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
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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]
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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
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Title: Marketing Manager
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