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EXHIBIT 10.36.3
SIGNATURE VERSION
Third Amended and Restated ATTACHMENT No. 1
To the Agreement for Fabrication and Purchase of Semiconductor Products
Agreement Number: 000690
Customer Name: Western Digital Technologies, Inc. Customer Number: WD 1
The parties agree that Attachment No. 1 under the Agreement for Fabrication and
Purchase of Semiconductor Products between Western Digital Technologies, Inc.
(f/k/a Western Digital Corporation) ("Buyer") and International Business
Machines Corporation ("IBM") with Agreement No. 000690 is amended and restated
as of June 19, 2002 (the "Attachment Effective Date") in its entirety to read as
follows:
PRODUCT PURCHASE INFORMATION AND SPECIFICATIONS FOR
THE I295TLC, TALON and REDWING PRODUCTS
1.0 Product Description and Specifications:
TABLE I
Product Name I295TLC Talon
Product Type ASIC (1) Read Channel
ASIC Family SA27E Not applicable
Process Technology CMOS7SF/4LM CMOS 7SF/4LM
Ldrawn 0.15um 0.15um
Chip Size (mm) 4.23x4.23 2.79x2.85
Package Description 176LQFP(2) 80TQFP-EP
Product Name Redwing
Product Type Read Channel
ASIC(1) Family Not applicable
Process Technology CMOS 7SF/4LM
Ldrawn 0.15um
Chip Size (mm) 3.0611 x 2.7388
Package Description 80TQFP-EP
(1) Application Specific Integrated Circuit
(2) 24x24mm body size, 0.5mm OLB pitch, 1.6mm height
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2.0 Volume Purchase Commitments for Talon and I295TLC Chipset in 2002
2.1 For purposes of this Section 2.0, Chipset shall mean the
combination of one Unit of the Talon and one Unit of the I295TLC
Product.
2.2 Buyer agrees to purchase the minimum amounts of Chipsets to be
shipped and invoiced during the calendar quarters listed below in
TABLE III. As of the Attachment Effective Date, Buyer has already
placed Blanket Purchase Orders consistent with this Section 2.2
and TABLE III. Buyer shall forecast and set delivery schedules
and IBM shall deliver the Chipsets in accordance with the JIT
Program Supplement attached hereto; provided that Buyer may
reschedule the delivery of the Chipsets in accordance with
Section 4 of the JIT Supplement attached hereto, except that the
rescheduled Shipment Date may not fall on a date outside of the
calendar quarter of the originally scheduled Shipment Date,
unless both parties agree in writing. The prices listed below in
TABLE III shall apply to the Chipsets shipped during the
respective calendar quarters listed in TABLE III. Notwithstanding
the cancellation charges set forth in Section 7.3 (a) and (b) of
this Attachment 1, Buyer will pay the applicable cancellation
charge as indicated in TABLE II below for any cancellation of the
Purchase Orders for its minimum purchase commitment as set forth
in this Section 2.2. The Cancellation Fee in TABLE II below is
the percentage of the price for any Product for which Buyer
cancelled the Purchase Order.
TABLE II
[***] [***]
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[***] [***]
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TABLE III
I295TLC Unit Talon Unit
Quarter Product Volume+ Price* Price Price** Payment Terms
----------------------------------------------------------------------------------------------
1Q'02 Chipset [***] $[***] $[***] $[***] Net [***] days++
[***] $[***] $[***] $[***] Net [***] days+++
2Q'02 Chipset [***] $[***] $[***] $[***] Net [***] days***
[***] $[***] $[***] $[***] Net [***] days
3Q'02 Chipset [***] $[***] $[***] $[***] Net [***] days****
4Q'02 Chipset [***] $[***] $[***] $[***] Net [***] days
----------------------------------------------------------------------------------------------
+ [***].
* The price stated is the price for one (1) Chipset.
** The Talon Unit price applies only when Buyer purchases a
complete Chipset.
++ [***] of the [***] of the 1Q'02 I295TLC Product was shipped
December of 2001 with net [***] day payment terms.
+++ For this Purchase Order of [***] Chipsets, if all [***]
Chipsets are shipped on the last day of the first calendar
quarter of 2002, the payment terms shall be net [***] days.
*** The [***] Units of the I295TLC Product will be shipped in
March 2002, at a price of $[***] and with net [***] day payment
terms [***] Units of the Chipset, the [***] Talons, shall be
shipped in the second calendar quarter of 2002 in accordance
with the JIT Program Supplement. The price for such Talons
shall be $[***] and the payment terms shall be net [***] days.
**** Notwithstanding the foregoing, Xxxxx agrees that IBM will
ship the [***] I295TLC Products to Buyer on June 29, 2002 or
June 30, 2002, with net [***] day payment terms.
2.3 In addition to those volumes listed in Table III, Xxxxx also
agrees to purchase the minimum amounts of Talon, I295TLC, and
Redwing Product to be shipped and invoiced during the calendar
quarters listed below in TABLE IV; provided, however, that as to
the Talon Product required to be purchased in the third quarter
and fourth quarter of 2002 and the first quarter of 2003, Buyer
may request the shipment of up to an aggregate of [***] Units on
the last day of the third
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quarter of 2002, up to an aggregate of [***] Units the last day
of the fourth quarter of 2002, and up to an aggregate of [***]
Units the last day of the first quarter of 2003, in accordance
with Section 4 of the JIT Program Supplement attached hereto.
[***] Units may be rescheduled by Buyer in accordance with
Section 4 of the JIT Program Supplement, except that the
rescheduled delivery date may not fall on a day outside the
calendar quarter that corresponds to the Product in Table IV,
unless both parties agree in writing. Notwithstanding the
foregoing sentence, Buyer may reschedule [***] Units of the Talon
Product to be delivered in the first calendar quarter of 2003 in
accordance with the terms of JIT Program Supplement. No later
than five business days after the Attachment Effective Date,
Buyer shall place Blanket Purchase Orders consistent with this
Section 2.3 and TABLE IV for the Redwing and I295TLC Product and
change orders for the Talon Product. IBM will accept such Blanket
Purchase Orders and change orders without regard to leadtime
requirements or imposition of cancellation fees, provided that
Buyer submits such Purchase Order within five business days after
the Attachment Effective Date. Buyer shall forecast and set
delivery schedules and IBM shall deliver the Product in
accordance with the JIT Program Supplement attached hereto. The
prices listed below in TABLE IV shall apply to the Talon,
I295TLC, and Redwing Product to be shipped during the respective
calendar quarters listed in TABLE IV. Notwithstanding the
cancellation charges set forth in Section 7.3 (a) and (b) of this
Attachment 1, Buyer will pay the applicable cancellation charge
as indicated in TABLE II above for any cancellation of any
Purchase Order or any failure to issue Purchase Orders as set
forth in this Section 2.3. The Cancellation Fee in TABLE II above
is [***] for any Product for which Buyer cancelled the Purchase
Order or failed to issue a Purchase Order.
TABLE IV
Quarter Product Volume+ Price per Unit Payment Terms
--------------------------------------------------------------------------------
2Q'02 Talon [***] $[***] Net [***] days
2Q'02 Talon [***] $[***] Net [***] days
3Q'02 Talon [***] $[***] Net [***] days
3Q'02 Redwing [***] $[***] Net [***] days
4Q'02 Talon [***] $[***] Net [***] days
4Q'02 Redwing [***] $[***] Net [***] days
4Q'02 I295TLC [***] $[***] Net [***] days
1Q'03 Talon [***] $[***] Net [***] days
+ [***]
2.4 Intentionally Blank.
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2.5 Notwithstanding the cancellation fees set forth in TABLE II above,
Buyer's obligations to pay the cancellation fees in TABLE II shall be
subject to the following. IBM may start manufacturing the Chipsets set
forth in TABLE III and the Talon, I 295TLC and Redwing Product set forth
in TABLE IV at any time. However, if IBM, without Buyer's express prior
written approval commences manufacturing the Chipsets or the Talon, I
295TLC and Redwing Products outside of [***] times the Purchase Order
Lead Time as shown in Section 6.0 and Buyer cancels such Chipsets and/or
Products before they are within [***] times the Purchase Order Lead
Time, then Buyer's only obligation is to pay a [***] cancellation fee
for such cancelled Product.
2.6 Cancellation Procedures for Chipsets in TABLE III and the Talon, I
295TLC and Redwing Products in Table IV: In the event that Buyer cancels
Chipsets in TABLE III or the Talon, I 295TLC, or Redwing Products in
TABLE IV under this Section 2.6, the following cancellation procedures
will apply:
2.6.1 Buyer shall provide IBM with written notice of the
cancellation, specifying the number of Units to be
cancelled and for which calendar quarter such cancellation
applies;
2.6.2 IBM shall provide Buyer with a written notice stating the
number of Units (if any) for which it had started wafers
and the total amount of the cancellation charge, which
shall be due [***] days after IBM provides such notice;
2.6.3 [***]
2.6.4 [***]
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[***]
2.6.5 [***]
3.0 [***]
3.1 [***]
3.2 Buyer shall pay the following cancellation charges for the
cancellation of any purchase order issued under Section 3.1 or
for any reduction to such purchase order to the extent of such
reduction:
Cancellation Schedule for Products
To Be Delivered in the Second Calendar Quarter of 2003
[***] [***]
----------------------------------------- ------------------------------------------------
[***] [***]
[***] [***]
[***] [***]
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3.3 The price for the Talon Products to be delivered under this
Section 3.0 (including the Talon Demand) shall be $[***] per
Unit. The payment terms are net [***] days.
3.4 [***]
4.0 Product Price
4.1 For all Product sold under this Attachment, the Product price
will be held firm and will not be increased on Purchase Orders
accepted by IBM. IBM agrees to discuss Xxxxxx at Xxxxx's request.
4.2 For all Product sold under this Attachment, unless otherwise
specified, the prices set forth in this Agreement do not include
taxes, duties and freight charges. If applicable, taxes, duties
and freight charges will appear as separate additional items on
IBM's invoice, but failure to include any tax, duty or freight
charge shall not affect Buyer's responsibility for such.
4.3 For Products that are not sold as part of a Chipset in Section
2.2 or as part of the volume purchase commitment in Section 2.3
and Section 3.1, the Product Unit
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SIGNATURE VERSION
pricing for I295TLC, Talon and Redwing below applies to Product
shipped during the applicable calendar quarter.
I295TLC Talon Redwing
------- ----- -------
Q4'01 $[***] $[***] [***]
Q1'02 $[***] $[***] [***]
Q2'02 $[***] $[***] [***]
Q3'02 $[***] $[***] $[***]
Q4'02 $[***] $[***] $[***]
* [***] Units of Talon Product shipped in March 2002 shall have a
purchase price of $[***] each and shall have net [***] day
payment terms.
5.0 Purchase Orders
[***] Purchase Orders must be placed in advance, with at least the
Purchase Order Lead Time specified in Section 6.0, to allow IBM to meet
Buyer's requested Shipment Date. Buyer may request an improved shipment
date, however, such request is subject to acceptance by IBM.
6.0 Purchase Order Lead Time:
Product Purchase Order Lead Time/Weeks
------- ------------------------------
I295TLC [***] weeks
Talon [***] weeks
Redwing [***] weeks
Notwithstanding any other term of this Agreement, the Purchase
Order Lead Times above do not include the time in which IBM has
to reply to Buyer's Purchase Order.
7.0 Cancellation, Change Orders and Rescheduling Provisions for Products
7.1 Buyer may cancel or alter a Purchase Order or any portion thereof
upon written notice to IBM. In any such event, a cancellation
charge will immediately become due for each cancelled Unit or
Chipset as specified under this Agreement.
7.2 [***]
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[***]
[***]
7.3 The cancellation charges for Chipsets ordered pursuant to Section
2.2 and TABLE III, the Talon, Redwing, and I295TLC Product
ordered pursuant to Section 2.3 and TABLE IV, and [***] pursuant
to Section 5 of the JIT Supplement are stated in Section 2.2,
TABLE II and Section 2.5. The cancellation charges for Talon
Product ordered pursuant to Section 3.1 are stated in Section
3.2. Cancellation charges for any additional I295TLC, Redwing,
and Talon Products ordered are as follows:
[***]
[***]
7.4 Buyer may issue change orders to previously accepted Purchase
Orders for IBM's acceptance. In such change orders, Buyer may
request (1) an increase or decrease of quantity of Products it
ordered; (2) different Product from the Product originally
ordered or (3) an earlier delivery date. IBM may accept or reject
the change order. In the event that IBM accepts or is required to
accept a change order, the newly accepted change order becomes an
accepted Purchase Order, replacing the original Purchase Order.
Notwithstanding the above, Buyer reserves the right to reschedule
deliveries per Sections 2.2 and 2.3 of this Attachment 1 and
Section 4 of the JIT Program Supplement attached hereto. If a
change order is identified as exercising this reschedule right,
IBM will accept that change order per the conditions set forth in
the relevant sections.
8.0 Shipment
8.1 The delivery terms for Products are as stated in the table below,
with title passing to Buyer upon shipment from the "Shipment
From" location in the table. For shipments
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not covered by the table below, Xxxxx is responsible for all
freight and duty charges from IBM's shipping location and title
and risk of loss pass to the Buyer upon tender to the carrier for
shipment to the Buyer.
SHIPMENTS FROM SHIPMENTS TO INCOTERM*
--------------------------------------------------------------
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
* As defined in ICC 2000 Incoterms.
8.2 [***]
9.0 Quality Assurance
9.1 IBM will follow its standard workmanship and quality assurance
procedures for Products sold under this Agreement.
9.2 [***]
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[***]
9.3 [***]
[***]
[***]
10.0 Warranty Period
The Warranty Period for Products under this Attachment is [***]
years from delivery. For purposes of this Section 10, delivery to Buyer
of each Unit is deemed to occur five (5) days after shipment from IBM's
plant or distribution point.
11.0 Redwing NRE
11.1 Buyer shall make payments for a nonrecurring engineering ("NRE")
charge of $[***] for the development of the Redwing Product,
which shall be due in $[***] increments upon the following
dates:
1Q'02: 02/15/02
2Q'02: 05/15/02
3Q02: 08/15/02
4Q02: 11/15/02
11.2 Prior to the Attachment Effective Date, Buyer submitted a
purchase order for the entire NRE charge of $[***] and has
already made the $[***] payments due in each of the first
and second quarters of 2002. Neither party may cancel the Redwing
NRE.
11.3 [***]
12.0 Notices
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SIGNATURE VERSION
All notices required to be given under this Agreement will be in writing
and deemed given if sent postage prepaid or by facsimile transmission
(FAX), receipt confirmed by intended recipient, to the parties as
follows:
IBM: BUYER:
IBM Corp. Western Digital Technologies, Inc.
Attn: Contract Administrator Attn: General Counsel
0000 Xxxxx Xxxxxx, 965-3B 00000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxx., Xxxxxxx 00000 Xxxx Xxxxxx, Xxxxxxxxxx 00000
Fax: [***] Fax: (000)-000-0000
13.0 No Other Amendment or Modification. This Third Amended and Restated
Attachment No. 1 amends and restates the Second Amended and Restated
Attachment No. 1 with an Attachment Effective Date of April 11, 2002.
IBM previously retracted and agreed that the Second Amended and Restated
Attachment No. 1 superseded IBM's letter dated March 1, 2002 as to the
discontinuance of the I295TLC, Talon and Redwing Products. Accordingly,
those Products have not been discontinued. Except as expressly set forth
in this Third Amended and Restated Attachment No. 1, the Agreement, as
amended by Amendment No. 1 dated December 18, 2001 and Amendment 2 dated
June 19, 2002, remains in full force and effect without further
modification. The terms and conditions of the Agreement, as amended, and
this Third Amended and Restated Attachment No. 1 shall not be further
modified or amended except by a writing signed by authorized
representatives of both parties.
ACCEPTED AND AGREED TO AS OF THE ATTACHMENT EFFECTIVE DATE:
Western Digital Technologies, Inc. International Business Machines
Corporation
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxxxxxxx
------------------------------ -------------------------------
Name: Xxxxxx Xxxxx Name: Xxxx X. Xxxxxxxxxx
------------------------------ -------------------------------
(print or type name)
Exec. Mgr., MD WW Contracts &
Title: V.P., Materials Title: Business Practices, IBM TG
------------------------------ -------------------------------
(print or type title)
Date: 19-June '02 Date: June 19, 2002
------------------------------ -------------------------------
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JUST-IN-TIME (JIT) PROGRAM SUPPLEMENT
TO THE AGREEMENT FOR FABRICATION AND PURCHASE OF SEMICONDUCTOR PRODUCTS
[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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