EXHIBIT 10.1
DATED THIS 27TH DAY OF SEPTEMBER 1996
BETWEEN
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
And
INTEGRATED CIRCUIT SYSTEMS, INC.
______________________________________________________
AMENDMENT AGREEMENT (NO.1)
TO
DEPOSIT AGREEMENT DATED 8 NOVEMBER 1995
______________________________________________________
AMENDMENT AGREEMENT (NO.1)
THIS AMENDMENT AGREEMENT (NO. 1) is made the 27th day of September 1996, by and
between:-
(1) CHARTERED SEMICONDUCTOR MANUFACTURING LTD (formerly known as Chartered
Semiconductor Manufacturing Pte Ltd), a Singapore corporation having a
place of business at 00 Xxxxxxxxx Xxxxxxxxxx Xxxx X, Xxxxxx 0, Xxxxxxxxx
000000 ("CSM"); and
(2) INTEGRATED CIRCUIT SYSTEMS, INC., a company incorporated in Pennsylvania
and having its place of business at 2435 Blvd of the Generals, Xxxxxx
Xxxxx, XX 00000, Xxxxxx Xxxxxx of America ("Customer").
WHEREAS
(A) CSM and Customer had entered into a Deposit Agreement dated 8 November
1995, as amended by a Letter of Amendment dated 23 April 1996 (the Deposit
Agreement and the Letter of Amendment shall be hereinafter collectively
known as the "Deposit Agreement") for the purpose of Customer depositing
certain funds with CSM and to procure CSM to make available to Customer
certain wafer manufacturing capacity.
(B) CSM and Customer hereto are entering into this Amendment Agreement to vary
the Deposit Agreement with effect from the date hereof.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:-
1. INTERPRETATION
All terms and references used in the Deposit Agreement and which are
defined or construed in the Deposit Agreement but are not defined or
construed in this Amendment Agreement shall have the same meaning and
construction in this Amendment Agreement.
1
2. AMENDMENT TO THE DEPOSIT AGREEMENT
The Parties agree that with effect from the date of this Amendment
Agreement, the Deposit Agreement shall be amended as follows:-
2.1 CLAUSE 1 (THE DEPOSIT)
----------------------
The provisions of CLAUSE 1 shall be amended as follows:-
(i) The figure "US$20,000,000" appearing at the beginning of the
third line of CLAUSE 1.1 shall be deleted and replaced by the
figure "US$10,000,000".
(ii) CLAUSES 1.2 AND 1.3 shall be deleted in their entirety and
replaced with the following new Clauses 1.2, 1.3 and 1.4:-
"1.2 The Deposit shall be paid by telegraphic transfer to an account
designated by CSM and such Deposit shall be maintained by
Customer to the full amount of US$10,000,000 during the term of
this Agreement, less such amounts that may have been refunded by
CSM to Customer pursuant to Clause 4.4 below.
1.3 Upon the expiry of the term of this Agreement or the earlier
termination thereof in accordance with Clause 5 or Clause 6.2,
CSM will return to Customer the Deposit, without interest and
subject to any deductions or refunds made by CSM pursuant to the
terms of this Agreement.
1.4 Customer shall have the option to increase the Deposit to the
sum of US Dollars Twenty Million (US$20,000,000.00), provided
that:-
(a) Customer shall give CSM at least six (6) to twelve (12)
months' written notice of such intention to increase the
Deposit, such period to be mutually agreed by the parties;
(b) CSM has the right to request Customer to increase the
Deposit by a date ("Expiry Date") to be determined by CSM
in its sole discretion, provided that CSM shall give
Customer at least six (6) to twelve (12) months notice. In
the event Customer does not increase the Deposit to
US$20,000,000 by the determined Expiry Date, Customer's
option to increase the Deposit shall expire;
2
(c) in the event Customer increases the Deposit to US$20,000,000.00
before the Expiry Date, CSM's Supply Commitment shall be
calculated in accordance with the formula set out in Annex B;
and
(d) the terms and conditions of such increase shall be mutually
agreed between the parties.
2.2 CLAUSE 2 (CSM SUPPLY COMMITMENT)
--------------------------------
The provisions of CLAUSE 2 shall be amended as follows:-
(i) By deleting CLAUSE 2.1 in its entirety and replacing it with the
following new Clause 2.1:-
"2.1 In consideration of the payment of the Deposit by Customer and
Customer's maintenance of the full deposit amount of
US$10,000,000 with CSM, less such amounts that may have been
refunded by CSM to Customer pursuant to Clause 4.4 or Clause 4.5
below, CSM will make available to Customer, wafer manufacturing
capacity for 8-inch wafers (based on 15 mask level wafers) in
each calendar year commencing the year 1997 until the expiry or
the earlier termination of the term of this Agreement, in such
quantities as set out in Annex B (the "CSM supply Commitment").
(ii) The word "Clause 8.6" appearing at the third line of CLAUSE 2.4 shall
be deleted and the word "Clause 7.6" substituted therefor.
2.3 CLAUSE 3 (CUSTOMER LOADING COMMITMENT)
--------------------------------------
The provisions of Clause 3 shall be amended as follows:-
(i) The word "quarters" appearing in the second line of CLAUSE 3.1 shall
be deleted and replaced by the word "years" and the words "Annex B"
appearing in the third line shall be deleted and replaced with the
words "Annex C".
(ii) The word "quarter" appearing in the first line of CLAUSE 3.2 shall be
deleted and replaced by the word "year".
3
(iii) CLAUSE 3.3 shall be deleted in its entirety.
2.4 CLAUSE 4 (LIQUIDATED DAMAGES)
-----------------------------
The heading 4. and Clauses 4.1, 4.2, 4.3, 4.4 and 4.5 shall be deleted in
their entirety.
2.5 CLAUSE 5 (SET OFF AND MAINTENANCE OF DEPOSIT)
---------------------------------------------
The provisions of CLAUSE 5 shall be amended as follows:-
(i) by renumbering the heading 5. as "4.".
(ii) by deleting Clauses 5.1 and 5.2 in their entirety and replacing them
with the following new Clauses 4.1 and 4.2:-
"4.1 CSM shall be entitled to deduct from and set-off against the
Deposit, any payment falling due and remaining unpaid by
Customer under the Foundry Agreement.
4.2 At the end of each calender quarter, CSM shall issue a written
notice to Customer stating the amount of the overdue payments
and Customer shall pay the relevant sum to CSM within 30 days
of the date of such notice, so as to maintain the Deposit at
US$10,000,000.00 less such amounts that may have been refunded
by CSM to Customer pursuant to Clause 4.4 or Clause 4.5
below."
(iii) by renumbering Clause 5.3 as Clause "4.3"; by deleting the word
"Clause 5.2" appearing in the first line and substituting the word
"Clause 4.2" therefor; and by deleting the words "liquidated damages
and" appearing in the second line.
(iv) by inserting the following new Clause 4.4:-
"4.4 For the period 1 January 1997 to the expiry of this Agreement
or to such time as the Deposit balance remaining with CSM is
reduced to zero (whichever is earlier), :-
(a) provided that (i) the Customer Actual Loading quantity
for each calendar year is between 80% and 125% (both
percentages inclusive) of the quantity for such calendar
4
year specified in Annex C, (the Customer Loading Commitment), AND
(ii) Customer pays the Deposit instalments in accordance with the
Payment Schedule set out in Annex A, then for every 8-inch wafer
that CSM ships to Customer, Customer is entitled to a refund of
US$300 per wafer from the Deposit. CSM will refund such amount to
Customer on 1 January of the year immediately following the year
in which Customer has fulfilled both conditions stated in Clause
4.4(a)(i) and (ii) above.
By way of illustration, if Customer (i) purchases 80% of the
quantity for the calendar year of 1997 as set out in Annex C and
(ii) has paid the Deposit instalments of US$3,000,000.00 within 5
days of the date of the Amendment Agreement, US$3,000,000.00 on 1
March 1997 and US$2,000,000.00 on 1 September 1997, then CSM will
refund US$1,080,000.00 to Customer on 1 January 1998.
(b) provided that (i) the Customer Actual Loading quantity for each
calendar year exceeds 125% of the quantity specified in Annex C
(the Customer Loading Commitment) for such calendar year, AND
(ii) Customer pays the Deposit instalments in accordance with the
Payment Schedule set out in Annex A, then for every 8-inch wafer
that CSM ships to Customer, Customer is entitled to (x) a refund
of US$300 per wafer from the Deposit, and (y) a refund of
US$500,000. CSM will refund such amounts referred to in (x) and
(y) to Customer on 1 January of the year immediately following
the year in which Customer has fulfilled both conditions stated
in Clause 4.4(b)(i) and (ii) above.
By way of illustration, if Customer (i) purchases 130% of the
quantity for the calendar year of 1997 as set out in Annex C and
(ii) has paid the Deposit instalments of US$3,000,000.00 within 5
days of the date of the Amendment Agreement, US$3,000,000.00 on 1
March 1997 and US$2,000,000.00 on 1 September 1997, then CSM will
refund US$2,255,000 to Customer on 1 January 1998."
5
2.6 CLAUSE 6 (TERM AND TERMINATION)
-------------------------------
The provisions of CLAUSE 6 shall be amended as follows:-
(i) By renumbering the heading 6. as "5.".
(ii) By renumbering CLAUSE 6.1 as Clause "5.1"; by deleting the words "31
December 2000" appearing in the first line and replacing them with
the words "30 June 2002 or such date on which the Deposit balance
remaining with CSM is reduced to zero (whichever is earlier),"; and
by deleting the word "termination" appearing in the second line and
replacing it with the word "terminated".
(iii) By deleting SUB-CLAUSE 6.1(a) in its entirety.
(iv) By renumbering SUB-CLAUSE 6.1(b) as sub-clause 5.1 "(a)".
(v) By renumbering SUB-CLAUSES 6.1(c) as sub-clauses 5.1 "(b)" and by
deleting the words "Customer Actual Loading" appearing in the second
line and replacing it with the words "CSM Supply Commitment".
(vi) By renumbering SUB-CLAUSE 6.1 (d) as sub-clauses 5.1 "(c)".
(vii) By renumbering Clause 6.2 as Clause "5.2"; and by deleting the word
"Clause 6.1" appearing in the first line and substituting the word
"CLAUSE 5.1" therefor.
2.7 CLAUSE 7 (FORCE MAJEURE)
------------------------
(i) The HEADING 7. AND CLAUSE 7.1 shall be renumbered as "6." and Clause
"6.1" respectively.
(ii) CLAUSE 7.2 shall be renumbered as CLAUSE "6.2"; and the word "Clause
7" appearing in the first line shall be deleted and the word "Clause
6" substituted therefor.
2.8 CLAUSE 8 (WARRANTY AND INDEMNITY)
---------------------------------
6
The heading 8. and Clauses 8.1, 8.2, 8.3, 8.4, 8.5 and 8.6 shall be
renumbered as "7." and Clauses "7.1", "7.2", "7.3", "7.4", "7.5" and "7.6
respectively.
2.9 CLAUSE 9 (CONFIDENTIALITY)
--------------------------
The heading 9. and Clauses 9.1, 9.2 and 9.3 shall be renumbered as "8.",
and Clauses "8.1", "8.2" and "8.3" respectively.
2.10 CLAUSE 10 (NOTICES)
-------------------
By amending Clause 10 as follows:-
(i) By renumbering the heading 10. and "9.".
(ii) By renumbering Clause 10.1 as Clause "9.1" and by deleting the
address and facsimile number for CSM in its entirety and replacing
it with the following:-
"CSM
---
00 Xxxxxxxxx Xxxxxxxxxx Xxxx X, Xxxxxx 0
Xxxxxxxxx 000000
Facsimile no: (00) 0000000
Attn: Xx. Xxx Xxxx Xxxx
President"
(iii) By renumbering Clause 10.2 as Clause "9.2".
2.11 CLAUSE 11 (WAIVER AND REMEDIES)
-------------------------------
The heading 11. and Clauses 11.1, and 11.2 shall be renumbered as "10."
and Clauses "10.1" and "10.2" respectively.
2.12 CLAUSE 12 (SEVERANCE)
---------------------
The heading 12. shall be renumbered as "11.".
2.13 CLAUSE 13 (ENTIRE AGREEMENT)
----------------------------
The heading 13. shall be renumbered as "12.".
7
2.14 CLAUSE 14 (GOVERNING LAW)
-------------------------
The heading 14. shall be renumbered as "13.".
2.15 ANNEX A (PAYMENT SCHEDULE)
--------------------------
ANNEX A shall be deleted in its entirety and replaced by the Annex A
(PAYMENT SCHEDULE) attached hereto.
------------------
2.16 ANNEX B (CSM SUPPLY COMMITMENT/CUSTOMER LOADING COMMITMENT)
-----------------------------------------------------------
ANNEX B shall be deleted in its entirety and replaced by the Annex B
(CSM SUPPLY COMMITMENT) attached hereto.
-----------------------
2.17 The new ANNEX C (CUSTOMER LOADING COMMITMENT) attached hereto shall
-----------------------------
be inserted.
3. SAVING AND INCORPORATION
3.1 Save as expressly amended by this Amendment Agreement, the terms and
conditions of the Deposit Agreement shall continue to be in full force and
effect in all other respects.
3.2 The Deposit Agreement and this Amendment Agreement shall be construed as
one document and this Amendment Agreement shall be deemed to be part of the
Deposit Agreement. Where the context so permits, references in the Deposit
Agreement and in this Amendment Agreement to "the Deposit Agreement" or
"this Agreement" shall be read and construed as references to the Deposit
Agreement as amended and supplemented by this Amendment Agreement.
4. GOVERNING LAW
This Amendment Agreement shall be governed by and construed in accordance
with the laws of Singapore. The parties hereby irrevocably submit to the
non-exclusive jurisdiction of the courts of Singapore.
8
IN WITNESS WHEREOF the Parties have hereunto entered into this Agreement the
date first above written.
Signed by Xxx Xxxxxx, )
Chief Operating Officer, )
CHARTERED SEMICONDUCTOR )
MANUFACTURING LTD )
in the presence of:- )___________________________
/s/
---------------------------
Name:
Signed by /s/ Xxxxx X. Xxxxxx
---------------------------
INTEGRATED CIRCUIT SYSTEMS, INC.
in the presence of:- ) /s/ Xxxxx X. Xxxxxx
-----------------------------
/s/ Xxxx X. Xxx
---------------------------
Name: XXXX X. XXX
9
ANNEX A
PAYMENT SCHEDULE
----------------
1. Paid to date US$ 2 million
2. Within 5 days of signing Amendment Agreement US$ 3 million
3. 1 March 1997 US$ 3 million
4. 1 September 1997 US$ 2 million
-------------
Total amount of Deposit US$10 million
-------------
10
ANNEX B
CSM SUPPLY COMMITMENT
---------------------
CSM Supply Commitment per month = (D x 0.00006) 8-inch wafers
where D = the amount of Deposit then remaining with CSM
11
ANNEX C
CUSTOMER LOADING COMMITMENT
---------------------------
=========================================================================
Year 1997 1998 through 30 June 2002
-------------------------------------------------------------------------
Number of 8-inch wafers per year 4500 7200
=========================================================================
12
EXHIBIT 10.1
DATED THIS 7TH DAY OF OCTOBER 1998
BETWEEN
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
AND
INTEGRATED CIRCUIT SYSTEMS INC.
----------------------------------------------------
SECOND DEPOSIT AGREEMENT
----------------------------------------------------
SECOND DEPOSIT AGREEMENT
THIS SECOND DEPOSIT AGREEMENT (the "Agreement") is made the 7th day of October
1998, by and between :-
(1) CHARTERED SEMICONDUCTOR MANUFACTURING LTD (formerly known as Chartered
Semiconductor Manufacturing Pte Ltd), a Singapore corporation having a
place of business at 00 Xxxxxxxxx Xxxxxxxxxx Xxxx X, Xxxxxx 0, Xxxxxxxxx
000000 ("CSM"); and
(2) INTEGRATED CIRCUIT SYSTEMS, INC., a Pennsylvania corporation and having its
place of business at 2435 Boulevard of the Generals, Xxxxxx Xxxxx, XX
00000, Xxxxxx Xxxxxx of America ("ICS").
WHEREAS
(A) CSM and ICS had entered into a Deposit Agreement dated 8 November 1995, as
amended by a Letter of Amendment dated 23 April 1996 and an Amendment
Agreement (No. 1) dated 27 September 1996 (together called the "First
Deposit Agreement") for the purpose of ICS depositing certain funds with
CSM to enable CSM to make available to ICS certain wafer manufacturing
capacity.
(B) Chips and Technology, Inc. ("C&T") and CSM had entered into a Deposit
Agreement dated 16 November 1995, amended by Amendment Agreement (No. 1)
dated 17 October 1996 (together called the "C&T Deposit Agreement")
pursuant to which C&T had a deposit balance of US$15,000,000 ("C&T
Deposit") with CSM.
(C) C&T has transferred to Intel all its rights and obligations under the C&T
Deposit Agreement and Intel desires to obtain a refund of US$12,000,000 of
the C&T Deposit from CSM.
C&T, Intel, ICS and CSM has by a separate agreement superseded the C&T
Deposit Agreement and the terms of such agreement governs Intel's balance
US$3,000,000 deposit with CSM as well as the refund of US$12,000,000 of the
C&T Deposit.
(D) ICS desires to maintain the said deposit of US$12,000,000 with CSM (in
addition to the deposit maintained by ICS with CSM under the First Deposit
Agreement) to enable CSM to make available certain wafer manufacturing
capacity to Customer (as hereinafter defined) on the terms and conditions
of this Agreement.
CSM-ICS CONFIDENTIAL
1
IT IS HEREBY AGREED as follows:-
1. THE DEPOSIT
1.1 In consideration of CSM agreeing to make available to Customer certain
wafer manufacturing capacity as set out herein, ICS agrees to place a
deposit with CSM of the sum of US$12,000,000 (the "Deposit") by paying in
full the sum of US$12,000,000 being CSM's refund of the C&T Deposit to
Intel on behalf of CSM. Such payment shall be made by ICS to Intel within
14 days from the date of this Agreement. For the avoidance of doubt, such
Deposit shall be separate from and not in lieu of the deposit maintained by
ICS with CSM under the First Deposit Agreement.
1.2 Such Deposit shall be maintained by ICS to the full amount of US$12,000,000
during the term of this Agreement, less such amounts that may have been
refunded by CSM to ICS pursuant to Clause 3.5 below.
1.3 Upon the expiry of the term of this Agreement or the earlier termination
thereof in accordance with Clause 4 or Clause 5.2, CSM will return to ICS
the Deposit, without interest and subject to any deductions or refunds made
by CSM pursuant to the terms of this Agreement.
2. SUPPLY AND PURCHASE OF WAFERS
2.1 In consideration of the payment of the Deposit by ICS and ICS's maintenance
of the full deposit amount of US$12,000,000 with CSM, CSM will make
available to ICS and ICS' majority owned subsidiaries (together known as
"Customer"), wafer manufacturing capacity for 8-inch wafers in each
calendar year commencing on 1 January 1999 until the expiry or the earlier
termination of the term of this Agreement in accordance with Clause 4.1
below, in such quantities as set out in Annex B (the "CSM" Supply
Commitment").
2.2 Unless otherwise expressly provided in this Agreement, the sale of wafers
by CSM to Customer shall be governed by the terms and conditions of the
Manufacturing Agreement dated 29 September 1995 between ICS and CSM (the
"Manufacturing Agreement").
2.3 CSM reserves the right to adjust the pricing of wafers to be supplied by
CSM from time to time depending on prevailing market conditions and/or
subject to the provisions of Clause 6.6, provided however that CSM shall
give ICS not less than 3 months' prior written notice of such adjustment.
In any event, the price of wafers supplied to Customer shall be no more
than 5% above CSM's pricing for similar products and processes and similar
quantities available to CSM's equity investors.
2.4 ICS agrees to place and agrees to procure ICS' majority owned subsidiaries
to place purchase orders with CSM for such quantity of 8-inch wafers for
delivery during the calendar years set out in Annex C (the "Customer
Loading Commitment"). The quantity of wafers for which orders are placed by
Customer is hereinafter referred to as the "Customer Actual Loading". ICS
CSM-ICS CONFIDENTIAL
2
agrees to guarantee the payment obligations of any of ICS' majority
subsidiaries who place purchase orders with CSM under this Agreement.
2.5 The Customer Actual Loading for each calendar year during the term of the
Agreement shall be equal to the Customer Loading Commitment. In addition,
the month to month variation in the Customer Actual Loading shall not
exceed 20% without the prior written approval of CSM.
3. SET OFF AND MAINTENANCE OF DEPOSIT
3.1 CSM shall be entitled to deduct from and set-off against the Deposit, any
payment falling due and remaining unpaid by Customer under the
Manufacturing Agreement.
3.2 At the end of each calendar quarter, CSM shall issue a written notice to
Customer stating the amount of the overdue payments and Customer shall pay
the relevant sum to CSM within 30 days of the date of such notice, so as to
maintain the Deposit at US$12,000,000.00 less such amounts that may have
been refunded by CSM to ICS pursuant to Clause 3.5 or Clause 3.6 below.
3.3 CSM's right of deduction and set-off pursuant to Clause 3.2 shall be in
addition to CSM's right to claim the aforesaid overdue payments separately
as a debt due from Customer and shall not in any way prejudice such right
or any other rights or remedies which CSM may have at law or in equity.
3.4 For the purposes of this Agreement, the following definitions apply:-
(a) "Incremental Intel Wafers" shall mean the wafers which (1) CSM ships
to Customer in each calendar quarter; (2) Customer directly sells to
Intel Corporation ("Intel"); and (3) exceed the first 400 wafers that
is shipped by CSM to Customer in that calendar quarter which Customer
directly sells to Intel.
(b) "Associated Intel Reference Wafers" shall mean the wafers which CSM
ships to Customer in each calendar quarter, and which are sold by
Customer to other non-Intel parties, based on products that are on the
Intel reference designs and are designed-in by non-Intel parties.
(c) "Non-Intel Wafers" shall mean wafers which CSM ships to Customer in
each calendar quarter and which exclude Associated Intel Reference
Wafers, Incremental Intel Wafers and the first 400 wafers referred to
in Clause 3.4(a)(3) above.
3.5 For the period 1 October 1998 to the expiry of this Agreement or to such
time as the Deposit balance remaining with CSM is reduced to zero
(whichever is earlier),:-
(a) For every Incremental Intel Wafer that CSM ships to Customer in a
calendar quarter, ICS is entitled to a refund of the higher of (1)
US$300
CSM-ICS CONFIDENTIAL
3
per Incremental Intel Wafer; or (2) 35% of CSM's wafer price to
Customer for the Incremental Intel Wafer, from the Deposit; and
(b) provided that the cumulative total number of Non-Intel Wafers shipped
by CSM to Customer as at the end of any calendar quarter is equal to
or more than the Threshold Volume (as defined in Clause 3.5(d) below)
relevant to that quarter, then for every Associated Intel Reference
Wafer that CSM ships to Customer that quarter, ICS is entitled to a
refund of the higher of (1) US$300 per Associated Intel Reference
Wafer; or (2) 35% of CSM's wafer price to Customer for the Associated
Intel Reference Wafer, from the Deposit; subject to the provisions of
Clause 3.4(c) below;
(c) in the event that the cumulative total number of Non-Intel Wafers
shipped by CSM to Customer as at the end of any calendar quarter is
less than the Threshold Volume relevant to that quarter, then:-
(1) the Non-Intel Wafers shipped by CSM to Customer in such calendar
quarter shall be deemed to be Customer Actual Loading (as defined
in the First Deposit Agreement) and ICS shall be refunded
according to the provisions of the First Deposit Agreement for
such loading;
(2) the Associated Intel Reference Wafers shipped by CSM to Customer
in such calendar quarter shall be deemed to be Customer Actual
Loading and ICS shall be refunded according to the provisions of
the First Deposit Agreement for such Associated Intel Reference
Wafers, subject to a maximum of the difference between the
Threshold Volume and number the Non-Intel Wafers shipped in such
calendar quarter;
(3) ICS shall be refunded in accordance to Clause 3.5(b) above for
the balance (if any) of Associated Intel Reference Wafers shipped
in such calendar quarter that was not subject to refund under
Clause 3.5(c)(2) above; and
(4) and if in a subsequent quarter, the number of Non-Intel wafers
Threshold Volume is met, then provided that 35% of CSM's wafer
price to Customer for the Associated Intel Reference Wafers
deemed to be Customer Actual Loading under Clause 3.5(c)(2) above
(the "Relevant Wafers") is more than US$300 per wafer, ICS shall
be refunded:-
the number of Relevant wafers multiplied by an amount equal to
(35% of CSM's wafer price to Customer for the Relevant Wafers -
US$300);
(d) "Threshold Volume" referred to in Clause 3.5 (b) above shall mean the
following:-
CSM-ICS CONFIDENTIAL
4
-------------------------------------------------------
Calendar quarter Threshold Volume (on a cumulative
basis based on 2,100 per quarter)
-------------------------------------------------------
1Q 2,100 wafers
2Q 4,200 wafers (ie. 2,100 x 2)
3Q 6,300 wafers (ie. 2,100 x 3)
4Q 8,400 wafers (ie. 2,100 x 4)
-------------------------------------------------------
Annex A sets out examples for the purposes of illustrating the refunds in
this Clause 3.5.; and
(e) Wafers which CSM ships to Customer during a calendar year for which
Customer is not entitled to a refund under this Agreement shall be
deemed to be Customer Actual Loading (as defined in the First Deposit
Agreement) and ICS shall be refunded according to the provisions of
the First Deposit Agreement for such loading.
3.6 ICS shall within 7 days after the end of each calendar quarter provide CSM
with an invoice stating the amount of refund payable to ICS pursuant to
Clause 3.5 above. After receipt of such invoice, CSM shall within 30 days
from the end of such calendar quarter refund such amounts to ICS.
4. TERM AND TERMINATION
4.1 The term of this Agreement shall expire on 31 December 2000 and may be
earlier terminated in the following events:-
(a) when the Deposit balance remaining with CSM is reduced to zero;
(b) at the option of CSM, in the event that the Customer Actual Loading is
in aggregate less than 50% of the Customer Loading Commitment for 12
consecutive calendar months;
(c) at the option of ICS, in the event that CSM fails to deliver to
Customer in aggregate at least 50% of the Customer Actual Loading for
12 consecutive calendar months; or
CSM-ICS CONFIDENTIAL
5
(d) at the option of either party, in any of the following events:
(i) the inability of the other Parties to pay its debts in the
normal course of business; or
(ii) the other Parties ceasing or threatening to cease wholly or
substantially to carry on its business, otherwise than for the
purpose of a reconstruction or amalgamation without insolvency;
or
(iii) any encumbrancer taking possession of or a receiver, manager,
trustee or judicial manager being appointed over the whole or
any substantial part of the undertaking, property or assets of
the other Parties; or
(iv) the making of an order by a court of competent jurisdiction or
the passing of a resolution for the winding-up of the other
Parties or any company controlling the other Parties, otherwise
than for the purpose of a reconstruction or amalgamation
without insolvency.
4.2 Termination of the Agreement pursuant to Clause 4.1 shall take effect
immediately upon the issue of a written notice to that effect by the Party
terminating the Agreement to the other. The termination of this Agreement
howsoever caused shall be without prejudice to any obligation or rights of
any Party which have accrued prior to such termination and shall not affect
any provision of this Agreement which is expressly or by implication
provided to come into effect on or to continue in effect after such
termination.
5. FORCE MAJEURE
5.1 CSM's obligation to provide wafer manufacturing capacity and Customer's
obligation to place purchase orders for wafers in accordance with the terms
of this Agreement shall be suspended upon the occurrence of a force majeure
event such as act of God, flood, earthquake, fire, explosion, act of
government, war, civil commotion, insurrection, embargo, riots, lockouts,
labor disputes affecting CSM or Customer as the case may be, for such
period as such force majeure event may subsist. Upon the occurrence of a
force majeure event, the affected Party shall notify the other Party in
writing of the same and shall by subsequent written notice after the
cessation of such force majeure event inform the other Party of the date on
which that Party's obligation under this Agreement shall be reinstated.
5.2 Notwithstanding anything in this Clause 5, upon the occurrence of a force
majeure event affecting either Party, and such force majeure event
continues for a period exceeding 6 consecutive months without a prospect of
a cure of such event, the other Party shall have the option, in its sole
discretion, to terminate this Agreement. Such termination shall take effect
immediately upon the written notice to that effect from the other Party to
the Party affected by the force majeure event.
CSM-ICS CONFIDENTIAL
6
6. WARRANTY AND INDEMNITY
6.1 ICS warrants that it has the right to use and license the use of the design
provided by Customer and processes provided by Customer and hereby grants
to CSM the right to use the aforesaid design and processes for the
performance of its obligations under this Agreement and the Manufacturing
Agreement.
6.2 ICS shall indemnify, hold harmless and defend CSM against any claims that
Customer's products or a process or design licensed from or otherwise
provided by Customer and used by CSM for the performance of its obligations
under this Agreement is an infringement of any letters patent or other
intellectual property rights, including, without limitation, any
infringement based on specifications furnished by Customer or resulting
from the use of any equipment or process specified by Customer.
6.3 CSM shall notify ICS of any claim of infringement or of commencement of any
suit, action, or proceedings alleging infringement of any intellectual
property rights of any third party forthwith after receiving notice
thereof. ICS shall have the right in its sole discretion and at its expense
to participate in the defence of any such claim, suit, action or
proceedings and in any and all negotiations with respect thereto.
6.4 CSM shall indemnify, hold harmless and defend ICS against any claims that
the wafers manufactured by CSM pursuant to this Agreement using
manufacturing processes provided by CSM for the performance of its
obligations under this Agreement is an infringement of any letters patent
or other intellectual property rights of any third party.
6.5 ICS shall notify CSM of any claim of infringement or of commencement of any
suit, action, or proceedings alleging infringement of any intellectual
property rights of any third party forthwith after receiving notice
thereof. CSM shall have the right in its sole discretion and at its expense
to participate in the defence of any such claim, suit, action or
proceedings and in any and all negotiations with respect thereto.
6.6 ICS hereby agrees that in the event that CSM is required to make any
payments, including without limitation, licence fees or royalty payments,
to any third party in respect of any of CSM's manufacturing processes used
by CSM in the performance of its obligations under this Agreement, CSM
shall be entitled to adjust the pricing of the wafers supplied to Customer
accordingly. Such adjustment shall be effective upon CSM giving to ICS not
less than 3 months' prior written notice thereof.
7. CONFIDENTIALITY
7.1 All Confidential Information shall be kept confidential by the recipient
unless or until the recipient Party can reasonably demonstrate that any
such Confidential Information is, or part of it is, in the public domain
through no
CSM-ICS CONFIDENTIAL
7
fault of its own, whereupon to the extent that it is in the public domain
or is required to be disclosed by law this obligation shall cease. For the
purposes of this Agreement, "Confidential Information" shall mean all
communications between the Parties, and all information and other materials
supplied to or received by either of them from the other (a) prior to or on
the date of this Agreement whether or not marked confidential; (b) after
the date of this Agreement which is marked confidential with an appropriate
legend, marking, stamp or other obvious written identification by the
disclosing Party, and (c) all information concerning the business
transactions and the financial arrangements of the Parties with 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.
7.2 The Company and the Parties and shall take all reasonable steps to minimise
the risk of disclosure of Confidential Information, by ensuring that only
they themselves and such of their employees and directors whose duties will
require them to possess any of such information shall have access thereto,
and will be instructed to treat the same as confidential.
7.3 The obligation contained in this Clause shall endure, even after the
termination of this Agreement, for a period of 5 years from the date of
receipt of the Confidential Information except and until such Confidential
Information enters the public domain as set out above.
8. NOTICES
8.1 Addresses
---------
All notices, demands or other communications required or permitted to be
given or made under or in connection with this Agreement shall be in
writing and shall be sufficiently given or made (a) if delivered by hand or
commercial courier or (b) sent by pre-paid registered post or (c) sent by
legible facsimile transmission (provided that the receipt of such facsimile
transmission is confirmed and a copy thereof is sent immediately thereafter
by pre-paid registered post) addressed to the intended recipient at its
address or facsimile number set out below. A Party may from time to time
notify the others of its change of address or facsimile number in
accordance with this Clause.
CSM
---
00 Xxxxxxxxx Xxxxxxxxxx Xxxx X, Xxxxxx 0
Xxxxxxxxx 000000
Facsimile no: (00) 0000000
Attn: The Legal Department
ICS
---
2435 Boulevard of the Generals
Xxxxxx Xxxxx, XX 00000,
Xxxxxx Xxxxxx of America
Facsimile no: ________________
Attn: ________________________
CSM-ICS CONFIDENTIAL
8
8.2 Deemed Delivery
---------------
Any such notice, demand or communication shall be deemed to have been duly
served (a) if delivered by hand or commercial courier, or sent by pre-paid
registered post, at the time of delivery; or (b) if made by successfully
transmitted facsimile transmission, at the time of dispatch (provided that
the receipt of such facsimile transmission is confirmed and that
immediately after such dispatch, a copy thereof is sent by pre-paid
registered post.
9. WAIVER AND REMEDIES
9.1 No delay or neglect on the part of either Party in enforcing against the
other Party any term or condition of this Agreement or in exercising any
right or remedy under this Agreement shall either be or be deemed to be a
waiver or in any way prejudice any right or remedy of that Party under this
Agreement.
9.2 No remedy conferred by any of the provisions of this Agreement is intended
to be exclusive of any other remedy which is otherwise available at law, in
equity, by statute or otherwise and each and every other remedy shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law, in equity, by statute or otherwise.
The election of any one or more of such remedies by either of the Parties
hereto shall not constitute a waiver by such Party of the right to pursue
any other available remedy.
10. SEVERANCE
If any provision or part of this Agreement is rendered void, illegal or
unenforceable in any respect under any enactment or rule of law, the
validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
11. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between CSM and ICS and
shall supersede all previous agreements and undertakings between Parties
with respect to the subject matter hereof, provided however that the First
Deposit Agreement shall remain in full force and effect in accordance with
the terms therein.
12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Singapore. The Parties hereby irrevocably submit to the non-
exclusive jurisdiction of the courts of Singapore.
IN WITNESS WHEREOF the Parties have hereunto entered into this Agreement the
date first above written.
CSM-ICS CONFIDENTIAL
9
/s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx
Senior Vice President, Business Operations
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
/s/ Xxxx X. Xxx
-------------------------------
Name: XXXX X. XXX
Title: Chief Financial Officer
INTEGRATED CIRCUIT SYSTEMS INC.
CSM-ICS CONFIDENTIAL
10
ANNEX A
The following set out examples of the refunds in Clause 3.5 :-
Example 1(Clause 3.5(a)) :
--------------------------------------------------------------------------------
(A) Total no. of wafers (B) Incremental Intel Refund
shipped by CSM to Customer Wafer
which Customer ships to Intel
--------------------------------------------------------------------------------
1Q99 500 100 (1) 400 of (A) to be
refunded per First
Deposit Agreement
(2) 100 of (B) to be
refunded per CL.
3.5(a) above
--------------------------------------------------------------------------------
2Q99 300 0 All 300 of (A) to be
refunded per First
Deposit Agreement
--------------------------------------------------------------------------------
Example 2(Clauses 3.5(b) and (c)) :
--------------------------------------------------------------------------------
(A) Associated (B) Non-Intel Refund
Intel Reference Wafers
Wafers
--------------------------------------------------------------------------------
1Q99 1000 2000 (1) refund for only 900 of (A) per
CL. 3.5(b) above because Threshold
Volume of 2,100 Non-Intel Wafers not
met
(2) refund for 2,000 of (B) and 100
of (A)* per First Deposit Agreement
--------------------------------------------------------------------------------
2Q99 1000 3000 (1) refund for 1000 of (A) per CL.
(cumulatively, (cumulatively 3.5(b) above because Threshold Volume
2,000) 5,000) of 4,200 Non-Intel Wafers is met
(2) refund for 3000 of (B) per First
Deposit Agreement
(3) refund for 100 wafers* per CL.
3.5(c)(4) above (provided 35% of ASP
is higher than US$300)
--------------------------------------------------------------------------------
3Q99 1000 500 (1) refund for only 200 of (A) per
(cumulatively (cumulatively CL. 3.5(b) above because Threshold
3,000) 5,500) Volume of 6,300 Non-Intel Wafers not
met
(2) refund of 500 of (B) and 800 of
(A)** per First Deposit Agreement
--------------------------------------------------------------------------------
4Q99 2000 5000 (1) refund for 2000 of (A) per CL.
(cumulatively (cumulatively 3.5(b) above because Threshold Volume
5,000) 10,500) of 8,400 Non-Intel Wafers is met
(2) refund for 5000 of (B) per First
Deposit Agreement
(3) refund for 800 wafers** per CL.
3.5(c)(4) above (provided 35% of ASP
is higher than US$300)
--------------------------------------------------------------------------------
11
Example 3 (Clauses 3.5(b) and (c)) :
--------------------------------------------------------------------------------
(A) Associated (B) Non-Intel Refund
Intel Reference Wafers
Wafers
--------------------------------------------------------------------------------
1Q99 0 0 (1) no refund for (A) per CL. 3.5(b)
above because Threshold Volume of
2,100 Non-Intel Wafers not met
(2) no refund for (B)
--------------------------------------------------------------------------------
2Q99 0 0 (1) no refund for (A) per CL. 3.5(b)
above because Threshold Volume of
4,200 Non-Intel Wafers not met
(2) no refund for (B)
--------------------------------------------------------------------------------
3Q99 1000 5000 (1) no refund for (A) per CL.
(cumulatively (cumulatively 3.5(b) above because Threshold Volume
1,000) 5,000) of 6,300 Non-Intel Wafers not met
(2) refund of 5000 of (B) and 1000 of
(A) per First Deposit Agreement
--------------------------------------------------------------------------------
4Q99 1000 1000 (1) no refund for (A) per CL. 3.5(b)
(cumulatively (cumulatively above because Threshold Volume of
2,000) 6,000) 8,400 Non-Intel Wafers not met
(2) refund for 1000 of (B) and 1000 of
(A) per First Deposit Agreement
--------------------------------------------------------------------------------
12
ANNEX B
CSM SUPPLY COMMITMENT
---------------------
CSM Supply Commitment per month = (D x 0.00006) 8-inch wafers
where D = the amount of Deposit then remaining with CSM
CSM-ICS CONFIDENTIAL
13
ANNEX C
CUSTOMER LOADING COMMITMENT
---------------------------
================================================================================
Year 1 January 1999 through 30 June 2002
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number of 8-inch wafers per year 7200
================================================================================
CSM-ICS CONFIDENTIAL
14
CHARTERED SEMICONDUCTOR 00 XXXXXXXXX XXXXXXXXXX XXXX X
MANUFACTURING LTD XXXXXX 0 XXXXXXXXX 000000
TELEPHONE: (00) 0000000
FACSIMILE: (00) 0000000
7 October 1998
Integrated Circuit Systems
0000 Xxxxxxxxx xx xxx Xxxxxxxx
Xxxxxx Xxxxx
XX 00000
Attention: Xx Xxxx Tan, President
Dear Xx Xxx,
DEPOSIT AGREEMENT BETWEEN CHARTERED SEMICONDUCTOR MANUFACTURING LTD ("CSM") AND
INTEGRATED CIRCUIT SYSTEMS, INC. ("ICS")
We refer to the Deposit Agreement between CSM and ICS dated 8 November 1995 as
amended by a Letter of Amendment dated 23 April 1996 and an Amendment Agreement
(No. 1) dated 27 September 1996 (the "Deposit Agreement").
This is to confirm and set out CSM and ICS' agreement that purchase orders for
wafers placed by any of ICS' majority owned subsidiaries with CSM shall count
towards the Customer Actual Loading (as defined in the Deposit Agreement) and
shall be entitled to the refunds in accordance with Clause 4.4 of the Deposit
Agreement. Such refund shall be payable by CSM to ICS.
ICS agrees to guarantee the payment obligations of any of ICS's majority
subsidiaries who place purchase orders with CSM under the Deposit Agreement.
Except as expressly amended by this letter, the terms and conditions of the
Deposit Agreement shall continue to be in full force and effect in all other
respects.
Kindly signify your acceptance of this letter by signing and returning one
original of this letter to the undersigned. Thank you.
Yours sincerely,
/s/ Xxxxxx Xxxxxx
----------------------
Xxxxxx Xxxxxx
Senior Vice President
Business Operations
Agreed and accepted this 7th day of October 1998 by
/s/ Xxxx X. Xxx
----------------------
Name: Xxxx X. Xxx
Title: Chief Financial Officer
AMENDMENT AND ASSIGNMENT AGREEMENT BETWEEN
INTEL CORPORATION, CHARTERED SEMICONDUCTOR MANUFACTURING LTD,
INTEGRATED CIRCUIT SYSTEMS INC. AND CHIPS AND TECHNOLOGIES, INC.
This Addendum to the Deposit Agreement dated November 16, 1995 together with an
Amendment thereto dated October 17, 1996, shall become effective October 7,
1998, as is entered into by and between (1) Intel Corporation, a Delaware
corporation having its principal place of business at 0000 Xxxxxxx Xxxxxxx
Xxxx., Xxxxx Xxxxx, Xxxxxxxxxx 00000, XXX, (2) Chartered Semiconductor
Manufacturing Ltd, a Singapore corporation having a place of business at 00
Xxxxxxxxx Xxxxxxxxxx Xxxx X, Xxxxxx 0, Xxxxxxxxx 000000 ("CSM"), (3) Integrated
Circuit Systems Inc., a Pennsylvania corporation and having its place of
business at 0000 Xxxxxxxxx xx xxx Xxxxxxxx, Xxxxxx Xxxxx, XX 00000, XXX ("ICS"),
and (4) Chips and Technologies, Inc., a former Californian corporation having
its principal place of business at 0000 Xxxxxx Xxxx, Xxx Xxxx, Xxxxxxxxxx 00000,
XXX ("C&T"), and now a wholly owned subsidiary of Intel.
WHEREAS CSM and C&T entered into that certain Deposit Agreement dated November
16, 1995 together with an Amendment thereto dated October 17, 1996 (hereinafter
collectively the "Deposit Agreement"), and
WHEREAS Intel has acquired all rights and obligations to C&T, including the
rights and obligations under the Deposit Agreement, and
WHEREAS Intel and ICS entered into a Purchase Agreement - Goods and are desirous
of entering into an Addendum to that Purchase Agreement - Goods to be dated
October 7, 1998 between ICS and Intel, and
WHEREAS ICS and CSM are desirous of entering into a new deposit agreement to be
dated October 7, 1998 (hereinafter the "New Deposit Agreement").
NOW THEREFORE in consideration of the mutual covenants and promises, the parties
agree to amend and assign the Deposit Agreement as follows:
A. C&T assigns to Intel, and Intel agrees to assume all rights, privileges and
obligations to the Deposit (as defined in the Deposit Agreement) of fifteen
million U.S dollars (US$15,000,000).
B. With effect from the date of this Amendment and Assignment Agreement
("Agreement"), C&T hereby releases and discharges CSM from all obligations,
liabilities, claims and demands of C&T in respect of the Deposit Agreement
and CSM hereby releases and discharges C&T from all obligations,
liabilities, claims and demands of CSM in respect of the Deposit Agreement.
C. Within fourteen days from the date of this Agreement, CSM hereby agrees to
refund to Intel twelve million U.S. dollars (US$12,000,000) of the Deposit
(as defined in the Deposit Agreement), which payment ICS hereby undertakes
to make in full on behalf of CSM in satisfaction of ICS' obligation under
the New Deposit Agreement between ICS and CSM ("Refund").
Page 1 of 3
D. Provided that the Refund is made to Intel in accordance with Clause C.
above, with effect from the date the Refund:
(i) this Agreement shall supersede the Deposit Agreement and the
Deposit Agreement shall be null and void and cease to have any
force or effect;
(ii) Intel releases and discharges CSM from all rights, claims and
demands of Intel in respect of the said twelve million U.S.
dollars (US$12,000,000) and CSM releases and discharges Intel
from all rights, claims and demands of CSM in respect of the
said twelve million U.S. dollars US$12,000,000; and
(iii) Intel agrees to pursue qualification activities on the CSM 0.25
and 0.35 micron logic wafer processes. Intel does not guarantee
successful qualification but does agree to put forth its
commercially reasonable efforts in pursuit of process
qualification at CSM. Intel and CSM shall mutually agree on and
determine whether such qualification activities have been
completed. Within 30 days after completion of the qualification
activities, CSM shall refund and deliver to Intel the sum of
three million U.S. dollars (US$3,000,000). If in the event Intel
is unable to pursue qualification activities at CSM, Intel shall
retain its right to receive full refund of the remaining three
million U.S. dollars (US$3,000,000) deposit on December 31,
2000.
AGREED TO:
INTEL CHARTERED
CORPORATION SEMICONDUCTOR
/s/ Xxxx Xxxxxx /s/ Xxx Xxxxxx
------------------------- ---------------------
Signature Signature
Xxxx X. Xxxxxx Xxx Xxxxxx
------------------------- ---------------------
Printed Name Printed Name
Vice President, Materials Senior Vice President, Business Operations
------------------------- ------------------------------------------
Title Title
10/7/98
------------------------- ---------------------
Date Date
INTEL/CSM/ICS/Chips & Tech Confidential
Page 2 of 3
INTEGRATED CIRCUIT CHIPS AND TECHNOLOGIES INC.
SYSTEMS INC.
/s/ Xxxx Tan /s/ Xxxxxxx X. Xxxxxxx
----------------------- ---------------------------
Signature Signature
Xxxx Tan Xxxxxxx X. Xxxxxxx
----------------------- ---------------------------
Printed Name: Printed Name:
Chief Financial Officer Secretary
----------------------- ---------------------------
Title Title
10-7-98 10-7-98
----------------------- ---------------------------
Date Date
INTEL/CSM/ICS/Chips & Tech Confidential
Page 3 of 3
