EXHIBIT 99.3
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND NOTED WITH "***." AN UNREDACTED VERSION OF
THIS DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION.
TI No: 0005-05021
Page 1 of 10
TEXAS INSTRUMENTS INCORPORATED
CORPORATE PURCHASE OPTION AGREEMENT
SELLER: DELTA DESIGN INCORPORATED
00000 Xxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000-0000
PURCHASER: TEXAS INSTRUMENTS INCORPORATED
0000 Xxxxxx Xxxxx, X/X 0000
Xxxxxx, XX 00000
EFFECTIVE PERIOD: APRIL 25, 2002 THROUGH DECEMBER 31ST, 2004
This Agreement sets forth the understandings reached by the parties to this
Agreement during negotiations concerning the items and work listed herein. Delta
Design Incorporated ("Delta") hereby grants to Texas Instruments Incorporated
("TI") a continuing option to purchase, in whole or in part, the items listed
herein in accordance with the following terms and conditions.
1. TERM
The option set forth herein shall be valid for the Effective Period shown above
unless sooner terminated as hereinafter provided. This Agreement can be extended
by either party for three months through written notice (delivered or mailed
prepaid) prior to the expiration of this Agreement. Deliveries may extend for
six months thereafter.
2. GOODS
Delta shall provide the goods briefly described as automated semiconductor
device handling equipment and related spares and accessories, and listed in
Attachment A and Attachment B (which is attached hereto and by this reference
made a part hereof) at the prices shown thereon.
3. QUANTITIES
a) This Agreement is not a purchase order and does not authorize
delivery of or payment for any goods.
(b) The consideration for the option granted herein is the initial
commitment of TI to purchase an estimated quantity of *** Castle LX
handlers during the calendar year of 2002. TI further guarantees
that Delta shall be the primary supplier of pick and place style
test handlers, the exclusive supplier for pick and place handlers
for all new product developments for all sites world wide excluding
HIJI, and exclusive supplier for device dedication kits for Castle
handlers conforming to the MAKE Y2K01 kit standard for the term of
this agreement.
(c) TI reserves the right to purchase pick and place handlers from
existing suppliers in order to increase capacity for existing
devices. If an existing device is running on both a handler from an
existing supplier and a handler from Delta Design at the same
location, TI will purchase all pick and place handlers necessary to
increase capacity from Delta.
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 2 of 10
(d) Should TI exceed the initial commitment during the calendar year,
Delta and TI shall review this agreement to determine if there
should be a change in the pricing structure. Furthermore, Delta and
TI agree to review quarterly the initial commitment and make
necessary changes to the current pricing structure if based on the
review it is agreed that TI will not be able to meet the initial
commitment. Pricing structure changes may not
(e) Seller agrees to the cancellation of the NRE-26000 charge on PO
4510122418. This charge was for the development of the Integrated
Laser Marking System for the Castle EC. If TI should decide to
deploy the Laser Marking System into production beyond the original
unit to be shipped to under PO 4510122418 they agree to pay the NRE
as part of the next order for a Laser Marking System.
4. PRICES
(a) Prices herein are EX Works factory. Under Ex-Works factory the
Seller fulfils his obligation to deliver when he has made the goods
available at his premises to the buyer. Seller is not responsible
for loading the goods or clearing the goods for export. Buyer bears
all costs and risks involved in taking the goods from the seller's
premises to the desired location.
(b) Unless otherwise indicated herein, prices shall be firm for the term
of this Agreement, provided downward adjustment will be made if
savings accrue to Seller as a result of new technology, value
engineering, or reduced costs of materials and labor.
(c) Delta represents to TI that prices for goods sold hereunder shall be
as low as the prices at which Delta is selling such goods at the
same time to any other customers in the same or similar quantities
under the same or similar terms and conditions.
(d) If Delta reduces its prices to any other customer for any goods
listed in Attachment A, quality and quantity considered, below the
price then in effect for TI, TI shall receive the benefit of such a
lower price in all shipments made after Delta reduces such price.
(e) TI will not accept shipment at any increase in price above that
indicated on this Agreement. Any decrease in general prices and/or
materials similar to the items described in this Agreement shall
automatically reduce the price thereof by a comparable percentage.
(f) TI will audit this Agreement on a regular basis. A random series of
TI purchase orders representing a range of product lines will be
compared to the catalog prices to verify the agreed upon discounted
price.
(g) Prices are subject to change on an annual basis.
(h) It is the responsibility of Delta to list the applicable discount on
all quotes to TI. It is the responsibility of TI to exercise the
agreed discount on the PO. If TI does not exercise the discount
seller will invoice as per the PO and the discount will not be
retroactive.
5. DELIVERY
(a) The delivery dates indicated by TI for the articles, material or
work to be supplied under this Agreement are of the essence.
(b) Delta agrees that the goods shall be delivered to TI's dock on the
dates set forth in the applicable purchase order(s), unless the
parties agree otherwise in writing. In the event
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 3 of 10
that any goods are not shipped in accordance with such delivery
dates, Delta agrees to ship via air freight (or as directed by TI)
and to pay for all extra costs.
(c) Failure to meet agreed upon delivery date that is based on the
standard lead times in attachment A shall be considered a breach of
contract. Furthermore, Delta agrees to pay to TI penalties and
damages imposed upon or incurred by TI for failure of Delta to
deliver articles, materials, or work on such delivery dates. These
penalties and damages shall not exceed the 50% of the value of the
Purchase Order for the item(s) considered to be in breach of
contract. Delta shall not be considered in breach of contract and
therefore not liable for penalties and damages for any delay that
caused by TI. TI must show proof of all damages to Delta. Delta is
not responsible for in-transit delays. TI will advise Delta of
carrier at the time of order.
(d) Unless otherwise agreed in writing, Delta shall not make commitments
for material or production in excess of the amount or in advance of
the time necessary to meet TI's delivery schedule. It is Delta's
responsibility to comply with this schedule, but not anticipate TI's
requirements. Goods shipped to TI in advance of schedule may be
returned to Delta at Delta's expense.
-
(e) If at any time prior to the delivery of an order TI reschedules that
delivery for a later date the following terms shall apply. If the
order is rescheduled to a date that is 4 weeks or less from the
agreed ship date there shall be no charge. If the order is
rescheduled to a date that is between 5 to 26 weeks TI agrees to pay
a *** of the sales price of the order as a rescheduling fee. If the
order is rescheduled to a date that is 27 or more weeks from the
agreed ship date it will be considered a cancellation and be subject
to the terms and conditions of the cancellation section of this
agreement.
(f) The goods shall be packaged in accordance with commercially
acceptable standards, or to applicable TI specifications, to ensure
safe arrival at TI's location.
(g) If Delta is prevented from delivering, or TI is prevented from
receiving the materials or articles referenced in a purchase order
issued hereunder as a result of governmental actions or regulation,
except as hereinafter provided, or of fires, strikes, accidents, and
other unforeseeable causes beyond the control of either party, the
obligation to receive or deliver shall be suspended for a reasonable
time during which such causes continue to exist.
6. SPECIFICATIONS
Delta shall deliver the goods in accordance with Delta's published
specifications, unless otherwise specified in TI's purchase order(s). Notice of
any Delta requested changes or waivers in applicable specifications must be
given to TI in writing and acknowledged by TI in writing prior to any deliveries
being made of goods manufactured under revised specifications.
TI may change from time to time any of the drawings, specifications or
instructions for work covered by any purchase order issued hereunder and Delta
shall comply with such change notices. If such changes result in a decrease or
increase in Delta's cost or in the time for performance, an adjustment in the
price and time for performance may be made by the parties in writing, provided,
however, that Delta notifies TI of the request for such adjustments within
thirty (30) days after receipt by TI of the change notice.
7. RETURN MATERIAL AUTHORIZATIONS
Delta agrees to provide Return Material Authorizations (RMAs) within one (1)
working day from the initial call from the TI buyer or his representative. TI
agrees to return defective parts within 30 Days of receiving replacement parts
or they may be billed for the additional parts.
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 4 of 10
8. TERMS AND CONDITIONS
The terms and conditions governing each sale will be as set forth in this
Agreement and any purchase order issued hereunder. Performance under this
Agreement or any purchase order issued under this Agreement is expressly limited
to the terms and conditions of this Agreement and the terms and conditions of
the TI purchase order. In the event of a conflict between the terms and
conditions of this Agreement and the terms and conditions of the TI purchase
order issued under this Agreement, the terms and conditions of this Agreement
will take precedence.
9. QUALITY
Delta agrees to maintain at least a *** ontime delivery rating in accordance
with TI's rating system; if Delta fails to maintain either of these minimum
ratings, and fails to correct such deficiencies within sixty (60) days after
notification from TI, then TI may immediately terminate existing orders
hereunder, in whole or in part, without any liability.
10. CANCELLATION
a) Any cancellation by TI will be subject to the following terms. If
the cancellations is 4 weeks or less prior to the agreed ship date
TI agrees to pay *** of the sales price of all canceled non-custom
items. If TI cancels an order between 5 to 12 weeks prior to the
agreed ship date TI agrees to Delta pay *** of the price of all
canceled non-custom items. If TI cancels an order between 13 - 26
weeks prior to the agreed ship date TI agrees to pay Delta *** of
the sales price of all canceled non-custom items 27+ weeks they pay
0% of the price of all non-Custom items.
b) If TI cannot meet the initial commitment in section 3 of ***
machines, TI and Delta shall determine the actual cost incurred by
Delta to meet the initial commitment in section 3 of *** and TI will
pay these costs. An independent CPA may be employed to protect Delta
sensitive information by providing TI with factual information to
determine Delta Design expenditures on such equipment.
c) If TI cancels an order or portion thereof for custom equipment under
this agreement, TI and Delta shall determine the actual cost
incurred by Delta for the canceled equipment and TI will pay these
costs. An independent CPA may be employed to protect Delta sensitive
information by providing TI with factual information to determine
Delta expenditures on such equipment.
11. WARRANTY
Warranty for Equipment shall be one (1) year parts and labor for all electrical
& mechanical components. On-site labor will be utilized only when component
repair of replacement is not an option. Such labor warranty shall be for eight
hours a day, five days a week, during normal business hours and expect for
holidays recognized by Delta or TI. Warranty will commence upon final acceptance
of equipment, not to exceed 30 days from the date of receipt of equipment by TI,
unless such equipment is not accepted as of such date due to the fault of Delta.
12. TRAINING
Delta will provide unlimited available training slots at our in-house training
facilities for regularly scheduled classes with each test handler or burn-in
loader sold to TI at no additional cost. All classroom training will be at one
of Delta's facilities. TI will be required to pay all expenses associated with
travel, room and meals for the individuals attending the classes. On-site
training will be priced in accordance with Delta's
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 5 of 10
current price structure in Attachment C. and will include all travel, and travel
related expenses as per attachment D.
13. FORCE MAJEURE
Delta shall not be liable for nonperformance or delays, which occur due to
causes beyond its reasonable control. These causes shall include, but shall not
be limited to, acts of God, acts of terrorism, wars, riots, strikes, fires,
storms, flood, earthquake, shortages of labor or material, labor disputes,
vendor failures, transportation embargoes, acts of any governmental or agency
thereof, and judicial action. In the event of any such excused delay or failure
of performance, the date of deliver shall be deferred for a period equal to the
time lost by reason of the delay. Delta shall notify TI in writing of any such
event or circumstance within a reasonable time after it learns of same.
14. PAYMENT TERMS
Payment terms shall be executed at 100% Net 30 days from date of shipment. If
installation and buy-off (or certification) with agreed specification occurs
after payment, TI then has proper recourse for full credit/reimbursement if
workmanship or damages are identified.
15. NOTICES
Any notice, required or permitted to be given hereunder shall be in writing and
shall be valid and sufficient if dispatched by registered or certified mail,
postage prepaid, in any post office in the United States addressed as follows:
IF TO SELLER: IF TO BUYER:
Delta Design Incorporated Texas Instruments Incorporated
00000 Xxxxxxxxxxx Xxxxxx 0000 Xxxxxx Xxxxx, X/X 0000
Xxxxx, XX 00000-0000 Xxxxxx, XX 00000
Attn: Xxxx Xxxxx, TI Account Manager Attn: Xxxx X. Xxxxxxx, Procurement Mgr.
Assembly/Test Capital Equipment
16. DEFAULT
In the event Delta is in breach of any of its obligations hereunder, TI may
terminate existing orders without liability. The foregoing is in addition to any
rights and remedies TI may have at law or in equity.
17. RELEASE OF INFORMATION
Delta shall not, without the prior written permission of TI, publicly announce
or otherwise disclose, except to the U.S. Government when a purchase order
references a U.S. Government contract or subcontract number, the existence of
this Agreement or the terms hereof, or any purchase order placed hereunder, or
release any publicity regarding this Agreement. This provision shall survive the
expiration, termination or cancellation of this Agreement.
In the event that one party hereto wishes to disclose to the other party hereto
information which it deems proprietary, the parties, prior to disclosure, shall
execute a specific nondisclosure agreement regarding such information.
18. ENTIRE AGREEMENT
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 6 of 10
This Agreement sets forth the entire understanding and agreement between the
parties as to the subject matter of this Agreement and merges and supersedes all
previous communications, negotiations, warranties, representations and
agreements, either oral or written, with respect to the subject matter hereof,
and no addition to or modification of this Agreement shall be binding on either
party hereto unless reduced to writing and duly executed by each of the parties
hereto.
IN WITNESS WHEREOF, both parties have signed and dated this document in the
spaces provided below:
DELTA DESIGN INCORPORATED TEXAS INSTRUMENTS INCORPORATED
By: By:
---------------------------------- --------------------------------------
Name: Xxxx Xxxxx Name: Xxxx X. Xxxxxxx
-------------------- -------------------
Title: Account Manager Title: Procurement Mgr. Assy/Test Capital
Equipment
Date: Date:
-------------------------------- -------------------------------------
Attachments: Attachment A (Goods & Prices / Discounts)
Attachment B (Kit Discounts)
Attachment C (On-site Training Prices)
Attachment D (TI Reimbursement Guidelines)
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 7 of 10
ATTACHMENT A
DELTA DESIGN, INC. GOODS AND PRICING / DISCOUNT MATRIX
--------------------------------------------------------------------------------
ITEM DISCOUNT STANDARD LEAD TIME
--------------------------------------------------------------------------------
Castle LX 7500 *** ***
(Hot/Ambient)
--------------------------------------------------------------------------------
Summit ATC *** ***
--------------------------------------------------------------------------------
Summit PTC *** ***
--------------------------------------------------------------------------------
Flex ( All Models) *** ***
--------------------------------------------------------------------------------
1688 *** ***
--------------------------------------------------------------------------------
Spares *** ***
--------------------------------------------------------------------------------
Handler Kits ***
--------------------------------------------------------------------------------
Contactors *** ***
--------------------------------------------------------------------------------
IHS500le/ IHS250le *** ***
--------------------------------------------------------------------------------
IHS500le Kits *** ***
--------------------------------------------------------------------------------
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 8 of 10
ATTACHMENT B
TEXAS INSTRUMENTS HANDLER KIT DISCOUNT MATRIX
--------------------------------------------------------------------------------
ITEM DISCOUNT STANDARD LEAD TIME
--------------------------------------------------------------------------------
Castle LX/EC Y2K01 *** ***
--------------------------------------------------------------------------------
Castle LX/EC non Y2K01 *** ***
--------------------------------------------------------------------------------
Summit ATC *** ***
--------------------------------------------------------------------------------
Summit PTC *** ***
--------------------------------------------------------------------------------
Flex ( All Models) *** ***
--------------------------------------------------------------------------------
1688 *** ***
--------------------------------------------------------------------------------
Mounting Plates *** ***
--------------------------------------------------------------------------------
Seal Adapters *** ***
--------------------------------------------------------------------------------
Seal Blocks *** ***
--------------------------------------------------------------------------------
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 9 of 10
ATTACHMENT C
ON-SITE TRAINING PRICES
--------------------------------------------------------------------------------
*On site charges include Domestic On Site International On Site
travel and expenses. Training Training
--------------------------------------------------------------------------------
Length of Course *** ***
--------------------------------------------------------------------------------
Cost of Basic Course *** ***
--------------------------------------------------------------------------------
Cost of Advance Course *** ***
--------------------------------------------------------------------------------
*** Confidential material redacted and submitted separately to the Commission
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
TI No: 0005-05021
Page 10 of 10
ATTACHMENT D
This document outlines Texas Instruments' ("TI") policy with Suppliers that
relates directly to travel and similar reimbursable expenses which are covered
in the Agreement. DELTA DESIGN, INC. ("DELTA") is requested to comply with these
practices when billing for direct out-of-pocket costs.
1. Air transportation expenses: It is understood that TI will reimburse only
for tourist/economy fares on domestic flights. Business class is
reimbursable for international travel when it is in the best interest of
TI, and when cost is not prohibitive. Trips should also be booked as far
in advance as possible to qualify for special air fare promotions and
discount fares; otherwise, when possible, unrestricted low-cost carriers
should be used.
2. Lodging expense: It is understood that DELTA will use its best effort to
work with the TI liaison or a TI employee DELTA is visiting to ensure
DELTA are receiving TI'S special rate at certain major hotels.
3. Meal expenses: The reasonable cost of meals on overnight trips is allowed.
When dining with TIers on overnight trips, separate checks should be
requested. Entertainment, such as theater tickets and hotel room movies,
are personal expenses and are not reimbursable. Meals and other
entertainment expenses provided to TIers is part of DELTA overhead and is
not reimbursable. Meals pertaining to travel on day trips are not billable
to TI.
4. Alcoholic beverages: Alcoholic beverage costs which are reasonable
business expenses are reimbursable. However, DELTA will need to separate
all alcoholic beverage expenses and list them separately.
5. Tips: Tips are an acceptable expense if they represent customary and
reasonable amounts for meals, xxxxxx, taxi, and similar services. Tips for
meals must be included in the meal cost and tips for the ground
transportation must be included in transportation costs. Tips to porters,
bellhops, etc., should be listed as miscellaneous travel.
6. Laundry expense: Charges for laundry are reimbursable by TI if the trip
exceeds five (5) days.
7. Car rental: Compact cars are to be rented when available in the U.S. and
comparable models internationally. Reimbursement is not allowable for
optional collision insurance when renting cars in the U.S. or Canada.
Optional collision insurance purchased internationally is acceptable where
obligatory. Fines for parking or traffic violations are not reimbursable
expenses whether incurred in a rental car or while using one's personal
automobile.
8. Local travel: The approved reimbursement rate for use of one's personal
automobile is the maximum amount allowed by current IRS regulations. Local
travel between the DELTA and TI as a normal part of doing business is not
reimbursable.
9. Telephone expense: TI allows reasonable and customary personal telephone
expenses while traveling. In those instances where approved business calls
are charged to a personal telephone, the original xxxx must be submitted
with an explanation for reimbursement.
10. Expense statements: Expense Statements should contain information
pertaining to only one trip and must be prepared on a timely basis. Copies
of airline tickets, hotel charges and any other expense in excess of ***
must be included.
11. Office supplies: Office supplies including calendars and other such items
are considered part of the SUPPLIER'S overhead and are not reimbursable.
*** Confidential material redacted and submitted separately to the Commission
