**Exhibit 10.5**

 

**TerminationAgreement of Contract Manufacturing Agreement - Lithography Laser**

 

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

 

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

 

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

 

1.     TERMINATION OF THE AGREEMENT

The partiesacknowledge, confirm and agree that:

 

1) as of March 31,2003(“Termination Date”) the Agreement shall be terminated by mutual agreementand, except as may be specifically provided herein, the Agreement, shall be ofno further force and effect thereafter; and

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

 

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

 

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

 

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restated to read as follows;

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

 

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

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

 

3.     GOVERNING LAW

The validity,construction, and performance of this Termination Agreement and the legalrelations among the parties to this Agreement shall be governed by andconstrued in accordance with the laws of Japan, without reference to its principlesof conflicts of laws or statutory rules of arbitration. All disputes,controversies or differences which may arise between the parties, out of or inrelation to or in connection with this Termination Agreement, or for the breachthereof, shall be settled by negotiation in good faith between the parties aspromptly as possible. If such disputes, controversies or differences are notsettled amicably, within sixty (60) days of written notice, either party mayproceed to initiate an arbitration. The arbitration shall be held in Honolulu,Hawaii under the commercial rules and auspices of the Asia/Pacific Center forthe Resolution of International Business Disputes (the ‘‘Center), by which eachparty is hereby bound. Under such arbitration there shall be

 

 

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

 

4.     ENTIRE AGREEMENT

The partiesexpressly acknowledge that they have read this Termination Agreement and understandits provisions. The parties further agree and acknowledge that they understandthat this Termination Agreement constitutes the entire agreement between themwith respect to the subject matter of this Termination Agreement, and that itsupersedes all prior proposals, agreements, negotiations, representations,writings, and all other communications, whether written or oral, between themwith regard to the subject matter of this Termination Agreement. Nomodification of waiver of any provision of this Termination Agreement shall beeffective unless it is in writing and signed by each party. This TerminationAgreement may be executed in two or more counterparts, each of which will bedeemed an original and all of which shall constitute one document.

 

 

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IN WITNESS WHEREOF, the partieshereto have caused this ANNULLING AGREEMENT to be executed by their authorizedrepresentatives.

 

 
| CYMER, INC.;            | SEIKO  INSTRUMENTS INC.;   |
|-------------------------|----------------------------|
| a Nevada  corporation   | a Japanese  corporation    |
|                    |                       |
|                    |                       |
| By:                     |  /s/ Pascal Didier    |   | By: | /s/ Hiroyuki  Funamoto |   |
| Name                    | : Pascal  Didier           | Name | : Hiroyuki  Funamoto |
| Title                   | : President                | Title | : Division  Manager |
|                    |                       |
| CYMER JAPAN,  INC.;     |                       |
| a Japanese  Corporation |                       |
|                    |                       |
|                    |                       |
| By:                     |  /s/ Pascal Didier    |   |   |
| Name                    | : Pascal  Didier           |   |
| Title                   | :  Representative Director |   |
|                         |                            |  |  |  |  |  |  |  |

 

 

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