Master Agreement
Category: 270 Legal Recent Posts, Manufacturing
MASTER AGREEMENT
This Master Agreement, including the Exhibits hereto (this “Agreement”), is entered into as of February 27, 2006 (the “Effective Date”) by and between, on the one hand, Sipex Corporation, a Delaware corporation with its principal place of business at 233 South Hillview Drive, Milpitas, CA 95053, U.S.A. (”Sipex”) and, on the other hand, Hangzhou Silan Microelectronics Co., Ltd., a China limited liability company with its principal place of business at No. 4 Huang Gu Shan Road, Hangzhou, People’s Republic of China: Postcode 310012 (”Silan Micro” or “Parent”) and Hangzhou Silan Integrated Circuit Co., Ltd., a China limited liability company with its principal place of business at No. 10 Road, East HETZ, Hangzhou (Xiasha), People’s Republic of China, Postcode: 310018 (”Silan IC”, Parent and Silan IC are referred to collectively and individually as “Silan” (as the context requires) and together with Sipex, are referred to individually as a “Party” and collectively as the “Parties”).
RECITALS
WHEREAS, Sipex is engaged in the business of designing, manufacturing and marketing high performance, analog integrated circuits that are used primarily by original equipment manufacturers operating in the computing, consumer electronics, communications and networking infrastructure markets;
WHEREAS, Silan is engaged in the business of designing, developing and manufacturing semiconductor products in China;
WHEREAS, Sipex wishes to cease its wafer fabrication operations at the Sipex Facility in the United States;
WHEREAS, Silan and Sipex have, simultaneously with the execution of this Agreement, executed that certain Process Technology Transfer and License Agreement (or “PTTLA”) pursuant to which, among other things, Sipex will transfer the Sipex Process Technology to Silan resulting in Silan having a “copy exact” version, where possible, of the Sipex Process Technology qualified in the Silan Facility;
WHEREAS, pursuant to the PTTLA, Sipex will also grant to Silan a license to use the Sipex Process Technology to manufacture semiconductors in the Silan Facility;
WHEREAS, the Parties will work together to enable Silan to manufacture semiconductor wafers using the Sipex Process Technology, such collaboration to include, among other things, technical cooperation, qualification of the Sipex Process Technology and wafer testing and introduction of new Sipex products using the Sipex Process Technology;
WHEREAS, the Parties expect that the transfer of the Sipex Process Technology will commence upon execution of this Agreement and expect to complete such transfer within one (1) year of the date of that certain Term Sheet entered into by and between Parties;
WHEREAS, Silan and Sipex have, simultaneously with the execution of this Agreement, executed that certain Production Equipment Sale Agreement pursuant to which Sipex will transfer the Production Equipment at the Sipex Facility to Silan. This transfer is expected to be delivered following the successful qualification of the Sipex Process Technology in the Silan Facility as evidenced by Silan successfully manufacturing and supplying semiconductors using the Sipex Process Technology;
WHEREAS, Silan and Sipex have, simultaneously with the execution of this Agreement, executed that certain Wafer Supply Agreement pursuant to which, among other things, Silan will manufacture and supply to Sipex semiconductor wafers based on Sipex Maskworks manufactured using the Sipex Process Technology;
WHEREAS, Sipex shall grant Silan a license under Sipex’s Intellectual Property Rights to manufacture certain semiconductor devices in the Silan Facility based on Sipex Maskworks and to sell such products in, and only for use in, Greater China;
WHEREAS, pursuant to and subject to the terms and conditions of the Wafer Supply Agreement, among other things, Sipex has agreed to minimum order commitments and Silan has agreed to minimum supply commitments; and
WHEREAS, the Parties intend in this Agreement, including the other Transaction Agreements and Exhibits hereto, to set forth the entire understanding and agreement between them regarding the Transaction.
NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below, the Parties hereto agree as follows:
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ARTICLE 6
INDEMNIFICATION
6.1 Indemnification by Silan .
Silan shall indemnify and hold harmless the Sipex Indemnitees from and against any and all Liabilities that relate to, arise out of or result from any of the following items (without duplication):
any breach by Silan of its representations and warranties under the Transaction Agreements; and
any matters for which Silan is expressly obligated to indemnify any Sipex Indemnitees under any Transaction Agreements.
6.2 Indemnification by Sipex .
Sipex shall indemnify and hold harmless the Silan Indemnitees from and against any and all Liabilities that relate to, arise out of or result from any of the following items (without duplication):
any breach by Sipex of its representations and warranties under the Transaction Agreements; and
any matters for which Sipex is expressly obligated to indemnify any Silan Indemnitees under any Transaction Agreements.
6.3 Procedures for Defense, Settlement and Indemnification of Third Party Claims .
A Party entitled to indemnification pursuant to this Article 6 (the “Indemnified Party”) in connection with an Action initiated by a third party (any such claim or Action, a “Third Party Claim”), shall notify the Party obligated to indemnify it (the “Indemnifying Party”) in writing, and in reasonable detail, of that Third Party Claim as soon as practicable after receipt of notice of that Third Party Claim, except that any failure to give any such notification shall not affect the Indemnifying Party’s obligation to indemnify the Indemnified Party except to the extent the Indemnifying Party’s ability to provide indemnification is prejudiced as a result of that failure.
The Indemnifying Party may participate in the defense of the Third Party Claim and, if it so chooses, assume at its expense the defense of that Third Party Claim with counsel of its choice; provided that such counsel must be reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified Party shall also be entitled to participate in the defense of the Third Party Claim and to employ counsel, at its own expense (subject to the foregoing sentence), separate from counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall be entitled to control that defense except as stated herein. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party did not assume the defense of any Third Party Claim or as stated herein.
If the Indemnifying Party chooses to defend or prosecute a Third Party Claim, the Parties shall cooperate in the defense or prosecution of that Third Party Claim, including by retaining and providing to the Indemnifying Party records and information reasonably relevant to that Third Party Claim, and making employees available on a reasonably convenient basis.
In the event that a matter arises that would give rise to a claim of indemnification both by Silan against Sipex and by Sipex against Silan, then, to the extent of such overlapping claim of indemnification, Silan’s obligation to indemnify Sipex shall prevail and Sipex shall not have the obligation to indemnify Silan (but only to the extent of such overlapping claim).
6.4 Additional Matters .
Rights Cumulative. The remedies provided in this Article 6 shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.
Indemnification Payments. Indemnification required by this Article 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or loss, liability, claim, damage or expense is incurred.
6.5 No Representation or Warranty .
Except as otherwise explicitly set forth in any Transaction Agreement, Sipex does not make any representation as to, warranty of or covenant with respect to:
the value of any asset or thing of value to be transferred to Silan;
the freedom from encumbrance of any asset or thing of value to be transferred to Silan; or
the legal sufficiency of any assignment, document or instrument delivered hereunder to convey title to any asset or thing of value upon its execution, deliver and filing.
Except as may expressly be set forth in any Transaction Agreement, all assets and rights to be transferred or licensed to Silan shall be transferred or licensed, as the case may be, “AS IS, WHERE IS” and without warranty of any kind. Except as may expressly be set forth in any Transaction Agreement, Silan shall bear the economic and legal risk that any conveyance shall prove to be insufficient to vest in Silan good and marketable title, free and clear of any lien, claim, equity or other encumbrance.
6.6 Warranty Disclaimer and Limitation of Liability .
EXCEPT FOR ANY WARRANTIES EXPLICITLY SET FORTH HEREIN OR IN ANY OF THE OTHER TRANSACTION AGREEMENTS, SIPEX AND SILAN DISCLAIM ALL WARRANTIES, WHETHER EXPRESS, STATUTORY, OR IMPLIED, FOR ANY TECHNOLOGY, TECHNICAL INFORMATION, OR ANY OTHER INFORMATION OR MATERIALS, OR ANY PART THEREOF, PROVIDED HEREUNDER, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. EXCEPT FOR ANY WARRANTIES EXPLICITLY SET FORTH HEREIN OR IN ANY OF THE OTHER TRANSACTION AGREEMENTS, SIPEX AND SILAN EXPRESSLY DISCLAIM ANY WARRANTY THAT THE OTHER PARTY’S USE OF TECHNOLOGY WILL NOT INFRINGE ANY THIRD PARTY’S INTELLECTUAL PROPERTY RIGHTS. NEITHER SIPEX NOR SILAN AUTHORIZE ANY PERSON TO ASSUME FOR EITHER OF THEM ANY LIABILITIES IN CONNECTION WITH THIS AGREEMENT.
THE LIMITATIONS ON LIABILITY SET FORTH IN THESE SECTIONS 6.6 (c)-(e) SHALL (I) APPLY ONLY TO THOSE MATTERS FOR WHICH A LIMITATION OF LIABILITY IS NOT OTHERWISE EXPRESSLY PROVIDED FOR UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION AGREEMENT AND (II) NOT APPLY TO SILAN’S OR SIPEX’S INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION AGREEMENTS OR TO SILAN’S OR SIPEX’S MATERIAL BREACH OF Article 4.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY, OR OTHERWISE. THE FOREGOING LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER THE PARTY AGAINST WHOM LIABILITY IS ASSERTED HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
THE TOTAL AGGREGATE LIABILITY OF SILAN ARISING OUT OF OR RELATING TO THE PRODUCTION EQUIPMENT SALE AGREEMENT SHALL BE AMOUNTS PAID OR PAYABLE TO SIPEX UNDER SUCH AGREEMENT.
THE TOTAL AGGREGATE LIABILITY OF SIPEX ARISING OUT OF OR RELATING TO (I) THE PRODUCTION EQUIPMENT SALE AGREEMENT SHALL BE AMOUNTS PAID BY SILAN UNDER SUCH AGREEMENT; (II) THE PTTLA SHALL BE AMOUNTS PAID OR PAYABLE BY SILAN THEREUNDER; (III) THE PRODUCT LICENSE AGREEMENT SHALL BE AMOUNTS PAID TO SIPEX THEREUNDER WITH RESPECT TO THE PRODUCT THAT GIVES RISE TO SUCH LIABILITY; AND (IV), THE WAFER SUPPLY AGREEMENT, THE AMOUNTS PAID OR PAYABLE TO SILAN THEREUNDER WITH RESPECT TO THE PRODUCT THAT GIVES RISE TO SUCH LIABILITY.
6.7 Survival of Indemnities .
The rights and obligations of the Sipex Indemnitors and the Silan Indemnitors under this Article 6 shall survive the sale or other transfer by any Party of any assets or businesses or the assignment by it of any Liabilities or the sale by any Sipex Indemnitor or Silan Indemnitor of the capital stock or other equity interests of any Subsidiary or Affiliated Company to any Person.
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