Exhibit 10.16
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF
SEMICONDUCTOR PRODUCTS
BY AND BETWEEN
MARVELL SEMICONDUCTOR, INC.,
MARVELL ASIA PTE LTD
and
WESTERN DIGITAL TECHNOLOGIES, INC.
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF
SEMICONDUCTOR PRODUCTS
Section Page
------- ------
1.0 Definitions Page 3
2.0 Term of Agreement Page 4
3.0 [*] Page 4
4.0 Forecast of Product Purchases Page 5
5.0 Purchase Orders Page 5
6.0 Supplier's [*] Obligation and
Buyer's [*] Obligations Page 6
7.0 Rescheduling Shipment Dates Page 7
8.0 Cancellation of Purchase Orders Page 8
9.0 Pull Signals Page 8
10.0 [*] Program Page 9
11.0 Quarterly Business Review Page 9
12.0 Invoicing, Payment Terms, Taxes Page 9
13.0 Termination Page 10
14.0 Engineering Changes Page 11
15.0 Quality Standards Page 11
16.0 Product Warranty Page 11
17.0 Supplier's Indemnity Page 12
18.0 Confidential Information Page 13
19.0 Supplier Engineering Support Page 13
20.0 Notice Page 13
21.0 General Provisions Page 14
Exhibit A
Exhibit B
Exhibit C
2
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF
SEMICONDUCTOR PRODUCTS
THIS SUPPLY AGREEMENT FOR THE FABRICATION AND PURCHASE OF SEMICONDUCTOR
PRODUCTS (this "Agreement"), dated June 13, 2002, is made and entered into by
and among WESTERN DIGITAL TECHNOLOGIES, INC. ("Buyer"), MARVELL SEMICONDUCTOR,
INC., ("MSI"), MARVELL ASIA PTE LTD ("MAPL")(MSI AND MAPL are collectively the
"Supplier"). Buyer and Supplier are each a "party" and, collectively, are the
"parties" to this Agreement.
Buyer agrees to purchase from Supplier, and Supplier agrees to supply to
Buyer, Buyer's read channel supply requirements in accordance with the terms and
conditions stated in this Agreement and in any written exhibits agreed to by the
parties, attached to this Agreement and incorporated herein.
1.0 DEFINITIONS
1.1 Commencement Date: June 13, 2002.
1.2 Engineering Change: A mechanical or electrical change to a Product which
may effect the form, fit, function or maintainability of the Product
1.3 Plant of Manufacture: Buyer's manufacturing facility or assigned JIT
hubs.
1.4 Product(s): For the purposes of this Agreement, Product or Products, as
the case shall be, shall mean Supplier's [*] series read channel
integrated circuit devices. The parties agree that from time to time,
the parties may amend the definition of Products hereunder, but only if
both parties agree to do so in writing. The parties agree that, until
amended, the prices for each Product shall be as set forth in Exhibit A.
1.5 Purchase Order: An order submitted by Buyer for the purchase of Products
under this Agreement.
1.6 Purchase Order Lead Time: The required minimum amount of time between
Supplier's receipt of a Purchase Order issued by Buyer and the requested
Shipment Date necessary to complete Seller's entire manufacturing cycle
time, including Front End Manufacturing Cycle Time and Back End
Manufacturing Cycle Time. Purchase Order Lead Time shall be jointly
determined by Buyer and Supplier [*].
1.7 Front End Manufacturing Cycle Time: Lead-time from wafer start through
probe and shipping.
1.8 Back End Manufacturing Cycle Time: Lead-time from probe, die bank,
assembly, test and shipping.
1.9 Shipment Date: Date for shipment of Products specified by Buyer in a
Purchase Order or Pull Signal accepted by Supplier.
1.10 Related Company: A corporation, company or other entity which controls
or is controlled by a party hereunder or any another Related Company of
such party,
3
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
where control means ownership or control, direct or indirect, of more
than fifty (50) percent of: (i) the outstanding voting shares or
securities (representing the right to vote for the election of directors
or managing authority), or (ii) the ownership interests representing the
right to make decisions for such a corporation, company or other entity
(as the case may be in a partnership, joint venture or unincorporated
association having no outstanding shares or securities). However, any
such corporation, company or other entity shall be deemed to be a
Related Company of such party only so long as such ownership or control
exists.
1.11 Unit(s): A single unit of the Product.
1.12 Phase out: Supplier's determination to exit the ASIC business as defined
in this Agreement.
1.13 LCBI: Lot Control Burn In.
1.14 Epidemic Failure: In the case of: (i) customer line integration, any
component-related failure resulting in a DPPM level of [*]; (ii) a field
failure, any component-related failure resulting in a DPPM level or [*]
measured over a [*] day period; or, (iii) at an end user site, a higher
than expected failure rate as measured against the installed base and
the root cause of such failure is attributable to a single component,
the root cause of which is directly attributable to Supplier's
integrated circuit design or an integrated circuit fabrication issue.
1.15 Field Recall: Buyer-initiated recall of shipped units of Buyer's
products directly resulting from a failure of Supplier's Products
directly attributable to Supplier's integrated circuit design or an
integrated circuit fabrication issue. Field Recall shall not include
normal warranty returns over time.
1.16 QBR: Quarterly Business Review conducted by the parties hereto during
the term of this Agreement.
1.17 SQR: Supplier Quality Rating.
1.18 SSR: Supplier Service Rating.
1.19 SDR: Supplier Development Rating.
2.0 TERM OF AGREEMENT
The term of this Agreement shall commence on the Commencement Date and shall
expire five (5) years thereafter, unless otherwise terminated by either of the
parties in accordance with the provisions of this Agreement.
3.0 [*]
No later than June 24, 2002, Supplier shall [*]
4
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.1b where the omitted information
appeared in the original.
[*]
4.0 FORECAST OF PRODUCT PURCHASES
4.1 Buyer shall issue to Supplier a forecast covering a period of [*] to [*]
months (current fiscal quarter and [*] subsequent quarters) on the first
week of every Buyer fiscal quarter or more regularly as Buyer deems
necessary. Seller shall acknowledge receipt and acceptance of Buyer's
forecast by return facsimile or e-mail within forty-eight (48) hours of
Buyer's issuing such forecast. If Supplier fails to respond to Buyer's
forecast within forty-eight (48) hours, such forecast shall be deemed
accepted by Buyer. Both Supplier and Buyer agree that forecasts
constitute good faith estimates of Buyer's anticipated requirements of
Products for the periods indicated based on current market conditions,
and Supplier's acceptance shall constitute Supplier's agreement that it
will exercise good faith efforts to quote and supply the requirements
set forth in such forecast if finally ordered by Buyer in accordance
with applicable provisions of this Agreement.
4.2 If Supplier cannot meet Buyer's requirements as set forth in a forecast
or Buyer greatly reduces its forecast, Supplier and Buyer agree to
engage in good faith discussions to resolve the issue on terms
satisfactory to both parties.
5.0 PURCHASE ORDERS
5.1 Buyer shall submit a Purchase Order to Supplier on a quarterly basis.
The Purchase Order shall specify [*] for the Products [*] covered by the
Purchase Order and shall be based on [*] as of the date of the Purchase
Order.
5.2 Subject to the rescheduling and cancellation provisions herein, Buyer
agrees that it shall [*]. Supplier will ship Products during the quarter
by the Shipment Dates specified in the Purchase Order or, if Buyer
chooses, by Shipment Dates specified in Pull Signals issued by Buyer
throughout the quarter. Any [*], unless Buyer informs Supplier otherwise
in advance and in writing.
5.3 Supplier will acknowledge receipt and acceptance of Buyer's Purchase
Orders within 48 hours of receipt. If Supplier fails to respond to
Buyer's Purchase Order within forty-eight (48) hours, such Purchase
Order will be deemed accepted by Supplier. Purchase Orders must be
placed in advance, with at least the Purchase Order Lead Time agreed to
by the Parties, to allow Supplier to meet Buyer's requested Shipment
Date. Buyer may request, without incurring any liability
5
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.1b where the omitted information
appeared in the original.
hereunder, improved Shipment Dates, and Supplier will [*].
5.4 Purchase Order Lead Times shall be [*]. Purchase Order Lead Times may
not increase above [*] weeks during the term of this Agreement. Supplier
shall undertake [*] to reduce Purchase Order Lead Times during the Term
of this Agreement to [*] lead times of [*] weeks.
5.5 Purchase Orders and acknowledgements thereof exchanged by the parties
will be used to convey Product order information only. If the terms of a
Purchase Order conflict with the terms of this Agreement, the terms of
this Agreement shall govern.
5.6 Supplier shall supply [*] the Products at the prices set forth in
Exhibit A attached hereto [*].
5.7 Buyer's Purchase Orders issued hereunder shall specify and include the
following information:
a) Buyer's [*] for the Product being purchased;
b) Quantity of Product requested;
c) Product price agreed to by the parties per the applicable exhibit to
this Agreement;
d) Location to which the Buyer specifies the Products shall be shipped
and the Shipment Date specified by the Buyer; and
e) Reference to this Agreement.
6.0 SUPPLIER'S [*] OBLIGATION AND BUYER'S [*] OBLIGATIONS.
6.1 [*], Supplier shall [*] in accordance with EXHIBIT B from [*] through
[*] and shall [*] supply Buyer with up to [*] Product units per month
beginning in [*] and
6
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.1b where the omitted information
appeared in the original.
continuing through the life of the Buyer hard drive products
incorporating Supplier's Products.
6.2 In consideration of (i) Supplier [*] on Buyer's behalf as set forth
above, (ii) Supplier [*] and (iii) [*] contemplated in Section [*] below
and Supplier's performance thereon, Buyer agrees that Buyer shall
[*] during the Term of this Agreement.
6.3 Buyer and Supplier agree to work in good-faith to mutually define the
development and design milestones, pricing, delivery and other
reasonable requirements of all Products supplied hereunder.
Notwithstanding the contrary provisions of this section, Buyer's
obligation to [*].
6.4 Buyer agrees to work in good faith to complete [*]. Buyer agrees to [*]
to complete the [*], and agrees to work [*].
7.0 RESCHEDULING SHIPMENT DATES
7.1 Buyer may reschedule, without incurring any charge or liability to
Seller, the Shipment Date for up to 100% of the amount of the Products
specified in a Purchase Order accepted by Supplier, provided that Buyer
has provided to Supplier written notice of such rescheduled Shipment
Date within the time periods specified in the table below. Buyer may
reschedule each shipment of Products a single time for up to ninety (90)
days without incurring any charge or liability to Supplier.
Maximum amount of
days a reschedule
Number of Calendar Amount of Purchase quantity can be
Days' Notice Prior to Order Subject to moved from original
Shipment Date Reschedule ship date
---------------------------------------------------------------------
0 to [*] days 0
---------------------------------------------------------------------
[*] to [*] days [*] [*] days
---------------------------------------------------------------------
7
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
---------------------------------------------------------------------
[*] to [*] days [*] [*] days
---------------------------------------------------------------------
[*] days or more [*] [*] days
---------------------------------------------------------------------
8.0 CANCELLATION OF PURCHASE ORDERS
8.1 Buyer may cancel a Purchase Order upon written notice to Supplier only
in accordance with the terms of this Agreement. Once Supplier has
received Buyer's notice of cancellation, Supplier will immediately cease
all work assembling Products in support of such canceled Purchase Order
and will provide a status report of the works in progress ("WIP") to
assess Buyer's liability for such WIP. Buyer shall have the right to
inspect the WIP to verify the accuracy of Supplier's status report.
Buyer agrees that upon notifying Supplier that a Purchase Order is
cancelled, Buyer shall assume liability for such WIP according to the
following schedule based on the Purchase Order Price (POP) for each
outstanding Purchase Order
Finished Goods [*] of (POP)
Final Test [*] of POP
Assembly [*] of POP
Die Bank [*] of POP
Wafer Fab [*] of POP
8.2 No cancellation charges will be due if:
a) [*] a Purchase Order because of a [*] of more than [*] from a
designated Shipment Date due [*];
b) Buyer cancels a Purchase Order because Supplier executes an
unauthorized Engineering Change or an unauthorized change to the
Product qualification plan of record agreed to by the parties (i.e.
change of fabrication site, assembly site, and or test site); or
c) [*] a Purchase Order because [*].
9.0 PULL SIGNALS
9.1 Each week during the term hereof, Buyer shall issue to Seller a Pull
Signal which shall cover a [*] week period commencing on the day
Supplier receives such Pull Signal and continuing through the subsequent
calendar week. Such Pull Signal shall specify the amount of Products and
the Shipment Dates by which Products are to be delivered during such [*]
week period.
9.2 Supplier shall acknowledge, by return facsimile or e-mail, its receipt
and acceptance of each Pull Signal within [*] of Buyer's issuing such
Pull Signal. Any Pull Signal not so accepted will be deemed rejected.
8
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
9.3 If the Pull Signal is or is deemed rejected by Supplier, Supplier shall
notify Buyer within [*] of receiving the Pull Signal and provide Buyer
with an alternative to the Product amounts and Shipment Dates contained
in the Pull Signal. If Buyer is not satisfied with Supplier's response,
both Buyer and Supplier agree to immediately hold discussions to resolve
their disagreement.
10. [*] PROGRAM
Supplier will maintain a [*] approximately [*] remaining in such [*]. The [*]
will consist of [*] designated by Buyer [*] designated by Supplier but
acceptable to Buyer. Any change [*] set forth above must be mutually agreed upon
between Buyer and Supplier. Supplier will have [*] Product ramp and, thereafter,
shall [*] for the term of this Agreement. Buyer and Supplier will monitor
Buyer's demand for Products quarter to quarter with the intent of [*] the [*]
that there is no further requirement for the Product.
11. QUARTERLY BUSINESS REVIEW
Buyer and Supplier shall meet on a quarterly basis for a QBR. The QBR shall
focus on the SDR, SQR and SSR that Supplier has earned for the preceding
quarter. The parties shall review the Supplier's performance during the
preceding quarter, identify areas for improvement and recommend actions to be
taken by either Supplier or Buyer or both Supplier and Buyer to satisfy the
parties' business goals.
12.0 INVOICING, PAYMENT TERMS, TAXES
12.1 Supplier shall invoice Buyer for all Products shipped to Buyer's JIT Hub
located in Malaysia or to such other location, as Buyer shall designate
from time to time hereunder. Supplier shall ship all Products [*] from
Supplier's facility. Supplier will invoice Buyer once the Product is
pulled from Buyer's JIT Hub, and Buyer shall complete full and final
payment of such invoice within [*] of the date of Supplier's invoice.
Buyer will maintain good-faith efforts [*]. In the event that Buyer does
not pay Supplier's invoice within [*] days of the date of the invoice,
Buyer shall pay subsequent Supplier invoices no later than [*] days
after the date of Supplier's invoice. If Buyer thereafter pays all
invoices within [*] days of the date of Supplier's invoice for three
successive
9
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
months, Buyer shall again be permitted to pay subsequent invoices from
Supplier within [*] days of the date of such invoices [*].
12.2 Buyer agrees to pay any taxes resulting from the transactions
contemplated under this Agreement unless Buyer can provide appropriate
exemption certificates.
12.3 Buyer represents that it holds a valid Reseller's exemption certificate
for Products purchased for resale in each applicable taxing
jurisdiction. Based on this representation, Supplier shall, where the
law permits, treat Buyer as exempt from applicable state and/or local
sales tax for Products purchased hereunder.
12.4 Buyer shall promptly notify Supplier in writing of any modification or
revocation of Buyer's exempt status. Buyer shall reimburse Supplier for
any and all assessments resulting from a refusal by a taxing
jurisdiction to recognize any Buyer exemption certificates, or from
Buyer's failure to have a valid certificate.
13. TERMINATION
13.1 If either party is in default of any material provision of this
Agreement and such default is not corrected within [*] days of receipt
of written notice, this Agreement may be terminated by the party not in
default. If the default is such that is cannot be reasonably cured
within [*] days, then the defaulting party must commence cure within
[*] days and proceed to cure [*]. These provisions shall not affect
Supplier's obligations to Buyer set forth below in this Section 13, in
the event of Supplier's breach of a material provision of this
Agreement.
13.2 If Buyer terminates this Agreement due to Supplier's default, all
outstanding Purchase Orders shall be [*].
13.3 If Supplier terminates this Agreement due to Buyer's default, at
Supplier's discretion, all outstanding Purchase Orders shall be
automatically cancelled and the cancellation charges set forth in this
Agreement shall apply [*].
13.4 If Supplier (i) decides to [*] or (ii) Supplier is unable to [*], then
Supplier agrees to do the following:
10
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
[*].
14. ENGINEERING CHANGES
Supplier shall not make any Engineering Changes to Products under this Agreement
once final production level Product is qualified unless such Engineering Change
is specified in writing and expressly accepted by Buyer.
15. QUALITY STANDARDS
Supplier agrees to make [*] to achieve all quality and reliability requirements
to be set forth in a Statement of Quality (the "SOQ"), in substantially the same
form as Exhibit C hereto, to be mutually agreed upon by the parties. Supplier
agrees that the requirements set forth in the SOQ shall apply to all Products
that Supplier supplies to Buyer hereunder.
16. PRODUCT WARRANTY
16.1 Notwithstanding any other provision of this Agreement, Supplier warrants
that for a period of [*] each unit of Product delivered will comply with
each [*] part of the [*] including all changes to and iterations of [*]
and that such Product will be [*] provided, that, such use is in
conformance with the [*]. All [*] are provided [*].
16.2 If Buyer determines during the warranty period that a Product does not
conform to the [*], Supplier's obligation shall be limited to (i)
replacing such Product with a new Product that conforms to Seller's
warranty or (ii) issuing Buyer a credit equal to the amount that Buyer
paid for the Product, at Supplier's option.
16.3 In addition to Supplier's obligations under Section 16.2, in the event
of an [*] of a Product during Supplier's warranty term or
11
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
Buyer's warranty term, whichever is shorter, Buyer and Supplier shall
meet and attempt to develop a mutually satisfactory resolution regarding
liability resulting from [*]. In the event that the parties are unable
to reach a mutually satisfactory resolution, each party reserves all
claims and defenses available to it, at law or in equity, regarding such
[*].
16.4 Subject to the confidentiality provisions of this Agreement, Buyer
agrees to provide Supplier with Buyer's [*] that Buyer generates [*] of
manufacturing its hard drive products that incorporate the Products.
17.0 SUPPLIER'S INDEMNITY
17.1 Supplier agrees to indemnify, defend and hold harmless Buyer and its
Related Companies and their respective directors, officers, employees,
representatives, agents, successors and assigns, from and against any
claims, losses, damages, liabilities, causes of action, suits, costs and
expenses, including all reasonable attorneys' fees and disbursements of
counsel and expenses of investigation, finally awarded against Buyer or
its Related Companies arising out of or related to (a) any claims,
actions, suits or proceedings alleging that any Products that Buyer
purchases or otherwise receives from Supplier infringe any patent, trade
secret, copyright or other intellectual property rights of any third
party and (b) any claims, actions, suits or proceedings whether in tort,
contract or otherwise alleging personal injury or death, or any damage
to any property, caused or allegedly caused by any negligent act or
omission by Supplier or any defect in any Products that Buyer purchases
or otherwise receives from Supplier. Notwithstanding the foregoing,
Supplier is not obligated to defend or settle any such suit and is not
obligated to pay any such damages or costs, if such claim arises out of
(i) a combination of the Supplier's technology with technology not
supplied by the Supplier or (ii) a modification, alteration or amendment
of the Supplier's Technology. In the event that any Products are alleged
to be infringing, Supplier agrees, in its sole discretion and at its own
expense, to (i) procure for Buyer the right to continue to use such
Products, (ii) replace such Products with noninfringing products that
comply with Section 16.1 above, or (iii) modify such Products so that
they become noninfringing and continue to comply with Section 16.1
above.
17.2 Buyer agrees to indemnify, defend and hold harmless Supplier and its
Related Companies and their respective directors, officers, employees,
representatives, agents, successors and assigns from and against any
claims, losses, damages, liabilities, causes of action, suits, costs and
expenses, including all reasonable attorneys' fees and disbursements of
counsel and expenses of investigation, finally awarded against Supplier
or its Related Companies arising out of or related to any claims,
actions, suits or proceedings alleging that any specification, design or
implementation detail that Supplier receives from Buyer or that Supplier
is
12
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
required to incorporate into any Products as a result of Buyer's
requirements or technical specifications infringes any patent, trade
secret, copyright or other intellectual property right of a third party.
18. CONFIDENTIAL INFORMATION
18.1 Except as set forth below, all information exchanged under this
Agreement will be deemed to be non-confidential. If either party
determines that it becomes necessary to exchange confidential
information in order to perform under this Agreement, the exchange of
such confidential information will be made under a separate written
nondisclosure agreement.
18.2 Each party (i) will keep the existence of this Agreement confidential
until the first Unit is shipped by Supplier to Buyer, (ii) will keep the
contents of this Agreement confidential during the term of the Agreement
and for a period of [*] thereafter, and (iii) will not, without first
obtaining the written consent of the other party, disclose any portion
of this Agreement or any information contained herein to any third party
except as may be required to enforce this Agreement or as may be
required by applicable statute, regulation or court order. In the event
such disclosure is required, the party making such disclosure will
provide the other party sufficient notice for the other party to seek
appropriate protection, in court if necessary. In the event of
disclosure thereafter, the party making the disclosure will keep such
disclosure to a minimum and protect the information so disclosed by a
protective order or the like unless otherwise agreed by the parties.
The parties agree that each party may be required to file this Agreement
as an exhibit to filings each party makes with the U.S. Securities and
Exchange Commission (the "SEC"). In connection with any such filing,
each party agrees to seek confidential treatment of the terms of the
Agreement from the SEC, and each party further agrees to notify the
other party in advance of such filing and to work cooperatively with the
other party regarding the form and content of such confidential
treatment request.
19. SUPPLIER ENGINEERING SUPPORT
Supplier agrees to support [*] for the Products and any other [*] covered by
this Agreement. Support to include [*] all of which [*] shall be subject to the
provisions of the NDA.
20. NOTICES
Any notices or other communications given by either party under this Agreement
shall be in writing and shall be (a) delivered personally, (b) transmitted by
facsimile machine with
13
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
confirmation in writing mailed first class, (c) sent by a nationally recognized
overnight courier or overnight mail service that guarantees overnight delivery
or (d) sent by registered certified United States mail with return receipt
requested, postage prepaid, addressed as follows:
If to Buyer: Western Digital Technologies, Inc.
00000 Xxxx Xxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Attn: General Counsel
Tel: (000) 000-0000
Fax: [*]
If to Supplier: Marvell Asia Pte Ltd
000 Xxxxxx Xxxxx #00-00
Xxx Xxxx Xxxx
Xxxxxxxxx 000000
Attn: General Manager
Tel: (00) 000-0000
Fax: [*]
With a copy to: Marvell Semiconductor, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Vice President of Business Affairs
and General Counsel
Tel: (000) 000-0000
Fax: [*]
Any such notice shall be effective (a) upon receipt if personally
delivered, (b) on the date of the facsimile transmission (which date is
indicated by the facsimile machine of the party) if sent by facsimile
and confirmed by mail, (c) on the first business day if sent by a
nationally recognized overnight courier or overnight mail that
guarantees overnight delivery and (d) on the third business day
following the date of mailing if sent by registered or certified mail.
Each party may change the address to which notices are to be delivered
by giving notice as provided in this section.
21. GENERAL PROVISIONS
21.1 Subject to the confidentiality and intellectual property provisions
contained herein, neither this Agreement nor any activities hereunder
will impair any right of Supplier or Buyer to design, develop,
manufacture, market, service, or otherwise deal in, directly or
indirectly, products or services including those which are competitive
with those offered by Supplier or Buyer.
14
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
21.2 This Agreement may be modified only by a written amendment signed by
authorized representatives of the Buyer and the Supplier.
21.3 All obligations and duties which by their nature survive the expiration
or termination of this Agreement shall remain in effect beyond any such
expiration or termination.
21.4 Except for the obligation to pay any monetary sums due, neither party
shall be responsible for failure to fulfill its obligations under this
Agreement due to fire, flood, war or other such cause beyond its control
and without its fault or negligence provided it promptly notifies the
other party.
21.5 Neither party shall assign this Agreement or any rights hereunder
without the prior written consent of the other party, except that
Supplier's rights to payments under the Agreement are freely assignable.
In the event that Buyer merges with or into, or is acquired by, another
entity such that Buyer is not the surviving entity of such merger or
acquisition (the "Successor Entity"), the rights and obligations of
Buyer under this Agreement shall automatically become the rights and
obligations of the Successor Entity. A sale by Buyer of all or
substantially all of its assets to a third party shall be deemed to be a
merger with or into, or an acquisition by, such party for purposes of
this provision. In the event any Successor Entity is unable or unwilling
to assume the rights and obligations of this Agreement, then such
Successor Entity shall immediately [*].
21.6 The waiver by either party of an instance of the other party's
noncompliance with any obligation or responsibility herein shall not be
deemed a waiver of subsequent instances or of either party's remedies
for such noncompliance.
21.7 Each party will comply with all applicable federal, state and local
laws, regulations and ordinances including, but not limited to, the
regulations of the U.S. Government relating to the export or re-export
of machines, commodities, software and technical date insofar as they
relate to the activities under this agreement. Buyer agrees that
machines, commodities, software and technical data provided under this
Agreement may be subject to restrictions under the export control laws
and regulations of the United States of America, including, but not
limited to, the U.S. Export Administration act and the U.S. Export
Administration Regulations. Buyer hereby agrees that neither machines,
commodities, software or technical data provided by Supplier under this
Agreement, nor the direct product thereof, is intended to be shipped,
directly or indirectly, to prohibited countries or nationals thereof.
Buyer agrees it is responsible for obtaining required government
documents and approvals to export any machine, commodity, software or
technical data.
15
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
21.8 This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which taken together shall constitute one
and the same instrument. Facsimile signatures shall be deemed to be
originals.
16
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
SUPPLIER BUYER
Marvell Semiconductor, Inc. Western Digital Technologies, Inc.
000 Xxxxx Xxxxxx 00000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxx Xxxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxxx By: /s/ XXXXXXX XXXXX
------------------------------- ---------------------------------
Dr. XXXXX XXXXXXXX,
PRESIDENT and CEO
Title: VP Worldwide Matls.
------------------------------
Marvell Asia Pte Ltd
000 Xxxxxx Xxxxx #00-00
Xxxxxxxxx 000000.
By: /s/ Xx. X. Xxxxx
-------------------------------
Xx. X. XXXXX,
GENERAL MANAGER
17
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
EXHIBIT A
PRODUCT PRICES
[*]
[*]
[*]
[*]
[*]
[*]
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
EXHIBIT B
TIME PERIOD [*] COMMENT
----------- --- -----------------------------------
July 02 [*] Deliveries starting July 15th
August 02 [*] Actual quantity needed
September 02 [*] Actual quantity needed
Q3 TOTAL [*]
October 02 [*] Finalize by July 1st
November 02 [*] Finalize by August 1st
December 02 [*] Finalize by September 1st
Q4 TOTAL [*]
2003 QUARTERLY [*] [*] [*], Finalize January by October 1st
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
[WESTERN DIGITAL LOGO] [MARVELL LOGO]
[*]
Statement of Quality
--------------------------------------------------------------------------------
[*]
[*]
STATEMENT OF QUALITY
Page 1 of 5
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
[WESTERN DIGITAL LOGO] [MARVELL LOGO]
[*]
Statement of Quality
--------------------------------------------------------------------------------
[*] STATEMENT OF QUALITY (REVISION 1.0)
This Statement of Quality (this "SoQ") is agreed to as of June 24, 2002 by and
between Western Digital TECHNOLOGIES ("WD") and Marvell asia pte ltd ("MAPL").
1. PURPOSE
The purpose of this document is to specify the quality and reliability
requirements for the [*] and to document the processes and procedures MAPL
shall employ to attain those requirements.
2. OVERVIEW OF [*] PROGRAM
[*] is the first generation of a family [*]. The intent of [*] and
follow-on versions is to take advantage of cost reduction opportunities.
The [*] is targeted for use in the WD [*] line of hard disk drive products.
2.1 Description of [*]
[*] is an [*] product for WD that integrates MAPL's proven technology
cores. [*] wafer fabrication uses the [*] process technology [*] and is
packaged in [*] body outline [*] package. Approximate die size for [*] is
[*].
2.2 Description of [*] Manufacturing Flow
Wafer fab is [*]. Wafer probe is performed at [*]. Package assembly
subcontractor is [*] Final test [*]. Parts are finished, packed and shipped
from [*].
Page 2 of 5
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
[WESTERN DIGITAL LOGO] [MARVELL LOGO]
[*]
Statement of Quality
--------------------------------------------------------------------------------
3. QUALITY REQUIREMENTS
It is central to WD's mission to provide best-in-class quality and
reliability product to our customers. Consequently, components used in WD
HDD products must meet stringent levels of quality and reliability in terms
of expected fitness-for-use and failure during PCBA assembly and test, HDD
assembly and test, end customer integration, and field use. These
requirements are subject to review and change as the business situation
warrants, but no less than annually. MAPL understands and agrees that
failure to meet these quality levels will require immediate and resolute
actions to rectify in the most expeditious manner possible [*]. WD will
cooperate fully in these efforts. It is not WD's intention to reject
component shipments based upon occasional and marginal failure to meet
these quality levels. However, sustained quality excursions and/or
inability to correct quality problems to meet these requirements will
affect WD's ability to integrate said components and may be cause for
business interruptions, such as stop-ship orders (MSSO).
Current requirements as stated below should be viewed as minimum acceptable
criteria for[*]:
3.1 [*]
3.2 [*]
3.3 [*]
3.4 [*]
3.5 [*]
3.6 [*]
4. COMPONENT QUALIFICATION
WD has a comprehensive process in place to qualify components for
integration into our products. This process involves Engineering teams in
the US and in our factories and our suppliers, and concludes when the
component is listed unfettered on our Approved Vendor List (AVL). It must
be demonstrated that the component in question can achieve the quality
requirements listed above through direct measurement as well as artifices
such as accelerated life tests. The [*] attached hereto as Exhibit 1 lists
related actions required of the supplier in detail. It is incumbent upon
both parties to schedule this work such that the successful conclusion of
these tests occurs well before WD builds and ships products containing said
components.
Page 3 of 5
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
[WESTERN DIGITAL LOGO] [MARVELL LOGO]
[*]
Statement of Quality
--------------------------------------------------------------------------------
4.1 [*] qualification summary
Activity [*] Who ECD
-------- --- ----- ---
Wafer-level reliability 1st wafer lot [*] Xxxx
2nd wafer lot Xxxx
3rd wafer lot Xxxx
Device construction analysis [*] WD
Xxxx
High temperature operating life [*] Xxxx
[*] Xxxx
[*] Xxxx
[*] Xxxx
High temp storage [*] [*] Xxxx
Corner lot characterization [*] Xxxx
Rogue lot screening program [*] Xxxx
CPCP reporting program [*] Xxxx
Latch-up sensitivity [*] Xxxx
ESD sensitivity [*] Xxxx
JEDEC precondition [*] Xxxx
Pkg thermal cycle [*] [*] Xxxx
Pkg pressure cooker ([*] [*] Xxxx
Pkg construction analysis [*] Xxxx
5. QUALITY PROCESSES
Western Digital firmly believes that high quality products germinate from
high quality processes. In order to assure visibility into the quality of
our suppliers' processes, we request certain manufacturing data be made
available on a routine basis. This data is often expressed as process
capability measurements, wherein [*] is viewed as a minimum to assure
consistent product attributes. The following is a list of typical critical
manufacturing parameters for [*]:
Parameter Frequency
--------- ---------
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
Page 4 of 5
Certain confidential information has been omitted from this Exhibit 10.16
pursuant to a confidential treatment request filed separately with the
Securities and Exchange Commission. The omitted information is indicated by the
symbol "[*]" at each place in this Exhibit 10.16 where the omitted information
appeared in the original.
[WESTERN DIGITAL LOGO] [MARVELL LOGO]
[*]
Statement of Quality
--------------------------------------------------------------------------------
5. Quality Processes (con't)
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
[*] [*]
6. SUPPLIER QUALITY MEASUREMENT
Suppliers of significant components are measured by WD in a formal ongoing
process, culminating in the Quarterly Business Review (QBR) meeting. [*]%
of the QBR rating is the Supplier Quality Rating (SQR), a method of rating
and ranking suppliers according to achieving the required quality and
reliability metrics. The most heavily-weighted elements of the SQR are [*].
7. SIGNATURES FOR STATEMENT OF QUALITY
WESTERN DIGITAL TECHNOLOGIES MARVELL ASIA PTE LTD
/s/ XXXXXXX XXXXXX /s/ XX. X. XXXXX
------------------------------------ ------------------------------
Xxxxxxx Xxxxxx Xx. X. Xxxxx
Xx. Director, Supplier Engineering General Manager
/s/ XXXXX XXXXXXXXXX
---------------------------------- ------------------------------
Xxxxx Xxxxxxxxxx
Vice President, HDS Quality
Page 5 of 5
