Document:

exv10w29

 

Exhibit 10.29

Master Sales Agreement

Hitachi Electronic Devices Sales, Inc. (hereafter, the “Buyer”) and Opnext Japan, Inc.
(hereafter, the “Seller,” collectively, the “Parties”) hereby enter into the following Master
Agreement regarding transactions between them.

Section 1 (Sales)

	1.1	 	The Seller shall sell to the Buyer those products (hereafter, the “Products”) agreed to in a
separate sales contract to be entered into between the parties (hereafter, the “Individual
Contract”), and the Buyer shall purchase the Products from the Seller for resale within the
territory of Japan, only to third parties in Japan. Should the Buyer wish to export the
Products outside of Japan, or should the Buyer be aware, at the time of sale, of a purchasing
client’s intent to export the Products outside of Japan, the Buyer must obtain the Seller’s
approval in writing prior to such a transaction.

Section 2 (Cooperative Sales)

	2.1	 	The Buyer shall cooperate closely with the Seller in selling the Products, and shall make
efforts to increase sales of the Products and expand sales channels.
	 
	2.2	 	The Buyer shall work to support and maintain the sales structure needed to promote close
sales cooperation with the Seller, including providing system support infrastructure and the
staffing necessary to maintain such a system.

Section 3 (Post-Sales Service)

	3.1	 	The Parties shall endeavor in good faith to provide post-sales service (hereafter, “Service”)
to the Buyer’s clients who have questions regarding the Products they have purchased, and
shall work aggressively to increase customer satisfaction ratings for the Products.
	 
	3.2	 	The Parties shall work to support and maintain the systems necessary to implement such
post-sales service, including providing system support infrastructure and the staffing
necessary to maintain such a system.
	 
	3.3	 	The Parties shall agree to cooperate with one another to the extent necessary to accomplish
the objectives set forth in preceding paragraphs, 3.1 and 3.2.

Section 4 (Sales Goals)

	4.1	 	The Parties agree to establish quarterly sales goals for the Products based on discussions
between them, in the form indicated, and based on the sales policies specified by, the Seller.
	 
	4.2	 	The Parties agree to cooperate with one another in meeting the sales goals as set forth under
the preceding paragraph, 4.1.

Section 5 (Sales Support)

	5.1	 	The Seller shall support the Buyer’s sales of the Products via the following:

	 	1)	 	Providing sales materials for the Products, as well as various technical training.

 

 

	 	2)	 	Hosting conferences and other opportunities to further promote the alliance between
the Parties.
	 
	 	3)	 	Other support and supervision as the Parties agree may be necessary.

Section 6 (Training)

	6.1	 	The Buyer agrees to train its staff as needed to sell the Products in good faith, and the
Seller agrees to provide such training and advice.

Section 7 (Sales Contract)

	7.1	 	With the exception of those terms set forth in this Agreement, all terms governing the sales
of Products provided to the Buyer by the Seller, including price, quantity, delivery dates,
delivery conditions, and delivery location, shall be as defined in the Individual Contract.

Section 8 (Delivery and Title)

	8.1	 	The Seller shall deliver the Products to the Buyer in accordance with the delivery date(s)
and delivery location(s) set forth in the Individual Contract.
	 
	8.2	 	Title to the Products shall be transferred to the Buyer upon delivery of the Products by the
Seller to the location specified in the Individual Contract, and the Buyer’s receipt of a
delivery statement, certificate of acceptance, or other such document as may be specified by
the Seller.

Section 9 (Assumption of Risk)

	9.1	 	The Buyer shall assume all risk for loss of, damage to, depletion of, or for any and all
other damages to the Products, which incur after the delivery to the Buyer by the Seller.

Section 10 (Payment)

	10.1	 	All payments due (including hereafter shipping, packing, and any other expenses paid) for the
Products shipped each month by the last day of that month, shall be paid by the Buyer in
accordance with the Seller’s invoice no later than the last day of third month following the
month in which the Products were sold, via bank transfer to the account specified by the
Seller. The parties shall agree to periodically discuss reducing this payment period,
including payments by the final end user.

Section 11 (Warranties)

	11.1	 	The Seller shall replace, free of charge, any Products found to be defective for any reason
attributable to the Seller, for a period of 180 days from the time the Products are delivered
by the Seller to the location indicated in the Individual Contract, and only upon receipt of
written notice of such defect from the Buyer. No such warranty is provided for obvious defects
such as short shipments or external damage, unless the Buyer notifies the Seller of such
defect within 30 days of delivery of the Products to the location indicated in the Individual
Contract.
	 
	11.2	 	Notwithstanding the 180-day limit set forth in 11.1 above, the Buyer shall immediately

 

 

	 	 	inform the Seller of any significant defect in the Products, and may demand compensation from
the Seller for such defect, provided however that the amount of any such compensation shall be
subject to discussion.

Section 12 (Statutory Compliance)

	12.1	 	The Parties shall comply with all statutes related to the sale of the Products and the
execution of this Agreement, including criminal codes, anti-monopoly law, commercial law, and
construction codes.
	 
	12.2	 	Should the Buyer export any Products, the Buyer shall be responsible for obtaining the
necessary statutory permits, and the cost of obtaining such permits, to ensure that any
Products and/or related technologies and/or services which may fall under foreign exchange or
foreign trade laws governing such products, technologies, and/or services, are in compliance
with those laws.
	 
	12.3	 	Should any Products and/or related technologies and/or services exported under the terms of
12.2, above, be subject to the regulation of any foreign government, the Buyer agrees to
comply with all such related foreign government regulations.
	 
	12.4	 	The Parties agree that neither shall demand, through either action or omission, any act by
the other which may violate any law.

Section 13 (Notices)

	13.1	 	The Parties shall inform one another promptly should any of the following occur:

	 	1)	 	Changes in addresses, names, company names, representatives, official seals, and/or
Articles of Incorporation;
	 
	 	2)	 	Significant changes in shareholders;
	 
	 	3)	 	Mergers, increases in capital, corporate dissolution, assignment of all or part of
sales, loans, and other significant changes to operations and/or assets, and/or other
circumstances which may result in significant changes.

Section 14 (Confidentiality)

	14.1	 	Neither party shall, either during or after the term of this Agreement, reveal to any third
party any business secrets of the other known to it in the course of this Agreement, except in
cases where information to which one of the following applies shall not be considered
confidential:

	 	1)	 	Information for which approval of the other party has been given in advance in
writing;
	 
	 	2)	 	Information already held by the receiving party at the time it was revealed;
	 
	 	3)	 	Information which, after being revealed, becomes public knowledge through no fault of
the receiving party;
	 
	 	4)	 	Information received from a third party without any obligation of confidentiality;

5) Information which is already public knowledge at the time it is revealed;
	 
	 	6)	 	Information developed independently by either party.

 

 

Section 15 (Intellectual Property Rights)

	15.1	 	Except for where otherwise provided for in the Individual Contract, no patents, copyrights,
circuit layout rights, or other intellectual property rights (hereafter, “IP Rights”) related
to the Products and held by the Seller or other third party shall be transferred to the Buyer
or its clients.
	 
	15.2	 	Program Products included in the Products under this Agreement are provided to the Buyer by
the Seller on the condition that the Buyer’s clients agree to the terms of the license to be
provided separately, and the Buyer shall ensure that its clients comply with the terms of that
license.
	 
	15.3	 	Should the Products sold by the Seller infringe on any IP rights held by a third party, or
should a claim of such infringement be made, the Seller shall be responsible for resolving
such claim, provided, however, that this provision shall not apply when said claim arises from
the specifications or instructions of the Buyer. Should the Buyer become aware that any
Products sold may infringe on the IP Rights of any third party, or should it receive any such
notice from any third party, the Buyer will promptly inform the Seller in writing, and shall
provide its utmost cooperation in resolving such claims at the direction of the Seller.

Section 16 (No Assignment of Rights and Obligations)

	16.1	 	Neither party may assign to a third party, or provide as collateral, any of its rights or
obligations under this Agreement or under the Individual Contract, without the approval in
writing of the other party, provided, however, that the Seller may, upon notifying the Buyer
in advance in writing, assign to a third party all or part of its monetary or other claims
under this Agreement or under the Individual Contract.

Section 17 (Goodwill)

	17.1	 	Neither party shall engage in any actions which defame, or which may defame, the goodwill of
the other party.

Section 18 (Request for Termination)

	18.1	 	Either party may request to discuss termination of the Agreement should cause be found with
the other party under one of the following conditions:

	 	1)	 	A violation of Section 2, Paragraph 2 and Section 3, Paragraph 2 of this Agreement;
	 
	 	2)	 	Future continuation of the cooperative alliance between the Parties becomes difficult
due to a capital restructuring or revision in management or other policies due to a change
in Directors or other changes;
	 
	 	3)	 	Significant differences in basic policy arise between the Parties regarding sales of
the Products.

	18.2	 	Upon receipt of a request for discussion under 18.1 above, the Parties shall conduct such
discussions in good faith.
	 
	18.3	 	Should discussions carried out under 18.2 above, not result in agreement between the parties
within a reasonable period, either party may then terminate the Agreement.

 

 

Section 19 (Termination)

	19.1	 	Should one or more of the following conditions be found to apply to either party, the other
party may, without notice and without further execution of its liabilities herein, immediately
terminate all or part of this Agreement or the Individual Contract and may temporarily suspend
all transactions:

	 	1)	 	Failure to execute obligations under this Agreement or under the Individual Contract;
	 
	 	2)	 	Violation of Section 12, Section 13, Section 14, Section 16, or Section 17 of this
Agreement, or the terms of the Individual Contract;
	 
	 	3)	 	Attachment, provisional attachment, provisional disposal, petition for auction or
attachment for delinquent tax, bankruptcy, corporate reorganization, corporate
rehabilitation, or petition for a civil rehabilitation;
	 
	 	4)	 	Order from the governing regulatory agency to cease sales, or loss of business
license or corporate registration;
	 
	 	5)	 	Reduction in capital, or resolution to cease or alter operations or dissolve the
company;
	 
	 	6)	 	Action for nonpayment of drafts or checks received or issued, or other circumstances
leading to a stop in payments;
	 
	 	7)	 	An impairment of assets, or sufficient reason to believe such impairment is likely;
	 
	 	8)	 	One party recognizes that it has damaged the goodwill of the other party, or the
trust relationship between the Parties.

	19.2	 	Should one or more of the following conditions be found to apply to the Buyer, the Seller
may, without notice and without further execution of its liabilities herein, immediately
terminate all or part of this Agreement or the Individual Contract, and may temporarily
suspend all transactions:

	 	1)	 	Violation of Section 10 or Section 15 of this Agreement;
	 
	 	2)	 	Claims arise from clients due to Buyer’s failure to provide post-sales service to
clients as defined in Section 3 herein, with such claims threatening to have a detrimental
impact on the reputation of the Products.

	19.3	 	Should any of the conditions of this Section be found to apply to the Buyer, the Buyer shall,
without prior notification or warning from the Seller, forfeit all benefit of term, and shall
immediately discharge the total sum of all outstanding liabilities in cash.

Section 20 (Jurisdiction)

	20.1	 	All litigation relating to this Agreement, to the Individual Contract, and to the rights and
obligations related to transactions therein, shall fall under the exclusive jurisdiction in
the first instance of the Tokyo Regional Court.

Section 21 (Term of Validity)

	21.1	 	Either party may terminate this Agreement by notifying the other party at least two months
prior to such termination.
	 
	21.2	 	In the event of any termination under 21.1 above, neither party may make claim to the other
for compensation of damages.

 

 

Section 22 (Interpretation)

	22.1	 	All questions of interpretation of or changes to the terms of this Agreement, or any items
not otherwise defined herein, shall be resolved between the Parties via separate discussion.

IN WITNESS HEREOF, the Parties have duly executed two copies of this Agreement, with each party
retaining one signed copy for its records.

April 1, 2001

	 	 	 	 	 
	 

	 	Buyer:
	 	Hitachi Electronic Devices Sales, Inc.
	 

	 	 	 	3-4-4 Muromachi, Nihonbashi, Chuo-ku, Tokyo
	 

	 	 	 	Saburo Tajima, President
	 
	 	 	 	 
	 

	 	Seller:
	 	Opnext Japan, Inc.
	 

	 	 	 	216 Totsuka-cho, Totsuka-ku, Yokohama, Kanagawa
	 

	 	 	 	Junsuke Kusanagi, Representative Directorexv10w30

 

Exhibit 10.30

Basic Agreement

Article 1: General Principles

Section 1 (Applicability)

1.1 This Agreement shall apply to all Individual Contracts for transactions between the Seller and
the Buyer, in which the Seller is providing materials (including intangible materials and services,
hereafter the “Materials”) to the Buyer from its headquarters or the materials departments of any
of its offices.

Section 2 (Purpose of the Agreement)

2.1 The Parties enter into this Agreement with the understanding that it is based on a mutual
trust relationship between the Parties, and that it shall be executed in good faith and with the
goodwill of both Parties, in the interest of continuing equitable transactions between them.

Section 3 (Changes and Additions to the Agreement)

3.1 This Agreement may be modified or added to, as required, upon the written agreement of both
Parties, and such agreements shall be incorporated into this Agreement.

Section 4 (Relationship between this Agreement and the Individual Contracts)

4.1 If any Individual Contracts are executed between the Parties during the term of this
Agreement, the Parties shall abide by the terms of both this Agreement and the Individual
Contracts.

4.2 Should any conflict arise between the terms of this Agreement and those of an Individual
Contract, the terms of the Individual Contract shall take precedence.

Article 2: Individual Contracts

Section 5 (Individual Contracts)

5.1 In principle, issuance of a purchase order by the Buyer constitutes application for an
Individual Contract.

5.2 Application as noted above shall, in principle, be in the format specified by the Buyer. The
Individual Contract becomes effective upon the Seller’s approval of the Buyer’s application.

Article 3: Delivery of Materials

Section 6 (Delivery Date)

6.1 Delivery Date is defined as the exact date on which Materials are to be delivered to the
location specified by the Buyer.

6.2 When the Delivery Date specified in the Individual Contract falls on a date when the Buyer’s
offices are closed, Delivery shall be made on the day before such closing date (or the day before
the first day of any multi-day closing).

 

 

Section 7 (Delivery Prior to Delivery Date)

7.1 The Seller must obtain the Buyer’s permission in advance when delivering the Materials prior
to the Delivery Date.

Section 8 (Late Deliveries)

8.1 Should the Seller find it will be unable to deliver the Materials by the Delivery Date,
regardless of whether or not such delay is attributable to the Seller, it must promptly notify
Buyer of such delay, and follow the Buyer’s subsequent instructions regarding delivery.

8.2 Except where otherwise agreed to in writing, such notifications and instructions as may be
exchanged between the Parties under 8.1, above, shall not constitute a change in the Delivery Date.

Section 9 (Invoices and Other Documents)

9.1 Upon delivery of the Materials, the Seller shall submit to the Buyer delivery statements as
prescribed by the Buyer, along with any blueprints and specification sheets the Buyer may have
provided to the Seller, provided, however, that this shall not apply to any blueprints and
specification sheets the Buyer has agreed the Seller may continue to use.

9.2 Upon delivery of the Materials, the Seller shall submit any test results analysis, manuals,
and regulatory agency permits required, in accordance with the Buyer’s purchase order,
specification sheet, and/or the terms of the Individual Contract.

Section 10 (Safeguards)

10.1 The Seller must, in the delivery of the Materials, and otherwise in its execution of the
Individual Contracts, comply with all applicable laws, regulations, and regulatory agency
instructions and guidance based on such laws (hereafter, the “Regulations”), as well as the rules
and instructions of the Buyer, as well as providing adequate consideration to safety, disaster
prevention, and environmental management.

10.2 If in the delivery of the Materials, or otherwise in its execution of the Individual
Contracts, environmental pollution or other accident occurs, the Seller must promptly inform the
Buyer of such occurrence, and must immediately take emergency steps to remedy the situation, while
also taking all possible measures to prevent a recurrence of such pollution or accidents.

10.3 The Seller is liable to the Buyer and any third party for any damages caused by pollution or
accident, as noted above, attributable to the Seller.

10.4 The Seller must cooperate with any inspection of, or request for materials from the Buyer
regarding the Seller’s safety, disaster prevention, and environmental management measures.

Article 4: Testing

Section 11 (Testing)

11.1 Upon delivery of the Materials by the Seller to the location specified by the Buyer, the
Buyer will conduct tests of the Materials. All testing methods, pass or fail standards, and other
detailed terms governing such tests will be as determined separately by the Buyer.

 

 

Should the Materials be delivered to a location other than the Buyer’s own facility, the Buyer may,
at its discrection, send an individual assigned by the Buyer to perform such tests.

11.2 The Buyer shall inform the Seller of any Materials that do not pass the Buyer’s tests.

Section 12 (Interim Testing)

12.1 Prior to delivery of Materials by the Seller, the Buyer may, at its discretion, send an
individual assigned by the Buyer to perform interim testing at the Seller’s office, factory, or
other facility where the Materials are located, and provide instruction to the Seller as necessary.

Section 13 (Handling of Rejected Products)

13.1 Should the Materials fail to pass testing, the Seller must, at the direction of the Buyer,
promptly provide replacement Materials and take corrective action to repair the failed Materials,
or provide other such services as specified in the Individual Contract.

13.2 Should testing reveal a shortfall, the Seller must, within the time period specified by the
Buyer, deliver Materials sufficient to remedy the shortfall.

13.3 Should any Materials that have failed testing be determined by the Buyer to be useable, the
Buyer may, at its discretion, accept delivery of such Materials at an equitable valuation lower
than the established price (hereafter, “Special Use”).

13.4 The Buyer may invoice the Seller for all reasonable costs required under the Special Use,
including the cost of screening, assessing, and repairing any such Materials.

Section 14 (Rejected Products and Overages)

14.1 The Seller must promptly take possession of rejected products and delivery overages,
provided, however, that such requirement shall not apply in the case of rejected products accepted
by the Buyer under the Special Use provision.

14.2 Should the Seller fail to take possession of rejected products and delivery overages, the
Buyer may arrange to return such products to the Seller, and invoice the Seller for any costs
thereby incurred.

Section 15 (Transfer of Rights)

15.1 Rights to the Materials shall transfer from the Seller to the Buyer upon successful
completion of testing, or, in the case of Materials which have failed testing, upon acceptance by
the Buyer under the Special Use provision.

Section 16 (Redelivery)

16.1 Should delivered Materials be lost, damaged, or deteriorate prior to passing testing or
acceptance under Special Use, the Seller must deliver replacement Materials to Buyer, except where
such damage or loss is attributable to Buyer.

Article 5: Payment

Section 17 (Payment)

17.1 The Buyer shall post as accounts payable all Materials which have passed testing or

 

 

which have been accepted under Special Use within the billing month, and shall, at the end of each
month, deliver to the Seller a detailed statement of the accounts payable balance (hereafter, the
“Statement”) at a location to be specified by Buyer.

17.2 Unless the Seller issues a notice of discrepancy in writing within ten days after receipt of
the Statement, the Buyer shall process payment of the amount shown on the Statement by the date and
in the form of payment specified therein.

Section 18 (Offsets)

18.1 The Buyer may offset any obligations payable to the Seller with any amounts owed by the
Seller to the Buyer, including the cost of the supplied materials under Section 20 below, and other
payments advanced by the Buyer, as such amounts occur.

18.2 Upon completion of such offsets, the Buyer and the Seller shall, in principle, exchange bills
of receipt, except in cases where the Buyer may notify the Seller of the Statement details in lieu
of issuing a receipt.

Article 6: Warranty

Section 19 (Warranty after Successful Testing or Acceptance under Special Use)

19.1 Except where otherwise provided for in the Individual Contract, should any defects be found
in the Materials within one year of successful testing or acceptance under Special Use, the Seller
shall, at the Buyer’s instruction and at the Seller’s cost, promptly replace or repair such
Materials in accordance with the terms of the Individual Contract.

19.2 In the case of such defects as noted in 19.1 above, the Buyer may, in lieu of or in addition
to the Material replacement and/or repair, invoice the Seller for compensation of damages or a
reduction in price.

19.3 Notwithstanding expiration of the warranty period indicated in 19.1, above, should any defect
in the Materials be found to be attributable to the Seller, the parties agree to discuss
compensation for any damages to the Buyer that may result from such defects.

Article 7: Supplied Materials and Jigs/Tools

Section 20 (Provision of Supplied Materials)

20.1 The Buyer may, when deemed necessary to maintain the quality, functionality, and standards of
the Materials, or for any other equitable reason, provide the Seller with certain materials and
parts (hereafter, the “Supplied Materials”) necessary in the manufacture of the Materials.

20.2 In the case of such provision as noted in 20.1 above, the Supplied Materials will, in
principle, be provided for a fee at prices to be determined by the Buyer, and shall be delivered to
the Seller at a location in its business office to be specified by the Buyer.

Section 21 (Inspection of Supplied Materials; Notices)

21.1 The Seller shall inspect all Supplied Products promptly upon their taking acceptance of them,
and shall promptly inform the Buyer of any defects or shortfalls therein.

21.2 The Seller shall promptly inform the Buyer of any other defects revealed later, which were
not found in the original inspection process as noted in 21.1, above.

 

 

Section 22 (Title of Supplied Materials)

22.1 Ownership of the Supplied Materials shall transfer from the Buyer to the Seller upon
completion of payment for such Supplied Materials, when provided for a fee, and shall remain with
the Buyer when supplied without charge to the Seller.

Section 23 (Sale and Leasing of Jigs/Tools)

23.1 Should the Buyer lease to the Seller any equipment, machinery, jigs/tools, molds, or other
items (hereafter, the “Jigs/Tools”) necessary in the manufacture of the Materials, the Parties
shall specify lease term, price, and method of payment in a contract to be entered into separately.

23.2 Should the Buyer sell Jigs/Tools to the Seller, ownership of such Jigs/Tools shall remain
with the Buyer until all payment for such Jigs/Tools is complete, with sale prices and terms of
payment to be specified in a contract to be entered into separately.

23.3 The Seller shall not transfer or sublease to a third party the Jigs/Tools belonging to the
Buyer, except with the prior permission in writing of the Buyer.

Section 24 (Custody of Supplied Materials and Jigs/Tools)

24.1 The Seller shall maintain the Supplied Materials and the Jigs/Tools under the careful
supervision of a qualified manager, and further shall comply with the following:

	 	1)	 	The Supplied Products and the Jigs/Tools belonging to the Buyer shall be
used only for the purpose of manufacturing Materials ordered by the Buyer.
	 
	 	2)	 	To avoid confusion with other items, the Supplied Materials and the
Jigs/Tools belonging to the Buyer shall be labeled as such, and shall be accounted
for separately.

24.2 The Buyer may, at its discretion, call for inspection of, and as needed, request improvements
in, the management of its Supplied Materials and Jigs/Tools at the Seller’s factories and business
office.

24.3 The Buyer may, at any time deemed necessary, request that the Seller return any Supplied
Materials and/or the Jigs/Tools in its possession that belong to the Buyer.

Section 25 (Loss of or Damage to Supplied Materials and Jigs/Tools)

25.1 Should any Supplied Materials or Jigs/Tools belonging to the Buyer be lost or damaged through
causes attributable to the Seller, the Buyer may request the Seller to repair such items to their
original condition or provide replacements, and may invoice the Seller for any damages incurred
therein.

Article 8: Management of Blueprints and Other Data

Section 26 (Management of Blueprints and Other Data)

26.1 The Seller shall maintain all blueprints, specification sheets, film, magnetic tape, floppy
disks, magnetic disks, optical disks, MO disks, ROM, CD-ROM, and all other documents and media
(hereafter, the “Blueprints and Media”) provided by the Buyer, as well as programs and all other
data provided via the Blueprints and Media, under the careful

 

 

supervision of a qualified manager, and further shall comply with the following:

	 	1)	 	The Blueprints and Media shall be used only for the purpose for which
they were provided or supplied by the Buyer.
	 
	 	2)	 	The Seller shall not copy, allow access to, lend, divulge, leak, or
otherwise provide the Blueprints and Media to any third party without the prior
written permission of the Buyer.
	 
	 	3)	 	The Seller shall return all the Blueprints and Media promptly upon the
completion of their objective, or at the instruction of the Buyer (in accordance
with 9.1, above, or at the direction of the Buyer).

26.2 Any Blueprints and Media copied by the Seller with the permission of the Buyer will be
handled in the same manner as noted above for other Blueprints and Media and the data provided
therein.

Section 27 (Resolution of Issues Regarding Blueprints and Media or Other Data)

27.1 The Seller shall inform the Buyer of any questions or points of clarification regarding the
Blueprints and Media or other data provided, or the Buyer’s directions or explanations regarding
the items therein, and shall follow all the Buyer’s instructions regarding such issues.

Article 9: Intellectual Property Rights

Section 28: (Management of Intellectual Property and Other Rights)

28.1 All patents, utility model rights, design rights, trademartks, semiconductor circuit layout
access rights, copyrights, and the rights to the use of all such rights (hereafter, the “IP
Rights”), as well as confidential business information and expertise (hereafter, collectively with
IP Rights, the “IP Rights and Other Information”) disclosed to the Seller by the Buyer, or for
which the Seller has the Buyer’s permission for implementation, use, or application (hereafter, the
“Implementation”), shall be maintained by the Seller under the careful supervision of a qualified
manager, and the Seller shall further comply with the following:

	 	1)	 	Implementation shall be solely for that purpose under which disclosure
was made or permission for Implementation given to the Seller by the Buyer in
connection with the Buyer’s order for the Materials.
	 
	 	2)	 	The Seller shall not disclose or leak to, or permit Implementation by any
third party of the IP Rights and Other Information without the prior written
permission of the Buyer.
	 
	 	3)	 	The Seller shall not apply for patents to or register any of the IP
Rights and Other Information.

Section 29: (Ownership of IP Rights and Other Information)

29.1 Should Seller or Seller’s employees produce any inventions or ideas based on Blueprints and
Other Media, or on Materials developed using, or production methods based on, information provided
by Buyer, or produce any designs, copyrights (including copyrights to programs and secondary use
copyrights), circuit layouts, expertise, or other creations based on technical results (hereafter,
the “Inventions”) thereof, Seller shall promptly inform

 

 

Buyer of such content and the process leading to its development, and the Parties shall enter into
discussions regarding any ownership of any IP rights, application for IP Rights to any Inventions,
and registration of such Inventions.

Article 10: General Terms

Section 30: (Improvement Efforts)

30.1 In order to ensure the continuous improvement in the price, quality, functioning, and
manufacture of the Materials, the Seller shall develop new technology, and shall take active steps
to share information and make proposals for improvement.

30.2 The Buyer shall, when necessary, provide advice and direction regarding the manufacture of
the Materials, their quality, delivery management, and improvements to facilities.

Section 31: (Regulatory Compliance)

31.1 The Seller shall comply with all Regulations, and shall perform its obligations under the
Individual Contracts in a fair and equitable manner.

31.2 The Seller shall respond promptly to all requests for the Materials and reports as may be
required by the Buyer to comply with Regulations concerning the Materials.

Section 32: (Assignment of Rights)

32.1 Without the prior written permission of the other party, neither Party may:

	 	1)	 	Allow a third party to fulfill all or part of its obligations under this
Agreement or under the Individual Contracts.
	 
	 	2)	 	Assign all or part of its financial liabilities or rights under this
Agreement or under the Individual Contracts to a third party, provide them as
collateral, or otherwise dispose of them.

Section 33: (Confidentiality)

33.1 Neither party may disclose or leak to any third party any of the following information
without the prior written permission of the other party:

	 	1)	 	Any information disclosed to it by the other party in negotiations prior
to the signing of this Agreement or the Individual Contracts, including technical
and business information of the disclosing party provided via blueprints,
specifications, materials, forms, facilities, requests for proposal, or through
verbal explanations.
	 
	 	2)	 	Any information disclosed to it by the other party subsequent to the
signing, and as a result of the performance of this Agreement or the Individual
Contracts, including technical and business information of the disclosing party
provided via blueprints, specifications, materials, forms, facilities, requests for
proposal, or through verbal explanations.
	 
	 	3)	 	In addition to the above, any other technical or business information of
the other party obtained through under this Agreement or under the Individual

 

 

	 	 	 	Contracts.

33.2 The conditions described in 33.1 above shall not apply to the following information:

	 	1)	 	Information already known to the receiving party at the time of its
disclosure.
	 
	 	2)	 	Information developed independently.
	 
	 	3)	 	Information legally obtained from a third party without obligation of
confidentiality.
	 
	 	4)	 	Information already in the public domain.

Section 34: (Resolution of Conflicts Relating to Third Party IP Rights)

34.1 The Seller shall conduct research into, and shall take all reasonable business precautions to
ensure that the Materials, their use, or their sale do not infringe on any third party IP Rights,
either in Japan or overseas, and, except where otherwise provided for in the Individual Contracts,
shall, at the time of delivery, warrant that the Materials, their use, or their sale do not in fact
infringe on any third party IP Rights, provided, however, that this obligation shall not apply when
such infringement is attributable to the Buyer.

34.2 Should the Materials, their use, or their sale be found to infringe, or carry the possibility
of infringing, on any third party IP rights, in violation of 34.1 above, the Seller shall promptly
inform the Buyer of such possible infringement, and shall, at its own expense and liability,
resolve any such infringement.

34.3 Notwithstanding the above, should any third party make claim against the Buyer, its
subsidiaries, distributors, or customers related to the warranty provided in 34.1 above concerning
the Materials, their use, or their sale, or demand a suspension of sales, compensation for damages,
or otherwise present a conflict regarding infringement of that third party’s IP Rights, the Buyer
shall promptly inform the Seller of such conflict, and the Seller shall indemnify the Buyer for any
damages (including payment of legal fees) it incurs determined to be caused by any violation of the
warranty provided in 34.1, above.

Section 35: (Reporting Obligation)

35.1 Commencing with the start of business, the Seller shall provide regular reports to the Buyer
on those items and in the format specified by the Buyer.

35.2 The Seller shall inform the Buyer in advance of the following:

	 	1)	 	Any changes to the reports required under 35.1 above.
	 
	 	2)	 	Mergers, increases or reductions in capital, corporate dissolution,
assignment of all or part of sales, or any other significant changes or potential
changes to borrowings, assets, or operations.

35.3 In addition to reporting as required in 35.1 and 35.2, above, the Seller shall also, when so
requested by the Buyer, cooperate in providing survey result forms and other materials in the form
specified by the Buyer.

Section 36: (Enhancements and Maintenance)

36.1 Subsequent to delivery of the Materials, the Seller shall, at the request of the Buyer,
cooperate in the enhancement and maintenance of the Materials, with terms of such cooperation to be
determined through mutual discussion between the Parties.

 

 

Section 37: (Provision of Maintenance Parts)

37.1 The Seller shall cooperate in providing maintenance parts related to the Materials even after
the completion of a transaction for such Materials, provided, however, that the terms of each case
will be determined through mutual discussion between the Parties.

37.2 Regardless of ownership, the Seller shall inform the Buyer in advance of any issues that may
affect the Seller’s ability to fulfill its obligation to supply maintenance parts and related
tools, and enhance production facilities, with the terms of each case to be determined through
mutual discussion between the Parties.

Section 38: (Termination of or Revisions to Individual Contracts)

38.1 The Buyer may, upon notice to the Seller, terminate or revise all or part of an Individual
Contract, provided that should such termination or revision result in loss to the Seller, the
Parties may, upon request of the Seller, determine compensation to the Seller through mutual
discussion between the Parties.

Section 39: (Termination of the Agreement or the Individual Contracts)

39.1 Should one or more of the following conditions apply to either party, that party shall, with
or without notification from the other party, lose all benefit of term regarding any or all
liabilities (including those obligations received from a third party), and the other party may
immediately demand fulfillment of such obligations, and may also terminate all or part of this
Agreement and/or the Individual Contracts:

	 	1)	 	Violation of the terms of this Agreement or the Individual Contracts.
	 
	 	2)	 	The unlikelihood of the Materials being delivered by the Delivery Date.
	 
	 	3)	 	Bankruptcy, start of civil rehabilitation proceedings, start of corporate
reorganization or petition for corporate reorganization, or when the company enters
liquidation proceedings.
	 
	 	4)	 	Stop payments (including a single non-payment of a check or draft), or
order for suspension of business with a clearinghouse.
	 
	 	5)	 	Attachment, provisional attachment, provisional disposition or petition
for auction, or attachment for delinquent tax.
	 
	 	6)	 	Loss of business license or suspension of business order from a relevant
regulatory agency.
	 
	 	7)	 	Petition for deferral of performance of obligation to the other party or
any third party, or preparations for a meeting of creditors or the disposal of major
assets, or other indications that the party may be unable to fulfill its
obligations.

Section 40: (Measures Necessary for Completion of the Materials)

40.1 Upon the termination of an Individual Contract, the Seller shall promptly return to the Buyer
any Supplied Products and Jigs/Tools belonging to the Buyer, as well as any Blueprints and Other
Media as provided for in 25.1 and 25.2 above.

40.2 Should the Seller be found in violation of any provision of 39.1 above, the Buyer may, upon
notice to the Seller, obtain the rights to all Materials and to unfinished Materials still in

 

 

production, and the Seller shall promptly deliver such Materials to the Buyer. A fair price for the
unfinished Materials still in production shall be determined based on the original Materials
pricing and a per-piece rate based on volume.

40.3 Should the Seller be found in violation of any provision of 39.1 above, the Buyer may, upon
notice to the Seller, acquire or lease the rights to all Supplied Products, raw materials,
machinery and equipment, tools, forms, blueprints, specifications, programs, film, magnetic tape,
magnetic disks, and other items belonging to the Seller required for the completion of the
Materials, and the Seller shall promptly deliver such items to the Buyer. Items will be assessed
and a fair and equitable purchase or lease price will be set.

Section 41: (Previous Agreements)

41.1 Any Basic Agreement that may exist between the Parties prior to the signing of this Agreement
(hereafter, the “Previous Agreement”) shall cease to be valid upon the signing of this Agreement.

41.2 Notwithstanding the forgoing, terms of the Previous Agreement shall govern all liabilities
and obligations related to Individual Contracts executed under the Previous Agreement.

41.3 Any letters of understanding between the Parties regarding modifications or additions to the
Pervious Agreement shall be deemed agreements between the Parties under 3.1 above.

Section 42: (Survival Provisions)

42.1 Terms of any Individual Contracts closed prior to the termination or cancellation of this
Agreement, as well as those terms in this Agreement affecting such Individual Contracts, shall
survive the termination or cancellation of this Agreement.

42.2 Terms of Section 19 (Warranty after Successful Testing or Acceptance under Special Use),
Section 28 (Management of Intellectual Property and Other Rights), Section 29 (Ownership of IP
Rights), Section 33 (Confidentiality), Section 34 (Resolution of Conflicts Regarding Third Party IP
Rights), Section 36 (Enhancements and Maintenance), Section 37 (Provision of Maintenance Parts),
and Section 41 (Previous Agreements) shall all survive the termination or cancellation of this
Agreement.

Section 43: (Contact with Customers)

43.1 The Seller may, only when so directed by the Buyer, have direct contact with the Buyer’s
clients under the Individual Contract.

Section 44: (Jurisdiction)

44.1 Any and all conflicts arising from this Agreement or the Individual Contracts shall fall
under the exclusive jurisdiction of the Regional Court in the district where the Buyer’s
headquarters are located.

Section 45: (Mediation)

45.1 All issues and concerns not addressed by the terms of this Agreement or the

 

 

Individual Contracts, and not resolvable through normal business practice, shall be resolved
through mutual discussion between the parties.

Section 46: (Term)

46.1 This Agreement shall be valid for a period of ___full years from the date of its signing.

46.2 Unless either party gives notice to the other within one month prior to the expiration of the
Term, this Agreement shall automatically be renewed for a period of one year, under the same terms
and conditions, and the same shall apply to subsequent renewals.

 

 

Memorandum Regarding Trade Secrets

In order to define the handling of Trade Secrets under the terms of Section 33
(Confidentiality) of the Basic Agreement, the Parties hereby enter into this Memorandum (hereafter,
the “Memorandum”).

Section 1: (Applicability)

1.1 This Memorandum shall govern the handling of all trade secrets disclosed by one party to the
other in the course of negotiating, and subsequent to the signing of, the Basic Agreement and the
Individual Contracts for Materials transactions between the Parties.

Section 2: (Relationship between the Memorandum and the Basic Agreement)

2.1 All terms not covered in the Memorandum shall be governed by the provisions of the Basic
Agreement.

Section 3: (Definitions)

3.1 Terms used in the Memorandum shall be defined as follows:

	 	1)	 	Trade Secrets
	 
	 	 	 	Whether in writing or otherwise, all information treated as confidential and not
generally made public regarding production methods, sales methods, and other
technical or business information valuable to the conduct of business (including
third party trade secrets disclosed under obligation of confidentiality).
	 
	 	2)	 	Confidential Documents
	 
	 	 	 	All trade secrets in document form (including blueprints, film, floppy disks,
magnetic disks, and other media), samples, prototypes, semifinished goods, and other
tangible objects.

Section 4: (Handling of Questions)

4.1 Should the confidential nature of any technical or business information disclosed as a trade
secret be in doubt, the Parties shall determine any obligation to handle the information as such
via mutual discussion.

Section 5: (Warranty of Authorization)

5. 1 The Parties hereby warrant that each is duly authorized to disclose trade secrets under this
Memorandum.

Section 6: (Disclosure of Trade Secrets)

6.1 Each party shall, when disclosing confidential documents to the other, clearly mark the
confidential documents as trade secrets, except in cases that when such marking is made difficult
by the type or nature of the document, or would not be considered normal practice, such marking may
be foregone provided the confidential documents are handled in accordance with the terms of
Paragraph 3 of this section, below.

 

 

6.2 Should either party be required to disclose trade secrets to the other either verbally or
aurally, the content of such trade secrets shall be put in writing, and the subsequent document
clearly marked as containing trade secrets.

6.3 The Parties agree that terms related to the use, extent of disclosure, period of
confidentiality, management, and return of all trade secrets shall be determined on an “as needed”
basis via mutual discussion between the parties.

Section 7: (Handling of Trade Secrets)

7.1 Each party shall protect the confidentiality of the trade secrets revealed to it by the other
party, and shall not use or disclose the trade secrets for other than their intended purpose
without the prior written permission of the disclosing party, provided however that this shall not
apply when the Buyer is using the Materials, or products containing the Materials, in its sales
activities.

Section 8: (Handling in the Case of Uncompleted Contracts)

8.1 Should any Individual Contract not be completed between the Parties, any confidential
documents provided by one party to the other in the course of negotiating said Individual Contract
shall be promptly returned to the disclosing party, and utmost care shall be taken in ensuring that
such confidential documents are not otherwise used or disclosed.

Section 9: (Handling Once Intended Purpose is Complete)

9.1 All confidential documents disclosed or lent by one party to the other shall be promptly
returned to the disclosing party once their intended use has been completed.

Section 10: (Inspections)

10.1 Either party may, upon mutual discussion, inspect the handling of confidential information by
the other party, to confirm compliance with the terms of this Memorandum regarding proper handling
of trade secrets.

Section 11: (Confidentiality Obligation of Departing Employees)

11.1 For directors and employees of either party who may have had knowledge of trade secrets
during their employment and who then depart the company, each party is responsible for clarifying
with such departing employees, either via a contract or written pledge, their obligation to
maintain the confidentiality of the other party’s trade secrets.

Section 12: (Mediation)

12.1 All issues arising from this Memorandum and not resolvable through normal business practice,
shall be resolved via mutual discussion between the Parties.

Section 13: (Term)

13.1 The term of this Memorandum shall be the same as for the Basic Agreement.

 

 

Section 14: (Survival Provisions)

14.1 Terms of any Individual Contracts closed prior to the termination of this Memorandum, as well
as those terms in this Memorandum affecting such Individual Contracts, shall survive the
termination of this Memorandum.

14.2 Terms of Section 5, Section 7, Section 8, Section 9, Section 10, and Section 11 of this
Memorandum shall survive the termination of this Memorandum.

IN WITNESS HEREOF, the Parties hereby duly execute two copies of this Memorandum Regarding Trade
Secrets, with each party retaining one copy for its records.

April 1, 2003

	 	 	 	 	 
	 

	 	Buyer:
	 	Renesas Technology Sale Co., Ltd.
	 

	 	 	 	2-6-2 Otemachi, Chiyoda-ku, Tokyo
	 

	 	 	 	Katsumi Suizu, President
	 
	 	 	 	 
	 

	 	Seller:
	 	Opnext Japan, Inc.
	 

	 	 	 	216 Tosuka-cho, Tosuka-ku, Yokohama, Kanagawa
	 

	 	 	 	Tadayuki Kanno, Representative Director

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