Exhibit 10.25
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
FOURTH AMENDMENT
TO
PRODUCT PURCHASE AGREEMENT
This FOURTH AMENDMENT TO PRODUCT PURCHASE AGREEMENT (this "Amendment") is
made and entered into as of the 31st day of March, 2004 by and between GENERAL
INSTRUMENT CORPORATION, a Delaware corporation with its principal place of
business at 000 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, acting as the
Broadband Communications Sector of Motorola, Inc.("Customer"), and BROADCOM
CORPORATION, a California corporation with its principal place of business at
00000 Xxxxx Xxxxxxx, Xxxxxx, Xxxxxxxxxx 00000 ("Supplier"), with reference to
the following facts and circumstances:
A. Supplier and Customer are parties to that certain Product Purchase
Agreement dated as of November 22, 2000 (the "Initial Agreement") by and
between Customer and Supplier.
B. Supplier and Customer amended the Initial Agreement by (1) the
Amendment to Product Purchase Agreement dated as of January 1, 2002 (the "First
Amendment") by and between Customer and Supplier, (2) the Amendment to Product
Purchase Agreement dated as of December 3, 2002 (the "Second Amendment") by and
between Customer and Supplier, and (3) the Amendment to Product Purchase
Agreement dated as of January 1, 2003 by and between Customer and Supplier.
C. Supplier and Customer desire to further amend the Initial Agreement
as previously amended by the First Amendment, the Second Amendment, and the
Third Amendment (the Initial Agreement, as so amended by the First Amendment,
the Second Amendment, and the Third Amendment, the "Existing Agreement") in the
manner set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and intending to be legally bound,
the parties hereto hereby agree as follows:
1. AMENDMENTS.
(a) The Existing Agreement is hereby amended to delete Exhibit A thereto
and replace it with Exhibit A attached hereto.
(b) Section 1.4 of the Existing Agreement is hereby amended by making the
existing text of that Section subsection (a) and by adding the following new
subsection (b):
"(b) Customer shall be entitled to a rebate with respect to all Products
purchased by [***] to the extent [***]. The rebate for each Product shall be in
an amount (the "Rebate Amount") equal to [***]. The rebate shall be provided
pursuant to the following provisions:
(i) Within 30 days following the end of each calendar quarter,
Customer shall provide Supplier with a statement (the "Rebate Statement")
specifying the aggregate Rebate Amount to be paid or credited by Supplier
(the "Rebate Amount") for Products purchased by [***] during such calendar
quarter (and during previous
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
calendar quarters to the extent not included in a prior Rebate Statement),
including [***]. Customer shall also provide such additional documentation
which may be reasonably requested by Supplier with respect to the Rebate
Amount set forth in any Rebate Statement, to the extent such documentation
is in Customer's possession and Customer has the right to provide such
documentation to Supplier.
(ii) Subject to the further provisions of clause (iii), Supplier shall
pay or credit the Rebate Amount in each Rebate Statement within [***] after
its receipt of such Rebate Statement. The unapplied portion of any credit
arising from the Rebate Amount existing at the expiration or termination of
this Agreement shall be paid to Customer in immediately available funds
[***] after the date of such expiration or termination.
(iii) Rebates will not be effectuated by Supplier unless and until
[***] and Customer is otherwise in compliance with its obligations to
Supplier. [***].
(iv) No rebate shall be paid or credited for Products purchased by
Contract Manufacturers to manufacture a product using [***].
(c) From and after the date hereof, all references in the Existing
Agreement and herein to the "Agreement" shall refer to the Existing Agreement,
as modified by this Amendment. For all purposes of the Agreement, other than the
Minimum Purchase Commitment, the term "Products" shall be and shall be deemed to
refer to all of the original Products under the Initial Agreement (which remain
covered by the Minimum Purchase Commitment) as well as all of the new Products
described in Exhibit A and herein.
2. CREDIT MEMO.
(a) On or before April 15, 2004, Supplier will provide Customer with a
credit memo (the "Credit Memo") entitling Customer to a credit (the "Credit") in
an amount equal to (a) the sum of (i) the Discount Amount (as defined
hereinafter)[***]. For the purposes of this paragraph, the term "Discount
Amount" shall be the excess of (a) the amounts paid or payable by Customer for
Products shipped during the period from January 1, 2004 to March 31, 2004 (the
"First Quarter") at the prices in effect prior to the date of this Amendment
over (b) the amounts that would have been paid or payable by Customer for
Products shipped during the First Quarter had the prices set forth in Exhibit A
to this Amendment been in effect for the First Quarter. [***]. The terms of the
Credit Memo will entitle Customer to apply the amount thereof to outstanding
accounts payable to Supplier.
(b) [***].
3. [***].
4. DESIGN OF CERTAIN PRODUCTS. Customer agrees to include Supplier's [***] in
any products that feature [***] for the period commencing on [***] and ending on
[***].
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[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
5. GOVERNING LAW. This Amendment shall be governed by and construed under the
laws of the State of California, without reference to conflict of laws
principles.
6. COUNTERPARTS. This Amendment may be executed in two or more counterparts,
each of which shall be considered an original, but all of which together will
constitute one and the same instrument. One or more counterparts of this
Amendment may be delivered by telecopier, with the intention that they shall
have the same effect as an original counterpart thereof.
7. NO OTHER AMENDMENT. Except as amended hereby, the Existing Agreement shall
remain in full force and effect, and all other terms and conditions of the
Existing Agreement shall remain in full force and effect and are otherwise
unmodified by this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their representatives thereunto duly authorized as of the date
first written above.
GENERAL INSTRUMENT CORPORATION BROADCOM CORPORATION
acting as the Broadband Communications
Sector of Motorola, Inc.
By: [***] By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: [***] Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: [***] Title: V.P., Marketing, Broadband
Communications Group
-----------------------------
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[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
Exhibit A
Exhibit A to Product Purchase Agreement
Products, Prices and Minimum Purchase Commitment
PRODUCTS, PRICES
The following are the Products referred to in this Agreement for which prices
have been agreed and constitute the "Products" under this Agreement. The per
unit prices to be paid for such Products are as set forth below for the calendar
half year or quarter in which the order for the Product is made, subject to
adjustment as hereinafter set forth:
The prices for the following Products would be no higher than as follows for
each calendar quarter through [***]:
[***]
The prices for the following Products would be no higher than as follows for
each calendar half year or quarter through [***]:
[***]
MINIMUM PURCHASE COMMITMENT
1. The amount of Products required to be purchased by Customer and
Customer Affiliates pursuant to the Minimum Purchase Commitment referred to in
this Agreement shall be equal to the following percentages of the aggregate
quarterly requirements of Customer and Customer Affiliates:
(a) for [***] semiconductor device(s), in whatever mix selected by
Customer (whether bought individually or in an OEM or ODM product) which provide
[***] (specifically the functions provided by Supplier's [***] devices) for
[***] products of Customer and the Customer Affiliates, excluding (i) any
semiconductor devices which provide [***] and (ii) ancillary devices such as
Supplier's [***] (the "[***] Requirements"), to be calculated on the basis of
[***] (taking into account all [***] programs of Customer and the Customer
Affiliates requiring [***] semiconductor devices (including, without limitation,
the following programs: [***].)):
Calendar Quarter Percent
---------------- -------
[***] [***]
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
For clarity, the parties agree that Supplier's devices [***] are not part of
the Minimum Purchase Commitment contained in this paragraph 1(a).
(b) for semiconductor device(s) (except for [***] integrated circuits,
[***] integrated circuits, and [***] integrated circuits), in whatever mix
selected by Customer that contain [***] (specifically the functions provided by
Supplier's [***], but excluding the [***] device on a stand alone basis)
(collectively, the "[***] Requirements"), to be calculated on the basis of
[***] taking into account all domestic [***] programs of Customer and the
Customer Affiliates (including, without limitation, the [***] programs
(including, without limitation, [***]).
Calendar Quarter Percent
---------------- -------
[***] [***]
*[***]
The [***] Requirements shall also include Customer's requirements for
semiconductor device(s) included within the foregoing definition of [***]
Requirements that are purchased as part of an OEM or ODM product, except for
components [***], such as the [***] components to be included in Customer's
[***] product.
(c) for [***] semiconductor device(s), in whatever mix selected by
Customer (whether bought individually or in an OEM or ODM product) which
provide [***] functions (specifically the functions provided by Supplier's
[***] chipsets, [***]) for use in the [***] products sold by Customer's [***]
Business [***]:
Calendar Quarter Percent
---------------- -------
[***] [***]
As used in this Agreement, the term "Requirements" shall refer collectively to
the [***] Requirements, the [***] Requirements, and the [***] Requirements.
In connection with their annual audit of the financial statements of Customer
and its Affiliates, upon the written request of Supplier delivered to Customer
no later than December 1 of the year under audit, the independent certified
public accountants of Customer and its Affiliates shall be requested to audit
the records of Customer and its Affiliates with respect to Customer's
compliance with the
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[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
Minimum Purchase Commitment provisions. The cost of such audit shall be borne by
[***]. Customer also agrees to certify its compliance with these provisions upon
reasonable request by Supplier. In addition, Supplier may engage its own
accounting firm to independently audit and inspect the books and records of
Customer with respect to Customer's compliance with the Minimum Purchase
Commitment provisions.
PRICE ADJUSTMENTS
The prices for the Products set forth above (or otherwise agreed) shall be
subject to the following adjustments.
[***]
[***]
[***]
[***]
In connection with their annual audit of Supplier's financial statements, upon
the written request of Customer delivered to Supplier no later than December 1
of the year under audit, Supplier's independent certified public accountants
shall be requested to audit the records of Supplier and its Affiliates with
respect to Supplier's compliance with the [***] provisions. In addition,
Customer may engage its own accounting firm to independently audit and inspect
the books and records of Supplier with respect to Supplier's compliance with the
[***] provisions. The cost of such audit shall be borne by [***]. Supplier also
agrees to certify its compliance with these provisions upon reasonable request
by Customer.
Competitiveness
In furtherance of Section 1.5 of this Agreement, in the event that Customer is
given in writing an arms length, bonafide offer from an independent third party
(i.e. not an Affiliate of Customer and/or any Affiliate of Customer, or the
Customer Affiliates) supplier capable of fulfilling orders for the quantities
described in clause (A), (B), or (C), as applicable, to purchase (A) [***] (B)
[***] and/or (C) [***] and, in the case of each of (A), (B), and (C), Customer
has qualified such other supplier's product as production ready for such
quantities and, to the extent that Customer's customers require [***] for such
product, such product is [***], as applicable (to the extent that the Product to
which such alternative is being compared is itself [***], as applicable), then
Customer shall provide written notice of all of the material financial and other
relevant terms (including, without limitation, the duration of such offer) (the
"Offer Notice") to Supplier. The Offer Notice shall be provided regardless of
whether the product offered by the third party supplier is [***]. Nothing herein
shall require Customer to divulge the name of the third party making the offer.
The Offer Notice will include certification by an authorized officer of Customer
as to the accuracy and completeness of the foregoing, and that the Offer Notice
is capable of being accepted for at least [***] days after the Offer Notice is
provided to Supplier. Supplier shall have the opportunity, exercisable within
[***] days after Supplier's receipt of the Offer Notice, to meet the terms set
forth in the Offer Notice for
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confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
the relevant product for the period stated in the Offer Notice. In the event
that Supplier does not agree to meet the terms set forth in the Offer Notice
within such [***] day period, Customer may then accept such offer from such
other supplier on the terms set forth in the Offer Notice, without any
modification and any products purchased by Customer pursuant to such offer shall
be credited toward Customer's Minimum Purchase Commitment to the same extent as
if purchased from Supplier; provided that if at any time thereafter any material
modifications are made to the terms set forth in the Offer Notice which entitled
Customer under clause (A), (B), or (C) to provide the Offer Notice or if
Customer does not purchase any products from such other supplier on the terms
set forth in the Offer Notice within [***] from the last date on which Supplier
was permitted to deliver an acceptance of such Offer Notice hereunder, the
Customer shall again be required to submit a new Offer Notice with respect
thereto prior to being permitted to receive any credit for such products
purchased from the third party supplier.
Periodic Review of Prices
Starting no later than [***], and no later than the end of each [***] period
thereafter during the term of this Agreement, Supplier and Customer shall review
the prices set forth in this Exhibit to determine what adjustments, if any, are
appropriate in light of the conditions then prevailing in the market for
Customer's products. Supplier and Customer shall negotiate any such adjustments
in good faith, but neither party shall have an obligation to agree to such
adjustments.
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[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
