  Zeiss SMT*[. . . *** . . .]*. *For so long as Zeiss LOB iscontrolled by Zeiss SMT, Zeiss SMT [... . *** . . .] by Zeiss LOB of Zeiss LOB’s obligations under thisAgreement.

 

Section 12.05*.  Successors and Assigns. *This Agreement is personal to theMembers and may not be assigned or otherwise transferred by a Member except toa transferee of such Member’s Interest in connection with a transfer permittedby and made in accordance with the terms hereof.  Any purported assignment or other transfer inviolation of this Agreement shall be null and void.  The provisions of this Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective permitted successors and assigns. This Agreement is for the sole benefit of the parties hereto and, exceptas otherwise contemplated herein, nothing herein expressed or implied shallgive or be construed to give any Person, other than the parties hereto, anylegal or equitable rights hereunder.

 

Section 12.06*.  Headings. *Headings are for ease of referenceonly and shall not form a part of this Agreement.

 

Section 12.07*.  Entire Agreement.  *This Agreement together, with theExhibits hereto, and any documents referred to herein or therein, constitutesthe entire agreement of the Members with respect to the subject matterhereof.  Any references in this Agreementto provisions in the Exhibits to this Agreement are intended for clarificationonly, and in the event of any inconsistency, the provisions of the Exhibitsshall govern.

 

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Section 12.08*.  Governing Law. *This Agreement shall be governedby, and construed under, the laws of [... . *** . . .] (without regard to conflicts of laws principles).

 

Section 12.09*.  Waiver of Jury Trial. *EACH OF THE PARTIES HERETO HEREBYIRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATEDHEREBY.

 

Section 12.10*.  Dispute Resolution;Arbitration. *(a) Anydispute, controversy or claim arising out of or in connection with thisAgreement, or any of the Joint Venture Documents, or the alleged breach,termination or invalidity thereof, may be escalated, at the request of eitherMember, to the Chairman of the Board (or equivalent officer) of each Member forresolution.  In the event of such arequest, the Chairmen shall meet, either in person or by telephone, withinthirty (30) days after the date of such request in order to discuss and attemptto resolve such dispute, controversy or claim by mutual agreement.

 

(b)           Any dispute,controversy or claim arising out of or in connection with this Agreement or thealleged breach, termination or invalidity thereof that is not settled by thedispute resolution process set forth in Section 12.10(a) or otherwiseby the joint agreement of the Parties shall be finally settled under Rules ofArbitration of the International Chamber of Commerce by three arbitratorsappointed in accordance with the said Rules. Unless otherwise agreed by the Parties, such arbitration shall takeplace in [. . . *** . . .].  Any award rendered by the arbitratorswill be final and binding on the parties, and judgment upon the award may beentered in the [. . . *** . . .],or any other court having jurisdiction over the award or having jurisdictionover the parties or their assets.  Thearbitration agreement contained in this Section 12.10 will not beconstrued to deprive any court of its jurisdiction to grant provisional relief(including by injunction or order of attachment) in aid of arbitrationproceedings or enforcement of an award.

 

Section 12.11*.  Counterparts;Effectiveness. *This Agreementmay be signed in any number of counterparts, each of which shall be deemed anoriginal.  This Agreement shall becomeeffective only after and subject to each party having received a counterparthereof signed by each of the other parties.

 

Section 12.12*.  Severability. *If any term, provision, covenantor restriction of this Agreement is held by a court of competent jurisdictionor other authority to be invalid, void or unenforceable, the remainder of theterms, provisions, covenants and restrictions of this Agreement shall remain infull force and effect and shall in no way be affected, impaired or invalidatedso long as the economic or legal substance of the transactions contemplatedhereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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shall negotiate in good faith to modify this Agreement so as to effectthe original intent of the parties as closely as possible in an acceptablemanner in order that the transactions contemplated hereby be consummated asoriginally contemplated to the fullest extent possible.

 

Section 12.13*.  Further Assurances; SwissCorporate Documents. *TheMembers will execute and deliver such further instruments and do such furtheracts and things as may be required to carry out the intent and purpose of thisAgreement.  In particular, and withoutlimiting the generality of the foregoing, each Member agrees (i) that theCompany’s Articles of Association (*Statuten*) andother Swiss corporate legal documents (collectively, the “**SwissCorporate Documents**”) shall at all times contain provisions as maybe necessary or appropriate to give effect and facilitate the provisions ofthis Agreement, (ii) that in the event of any inconsistency between theSwiss Corporate Documents and this Agreement, this Agreement shall prevail and (iii) totake such actions with respect to its shares or in its capacity as ashareholder of the Company, including voting its shares at a shareholdersmeeting and adopting any changes to the Swiss Corporate Documents, all to beconsistent with and in accordance with the terms of this Agreement.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESSWHEREOF, the parties hereto have entered into this Agreement as of the date setforth above.

 
| ** ** | **CYMER, INC.** |
|------------|-----------------|
| ** ** | ** **      |
| ** ** | ** **      |
|       | By:             |   /s/ Robert P. Akins |
|       |            | Name: | Robert P. Akins |
|       |            | Title: | CEO |
|            |                 |  |  |  |

 

 

 
| ** ** | **CARL ZEISS LASER OPTICS  BETEILIGUNGSGESELLSCHAFT  MBH** |
|------------|------------------------------------------------------------|
| ** ** | ** **                                                 |
| ** ** | ** **                                                 |
|       | By:                                                        |   /s/ J. Krause-Bonte |
|       |                                                       | Name: | Dr. Jürgen Krause-Bonte |
|       |                                                       | Title: | Attorney-in-fact (*Handlungsbevollmächtigter*) |

 

 
| ** ** | **CARL ZEISS SMT AG** |
|------------|-----------------------|
| ** ** | ** **            |
| ** ** | ** **            |
|       | By:                   |   /s/ H. Gerlinger, C.E.O. |
|       |                  | Name: |
|       |                  | Title: |
|       | By:                   |   /s/ Daniel Schoh |
|       |                  | Name: | Daniel Schoh |
|       |                  | Title: | Member of the Board &  CFO |
|            |                       |  |  |  |  |

 

 
| ** ** | Joined by TCZ GmbH as the Company as  of                  ,  2005: |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |                                                                                                                                                    |
|       | **TCZ GMBH**                                                                                                                                            |
|       |                                                                                                                                                    |
|       |                                                                                                                                                    |
|       | By:                                                                                                                                                     | /s/ Brian C. Klene |
|       |                                                                                                                                                    | Name: | Brian C. Klene |
|       |                                                                                                                                                    | Title: | President & CEO |

 

36

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**EXHIBIT A**

 

**Form of Intellectual Property Agreement**

 

----

 

**IntellectualProperty Agreement**

 

dated as of

 

                      ,2005

 

among

 

**Cymer, Inc.**

 

**Carl Zeiss SMT AG**

 

and

 

**TCZ GMBH**

 

 

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**TABLE OFCONTENTS**

 
| ** **                                                                                                             | **Page** |
|------------------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                                   |     |
| ARTICLE 1  DEFINITIONS                                                                                            |     |
|                                                                                                                   |     |
| Section 1.01.  Definitions                                                                                        | 1        |
|                                                                                                                   |     |
| ARTICLE 2  OWNERSHIP OF TECHNOLOGY                                                                                |     |
|                                                                                                                   |     |
| Section 2.01  Ownership of Foreground Technology                                                                  | 5        |
| Section 2.02.  Ownership of Background Technology                                                                 | 5        |
| Section 2.03  Employees and Contractors                                                                           | 6        |
|                                                                                                                   |     |
| ARTICLE 3  PROSECUTION AND ENFORCEMENT OF SHARED FOREGROUND TECHNOLOGY                                            |     |
|                                                                                                                   |     |
| Section 3.01.  Prosecution of Inventions in Solely Owned Foreground Technology                                    | 6        |
| Section 3.02.  Prosecution of Inventions in Shared Foreground Technology                                          | 8        |
| Section 3.03.  Infringement of Patents in the Shared Foreground Technology by Third Parties                       | 10       |
|                                                                                                                   |     |
| ARTICLE 4  LICENSES                                                                                               |     |
|                                                                                                                   |     |
| Section 4.01.  Non-Exclusive Licenses for Competencies                                                            | 11       |
| Section 4.02  Exclusive Licenses in Exclusive Fields                                                              | 12       |
| Section 4.03  License to JV of Selling Party’s Foreground Technology                                         | 12       |
| Section 4.04.  License to Continuing Party of Selling Party’s Foreground Technology                          | 12       |
| Section 4.05  Limitation of Exclusivity of License to Selling Party of Foreground  Technology of Continuing Party | 13       |
| Section 4.06  License to Selling Party of JV’s Foreground Technology                                         | 13       |
| Section 4.07  No Right to Prosecute or Enforce                                                                    | 13       |
|                                                                                                                   |     |
| ARTICLE 5  ROYALTIES                                                                                              |     |
|                                                                                                                   |     |
| Section 5.01.  Royalties.                                                                                         | 14       |
| Section 5.02.  Reporting                                                                                          | 14       |
| Section 5.03.  Records Retention                                                                                  | 15       |
| Section 5.04.  Taxes                                                                                              | 15       |

 

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| ** **                                         | **Page**            |
|----------------------------------------------------|---------------------|
|                                               |                |
| Section 5.05.  Audit                          | 15                  |
|                                               |                |
| ARTICLE 6  TERM                               |                |
|                                               |                |
| Section 6.01.  Term                           | 15                  |
| Section 6.02.  Survival                       | 15                  |
|                                               |                |
| ARTICLE 7  MISCELLANEOUS                      |                |
|                                               |                |
| Section 7.01.  Assignment                     | 15                  |
| Section 7.02.  Independent Contractors        | 16                  |
| Section 7.03.  Severability                   | 16                  |
| Section 7.04.  Entire Agreement.              | 16                  |
| Section 7.05.  No Waiver                      | 16                  |
| Section 7.06.  Notices                        | 16                  |
| Section 7.07.  Counterparts                   | 17                  |
| Section 7.08.  Amendments                     | 17                  |
| Section 7.09.  Expenses                       | 17                  |
| Section 7.10.  Limitation Of Liability        | 17                  |
| Section 7.11.  Governing Law                  | 18                  |
| Section 7.12  Dispute Resolution; Arbitration | 18                  |
| Section 7.13.  WAIVER OF JURY TRIAL           | 18                  |
| Section 7.14.  Third Party Beneficiaries      | 18                  |
| Section 7.15.  Representation and Warranty    | 18                  |
|                                               |                |
| **EXHIBITS**                                       |                |
|                                               |                |
| Exhibit A                                     | Competencies        | 20 |
|                                               |                |   |
| Exhibit B                                     | Additional Products | 23 |

 

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**IntellectualProperty Agreement**

 

This Intellectual PropertyAgreement (this “**Agreement**”) datedas of                                           ,2005 (the “**Effective Date**”) by andamong Cymer, Inc., a Nevada corporation (“**Cymer**”) having its principal offices located at 17075Thornmint Court, San Diego, California USA 92127, Carl Zeiss SMT AG a stockcorporation organized under the laws of Germany (“**SMT**”) having its principal offices located at 73446Oberkochen, Germany, and TCZ GmbH, a limited liability company organized underthe laws of Switzerland (“**JV**”)having its principal offices located at                                                                                    .  Cymer, SMT and JV are each a “**Party**” and together constitute the “**Parties**” to this Agreement.

 

**RECITALS:**

 

1.                                       TheParties desire to collaborate to develop, integrate, market, sell and supporttools employing a beam generated by an excimer laser to induce crystallizationfor Low Temperature of Poly-Silicon (LTPS) processing for the manufacture offlat panel displays, including LCDs, LCD-SOGs and OLEDs, to engage in relatedapplication development and any products, if any, within the scope of aBusiness Plan approved by JV (the “**Collaboration**”).

 

2.                                       Cymerand SMT have formed JV in furtherance of the Collaboration, pursuant to anagreement dated July 15, 2005 (the “**JV Agreement**”).

 

3.                                       TheParties are entering into this Agreement in order to set forth the intellectualproperty rights in the intellectual property created during the term of the JVand rights that will apply following the termination of the JV.

 

NOW, THEREFORE, in considerationof the promises and the respective representations, warranties, covenants, andagreements set forth herein, the Parties agree as follows:

 

ARTICLE 1DEFINITIONS

 

Section 1.01*.  Definitions.*  (a) The following terms shall be used inthis Agreement with the following meanings. Capitalized terms not otherwise defined in this Agreement shall have themeaning set forth in the JV Agreement.

 

“**Affiliate**”means, with respect to any Person, any other Person directly or indirectlycontrolling, controlled by or under common control with such Person.  As used herein, “**control**”(and the derivative terms “**controlling**”and “**controlled**”) means the direct orindirect ownership of more than fifty percent (50%) of the equity securities orother ownership interests and voting rights of,

 

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and thepossession, direct or indirect, of the power to direct or cause the directionof the management and policies of a person, whether through the ownership ofvoting securities, by contract or otherwise. No party or its Affiliates shall by reason of this Agreement be deemedto be an affiliate of the other party or its Affiliates.  The term “**affiliated**”shall have a corresponding meaning. Notwithstanding the foregoing definition, when used with respect to SMT,the term “**Affiliate**” shall exclusively mean(a) SMT and any Person under the control of SMT and (b) IMT and anyPerson under the control of IMT. Notwithstanding the foregoing definition, for purposes of thisAgreement, JV shall not be considered an Affiliate of either Cymer or SMT.

 

“**Background Technology**” means (i) Patents and Know-Howexisting prior to the commencement of the Collaboration on August 1, 2004that are owned, licensed or otherwise controlled by a Party or its Affiliatesand (ii) Patents and Know-How that are conceived, developed, licensed orotherwise brought under the control of, a Party or its Affiliates outside theCollaboration.

 

“**Competency(ies)**”****means: with respect to Cymer and SMT, the fields specifiedin Exhibit A as Cymer Competencies and Zeiss Competencies, respectively;and with respect to JV, application development and systems integration withrespect to the Products.

 

“**ContinuationEvent**” means (a) the exercise by the Non-Triggering Party ofits option to purchase the Triggering Party’s interest in JV following aTriggering Event in accordance with the JV Agreement, (b) the exercise bya Member of its rights [. . . *** . . .] to purchase the other Member’sInterest in the JV under the JV Agreement, or (c) the Transfer by a Memberof its interest in the JV to a Permitted Transferee which is not an Affiliateof such Member.

 

“**Continuing Party**”shall mean (a) the Non-Triggering Party as defined in the JV Agreement,(b) the Member that exercises its right [. . . *** . . .]to purchase the Interest in the JV ofthe other Member of the JV, or (c) the Member that retains its Interest inthe JV upon the Transfer by the other Member of the JV of its Interest in theJV to a Permitted Transferee which is not an Affiliate of such Member.

 

“**Cymer Contributed****[. . . *** . . .]**” means the [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .]Cymer contributed to JV pursuant tothe Contribution Agreement dated as of the date hereof as identified inExhibit A hereto.

 

“**Cymer Exclusive Fields**” means those Competencies specified inExhibit A as Cymer Competencies that are not specified in Exhibit Aas Zeiss Competencies and are not specified as a JV Competency.

 

“**Disclosed Know-How**” means Know-How of one Party or itsAffiliates that is disclosed to another Party or its Affiliates in the courseof performance of the Collaboration.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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“**ExclusiveField**” means the Cymer Exclusive Field, Zeiss Exclusive Field or JVExclusive Field, as applicable.

 

“**ExistingCross License Agreements**” means(i) [. . . *** . . .] and (ii) anycross-license agreement in effect as of the Effective Date between a Party orits Affiliates, on the one hand, and a third party, on the other hand.

 

“**Foreground Technology**” means Patents and Know-How relating toProducts that are made, conceived or reduced to practice in the course ofperformance of the Collaboration by a Party or any of its Affiliates.  Foreground Technology does not includeBackground Technology.

 

 “**IMT**” means CarlZeiss Industrielle Messtechnik GmbH, a limited liability company organizedunder the laws of Germany.

 

“**Interest**”shall have the meaning set forth in the JV Agreement.

 

“**JV ExclusiveField**” means those Competencies specified as JV Competencies thatare not specified in Exhibit A as Zeiss Competencies or CymerCompetencies.

 

“**Know-How**” means information or inventions not generally knownor available.

 

“**Member**”shall mean Cymer or SMT, or any Affiliate of Cymer or SMT who is a Member (asdefined in the JV Agreement) of JV.

 

“**Net Sales**” means, with respect to any Party, the amount ofgross sales invoiced by such party or its Affiliates to third parties(excluding any party hereto or its Affiliates) for Products, less deductionsfor the following items which are included in the invoiced amounts and do notexceed reasonable and customary amounts in the country in which such saleoccurred: (a) returns (including withdrawals and recalls),(b) rebates, (c) volume discounts granted at the time of invoicing,(d) sales taxes, value-added taxes and other taxes directly linked andincluded in the gross sales amount. “**NetSales**” shall also include the amount or fair market value of allother consideration received by a Party or its Affiliates (other than JV) withrespect to Products, whether such consideration is in cash, payment in kind,exchange or another form.

 

“**Non-Compete Period**” shall have the meaningset forth in the JV Agreement.

 

“**Patents**” mean all foreign and domestic patents, utility modelsand patent applications (including all provisional, divisional, substitution,continuation and continuation in-part applications, and all foreigncounterparts thereof).

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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“**Person**” meansan individual, corporation, partnership, association, trust, limited liabilitycompany or any other entity or organization, including a government orpolitical subdivision or an agency or instrumentality thereof.

 

“**Products**” means low temperature polysilicon tools for laserinduced crystallization for manufacturing flat panel displays, includingwithout limitation LCDs, SOGs and OLEDs, and any additional products listed inExhibit B as amended from time to time by mutual agreement of the Parties.

 

“**Selling Party**” shallmean (a) the Triggering Party as defined in the meaning set forth in theJV Agreement, (b) the Member that sells its Interest in the JV to theother Member of the JV upon the other Member’s exercise of its right [. . . *** . . .] under the JV Agreement, or (c) theMember that Transfers its Interest in the JV to a Permitted Transferee which isnot an Affiliate of such Member.  If theTriggering Party under (a) or the selling or transferring Member under(b) or (c) above is [. . . *** . . .] or an Affiliate of [. . . *** . . .], then the “Selling Party” shall, forpurposes of this definition, include [. . . *** . . .] and [. . . *** . . .] and their respective Affiliates.

 

“**SupplyAgreement**” means the Supply Agreement between JV and Cymer or theSupply Agreement between JV and SMT or an Affiliate of SMT, each of even datewith this Agreement.

 

“**Triggering Event**” shall have the meaningset forth in the JV Agreement.

 

“**Zeiss Exclusive Fields**” means thoseCompetencies specified in Exhibit A as Zeiss Competencies that are notspecified in Exhibit A as Cymer Competencies and are not specified as JVCompetencies.

 

(b)                                 Eachof the following terms is defined in the Section set forth opposite suchterm:

 
| **Term**                                                        | ** ** | **Section**          |
|-----------------------------------------------------------------|------------|----------------------|
| Agents                                                          |       | Section 6.01    |
| Collaboration                                                   |       | Recitals             |
| Effective  Date                                                 |       | Preamble             |
| JV Agreement                                                    |       | Recitals             |
| Licensed  Party                                                 |       | Section 4.01    |
| Licensing  Party                                                |       | Section 4.01    |
| [. . . *** . . .]  Royalty Period |       | Section 5.01(a) |
| [. . . *** . . .]  Royalty Rate   |       | Section 5.01(c) |
| [. . . *** . . .]  Royalty Period |       | Section 5.01(b) |
| [. . . *** . . .]  Royalty Rate   |       | Section 5.01(c) |
| Responsible  Party                                              |       | Section 3.02(a) |
| Shared  Foreground Technology                                   |       | Section 2.01(b) |
| Ships a  Product                                                |       | Section 5.01(b) |
| Solely Owned  Foreground Technology                             |       | Section 2.01(a) |

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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ARTICLE 2OWNERSHIP OF TECHNOLOGY

 

Section 2.01*Ownership of Foreground Technology.*

 

(a) *  Solely Owned Foreground Technology.*  Foreground Technology that is solely made,conceived and reduced to practice by the employees or contractors of one Party,or any of its respective Affiliates, and all intellectual property rightstherein, shall represent “**Solely OwnedForeground Technology**” of such Party and shall be solely owned bysuch Party.

 

(b) *Shared ForegroundTechnology*.  ForegroundTechnology that is made, conceived or reduced to practice by at least oneemployee or contractor of one Party or its Affiliates, on the one hand, and atleast one employee or contractor of another Party or its Affiliates, on theother hand, and all intellectual property rights therein, shall represent “**Shared Foreground Technology**” and shall beowned equally by such Parties. Exceptfor Patents contained in Shared Foreground Technology that are exclusivelylicensed under the provisions of Article 4 and then only to the extentlimited by such exclusive license, each jointly owning Party may useShared Foreground Technology and grant any licenses to the Shared ForegroundTechnology to third parties without the consent of the other Party and withoutany obligation to account to or share any royalties or other proceeds resultingfrom licenses with the other jointly owning Party.

 

Section 2.02.  *Ownershipof Background Technology*. Each Party and its Affiliates shall retain sole right, title andinterest to its Background Technology and this Agreement shall not confer to aParty any intellectual property rights in the Background Technology of anyother Party or its Affiliates.  Otherthan as expressly provided with respect to Disclosed Know-How, no license toBackground Technology is granted hereunder. Cymer and SMT each represent and warrant that, to the best of itsknowledge, it and its Affiliates[. . . *** . . .] as of the Effective Date[. . . *** . . .] with claims that would be directly infringed by a tool****employing a beam generated by an excimer laser to inducecrystallization for Low Temperature Poly-Silicon processing for the manufactureof flat panel displays (“**Subject Tool**”)(excluding the [. . . *** . . .] to be contributed by Cymer to JVpursuant to a Contribution Agreement of even date with this Agreement) but notby a component, subassembly, or materials contained therein within theCompetency of Cymer or SMT, respectively. Cymer and SMT each agree and covenant that should any Patent issue inthe future on any currently pending patent applications owned or controlled bysuch Party or any of its Affiliates, or any continuation or divisional of anysuch pending patent application, that would be directly infringed by a SubjectTool made or sold by JV but not by a component, subassemply or materialscontained therein within the Competency of Cymer or SMT,

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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respectively, such Party will, for itself and on behalf of itsAffiliates, grant to JV a world-wide, non-transferable, non-sublicensable,non-exclusive, royalty-free, perpetual, irrevocable license under such Patentto make, have made, use, import, sell and offer for sale, lease and otherwisetransfer Subject Tools that would directly infringe such Patent.  For the avoidance of doubt, Subject Tool doesnot include, and neither Party shall have any obligation to grant any licenseunder any claim in any Patent that would be infringed by, any component,subassembly or materials used in a Subject Tool even if such component,subassembly or materials have no substantial non-infringing use other than usein a Subject Tool or would be deemed to contributorily infringe or induceinfringement of a Patent covering a Subject Tool.

 

Section 2.03  *Employees and Contractors*.  Each Party and its Affiliates shall have awritten agreement with each employee or contractor engaged in any developmentactivities related to and conducted as part of the Collaboration, or shall takesuch other or additional steps as may be necessary under applicable law, tosecure ownership by such Party or its Affiliates of all Foreground Technologymade, conceived or reduced to practice by its employees or contractors in thecourse of performance of the Collaboration. Without limiting the generality of the foregoing, any Party or itsAffiliates with employees in Germany will take at its expense all stepsnecessary to claim full, unrestricted ownership of Foreground Technology madeby its employees that may be patentable and may result in a Patent under whichanother Party has been granted an exclusive license under the provisions ofSection 4.02, provided that such other Party undertakes to file a patentapplication therefor in Germany under the provisions ofSection 3.01(b) or Section 3.02. Each Party or its Affiliates shall be solely responsible for payment ofany remuneration payable to its employees or contractors in respect to ForegroundTechnology.

 

ARTICLE 3PROSECUTION AND ENFORCEMENT OF SHARED FOREGROUND TECHNOLOGY

 

Section 3.01.  *Prosecution of Inventionsin Solely Owned Foreground Technology.*

 

(a) The Party owningSolely Owned Foreground Technology shall be entitled, but have no obligation tofile, prosecute and maintain the Patents claiming such inventions, except asotherwise provided in Section 3.01(b).

 

(b) With respect to any invention contained in Solely OwnedForeground Technology that may be patentable and may result in a Patent under which another Party has beengranted an exclusive license under the provisions of Section 4.02 (the “**Exclusively Licensed Party**”), suchExclusively Licensed Party shall have the first right, but not the obligation,of filing, prosecuting and maintaining the Patent claiming such invention.  At least forty-five (45) days prior to filingan application disclosing or claiming Solely Owned Foreground 

 

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Technology that may be patentable and mayresult in a Patent exclusively licensed to another Party underSection 4.02, the owning Party will by notice request the ExclusivelyLicensed Party to elect whether or not it will undertake the filing,prosecuting and maintaining of such Patent.

 

(i)             If the ExclusivelyLicensed Party notifies the owning Party within forty-five (45) days after suchrequest that it elects to undertake the filing, prosecution and maintenance ofsuch Patent, the Exclusively Licensed Party (x) shall take all commerciallyreasonable efforts to prepare, file, prosecute and maintain such Patent onbehalf of the owning Party, and (y) shall be responsible for the expenses andattorneys fees in connection therewith, reasonably consult with the owningParty regarding such filing and prosecution efforts, keep the owning Partyreasonably informed of the prosecution (including by providing copies of allpatent applications, amendments and correspondence from U.S. and foreign patentoffices) so as to allow the owning Party a reasonable amount of time to reviewsuch information, seek the comments of the owning Party on proposedapplications, amendments, and responses to office actions and make commerciallyreasonable efforts to accommodate such comments of the owning Party.  The owning Party shall provide theExclusively Licensed Party with reasonable access to the inventors to assistthe Exclusively Licensed Party in preparing and prosecuting such Patent.

 

(ii)          If the ExclusivelyLicensed Party notifies the owning Party in writing within such forty-five (45)day period that it elects not to file such Patent or fails to respond withinsuch forty-five (45) day period, the owning Party shall have the right, but noobligation, to proceed with the filing, prosecution and maintenance of thepatent application for such invention at its own expense.  If the owning Party undertakes such filing,any license to such Patent granted under Section 4.02 shall becomenon-exclusive.

 

(c) If the Exclusively Licensed Party has undertaken the filing,prosecution and maintenance of a Patent pursuantsubsection (b) above, then within six (6) months from the filingof the first application for such Patent it shall notify the owning Party inwriting in which additional jurisdictions the Exclusively Licensed Partyintends to file, prosecute and maintain such Patent.  With respect to the jurisdictions so notifiedto the owning Party, the Exclusively Licensed Party and the owning Party shallhave the same obligations as with respect to the initial Patent filing pursuantto subsection (b)(i) above.  Inaddition, the owning Party then shall have the right, but no obligation, tofile, prosecute and maintain such Patent in any jurisdictions not so notifiedto it by the Exclusively Licensed Party and any license to such Patent underSection 4.02 shall become non-exclusive in such jurisdictions.

 

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(d)                                 Ifthe Exclusively Licensed Party has undertaken the filing, prosecution andmaintenance of a Patent pursuant to subsection (b) or (c) abovesubsequently decides not to prosecute or maintain such Patent in anyjurisdiction, it shall notify the owning Party of that decision in writing atleast one hundred twenty (120) days before the Patent would lapse if not dulyprosecuted or maintained in such jurisdiction. The owning Party then shall have the right, but no obligation, to assumesuch filing, prosecution or maintenance of the Patent in any such jurisdictionfrom the Exclusively Licensed Party at its own expense, and any license to suchPatent under Section 4.02 shall become non-exclusive in any suchjurisdiction in which the owning Party assumes such Patent.

 

Section 3.02.  *Prosecution of Inventionsin Shared Foreground Technology.*

 

(a) (i) With respect to each invention within SharedForeground Technology that may be patentable, such invention shall beconsidered by a joint committee to be established by the Parties consisting ofone representative from each Party owning such Shared Foreground Technology,which shall determine in good faith which of the owning Parties (the “**Responsible Party**”) should prosecute the Patents claimingsuch invention.  The Responsible Partyshall have the first right, but not the obligation, of filing, prosecuting andmaintaining the Patents claiming such invention on behalf of the owningParties, with expenses and attorney fees to be shared equally.  At least forty-five (45) days prior to filinga patent application disclosing or claiming Shared Foreground Technology, theResponsible Party will provide the other owning Party with written notice ofits intent.

 

(ii)          If the other owningParty consents to such filing or fails to respond within such forty-five (45)day period, the Responsible Party shall reasonably consult with the otherowning Party regarding such filing and prosecution efforts, keep the otherowning Party reasonably informed of the prosecution (including by providingcopies of all patent applications, amendments and correspondence from U.S. andforeign patent offices) so as to allow the other owning Party a reasonableamount of time to review such information, seek the comments of the otherowning Party on proposed applications, amendments, and responses to officeactions and make commercially reasonable efforts to accommodate such commentsof the other owning Party.

 

(iii)       If the other owning Partynotifies the Responsible Party in writing within such forty-five (45) dayperiod that it does not consent to such filing, the Responsible Party shallhave the right to proceed with the filing and prosecution of one or more patentapplications for such invention at its own expense and for its ownbenefit.  If the Responsible Partyundertakes such filing and prosecution, the non-consenting owning Party shallpromptly assign all of its right, title and interest in and to such inventionand any intellectual property rights arising therefrom to the

 

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Responsible Party; *provided*that, in such case the license granted under Section 4.02 to thenon-consenting owning Party shall not apply and the Responsible Party willgrant to the non-consenting owning Party and its Affiliates a worldwide, fullypaid up, [. . . *** . . .], non-transferable, non-sublicensable, non-exclusive, perpetual,irrevocable license to make, have made, use, import, sell and offer for sale,lease and otherwise transfer products using such invention and using anyintellectual property rights arising therefrom outside the Exclusive Field ofany Party other than the non-consenting owning Party.  To the extent such Patent is covered by oneor more of the Existing Cross License Agreements the Responsible Party agreesto be bound by all applicable licenses, immunities, covenants and restrictionsset forth in such Existing Cross License Agreements.

 

(b)                                 (i) Theother owning Party may request that the Responsible Party take all necessaryactions to file and prosecute a patent application on any particular inventionwithin the Shared Foreground Technology on behalf of each owning Party, ortheir respective Affiliates, and shall provide sixty (60) days notice prior toany critical date if possible.  Upon suchrequest, the Responsible Party shall have thirty (30) days to inform the otherowning Party whether the Responsible Party will proceed with the requestedfiling or prosecution, or if the Responsible Party will forego the same.

 

(ii)                                  Ifthe Responsible Party elects to proceed, it shall take all commerciallyreasonable efforts to accomplish such filing and prosecution and proceed as setforth in Section 3.02(a).  Withinsix (6) months of the filing of the first application for such Patent itshall notify the other owning Party in writing in which additionaljurisdictions the Responsible Party intends to file, prosecute and maintainsuch Patent.  With respect to thejurisdictions so notified by the Responsible Party, the Responsible Party andthe other owning Party shall have the same obligations as with respect to theinitial Patent filing.

 

(iii)                               Ifthe Responsible Party elects not to proceed within such thirty (30) day period(or with respect to any additional jurisdictions in which the Responsible Partydoes not notify its intention to file, prosecute and maintain), the otherowning Party shall have the right to proceed with the filing and prosecution ofone or more patent applications for such invention at its own expense and for itsown benefit.  If the other owning Partyundertakes such filing and prosecution, the Responsible Party shall promptlyassign all of its right, title and interest in and to such invention and anyintellectual property rights arising therefrom to the other owning Party (as awhole if the Responsible Party elects not to proceed with an initial filing orwith respect to the non-notified additional jurisdictions in the case that theResponsible Party elects to proceed with an initial filing); *provided* that, in such case the license granted underSection 4.02 to the Responsible Party shall not apply (in alljurisdictions if the Responsible Party elects not to proceed with an initialfiling or in the non-notified

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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additional jurisdictions in the case that theResponsible Party elects to proceed with an initial filing) and the otherowning Party will grant to the Responsible Party and its Affiliates aworldwide, [. . . *** . . .],[. . . *** . . .], non-transferable, non-sublicensable, non-exclusive, perpetual,irrevocable license to make, have made, use, import, sell and offer for sale,lease and otherwise transfer products using such invention and using anyintellectual property rights arising therefrom outside the Exclusive Field ofany Party other than the Responsible Party (in all jurisdictions if theResponsible Party elects not to proceed with an initial filing or in thenon-notified additional jurisdictions in the case that the Responsible Partyelects to proceed with an initial filing). To the extent such Patent is covered by one or more of the ExistingCross License Agreements the other owning Party agrees to be bound by allapplicable licenses, immunities, covenants and restrictions set forth in suchExisting Cross License Agreements.

 

(c)                                  Ifthe Responsible Party has undertaken the filing, prosecution and maintenance ofa Patent pursuant to subsection (a) or (b) above subsequentlydecides not to prosecute or maintain such Patent in any jurisdiction, it shallnotify the other owning Party of that decision in writing at least one hundredtwenty (120) days before the Patent would lapse if not duly prosecuted ormaintained in such jurisdiction.

 

(d)                                 SMT,Cymer and JV shall reasonably assist the other in the filing, prosecution andmaintenance of Patents under Section 3.02, including executing anynecessary powers of attorney.  Each ofSMT, Cymer and JV, and their respective Affiliates, as appropriate, shallpromptly execute any necessary documents or instruments in connection with anyassignments of its right, title and interest in and to any invention within theShared Foreground Technology required by this Section 3.02, andintellectual property rights arising therefrom.

 

(e)                                  Theprovisions of this Article 3 and of Article 2 are based on theassumption that Shared Foreground Technology and the intellectual property rightsarising therefrom will be owned by[. . . *** . . .] but not[. . . *** . . .] or[. . . *** . . .] of the Parties.  If thecase should arise that Shared Foreground Technology and intellectual propertyrights arising therefrom are owned by [. . . *** . . .](or [. . . *** . . .]) Parties, the Parties will adapt and apply the provisions ofthis Article 3 and Article 2 as appropriate to address such case.

 

Section 3.03*.  Infringement of Patents in theShared Foreground Technology by Third Parties.*

 

(a)                                  Forall joint Patents that are filed under Section 3.02(a)(ii) orSection 3.02(b)(ii), the owning Parties shall proceed as set forth insubsections (b) and (c) below with respect to such third partyinfringement.  As to any Patent in theShared Foreground Technology which is filed underSection 3.02(a)(iii) or

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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Section 3.02(b)(iii),the Party that solely owns such Patent shall have sole rights, at its solediscretion, to enforce such patent.

 

(b)                                 Eachowning Party must consent in advance to either owning Party or its Affiliatesbringing an action against any person or entity directly or contributorilyinfringing a Patent in the Shared Foreground Technology.  Notwithstanding the foregoing, in no eventshall either owning Party or its Affiliates be obligated to participate orotherwise cooperate, in any such action against a third party infringer.  For the avoidance of doubt, but withoutlimiting the foregoing sentence, neither owning Party shall have any obligationto notify the other owning Party of any alleged or threatened infringement, tobe named as a party in any such action, or to provide testimony in any suchaction.

 

(c)                                  Regardlessof which owning Party brings the action, any recovery obtained by settlement orotherwise in the action attributable to direct or contributory infringement ofa Patent in Shared Foreground Technology shall be distributed as follows:  (i) any recovery shall be applied firstto cover the reasonable expenses (including counsel fees) incurred by theowning Parties in such action, and (ii) thereafter, the net recovery shallbe retained solely by the owning Party named as party in such action (if onlyone owning Party is named as a party in such action) or shared equally betweenthe owning Parties (if both owning Parties are named as parties in suchaction).

 

Section 3.04                                *Transfers Subject to Existing License Agreement*.  The Parties acknowledge and agree that anyPatent exclusively licensed, transferred or assigned from one Party to anotherParty under the terms of this Section 3 or other provisions of thisAgreement remains subject to any applicable Existing Cross License Agreement ofthe transferring or assigning Party.

 

ARTICLE 4LICENSES

 

Section 4.01*. Non-Exclusive Licenses for Competencies. *Without limiting any other license granted in this Article 4, eachParty, on behalf of itself and its Affiliates, hereby grants each other Partyand its Affiliates (in each case, the licensing Party and its Affiliates beingreferred to as the “***4.01******Licensing Party***” andthe licensed Party and its Affiliates being referred to as the “***4.01******Licensed Party***”) a worldwide, non-exclusive,non-transferable, non-sublicensable, perpetual, irrevocable, paid-up androyalty-free license under any claims related to any Competency of the 4.01Licensed Party in the Patents in the Solely Owned Foreground Technology ownedby the 4.01 Licensing Party or its Affiliates to make, have made, use, import,sell and offer for sale, lease and otherwise transfer any products or portionsof products solely in the 4.01 Licensed Party’s Competencies.

 

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Section 4.02  *Exclusive Licenses inExclusive Fields*.  Withoutlimiting any other licenses granted in this Article 4, each Party, onbehalf of itself and its Affiliates, hereby grants each other Party and itsAffiliates (in each case , the licensing Party and its Affiliates beingreferred to as the “***4.02 Licensing Party”*** and thelicensed Party and its Affiliates being referred to as the “***4.02 Licensed Party”***) a worldwide,exclusive (even as to the 4.02 Licensing Party, except as provided inSection 4.05, but subject to any Existing Cross License Agreements),non-transferable, non-sublicensable, perpetual, irrevocable,[. . . *** . . .] and[. . . *** . . .] license under any claims related to any Exclusive Field of the4.02 Licensed Party in the Patents contained in Solely Owned ForegroundTechnology or Shared Foreground Technology owned by the 4.02 Licensing Party tomake, have made, use, import, sell and offer for sale, lease and otherwisetransfer any products or portions of products solely in the 4.02 LicensedParty’s Exclusive Fields.

 

Section 4.03  *License to JV of Selling Party’s Foreground Technology.*

 

(a)                                  Effective upon the occurrence of aContinuation Event, the Selling Party, on behalf of itself and itsAffiliates, hereby grants JV and itsAffiliates (i) a worldwide, non-transferable, non-sublicensable,perpetual, irrevocable license under the Patents contained in all ForegroundTechnology owned by the Selling Party or its Affiliates to make, have made,use, import, sell and offer for sale, lease and otherwise transfer Products andcomponents for use in Products, and (ii) a worldwide, non-transferable, non-sublicensable, perpetual,irrevocable license to use Disclosed Know-How owned by the Selling Party or itsAffiliates to make, have made, use, import, sell and offer for sale, lease andotherwise transfer Products and components for use in Products.

 

(b)                                 Thelicenses granted in subsection (a) shall be exclusive (even as to theSelling Party and its Affiliates but subject to any Existing Cross LicenseAgreements) during the Non-Compete Period and non-exclusive thereafter.

 

Section 4.04*.  License to Continuing Party ofSelling Party’s Foreground Technology.*  (a) Effective upon the occurrence of a Continuation Event, the SellingParty, on behalf of itself and its Affiliates, hereby grants the Continuing Party and its Affiliates (i) a worldwide,non-transferable, non-sublicensable, perpetual, irrevocable license under thePatents contained in all Foreground Technology owned by the Selling Party orits Affiliates to make, have made, use, import, sell and offer for sale, leaseand otherwise transfer Products and components for use in Products, and(ii) a worldwide,non-transferable, non-sublicensable, perpetual, irrevocable license to useDisclosed Know-How owned by the Selling Party or its Affiliates to make, havemade, use, import, sell and offer for sale, lease and otherwise transferProducts and components for use in Products.

 

(b)                                 Thelicenses granted in subsection (a) shall be exclusive (even as to theSelling Party and its Affiliates but subject to any Existing Cross LicenseAgreements) during the Non-Compete Period and non-exclusive thereafter.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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Section 4.05*Limitation of Exclusivity of License to SellingParty of Foreground Technology of Continuing Party.* * *Effective upon the occurrence of aContinuation Event, any license granted to the Selling Party inSection 4.02 under the Patents contained in Foreground Technology owned bythe Continuing Party or JV, or their Affiliates, shall become non-exclusive asto the Continuing Party and JV for Products and components for use inProducts.  That is to say, for theavoidance of doubt, the Continuing Party and, if so licensed by the Continuing Party,JV shall be entitled to make, have made, use, import, sell, offer for sale,lease and otherwise transfer Products and components for use in Products underPatents contained in Foreground Technology owned by the Continuing Party or itsAffiliates and licensed to the Selling Party under Section 4.02.

 

Section 4.06*License to Selling Party of JV’s Foreground Technology.* Withoutlimiting any other licenses granted in this Article 4, effective upon the termination of theNon-Compete Period, JV, on behalf of itself and its Affiliates, hereby grants the Selling Party and itsAffiliates a worldwide, non-transferable, non-sublicensable,non-exclusive, [. . . *** . . .], perpetual, irrevocable licenseunder the Patents contained in Solely Owned Foreground Technology owned by JVto make, have made, use, import, sell and offer for sale, lease and otherwisetransfer Products.  The Selling Partyshall have the option to add the Cymer Contributed Patents to the subjectmatter of the license granted under this Section 4.06, subject to paymentto the Continuing Party of an amount equal to the portion of the purchase pricepaid by the Continuing Party’s attributable to the Cymer ContributedPatents.  To exercise this option, theSelling Party must provide JV with notice of its election at least six(6) months prior to the expiration of the Non-Compete Period and pay anyamount required under this Section 4.06.

 

Section 4.07  *No Right to Prosecute orEnforce.*

 

(a)  Except as otherwise provided inSection 3.01 or 3.02, the licenses granted pursuant to this Article 4do not (i) include any right to file, prosecute or maintainPatents for any of the licensed Foreground Technology or Shared ForegroundTechnology or (ii) include any right to require, or impose or imply anyobligation on, the licensing party to do so.

 

(b)  The licenses grantedpursuant to this Article 4 do not (i) include any right toenforce any licensed Foreground Technology or (ii) include any right torequire, or impose or imply any obligation on, the licensing party to doso.  Notwithstanding the foregoing, thelicensee shall have the right to enforce the Patents licensed underSection 4.02 and, during the Non-Compete Period, under Sections 4.03 and4.04, against the Party granting the licenses and its Affiliates, and, to theextent permitted by applicable law, against third parties.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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ARTICLE 5ROYALTIES

 

Section 5.01*.  Royalties.*

 

(a)  *During the[. . . *** . . .]**Period. *During the period beginning on the [. . . *** . . .] and ending on the [. . . *** . . .] of the [. . . *** . . .] (the [. . . *** . . .]), the JV shall pay royalties to theSelling Party on the Net Sales of Products by the JV or its Affiliates and theContinuing Party shall pay royalties to the Selling Party on the Net Sales ofProducts by the Continuing Party or its Affiliates (excluding Products includedin the Net Sales of the JV or its Affiliates), at the[. . . *** . . .] Royalty Rate; provided, however, that no more than one royaltyshall be payable with respect to any Product.

 

(b) *After the[. . . *** . . .]**Period*. During the period beginning on the [. . . *** . . .] the [. . . *** . . .] and ending on the [. . . *** . . .] of (i) the date on which the SellingParty or any of its Affiliates [. . . *** . . .] (as defined below) or (ii) [. . . *** . . .]of the [. . . *** . . .] (the [. . . *** . . .]), the JV shall pay royalties to theSelling Party on the Net Sales of Products by the JV or its Affiliates, and theContinuing Party shall pay royalties to the Selling Party on the Net Sales ofProducts by the Continuing Party or its Affiliates (excluding Products includedwithin the Net Sales of Products by the JV or its Affiliates), at the[. . . *** . . .] Royalty Rate; provided, however, that no more than one royaltyshall be payable with respect to any Product. After the [. . . *** . . .] Royalty Period, the licenses set forth inSections 4.03 and 4.04 shall be [. . . *** . . .] and [. . . *** . . .].  Forpurposes of this Section 5.01(b), “**Shipsa Product**” means that the Selling Party or any of its Affiliatessells or otherwise delivers to a third party or specifically (and not as partof a general license agreement) licenses any third party to sell or otherwisedeliver, whether for revenue, demonstration, testing or any other purposes, aProduct or a component used or designed for use in a Product.

 

(c)  *Royalty Rates*.  The [. . . *** . . .] Royalty Rate shall be[. . . *** . . .] percent ([. . . *** . . .]%) andthe [. . . *** . . .] Royalty Rate shall be[. . . *** . . .] percent ([. . . *** . . .]%).

 

Section 5.02*.  Reporting. *JV or the Continuing Party shallmake written reports to the Selling Party within 30 days after the first day ofeach January, April, July and October, if it has Net Sales of Product soldor otherwise disposed of during the preceding three month period on which aroyalty is payable as provided in Section 5.01.  Such report shall state the Net Sales ofProduct sold or otherwise disposed of during the preceding[. . . *** . . .] month period by such Party and the royalty that is payable asprovided in Section 5.01.  TheSelling Party shall make a written report to the JV and the Continuing Partywithin 10 days after it Ships a Product. If the Selling Party is [. . . *** . . .] or an Affiliate of[. . . *** . . .], the reports shall be made and any payments shall be sent to[. . . *** . . .]

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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Section 5.03*. Records Retention. *JV and the Continuing Party shallretain records and supporting documentation sufficient to document its NetSales calculations for aminimum of [. . . *** . . .] following the[. . . *** . . .].

 

Section 5.04.  *Taxes. *JV or the Continuing Party, as thecase may be, is authorized to withhold from payment to the Selling Party and topay over to any federal, cantonal, communal or foreign government any amountswhich it reasonably determines may be required to be so withheld pursuant tothe THL or any provisions of any other federal, cantonal, communal or foreignlaw.  All amounts withheld pursuant to the THL or any provision of anyfederal, cantonal, communal or foreign tax law with respect to any payment tothe Selling Party shall be treated as amounts paid to the Selling Party pursuantto this Article for all purposes under this Agreement.

 

Section 5.05*.  Audit. *Each Party shall keep recordsshowing the sales or other disposition of products sold or otherwise disposedof under the licenses herein granted in sufficient detail to enable theroyalties payable hereunder by such Party to be determined, and further agreesto permit its books and records to be examined from time to time to the extentnecessary to verify the reports provided for in Section 5.02, suchexamination to be made at the expense of the other Party by a certified publicaccountant appointed by that Party, who shall be acceptable to the Partysubject to the examination. However, if such an audit reveals that the amountpaid by the Party subject to the examination for the period covered by suchaudit was more than [. . . *** . . .] percent([. . . *** . . .]%) less than the amount thatsuch Party should have been required to pay under this Article 5 for suchperiod, the Party subject to the examination shall bear the costs of suchaudit.

 

ARTICLE 6TERM

 

Section 6.01*.  Term.*  This Agreement shall commence as of theEffective Date and shall continue in force until the invalidity or expirationof all Patents contained within the Foreground Technology.  This Agreement may not be terminated forbreach.

 

Section 6.02*.  Survival. *The duties and obligations of theparties under Articles 1, 2, 5, 6 and 7 of this Agreement shall survivetermination or expiration of this Agreement.

 

ARTICLE 7MISCELLANEOUS

 

Section 7.01*.  Assignment.*  No Party shall assign, or grant any rightunder any of its Foreground Technology unless such assignment or grant is made 

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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subject to theterms and conditions of this Agreement. This Agreement may not be assigned or otherwise transferred by anyParty, in whole or in part, whether voluntarily or by operation of law(including by way of sale of assets, merger or consolidation) other than to aperson that is the successor to substantially all of the assets of such Partyrelated to this Agreement and who executes a written agreement of assumption bywhich it agrees to be bound hereby.

 

Section 7.02*.  Independent Contractors.*  The relationship of the Parties establishedby this Agreement is that of independent contractors, and nothing contained inthis Agreement shall be construed or implied to give any Party the power todirect or control the day-to-day activities of any other Party, nor shall anyParty have the right or authority to assume, create or incur any third partyliability or obligation of any kind, express or implied, against or in the nameof or on behalf of another Party except as expressly set forth in thisAgreement.

 

Section 7.03*.  Severability.*  In the event that any provision of thisAgreement conflicts with governing law or if any provision is held to be null,void or otherwise ineffective or invalid by a court of competent jurisdiction,(a) such provision shall be deemed to be restated to reflect as nearly aspossible the original intentions of the Parties in accordance with applicablelaw, and (b) the remaining terms, provisions, covenants and restrictionsof this Agreement shall remain in full force and effect.  This Agreement has been negotiated by theParties and their respective counsel and will be interpreted fairly inaccordance with its terms and without any strict construction in favor of oragainst any Party.

 

Section 7.04*.  Entire Agreement.*  This Agreement is an integrated document andall attachments hereto and incorporated herein constitute the entire, final,complete and exclusive agreement between the Parties and supersede all previousagreements, intentions, or representations, oral or written, relating to thisAgreement.  This Agreement may not bemodified or amended except in a writing signed by a duly authorizedrepresentative of each Party.  BothParties acknowledge having read the terms and conditions set forth in thisAgreement and all attachments hereto, understand all terms and conditions, andagree to be bound hereby.

 

Section 7.05*.  No Waiver.*  The failure of any Party to enforce at anytime any of the provisions of this Agreement shall not be deemed to be a waiverof the right of any Party thereafter to enforce any such provisions.

 

Section 7.06*.  Notices. *Any notice or other communicationrequired or permitted to be made or given to either Party hereto pursuant tothis Agreement shall be sent to such Party by courier or by registered airmail(except that registered or certified mail may be used where delivery is in thesame country as mailing), postage prepaid, addressed to it at its address setforth below, or to such other address as it shall designate by written noticegiven to the other party, and shall be deemed to have been made or given on thedate of receipt and shall be addressed as follows:

 

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if to Cymer:

 

Cymer, Inc.

17075Thornmint Court

San Diego,California USA 92127

Attn: SeniorVice President, Chief Intellectual Property Counsel

 

if to SMT:

 

Carl Zeiss SMTAG

Carl-Zeiss-Strasse22

73447Oberkochen, Germany

Attention:Dr. Hermann Gerlinger

Facsimile No:[. . . *** . . .]

Telephone No.:[. . . *** . . .]

 

if to JV:

TCZ GmbH

 

 

Attn: ChiefExecutive Officer

 

Section 7.07*.  Counterparts.*  This Agreement may be executed incounterparts, each of which so executed will be deemed to be an original andsuch counterparts together will constitute one and the same agreement.  This Agreement shall become effective wheneach Party hereto shall have received a counterpart hereof signed by all of theother Parties hereto.  Until and unlesseach Party has received a counterpart hereof signed by the other Party hereto,this Agreement shall have no effect and no Party shall have any right orobligation hereunder (whether by virtue of any other oral or written agreementor other communication).

 

Section 7.08*.  Amendments. *Any provision of this Agreementmay be amended or waived if, but only if, such amendment or waiver is inwriting and is signed, in the case of an amendment, by each Party to thisAgreement, or in the case of a waiver, by the Party against whom the waiver isto be effective.

 

Section 7.09*.  Expenses. *Except as otherwise providedherein, all costs and expenses incurred in connection with this Agreement shallbe paid by the Party incurring such cost or expense.

 

Section 7.10*.  Limitation Of Liability.*  IN NO EVENT SHALL ANY PARTY BE LIABLE TO THEOTHER FOR LOST PROFITS OF THE OTHER PARTY OR ANY CONSEQUENTIAL, SPECIAL,PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, 

 

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*******                 CONFIDENTIAL TREATMENTREQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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HOWEVER CAUSEDAND ON ANY THEORY OF LIABILITY, EXCEPT FOR GROSS NEGLIGENCE OR INTENTIONALMISCONDUCT.

 

Section 7.11*.  Governing Law. *This Agreement shall be governed by and construed in accordancewith the law of the [. . . *** . . .], withoutregard to the conflicts of law rules of such state.

 

Section 7.12  *DisputeResolution; Arbitration**. *Any dispute, controversy or claimarising out of or in connection with this Agreement or the alleged breach,termination or invalidity thereof that is not settled by the dispute resolutionprocess set forth in Section 12.09(a) of the JV Agreement orotherwise by the joint agreement of the Parties shall be finally settled underRules of Arbitration of the International Chamber of Commerce by threearbitrators appointed in accordance with the said Rules.  Unless otherwise agreed by the Parties, sucharbitration shall take place in [. . . *** . . .].  Anyaward rendered by the arbitrators will be final and binding on the parties, andjudgment upon the award may be entered in the[. . . *** . . .], or any other court having jurisdiction over the award orhaving jurisdiction over the parties or their assets.  The arbitration agreement contained in thisSection 12.09 will not be construed to deprive any court of itsjurisdiction to grant provisional relief (including by injunction or order ofattachment) in aid of arbitration proceedings or enforcement of an award.

 

Section 7.13*.  WAIVER OF JURY TRIAL. *EACH OF THE PARTIES HERETO HEREBYIRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATEDHEREBY.

 

Section 7.14*.**  Third Party Beneficiaries. *No provision of this Agreement isintended to confer upon any person other than the Parties hereto any rights orremedies hereunder.

 

Section 7.15.  *Representation and Warranty*. [. . . *** . . .] represents and warrantsthat all right, title and interest in and to Foreground Technology conceived orreduced to practice by [. . . *** . . .] or any Person under the control of[. . . *** . . .] has been assigned by [. . . *** . . .] to and will be owned by[. . . *** . . .], and that [. . . *** . . .] has obtained all rights from[. . . *** . . .] to fully perform its obligations under this Agreement.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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IN WITNESS WHEREOF, the partieshereto have caused this Agreement to be duly signed and effective as of theEffective Date.

 

Accepted and agreed to:

 
| CYMER, INC. |
|-------------|
|        |
|        |
| By:         |   |   |
|        | Name: |   |
|        | Title: |   |

 

 
| CARL ZEISS SMT AG |
|-------------------|
|              |
|              |
| By:               |   |   |
|              | Name: |   |
|              | Title: |   |
| By:               |   |   |
|              | Name: |   |
| Title:            |   |

 

 
| TCZ GMBH |
|----------|
|     |
|     |
| By:      |   |   |
|     | Name: |   |
|     | Title: |   |

 

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**Exhibit A**

 

**Competencies**

 

**1.****              Definitions**

 

For purposesof this Exhibit A:

 

“[. . . *** . . .]” means [. . . *** . . .] based on [. . . *** . . .] for [. . . *** . . .] and [. . . *** . . .] a [. . . *** . . .] and[. . . *** . . .].

 

“[. . . *** . . .]” means [. . . *** . . .] for [. . . *** . . .], [. . . *** . . .], [. . . *** . . .]([. . . *** . . .]),[. . . *** . . .] (which means [. . . *** . . .] a [. . . *** . . .] to a [. . . *** . . .] with a [. . . *** . . .] and [. . . *** . . .])and [. . . *** . . .] a [. . . *** . . .] and [. . . *** . . .].

 

“[. . . *** . . .]”means [. . . *** . . .] for [. . . *** . . .], including without limitation, [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .],[. . . *** . . .], [. . . *** . . .],[. . . *** . . .], a [. . . *** . . .] by a [. . . *** . . .] or a different [. . . *** . . .] to provide a [. . . *** . . .] and [. . . *** . . .] of [. . . *** . . .] at a[. . . *** . . .].

 

**“**[. . . *** . . .]” means [. . . *** . . .] for [. . . *** . . .].

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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**2.****              Cymer Competencies**

 

General Competencies:

•                  [. . . *** . . .] and [. . . *** . . .] with [. . . *** . . .] such as [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .]and [. . . *** . . .].

•                  [. . . *** . . .] – [. . . *** . . .], and [. . . *** . . .].

•                  [. . . *** . . .] – [. . . *** . . .] ([. . . *** . . .])[. . . *** . . .].

•                  [. . . *** . . .]

•                  [. . . *** . . .], but limited to applications in [. . . *** . . .] or [. . . *** . . .] at all[. . . *** . . .]: (i) [. . . *** . . .]and [. . . *** . . .], (ii) [. . . *** . . .], (iii) methods for [. . . *** . . .]and [. . . *** . . .] of [. . . *** . . .], (iv) [. . . *** . . .], (v) [. . . *** . . .]within the [. . . *** . . .], (vi) [. . . *** . . .]and [. . . *** . . .] and [. . . *** . . .] in the [. . . *** . . .] of the [. . . *** . . .] between [. . . *** . . .] and [. . . *** . . .] and between [. . . *** . . .] and [. . . *** . . .], based on [. . . *** . . .] mounted on[. . . *** . . .], (vii) [. . . *** . . .], [. . . *** . . .]([. . . *** . . .]) [. . . *** . . .]to process  [. . . *** . . .], (viii) [. . . *** . . .], [. . . *** . . .]to measure the [. . . *** . . .] properties, (ix) [. . . *** . . .].

 

Specificresponsibilities and competencies within the Collaboration:

•                  [. . . *** . . .], including [. . . *** . . .] ([. . . *** . . .])

•                  Within the [. . . *** . . .]: [. . . *** . . .] ([. . . *** . . .]) and [. . . *** . . .] ([. . . *** . . .])[. . . *** . . .].

•                  [. . . *** . . .], including (i) [. . . *** . . .],(ii) [. . . *** . . .], (iii) [. . . *** . . .]and [. . . *** . . .] with [. . . *** . . .], and (iv) [. . . *** . . .] of [. . . *** . . .] ([. . . *** . . .]itself is [. . . *** . . .] competency), (v) various [. . . *** . . .] including, [. . . *** . . .] and [. . . *** . . .] and (vi) [. . . *** . . .].

•                  [. . . *** . . .], including (i) [. . . *** . . .]and [. . . *** . . .], (ii) [. . . *** . . .]including [. . . *** . . .], and (iii) [. . . *** . . .].

•                  [. . . *** . . .].

 

----

*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

21

 

A-24

----

 

**3.****              ZeissCompetencies**

 

General Competencies:

•                  [. . . *** . . .], which means (i) [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .], including without limitation [. . . *** . . .], [. . . *** . . .], [. . . *** . . .]and [. . . *** . . .] for [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .] and (ii) [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .] for [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .] of such [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .].

•                  [. . . *** . . .] and [. . . *** . . .] which means (i) [. . . *** . . .]and [. . . *** . . .] or [. . . *** . . .] including [. . . *** . . .] and [. . . *** . . .] and (ii) [. . . *** . . .], [. . . *** . . .]and [. . . *** . . .] for [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .]and [. . . *** . . .] of such [. . . *** . . .] and [. . . *** . . .].

•                  [. . . *** . . .].

 

Specificresponsibilities and competencies within the Collaboration:

•                  [. . . *** . . .], including (i) [. . . *** . . .]and [. . . *** . . .], (ii) [. . . *** . . .] ([. . . *** . . .]) & [. . . *** . . .], (iii) [. . . *** . . .] ([. . . *** . . .]), (iv) [. . . *** . . .]and [. . . *** . . .], (v) [. . . *** . . .], (vi) [. . . *** . . .], (vii) [. . . *** . . .], (viii) [. . . *** . . .], (ix) [. . . *** . . .] ([. . . *** . . .]), and (x) [. . . *** . . .]of [. . . *** . . .] ([. . . *** . . .]) & [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] ([. . . *** . . .] & [. . . *** . . .] itself is [. . . *** . . .] competency).

•                  [. . . *** . . .], including (i) [. . . *** . . .], (ii) [. . . *** . . .], [. . . *** . . .], and [. . . *** . . .], and (iii) [. . . *** . . .]. [. . . *** . . .]within [. . . *** . . .].

•                  [. . . *** . . .]for [. . . *** . . .] and [. . . *** . . .].

 

----

*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

22

 

A-25

----

 

**Exhibit B**

 

**Additional Products**

 

None

 

23

----

 

**EXHIBIT B**

 

**Form ofContribution Agreement**

 

----

 

**CONTRIBUTIONAGREEMENT**

 

This Contribution Agreement (this “**Agreement**”) dated as of                                         ,2005 (the “**Effective Date**”), isentered into by and between Cymer, Inc., a Nevada corporation (“**Cymer**”), and TCZ GmbH, a Swiss limitedliability company (“**JV**”).  Cymer and JV are each a “**Party**” and together constitute the “**Parties**” to this Agreement.

 

**RECITALS:**

 

A.            Cymer and Carl ZeissLaser Optics Beteilungsgesellschaft mbH (“**Zeiss LOB**”)formed JV pursuant to a Joint Venture Agreement dated July 15, 2005 (the “**JV Agreement**”) to collaborate to develop, integrate, market,sell and support tools employing a beam generated by an excimer laser to inducecrystallization for Low Temperature Poly-Silicon (LTPS) processing for themanufacture of flat panel displays, including LCDs, LCD-SOGs and OLEDs, toengage in related application development and to search for other businessopportunities for process tools for the manufacture of flat panel displays asdescribed in the JV Agreement.

 

B.            Cymer owns theContributed Intellectual Property (as hereinafter defined), and Cymer desiresto contribute the Contributed Intellectual Property to the JV as additionalcapital surplus consideration for Cymer’s Percentage Interest in the JV.

 

**NOW, THEREFORE,** inconsideration of the foregoing recitals and the mutual promises hereinafter setforth, the parties hereto agree as follows:

 

**1.****                                      Contributionof Assets; Related Transactions**

 

**1.1          Contributionby Cymer. **Asadditional capital surplus consideration for Cymer’s Percentage Interest in theJV, Cymer shall contribute, assign, transfer, convey and deliver to the JV, andthe JV shall accept and acquire from Cymer, at the Closing (as defined in Section 1.3below), all of Cymer’s right, title and interest in and to the assets listed in***Exhibit A*** hereto (“**Contributed Intellectual Property**”), free and clear of anyencumbrances other than any Existing Cross License Agreement (as defined in theIntellectual Property Agreement among Cymer, JV, Carl Zeiss SMT AG and CarlZeiss Industrielle Messtechnik GmbH of even date herewith), on the terms andsubject to the conditions set forth in this Agreement (the “**Intellectual Property Contribution**”).

 

**1.2          Valueof Contributions. **For purposes of Cymer’s capital surpluscontribution to JV, the parties stipulate and agree that the IntellectualProperty Contribution has a value of U.S.$[. . . *** . . .].

 

**1.3          Closing.**  The IntellectualProperty Contribution set forth in Section 1.1above, shall take place in accordance with the JV Agreement at theClosing as set forth and defined in the JV Agreement (the “**Closing***”*) Atthe Closing, Cymer shall execute and deliver to the JV such bills of sale,endorsements, assignments and other documents as may (in the reasonablejudgment of the JV) be necessary or appropriate to assign, transfer, convey anddeliver to the JV

 

----

*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

B-1

----

 

all of Cymer’s right, title and interest in and to the ContributedIntellectual Property free and clear of any encumbrances other than any ExistingCross License Agreement (as defined in the Intellectual Property Agreementamong Cymer, JV, Carl Zeiss SMT AG and Carl Zeiss Industrielle Messtechnik GmbHof even date herewith).  JV acknowledgesand agrees that the Contributed Intellectual Property remains subject to anyapplicable Existing Cross License Agreement of Cymer.

 

**2.****                                      Conditionsto Closing.**

 

The parties’obligations to effect the Intellectual Property Contribution and to consummatethe transactions contemplated hereby at the Closing and, in Cymer’s case, tomake its surplus capital contributions for Cymer’s Percentage Interest in theJV, are subject to the consummation of the transactions contemplated under andpursuant to the JV Agreement.

 

**3.****                                      Miscellaneous.**

 

**3.1          Definitions.**  Except as otherwise defined herein,capitalized terms used herein shall have the same meanings attributed to themas in the JV Agreement.

 

**3.2          Notices.**  Allnotices, requests and other communications to any party or to the Partieshereto shall be in writing (including facsimile or similar writing) and shallbe given in conformance with Section 12.01 of the JV Agreement.

 

**3.3          GoverningLaw; Jurisdiction; Waiver of Jury Trial; Dispute Resolution; Arbitration.**  This Agreement shall give effect to and shallconform with Sections 12.07, 12.08, 12.09, 12.10 of the JV Agreement and suchsections shall be incorporated by reference and applied to this Agreement *mutatis mutandis*.

 

**3.4          EntireAgreement.**  ThisAgreement together, with the JV Agreement and the Exhibits hereto and thereto,and any documents referred to herein or therein, constitutes the entireagreement of the Parties with respect to the subject matter hereof.  Any references in this Agreement toprovisions in the Exhibits to this Agreement are intended for clarificationonly, and in the event of any inconsistency, the provisions of the Exhibitsshall govern.

 

**3.5          Severability.**  If any term, provision, covenant orrestriction of this Agreement is held by a court of competent jurisdiction orother authority to be invalid, void or unenforceable, the remainder of theterms, provisions, covenants and restrictions of this Agreement shall remain infull force and effect and shall in no way be affected, impaired or invalidatedso long as the economic or legal substance of the transactions contemplatedhereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties shallnegotiate in good faith to modify this Agreement so as to effect the originalintent of the parties as closely as possible in an acceptable manner in orderthat the transactions contemplated hereby be consummated as originallycontemplated to the fullest extent possible.

 

2.

 

B-2

----

 

**3.6          Amendmentand Waiver.**

 

**(a)          **Any provisionof this Agreement may be amended or waived if, and only if, such amendment orwaiver is in writing and signed, in the case of an amendment, by each Party, orin the case of a waiver, by the Party against whom the waiver is to beeffective.

 

**(b)          **No failure ordelay by any Party in exercising any right, power or privilege hereunder shalloperate as a waiver thereof nor shall any single or partial exercise thereofpreclude any other or further exercise thereof or the exercise of any otherright, power or privilege.  The rightsand remedies herein provided shall be cumulative and not exclusive of anyrights or remedies provided by law.

 

**3.7          Headings.**  Headings are for ease of reference only andshall not form a part of this Agreement.

 

**3.8          Counterparts.**  This Agreement may be executed in any numberof counterparts, each of which shall be an original, but all of which togethershall constitute one instrument.

 

**IN WITNESS WHEREOF**, the parties hereto have executed this Contribution Agreement as ofthe date set forth in the first paragraph hereof.

 
|   | TCZ GmbH    |
|--------|-------------|
|   |        |
|   |        |
|   | By:         |   |   |
|   |        | Name: |
|   |        | Title: |
|   |        |
|   |        |
|   | CYMER, INC. |
|   |        |
|   |        |
|   | By:         |   |   |
|   |        | Name: |
|   |        | Title: |

 

3.

 

B-3

----

 

**EXHIBIT A**

 

**CONTRIBUTEDINTELLECTUAL PROPERTY**

 

The following [. . . *** . ...], and any [. . . *** . . .], andany [. . . *** . . .], and any [. . . *** . . .], [. . . *** . . .],[. . . *** . . .] or [. . . *** . . .] thereof:

 

[. . . *** . . .]

 

[. . . *** . . .]

 

[. . . *** . . .]

 

----

*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

1.

 

B-4

----

 

**EXHIBIT C**

 

**Form ofSupply Agreement**

 

----

 

**SUPPLYAGREEMENT**

** **

**datedas of                                           ,2005**

** **

between

 

**TCZGMBH**

** **

and

 

**[Supplier]**

 

C-1

----

 
|              | ARTICLE 1  DEFINITIONS                             |   |
|-------------------|---------------------------------------------------------|--------|
|              |                                                    |   |
| Section 1.01 | *Definitions*                                           | 1      |
|              |                                                    |   |
|              | ARTICLE 2  TERM OF AGREEMENT                       |   |
|              |                                                    |   |
| Section 2.01 | *Term of Agreement*                                     | 5      |
| Section 2.02 | *Additional Term after Continuation Event*              | 5      |
|              |                                                    |   |
|              | ARTICLE 3  SCOPE OF AGREEMENT                      |   |
|              |                                                    |   |
| Section 3.01 | *General*                                               | 5      |
| Section 3.02 | *Exclusivity*                                           | 6      |
| Section 3.03 | *Research and Development Effort*                       | 6      |
|              |                                                    |   |
|              | ARTICLE 4  PRODUCTS AND CHANGES                    |   |
|              |                                                    |   |
| Section 4.01 | *Products*                                              | 6      |
| Section 4.02 | *Change at Supplier’s Request*                     | 6      |
| Section 4.03 | *Change at JV’s Request*                           | 7      |
| Section 4.04 | *Emergency Changes*                                     | 7      |
| Section 4.05 | *Impact on Part Numbers*                           | 7      |
| Section 4.06 | *Impact on Open Purchase Orders*                        | 7      |
|              |                                                    |   |
|              | ARTICLE 5  QUALITY AND INSPECTION                  |   |
|              |                                                    |   |
| Section 5.01 | *Specification Requirements*                            | 8      |
| Section 5.02 | *ISO 9000 Certification, Documentation and  Inspection* | 8      |
| Section 5.03 | *Agency Approvals*                                      | 8      |
| Section 5.04 | *Quality Tracking*                                      | 9      |
| Section 5.05 | *Serialization*                                         | 9      |
|              |                                                    |   |
|              | ARTICLE 6  PRICING                                 |   |
|              |                                                    |   |
| Section 6.01 | *Cost Model And Prices*                                 | 9      |
| Section 6.02 | *Currency*                                              | 10     |
| Section 6.03 | *Taxes*                                                 | 10     |
| Section 6.04 | *Audit  Rights*                                         | 10     |

 

i

 

C-2

----

 
|               | ARTICLE 7  PLANNING, ORDERS, AND ADJUSTMENTS                      |   |
|--------------------|------------------------------------------------------------------------|--------|
|               |                                                                   |   |
| Section 7.01  | *Planning*                                                             | 11     |
| Section 7.02  | *Purchase Orders*                                                      | 11     |
| Section 7.03  | *Acceptance of Purchase Orders*                                        | 11     |
| Section 7.04  | *Rescheduling of Purchase Orders*                                      | 12     |
| Section 7.05  | *Inventory Planning*                                                   | 12     |
| Section 7.06  | *Cancellation  of Purchase Orders*                                     | 12     |
| Section 7.07  | *Excess and Obsolete Material*                                         | 12     |
|               |                                                                   |   |
|               | ARTICLE 8  INVENTORY PLANNING                                     |   |
|               |                                                                   |   |
| Section 8.01  | *Procurement of Materials*                                             | 12     |
| Section 8.02  | *Quarterly BTR*                                                        | 13     |
|               |                                                                   |   |
|               | ARTICLE 9  DELIVERY; CARRIER; TITLE; RISK OF LOSS; AND ACCEPTANCE |   |
|               |                                                                   |   |
| Section 9.01  | *Delivery*                                                             | 13     |
| Section 9.02  | *Packaging and Shipping*                                               | 13     |
| Section 9.03  | *Failure to Meet Delivery Date*                                        | 13     |
| Section 9.04  | *Product Inspection and Acceptance*                                    | 14     |
| Section 9.05  | *Packaging and Printed Materials*                                      | 14     |
|               |                                                                   |   |
|               | ARTICLE 10  PAYMENTS                                              |   |
|               |                                                                   |   |
| Section 10.01 | *Payment for Products*                                                 | 14     |
|               |                                                                   |   |
|               | ARTICLE 11  WARRANTIES                                            |   |
|               |                                                                   |   |
| Section 11.01 | *Product Warranty*                                                     | 15     |
| Section 11.02 | *Warranty Exclusions*                                                  | 15     |
| Section 11.03 | *Repair Under Product Warranty*                                        | 15     |
| Section 11.04 | *Discovery of Defect By JV Purchasing Entity*                          | 15     |
| Section 11.05 | *Notice of Non-Compliance*                                             | 15     |
| Section 11.06 | *Limitation of Warranty*                                               | 16     |
| Section 11.07 | *No Waiver*                                                            | 16     |

 

ii.

 

C-3

----

 
|               | ARTICLE 12  INTEGRATION AND SUPPORT SERVICES                |   |
|--------------------|------------------------------------------------------------------|--------|
|               |                                                             |   |
|               | ARTICLE 13  INTELLECTUAL PROPERTY INDEMNITY AND INJUNCTIONS |   |
|               |                                                             |   |
| Section 13.01 | *Indemnity*                                                      | 16     |
| Section 13.02 | *Injunctions*                                                    | 17     |
| Section 13.03 | *Required Request from Member*                                   | 17     |
| Section 13.04 | *Exclusions*                                                     | 17     |
| Section 13.05 | *Sole Remedy*                                                    | 17     |
|               |                                                             |   |
|               | ARTICLE 14  INTELLECTUAL PROPERTY                           |   |
|               |                                                             |   |
| Section 14.01 | *Intellectual Property Generally*                                | 17     |
| Section 14.02 | *Non-Assertion of Method Patents*                                | 17     |
| Section 14.03 | *License in the Event of Outsourcing*                            | 18     |
| Section 14.04 | *Software License*                                               | 18     |
|               |                                                             |   |
|               | ARTICLE 15  EVENT OF DEFAULT; TERMINATION                   |   |
|               |                                                             |   |
| Section 15.01 | *Event of Default*                                               | 18     |
| Section 15.02 | *Termination*                                                    | 19     |
| Section 15.03 | *Survival of Provisions*                                         | 19     |
| Section 15.04 | *Acts of the Parties Upon Termination*                           | 19     |
|               |                                                             |   |
|               | ARTICLE 16  MISCELLANEOUS                                   |   |
|               |                                                             |   |
| Section 16.01 | *Notices*                                                        | 20     |
| Section 16.02 | *Amendments; No Waivers*                                         | 20     |
| Section 16.03 | *Expenses*                                                       | 21     |
| Section 16.04 | *Assignment*                                                     | 21     |
| Section 16.05 | *Headings*                                                       | 21     |
| Section 16.06 | *Entire Agreement*                                               | 21     |
| Section 16.07 | *Governing Law*                                                  | 21     |
| Section 16.08 | *WAIVER OF JURY TRIAL*                                           | 21     |
| Section 16.09 | *Dispute Resolution; Arbitration*                                | 21     |
| Section 16.10 | *Independent Contractors*                                        | 22     |
| Section 16.11 | *Severability*                                                   | 22     |
| Section 16.12 | *Counterparts; Effectiveness*                                    | 22     |
| Section 16.13 | *Limitation of Liability*                                        | 22     |

 

iii.

 

C-4

----

 
| Section 16.14 | *Third Party Beneficiaries* | 22 |
|--------------------|-----------------------------|----|
| Section 16.15 | *Guaranty*                  | 23 |
| Section 16.16 | *Force Majeure*             | 23 |

 

iv.

 

C-5

----

 

**SupplyAgreement**

 

This Supply Agreement (the “**Agreement**”) is made and entered into as of                                   ,2005 (the “**Effective Date**”) by and betweenTCZ GmbH, a limited liability company organized under the laws of Switzerland,having its principal place of business at [              ] (“**JV**”)and [             ], a [                      ], having its principalplace of business at [            ] (“**Supplier**”).  JV andSupplier are each a “**Party**” andtogether constitute the “**Parties**” tothis Agreement.

 

**RECITALS:**

 

1.             Supplieris a Member or Affiliate of a Member of JV, which has been formed by Cymer, Inc.and Carl Zeiss SMT AG (“**SMT**”) pursuantto a Joint Venture Agreement dated [date], 2005 (the “**JV Agreement**”);and

 

2.             JV,Cymer, Inc., SMT and Carl Zeiss Industrielle Messtechnik GmbH (“**IMT**”) have entered into an Intellectual Property Agreementdated [date], 2005 (the “**IP Agreement**”),and certain other agreements in furtherance of the collaboration contemplatedby the JV Agreement; and

 

3.             TheParties are entering into this Agreement in order to set forth the terms underwhich Supplier will supply certain Products (as defined below) to JV and itsAffiliates (as defined below).

 

NOW, THEREFORE, in consideration of thepromises and the respective representations, warranties, covenants, andagreements set forth herein, the Parties agree as follows:

 

ARTICLE 1DEFINITIONS

 

Section 1.01           *Definitions. * The following terms shall be used in thisAgreement with the following meanings. Capitalized terms not otherwise defined in this Agreement shall have themeaning set forth in the JV Agreement.

 

“**Affiliate**” means, with respect to any Person, any otherPerson directly or indirectly controlling, controlled by or under commoncontrol with such Person.  As usedherein, “**control**” (and the derivative terms “**controlling**” and “**controlled**”)means the direct or indirect ownership of more than fifty percent (50%) of theequity securities or other ownership interests and voting rights of, and thepossession, direct or indirect, of the power to direct or cause the directionof the management and policies of a person, whether through the ownership ofvoting securities, by contract or otherwise. No party or its Affiliates shall by reason of this Agreement be deemedto be an affiliate of the other party or its Affiliates.  The term “**affiliated**”shall have a corresponding meaning. Notwithstanding the foregoing definition, when used with respect to CarlZeiss Laser Optics GmbH or SMT, the term “**Affiliate**”shall exclusively mean (a) Carl

 

1.

 

C-6

----

 

Zeiss SMT AG and any Person under the control of Carl Zeiss SMT AG and (b) CarlZeiss IMT GmbH and any Person under the control of Carl Zeiss IMT GmbH.  Notwithstanding the foregoing definition, forpurposes of this Agreement, JV and its subsidiaries shall not be considered anAffiliate of Supplier.

 

“**Continuation Event**”means (a) the exercise by the Non-Triggering Party of its option topurchase the Triggering Party’s interest in JV following a Triggering Event inaccordance with the JV Agreement, (b) the exercise by a Member of itsrights of first refusal to purchase the other Member’s Interest in the JV underthe JV Agreement, (c) the Transfer of an Interest by a Member or MemberParent (as defined in the JV Agreement) to a Permitted Transferee that is notan Affiliate of such Member, or (d) the Transfer of an Interest aspermitted under Section 11.04(c) of the JV Agreement.

 

“**ContinuingParty**” shall mean (a) theNon-Triggering Party as defined in the JV Agreement, (b) the Member thatexercises its right of first refusal to purchase the Interest in the JV of theother Member of the JV, (c) the Member that retains its Interest in the JVupon the Transfer of an Interest by the other Member or Member Parent to aPermitted Transferee which is not an Affiliate of such Member, or (d) theMember that retains its Interest in the JV upon the Transfer by the otherMember or Member Parent of an Interest as permitted under Section 11.04(c) ofthe JV Agreement.

 

**Core Component**”means any component of a Product identified as a “Core Component” on Schedule 1,as amended and updated from time to time by the parties.

 

“**Delivery****Point**” means the place of delivery foreach Product as specified in Exhibit B.

 

“**ECO**”means an Engineering Change Order issued to Supplier by JV.

 

“**ECR**”means an Engineering Change Request from either Party to the other Party.

 

“**ECR Charge**”means the costs, as determined by Supplier, associated with implementing thechanges of a certain ECR, and shall include, but not be limited to, (i) anyadditional Expenses (as defined in Schedule 6.01, Para. 4); (ii) anychange in pricing or delivery schedule, and (iii) the cost impact of anyProduct, work-in-process, or component rendered excess or obsolete as a resultof the ECR, but shall exclude any costs associated with changes related toproduct safety, serviceability, liability, or correction of original designflaws.

 

**“Intellectual Property Rights”**means any or all of the following and allrights in, arising out of, or associated therewith, whether arising fromstatute or common law: (i) all United States and foreign patents andutility models and applications therefor and all reissues, divisions,re-examinations, renewals,

 

2.

 

C-7

----

 

extensions,provisionals, continuations and continuations-in-part thereof, and equivalentor similar rights anywhere in the world in inventions and discoveries,including, without limitation, invention disclosures, (ii) all tradesecrets and other rights in know-how and confidential or proprietaryinformation, (iii) all copyrights, copyright registrations andapplications therefor and all other rights corresponding thereto throughout theworld, (iv) all industrial designs and any registrations and applicationstherefor throughout the world, (v) all rights in World Wide Web addressesand domain names and applications and registrations therefor, all trade names,logos, common law trademarks and service marks, trademark and service markregistrations and applications therefor and all goodwill associated therewiththroughout the world, and (vi) any similar, corresponding or equivalentrights to any of the foregoing throughout the world.

** **

“**JV Product**”means any tool marketed by a JV Purchasing Entity from time to time employing abeam generated by an excimer laser to induce crystallization for LowTemperature Poly-Silicon (LTPS) processing for the manufacture of flat paneldisplays.

 

“**JVPurchasing Entity”**means JV or any Affiliate of JV that submits aPurchase Order for Products under this Agreement.

 

“**Member**” shallmean a Person who owns an Interest (as defined in the JV Agreement) in JV.

 

“**Non-Core Component**”means any component of a Product that is not a Core Component.

 

“**Other Supplier**”means the supplier under the Other Supply Agreement, supplying components to JVpursuant to the Other Supply Agreement.

 

“**Other Supply Agreement**”means the supply agreement between JV and [                                ]executed contemporaneously with the execution of this Agreement.

 

 “**Performance Test**” means the PerformanceTest to be performed on all Products, as specified by Section 9.04 anddescribed in Exhibit C.

 

“**Permitted****Transferee**” shall have the meaning set forth in Section 10.01of the JV Agreement.

 

“**Person**” meansan individual, corporation, partnership, association, trust, limited liabilitycompany or any other entity or organization, including a government orpolitical subdivision or an agency or instrumentality thereof.

 

“**PreferredCarrier(s)**” means thecarrier(s) specified by a JV Purchasing Entity from time to time.

 

3.

 

C-8

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“**ProcuredMaterials**” means the materials purchased by Supplier to manufacturethe Products for a JV Purchasing Entity under this Agreement.

 

“**Product**”means the products identified on Exhibit A, as amended and updatedfrom time to time by the Parties, to be manufactured by or for Supplier or itsAffiliates and supplied to a JV Purchasing Entity in accordance with thisAgreement.

 

“**PurchaseOrders**” means written or electronically transmitted purchase ordersfor the Products issued by a JV Purchasing Entity to Supplier under thisAgreement.

** **

“**Quality Manual**”  means the quality manual created or used bySupplier to comply with the International Organization for Standardization’srequirements for certification with its ISO 9000 standard.

 

“**QuarterlyBusiness Technical Review Meeting**” or “**Quarterly BTR**” means a meeting between Supplier and JV held atleast once every three (3) months, at which the Parties shall reviewperformance under this Agreement.

 

“**SCAR**”means a JV Purchasing Entity’s Supplier Corrective Action Form, which shallidentify defective Products and require immediate corrective action bySupplier.

 

“**Specifications**”means the specifications for a Product, detailed on Exhibit A asamended and updated from time to time by agreement of the Parties.

 

“**Stages**” meansprecision positioning and metrology systems to be incorporated into JVProducts.

 

“**Supplier****Intellectual Property**” means allIntellectual Property Rights to the Products.

 

(a)           Each of the following terms is defined in the Section setforth opposite such term:

 
| **Term**                   | ** ** | **Section**           |
|----------------------------|------------|-----------------------|
| Additional Term            |       | 2.01(b)               |
| Adjusted EBIT              |       | Schedule 6.01(4) |
| Agreement                  |       | Preamble              |
| Assumed Volume             |       | Schedule 6.01(3) |
| Changes in Working Capital |       | Schedule 6.01(4) |
| COGS                       |       | Schedule 6.01(4) |
| COS                        |       | Schedule 6.01(4) |
| Depreciation               |       | Schedule 6.01(4) |
| EBIT                       |       | Schedule 6.01(4) |
| Effective Date             |       | Preamble              |
| EULA                       |       | 14.04                 |

 

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| **Term**                       | ** ** | **Section**                  |
|--------------------------------|------------|------------------------------|
| Event of Default               |       | 15.01                        |
| Expenses                       |       | Schedule 6.01(4)        |
| First Customer Ship            |       | Schedule 6.01(2)(c)     |
| Forecasted Quantity            |       | 7.03                         |
| Generation                     |       | Schedule 6.01(1)        |
| IMT                            |       | Recital 2                    |
| Injunction Notification        |       | 13.02(a)                     |
| IP Agreement                   |       | Recital 2                    |
| JV                             |       | Preamble                     |
| JV Agreement                   |       | Recital 1                    |
| JV IP Notification             |       | 13.02(a)                     |
| JV IRR                         |       | Schedule 6.01(5)        |
| JV Target IRR                  |       | Schedule 6.01(5)        |
| Net Sales                      |       | Schedule 6.01(4)        |
| NPV                            |       | Schedule 6.01(4)        |
| Outsourced Non-Core Components |       | 14.03                        |
| Party or Parties               |       | Preamble                     |
| PPP                            |       | 4.01                         |
| Price                          |       | Schedule 6.01, Preamble |
| Pricing Period                 |       | Schedule 6.01(4)        |
| Product Defect Notice          |       | 9.04                         |
| Product Warranty               |       | 11.01                        |
| R                              |       | Schedule 6.01(4)        |
| R&D Expense                |       | Schedule 6.01(4)        |
| R&D Expense Budget         |       | Schedule 6.01(2)(b)     |
| SG&A Expense               |       | Schedule 6.01(4)        |
| SMT                            |       | Recital 1                    |
| Software                       |       | 14.04                        |
| Spares                         |       | Schedule 6.01(7)        |
| Supplier                       |       | Preamble                     |
| Supplier IP Notification       |       | 13.02(a)                     |
| Supplier NPV                   |       | Schedule 6.01(4)        |
| Warranty Expense               |       | Schedule 6.01(4)        |

 

ARTICLE 2TERM OF AGREEMENT

 

Section 2.01           *Term of Agreement.* The term of this Agreement will begin on theEffective Date and will continue as long as Supplier or any of its Affiliatesis a Member of JV or such longer period as specified in Section 2.02below, unless terminated by either Party in accordance with Article 15.

 

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Section 2.02           *Additional Term after Continuation Event*.

* *

(a)           Following occurrence of a Continuation Event, theContinuing Party shall have the option to extend the term of this Agreement foran additional period specified by the Continuing Party in a notice ofcontinuation to the other Party not to exceed the Non-Compete Period (asdefined in the JV Agreement) (the “**Additional Term**”).  During the Additional Term, JV shall have theright to terminate this Agreement for any reason upon at least six (6) monthsprior notice.

 

(b)           The term of this Agreement shall automatically be extendedfor successive one (1) year periods upon expiration of any Additional Termreferred to in clause (a) above (and any renewal period), unless either JVor Supplier gives the other Party notice that it does not wish to renew atleast six (6) months prior to the expiration of the Additional Term orrenewal period.

 

ARTICLE 3SCOPE OF AGREEMENT

 

Section 3.01           *General. *As more fully set forth in this Agreement, Suppliershall accept Purchase Orders for Products issued by JV or its Affiliates inaccordance with Article 7, shall purchase materials necessary to manufacture,assemble, test, and package such Products in accordance with the Specificationsand shall deliver the Products to JV or its Affiliates in accordance with theterms of this Agreement.  Supplier shallprovide all manufacturing technology, equipment, labor, materials, andfacilities necessary to fulfill the accepted Purchase Orders and provide theintegration and support services as specified in Article 12.  [Supplier shall use IMT as its exclusivesupplier of Core Components for Stages, unless otherwise agreed in writing byJV.](1)

 

Section 3.02           *Exclusivity. *As longas Supplier or any of its Affiliates is a Member of JV, JV and all of itsAffiliates shall use Supplier as their exclusive source of supply for theProducts (including any successor or substitute Products or any componentsthereof), other than Non-Core Components outsourced by JV to a third partysupplier  in accordance with Section 6.01(c).

 

Section 3.03           *Research and Development Effort. *So long as Supplier or any of its Affiliates is a Member ofJV, Supplier will use commercially reasonable efforts to develop the Products,or ensure that its Affiliates use commercially reasonable efforts to developthe Products, in accordance with the applicable Work Plan (as defined in the JVAgreement) adopted from time to time under the JV Agreement, except as may beotherwise mutually agreed by JV and Supplier. If neither Supplier nor any of its Affiliates is a Member of JV,Supplier will use commercially reasonable efforts to complete development ofany Products, or ensure that its Affiliates use commercially reasonable effortsto complete development of any Products that were under development as of thedate on

 

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(1) Only necessaryin the Zeiss Supply Agreement.

 

6.

 

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which Supplier and its Affiliates ceased tobe a Member of JV, except as may be otherwise mutually agreed by JV andSupplier.  All work performed by or forSupplier as part of this development will be performed in a professional,workmanlike manner and according to prevailing industry standards.  Supplier will allocate and assign to eachrelevant research and development project, at its discretion, a reasonablysufficient number of qualified personnel with appropriate technicalskills.  Supplier may, in addition, fromtime to time provide research and development services to JV or its Affiliateswhich shall be documented in the separate R&D Services Agreement betweenthe Parties.

 

ARTICLE 4PRODUCTS AND CHANGES

 

Section 4.01           *Products. *When the JVapproves a Product Proposal Process (“***PPP***”) for aJV Product and notifies Supplier in writing of such approval, all componentsidentified within such PPP which fall within the Competency (as defined in theIP Agreement) of the Supplier or its Affiliates shall become Products underthis Agreement.  As soon as reasonablypracticable thereafter, the Parties shall agree on the specific Specifications,Delivery Points, lead times, Performance Tests and material packaging standardsand Product Price for each such Product, and shall amend Exhibits A through Daccordingly.

 

Section 4.02           *Change at Supplier’s Request. *Suppliermay at any time send an ECR to JV for issues such as, but not limited to,improvement of the Product, lead time reduction, process enhancements, securingthe Product availability, or increase of the production yield.  JV shall acknowledge all ECR requests in areasonable period of time, not exceeding [... . *** . . .] ([. . . *** . . .])[. . . *** . . .] after receiptof Supplier’s ECR by JV.  JV shall reportto Supplier the steps and the timeline when the assessment of the ECR can befinalized and decided, not to exceed [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] inany event. No fees shall be charged for ECR administration. If a Supplier ECRis accepted by JV, it will be finalized in an ECO.

 

Section 4.03           *Change at JV’s Request*.  JV may at any time request changes todrawings, plans, designs, procedures, specifications, test specifications, orbill of materials, methods of packaging, and shipping quantities of Products,delivery schedules, or any other matter. All changes, other than changes in quantity of Products shall berequested pursuant to an ECR.

 

*(a)  Supplier’s Response to JV ECRs*.  No fees shall be charged for ECRadministration.  Supplier shall respondto all ECRs in writing within [. . .*** . . .] ([. . . *** . . .])[. . . *** . . .] after an ECRis received by Supplier.  In caseSupplier cannot report within [. . .*** . . .] ([. . . *** . . .])[. . . *** . . .] due to acomplex ECR, Supplier will disclose the steps and the timeline when theassessment of the ECR can be finalized and quoted, not to exceed [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] in any event.  Supplier’s response to an ECR shall includeany proposed ECR Charge.  Supplier shallrespond in writing to an ECR by (i) rejecting the ECR; (ii) acceptingthe ECR with no ECR Charge;

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND240.24b-2(b)(1)**

 

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or (iii) accepting the ECR conditionedupon JV accepting an ECR Charge.  If anysuch change shall cause either an increase or a decrease in Supplier’s costs orthe time required for performance of any part of the work, the changes inSupplier’s costs shall be identified and the delivery schedules may be adjustedas indicated on Supplier’s response to an ECR; provided, however, that suchadjustments are approved by JV in writing prior to implementation.

 

*(b)  JV Acceptance of ECRs*.  If an ECR is accepted by Supplier with no ECRCharge, it shall be finalized by JV in writing in an ECO.  In the event JV desires to proceed with achange after receiving a report containing an ECR Charge, JV shall finalize theECR in writing in an ECO and the Price of the relevant Product will be adjustedpursuant to Section 6.01 to reflect the ECR Charge.  In the event JV does not desire to proceedwith any change after receiving a report containing an ECR charge, JV shallnotify Supplier.  In the event Supplierdoes not receive written confirmation from JV regarding any change withinthirty (30) days after Supplier delivers JV with the report containing an ECRCharge, the corresponding ECR shall be deemed cancelled.

 

Section 4.04           *Emergency Changes. *IfJV submits an emergency ECO clearly identified as such, Supplier shallimplement such ECO as soon as possible; provided, however, that Supplier hasadvised JV of and JV has approved in writing any cost or other impact of suchchange.

 

Section 4.05           *Impact on Part Numbers. *Incase of a change in form, fit or function of a Product, a new part number willbe issued.

 

Section 4.06           *Impact on Open Purchase Orders. *UnlessJV specifies otherwise in its written approval of changes pursuant to this Article 4,such changes shall not impact any units already scheduled for delivery as ofthe date of JV’s approval.

 

ARTICLE 5QUALITY AND INSPECTION

 

Section 5.01           *Specification Requirements. *Suppliershall manufacture the Products in accordance with the Specifications,except as modified by written ECOs.  TheSpecifications shall include, but are not limited to, workmanship, test,dimensional, and cosmetic quality. Supplier shall provide JV at each Quarterly BTR reports and analysis ofits yields and failure rates. The format and content of the quality reportswill be agreed between both Parties.

 

Section 5.02           *ISO 9000 Certification,Documentation and Inspection. *Supplier(and any Affiliates of Supplier providing Products or components of Products toSupplier for delivery to  a JV PurchasingEntity under this Agreement) shall be, at a minimum, ISO 9000 compliant as ofthe Effective Date and at all times during the term of this Agreement,including any Additional Terms or renewal terms.  Supplieracknowledges that it is essential for JV and its 

 

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Affiliates to be able to satisfy and complywith the requirements for ISO 9000 certification.  Supplier agrees to assist JV and perform allacts reasonably requested by JV in furtherance of JV’s or JV Affiliates’ ISO9000 certification including but not limited to the following:

 

(a)           If Supplier is or becomes ISO 9000 certified, Suppliershall (i) promptly upon request provide JV with a copy of Supplier’s ISO9000 certificate from its registrar (e.g., DNV or TUV) and a copy of Supplier’sQuality Manual; and (ii)  in the event JV determines there are qualityissues with the Products or any part thereof and upon reasonable notice duringSupplier’s normal business hours, allow JV to conduct specialaudits/inspections of Supplier’s facility as JV deems necessary to assessSupplier’s compliance with its Quality Manual; and

 

(b)           If Supplier is not ISO 9000 certified, but is or becomesISO 9000 compliant, Supplier shall (i) promptly upon request provide JVwith a copy of Supplier’s Quality Manual; (ii) allow JV to conductpre-award, post-award and annual audits of Supplier’s facilities as requiredunder ISO 9000; and (iii)  in the event JV determines there are qualityissues with the Products or any part thereof and upon reasonable notice duringSupplier’s normal business hours, allow JV to conduct specialaudits/inspections of Supplier’s facility as JV deems necessary to assessSupplier’s compliance with its Quality Manual.

 

Any such inspections/audits and any testingdone by JV in accordance with (a) and (b) above shall not relieveSupplier of liability for Products later found to be defective or for Supplier’sfailure to meet its obligations under this Agreement.  JV shall have the same rights with respect toany Affiliates of Supplier providing Products or components of Products toSupplier for delivery to a JV Purchasing Entity under this Agreement as JV haswith respect to Supplier under this Section 5.02; provided that JV willfirst request Supplier to conduct such audits of its Affiliates and report theresults thereof to JV, and JV will only conduct such audits directly withrespect to Affiliates of Supplier if, in JV’s reasonable opinion, Supplier hasfailed to satisfactorily perform such audits. If JV elects to conduct an audit of a Supplier’s Affiliate, it shallnotify Supplier of its election and keep Supplier reasonably informed of theprogress of any such audit.

 

Section 5.03           *Agency Approvals. *Suppliershall be responsible for obtaining all required agency and regulatory approvalsfor the Products as specified in the Specifications; provided, however, that JVshall provide Supplier with all information and assistance reasonably requestedby Supplier for the purpose of obtaining such approvals.

 

Section 5.04           *Quality Tracking. *JVmay, at its expense and option, track and evaluate the quality of the Productsreceived from the Supplier.  The qualityof the Products shall be reviewed at each Quarterly BTR.

 

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Section 5.05           *Serialization. *AllProducts shall be serialized by Supplier. The serial number affixed to each Product shall be traceable back to themanufacturing location, time, and lot.

 

ARTICLE 6PRICING

 

Section 6.01           *Cost Model And Prices.*

* *

(a)           *General Pricing Model*.  Except as otherwise provided in this Article 6,the Price for each Product shall be determined by the Parties in accordancewith this Article 6 and the specific provisions of Schedule 6.01.

** **

(b)           *Tax or LegalRequirements*.  The Partiesbelieve that the Prices determined as provided in this Article 6 willrepresent fair compensation for the Products and reflect the amount the JVPurchasing Entity would pay and the Supplier would receive in an arms-lengthtransaction between unrelated persons. If either Party believes in good faith that applicable tax or other lawsor regulations require that the Prices be higher or lower than those otherwisedetermined under this Article 6, the Parties will discuss suchrequirements and make such adjustments to the Prices charged in the futureunder this Agreement as may be required by such applicable tax or other laws orregulations.  If (i) the pricescharged by the Other Supplier for its products are increased under theprovisions of the Other Supply Agreement with JV that are comparable to this Section 6.01(b) or(ii) the prices charged by the Other Supplier under an AdministrativeServices Agreement, Facilities Agreement or R&D Services Agreement (asthose terms are defined in the JV Agreement) are increased to include a highermargin than that called for by the terms of those agreements in order to meetthe requirements of applicable tax or other laws or regulation, then theParties will discuss making adjustments to the Prices charged in the future underthis Agreement so that the Supplier is treated equitably in relation to theOther Supplier and its Affiliates.  EachParty may conduct or have conducted such transfer pricing studies as itbelieves necessary or prudent to verify that the Prices comply with applicabletax or other laws or regulations, and shall provide a copy of any such transferpricing study to the other Party upon request.

 

(c)           *Process for Outsourcing toLower Cost Suppliers*.  Fromtime to time, beginning [. . . *** . ...] ([. . . *** . . .]) [. . . *** . . .] the [. . . *** . . .], JV may approachSupplier with an indication that it has reasonable grounds to believe that acertain Non-Core Component could be obtained from a third party supplier at thesame quality and performance level at a price that is [. . . *** . . .]% [. ... *** . . .] Supplier’s forecasted or applicable COGS (as defined in Schedule 6.01)for such Non-Core Component.  On thebasis of such indication, Supplier shall obtain quotes for such Non-CoreComponent from third party suppliers. Supplier and JV shall then discuss the quotes so obtained and considerthe feasibility of outsourcing the supply of the applicable Non-Core Componentto a third party supplier.  If a pricequote so obtained from a third party supplier is [. . . *** . . .]% [. ... *** . . .] Supplier’s

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1) **

 

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applicable COGS used in determining the pricefor such Non-Core Component, Supplier shall, at its option, (i) outsourcethe production of such Non-Core Component to such third party supplier, butremain the immediate and exclusive supplier to the JV for such Non-CoreComponent, (ii) continue to produce such Non-Core Component but reduce theapplicable price to the JV so that the COGS used in determining the price matchthe price quoted by the third party supplier, or (iii) permit JV tooutsource supply of such Non-Core Component to a third party supplier, in whichcase Supplier will cease to be the exclusive supplier for such Non-CoreComponent, the price of the Products will be reduced by the COGS of suchNon-Core Component used in determining such Price, and Supplier shall provideJV, [. . . *** . . .], with allrelevant design drawings and performance specifications to enable suchoutsourcing and JV shall be entitled to exercise the license under Section 14.03of this Agreement.  For the avoidance ofdoubt, this Section 6.01(c) shall apply to Non-Core Components ofStages supplied by IMT and any other Non-Core Components supplied by Supplier’sAffiliates.

 

Section 6.02           *Currency. *All Pricesof Products will be in Supplier’s functional currency.

 

Section 6.03           *Taxes.*

* *

(a)           All applicable taxes, including, but not limited to, salestaxes, use taxes, value-added taxes, transaction privilege taxes, grossreceipts taxes, and other charges, such as duties, customs, tariffs, imposts,and government imposed surcharges, and such taxes and/or other charges shall bestated separately on Supplier’s invoice to each JV Purchasing Entity.  Supplier shall remit all such charges to theappropriate tax authority on such JV Purchasing Entity’s behalf, unless such JVPurchasing Entity provides sufficient proof of tax exemption.

 

(b)           In the event that a JV Purchasing Entity is prohibited bylaw from making payments to Supplier unless such JV Purchasing Entity deductsor withholds taxes therefrom and remits such taxes to the local taxingjurisdiction, then JV Purchasing Entity shall duly withhold such taxes, shallpay to Supplier the remaining net amount after the taxes have been withheld,and shall make available to Supplier any statements or receipts for suchpayments that may be necessary for Supplier to claim a credit or refund forsuch withheld taxes.  Such JV PurchasingEntity shall not be required to reimburse Supplier for the amount of such taxeswithheld.  When property is deliveredand/or services are provided, or the benefit of services occurs withinjurisdictions in which Supplier’s collection and remittance of taxes isrequired by law, Supplier shall have sole responsibility for payment of saidtaxes to the appropriate tax authorities. In the event Supplier does not collect tax from a JV Purchasing Entity,and is subsequently audited by any tax authority, liability of such JVPurchasing Entity will be limited to the tax assessment, with no reimbursementfor penalty or interest charges.  EachParty is responsible for its own respective income taxes or

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND240.24b-2(b)(1)**

 

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taxes based upon gross revenues, including,but not limited to, business and occupation taxes.

 

Section 6.04           *Audit Rights*.  At any time during the term of this Agreementthat Supplier (directly or through an Affiliate) is no longer a Member, JVshall have the right, upon reasonable notice, to have inspected and examined byan independent third party auditing firm selected by JV, Supplier’s and itsAffiliates’ financial and business records relating to Expenses, to ensurecompliance with the pricing terms of this Agreement.  The auditor, at its option, may requestSupplier to make Supplier’s Affiliates’ financial and business recordsavailable for inspection and examination by the auditor or may audit suchAffiliates’ financial and business records directly with such Affiliates, orboth, provided that the auditor will advise Supplier in advance if it elects toconduct an audit of the Affiliates’ financial and business records directlywith such Affiliates and shall keep Supplier reasonably informed of theprogress of any such audit.  Such auditmay be conducted no more frequently than once in any year and shall beconducted at JV’s expense, unless such audit reveals that the amount paid byall JV Purchasing Entities for the period covered by such audit exceeded by [. . . *** . . .] than [. . . *** . . .] percent ([. . . *** . . .]%) the amount thatsuch JV Purchasing Entity should have been required to pay under this Agreementfor such period, in which event Supplier shall bear the costs of suchaudit.   The auditor may be required bySupplier to execute a confidentiality agreement with Supplier, and shall onlyreport to JV the amount and period of any overpayment or underpayment, theaffected Product(s) and a breakdown of the overpayment or underpayment by typesof Expenses (as defined in Schedule 6.01).

 

ARTICLE 7PLANNING, ORDERS, AND ADJUSTMENTS

 

Section 7.01           *Planning. *(a)  Aslong as Supplier (directly or through an Affiliate) is a Member of JV, thevolume and product mix scenarios contained in the Business Plan of the JV (asin effect from time to time) shall serve as non-binding indications for theParties.

 

(b)           If Supplier is no longer (directly or through anAffiliate) a Member of JV, in every calendar month during the remaining term ofthis Agreement, JV shall provide Supplier with a demand forecast covering theperiod of [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] beginning with the [. . . *** . . .] in which suchforecast is provided.  Such forecastshall specify the number of units of the Products that all JV PurchasingEntities anticipate purchasing during the [. . . *** . . .] ([. ... *** . . .]) [. . . *** . . .]period.  Such forecast shall benon-binding and shall not be regarded by Supplier as JV’s or JV PurchasingEntities’ commitment to purchase, or by JV or JV Purchasing Entities asSupplier’s commitment to produce and deliver, the quantity of Products.

 

Section 7.02           *Purchase Orders. *AnyJV Purchasing Entity may order Products by issuing Purchase Orders to Supplierin writing or by electronic means.  If anyof the terms of this Agreement conflict with any term of an issued

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND240.24b-2(b)(1)**

 

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Purchase Order, this Agreement shall takeprecedence. To be effective, all Purchase Orders must comply with the leadtimes for each Product listed on Exhibit B, and contain thefollowing terms:

 

(a)           description of the Products to be purchased, by partnumber;

 

(b)           quantity of the Products to be purchased;

 

(c)           delivery date or shipping schedule;

 

(d)           the location to which the Products are to be shipped;

 

(e)           transportation instructions; and

 

(f)            price.

 

Each PurchaseOrder shall provide an order number for billing purposes and may include otherinstructions and terms as may be appropriate under the circumstances as agreedby the Supplier and JV Purchasing Entity.

 

Section 7.03           *Acceptance of Purchase Orders.*Provided that JV PurchasingEntity complies with the lead time requirements for a Product listed on Exhibit Band except as otherwise provided in Section 13.02, Supplier shallaccept all Purchase Orders otherwise complying with this Article 7.  Supplier shall be bound to (and Supplier shallensure that any of its Affiliates supplying Products or components of Products)meet the requested delivery dates in such Purchase Orders for any quantity ofProducts that is within the quantity of Product specified in (a) if theSupplier is (directly or through an Affiliate) a Member of JV, the then currentBusiness Plan (including the upside quantity specified in the Business Plan) or(b) if the Supplier is no longer (directly or through an Affiliate) aMember of JV, the most current Business Plan (including the upside quantityspecified in the Business Plan) in effect at the time Supplier (directly orthrough an Affiliate) ceased to be a Member of JV  (“**Forecasted Quantity**”),and shall use commercially reasonable efforts to meet the requested deliverydates in such Purchase Orders to the extent that such Purchase Orders are for aquantity that exceeds the Forecasted Quantity. If Supplier fails to deliver to a JV Purchasing Entity a notice ofrejection of a Purchase Order within [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] ofreceipt of such Purchase Order, the Purchase Order shall be deemedaccepted.  In the event that Supplier isaware of any circumstances that will prevent it from complying with thedelivery date or shipping schedule, or finds the schedule unacceptable forsome other reason, the Supplier and JV Purchasing Entity agree to negotiate ingood faith to resolve the disputed matter.

 

Section 7.04           *Rescheduling of Purchase Orders. *With respect to each existing Purchase Order, the applicableJV Purchasing Entity shall have the right to reschedule the delivery ofProducts under such Purchase Order [... . *** . . .] time, at any

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND240.24b-2(b)(1)**

 

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time prior to shipment, without charge, fordelivery within [. . . *** . . .] ofthe originally scheduled delivery date.

 

Section 7.05           *Inventory Planning. *Suppliershall take all steps necessary to fulfill the Product and delivery requirementsof each Purchase Order.

 

Section 7.06           *Cancellation of Purchase Orders*.  A JV Purchasing Entity may cancel anyPurchase Orders, in whole or in part, on [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] noticeto Supplier; provided, however, that the JV Purchasing Entity shall reimburseSupplier for costs in accordance with this Section 7.06.  Notwithstanding the foregoing, both Supplier(and its Affiliates) and JV Purchasing Entity shall undertake all reasonablemeasures to mitigate the costs associated with the cancellation of a PurchaseOrder, and Supplier (and its Affiliates) shall make all reasonable efforts toreturn to suppliers all excess and obsolete material immediately upon receiptof any cancellation.  In the event that aJV Purchasing Entity cancels a Purchase Order, Supplier shall submit a reportwithin [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] of suchcancellation that details the costs associated with such cancellation.  In the event that Supplier is unable tomitigate certain costs associated with a cancellation, the JV Purchasing Entityshall reimburse Supplier for the costs associated with such cancellation;provided, however, that the JV Purchasing Entity shall only be required toreimburse Supplier for costs incurred by Supplier in accordance with actualmaterial requirements planning practices for raw material, tooling costs, andwork in progress and finished goods that cannot be used or reused in otherProducts under this Agreement or in products for other customers within [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] of the scheduleddelivery date under the cancelled Purchase Order.

 

ARTICLE 8INVENTORY PLANNING

 

Section 8.01           *Procurement of Materials. *JVPurchasing Entities shall not be parties to purchase transactions for ProcuredMaterials and Supplier shall be solely responsible for all payments for theProcured Materials.  Supplier shallmanage its inventory of Procured Materials in a manner that shall ensure thatSupplier can fill JV Purchasing Entities’ Purchase Orders according to theagreed upon lead times and flexibility terms and obtain competitive prices forsuch materials and components.

 

Section 8.02           *Quarterly BTR.  *Ateach Quarterly BTR, (a) Supplier shall present manufacturing capacityanalysis at the plant(s) that produces the Products (including any suchplant(s) of Supplier’s Affiliates), which should include, but is not limitedto, staffing, facilities, equipment dedicated to producing the Products,Supplier’s business growth that may impact Supplier’s ability to meet JV’sdemand; provided, however, that Supplier shall not be required to disclose anyinformation that is covered by any confidentiality agreement between Supplierand Supplier’s other customers, and (b) JV shall present its forecasts andexpected industry outlook.

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND240.24b-2(b)(1)**

 

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ARTICLE 9DELIVERY; CARRIER; TITLE; RISK OF LOSS; AND ACCEPTANCE

 

Section 9.01           *Delivery. *Suppliershall deliver or have delivered the total number of units of a Product orderedin a particular accepted Purchase Order to the Delivery Point no more than [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] nor [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] of the datespecified in such Purchase Order. Deliveries shall be FCA (Incoterms 2000) Delivery Point.  Risk of loss shall pass to JV PurchasingEntity upon delivery.

 

Section 9.02           *Packaging and Shipping. *Suppliershall mark, pack, package, crate, transport, ship, and store the Products toensure delivery of the Products to their ultimate destination in a safecondition and in compliance with all requirements of the carrier anddestination authorities and all special instructions from a JV PurchasingEntity.  Supplier shall use a PreferredCarrier or its own shipping services for delivery; provided, however, that if aJV Purchasing Entity does not designate a Preferred Carrier, Supplier mayselect a common carrier at its discretion.

 

Section 9.03           *Failure to Meet Delivery Date. *Inaddition, and without prejudice to any other rights or remedies available to JVor a JV Purchasing Entity under law or otherwise:

 

(a)           If a delivery is or shall be late by [. . . *** . . .] or [. . . *** . . .], provided latedelivery was not caused by affirmative acts of a JV Purchasing Entity, Suppliershall use its best efforts to expedite delivery and pay the incremental cost ofsuch accelerated delivery of the order to the JV Purchasing Entity and anypenalties or late fees which the JV Purchasing Entity is contractually requiredto pay to its customer as a result of such late delivery, *provided*such penalties or late fees shall have been disclosed to and accepted bySupplier.

 

(b)           If Supplier delivers Products [. . . *** . . .] than [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] ofthe required delivery date, the JV Purchasing Entity shall retain such Productsand postpone payment until it is due per the original delivery date and theterms hereof.

 

Section 9.04           *Product Inspection andAcceptance. *A JV PurchasingEntity may inspect Products delivered under this Agreement for deficiencies inworkmanship or material either at the Delivery Point and/or at itsdestination.  Prior to initiatingdelivery, Supplier shall conduct, or after delivery the JV Purchasing Entitymay conduct, a Performance Test, which shall demonstrate that the Products arein compliance with the Specifications. In the event that a Product fails a Performance Test performed bySupplier, Supplier shall cure such defect prior to initiating delivery.  If a Product delivered by or on behalf ofSupplier fails a Performance Test conducted by the JV Purchasing Entity or isotherwise found to be defective by a JV Purchasing Entity, the JV PurchasingEntity shall issue a notice of Product defect to Supplier (the “**Product Defect**

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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**Notice**”).  The JV Purchasing Entity may requireSupplier, at Supplier’s option, to repair or replace such defective or non-conformingProducts in accordance with and subject to the warranty provisions set forth inArticle 11.  Products shall bedeemed accepted by the JV Purchasing Entity upon delivery; however, acceptanceshall not affect any rights of the JV Purchasing Entity under the warrantyprovisions set forth in Article 11.

 

Section 9.05           *Packaging and Printed Materials. *All packaging and labeling shall comply with JV PurchasingEntity’s requirements, which shall be provided in Exhibit D foreach Product.  Supplier is not allowed toput a Supplier label on the Products and shipping crates for module and systemsunless stated in writing by JV.

 

ARTICLE 10PAYMENTS

 

Section 10.01         *Payment for Products. *TheJV Purchasing Entity shall pay Supplier for quantities of Product delivered tosuch JV Purchasing Entity (a) as long as Supplier or any of its Affiliatesis a Member of JV, [. . . *** . . .] the[. . . *** . . .] that such JVPurchasing Entity [. . . *** . . .] forthe [. . . *** . . .] in whichthe [. . . *** . . .] or (b) ifSupplier is [. . . *** . . .] (whether[. . . *** . . .]) a [. . . *** . . .], [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .].  Supplier shall have the right to place JVPurchasing Entity’s shipments on hold if the JV Purchasing Entity becomes [. . . *** . . .] than [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] delinquent, and, ifsuch delinquencies are not resolved within [. . . *** . . .], Supplier, in Supplier’s sole discretion, maystop obtaining the Procured Materials and manufacturing of Products.  JV Purchasing Entity’s payment of Supplier’sinvoice shall not constitute final acceptance of the Product and is subject toadjustments for errors, shortages and defects. Both Parties agree to work diligently to resolve any discrepanciesinvolving invoices.

 

ARTICLE 11WARRANTIES

 

Section 11.01         *Product Warranty. *Supplierrepresents and warrants to JV that each Product shall be free from defects inworkmanship and materials and conform to the Specifications from the date onwhich the Product is delivered until [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] fromthe date on which the JV Purchasing Entity’s product warranty to its customerfor the JV Product becomes effective, but in no event will the warranty periodcontinue beyond [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] from the date ofdelivery to the JV Purchasing Entity (the “**ProductWarranty**”).

 

Section 11.02         *Warranty Exclusions. *Thewarranty in Section 11.01. does not apply to:

 

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(a)           a Product that has been abused, damaged, altered ormisused by any person or entity after title passes to a JV Purchasing Entity;

 

(b)           any materials consigned or supplied by a JV PurchasingEntity or at a JV Purchasing Entity’s request to Supplier; and

 

(c)           any modification of the Products by a JV Purchasing Entityor its customer without approval by Supplier in writing, which approval shallnot unreasonably be delayed or conditioned.

 

Section 11.03         *Repair Under Product Warranty. *Suppliershall, at Supplier’s option and expense, repair or replace any Products founddefective and covered by the Product Warranty. Supplier shall bear warranty costs such as JV’s labor, Supplier’s labor,material, inspection and shipping to and from the Product user, including allcosts associated with Product installation.

 

Section 11.04         *Discovery of Defect By JV Purchasing Entity. * Upon the discovery of a defective Productwithin the warranty period, the JV Purchasing Entity shall issue to Supplier aSCAR.  Supplier shall promptly respond tothe SCAR with the appropriate corrective action or failure analysis.

 

Section 11.05         *Notice of Non-Compliance. *IfSupplier discovers or suspects that any Product (whether or not it has at thetime become part of an assembly with a JV Product) fails to comply with anyapplicable consumer product or electrical safety rule or contains a defectthat could create a substantial product or electrical hazard, Supplier shallnotify JV immediately and supply JV with information concerning the nature andextent of the defect involved and the nature and severity of injuries orpotential injuries related to the particular Product.  Supplier shall notify JV immediately of anyclaim made or proceeding commenced against it arising out of its activitiesunder this Agreement.

 

Section 11.06         *Supplier’s Representations and Warranties*.  Supplier represents and warrants that it hasobtained the rights from its Affiliates, including IMT, to fully perform underthis Agreement, including but not limited to obtaining from IMT the right forJV to conduct audits in accordance with Section 6.04.(2)

 

Section 11.07         *Limitation of Warranty.*

* *

(a)           All claims for breach of the Product Warranty must bereceived by Supplier no later than [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] afterthe expiration of the warranty period.

 

(b)           THE WARRANTIES IN THIS SECTION ARE THE ONLYWARRANTIES GIVEN BY SUPPLIER.  SUPPLIERMAKES, AND JV

 

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(2) References toIMT not necessary in Cymer Supply Agreement.

 

*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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RECEIVES, NO OTHER WARRANTY EITHER EXPRESS ORIMPLIED.  ALL WARRANTIES OFMERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE ARE EXPRESSLYDISCLAIMED AND EXCLUDED.

 

Section 11.08         *No Waiver. *A JVPurchasing Entity’s approval or acceptance of any Products that do not meet theSpecifications shall not relieve Supplier of its warranty obligations under thisSection 11.

 

ARTICLE 12INTEGRATION AND SUPPORT SERVICES

 

Section 12.01  *Integration and**Support Services for Products*.  As soon as reasonably practicable after theSpecifications for a Product have been agreed upon by the Parties, but in anyevent no later than two calendar quarters before the expected initial firstcommercial shipment of such Product by Supplier to JV, JV and Supplier willmutually agree upon the integration and support services to be provided bySupplier with respect to such Product, which will be included in the Price ofsuch Product.  A description of suchintegration and support services will be attached to this Agreement as Exhibit E.

 

Section 12.02.  *Additional**Integration and SupportServices for JV Products*.  TheParties may mutually agree that Supplier will provide integration and supportservices with respect to Products in addition to the integration and supportservices to be included in the Price of the Products under Section 12.01,or the Parties may mutually agree that Supplier will provide integration andsupports services to the JV with respect to JV Products.  Any such agreement for additional integrationand support services will be set forth in a separate support services agreementbetween the Parties.

 

ARTICLE 13INTELLECTUAL PROPERTY INDEMNITY AND INJUNCTIONS

 

Section 13.01         *Indemnity. *NotwithstandingSection 16.13, entitled Limitation of Liability, if notified promptly inwriting of any action brought against a JV Purchasing Entity or its customersbased on a claim that a Product provided hereunder or any of its parts directlyinfringes the Intellectual Property Rights of a third party, Supplier willdefend such action at its expense and will pay the cost and damages awarded inany such action, provided that, the JV Purchasing Entity (and any indemnifiedcustomer) grants Supplier sole control of the defense and settlement of suchaction and at Supplier’s request and expense provides Supplier with allassistance and information reasonably required for the defense and settlementof such action.

 

Section 13.02         *Injunctions; Claims*.

 

(a) In the event that aninjunction (whether temporary, preliminary or final) is obtained against a JVPurchasing Entity’s or a JV Purchasing Entity’s

 

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customer’s sale, offer for sale, importationor use of a Product or any of its parts, or against Supplier’s making, sale,offer for sale, importation or use of a Product or any of its parts by reasonof infringement of any third party’s Intellectual Property Rights, the JVPurchasing Entity or Supplier becoming aware of such injunction shall promptlyso notify the other (“**Injunction Notification**”).In the event that, in a JV Purchasing Entity’s reasonable opinion, a Productprovided hereunder or any of its parts becomes or is likely to become thesubject of a claim that it directly or contributorily infringes theIntellectual Property Rights of a third party, the JV Purchasing Entity shallpromptly so notify Supplier in writing ( “**JV IP Notification**”).  In the event that, in Supplier’s reasonableopinion, a Product provided hereunder or any of its parts becomes or is likelyto become the subject of a claim that it directly  or contributorily infringes the IntellectualProperty Rights of a third party, Supplier shall promptly so notify JV inwriting (a “**Supplier IP Notification**”).

 

(b)  In the event of anInjunction Notification or a JV IP Notification Supplier must, and inthe event of Supplier IP Notification Supplier may, at its option andexpense, either (i) procure for any affected JV Purchasing Entity and itscustomers the right to continue selling, offering for sale, using and importingthe affected Product or (ii) replace or modify same so that it becomesnon-infringing, free of any third party Intellectual Property Rights, butsubstantially equivalent in function to such Product.  If in the case of any InjunctionNotification, JV IP Notification, or Supplier IP Notification, options (i) and(ii) above cannot be accomplished by Supplier despite Supplier’scommercially reasonable efforts and expense, then Supplier may, upon notice toJV and each affected JV Purchasing Entity:

 

(x) reject future purchase orders and cancelany previously accepted but not yet fulfilled purchase orders for the affectedProducts, and

 

(y) offer to accept the return, for a fullrefund of the purchase price, of any affected Products previously deliveredunder this Agreement and not yet sold or otherwise transferred by any JVPurchasing Entity to a customer; and, in the event of such offer, Suppliershall be relieved of any obligation to indemnify the JV Purchasing Entitypursuant to Section 13.01 above to the extent of any and all amountsattributable to the making, use, sale, offer for sale, importation,duplication, distribution or other exploitation, by the Purchasing JV Entity,occurring after the date of such notice, of any such Product for which Supplierhas offered to accept return. For the avoidance of doubt, nothing in this Section 13.02(b) shallrelieve Supplier of its obligation to indemnify any JV Purchasing Entity andits customers for the making, use, sale, offer for sale, importation,duplication, distribution or other exploitation of such Product sold orotherwise transferred by any JV Purchasing Entity to a customer prior to thedate of such notice.

 

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Section 13.03         *Required Request from Member*.  No JV Purchasing Entity shall have any rightsagainst Supplier, and Supplier shall have no liability to a JV PurchasingEntity, under this Article 13 unless one Member of JV requests in writingthat Supplier comply with its obligations thereunder.

 

Section 13.04         *Exclusions*.  Suppliershall have no liability under this Article 13 in relation to anyinfringement or alleged or potential infringement (a) of IntellectualProperty Rights of any Member of the JV that is not an Affiliate of Supplier orof any Affiliates of such Member, (b) resulting from the combination ofSupplier’s Products with products supplied by other entities that are notAffiliates of Supplier, including without limitation the Member of the JV thatis not an Affiliate of Supplier, or (c) based on the practice of anymethods by JV Purchasing Entities or their customers.  Supplier’s obligations to indemnify acustomer of a JV Purchasing Entity under this Article 13 shall be limitedin scope and amount to the obligation of the JV Purchasing Entity to indemnifysuch customer.

 

Section 13.05         *Sole Remedy*.  Theprovisions of this Article 13 set forth Supplier’s sole and exclusiveobligations, and JV Purchasing Entity’s sole and exclusive remedies, withrespect to infringement of Intellectual Property Rights of any kind.

 

ARTICLE 14INTELLECTUAL PROPERTY

 

Section 14.01         *Intellectual Property Generally*.  As between the Parties, Supplier (or itsAffiliates) shall retain all Intellectual Property Rights in the Products,provided that nothing in this Agreement, will supersede or limit the terms ofthe Intellectual Property Agreement or any licenses granted therein.

 

Section 14.02         *Non-Assertion of Method Patents*.  Supplier, on behalf of itself and itsAffiliates, covenants that it and its Affiliates will not at any time sue anyJV Purchasing Entity or users of Products purchased by any JV Purchasing Entityunder this Agreement for infringement of any patents owned or controlled bySupplier or its Affiliates for the use of the Product, or the practice of anyprocess or method performed by such Product in the course of use of theProduct, in the manufacture of flat panel displays.

 

Section 14.03         *License in the Event of Outsourcing*.  Without limiting any licenses granted underthe Intellectual Property Agreement, if and to the extent that JV is entitledto outsource the supply of Non-Core Components after following the processrequired by Section 6.01(c) (“**Outsourced Non-CoreComponents**”), Supplier, on behalf of itself and its Affiliates,hereby grants JV and its Affiliates a worldwide, non-exclusive,non-transferable (except as permitted under this Agreement), sublicensable,irrevocable, [. . . *** . . .],during the term of this Agreement, under any Intellectual Property Rights ownedor controlled by Supplier or its Affiliates in the design drawings orperformance

 

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specifications for Outsourced Non-CoreComponents and in any Patents contained in Foreground Technology and DisclosedKnow-How (as defined in the IP Agreement) relating to such Outsourced Non-CoreComponents, to have made, use and import, sell and offer for sale, lease andotherwise transfer any Outsourced Non-Core Components. For the avoidance ofdoubt, JV shall be entitled to exercise the foregoing license only if and tothe extent that it is entitled to outsource the supply of such Non-Core Componentsafter following the process required by Section 6.01(c).

 

Section 14.04         *Software License*.  Notwithstanding anything in this Agreement tothe contrary, to the extent that any Product includes or comprises computerprograms or other computer software (collectively “**Software**”), such Software will be delivered to the JVPurchasing Entity subject to, and JV Purchasing Entity shall distribute suchSoftware only accompanied by a copy of, Supplier’s then current end userlicense agreement applicable to such Software (“**EULA**”).  The EULA may beeither a written agreement signed by the end user or in such form and with suchacceptance notices and procedures as Supplier may reasonably specify from timeto time during the term of this Agreement. The JV Purchasing Entity will distribute the Software solely withProducts and solely for use in conjunction with Products (and not on a “stand-alone”basis).  For the avoidance of doubt,neither Software nor any copy of Software is sold to any JV Purchasing Entity.

 

ARTICLE 15EVENT OF DEFAULT; TERMINATION

 

Section 15.01         *Event of Default. *Thefollowing shall constitute an “**Event ofDefault**”:  A material breachby either Party or any of its Affiliates of its obligations under thisAgreement that is not remedied within [... . *** . . .] ([. . . *** . ...]) [. . . *** . . .] afternotice by the other Party describing the specific breach and invoking this Section 15.01.  For avoidance of doubt, an Event of Defaultshall not constitute grounds for terminating this Agreement except as providedin Section 15.02.

 

Section 15.02         *Termination. *Inaddition to the termination of this Agreement upon expiration of its term inaccordance with Article 2, without limiting any other rights or remedies,either Party may, at its election, terminate this Agreement upon [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] notice to the otherParty:

 

(a)           if neither the Supplier nor any of its Affiliates is aMember of JV, and an Event of Default by the other Party or its Affiliates hasoccurred and is continuing;

 

(b)           upon the commencement by or against the other Party of anycase or proceeding under any bankruptcy, reorganization, insolvency ormoratorium law, or any other law or laws for the relief of debtors, or theappointment of any receiver, trustee or assignee to take possession of the

 

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properties of the other Party, unless suchpetition or appointment is set aside or withdrawn or ceases to be in effectwithin thirty (30) days from the date of said commencement or appointment; or

 

(c)           upon dissolution of JV, provided that Supplier shall not beentitled to terminate under this paragraph (c) if there has been aContinuation Event prior to such dissolution.

 

Section 15.03         *Survival of Provisions. *Notwithstandinganything herein to the contrary, the provisions of Articles 1 (Definitions), 11(Warranties), 13 (Intellectual Property Indemnity and Injunctions), 14(Intellectual Property), and 16 (Miscellaneous) and Sections 15.03 (SurvivalProvisions) and 15.04 (Acts of the Parties Upon Termination) shall survivetermination or expiration of this Agreement.

 

Section 15.04         *Acts of the Parties Upon Termination. *Upon termination for cause:

 

(a)           Supplier, at JV’s election, shall continue working onoutstanding Purchase Orders and protect all property in which a JV PurchasingEntity has or may acquire an interest; and such JV Purchasing Entity shallcompensate Supplier for all Products delivered and accepted by such JVPurchasing Entity under the terms of the Purchase Orders; and

 

(b)           Each Party shall return to the other, freight collect, allmaterials that contain the other’s Confidential Information (as defined in theConfidentiality Agreement among the Parties executed contemporaneously withthis Agreement), or if the other Party gives written instructions to do so,destroy all such materials and provide the other Party a written certificate ofdestruction within thirty (30) days after such destruction.

 

ARTICLE 16MISCELLANEOUS

 

Section 16.01         *Notices. *All notices,requests and other communications to any Party shall be in writing (includingfacsimile or similar writing) and shall be given,(3)

 

if to the JV, to:

 

TCZ GMBH

[address]Attention: Chief Executive Officer

 

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(3) Note todraft: addresses for notices to be completed at time of execution of agreement.

 

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Facsimile No: [                  ]Telephone No.: [                        ]

 

with a copy to:

 

[                  ]Attention: [                ]Facsimile No: [                  ]Telephone No.: [                        ]

 

if to Supplier, to:[                  ]Attention: [                ]Facsimile No: [                  ]Telephone No.: [                        ]

 

with a copy to:

 

[                  ]Attention: [                ]Facsimile No: [                  ]Telephone No.: [                        ]

 

Section 16.02         *Amendments; No Waivers.*

* *

(a)           Any provision of this Agreement may be amended or waivedif, and only if, such amendment or waiver is in writing and signed, in the caseof an amendment, by each Party, or in the case of a waiver, by the Partyagainst whom the waiver is to be effective.

 

(b)           No failure or delay by any Party in exercising any right,power or privilege hereunder shall operate as a waiver thereof nor shall any singleor partial exercise thereof preclude any other or further exercise thereof orthe exercise of any other right, power or privilege.  The rights and remedies herein provided shallbe cumulative and not exclusive of any rights or remedies provided by law.

 

Section 16.03         *Expenses. *Except as otherwise provided herein, allcosts and expenses incurred by the Parties hereto in connection with thisAgreement shall be paid by the Party incurring such cost or expense.

 

Section 16.04         *Assignment. *ThisAgreement may not be assigned or otherwise transferred by the Supplier, exceptto a Permitted Transferee or a transferee permissible under Section 11.04(c) ofthe JV Agreement who in each case is assigned Supplier’s entire Interest in theJV (or Supplier’s Affiliate’s entire 

 

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Interest in the JV in the event Supplier’sAffiliate holds an Interest).  ThisAgreement may not be assigned or otherwise transferred by the JV, except: (i) toan Affiliate; or (ii) to a Continuing Party or to an entity acquiring allor substantially all of the assets of the JV following a ContinuationEvent.  Terms used in this Section 16.04not defined in this Agreement are defined in the JV Agreement.

 

Section 16.05         *Headings. *Headingsare for ease of reference only and shall not form a part of this Agreement.

 

Section 16.06         *Entire Agreement. *This Agreement together, with the Exhibits hereto, and anydocuments referred to herein or therein, constitutes the entire agreement ofthe Parties with respect to the subject matter hereof.  Any references in this Agreement toprovisions in the Exhibits to this Agreement are intended for clarification only,and in the event of any inconsistency, the provisions of this Agreement shallgovern.

 

Section 16.07         *Governing Law. *ThisAgreement shall be governed by, and construed under, the laws of [. . . *** . . .] (without regard toconflicts of laws principles).

 

Section 16.08         *WAIVER OF JURY TRIAL. *EACHOF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BYJURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THETRANSACTIONS CONTEMPLATED HEREBY.

* *

Section 16.09         *Dispute Resolution; Arbitration. *(a) Any dispute, controversy or claim arising out of orin connection with this Agreement or the alleged breach, termination orinvalidity thereof, may be escalated, at the request of either Party, to theChairman of the Board (or equivalent officer) of each Party forresolution.  In the event of such arequest, the Chairmen shall meet, either in person or by telephone, within [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] after the date ofsuch request in order to discuss and attempt to resolve such dispute,controversy or claim by mutual agreement.

 

(b)  Any dispute,controversy or claim arising out of or in connection with this Agreement or thealleged breach, termination or invalidity thereof that is not settled by thedispute resolution process set forth in Section 16.09(a) or otherwiseby the joint agreement of the Parties shall be finally settled under Rules ofArbitration of the International Chamber of Commerce by three arbitratorsappointed in accordance with the said Rules. Unless otherwise agreed by the Parties, such arbitration shall takeplace in [. . . *** . . .].  Any award rendered by the arbitratorswill be final and binding on the parties, and judgment upon the award may beentered in the [. . . *** . . .],or any other court having jurisdiction over the award or having jurisdictionover the Parties or their assets.  Thearbitration

 

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agreement contained in this Section 16.09will not be construed to deprive any court of its jurisdiction to grantprovisional relief (including by injunction or order of attachment) in aid ofarbitration proceedings or enforcement of an award.

 

Section 16.10         *Independent Contractors. *Therelationship of the Parties established by this Agreement is that ofindependent contractors, and nothing contained in this Agreement shall beconstrued or implied to give any Party the power to direct or control theday-to-day activities of any other Party, nor shall any Party have the right orauthority to assume, create or incur any third party liability or obligation ofany kind, express or implied, against or in the name of or on behalf of anotherParty except as expressly set forth in this Agreement.

 

Section 16.11         *Severability.  *If anyterm, provision, covenant or restriction of this Agreement is held by a courtof competent jurisdiction or other authority to be invalid, void orunenforceable, the remainder of the terms, provisions, covenants andrestrictions of this Agreement shall remain in full force and effect and shallin no way be affected, impaired or invalidated so long as the economic or legalsubstance of the transactions contemplated hereby is not affected in any mannermaterially adverse to any party.  Uponsuch a determination, the Parties shall negotiate in good faith to modify thisAgreement so as to effect the original intent of the Parties as closely aspossible in an acceptable manner in order that the transactions contemplatedhereby be consummated as originally contemplated to the fullest extentpossible.

 

Section 16.12         *Counterparts; Effectiveness. *ThisAgreement may be signed in any number of counterparts, each of which shall bedeemed an original.  This Agreement shallbecome effective only after and subject to each Party having received acounterpart hereof signed by each of the other Parties.

 

Section 16.13         *Limitation of Liability.*

* *

(a)           EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT NEITHERPARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, PUNITIVE,EXEMPLARY, OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON CONTRACT, TORT, OR ANYOTHER LEGAL THEORY, INCLUDING WITHOUT LIMITATION LOST PROFITS AND OPPORTUNITYDAMAGE TO ASSOCIATED EQUIPMENT, COST OF CAPITAL, FACILITIES, SERVICE, ORREPLACEMENT POWER, DOWNTIME COSTS, OR CLAIMS OF EITHER PARTY’S CUSTOMERS FORSUCH DAMAGES, WHETHER OR NOT EITHER PARTY WAS ADVISED OF THE POSSIBILITY OFSUCH DAMAGE.

 

(b)           EXCEPT WITH REGARD TO INTELLECTUAL PROPERTY INDEMNITYOBLIGATIONS, EACH PARTY’S TOTAL LIABILITY UNDER THIS AGREEMENT SHALL IN NOEVENT EXCEED THE AMOUNT OF THE GREATER OF [. . . *** . . .]

 

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(US$[... . *** . . .]) OR THE AGGREGATE AMOUNT PAID AND PAYABLE BY JV UNDERTHIS AGREEMENT DURING THE [. . . *** ... .] PRECEDING THE DATE ON WHICH SUCH LIABILITY AROSE; PROVIDED THATSUCH AGGREGATE AMOUNT SHALL NOT EXCEED [... . *** . . .] (US$[. . . *** ... .]).

 

Section 16.14         *Third Party Beneficiaries. *No provision of this Agreement isintended to confer upon any Person other than the Parties hereto any rights orremedies hereunder, unless expressly provided herein.

 

Section 16.15         *Guaranty. *Each Partyguarantees the full and timely performance of any and all of its Affiliates’obligations under this Agreement.

 

Section 16.16         *Force Majeure. *In theevent that either Party is prevented from performing or, is unable to perform,any of its obligations under this Agreement (other than a payment obligation)due to any Act of God, fire or other physical casualty, such as flood orearthquake, war, act of terrorism, civil disturbance, strike, lockout,epidemic, destruction of production facilities, riot, insurrection, or anyother cause (excluding unavailability of funds, other than in case of bankclosure) beyond the reasonable control of the Party invoking this section, andif such Party shall have used its commercially reasonable efforts to mitigateits effects, such party shall give prompt notice to the other Party, and thetime for the performance shall be extended for the period of delay or inabilityto perform directly resulting from such occurrences. Regardless of the excuseof *Force Majeure*, if such Party is not ableto perform within ninety (90) calendar days after such event, the other Partymay terminate this Agreement.

 

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IN WITNESSWHEREOF, the Parties hereto have caused this Agreement to be duly signed andeffective as of the Effective Date.

 
|   | Accepted and agreed to: |
|--------|-------------------------|
|   |                    |
|   | [SUPPLIER]              |
|   |                    |
|   | By:                     |   |   |
|   |                    |
|   | Name:                   |
|   |                    |
|   | Title:                  |
|   |                    |
|   | TCZ GMBH                |
|   |                    |
|   | By:                     |   |   |
|   |                    |
|   | Name:                   |
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**SCHEDULE 1**

 

**CORE COMPONENTS**

 

**1.****              Definitions**

** **

For purposes of this Schedule 1 thefollowing terms shall be used with the following meanings:

 

“Background Technology” shall have themeaning set forth in the IP Agreement.

 

 “BackgroundIP” shall mean any Intellectual Property Rights within BackgroundTechnology of the respective Party.

 

“[... . *** . . .]” means [. . .*** . . .] of Products that involve [. . . *** . . .], or that are not [. . . *** . . .] in a [... . *** . . .].

 

“[... . *** . . .]”****means [. . . *** . . .] based on [. . . *** . . .] for [. . . *** . . .] and [. . . *** . . .] a [. . . *** . . .] and [. . . *** . . .].

 

“[... . *** . . .]”****means [. . . *** . . .] for [. . . *** . . .], [. . . *** . . .], [. . . *** . . .] ([. . . *** . . .]), [. . . *** . . .] (which means [. . . *** . . .] to a [. . . *** . . .] with a [. . . *** . . .] and [. . . *** . . .]) and [. . . *** . . .] a [. . . *** . . .] and [. . . *** . . .].

 

“[... . *** . . .]” means [. . .*** . . .] for [. . . *** . ...] , including without limitation, [. . . *** . . .], [. ... *** . . .], [. . . *** . . .],[. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .] by a [. . . *** . . .] to provide a [. . . *** . . .] and [. . . *** . . .] at a [. . . *** . . .], but not including [. . . *** . . .] and [. . . *** . . .].

 

“[. . . *** . . .]” means [. . . *** . . .] for [. . . *** . . .], but not including [. . . *** . . .] .

 

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**2.****              Core Components ofCymer means**

** **

•                  [. . . *** . . .] of Products, for which [. . . *** . . .];

•                  [. . . *** . . .] ([... . *** . . .]) for [. . . *** . . .];

•                  [. . . *** . . .]

•                  [. . . *** . . .] for [. . . *** . . .];

•                  [. . . *** . . .], including [. . . *** . . .];

•                  [. . . *** . . .], including [. . . *** . . .];and

•                  [. . . *** . . .], including [. . . *** . . .].

 

**3.****              CoreComponents of Carl Zeiss Laser Optics means**

** **

•                  [. . . *** . . .] of Products, for which [. . . *** . . .];

•                  [. . . *** . . .] and [. . . *** . . .] ([. . . *** . . .]), including (i) [. . . *** . . .], (ii) [. . . *** . . .],and (iii) [. . . *** . ...], but excluding [. . . *** . . .];

•                  [. . . *** . . .]; and

•                  [. . . *** . . .] ([... . *** . . .], [. . . *** . . .] and [. . . *** . . .])[. . . *** . . .] and [. . . *** . . .].

 

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*******                ****CONFIDENTIAL TREATMENTREQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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SCHEDULE 6.01

 

**PRICING**

 

Introduction.  It is the intention of the parties todetermine the price per unit for each Product intended for use in [. . . *** . . .] JV Products (the “**Price**”) on the basis of the [. . . *** . . .] for all Products for the [. . . *** . . .] for the [. . . *** . . .] of such Product [. . . *** . . .] during the [. . . *** . . .] of such [. . . *** . . .] according to the [. . . *** . . .] and otherprovisions in this Schedule 6.01 and Article 6 of the Agreement.

 

1.             JV Product Generations.  For purposes of this Agreement, a “**Generation**” of JV Products shall include [. . . *** . . .] used in themanufacture of flat panel displays, as determined by [. . . *** . . .] (e.g. “[... . *** . . .]”, “[. . . *** ... .]”, “[. . . *** . . .]”.....),including any [. . . *** . . .] or[. . . *** . . .] designatedwith the [. . . *** . . .] (e.g.“[. . . *** . . .]” – if any –would be treated [. . . *** . . .] “Generation”as “[. . . *** . . .]”).  Notwithstanding the foregoing, if Supplierproduces, in accordance with JV’s requirements, [. . . *** . . .] or [... . *** . . .] of Products for the [. . . *** . . .], these Product types shall be treated [. . . *** . . .], and Prices shallbe determined [. . . *** . . .].

 

2.             Process forDetermining Price.

 

(a)  [. . . *** . . .]  of Price.  A [... . *** . . .] of the Price per unit for Products for [. . . *** . . .] shall be [. . . *** . . .] and [. . . *** . . .] .

 

(b)  Transparency; R&D ExpenseBudget.  For purposes of determiningthe Price, Supplier shall provide JV with a written report setting forthexpected [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .], each determined inaccordance with the definitions in paragraph 4 below together with suchsupporting materials as JV may reasonably request (including materials from anyAffiliate of Supplier supplying Products or components relating to its [. . . *** . . .]) for the purpose ofunderstanding the basis on which such amounts were calculated by Supplier.  At the time that the Parties agree upon the [. . . *** . . .] of the Price,Supplier and JV shall agree upon the [... . *** . . .] (as defined in paragraph 4 below) that Supplier [. . . *** . . .] in connection withthe Product (“[. . . *** . . .]”).  Supplier shall thereafter promptly notify JVif Supplier’s [. . . *** . . .] orit [. . . *** . . .] the [. . . *** . . .]; and in such eventJV and Supplier will [. . . *** . . .]with respect to [. . . *** . ...] and whether the agreed [. ... *** . . .].

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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(c)  [. . . *** . . .] of Price. [. . . *** . . .] after the [. . . *** . . .] by the Parties, butin any event no later than [. . . ***.. . .] of the Products by Supplier to JV (“**FirstCustomer Ship**”),  JV andSupplier shall [. . . *** . . .] thePrice for such Products.  JV and Suppliershall [. . . *** . . .] Pricefor such Products (subject to any [. ... *** . . .] as provided in paragraph 6 and in Article 6 of theAgreement) [. . . *** . . .] theFirst Customer Ship, by [. . . *** . ...] to [. . . *** . . .] FirstCustomer Ship.

 

3.             [. . . *** . . .] Used forDetermining Price.  The Price shallbe determined on the basis of the [. ... *** . . .] by JV for the applicable [. . . *** . . .] (and the [. . . *** . . .]) (the “[... . *** . . .]”) as agreed by JV and Supplier, provided that if JV andSupplier are [. . . *** . . .] onthe [. . . *** . . .], the [. . . *** . . .] shall be determinedas follows:

 

(a)           IfSupplier or any Affiliate of Supplier is a Member of JV, then (i) eitherJV or Supplier may request the Board of Representatives to [. . . *** . . .], and the [. . . *** . . .], but (ii) ifthe Board of Representatives fails to [... . *** . . .] of such request, the [. . . *** . . .] shall be based on [. . . *** . . .] by the Board of Representatives.

 

(b)           Ifneither Supplier nor any Affiliate of Supplier is a Member of JV, then the [. . . *** . . .] shall be made by [. . . *** . . .] in its reasonablejudgment.

 

4.             Pricing Formulafor Products other than Spares.  ThePrice for Spares shall be determined as provided in paragraph 7 below.  Except as otherwise provided below or in Article 6of the Agreement, the Price for all Products (other than Spares) shall bedetermined such that the [. . . *** ... .] (“[. . . *** . . .]”)of the [. . . *** . . .] to theSupplier from the [. . . *** . . .] ofProducts for the applicable [. . . ***.. . .], [. . . *** . . .],over the [. . . *** . . .] ofthe applicable [. . . *** . . .] (asprojected in the [. . . *** . . .]),but in no event [. . . *** . . .] than[. . . *** . . .] from the dateof the [. . . *** . . .] bySupplier of such Product for [. . .*** . . .] of a JV Product (the “**Pricing Period**”),[. . . *** . . .] at a rate of [. . . *** . . .]% per [. . . *** . . .], (“[. . . *** . . .]”) shall be [. . . *** . . .], calculated asfollows on the basis of the following definitions:

 
|           | ** ** | **Pricing Period** | ** ** |
|----------------|------------|--------------------|------------|
|           |       | [... ***...]       |       | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   |
| [...  ***...]= |       | [... ***...]       |       | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   |
|           |       |               |       | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   |
|           |       |               |       | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   | [...  ***...] |   |

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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*If applicable

 

Where:

 

“[... . *** . . .] means [. . . ***.. . .] plus [. . . *** . . .] forthe applicable product year (“**Product Year**”),where [. . . *** . . .] is the [. . . *** . . .] commencing on [. . . *** . . .] for the applicableJV Product as specified in Section 4.01 of the Supply Agreement, providedthat the [. . . *** . . .] forthe [. . . *** . . .] ([. . . *** . . .]) Products shall bedeemed to have commenced as of [. . .*** . . .].

 

“[... . *** . . .]” **=**[. . . *** . . .]

 

“**Earnings Before Interestand Taxes**” for each Product Year means expected Net Sales minusExpenses.

 

“**Net Sales**”means the sum of the expected total net sales during the applicable ProductYear of (a) Products ([. . . ***.. . .], [. . . *** . . .]),by Supplier to JV at the Price, and (b) of Spares for such [. . . *** . . .] at the price forSpares specified in paragraph 7. below.

 

“**Expenses**”means, for each Product Year, the [. ... *** . . .] of

 

[. . . ***.. . .],

[. . . ***.. . .],

[. . . ***.. . .],

[. . . ***.. . .], and

[. . . ***.. . .],

 

each (i) based on Supplier’s [. . . *** . . .] as of the [. . . *** . . .] based on the [. . . *** . . .], (ii) computedusing US GAAP unless otherwise specified and (iii) reflecting Supplier’s [. . . *** . . .] of its [. . . *** . . .] based on the [. . . *** . . .], where:

 

“[... . *** . . .]” means the [. ... *** . . .] of the following [... . *** . . .] for the Products ([... . *** . . .]) [. . . *** . ...] to be delivered during the applicable Product Year: [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], and [. . . *** . . .] (including [. . . *** . . .]).  [. ... *** . . .] for Products (including [. . . *** . . .]) or components [. . . *** . . .] Supplier from [. . . *** . . .] Supplier shall be the [. . . *** . . .] of such [... . *** . . .], as defined above, [... . *** . . .] by the [. . .*** . . .] or Supplier.

 

“[... . *** . . .]” means an amount for [. . . *** . . .] to be furnished by Supplier under thisAgreement, such amount to be [. . .*** . . .] the Parties at the [... . *** . . .] and

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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[. . . ***.. . .] to be furnished by Supplier for such Product [. . . *** . . .] by the Parties.

 

“**Depreciation**” meansdepreciation recognized by Supplier during the applicable Product Year withrespect to [. . . *** . . .],or [. . . *** . . .] and [. . . *** . . .], the development ormanufacturing of the Product.

 

“[... . *** . . .]” means any [. ... *** . . .] and related expense with Products expected to be soldduring the applicable Product Year.

 

“[... . *** . . .]” means [. . .*** . . .] or [. . . *** . . .]by Supplier during the applicable Product Year in connection with the [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .] of the Products forthat [. . . *** . . .] on thebasis of the [. . . *** . . .] betweenSupplier and JV, provided that [. . .*** . . .] shall not [. . . ***.. . .] unless [. . . *** . . .]Supplier and JV.   JV will not [. . . *** . . .] in the [. . . *** . . .] for [. . . *** . . .] provided that Supplierhas [. . . *** . . .] JV ofsuch [. . . *** . . .].

 

“[... . *** . . .]” means an amount equal to [US$[. . . *** . . .]](4) per Product Year, provided that ifProducts for [. . . *** . . .] ofJV Product will be supplied by Supplier to JV during the applicable ProductYear, this sum shall be [. . . *** . ...] between such Products of [... . *** . . .] in accordance with [... . *** . . .] (based on [. . .*** . . .]).

 

**Changes in Working Capital**means[. . . *** . . .] of [. . . *** . . .] in [. . . *** . . .], [. . . *** . . .] and [. . . *** . . .] for the Products(including [. . . *** . . .])during such Product Year.

 

5.             JV [. . . *** . . .].  The provisions of this paragraph 5 shall onlyapply for Prices that are determined in accordance with paragraph 4 [. . . *** . . .], but shall notapply for Prices that are determined in accordance with paragraph 4 [. . . *** . . .].  If the Price determined in accordance with

 

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(4) €[. . .*** . . .] in the Zeiss Supply Agreement; US$[. . . *** . . .] in Cymer’s.

 

*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND240.24b-2(b)(1)**

** **

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paragraph 4, and the price determined in accordance with the [. . . *** . . .] of JV’s [. . . *** . . .] Agreement for the [. . . *** . . .] products of thesame [. . . *** . . .] as theProduct, would result in [. . . *** ... .] (the “**JV**[. . . *** ... .]”) on its business related to JV Products of the applicable [. . . *** . . .] (such JV [. . . *** . . .] to be determined inaccordance with the [. . . *** . . .] ofthe JV) that is [. . . *** . . .] thanthe amount provided in this paragraph 5 (“**JV**[. . . *** . . .] “), then JV,Supplier and the [. . . *** . . .] shall[. . . *** . . .] and [. . . *** . . .] for [. . . *** . . .] with a view to [. . . *** . . .] the JV [. . . *** . . .] at the JV [. . . *** . . .] or [. . . *** . . .].  If, after such [. . . *** . . .] have been [. . . *** . . .], the calculation still yields JV [. . . *** . . .] the JV [. . . *** . . .], the Price underthis Agreement and the price determined in accordance with the [. . . *** . . .] of the JV’s [. . . *** . . .] Agreement with the [. . . *** . . .] shall each be [. . . *** . . .] by [. . . *** . . .] used in calculatingthe Prices by the [. . . *** . . .] untilthe JV [. . . *** . . .] is [. . . *** . . .] the JV [. . . *** . . .] or the JV [. . . *** . . .], whichever occurs [. . . *** . . .].  The JV [... . *** . . .] for [. . . *** ... .] made during the [. . . ***.. . .] following the Effective Date shall be [. . . *** . . .] percent ([. . . *** . . .]%).  [. . . *** . . .] the [. . . *** . . .] of the EffectiveDate, the Parties will review the [. ... *** . . .] of JV and Supplier under this Agreement, and [. . . *** . . .] the JV [. . . *** . . .], as the Parties [. . . *** . . .] is [. . . *** . . .], to reflect the [. . . *** . . .] of  JV and Supplier.

 

6.             [. . . *** . . .] Price. Once thePrice has been established for Products for a given [. . . *** . . .] as provided in paragraphs 2, 3, 4 and 5, suchPrice shall [. . . *** . . .] thePrice for all Products purchased by JV for use in that [. . . *** . . .], [. ... *** . . .] in this paragraph 6 and in Section 6.01(b) and (c) ofthe Agreement, [. . . *** . . .],[. . . *** . . .], to be a [. . . *** . . .] or [. . . *** . . .] by JV is [. . . *** . . .] or [. . . *** . . .] the [. . . *** . . .] used in determiningthe Price or the [. . . *** . . .] or[. . . *** . . .] than that [. . . *** . . .] in determining thePrice.

 

(a)           [. . . *** . . .] If [. . . *** . . .] Was [. . . *** . . .] by [. . . *** . . .].  If the Price was established based upon an [. . . *** . . .] by [. . . *** . . .] pursuant toparagraph 3(b), then the Price determined in accordance with paragraphs 2, 3, 4and 5 above shall [. . . *** . . .] thePrice, [. . . *** . . .] inthis paragraph 6, only for [. . . ***.. . .], and the Price for the [... . *** . . .] shall be the [... . *** . . .] of (a) such Price and (b) an amount [. . . *** . . .] to [. . . *** . . .]%.

 

(b)           [. . . *** . . .]  for JV [... . *** . . .].  JV andSupplier shall, on a [. . . *** . . .]basis, [. . . *** . . .] forthe relevant JV Product as [. . . ***.. . .] used in determining the Price. If such [. . . *** . . .] forJV Products of the applicable [. . .*** . . .]

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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during such [. . . *** . . .] in[. . . *** . . .] of [. . . *** . . .]% of the [. . . *** . . .] price used incomputing the JV [. . . *** . . .] inparagraph 5, then Supplier shall [. ... *** . . .] JV with [. . . ***.. . .] in an [. . . *** . . .] of(a) the [. . . *** . . .] byJV on such JV Product [. . . *** . ...] (b) the Price for the relevant Product supplied by Supplierduring such [. . . *** . . .].

 

(c)           [. . . *** . . .] Efficiencies.  Within [... . *** . . .] ([. . . *** . ...]) days after the [. . . *** ... .] of each calendar year, or [... . *** . . .], Supplier shall [... . *** . . .], and [. . . ***.. . .], together with [. . .*** . . .] ([. . . *** . . .])for the purpose of [. . . *** . . .].  Supplier agrees to [. . . *** . . .] ([. ... *** . . .]%) of any [. . .*** . . .], by [. . . *** . ...] as provided in this paragraph. If [. . . *** . . .], [. . . *** . . .], than the [. . . *** . . .] in calculating thePrice under paragraphs 2, 3, 4 and 5, then the Price for [. . . *** . . .] of the Product(i.e. sales made [. . . *** . . .] calendaryear) shall be [. . . *** . . .] by[. . . *** . . .] withparagraph 4. above, [. . . *** . . .]%of the [. . . *** . . .] betweenthe [. . . *** . . .]; *provided*, *that*, if [. . . *** . . .], the [. . . *** . . .], [. . . *** . . .], [. . . *** . . .].

 

(d)           Adjustmentsfor ECR Charges.  If an ECR Charge isaccepted by JV in accordance with Section 4.03(b) of the Agreement,the Price for the relevant Product shall be adjusted to reflect any increases inExpenses due to implementation of the relevant ECO, subject to a maximumadjustment of the ECR Charge.

 

7.             Pricing FormulaforSpares.  The price for allProducts purchased by JV as Spares shall be [. . . *** . . .] (as defined above) [. . . *** . . .]%.  Forpurposes of this Agreement, “***Spares***”shall mean [. . . *** . . .], [. . . *** . . .], [. . . *** . . .], and [. . . *** . . .], [. . . *** . . .] or [. . . *** . . .] (or [. . . *** . . .]) of the [. . . *** . . .] by JV to acustomer.

 

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*******                CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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**EXHIBIT A**

 

**PRODUCTS AND SPECIFICATIONS**

 

[to be attached in accordancewith Section 4.01]

 
| **Product** | ** ** | **Specification file  reference** | ** ** |
|-------------|------------|-----------------------------------|------------|
| ** **  | ** ** | ** **                        | ** ** |
| ** **  | ** ** | ** **                        | ** ** |
| ** **  | ** ** | ** **                        | ** ** |

 

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**EXHIBIT B**

 

[to be attached in accordancewith Section 4.01]

 

**DELIVERY POINTS**

 

**LEAD TIMES**

 

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**EXHIBIT C**

 

[to be attached in accordancewith Section 4.01]

 

**PERFORMANCE TEST**

 

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**EXHIBIT D**

 

[to be attached in accordancewith Section 4.01]

 

**MATERIAL PACKAGING STANDARDS**

 

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**EXHIBIT E**

 

[to be attached in accordancewith Section 12.01]

 

**INTEGRATION AND SUPPORT SERVICES**

 

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**EXHIBIT D**

 

**Form of Confidentiality Agreement**

 

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**CONFIDENTIALITY AGREEMENT**

 

ThisConfidentiality Agreement (this “**Agreement**”)dated as of [                 ],2005 (the “**Effective Date**”) by andamong Cymer, Inc., a Nevada corporation (“**Cymer**”), Carl Zeiss SMT AG a stock corporation organized underthe laws of Germany (“**SMT**”), CarlZeiss Industrielle Messtechnik GmbH, a limited liability company organizedunder the laws of Germany (“**IMT**”),  and TCZ GmbH, a limited liability companyorganized under the laws of the Canton of Zug, Switzerland (“**JV**”). Cymer, SMT, IMT and JV are each a “**Party**”and together constitute the “**Parties**”to this Agreement.

 

**RECITALS**

 

A.                                   Cymer, SMT and Carl Zeiss Laser OpticsBeteilungsgesellschaft mbH (have formed JV pursuant to a Joint VentureAgreement dated July 15, 2005 (the “**JV Agreement**”)to collaborate to develop, integrate, market, sell and support tools employinga beam generated by an excimer laser to induce crystallization for LowTemperature Poly-Silicon (LTPS) processing for the manufacture of flat paneldisplays, including LCDs, LCD-SOGs and OLEDs, to engage in related applicationdevelopment and to search for other business opportunities for process toolsfor the manufacture of flat panel displays as described in the JV Agreement(the “**Collaboration**”);

 

C.                                     IMT is an Affiliate of SMT, and as part ofthe Collaboration, IMT will be developing certain components to be supplied toJV by SMT or one of its Affiliates for use in JV’s products; and

 

D.                                    The Parties wish to protect confidential informationdisclosed by the Parties to each other in the course of the Collaboration or administrationof this Agreement, the JV Agreement and the Joint Venture Documents (as usedherein, collectively the “**JV Documents**”).

 

NOW, THEREFORE, in consideration of the foregoingrecitals and the mutual promises hereinafter set forth, the Parties each agreeas follows:

 

ARTICLE 1DEFINITIONS

 

Section 1.01                                *Definition of ConfidentialInformation.*

 

“**Confidential Information”**means any non-public, confidential or proprietary information relating to adisclosing Party or its products or business, whether or not technical innature, that (i) is clearly marked as “proprietary” or “confidential” orwith a similar legend by the disclosing Party at the time of disclosure, or (ii) ifdisclosed orally, is identified as confidential at the time of disclosure and reducedto a summary in writing, marked as proprietary or confidential, and provided tothe receiving Party within thirty (30) days of such oral disclosure.  Notwithstanding the foregoing, “**Confidential Information**” shall not includeinformation, technical data or know-how which: (i) is in the public domain at the time of disclosure or becomesavailable thereafter to the public without restriction, and in either case notas a result of

 

1.

 

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the act or omission of the receiving Party; (ii) is rightfullyobtained by the receiving Party from a third party without restriction as todisclosure; (iii) is lawfully in the possession of the receiving Party atthe time of disclosure by the disclosing Party and not otherwise subject torestriction on disclosure; (iv) is approved for disclosure by priorwritten authorization of the disclosing Party; or (v) is developedindependently and separately by the receiving Party without use of thedisclosing Party’s Confidential Information.

 

Section 1.02                                *Other Definitions.*  Except as otherwise defined herein,capitalized terms used herein shall have the same meanings attributed to themas in the JV Agreement.

 

ARTICLE 2PROTECTION OF CONFIDENTIAL INFORMATION

 

Section 2.01                                *Protection of ConfidentialInformation*.  For aperiod of five (5) years from disclosure to the receiving Party by thedisclosing Party or until Confidential Information ceases to be ConfidentialInformation pursuant to Section 1.01(b), whichever is earlier, in case ofnon-technical Confidential Information, or until Confidential Informationceases to be Confidential Information pursuant to Section 1.01(b) inthe case of technical Confidential Information,**andexcept as otherwise provided in this Agreement, the receiving Party and itsAffiliates shall, and shall each use its reasonable efforts to cause its respectiverepresentatives, officers, directors, employees, accountants, counsel,contractors, and financing parties (collectively, “**Agents**”)to, hold Confidential Information of the disclosing Party in confidence and onlyto disclose such Confidential Information to its Agents and Affiliates who havea need to know such Confidential Information in order to perform its duties andobligations or exercise its rights under the JV Documents and who are under aduty of confidentiality no less restrictive than the receiving Party’s dutyhereunder.  The receiving Party and itsAffiliates shall protect the disclosing Party’s Confidential Information fromunauthorized use, access, or disclosure in the same manner as the receivingParty protects its own confidential or proprietary information of a similarnature, but with no less than reasonable care, and will be responsible for anybreach of this Agreement by its Agents.

 

Section 2.02                                *Restricted Use.*  With respect to the Confidential Informationof each other Party, each Party and its Affiliates shall:

 

(a)                                  use theConfidential Information only for the purposes of the Collaboration and only asexpressly permitted by the JV Documents or as reasonably necessary to performits duties and obligations or exercise its rights under the JV Documents;

 

(b)                                 not make copiesof or store Confidential Information or any part thereof except as expresslypermitted by the JV Documents or as reasonably necessary to perform its dutiesand obligations or exercise its rights under the JV Documents;

 

(c)                                  reproduce andmaintain on any copies of any Confidential Information such proprietary legendsor notices (whether of disclosing Party or a third party) as are contained inor on the original or as the disclosing Party may otherwise reasonably request;and

 

2.

 

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(d)                                 not modify orprepare derivative works from, or decompile, disassemble or reverse engineerany Confidential Information except as expressly permitted by the JV Documents.

 

Section 2.03                                *Terms of Agreements. *Except as otherwise providedherein, no Party shall disclose the terms of the JV Documents to anyone otherthan its Affiliates and Agents under a duty of confidentiality.

 

Section 2.04                                *Permitted Disclosure. *Notwithstanding anything inthe foregoing to the contrary:

 

(a) The receiving Party and its Affiliatesshall be entitled to disclose Confidential Information of the disclosing Party andthe terms of the JV Documents to the extent that such disclosure is (i) reasonablynecessary for the receiving Party or its Affiliates to perform its duties andobligations or exercise its rights under the JV Documents; (ii) requiredby law or regulations, including without limitation as required in connectionwith any tax reporting or filing by such Party or by applicable securities lawsor the rules of any stock exchange on which securities of such Party aretraded or any other applicable regulatory rule or regulation orgovernmental agency directive; (iii) required by the order of a court orother judicial or administrative body, provided that the receiving Partynotifies the disclosing Party of such required disclosure promptly and inwriting and cooperates with the disclosing Party, at the disclosing Party’sreasonable request and expense, in any lawful action to contest or limit thescope of such required disclosure, or (iv) in connection with a proposedmerger, financing, or sale of such Party’s business (*provided*that any third party to whom such disclosure is made has signed aconfidentiality agreement prohibiting further disclosure of such informationand limiting use of such information solely to due diligence in connection withsuch proposed merger, financing or sale, and *providedfurther* that the exception in this item (iv) shall not apply totechnical Confidential Information).

 

(b) To the extent areceiving Party is required to report the financial results of the JV on aconsolidated basis with its own financial results, such Party may disclose non-technicalConfidential Information of and relating to the JV in the same manner and tothe same extent as it discloses similar information regarding its own business.

 

ARTICLE 3TERM AND TERMINATION.

 

Section 3.01                                *Term.* The term of this Agreement will commence as ofthe Effective Date and continue until terminated by mutual agreement of theParties.

 

Section 3.02                                *Effect of Termination. *Each Party’s obligationsunder this Agreement shall survive termination of this Agreement and shallcontinue in full force and effect in accordance with its terms with respect toall Confidential Information disclosed prior to termination of this Agreement.

 

3.

 

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ARTICLE 4MISCELLANEOUS

 

Section 4.01                          *Notices.*  All notices, requests and othercommunications to any Party or to the Parties hereto shall be in writing(including facsimile or similar writing) and shall be given in conformance withSection 12.01 of the JV Agreement.

 

Section 4.02                          *Governing Law; Jurisdiction;Waiver of Jury Trial; Dispute Resolution; Arbitration.*  This Agreement shall give effect to and shallconform with Sections 12.07, 12.08, 12.09, 12.10 of the JV Agreement and suchsections shall be incorporated by reference and applied to this Agreement *mutatis mutandis*.

 

Section 4.03                          *Entire Agreement.*  This Agreement, together with the other JV Documentsand the Exhibits hereto and thereto, and any documents referred to herein ortherein, constitutes the entire agreement of the Parties with respect to thesubject matter hereof. * [Note to draft: consider treatment of previousNDAs and information previously disclosed under them.**]***

 

Section 4.04                          *Severability.*  If any term, provision, covenant orrestriction of this Agreement is held by a court of competent jurisdiction orother authority to be invalid, void or unenforceable, the remainder of theterms, provisions, covenants and restrictions of this Agreement shall remain infull force and effect and shall in no way be affected, impaired or invalidatedso long as the economic or legal substance of the transactions contemplatedhereby is not affected in any manner materially adverse to any party.  Upon such a determination, the parties shallnegotiate in good faith to modify this Agreement so as to effect the originalintent of the parties as closely as possible in an acceptable manner in orderthat the transactions contemplated hereby be consummated as originallycontemplated to the fullest extent possible.

 

Section 4.05                          *Amendment and Waiver.*

 

(a)                            Any provision of thisAgreement may be amended or waived if, and only if, such amendment or waiver isin writing and signed, in the case of an amendment, by each Party, or in thecase of a waiver, by the Party against whom the waiver is to be effective.

 

(b)                           No failure or delay by anyParty in exercising any right, power or privilege hereunder shall operate as awaiver thereof nor shall any single or partial exercise thereof preclude anyother or further exercise thereof or the exercise of any other right, power orprivilege.  The rights and remediesherein provided shall be cumulative and not exclusive of any rights or remediesprovided by law.

 

Section 4.06                          *Headings.*  Headings are for ease of reference only andshall not form a part of this Agreement.

 

Section 4.07                          *Counterparts.*  This Agreement may be executed in any numberof counterparts, each of which shall be an original, but all of which togethershall constitute one instrument.

 

4.

 

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**IN WITNESS WHEREOF**, the parties hereto have executed this Confidentiality Agreement as ofthe date set forth in the first paragraph hereof.

 
|   | TCZ GMBH                                  |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   | By:                                       |   |   |
|   |                                      | Name: |   |
|   |                                      | Title: |   |
|   |                                      |   |   |
|   |                                      |   |   |
|   | CYMER, INC.                               |
|   |                                      |
|   |                                      |
|   | By:                                       |   |   |
|   |                                      | Name: |   |
|   |                                      | Title: |   |
|   |                                      |   |   |
|   |                                      |   |   |
|   | CARL ZEISS SMT AG                         |
|   |                                      |
|   |                                      |
|   | By:                                       |   |   |
|   |                                      | Name: |   |
|   |                                      | Title: |   |
|   |                                      |   |   |
|   | By:                                       |   |   |
|   |                                      | Name: |   |
|   |                                      | Title: |   |
|   |                                      |   |   |
|   |                                      |   |   |
|   | CARL ZEISS INDUSTRIELLE  MESSTECHNIK GMBH |
|   |                                      |
|   |                                      |
|   | By:                                       |   |   |
|   |                                      | Name: |   |
|   |                                      | Title: |   |
|   | By:                                       |   |   |
|   |                                      | Name: |   |
|   |                                      | Title: |   |
|        |                                           |  |  |  |  |  |  |  |  |  |

 

5.

 

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**EXHIBIT E**

 

**Description of Incremental Legaland Administrative Costs**

 

Costs of incorporation andcorporate maintenance in Switzerland

Costs of obtaining Swiss taxrulings

Costs of preparing Swiss taxfilings

Any fees and expenses paidto a Swiss-domiciled managing director

Costs of incorporation andcorporate maintenance of U.S. JV entity

Costs for transfer pricestudies by Cymer

 

in each case to the extent of the excess over coststhat would be incurred if the Company was organized as U.S. limited liabilitycompany

 

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**EXHIBIT F**

 

**SwissCorporate Legal Implementation Timetable**

 
| **Action**    | ** ** | **Time**                                                                        | ** ** | **Description**                                                                                                                                                                                                                                                  |
|---------------|------------|---------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
| Signing       |       | Date hereof                                                                     |       | Signing of the Joint  Venture Agreement and the IMT non-compete side letter agreement                                                                                                                                                                            |
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
|          |       | As soon as reasonably  practicable after signing of the Joint Venture Agreement |       | Parties to transfer CHF  12,000 (Cymer) and CHF 8,000 (Zeiss) to bank account for formation of GmbH                                                                                                                                                              |
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
|          |       | Selection of Trustees                                                           |       | Signing of Trust  Agreements                                                                                                                                                                                                                                     |
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
|          |       |                                                                            |       | Identification of  Address                                                                                                                                                                                                                                       |
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
| Incorporation |       | After receipt of funds  and selection of Trustees                               |       | Incorporation of GmbH  with funds referred to above; appointment of CEO and Swiss Trustees and  granting of signatory powers                                                                                                                                     |
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
| Registration  |       | Incorporation + five  business days                                             |       | GmbH to be entered into  commercial register                                                                                                                                                                                                                     |
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
| Closing       |       | Promptly after  Registration                                                    |       | Signing of Intellectual  Property Agreement, Supply Agreements, Contribution Agreement,  Confidentiality Agreement, IMT IP Side Letter, Administrative Services  Agreements, R&D Services Agreements, Trademark License Agreement and  Facilities Agreements |
|          |       |                                                                            |       |                                                                                                                                                                                                                                                             |
|          |       |                                                                            |       | Parties to make  contributions according to Joint Venture Agreement; Cymer makes contribution  of Cymer patents according to Contribution Agreement                                                                                                              |

 

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**EXHIBIT G**

 

**Articles of Association (English Version)**

 

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TRANSLATION

 

**ARTICLESOF INCORPORATION**

 

**of**

 

**TCZ GmbH**

 

**(TCZSàrl)**

 

**(TCZL.L.C.)**

 

# **I.**                                       CORPORATE NAME, PRINCIPAL OFFICE ANDPURPOSE OF THE COMPANY

 

Article 1

 

**CorporateName, Principal Office**

 

Underthe name TCZ GmbH (TCZ Sàrl) (TCZ L.L.C.) (the “**Company**”) there exists a limited liability company which issubject to these Articles of Incorporation and the provisions of Chapter 28 ofthe Swiss Code of Obligations (CO). The principal office of the Company is inZug, Canton of Zug. The duration of the Company shall be perpetual.

 

Article 2

 

**Purpose**

 

Thepurpose of the Company is to develop, integrate, market, sell and support toolsemploying a beam generated by an excimer laser to induce crystallization forLow Temperature Poly-Silicon (LTPS) processing for the manufacture of flatpanel displays, including LCDs, LCD SOGs and OLEDs, to engage in relatedapplication development based on such products, and to search for other businessopportunities for process tools for the manufacture of flat panel displays.

 

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TheCompany may open branch offices and subsidiaries in Switzerland and abroad. Itmay also acquire participations in other companies in Switzerland and abroad.

 

TheCompany may acquire, hold, use and sell real estate and intellectual propertyrights in Switzerland and abroad.

 

TheCompany may also engage in any commercial, financial or other activities whichare apt to favor the purpose of the Company or which are related to itspurpose.

 

**II.****                                   Capitaland Quotas**

 

Article 3

 

**Capitaland Quotas**

 

Thecapital of the Company is CHF 20,000.– (Swiss Francs twenty thousand). It is dividedinto two quotas with a nominal value of CHF 12,000.– (Swiss Francs twelvethousand) and CHF 8,000.– (Swiss Francs eight thousand).

 

Thecapital is fully paid-in.

 

Article 4

 

**AdditionalCapital Payments**

 

Anobligation to make additional capital payments by the members is strictlyexcluded.

 

Article 5

 

**Quota Register, List**

 

Aquota register shall be kept as to all quotas reflecting the names of themembers, the amount of the individual quota and the contribution made onaccount thereof, as well as every transfer of a quota and every other change ofthese facts.

 

At thebeginning of each calendar year, a list is to be filed with the CommercialRegister, signed by the Managers and including the names of the members, the

 

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quotasand the contributions made on account thereof or it has to be communicated thatsince the filing of the previous list, there had been no changes.

 

Article 6

 

**Transfer**

 

Theassignment of a quota shall only be effective vis-à-vis the Company if theCompany has been notified and the assignment has been entered in the quotaregister.

 

Theentry in the quota register may only be made with the consent of all membersrepresenting at the same time 100 % of the capital.

 

Inorder to be valid, the assignment of a quota as well as the obligation toassign, require recording in a notarized deed.

 

Thetransferor has to communicate in writing the transfer of a quota within 30 daysto the Company.

 

**III.****                               CorporateStructure**

 

Article 7

 

**Corporate Bodies**

 

The corporate bodies are:

 

a)                           theMeeting of the Members;

 

b)                          theManagers;

 

a)                                      TheMeeting of the Members

 

Article 8

 

**Powers ofthe Meeting of the Members**

 

TheMeeting of the Members is the supreme body of the Company. It shall, inparticular, supervise the Managers. It has the following non delegable powers:

 

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1.                                       toadopt and amend the Articles of Incorporation;

 

2.                                       toappoint and remove the Managers;

 

3.                                       toapprove the appointment of further management and representatives of theCompany by the Managers;

 

4.                                       toapprove the balance sheet and the income statement and to determine theallocation of profits;

 

5.                                       toapprove the assignment, division and reunion of quotas as well as to pass theresolution concerning the repayment of quotas;

 

6.                                       toissue any new quotas or admit any new members;

 

7.                                       todischarge the Managers;

 

8.                                       toassert claims for damages belonging to the Company against the corporate bodiesor members resulting from the incorporation or the management;

 

9.                                       totake any actions in respect of the dissolution or liquidation of the Company;

 

10.                                 tofile or acquiesce to the filing of a petition in respect of the Company underbankruptcy or insolvency laws, or the making of any assignment for the benefitof creditors;

 

11.                                 toacquiesce to any merger, consolidation, reorganization (including conversion)or other business combination involving the Company or any of its affiliates(other than of a wholly owned affiliate with or into another wholly ownedaffiliate) or any acquisition of the Company or any of its affiliates byanother entity by means of any transaction or series of related transactions;

 

12.                                 toacquiesce to any acquisition or disposition (in a single transaction or aseries of related transactions) of any assets, business or operations outsidethe ordinary course of business in an aggregate value of more thanUSD 100,000;

 

13.                                 toadopt and amend a Business Plan and a product development process;

 

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14.                                 toenter into or make any loans or advances to, guarantees for the benefit of, orinvestments by the Company, in excess of USD 100,000, other than trade creditin the ordinary course of business and investments in cash or cash equivalentsin accordance with an investment policy adopted by the Meeting of the Members;

 

15.                                 toenter into any agreement or commitment (or series of related agreements orcommitments) outside the ordinary course of business involving an aggregatevalue of more than USD 100,000 per year;

 

16.                                 toenter into any transaction with any member of the Company or affiliate of anymember of the Company;

 

17.                                 tolicense any of the Company’s intellectual property outside the ordinary courseof business or the commencing or settling of any litigation or claim involvingthe Company’s intellectual property;

 

18.                                 tocommence or settle any material litigation or claim;

 

19.                                 topass resolutions concerning all matters which are reserved to the authority ofthe Meeting of the Members by law or by the Articles of Incorporation or whichhave not been allocated to the Managers.

 

Article 9

 

**Calling,Ordinary and Extraordinary Meetings of the Members**

 

TheMeeting of the Members is called by the Managers. The Managers shall also calla Meeting of the Members if one or more members whose combined holdingsrepresent at least 10 percent of the capital so demand in writing specifyingthe items and the proposals to be submitted to the Meeting.

 

TheOrdinary Meeting of the Members shall be held each year within six months afterthe close of the fiscal year. Extraordinary Meetings of the Members shall becalled, whenever necessary.

 

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Article 10

 

**Form ofNotice**

 

Tocall ordinary or extraordinary Meetings of the Members written notices shall besent by ordinary mail or fax to the addresses of the members registered in thequota register.

 

Article 11

 

**NoticeDeadline, Documents, Non Properly Noticed Items**

 

Thenotice is effected at least 5 days before the date of the Meeting of the Members.The notice of a meeting shall state the place, date and hour, the items on theagenda and the proposals of those members who demanded that the Meeting of theMembers be called or that items be included in the agenda.

 

Noresolution shall be passed on items for which no proper notice has been given;this prohibition does not apply to proposals to call an Extraordinary Meetingof the Members. No prior notice is required for proposals concerning itemsincluded in the agenda and discussions that do not result in the adoption ofresolutions.

 

Article 12

 

**Meetingof All Members**

 

Allmembers may hold a Meeting of the Members without observing the formalitiesrequired for calling a meeting, unless objection is raised. At such a meeting,discussions may be held and resolutions passed on all matters within the scopeof the powers of the Meeting of the Members as long as all members are present.

 

Article 13

 

**Resolutionby Written Consent**

 

If nomember requests that a Meeting of the Members be held, the members may alsopass any resolutions within the powers of the Meeting of Members by written,circular resolution.

 

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Article 14

 

**Right toVote, Representation**

 

Thevoting right of each member is proportionate to the value of his quota, wherebyeach CHF 1’000.– (Swiss francs one thousand) entitle to one vote.

 

Themembers may be represented at the Meeting of the Members by any person who isso authorized by a written proxy. A proxy need not be a member.

 

Article 15

 

**Chairman,Resolutions**

 

TheMeeting of the Members shall designate the Chairman of the Meeting. TheChairman of the Meeting shall designate a Secretary who needs not be a member.

 

Unlessmandatory provisions of Swiss law provide otherwise, the approval of allmembers representing at the same time 100 % of the capital is required forthe adoption of resolutions or for elections.

 

Electionsand votes shall take place by a show of hands provided that neither theChairman nor one of the members requests a secret ballot.

 

Article 16

 

**Minutes**

 

Minutesof meetings recording the deliberations and containing the resolutions adopted andelections made shall be kept. The Minutes shall be signed by the Chairman andthe Secretary. In case of written, circular resolutions, the writings are filedinstead of minutes.

 

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**b)****                                      TheManagers**

 

Article 17

 

**Eligibility**

 

TheManagement shall consist of three persons who can be members or representativesof legal entities or business associations that are members or third persons.

 

Atleast one manager has to be a Swiss resident.

 

Article 18

 

**Term,Organization**

 

TheManagers are elected by the Meeting of the Members for a term of two years,beginning with the day of their election and ending on the day of the nextOrdinary Meeting of the Members. If a Manager is replaced during his term, hissuccessor shall continue in office until the end of his predecessor’s term.

 

TheManagers may be re-elected without limitation. They can be removed at any timeindependently from their term. They may resign at any time unless at an impropertime.

 

TheManagement determines its own organization.

 

Article 19

 

**Powers**

 

TheManagers shall be responsible for managing the following activities of theCompany, in accordance with the Company’s then current Business Plan as ineffect from time to time:

 

1.                                       salesand marketing;

 

2.                                       applicationdevelopment:

 

3.                                       supplymanagement;

 

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4.                                       serviceand support to the Company’s customers;

 

5.                                       systemsintegration;

 

6.                                       businessdevelopment and

 

7.                                       accounting,finance, and general and administrative functions.

 

Subjectto the approval of the Meeting of the Members, the Managers shall appointfurther management and representatives of the Company, grant the respectivesignatory powers and determine the kind of power of signature, to the extentthat they shall be entered to the Commercial Register.

 

Article 20

 

**Callingof Meeting, Resolutions, Minutes**

 

Meetingsof the Managers shall be called by a member of the Management whenever the needarises, at least once a year.

 

Theadoption of resolutions requires the approval of all Managers who are presentat the meeting. Resolutions may also be passed by written consent of allManagers to a proposal, unless a Manager requests oral deliberation.

 

Minutesof meetings recording the deliberations and containing the resolutions adoptedshall be kept. In case of written, circular resolutions, the writings are filedinstead of minutes.

 

**IV.****                              FiscalYear, Allocation of Profits**

 

Article 21

 

**FiscalYear, Balance Sheet and Income Statement**

 

Thefiscal year shall end on December 31of each year. The bookshave to be closed upon the end of a fiscal year.

 

Thebalance Sheet and the income Statement have to be prepared according to art.662 et seq. CO.

 

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Article 22

 

**Allocationof Annual Profits, Reserves**

 

Subjectto the legal provisions regarding distribution of profits, the profit as shownon the balance sheet shall be allocated firstly to the reserve fund. Theremainder is at the disposal of the Meeting of the Members at its discretionwithin the legal framework. In addition to the legal reserves, the Meeting ofthe Members may create supplemental reserves and decide on their purpose anduse. Each member shall be entitled to the Company’s profits and otherdistributions in proportion to the quota paid into by it.

 

**V.****                                  Dissolution,Liquidation**

 

Article 23

 

**Dissolution,Liquidation**

 

TheMeeting of the Members may at any time resolve the dissolution and liquidationof the Company in accordance with the provisions of the law and of the Articlesof Incorporation.

 

Theliquidation shall be carried out by the Managers to the extent that the Meetingof the Members has not entrusted the same to other persons. At least one of theliquidators has to be Swiss resident and must be entitled to represent theCompany. The liquidators are entitled to call the Meeting of the Members.

 

Theliquidation of the Company shall take place in accordance with Art. 742 et seq.CO. The liquidators are authorized to dispose of the assets (including realestate) by way of private contract.

 

Afterall debts have been satisfied, the net proceeds shall be distributed among themembers in proportion to the amounts paid-in.

 

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**VI.****                             ****Notices, Publications**

 

Article 24

 

**Notices,Publications**

 

Membercommunications of the Company shall be sent by registered mail to the addressesof the members registered in the quota register.

 

Allpublications of the Company shall be made in the Swiss Official Gazette ofCommerce.

 

 

[Place,Date]

 

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**EXHIBIT H**

 

**Form of Swiss Trust Agreement**

 

----

 

**TrustAgreement**

 

between

 

Cymer, Inc., • OR Carl Zeiss, •

 

(hereinafter “Appointing Member”)

 

and

 

•

(hereinafter “Trustee”)

 

WHEREAS Cymer and CarlZeiss (the “Two Members”) are quota holders of TCZ GmbH (hereinafter “Company”).The [. . . *** . . .] will [. . . *** . . .] appoint [. . . *** . . .] of the management (*Geschäftsführer*) to act as [. . . *** . . .] Geschäftsführer of the Company together withthe CEO. The [. . . *** . . .] will[. . . *** . . .] instruct [. . . *** . . .] members of themanagement [. . . *** . . .] appointedby them.

 

NOW, therefore, theparties agree as follows:

 

1.                                       TheAppointing Member hereby appoints the Trustee to be a member of the managementof the Company (*Geschäftsführer*),in his capacity as an individual, and not as representative, employee, member,shareholder or partner of a corporate entity or partnership.

 

TheTrustee agrees to serve [. . . *** . ...] as manager of the Company, with [. . . *** . . .] signatory power.

 

2.                                       TheTrustee shall only act on [. . . *** ... .] instructions from the [. ... *** . . .].

 

Incarrying out the instructions of the [... . *** . . .], the Trustee shall comply with the rules imposed bylaw and the Articles of Incorporation of the Company, and the Trustee shallinform the [. . . *** . . .] ifthe instructions given violate such rules.

 

3.                                       Ifthe [. . . *** . . .] are notable to, or if they fail to, timely issue instructions, or if the interest ofthe Company requires immediate action and the Trustee is not able to obtaininstructions, then the Trustee shall to the best of his knowledge act in theinterest of the Company and in accordance with Article 2, Paragraph 2 ofthis Agreement.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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4.                                       TheAppointing Member shall inform the Trustee on the business activities of theCompany on a [. . . *** . . .] basisand at any time on the Trustee’s request and immediately in case ofextraordinary events.

 

5.                                       Duringthe term of this Agreement and following its termination, the Appointing Membershall neither directly nor indirectly assert any claims against the Trusteeincluding, but not limited to, claims for Directors’ liability; provided,however, that the Appointing Member may assert claims for intentional misconductor gross negligence. The Appointing Member hereby waives any claims as againstthe Trustee and releases the Trustee from any responsibility arising out of orin connection with the Trustee’s actions or omissions in the management of theCompany made in accordance with the [... . *** . . .] instructions or otherwise in accordance with this Agreement.

 

7.                                       Duringthe term of this Agreement and following its termination, the Appointing Membershall, on Trustee’s first demand, release and hold the Trustee harmless (i) fromall liabilities of whatever nature incurred by the Trustee in the course of thedue performance of this Agreement or pursuant to provisions of law and (ii) fromall claims, including, but not limited to claims for Directors’ liabilityasserted against the Trustee out of, or in connection with, this Agreement orthe Trustee’s office as manager of the Company; provided, however, that theAppointing Member is not bound to release and hold the Trustee harmless in caseof the Trustee’s intentional misconduct or gross negligence.

 

The AppointingMember shall assist the Trustee in all legal proceedings and shall on Trustee’sfirst request take over such proceedings to the extent permitted by applicableprocedural rules.

 

8.                                       Inview of the statutory provisions on Swiss withholding tax and the responsibilityof the management related thereto, the Appointing Member shall, at any time onTrustee’s first demand, make available to the Company in Switzerland liquidassets or appropriate security in an amount equal to the applicable withholdingtax on the Company’s reported and accrued earnings in the current businessyear.

 

9.                                       Forhis services as manager, the Trustee shall receive [. . . *** . . .] fee of CHF               plus reimbursement of all social charges and expenses levied or incurred inconnection therewith.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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Thefee covers the Trustee’s work and time in connection with the preparation andattendance of management and other meetings in Switzerland. The AppointingMember shall be responsible for due payment of fees and reimbursements.

 

10.                                 TheAppointing Member may at any time terminate this Agreement or have the Trusteeremoved from the management by the Members’ meeting. If the Appointing Memberterminates this Agreement, the Trustee must resign from the management.

 

TheTrustee may at any time resign from the management and have his registration inthe Commercial Register canceled.

 

TheAppointing Member shall cause the Company to decide on the Trustee’s dischargeat the next ordinary Member’ meeting following the termination of the Trustee’soffice as member of the management, at the latest within [. . . *** . . .] ([. . . *** . . .]) [. . . *** . . .] following the termof the relevant fiscal year.

 

11.                                 ThisAgreement is governed by Swiss substantive law.

 

Alldisputes arising out of or in connection with this Agreement shall be resolved,to the exclusion of the ordinary courts, by a sole arbitrator in accordancewith the International Arbitration Rules of the [. . . *** . . .] Chamber of Commerce. The seat of the arbitraltribunal is [. . . *** . . .].

 

               ,               [Place, Date]

 

 
| The Appointing  Member: |   | The Trustee: |
|-------------------------|--------|--------------|
|                    |   |         |
|                    |   |         |
|                    |   |         |   |
|                    |   |         |
|                    |   |         |
|                    |   |         |   |
|                         |        |              |  |  |

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

H-3

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**EXHIBIT I**

 

**Form of IMT IP Side Letter**

 

----

 

Cymer, Inc.

17075 Thornmint Court

San Diego, CA 92127-1712

USA

 

Carl Zeiss SMT AG

Carl-Zeiss-Strasse 22

73447 Oberkochen, Germany

 

TCZ GmbH

 

July    , 2005

 

Re:                        **TCZ GmbH — Intellectual PropertyAgreement**

 

Ladies and Gentlemen:

 

This is to acknowledge our mutual understanding withrespect to certain matters set forth in the Intellectual Property Agreementdated as of the date hereof  (the “**Intellectual Property Agreement”**) among TCZ GmbH, a limitedliability company organized under the laws of Switzerland (the “**JV**”), Carl Zeiss SMT AG, a stock corporation organized underthe laws of Germany (“**Zeiss SMT**”) andCymer, Inc., a Nevada corporation (“**Cymer**”).  Unless otherwise defined herein, capitalizedterms used herein shall have the meanings assigned to them in the IntellectualProperty Agreement.

 

Whereas Cymer and Zeiss Laser OpticsBeteiligungsgesellschaft mbH, a limited liability company organized under thelaws of Germany (**“Zeiss LOB”**), have formed JV todevelop, integrate, market, sell and support tools employing a beam generatedby an excimer laser to induce crystallization for Low Temperature Poly-Silicon(LTPS) processing for the manufacture of flat panel displays, including LCDs,LCD SOGs and OLEDs, to engage in related application development and anyproducts, if any, within the scope of a Business Plan approved by JV (the “**Collaboration”**).

 

WhereasCarl Zeiss Laser Optics GmbH, a limited liability company organized under thelaws of Germany (the “**Supplier**”),will, pursuant to the Supply Agreement dated as of the date hereof (the “**Supply Agreement**”) between JV and Supplier, supply certainproducts to JV and its Affiliates for incorporation into JV’s Products and,pursuant to Section 3.01 thereof, will use Carl Zeiss IMT GmbH, a limitedliability company organized under laws of

 

I-1

----

 

Germany (**“****IMT”**), as its exclusive supplier of CoreComponents for Stages (each as defined in the Supply Agreement unless otherwiseagreed in writing by JV), and as a result thereof IMT will participate in theCollaboration.

 

WhereasJV, Zeiss SMT and Cymer are entering into the Intellectual Property Agreementin order to set forth the intellectual property rights in the intellectualproperty created in connection with the joint venture and the Collaborationdescribed above , including intellectual property that may be created by IMT.

 

NOW,THEREFORE, for good and valuable consideration receipt of which is herebyacknowledged, we hereby agree as follows:

 

(1)             All right, titleand interest in and to Foreground Technology made, conceived or reduced topractice by IMT or any Person under the control of IMT or in and to DisclosedKnow-How disclosed by IMT or any Person under the control of IMT shall be ownedby Zeiss SMT and is hereby assigned by IMT to Zeiss SMT. “**Foreground Technology**” means Patents and Know-How relating toProducts that are made, conceived or reduced to practice in the course ofperformance of the Collaboration by a Party or any of its Affiliates, includingwithout limitation IMT or any Person under the control of IMT.  Foreground Technology does not includeBackground Technology.  “**Disclosed Know-How**” means Know-How of one Party or itsAffiliates, including without limitation IMT or any Person under the control ofIMT, that is disclosed to another Party or its Affiliates in the course ofperformance of the Collaboration.

 

(2)             IMT acknowledges that, pursuant to the IntellectualProperty Agreement, SMT shall be obligated to grant certain licenses and otherrights to JV, Cymer and their respective Affiliates and hereby agrees andconsents to the granting of such licenses and other rights and the performanceby SMT of all such obligations insofar as they relate to the ForegroundTechnology or Disclosed Know-How described in paragraph (1).  The foregoing sentence shall not preventZeiss SMT from granting to IMT or any Person under the control of IMT licenseswith respect to Foreground Technology and Disclosed Know-How owned by SMTpursuant to the Intellectual Property Agreement for use, subject in allrespects to any exclusive licenses granted by SMT pursuant to Article 4 of the Intellectual Property Agreement.

 

(3)             IMT agrees to execute and deliver such additionalassignments and other documents and instruments as may be reasonably requestedby JV, Cymer or SMT from time to time in order to confirm or implement SMT’s ownership of Foreground Technology andDisclosed Know-How and the licenses and rights contemplated by this letteragreement.

 

I-2

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ThisAgreement shall be governed by and construed in accordance with the laws of [. . . *** . . .] (without regard toconflicts of laws principles).

 

Wehereby irrevocably waive any and all right to trial by jury in any legal proceedingarising out of or related to this Agreement or the matters contemplatedhereby.  Any dispute, controversy orclaim arising out of or in connection with this Agreement or the allegedbreach, termination or invalidity thereof shall be settled by the disputeresolution process set forth in Section 7.12 of the Intellectual Property Agreement orotherwise by the joint agreement of the parties hereto, or else shall befinally settled under Rules of Arbitration of the International Chamber ofCommerce in accordance with Section 7.12 of the Intellectual Property Agreement.

 

* * * * *

 

----

*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

I-3

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**INWITNESS WHEREOF**, the parties hereto have executed thisAgreement as of the date set forth above.

 
|   | Carl Zeiss Industrielle Messtechnik GmbH |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |   |
|   | By:                                      |
|   | Name:                                    |
|   | Title:                                   |
|   |                                     |
|   |                                     |   |
|   | By:                                      |
|   | Name:                                    |
|   | Title:                                   |
|   |                                     |

 
| CONFIRMED AND AGREED  TO: |
|---------------------------|
|                      |
| Cymer, Inc.          |
|                      |
|                      |   |
| By:                       |
| Name:                     |
| Title:                    |
|                      |
|                      |
| Carl Zeiss SMT AG         |
|                      |
|                      |   |
| By:                       |
| Name:                     |
| Title:                    |

 
|   | Joined by TCZ GmbH as the JV as                                                                            |
|--------|------------------------------------------------------------------------------------------------------------|
|   | of                 ,  2005 |
|   |                                                                                                       |
|   | **TCZ GMHB**                                                                                               |
|   |                                                                                                       |
|   | By:                                                                                                        |   |   |
|   |                                                                                                       | Name: |   |
|   |                                                                                                       | Title: |   |

 

I-4

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**SCHEDULE A**

 

**Business Plan**

 

TheBusiness Plan is the TCZ Business Plan dated [. . . *** . . .] previouslyapproved by Cymer and Zeiss LOB.

 

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*******                 CONFIDENTIALTREATMENT REQUESTED UNDER 17 C.F.R. §§ 200.80(b)(4) AND 240.24b-2(b)(1)**

 

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**TCZ GmbH**

 

A Joint Venture betweenCymer and Carl Zeiss SMT

**Business Plan**

**[. . .***. . .]**

 

This is the initial BusinessPlan approved by the Members of the TCZ GmbH. Certain information herein is based on information known as of [. . .***. . .] and may change over time. This Business Plan is subject to annualreview and approval by the Board of Members of TCZ GmbH in accordance with theJoint Venture Agreement.

 

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*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

March 31, 2004

©Copyright 2004 Cymer, Inc.

 

----

 

**T****CZ Logo Design**

 

[LOGO]

 

----

 

**B****usinessOpportunity/Rationale**

 

The growing demand for highresolution, small screen flat panel displays, and the continuous effort by flatpanel display makers to reduce cost and increase performance by integratingdiscrete logic devices into Liquid Crystal Display (LCD) panels, and theemergence of Organic Light Emitting Diode (OLED) displays as a promisingtechnology has lead to increased demand for a manufacturing process capabilityreferred to as Low Temperature Polycrystalline Silicon (LTPS).  TCZ believes that working collaborativelywith Suppliers it  can develop anext-generation amorphous silicon crystallization tool that will enable thecreation of high yield, high performance polycrystalline silicon Thin FilmTransistor (TFT) device structures to accelerate the integration of discretelogic devices for lower cost, higher reliability, higher performance LCDdisplays, as well as meet the process development and production needs for OLEDdisplays.  Such a product is likely toresult in significant revenue and market share gains in the market for LTPSprocess tools, and provide an advantageous point of entry into the largermarket for flat panel display manufacturing tools.

 

November 4, 2004

©Copyright 2004 Cymer, Inc.

 

3

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**M****arket & Competitive Analysis**

 

4

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**[****... .***. . .]**

 
| [      | ** **    | ** ** | **[**. . .***. . .**]**                          | ** ** |
|--------|---------------|------------|--------------------------------------------------|------------|
|   |          |       | •     [.  . .***. . .]. |       |
|   | . . .***. . . |       | •     [.  . .***. . .]. |       |
|   |          |       |                                             |       |
|   |          | ]          |                                             |       |
|   |          |       |                                             |       |
| [      |          |       | **[**. . .***. . .**]**                          |       |
|   |          |       | •     [. . .***. . .].  |       |
|   | . . .***. . . |       | •     [. . .***. . .].  |       |
|   |          |       | •     [. . .***. . .].  |       |
|   |          | ]          |                                             |       |
|   |          |       |                                             |       |
| [      |          |       | **[**. . .***. . .**]**                          |       |
|   |          |       |                                             |       |
|   | . . .***. . . |       | •     [...***...]       |
|   |          |       | •      [...***...] |
|   |          | ]          | •      [...***...] |

 

----

*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

5

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**[****... .***. . .]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |
|   |          |       |
| [      |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

6

----

 

[. ...***. . .]

[. . .***... .]

 

[. . .***... .]

 
| [               | ** **    | ** ** |
|-----------------|---------------|------------|
|            |          |       |
|            | . . .***. . . |       |
|            |          |       |
|            |          | ]          |
|            |          |       |
| [. . .***. . .] |
|            |          |       |
| [               |          |       |
|            |          |       |
|            | . . .***. . . |       |
|            |          |       |
|            |          | ]          |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

7

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**[****... .***. . .]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |
|   |          |       |
| [      |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

8

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**T****CZ Market Share & ToolForecast**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |
|   |          |       |
| [      |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

9

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**L****TPSCompetitive Summary**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

10

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**C****ustomerSummary**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

11

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| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

12

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**[****...***...]**

 
|    •    [...***...]             | •      [...***...] |
|-------------------------------------------------------------------------------|--------------------------------------------------------|
| •     [...***...]                              | •     [...***...]       |
| •      [...***...]                        | •     [...***...]       |
| •      [...***...]                        | •     [...***...]       |
| •      [...***...]                        | •     [...***...]       |
| •      [...***...]                        |                                                   |
| •      [...***...]                        | •      [...***...] |
|                                                                          | •     [...***...]       |
|                                                                          | •     [...***...]       |
|      •    [...***...] | •     [...***...]       |
| •     [...***...]                              | •     [...***...]       |
| •     [...***...]                              | •     [...***...]       |
| •     [...***...]                              | •     [...***...]       |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

13

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**O****ther Potential FPD Product Opportunities for TCZ**

 

•                  [...***...]

•                  [...***...] ([. . .***. . .]) [...***...]

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

14

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**O****rganization & Management**

 

15

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**T****CZ Organization**

 

Functions: [. . .***. . .], [...***...], [...***...], [. . .***. . .], [. . .***. . .], [...***...], [...***...], [...***...], [...***...]

 
| [                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | ** **    | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |          |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |          |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | . . .***. . . |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |          |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |          |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |          | ]          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |          |       |
| Location Key:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |          |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |          |       |
| [                                                . . .***. . .                                                ] |          |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

16

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**[****... .***. . .]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |
|   |          |       |
| [      |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

17

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**[****...***...] Function & Organization**

 

Functions: [...***...], [...***....], [...***...],[...***...]

 
| [                                                                                                                                                                                                                             | ** **    | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|------------|
|                                                                                                                                                                                                                          |          |       |
|                                                                                                                                                                                                                          | . . .***. . . |       |
|                                                                                                                                                                                                                          |          |       |
|                                                                                                                                                                                                                          |          | ]          |
|                                                                                                                                                                                                                          |          |       |
| Location key:                                                                                                                                                                                                                 |          |       |
| [                 . . .***. . .                   ] |          |       |

 

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*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

18

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**T****CZ Operations Headquarters in SanDiego**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential Treatment Requestedunder 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

19

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**[****...***...]**

 

•                  [...***...]

•                  [...***...] ([...***...]) [...***...]

 

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*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

20

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**P****roduct Roadmap & Work Plan**

 

21

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**[****. . .***. . .]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

22

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**[****. . .***. . .]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

23

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**W****ork Plans For TCZ, Cymer, and Zeiss**

 

Per JV Agreement, paragraph 6.03(a),Work Plans with respect to each distinct area of inquiry for each party willcontain (I) [...***...] for the Project and/or the [...***...]; (2) adescription of [...***...], [...***...] and [...***...] to be generated during the Project;(3) [...***...] for [...***...] of the Members during such Project including, butnot limited to, [...***...], [...***...], and [...***...]; and (4) [...***...].

 

It is anticipated that thisinformation will be [...***...] and [...***...] at their regularly scheduled meeting in[...***...].

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

March 31, 2004

©Copyright 2004 Cymer, Inc.

 

24

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**A****reas of Responsibility**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

November 4, 2004

©Copyright 2004 Cymer, Inc.

 

25

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**M****ajor Deliverables by Party**

 
| TCZ                                                          |
|--------------------------------------------------------------|
| [...***...]                                            |   | [...***...] |   |
| [...***...]                                            |   | [...***...] |   |
| CYMER                                                        |
| [...***...], [...***...],  and [...***...] |   | [...***...] |   |
| [...***...]                                            |   | [...***...] |   |
| [...***...]                                            |   | [...***...] |   |
| ZEISS                                                        |
| [...***...]                                            |   | [...***...] |   |
| [...***...]                                            |   | [...***...] |   |

 

•                  [...***...]

•                  [...***...]. [...***...].

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

26

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[...***...]and [...***...]

 

Per Supply Agreement,paragraph 6.01, section 3, and paragraph 7.01.

 

It is anticipated that thisinformation will be [...***...] and [...***...] at their regularly scheduled meeting in[...***...].

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

March 31, 2004

©Copyright 2004 Cymer, Inc.

 

27

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**P****roduct Mix Scenarios**

 

Per Supply Agreement,paragraph 7.01.

 

It is anticipated that thisinformation will be [...***...] and [...***...] at their regularly scheduled meeting in[...***...].

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

28

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**F****inancial Projections**

 

November 4, 2004

©Copyright 2004 Cymer, Inc.

 

29

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**T****CZ GmbH – [****...***...]Balance Sheet**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

30

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**T****CZGmbH Inc. – [...***...] P&L**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

31

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**T****CZ GmbH – [...***...] Cash Flow**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

32

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**T****CZ GmbH - Required CapitalContributions Summary**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          | ]          |

 

**Assumptions:**

 

**1.****             ****[...***...]**

**2.****             ****[...***...]**

**3.****             ****[...***...]**

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

33

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**T****CZ GmbH – Detailed [...***...] Budget**

**[...***...]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

**Note: [...***...]**

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

34

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**T****CZ GmbH – Detailed [...***...] Budget**

**[...***...]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

35

----

 

**T****CZ GmbH – Detailed [...***...] Budget**

**[...***...]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

36

----

 

**T****CZ GmbH – Detailed [...***...] Budget**

**[...***...]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

37

----

**TCZ****GmbH – Detailed [...***...] Budget**

**[...***...]**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

38

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**T****CZ GmbH – Required CapitalContributions**

 
| [      | ** **    | ** ** |
|--------|---------------|------------|
|   |          |       |
|   |          |       |
|   | . . .***. . . |       |
|   |          |       |
|   |          |       |
|   |          | ]          |

 

[...***...]

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

39

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**[****...***...]**

 

•      [...***...]

•      [...***...]

•      [...***...]

•      [...***...]

•      [...***...]

•      [...***...]

•      [...***...]

•      [...***...]

•      [...***...]

•      [...***...]

 

----

*******                ****Confidential TreatmentRequested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2(b)(1)**

 

40

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[LOGO]

 

March 31, 2004

©Copyright 2004 Cymer, Inc.

 

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