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REDACTED FOR CONFIDENTIALITY
EXHIBIT 10.9
ASSURED SUPPLY AND DEMAND AGREEMENT
ASSURED SUPPLY AND DEMAND AGREEMENT (this "Agreement"), made as of February
17, 1998, by and among Lucent Technologies Microelectronics Pte. Ltd., a
Singapore corporation ("Lucent"), Chartered Semiconductor Manufacturing Ltd., a
Singapore corporation ("CSM"), and Silicon Manufacturing Partners Pte. Ltd. , a
Singapore corporation (the "Supplier"), Lucent and CSM being sometimes referred
to herein individually as a "Purchaser" and collectively as the "Purchasers".
Terms in capital or with initial capital letters which are not defined herein
shall have the meanings assigned to them in the Joint Venture Agreement
hereinafter referenced.
WHEREAS, Lucent and CSM have entered into a joint venture agreement, dated
December 19, 1997 (the "Joint Venture Agreement"), which also provides for other
Collateral Agreements including this Agreement (as defined in the Joint Venture
Agreement), for the purpose of supplying silicon wafers ("Wafers") produced by
the Supplier to Lucent and to CSM; and
WHEREAS, the Purchasers desire to purchase, and the Supplier desires to sell,
the Wafers upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the parties hereto agree, subject to the conditions
contained herein, as follows:
1.0 TERM
This Agreement shall be effective on the date hereof and, except as provided in
the Joint Venture Agreement or otherwise mutually agreed upon by the parties,
shall terminate upon termination of the Joint Venture Agreement. The amendment
or termination of this Agreement shall not affect the obligations of the
Supplier or the Purchasers under then existing purchase orders issued pursuant
to this Agreement.
2.0 WAFER PURCHASE
(a) During the term of this Agreement, the Purchasers shall purchase, and
the Supplier shall sell to the Purchasers, Wafers upon the terms and
subject to the conditions set forth in this Agreement, including Exhibit A
hereto and made a part hereof.
(b) Any material adverse variance to the Supplier's operations caused by a
Purchaser not taking its required share of Wafer output shall be
compensated for by such Purchaser in accordance with Exhibit A hereto.
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3.0 ORDER
For purposes of this Agreement, a purchase order shall mean the form of
purchase order, contract or document ("order") adopted by the Purchasers
for the purpose of ordering Wafers. Each order shall reference this
Agreement, thereby incorporating in such order the terms and conditions
stated in this Agreement. Terms or conditions contained in any order,
whether written, typed or printed, shall be without effect should they be
in conflict with those incorporated by reference to this Agreement.
4.0 PRICE
Price for Wafers shall be established in accordance with the Pricing
Principles set forth in Exhibit B hereto.
5.0 BENCHMARKING
On an annual basis, the Supplier and the Purchasers shall undertake to
benchmark product quality, and service performance of the Wafers purchased
by the Purchasers against the then existing standards of the industry. The
Wafer specifications benchmarked shall be the codes that comprise the top
eighty percent of the volume purchased by each Purchaser. The Supplier and
the Purchasers shall review such benchmark information and the Supplier
shall develop a plan of action for improving Wafer product quality and
service performance if such benchmark information indicates improvements
are needed.
6.0 ASSIGNMENT AND SUBCONTRACTING
Except as set forth in this Section 6.0, the Supplier shall not assign
this Agreement or any right or interest hereunder (excepting monies due or
to become due or as otherwise provided in the Joint Venture Agreement or
any of the other Collateral Agreements) or delegate or subcontract any
work or other obligation to be performed under this Agreement, without the
prior written consent of each Purchaser. Any attempted assignment,
delegation or subcontracting in contravention of the above provisions
shall be void and ineffective. Any assignment of monies shall be void and
ineffective to the extent that (1) the Supplier shall not have given each
Purchaser at least thirty (30) days prior written notice of such
assignment or (2) such assignment attempts to impose upon the Purchasers
obligations to the assignee in addition to the payment of such monies, or
to preclude either of the Purchasers from dealing solely and directly with
the Supplier in all matters pertaining to this Agreement including the
negotiation of amendments or settlements of charges due. All work
performed by the Supplier's subcontractor(s), including but not limited to
labor services, shall be deemed work performed by the Supplier. Either
Purchaser may, with the prior written consent of the other Purchaser which
shall not be unreasonably withheld, assign this Agreement to a subsidiary
or Affiliate of such Purchaser; provided that such
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Purchaser shall not thereby be relieved of any of its obligations
hereunder or under the Joint Venture Agreement or any other Collateral
Agreement.
7.0 CHOICE OF LAW
The construction, interpretation and performance of this Agreement, and
all transactions hereunder, shall be governed by the laws of Singapore,
without regard to its choice of laws principles and excluding the
Convention for the International Sale of Goods.
8.0 COMPLIANCE WITH LAWS
The Supplier shall comply with all applicable material United States and
Singapore federal, state, local and foreign laws, ordinances, regulations
and codes, including those relating to the use of chlorofluorocarbons, and
including the identification and procurement of required permits,
certificates, licenses, insurance, approvals and inspections as may be
required by it to effect this Agreement.
9.0 ENTIRE AGREEMENT
Except as otherwise set forth in Section 3.0 hereof, the terms and
conditions set forth in this Agreement shall apply to any orders issued
pursuant to this Agreement. To the extent in conflict with those
incorporated by reference to this Agreement, any printed provisions
contained in either of the Purchaser's orders and any provisions on the
Supplier's purchase order acknowledgment forms shall be deemed null and
void. Amendments to this Agreement shall be of no force and effect, unless
expressly consented to by the parties hereto in writing. Unless otherwise
stated herein or in any other agreement between the relevant parties,
estimates or forecasts furnished by the Purchasers shall not constitute
commitments. This Agreement, the Joint Venture Agreement and the
Collateral Agreements, together with all Exhibits, Schedules, Appendices
and attachments hereto and thereto, represent the entire agreement and
understanding between the parties hereto with respect to the subject
matter hereof and supersede any prior agreement or understanding, written
or oral, that the parties hereto may have had.
10.0 FORCE MAJEURE
No party hereto shall be held responsible for any delay or failure in
performance of any part of this Agreement to the extent such delay or
failure is caused by fire, flood, explosion, war, strike, embargo,
government requirement, civil or military authority, act of God, or other
similar causes beyond its control and without the fault or negligence of
the delayed or nonperforming party or its subcontractors (each being
referred to in this Agreement as a "Force Majeure Condition").
Notwithstanding the foregoing, the Supplier's liability for loss or damage
to the
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Purchasers' materials in the Supplier's possession or control shall not be
modified by this clause. If any Force Majeure Condition occurs, the party
delayed or unable to perform shall give immediate notice to the other
party, stating the nature of the Force Majeure Condition and any action
being taken to avoid or minimize its effect. Once the Force Majeure
Condition ceases, each party shall resume performance under this Agreement
or any applicable order.
11.0 GOVERNMENT CONTRACT PROVISIONS
Orders placed under this Agreement containing a notation that the Wafers
are intended for use under U.S. Government contracts shall be subject to
such other provisions required by the U.S. Government printed, typed or
written thereon, or on the reverse side thereof, or in attachments
thereto. Supplier shall charge the Purchaser for any additional costs
incurred to comply with such provisions.
12.0 IDENTIFICATION
(a) The Supplier shall not, without the Purchasers' prior written consent,
engage in advertising, promotion or publicity related to this Agreement,
or make public use of any Identification (as hereinafter defined) in any
circumstances related to this Agreement. As used in this Agreement, the
term "Identification" means any copy or semblance of any trade name,
trademark, service ▇▇▇▇, insignia, symbol, logo, or any other product,
service or organization designation, or any specification or drawing of
Lucent or CSM or their respective affiliates, or evidence of inspection by
or for any of them.
(b) To the extent the Supplier is requested by either Purchaser, and
Supplier has the capability to use such Purchaser's Identification in
connection with such Purchaser's Wafers, the affected parties shall enter
into a separate agreement therefor. The Supplier shall remove or
obliterate any Identification prior to any use or disposition of any
Wafers rejected or not purchased by either of the Purchasers, and, shall
indemnify, defend (at a Purchaser's request) and save harmless Lucent or
CSM and their respective affiliates and each of their officers, directors
and employees from and against any losses, damages, claims, demands,
suits, liabilities, fines, penalties and expenses (including reasonable
attorneys' fees) arising out of the Supplier's failure to so remove or
obliterate Identification.
13.0 INVOICING
The Supplier shall: (1) render original invoice, or as otherwise specified
in this Agreement, showing Agreement number, through routing and weight;
(2) render separate invoices for each shipment within twenty-four (24)
hours after shipment; and (3) mail invoices to the address shown on the
order.
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14.0 TERMS OF PAYMENT
The terms of payment are as follows: net thirty (30) days from the date
of invoice.
15.0 RECORDS
The Supplier shall aggregate all material records relating to the
manufacture of wafers for each Purchaser under this Agreement, including a
physical inventory if applicable, and maintain such records in an accurate
and complete manner for two (2) years from the date of invoice. These
records, where applicable, shall be maintained in accordance with
recognized commercial accounting practices so they may be readily
available for review and audit by each Purchaser as provided in Section
28.0. Supplier shall maintain for two (2) years processing IV tests, and
wafer sort data on each individual lot.
16.0 RIGHT OF ACCESS
(a) The Supplier shall permit access to its premises by either Purchaser
in connection with work hereunder for such Purchaser without execution of
additional agreements. Prior notification will be given when access is
desired. In addition, each Purchaser shall have the right to access all of
the Supplier's in-process records related to Wafers produced for such
Purchaser on its premises on reasonable notice and at reasonable times.
(b) The Supplier shall prevent access by third parties which manufacture,
design, repair and/or sell products similar to Wafers to any of the
manufacturing facilities which are associated with Wafers unless mutually
agreed to in writing by the Purchasers.
17.0 PROCESS CERTIFICATION AND INSPECTION
(a) In regard to the Supplier's manufacturing processes, each Purchaser,
and each Purchaser's customers as designated by such Purchaser, may,
subject to appropriate confidentiality restrictions and the provisions of
Section 16.0(b), with respect to those processes identified in the
manufacture of Wafers for such Purchaser, perform periodic quality
surveys, evaluations, audits and approvals, including but not limited to
equipment calibration and operator performance, and evaluation of quality
control/quality assurance and data collection and analysis procedures.
(b) The Supplier shall conduct appropriate incoming inspection of raw
materials in accordance with its standard practices approved by the
Purchasers and any specific requirements of the Purchasers. Such practices
may be modified from time to time to address specific conditions as
requested by the Purchasers.
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18.0 QUALITY
The Supplier shall use its reasonable efforts to ensure that all
manufacturing and design operations which contribute to the design,
development, production and services of Wafers remain ISO-14001 certified.
Furthermore, the Supplier will use its reasonable efforts to attain and
maintain acceptable ratings in any future quality programs as agreed to by
the parties hereto.
19.0 PURCHASER ACCEPTANCE AND QUALIFICATION TESTS
Prior to the Supplier initiating volume manufacture of Wafers, each
Purchaser shall have the right to conduct acceptance or qualification
tests of Wafers and processes, including but not limited to technical
acceptance tests to ensure conformity with a Purchaser's specifications.
This testing shall in no way relieve the Supplier of any other
responsibilities under this Agreement.
20. SPECIFICATIONS OR DRAWINGS
(a) As used in this Agreement, the term "Specifications" means the design
features, functions, characterization, dimensions, performance
capabilities, quality specifications and process specifications, and
samples and drawings associated with any of the foregoing as provided by a
Purchaser to the Supplier, and any modifications or changes thereto
pursuant to the terms of this Agreement.
(b) Prior to implementation of any change proposed to be made by the
Supplier in the Wafers furnished in accordance with the Specifications
under this Agreement, the Supplier shall provide the Purchasers with
written notice thereof in accordance with the procedures mutually agreed
between the Supplier and the relevant Purchaser. If the Purchasers agree
to the Supplier's proposed changes, all Wafers affected by such changes
and shipped after the implementation of such changes shall conform to such
changed specifications.
21. MARKING
All Wafers furnished under this Agreement shall be marked for
identification purposes in accordance with the specifications set forth in
this Agreement and at a minimum as follows as shown in Exhibit C attached:
lot no., wafer no., and K no. (clean room identification). In addition,
the Supplier agrees to add any other identification which might be
requested by either Purchaser such as, but not limited to, distinctive
marks conforming to Purchaser's serialization plan or to a Purchaser's
bar-coding plan after charges, if any, for such additional identification
marking have been agreed to by the Supplier and such Purchaser.
22.0 TITLE AND RISK OF LOSS
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Title and risk of loss or damage to Wafers purchased by either Purchaser
under this Agreement shall vest in such Purchaser when the Wafers have
been delivered Ex Works.
23.0 TRANSPORTATION TERMS
The completed Wafers shall be delivered Ex Works.
24.0 SERVICE
(a) Purchasers will establish shipping performance criteria and
specifications which will be provided to the Supplier.
(b) The Supplier shall use its reasonable efforts to deliver Wafers in
accordance with each Purchaser's required delivery schedule as contained
in such Purchaser's orders, as such delivery schedule may be subsequently
modified by agreement of the Supplier and such Purchaser. The Supplier
will promptly notify each Purchaser of an "Acknowledged Delivery
Schedule", which shall be the schedule upon which the Supplier can deliver
Wafers to each Purchaser. The Supplier shall use its reasonable efforts to
communicate to each Purchaser any change to the Acknowledged Delivery
Schedule. The Supplier's compliance with the foregoing obligation will not
relieve the Supplier of the shipping performance criteria and
specifications established pursuant to paragraph (a) of this Section 24.0.
25.0 SUPPLIER INTERVAL
(a) For the purposes of this Agreement, the terms "Lead Time" or "Supplier
Interval" shall mean the period of time expressed in days commencing on
the date an order for Wafers is placed with the Supplier by a Purchaser
and ending upon delivery of such Wafers to such Purchaser pursuant to
Section 23.0.
(b) If, during the course of this Agreement, the Supplier determines
that it will no longer be the able to deliver Wafers within the then
existing Lead Times, the Supplier shall immediately notify the ordering
Purchaser to that effect. The Supplier shall use its reasonable best
efforts to quote reduced Lead Times when responding to orders placed under
this Agreement if required to meet a Purchaser's requested delivery date.
26.0 INDEMNIFICATION
(a) Lucent will defend, indemnify and hold harmless the Supplier against
all suits, claims, demands or actions alleging that any Wafers purchased
hereunder by Lucent or the manufacture of such Wafers for Lucent infringes
any patent or other intellectual property right of any third party solely
as a result of the use by the
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Supplier of any technology, processes or specification furnished to the
Supplier by Lucent or any of its Affiliates for the purpose of
manufacturing such Wafers for Lucent and will pay all damages, awards or
settlements and costs (including reasonable attorneys' fees) which may be
incurred by or assessed against the Supplier on account of such
infringement whether or not legal proceedings are commenced; provided that
Lucent (i) shall have had prompt written notice of all claims of such
infringement and suits, claims, demands or actions and full opportunity
and authority to assume the sole defense of and to settle the same, and
(ii) shall be furnished upon Lucent's request, and at Lucent's expense,
all information and assistance available to the Supplier for such defense.
(b) CSM will defend, indemnify and hold harmless the Supplier against all
suits, claims, demands or actions alleging that any Wafers purchased
hereunder by CSM or the manufacture of such Wafers for CSM infringes any
patent or other intellectual property right of any third party solely as a
result of the use by the Supplier of any technology, processes or
specification furnished to the Supplier by CSM or any of its Affiliates
for the purpose of manufacturing such Wafers for CSM and will pay all
damages, awards or settlements and costs (including reasonable attorneys'
fees) which may be incurred by or assessed against the Supplier on account
of such infringement whether or not legal proceedings are commenced;
provided that CSM (i) shall have had prompt written notice of all claims
of such infringement and suits, claims, demands or actions and full
opportunity and authority to assume the sole defense of and to settle the
same, and (ii) shall be furnished upon CSM's request, and at CSM's
expense, all information and assistance available to the Supplier for such
defense.
27.0 CONFIDENTIAL INFORMATION
All communications between the Supplier and the Purchasers or any of them
and all information and other material supplied to or received by any of
them from any one or more of the others in connection with the performance
of this Agreement which is either marked "confidential" or is by its
nature intended to be exclusively for the knowledge of the recipient alone
in connection with this Agreement, or to be used by the recipient only for
the benefit of the Supplier, any information concerning the business
transactions or the financial arrangements, including without limitation,
trade secrets, customer lists, know-how, designs, processes, drawings and
specifications, ("Confidential Information") of the Supplier or of the
Purchasers or any of them, or of any person with whom any of them is in a
confidential relationship with regard to the matter in question coming to
the knowledge of the recipient shall be kept confidential by the recipient
(including to the exclusion of the non-disclosing party) and shall be used
by the recipient solely and exclusively for achieving the purposes of this
Agreement during the term of this Agreement, and for a period of five (5)
years following the termination thereof. Neither Purchaser shall disclose
to the Supplier or to the other Purchaser competitively sensitive
information concerning either's sale, transfer or use of Wafers (e.g.
pricing, cost, volume, capacity, customer identification), except as
reasonably required under this Agreement relating to any wafer fabrication
facility operated, managed or
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controlled by such Purchaser or in which such Purchaser has a
non-controlling interest or role. At the expiration or termination of this
Agreement, written Confidential Information will be returned to the party
supplying such information or destroyed immediately upon the request of
such party and no copies, extracts or other reproductions shall be
retained by recipient. All documents, memoranda, notes and other writings
whatsoever prepared by recipient which contain the Confidential
Information shall be returned to such party or destroyed at such party's
request. Notwithstanding the foregoing, information shall not be deemed
confidential and the recipient shall have no obligation with respect to
any such information which was in the recipient's possession before
receipt from the discloser; which are rightfully received by the recipient
without restriction from a third party without a duty of confidentiality
on the third party; which are independently developed by recipient; or
which are in the public domain through no act or default on the part of
the recipient, its Affiliates, its servants and/or agents, whereupon, to
the extent that it is public, this obligation shall cease. In addition, in
the event a recipient becomes compelled by law or regulatory authority to
disclose any of the Confidential Information, the recipient party shall
provide the disclosing party with prompt written notice so that the
discloser may seek protective order or other appropriate remedy or waive
compliance with the provisions of this Section 27.0. In the event that
such protective order or other remedy is not obtained, or that the
discloser waives compliance with the provisions of this Section 27.0, the
recipient shall furnish only that portion of the Confidential Information
which it is required by law or regulatory authority to disclose and will
exercise its commercially reasonable efforts to assure that confidential
treatment will be accorded the Confidential Information.
28.0 AUDIT
The Supplier shall permit each Purchaser or the representative of each
Purchaser to examine and audit the records relating to such Purchaser's
Wafers as described in Section 15.0 and all supporting records on
reasonable notice and at reasonable times. Audits shall be made not later
than two (2) calendar years after the final delivery date of Wafers
ordered.
29.0 SURVIVAL OF OBLIGATIONS
The obligations of the parties under this Agreement which by their nature
would continue beyond the termination, cancellation or expiration of this
Agreement shall survive such termination, cancellation or expiration.
30.0 CLAUSE HEADINGS
The headings of the Sections and paragraphs in this Agreement are inserted
for convenience only and are not intended to affect the meaning or
interpretation of this Agreement.
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31.0 DEFAULT
(a) In the event the Supplier or any Purchaser shall be in material breach
or default of any of the terms, conditions, or covenants of this Agreement
or any order and such breach or default shall continue for a period of
thirty (30) days after the giving of written notice to the breaching party
by the non-breaching party, then the parties hereto shall proceed to
resolve such dispute pursuant to the provisions of Section 39.0.
(b) The failure of any of the parties at any time to enforce any right or
remedy available under this Agreement or otherwise with respect to any
breach or failure by any other party shall not be construed to be a waiver
of such right or remedy with respect to any other breach or failure by the
breaching party.
32.0 EXPORT CONTROL
The Supplier acknowledges that any products, software and technical
information (including, but not limited to, services and training)
provided by Lucent under this Agreement are subject to U.S. export laws
and regulations and any use or transfer of such products, software and
technical information must be authorized under those regulations and that
products, software and technical information (including, but not limited
to, services and training) provided by CSM may be subject to U.S. export
laws and regulations and use or transfer of such products, software and
technical information may require authorization under those regulations.
The Supplier agrees that it will not use, distribute, transfer, or
transmit the products, software or technical information (even if
incorporated into other products) except in compliance with U.S. export
regulations. If requested by a Purchaser, the Supplier also agrees to sign
written assurances and other export-related documents as may be required
for a Purchaser to comply with U.S. export regulations.
33.0 NOTICES
All notices, demands or other communications required or permitted to be
given or made hereunder shall be in writing and delivered personally or
sent by prepaid registered post (by air-mail if to or from an address
outside Singapore) with recorded delivery, or by facsimile transmission
(provided that the receipt of such facsimile transmission is confirmed by
the dispatch of a hard copy of the facsimile sent immediately thereafter
by prepaid registered post) addressed to the intended recipient thereof at
its address or at its facsimile number set out in this Agreement (or to
such other address or facsimile number as a party to this Agreement may
from time to time duly notify the others in writing). Any such notice,
demand or communication shall be deemed to have been duly served, if given
or made by facsimile, immediately at the time of dispatch (provided that
the receipt of such
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facsimile transmission is confirmed by the dispatch of a hard copy of the
facsimile sent immediately thereafter by prepaid registered post) or, if
given or made by letter, immediately if delivered personally or 48 hours
after posting or, if given or made by air-mail, ten days after posting and
in proving the same it shall be sufficient to show that personal delivery
was made or that the envelope containing such notice was duly addressed,
stamped and posted. The address and facsimile numbers of the parties for
the purpose of this Agreement are:-
CSM : Chartered Semiconductor Manufacturing Ltd.
▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No. : (▇▇) ▇▇▇ ▇▇▇▇
Attention : Legal Department
Lucent : Lucent Technologies Microelectronics Pte. Ltd.
▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No. : (▇▇) ▇▇▇-▇▇▇▇
Attention : Managing Director
With copy to:
Lucent Technologies Inc.
Microelectronics Division
▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No. ▇▇▇ ▇▇▇ ▇▇▇-▇▇▇▇
Attention: Legal Department
Supplier : Silicon Manufacturing Partners Pte. Ltd.
c/o Singapore Technologies ▇▇▇.▇▇▇.
▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
#02-09/12
The ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No. : (▇▇) ▇▇▇-▇▇▇▇
Attention : The Company Secretary
Corporate Secretariat Department
with copies to Lucent and CSM at their above addresses.
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Any party hereto may change its address provided above for the purpose
hereof by giving written notice to the other parties hereto of such change
in the manner hereinabove provided.
34.0 TAXES AND INSURANCE PAYMENTS
Each Purchaser shall pay, in addition to the price of the Wafers
purchased, the amount of any freight, insurance, handling and other duties
levied on the shipment of the Wafers to such Purchaser. Such Purchaser
shall also pay for all sales, use, excise or other similar taxes levied on
the purchase of Wafers.
35.0 REPORTS
(a) Supplier agrees to maintain the following auditable order and shipment
reports and provide copies to Purchasers, if requested, on or before the
fifth working day of each month:
(1) Order and shipment reports for each shipment, including ▇▇▇▇ of
lading information.
(2) At the request of a Purchaser, monthly summaries of actual shipping
intervals achieved on Wafers ordered and manufactured hereunder,
identifying the number of units and such other information as either
Purchaser may reasonably request.
(b) Supplier further agrees to maintain and render quality and yield
data of the type and frequency specified by Purchasers to assure proper
control of Wafers quality and reliability. This data may include such
items as in-process daily yields, quality control, and quality assurance
daily records. Supplier shall furnish and render additional reports as may
be reasonably requested by Purchasers.
36.0 OZONE DEPLETING SUBSTANCES LABELING
The Supplier warrants and certifies that all products, including packaging
and packaging components, provided to the Purchasers under this Agreement
have been accurately labeled, in accordance with the requirements of 40
CFR, Part 82 entitled "Protection of Stratospheric Ozone, Subpart E - The
Labeling of Products Using Ozone Depleting Substances."
37.0 SHIPPING AND BILLING
For shipments against a purchase order placed pursuant to this Agreement,
the Supplier shall: (1) ship order complete unless instructed otherwise,
(2) ship to the destination designated in the order, (3) ship according to
routing instructions given by the each Purchaser, (4) place order number
on all subordinate documents, (5) enclose a packing memorandum with each
shipment and, when more than one package is shipped, identify the package
containing the memorandum, (6) ▇▇▇▇ order number on all packages and
shipping papers, (7) render invoices in duplicate or as otherwise
specified, showing order number, through routing and
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weight, (8) render separate invoices for each shipment within twenty-four
hours after shipment, (9) mail invoices and notices to the address shown
in order. Adequate protective packaging shall be furnished at no
additional charge. Shipping and routing instructions may be altered as
mutually agreed without a writing.
38.0 SEVERABILITY
If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire Agreement, but rather the entire Agreement
shall be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and obligations of
the Supplier and the Purchasers shall be construed and enforced
accordingly.
39.0 DISPUTE RESOLUTION
(i) In case any dispute or difference shall arise amongst the parties
hereto as to the construction of this Agreement or as to any matter or
thing of whatsoever nature arising hereunder or in connection herewith,
including any question regarding its existence, validity or termination,
such dispute or difference shall promptly be submitted to a committee
comprised of one Board member of the Supplier from each of Lucent and CSM.
If such committee is unable to resolve such dispute within 21 days of such
submission, it shall submit the dispute to a committee comprised of one
senior manager from each of Lucent and CSM, being in the case of:-
CSM : the President
Lucent : the Customer Satisfaction and Business Development
Vice President of Lucent Technologies Inc. ("LTI")
If such senior managers are unable to resolve such dispute within 14 days
of such submission, it shall be submitted to a committee comprised of one
senior officer from each of Lucent and CSM being in the case of:-
CSM : the Chairman of the Board of CSM
Lucent : Vice President, Integrated Circuits Division of LTI
(ii) If such senior officers are unable to resolve the dispute within 14
days of such submission, it shall be submitted to a single arbitrator to
be appointed by Lucent and CSM (the "Arbitrator"). If Lucent and CSM fail
to agree on an Arbitrator within 14 days after any of them has given to
the other a written request to concur in the appointment of an Arbitrator,
a single arbitrator (the "ICC Arbitrator") shall be
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appointed on the request of either Lucent or CSM within 10 days after the
14 day period by the International Chamber of Commerce and such submission
shall be a submission to arbitration in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce as
presently in force by which the parties in dispute agree to be so bound.
Both the Arbitrator and the ICC Arbitrator, as applicable, shall have 14
days after his appointment to request and receive all information (whether
written or oral) relating to the dispute from Lucent, CSM and the
Supplier. Each of Lucent and CSM shall use its commercially reasonable
efforts to comply with all of such requests for information. Lucent and
CSM shall jointly cause the Supplier to comply with all of the
Arbitrator's and the ICC Arbitrator's requests for information. The place
of arbitration shall be London, England and the arbitration shall be
conducted wholly in the English language. The Arbitrator and the ICC
Arbitrator, as applicable, shall render his decision within 30 days after
his appointment or, in the event the Arbitrator or the ICC Arbitrator, as
applicable, requires any hearings or proceedings with respect to such
arbitration, within 15 days after the completion of such hearings or
proceedings.
40.0 WARRANTY
EXCEPT FOR THE PROVISIONS OF EXHIBIT A PERTAINING TO WAFER DEFECTS, THE
SUPPLIER, ITS SUBSIDIARIES AND AFFILIATES, SUBCONTRACTORS AND SUPPLIERS
MAKE NO WARRANTIES EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIM ANY
WARRANTY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AS WELL AS
OTHER IMPLIED WARRANTIES, IN LAW OR EQUITY. EACH OF THE PURCHASER'S SOLE
AND EXCLUSIVE REMEDY SHALL BE THE SUPPLIER'S OBLIGATION TO CREDIT OR
REIMBURSE AS PROVIDED IN EXHIBIT A.
41.0. WAIVER OF IMMUNITY
Lucent, CSM and the Supplier hereby irrevocably agree not to claim and
irrevocably waive any claim or right which it has or may hereafter acquire
under any law, regulation, treaty or international agreement to immunity
for itself, or any of its revenues, assets or properties or those of any
of its agencies or instrumentalities from the jurisdiction of any court
(including but not limited to any court of the United States of America or
the State of New Jersey) with respect to the enforcement of an arbitral
award rendered pursuant hereto.
42.0 COMPLIANCE WITH UNITED STATES CUSTOMS LAWS AND REGULATIONS
Supplier shall comply with Purchaser's reasonable instructions relating to
compliance with United States Customs laws, statutes, or regulations.
Supplier
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agrees to assist Purchaser, at Purchaser's expense, in every reasonable
way necessary to ensure that Purchaser can import the material into the
United States in accordance with all applicable customs laws, statutes,
and regulations.
43.0 COUNTRY OF ORIGIN
Supplier agrees that, for all Wafers provided under this Agreement, it
will list the country of origin of the goods, by comcode, or in the event
that no comcode is provided, by other identifying number or symbol, on the
invoice.
44.0 IMPORT INVOICE
At Purchaser's request and expense, Supplier shall include an invoice with
the shipment of Wafers which includes the following information for every
Wafer shipped: a complete noun description in Spanish consistent with the
Harmonized Tariff Schedule; a statement as to the country of origin of the
Wafers; Purchaser's comcode for each type of Wafer shipped; the value of
the Wafer; the manufacturer's identification number, or in the absence of
such number, the full address of the manufacturer; and the terms of sale.
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IN WITNESS WHEREOF, each of the Supplier and the Purchasers have executed this
Agreement in duplicate on the day and year below written.
Lucent Technologies Microelectronics Pte. Ltd.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
(Signature)
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Title: Director
------------------------------------
Date: 17 February 1998
Chartered Semiconductor Manufacturing Ltd.
By: /s/ Tan ▇▇▇▇ ▇▇▇▇
---------------------------------------
(Signature)
Name: Tan ▇▇▇▇ ▇▇▇▇
-------------------------------------
Title: President and CEO
------------------------------------
Date: 17 February 1998
------------------------------------
Supplier
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
(Signature)
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Director
------------------------------------
Date: 17 February 1998
-------------------------------------
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REDACTED CONFIDENTIAL TREATMENT REQUESTED
The asterisked portions of this document have been omitted and
are filed separately with the Securities and Exchange Commission
Exhibit A
- TAKE OR PAY PRINCIPLES-
The parties agree that the following provisions will govern all purchase
obligations, pricing, and allocation of Wafer production output made under this
Agreement.
(A) Unless otherwise agreed to in writing, Lucent agrees to purchase and the
Supplier agrees to sell to Lucent fifty-one percent (51%) of the Supplier's
production output for Wafers, and CSM agrees to purchase and the Supplier agrees
to sell to CSM forty-nine percent (49%) of the Supplier's production output for
Wafers, based upon forecasts provided by the Supplier. The Supplier's Wafer
production capacity (and output) available to the Purchasers is determined as
follows:
****
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REDACTED CONFIDENTIAL TREATMENT REQUESTED
The asterisked portions of this document have been omitted and
are filed separately with the Securities and Exchange Commission
****
(C) Each Purchaser agrees to pay the Supplier for the costs associated with any
decrease in the Supplier's output of good Wafers which is directly caused by
such Purchaser ("Wrong-doing Costs"). Examples of this situation would include
but are not limited to: underloading the output of the Supplier, requesting that
the Supplier place Wafers on hold, causing the Supplier to generate scrap wafers
that are not a result of the Supplier's normal yield process, requesting
non-standard lot sizes, etc. Wrong-doing Costs clearly identified to a party
will be billed to that party.
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REDACTED CONFIDENTIAL TREATMENT REQUESTED
The asterisked portions of this document have been omitted and
are filed separately with the Securities and Exchange Commission
(D) In any given period, there will be variations between the Supplier's planned
and actual Wafer yields. Particularly where the period being measured is short
(e.g. weekly), the impact of those Wafer yield variations may not be exactly
equal for each Purchaser receiving production output from the Supplier. The
Supplier and the Purchasers agree that this is acceptable. The wafer yield
variations (as well as cycle time) will be tracked by the Supplier. However, if
there is any sign that the variations are not impacting each Purchaser equally
on a longer term basis (e.g., semi-annually), action will be taken by the
Supplier to equalize such impact.
(E) The Supplier will provide each Purchaser with a regularly updated (e.g.,
twice per month) view of its capability (including technology mix). That
capability will be stated in terms of base technology equivalent wafer starts.
(F) 1) Loadings - 12-Month - Each Purchaser shall provide the Supplier with an
updated (monthly) view by technology of how each such Purchaser intends to load
its portion of the available production capacity of the JV.
2) Loadings - Short-Term - Each Purchaser shall provide by technology, by
week, Wafer start instructions to the Supplier on a fixed day(s) of each week.
Such loadings shall cover the next *********. There will be a follow-up
conference call (where necessary) between the Supplier and each Purchaser to
confirm the Supplier's ability (availability of masks, etc.) to handle the
specific requests of the Purchaser. Each Purchaser will provide the Supplier
with code level detail as needed by the Supplier.
(G) The Supplier will provide information to each Purchaser on a daily basis
indicating progress of each lot through the Supplier's production cycle, as well
as the latest view of when each lot will be completed.
(H) Basis for Take-or-Pay Calculation due to underloadings shall be as follows:
1) Prior to the beginning of each calendar year (and whenever ramp plan is
changed), the parties will mutually agree on the ******************************
************************************ (relative to take or pay obligation) per
quarter, based on the formula shown below.
****
2) At the end of each quarter, each Purchaser will be billed for
********************** if the wafers started for them are less than as
determined in accordance with Clauses A and B of this Exhibit A.
(I) Technology Choices
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Each party shall have the right at their sole discretion to modify the
technology type running in their allocated capacity provided that (i) due
allowance is made for equipment line capacity, ordering lead times, and the
current technology mix of both parties, and (ii) there is no "material
deviation" caused by that party from the Supplier's capacity plan then in
effect. In the event of a party's (the "Requesting Party") request for such
modification causes any material deviation from the Supplier's capacity plan,
the Requesting Party shall direct the Supplier to make available to the other
party (the "Affected Party") wafer capacity from the wafer capacity reserved for
the Requesting Party, so as to ensure that the Affected Party's wafer capacity
is not affected by such material deviation.
(J) The Parties agree that the capacity, costs, and technologies forecasts,
criteria etc. of the Supplier referred to in this Exhibit A shall be consistent
with the Company Business Plan as may be updated from time to time.
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REDACTED CONFIDENTIAL TREATMENT REQUESTED
The asterisked portions of this document have been omitted and
are filed separately with the Securities and Exchange Commission
Exhibit B
-PRICING PRINCIPLES-
The Supplier shall agree with Lucent and CSM on the price of Wafers to be
purchased and sold under this Agreement. The Supplier shall initially issue
price quotations to Lucent and CSM. The price of Wafers supplied to Lucent and
CSM shall be negotiated taking into account volume, starting wafer type (e.g.
epitaxial), number of metal levels, demand and supply in the marketplace, and
other differences, and shall be mutually agreeable to the Supplier, Lucent and
CSM; ****.
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Exhibit C
-MARKING-
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