CONFIDENTIAL TREATMENT REQUESTED
FIRST AMENDMENT TO
TI PURCHASE AGREEMENT
This FIRST AMENDMENT TO TI PURCHASE AGREEMENT (the "First Amendment") is
dated as of April 1, 2000, by and among TEXAS INSTRUMENTS INCORPORATED, a
Delaware corporation ("TI"), MEMC ELECTRONIC MATERIALS, INC., a Delaware
corporation ("MEMC"), and MEMC SOUTHWEST INC., a Delaware corporation ("NUCO").
All terms used herein, unless otherwise defined, shall have the same meanings
ascribed to them in the Agreement (as defined below).
Recitals
WHEREAS, TI, NUCO and MEMC made and entered into the TI Purchase Agreement
dated as of June 30, 1995 (the "Agreement"); and
WHEREAS, TI, MEMC and NUCO wish to amend the Agreement, the Shareholders'
Agreement, the Lease and the Sublease to further strengthen the MEMC/TI
relationship, lower the total cost of ownership, provide competitive pricing to
TI, and to minimize time and resources required to support the business
relationship; and
WHEREAS, Section 22.03 of the Agreement allows the Agreement to be amended
with the written consent of TI, MEMC and NUCO.
NOW, THEREFORE, the parties agree as follows:
1. "Existing Products" means 125mm epi wafers, 125mm polished wafers, 125 mm
test monitor wafers, 150 mm epi wafers, 150 mm polished wafers, and 150 mm
test monitor wafers
2. Section 4.01(a) of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:
"(a) Beginning no later than the end of fourth calendar quarter 2000
and ending December 31, 2005, TI commits to purchase, subject to NUCO's and
MEMC's (and its Subsidiaries') material compliance with TI's quality,
delivery and service requirements (as described in Section 2.03(c)), and
NUCO and MEMC (and its Subsidiaries) commit to sell to TI in the aggregate,
a minimum each year of the lesser of (i) [CONFIDENTIAL MATERIAL HAS BEEN
DELETED AND FILED SEPARATELY WITH SEC] of TI's worldwide needs of such
Existing Products offered for sale by MEMC (and its Subsidiaries) or NUCO,
or (ii) [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED SEPARATELY WITH
SEC] (the "Existing Product Loading Commitment"). If either NUCO or MEMC
(or its Subsidiaries) cannot supply a specific Existing Product needed by
TI, TI's Existing Product Loading Commitment stated in this section 4.01(a)
shall be decreased in equal proportion. Unless mutually agreed differently,
TI shall initiate a volume ramp to MEMC and NUCO in the second calendar
quarter 2000 and shall make an effort to reach the Existing Product Loading
Commitment by the end of the third calendar quarter 2000. After 2005, MEMC
and TI will negotiate in good faith whether the purchase agreement for
Existing Products will be continued, and if so, on what terms."
3. Section 4.01(b) is deleted in its entirety and the following is substituted
in lieu thereof:
"MEMC and TI shall mutually agree on a [CONFIDENTIAL MATERIAL HAS BEEN
DELETED AND FILED SEPARATELY WITH SEC] for NUCO's Existing Facility."
4. The second sentence of Section 4.01(d) of the Agreement is deleted in its
entirety.
5. In the second sentence of Section 4.03(a), the parenthetical phrase is
deleted and replaced with the following:
"(unless such shortfall is solely attributable to NUCO or MEMC,
including, but not limited to, NUCO's inability to supply products or to
materially comply with TI's quality, delivery and service requirements, as
described in Section 2.03(c))"
6. Section 4.03(b) is deleted in its entirety.
7. The following is added as Section 4.05 to Article IV of the Agreement.
"Purchases from Other MEMC Sites. TI agrees to qualify the existing
MEMC (and its Subsidiaries') manufacturing sites (Novara, Kuala Lumpur, St.
Xxxxxx, Utsonimiya) at TI's expense. If reasonably requested by MEMC, TI
agrees to qualify Existing Products manufactured at MEMC (and its
Subsidiaries') manufacturing sites at MEMC's expense and at TI's actual
cost not to exceed Seventy-Five Thousand U.S. Dollars (US$75,000) per
product qualification. MEMC and NUCO can elect to supply TI qualified MEMC
product from any TI qualified MEMC (and Subsidiaries) site and TI's
purchases of Existing Products manufactured at such sites shall count
towards the fulfillment of TI's Existing Product Loading Commitment."
8. Section 10.01 (a) and (b) are deleted in their entirety and the following
is substituted in lieu thereof:
"(a) Beginning April 1, 2000, the price to be paid by TI to NUCO and
MEMC (and its Subsidiaries) in a calendar quarter for each product in the
six product families (125mm epi, 125 mm polished, etc.) comprising the
Existing Products shall be [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND
FILED SEPARATELY WITH SEC] than the "Benchmark Price" for that product
family, defined as the [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] for sales of that product family in the previous
calendar quarter to [CONFIDENTIAL MATERIAL HAS BEEN DELETED AND FILED
SEPARATELY WITH SEC] who purchased from [CONFIDENTIAL MATERIAL HAS BEEN
DELETED AND FILED SEPARATELY WITH SEC] in that product family in the
previous calendar quarter. The Benchmark Price and the price to be paid by
TI shall be in U.S. Dollars. Beginning July 1, 2000, the price paid by TI
for any product family in a given quarter shall [CONFIDENTIAL MATERIAL HAS
BEEN DELETED AND FILED SEPARATELY WITH SEC]. If the calculation of the TI
price demonstrates a putative TI price that is [CONFIDENTIAL MATERIAL HAS
BEEN DELETED AND FILED SEPARATELY WITH SEC]. A sample price calculation is
attached hereto as Exhibit A.
"(b) During the term of this Amendment and for two succeeding years,
TI may elect, at its expense, to have MEMC's and its Subsidiaries' customer
sales records audited by an independent third party acceptable to both
parties to confirm that the Benchmark Price has been calculated using the
methodology described in Exhibit A and if the audit reveals that MEMC did
not follow the described methodology and the result is a discrepancy in the
amount paid by TI, NUCO or MEMC, as the case may be, shall pay TI any
overpayments and TI shall pay MEMC or NUCO, as the case may be, any
underpayments. If the discrepancy is an overpayment by TI exceeding Fifty
Thousand U.S. Dollars (US$50,000) in a quarter, MEMC shall pay the cost of
the audit attributable to such quarter(s). Details of the audit report
shall remain confidential between MEMC and the independent third party."
9. In Section 14.01, each occurrence of "QDCS" shall be replaced with the
following:
" product quality, delivery and service".
10. Schedule 1.00 of the Agreement shall be amended to include Section 4.01 (a)
and (b), Section 4.05, and Section 10.01 (a) and (b). With respect to any
sales of Existing Products by MEMC or any MEMC Subsidiary to TI, the
parties agree that the terms and conditions of the Agreement shall apply to
such sales (except that TI's right of first refusal in Section 4.01(d)
shall not apply to MEMC or its Subsidiaries).
11. TI will request the consent of Meridian Trust Company and Bankers Trust
Company to the Sublease amendment. NUCO agrees that once TI has obtained
such consent, NUCO will promptly exercise its option to renew both the
Lease and the Sublease for the first Renewal Term (as defined in the Lease
and Sublease). TI and NUCO agree that the deadline for exercise by NUCO of
such renewal options is hereby extended to August 31, 2000. If TI is unable
to obtain the aforementioned consents prior to August 31, 2000, TI and NUCO
shall negotiate in good faith a further extension of such deadline.
12. Except as specifically amended by this First Amendment, all provisions of
the Agreement shall remain effective and binding. This Amendment, together
with the Agreement, constitutes the entire agreement between the Parties
relating to the subject matter hereof and supersedes all prior agreement,
oral or written, and all other communications between the Parties.
13. Each Party hereto, its successors, shareholders and assigns, release and
forever discharge and hold harmless each other Party, its successors,
shareholders and assigns, jointly and severally, of and from any and all
manner of claims whatsoever because of any manner of thing done, or omitted
to be done, existing at any time prior to and including the date of this
Amendment, in law, in equity or otherwise, liquidated or unliquidated,
known or unknown, suspected or unsuspected, arising from or related to
loading commitment, pricing, QDCS, or practices of epi production. Nothing
in this Agreement shall be construed as an admission of liability of any
Party, all such liability being expressly denied.
14. This Amendment shall be governed by the laws of the state of Texas, without
regard to any conflicts of law principles that may require the application
of the laws of any other jurisdiction. In no event shall the UN Convention
on Contracts for the International Sale of Goods be applicable to the
transactions under the Amendment.
IN WITNESS WHEREOF, the parties have executed this First Amendment as of
the date first above written and the terms herein shall be effective as of that
date.
TEXAS INSTRUMENTS INCORPORATED MEMC ELECTRONIC MATERIALS, INC.
By: /s/ X. Xxxxxxxxxxxxxxx By: /s/ Xxxxx X. von Horde
------------------------------ ---------------------------------
Name: X. Xxxxxxxxxxxxxxx Name: Xxxxx X. von Horde
Title: Senior Vice President Title: President and Chief Executive
Officer
MEMC SOUTHWEST INC.
By: /s/ Xxxxx Xxxx
------------------------------
Name: Xxxxx Xxxx
Title: President
