Letter Agreement re: Manufacture of Microprocessor Die - RSA Security Inc. and Sanyo Semiconductor Corp.
RSA RSA Security Inc. Tel 781 515 5000 SECURITY 174 Middlesex Tpke www.rsasecurity.com Bedford, MA 01730 December 1, 2004 Mr. Tom Takeda Marketing Manager Sanyo Semiconductor Corporation 80 Commerce Drive Allendale, NJ 07401 RE: Letter Agreement: Manufacture of Microprocessor Die Once again, the employees of RSA Security Inc. would like to express their sincere concern and compassion to the employees and families of Sanyo Semiconductor Corporation due to the recent earthquake. We have long maintained a successful relationship with Sanyo and have confidence that this relationship will continue as Sanyo recovers from this. As Sanyo moves its manufacturing facilities for the microprocessor die to the Gifu plant, it is our understanding that Sanyo desires a clarification of our projected manufacturing needs of this microprocessor die from February 2005 through May 2005. It is our intention at this point, based on our current forecast with our contract manufacturer, Flextronics International, that Flextronics International will be requiring from Sanyo the following quantity of microprocessor die on our behalf: Date Available Quantity --------------- ---------- February 2, 2005 [**] units February 16, 2005 [**] units March 1, 2005 [**] units April 1, 2005 [**] units May 1, 2005 [**] units PROJECTED ORDER TOTAL [**] UNITS We plan to place our orders with Flextronics who will in turn issue purchase orders to Sanyo for microprocessor dies (each a "Contract Manufacturing Order") substantially consistent with the above estimates in our normal supply chain process. Sanyo agrees to use its best efforts to supply the units in the quantities specified above to Flextronics substantially in accordance with the schedule set forth above. RSA Security agrees that in the event that Flextronics have not placed purchase orders with Sanyo for the Projected Order Total substantially in conformance to the schedule above by <PAGE> Mr. Tom Takeda December 1, 2004 Page 2 May 1, 2005, RSA Security will agree to issue a purchase order to Sanyo for a number of units equal to the difference between the Projected Order Total minus the total of the Contract Manufacturing Orders. Sanyo agrees that the unit cost of the microprocessor die under such purchase order shall be no more than USD $[**]. RSA Security's standard purchase order terms and conditions shall govern any such purchase. In the event that RSA Security issues such a purchase order, Sanyo further agrees to hold any such units in inventory on RSA Security's behalf in a commercially reasonable manner, consistent with industry standards, for a commercially reasonable period of time. Notwithstanding any contrary provision set forth herein, Sanyo acknowledges and agrees that it will maintain practices that have been established through the course of dealing among Sanyo, Flextronics and RSA Security through the ongoing relationship, including, without limitation, with respect to current practices related to supplier managed inventory hub and, by May 31, 2005, by replenishing the three (3) month supply of microprocessor die of approximately [**] units. Neither party shall, for any purpose, be deemed to be an agent of the other party and the relationship between the parties shall only be that of independent contractors. Neither party shall have any right or authority to assume or create any obligations or to make any representations or warranties on behalf of any other party, whether express or implied, or to bind the other party in any respect whatsoever. This Letter Agreement shall be governed and construed in all respects in accordance with the domestic laws and regulations of the Commonwealth of Massachusetts, without regard to its conflicts of laws provisions. This Letter Agreement is in English only, which language shall be controlling in all respects. All documents exchanged under this Letter Agreement shall be in English. Die availability dates are based on acceptance of the initial base wafer tests (TR Level Testing by 12/8). Also, the initial die shipment dates are based on some risk since the Sanyo and RSA reliability tests will not be fully completed prior to wafer processing. [Signature Page Follows] <PAGE> Mr. Tom Takeda December 1, 2004 Page 3 Thank you for your continued cooperation in this matter. Sincerely, RSA Security Inc. By: /s/ Jeffrey D. Glidden ----------------------------- Jeffrey D. Glidden CFO & Senior Vice President, Finance & Operations Acknowledged and agreed: Sanyo Semiconductor Corporation By: /s/ Tom Takeda ----------------------------- Name: Tom Takeda --------------------------- Title: Marketing Manager --------------------------