EXHIBIT 10.17
PURCHASE AGREEMENT
BETWEEN
XXXXXX SEMICONDUCTOR
AND
PRAXAIR, INC.
THIS AGREEMENT numbered PRAXHO92FINO4O1 is entered into as of the
fourteenth (14th) day of March, 1997, by and between Xxxxxx Semiconductor, a
Delaware corporation, having an office at 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx
00000, hereinafter referred to as "Buyer" and PRAXAIR, INC., a Delaware
corporation, having an office at 00 Xxx Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx
00000-0000 hereinafter referred to as "Seller").
WITNESSETH:
In consideration of the mutual promises contained herein, the parties intending
to be legally bound agree as follows:
I. SCOPE
Seller agrees to sell and Buyer agrees to purchase from Seller, on the terms and
conditions herein after set forth, Buyer's total requirements (at all locations
listed in Exhibit "A", (except Mountaintop's Existing Fab 8) of Silane as listed
on Exhibit "A" (hereinafter, "Product"). This Agreement will be in effect from
the date hereof for a term of six (6) years beginning March 14, 1997.
II. PRICING
All prices for locations listed in Exhibit "A" are F.O.B. delivered to Buyer's
locations for Findlay, Ohio and Mountaintop, Pennsylvania and F.O.B. Seller's
location for Palm Bay, Florida. In the event the parties agree to add additional
locations to Exhibit "A", said prices may be adjusted up or down to reflect any
additional cost variance associated with supply to such additional locations.
Prices shall remain as stated in Exhibit "A" through March 13, 1999, thereafter
Seller will have the right to revise the Prices annually by giving Buyer not
less than sixty (60) days prior written notice of the effective date of such
revision; provided, however, that if said Prices are increased and Buyer, within
thirty (30) days after said notice, furnishes Seller with credible written
evidence that Buyer can purchase Product to which such increased Prices apply
from a responsible supplier for a specified term in like quantities and
qualities at lower prices under similar terms and conditions, and Seller, within
thirty (30) days thereafter, does not agree to either meet said lower prices or
rescind the notice of increased Prices, Buyer will have the right within ten
(10) days thereafter to terminate this Agreement as to the supply of Product for
which such lower prices are offered by giving Seller not less than ten (10) days
prior written notice. A subsequent
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reduction in overall volume caused by this action shall not be grounds for any
price adjustments described herein in Section IV QUANTITIES. If Seller agrees to
meet the lower prices or rescind the notice of increased Prices, Seller will
also have the right to extend the Basic Term of the Agreement covering such
Product, for a period equal to the term specified in the lower price offer.
Seller agrees that: (1) No material will be invoiced against this Agreement
number as it is intended for use by Buyer as a control number only; (2) All
charges with respect to purchase orders issued hereunder shall be issued in
accordance with the purchase orders issued hereunder; and (3) Payment terms
shall be thirty (30) days after receipt of invoice for Buyer's locations in
Findlay, Ohio and Mountaintop, Pennsylvania and monthly per Buyer's invoices as
set forth in Section X TRANSPORTATION AND WAREHOUSING.
III. BUYER'S DIVISIONS AND SUBSIDIARIES
Seller agrees that the term "Buyer" as referred to herein, includes all of
Buyer's divisions and subsidiaries, which now, or during the Agreement period,
may make purchases under the terms of this Agreement. All purchase orders issued
with a notation thereon to the effect that they are submitted pursuant to and
are to be governed by this Agreement and which otherwise comply with the terms
hereof, shall be accepted hereunder by Seller and shall be subject to and
receive the benefits of all the terms of this Agreement, included in Exhibit
"A".
IV. QUANTITIES
It is understood by both parties of this Agreement that quantities indicated
herein are strictly projections made by Buyer with the best information
available at the time. These quantities could be subject to change due to
economic conditions or other factors beyond Buyer's control. Buyer will strive
to meet these commitments but will not be penalized for their inability to meet
the quantities indicated. The prices set forth in Exhibit "A" are predicated on
the total estimated volume and of the locations listed in Exhibit "A". Should
such quantities increase or decrease during a period of nine (9) months by an
average amount greater than - twenty-five percent (25%) for reasons other than
Seller's inability to supply Buyer's requirements, and such increased or
decreased quantities are expected to remain at that level, then Buyer and Seller
agree to discuss the impact on the Seller's costs and adjust the prices listed
in Exhibit "A" accordingly.
In the event the quantities of Product are more economically supplied in bulk
quantities as agreed to by Buyer and Seller, then Buyer and Seller will
negotiate in good faith any necessary adjustments in pricing, terms and
conditions.
If a part or all of the quantities for a location listed in Exhibit "A" is no
longer required and is subsequently required at an additional location not
listed in Exhibit "A" and Buyer
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is not obligated to purchase that Product from another supplier, then Buyer and
Seller agree to negotiate in good faith for the supply of the transferred
quantity.
V. QUALIFICATION TESTING
Without in any way limiting its warranty or acceptance testing rights under this
Agreement, Buyer intends to from time to time subject samples of Product to be
purchased hereunder to additional testing by a mutually agreed upon testing
facility to assure that said Product meets requirements of the specifications
set forth in Exhibit "A." Buyer will reference the specifications listed in
Exhibit "A" on Buyer's Purchase Orders as a method of communication of the
specification of the Product to the Seller with each order for Product to be
delivered to the locations specified in Exhibit "A". Buyer shall notify Seller
of any deficiencies indicated by said testing and Seller shall at its own
expense alter said items to be delivered hereunder so that they will perform to
the requirement of the specifications as defined in Exhibit "A" (attached)
unless Buyer has elected in writing to waive said deficiency.
Buyer retains the right and option to purchase Product under this Agreement
prior to completion of its qualification testing of said Product. In the event
said qualification tests by a mutually agreed upon testing facility shall
disclose deficiencies (deficiencies meaning not meeting agreed upon
specification) in any Product to be purchased hereunder, Buyer at its options
may require Seller to suspend further deliveries of said Product until such time
as Seller shall have corrected said deficiencies at its own expense. o Seller
agrees that it will repair, modify or replace at no cost to Buyer all of said
nonconforming Product which has been delivered to Buyer pursuant to this
Agreement within 60 days of receipt of Buyer's notice of deficiency.
In the event that Seller shall fail to correct at its own expense any and all
deficiencies within a reasonable period of time after receiving notice thereof
from Buyer, Buyer shall have the right at its option to cancel all or any
portion of its outstanding or completed orders for said items without charge and
to return for full credit at Seller's expense all nonconforming Product
delivered to Buyer within 90 days prior to the date upon which Seller received
Buyer's notice of deficiency. Seller agrees that with respect to items now or
anytime hereafter subject to this Agreement, it will make available to Buyer at
no charge results of its quarterly SPC data, and in conjunction with each
delivery, Seller shall also supply at no charge to Buyer, a Certificate of
Compliance representing Product supplied hereunder. Buyer has the option, with
thirty (30) days prior written notice to audit Seller's ISO 9000 procedures
associated with such Product.
VI. SPECIFICATIONS AND PRODUCTION PROCESS CHANGES
Seller agrees that all Products to be delivered under this Agreement shall meet
the specifications described in Exhibit "A" as well as applicable drawings,
Buyer approved samples and other descriptions thereof agreed to by the parties.
Seller further agrees that in addition to the foregoing requirements, and
without limitation thereof, it will not
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make any such change in a Product specification without first having received
Buyer's prior written consent. Seller recognizes that Buyer is in an industry
which requires an ever increasing gas purity. If during the term of the
Agreement, Buyer believes that a higher purity product is beneficial and
necessary, Buyer agrees to contact Seller in writing and advise Seller of such
needs and a brief description of Buyer's rational.
In such event, if the Product, based on the new specification, which is
verifiable using generally acceptable industry test procedures (or which is
verifiable using SEMI or ASTM test procedures) and is commercially available in
the marketplace from an alternate source, Seller will have the option to provide
Buyer with a product that is comparable in overall price and is equivalent to or
superior than the product that is available from an alternate source. Buyer and
Seller will negotiate in good faith the adjustments necessary to supply such
Product to Buyer within sixty (60) days. If such Product is not commercially
available in the marketplace from an alternate source, Seller will provide Buyer
with an estimate of the additional costs and time required to supply such
Product with improved specifications within sixty (60) days. If acceptable to
Buyer, Buyer will notify Seller of its acceptance and Seller will begin the
steps necessary to supply such Product and this Agreement will be amended to
reflect the new specifications and prices agreed upon by the parties. Buyer will
limit such requests for Product with new specifications that is not commercially
available, to no more than one request per year per location.
In either event, if Seller is unable or unwilling to supply Buyer with Product
with new specifications, Buyer shall have the right to terminate this Agreement,
after thirty (30) days from notification from Seller of such inability or
unwillingness, with respect to the location and quantity relating to the new
specification. This Agreement will remain in effect for all locations not
effected by such new specifications.
VII. ADDITIONAL ITEMS
If at any time during the term of this Agreement, Buyer shall have a need for
items being commercially produced by Seller, which although not then listed on
Exhibit "A" are in the same general product line as the Products listed on
Exhibit "A", Buyer shall have a right upon thirty (30) days prior written notice
to Seller to have said items added to this Agreement for purchase according to
the terms hereof at prices that are mutually agreeable at that time.
VIII. RELEASES
A. Buyer will issue monthly releases of required quantity to be delivered.
IX. OTHER TERMS AND CONDITIONS
This Agreement supersedes any prior agreement or agreements between Buyer and
Seller covering the supply of Product to Buyer's locations listed in Exhibit
"A". The entire
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agreement is contained herein and in the Exhibits and attachments hereto. There
are no other promises, representations or warranties affecting this Agreement,
and any other or different terms or conditions in any purchase orders or other
documents issued or accepted hereunder will be deemed null and void. Any
headings contained in this Agreement are used only as a matter of convenience
and reference, and are in no way intended to define, limit, expand or describe
the scope of this Agreement. This Agreement will be governed by the laws of the
State of Florida.
X. TRANSPORTATION AND WAREHOUSING
Buyer and Seller have agreed to maintain an inventory, as set forth in Exhibit
"A", of Product at a Buyer's location in Palm Bay, Florida. Product for Palm
Bay, Florida will be transported by a carrier selected by and paid for by the
Buyer, and approved by the Seller, which approval will not be unreasonably
withheld. Buyer accepts receipt of the Product when it reaches the Buyer's
location and will notify Seller weekly of the Product removed from inventory.
Buyer will submit an invoice for all removed Product and pay such invoice each
month.
Buyer and Seller have agreed to maintain an inventory as set forth in Exhibit
"A", of Product at Seller's warehouse in Findlay, Ohio for Buyer's location in
Findlay, Ohio. Product for Findlay, Ohio will be transported by a carrier
selected by and paid for by the Seller. Buyer accepts receipt of the Product
when it reaches the Buyer's location. Seller will submit an invoice with each
order and Buyer will pay such invoice within thirty (30) days of receipt of such
invoice.
Buyer and Seller have agreed to maintain an inventory as set forth in Exhibit
"A", of Product at Seller's warehouse in Bethlehem, Pennsylvania for Buyer's
location in Mountaintop, Pennsylvania. Product for Mountaintop, Pennsylvania
will be transported by a carrier selected by and paid for by the Seller. Buyer
accepts receipt of the Product when it reaches the Buyer's location. Seller will
submit an invoice with each order and Buyer will pay such invoice within thirty
(30) days of receipt of such invoice.
Buyer and Seller agree to negotiate in good faith any further adjustments to
such transportation and warehousing arrangements as deemed necessary by both
parties.
XI. WARRANTY
Product delivered hereunder will meet the specifications as set forth in Exhibit
"A". If in the event Seller fails to supply product (ASiMI and MEMC) and/or
product that meets the specifications as set forth in Exhibit "A", Buyer shall
notify Seller in writing of such occurrence and Seller shall remedy the failure
through replacement of Product. In the event Seller is unable or unwilling to
provide replacement Product which meets applicable specifications, Buyer shall
have the right to temporarily secure a supply of Product for that location
outside of this Agreement at no cost to Seller. Seller will have thirty (30)
days to provide Buyer with its action plan to resolve the problem so that Seller
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can provide Buyer with Product that meets the specification. Subsequently,
should the occurrence of such failures continue unresolved over a continuous
period of thirty (30) days or intermittently over a period of six (6) months for
a total of thirty (30) days then Buyer may terminate this Agreement at no cost
for that quantity at that location listed in Exhibit "A". Buyer acknowledges
that it may obtain devices which have the capability of testing whether the
Products delivered hereunder meet such specifications. In the event any Product
delivered hereunder fails to meet the specifications as set forth in Exhibit "A"
and solely as a result of such failure Buyer's piping system, wafers, devices,
or chips being manufactured are damaged, in addition to Buyer's remedies set
forth above, Seller shall pay for such damage an amount not to exceed two (2)
times the price of the non-conforming Product. THERE ARE NO EXPRESS WARRANTIES
BY SELLER OTHER THAN THOSE SPECIFIED IN PARAGRAPH VI AND THIS PARAGRAPH. NO
WARRANTIES BY SELLER (OTHER THAN WARRANTY OF TITLE AS PROVIDED IN THE UNIFORM
COMMERCIAL CODE) SHALL BE IMPLIED OR OTHERWISE CREATED, INCLUDING BUT NOT
LIMITED TO WARRANTY OF MERCHANTABILITY AND WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE UNDER THE UNIFORM COMMERCIAL CODE.
XII. LIABILITY
Buyer acknowledges that there are hazards associated with Product, including
without limitation the storage, use and handling thereof, and Buyer agrees that
its personnel concerned with Product are aware of such hazards. Buyer assumes
all responsibility for the suitability and the results of using Product alone or
in combination with other articles or substances and in any manufacturing,
medical, or other process or procedures. Buyer will notify Seller of any hazards
and safety procedures at Buyer's Location(s) and Buyer will notify Seller in
advance of any anticipated construction, renovation, or change in operations in
the area of any Supply System site so that any hazards associated with same can
be minimized. Buyer will be responsible for complying with all relevant
reporting obligations under all applicable laws, including without limitation
the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
Sections 11001-11049 [EPCRA, also commonly known as Title III of the Superfund
Amendments and Reauthorization Act of 1986 (XXXX Title III)], that result from
the presence at Buyer's Location(s) of Product supplied under this Agreement.
Buyer will warn and protect its employees, independent contractors and others
exposed to the hazards posed by Buyer's storage, use and handling of Product.
Seller will provide documents to Buyer containing Seller's safety and health
information pertaining to Product, including Seller's Material Safety Data
Sheet(s), and Buyer will incorporate such information into Buyer's safety
program. Seller shall not be liable under this Agreement for any incidental,
consequential, indirect or special damages. Each party hereby indemnifies and
holds harmless the other party from any actions, lawsuits, demands, claims,
losses, expenses, costs, including without limitation legal fees, and damages,
arising from the injury, illness or death of the indemnifying party's employees
in any way related to Product supplied by Seller under this Agreement, whether
or not such injury,
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illness, or death is claimed to have been caused by, resulted from, or was in
any way connected with the negligence of the party to be indemnified.
XIII. CONTINGENCIES
Seller will not be liable for default or delay in delivery or other performance
of any of its obligations hereunder due to acts of God, accident, fire, flood,
storm, riot, war, sabotage, explosion, strike, labor disturbance, national
defense requirement, governmental law, ordinance, rule or regulation, whether
valid or invalid, inability to obtain electricity or other type of energy, raw
material, labor, equipment or transportation, or any similar or different
contingency beyond its reasonable control which would make performance
commercially impracticable whether or not the contingency is of the same class
as those enumerated above.
XIV. ASSIGNMENT
Any assignment of this Agreement by either party without the prior written
consent of the other party, which consent will not be unreasonably delayed or
withheld, will be void; provided, however, that Seller will have the right
without Buyer's consent to assign this Agreement to any affiliate of Seller, or
any party obtaining all or substantially all of the business assets of Seller
and Buyer will have the right without Seller's consent to assign this Agreement
to any affiliate of Buyer, or any party obtaining all or substantially all of
the business assets of Buyer. This Agreement will inure to the benefit of, and
be binding upon, the respective heirs, representatives, successors, including
any by way of merger or consolidation, and permitted assigns of the parties.
XV. CONFIDENTIALITY
This Agreement, including the Exhibit(s) and any addendum hereto, and all
drawings, diagrams, specifications, operating data, pricing and costs and other
materials furnished by either party to the other in connection therewith, and
the information therein are proprietary to the disclosing party. Such materials
contain trade secrets and other confidential information of the disclosing
party. The receiving party may not reproduce or distribute such materials except
to the receiving party's employees for the purpose of performing the receiving
party's obligations under this Agreement. In the case of any of the
aforementioned disclosures, the receiving party will inform its employees that
such information is the confidential information of the disclosing party and is
to be treated accordingly. All such information (except information as may be
established to be in the public domain) will be received in confidence by the
receiving party, and the receiving party will exercise the same degree of care
to hold such information in confidence as it uses with respect to its own trade
secrets and/or confidential and proprietary information. Unless otherwise agreed
to by the parties, the receiving party will keep all such information
confidential for a period which will expire five (5) years after the termination
date of this Agreement. Notwithstanding anything herein to the contrary, Buyer
hereby grants to Seller the right to reasonably use the supply system(s) for
promotional purposes, including visits to the
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supply system site(s) by Seller with third parties. Each such promotional use,
however, will be subject to Buyer's approval, which approval will not be
unreasonably delayed or withheld.
XVI. AMENDMENTS
The provisions of this Agreement may not be and shall not be deemed or construed
to have been modified, amended, rescinded, canceled or waived in whole or in
part, except by written instruments signed by both parties. A waiver of any of
the terms and conditions hereof will not be deemed a continuing waiver, but will
apply solely to the instance to which the waiver is directed. IN WITNESS
WHEREOF, the parties have caused this Agreement to be executed as of _________,
1997.
Praxair, Inc. Xxxxxx Corp.
By: [illegible] By: /s/ Xxxx X. Xxxxxxx
------------------ ---------------------
Title: Sales Director Title: Sr. Mgr. Material
------------------ ---------------------
Date: 5/29/97 Date: 5-22-97
------------------ ---------------------
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Exhibit "A"
dated March 14, 1997
Palm Bay, Florida
Silane
Current ASiMI Silane:
(Engineering Specification 210177-001 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
-----------------------------------------------------------------------------------------------
2,500 grams 1,250 grams $0.221 $0.221 (See Article II) 0
165,000 grams 5,000 grams $0.175 $0.175 (See Article II) 4 to 10
Total: 167,000 grams
Optional ASiMI Silane:
(Engineering Specification 210177-001 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
-----------------------------------------------------------------------------------------------
2,500 grams 1,250 grams $0.42 $0.42 (See Article II) 0
165,000 grams 5,000 grams $0.30 $0.30 (See Article II) 0
Total: 167,000 grams
Cylinder rental costs have been integrated in base product charges based upon an
assumed cylinder residence time of one hundred and twenty (120) days. No
separate cylinder rental charges will be applied unless the residence time is
exceeded. In this event, cylinder rental charges shall be applied beginning on
the one hundred and twenty-first (121st) day at a rate then representative of
Seller's standard rental rates of such equipment.
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Exhibit "A"
dated March 14, 1997
Findlay, Ohio
Silane
Current MEMC Silane:
(Engineering Specification 000-0000-00 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
----------------------------------------------------------------------------------------------
510,360 grams 9,000 grams $0.31 $0.31 (See Article II) 4 to 10
Optional AsiMI Silane:
(Engineering Specification 000-0000-00 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
-----------------------------------------------------------------------------------------------
510,360 grams 9,000 grams $0.175 $0.175 (See Article II) 0
Cylinder rental costs have been integrated in base product charges based upon an
assumed cylinder residence time of one hundred and twenty (120) days. No
separate cylinder rental charges will be applied beginning on the one hundred
and twenty-first (121st) day at a rate then representative of Seller's standard
schedule rental rates for such equipment.
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Exhibit "A"
dated March 14, 1997
Mountaintop, Pennsylvania
Silane
Current MEMC Silane:
Batch Analysis (Engineering Specification 210177-001 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
------------------------ --------------------------------------------------------------------------
50,000 grams 5,000 grams $0.35 $0.35 (See Article II) 2 to 6
72,000 grams 12,000 grams $0.30 $0.30 (See Article II) 1 to 3
700,000 grams 14,000 grams $0.30 $0.30 (See Article II) 5 to 25
Total: 822,000 grams
Individual Analysis (Engineering Specification 210177-001 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
----------------------------------------------------------------------------------------------------
50,000 grams 5,000 grams $0.59 $0.59 (See Article II) 0
72,000 grams 12,000 grams $0.41 $0.41 (See Article II) 0
700,000 grams 14,000 grams $0.40 $0.40 (See Article II) 0
Total: 822,000 grams
Optional ASiMI Silane:
Batch Analysis (Engineering Specification 210177-001 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
---------------------------------------------------------------------------------------------------
50,000 grams 5,000 grams $0.21 $0.21 (See Article II) 0
72,000 grams 12,000 grams $0.186 $0.186 (See Article II) 0
700,000 grams 14,000 grams $0.186 $0.186 (See Article II) 0
Total: 822,000 grams
Individual Analysis (Engineering Specification 210177-001 - dated 03/14/97)
Year 1 Year 2 Year 3-6 Inventory
Quantity Package Price/gram Price/gram Price/gram Level
-----------------------------------------------------------------------------------------------------
50,000 grams 5,000 grams $0.53 $0.53 (See Article II) 0
72,000 grams 12,000 grams $0.35 $0.35 (See Article II) 0
700,000 grams 14,000 grams $0.33 $0.33 (See Article II) 0
Total: 822,000 grams
Cylinder rental costs have been integrated in base product charges based upon an
assumed cylinder residence time of one hundred and twenty (120) days. No
separate cylinder rental charges will be applied unless the residence time is
exceeded. In this event, cylinder rental charges shall be applied beginning on
the one hundred and twenty-first (121st) day at a rate then representative of
Seller's standard schedule rental rates for such equipment.
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