Deposit agreement between Chartered Semiconductor
Manufacturing Ltd. and PMC-Sierra, Inc. dated January 31, 2000.
Effective Date : 31st January 2000
Between
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
And
PMC-SIERRA, INC.
----------------------------------
DEPOSIT AGREEMENT
----------------------------------
DEPOSIT AGREEMENT
THIS AGREEMENT is made effective the 31st day of January, 2000 ("Effective
Date") by and between :-
(1) CHARTERED SEMICONDUCTOR MANUFACTURING LTD, a company incorporated in
Singapore with its registered office at 00 Xxxxxxxxx Xxxxxxxxxx Xxxx X,
Xxxxxx 0, Xxxxxxxxx 000000 (hereinafter referred to as "CHARTERED");
and
(2) PMC-SIERRA, INC., a company incorporated in California and having its
place of business at 000-0000 Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx, X0X 0XX (hereinafter referred to as "Customer"),
WHEREAS :
(A) CHARTERED is engaged primarily in the business of the manufacturing,
marketing and selling of semiconductors, with its 5 wafer fabrication
facilities situated in Singapore.
(B) Customer desires to deposit certain funds with CHARTERED to enable
CHARTERED to procure increased wafer fabrication capacity and to make
available to Customer certain wafer manufacturing capacity, on the
terms and conditions of this Agreement.
IT IS HEREBY AGREED as follows :
1. THE DEPOSIT
1.1 In consideration of the on-going business relationship with the
Customer, CHARTERED is agreeing to make available to the Customer up to
__% of the Customer Loading Commitment (as hereinafter defined),
without a deposit, in accordance with the provisions of Clause 2.1
below.
1.2 For the excess capacity over __% of the Customer Loading Commitment,
the Customer will deposit with CHARTERED the total sum of US$____ (the
"Deposit") on such dates and in such amounts as specified in Annex A
(as may be revised in accordance with Clause 3.6 below).
1.3 The Deposit shall be paid by telegraphic transfer to an account
designated by CHARTERED and such Deposit shall be maintained by
Customer to the amount for each year as set out in Annex A A (as may be
revised in accordance with Clause 3.6 below) during the term of this
Agreement.
1.4 Upon the expiry of this Agreement or the earlier termination thereof in
accordance with Clause 6 or Clause 7.2, CHARTERED will return to
Customer any Deposit remaining with CHARTERED in accordance with the
provisions of Clause 4.6 below.
2. CHARTERED SUPPLY COMMITMENT
2.1 CHARTERED agrees to make available capacity of up to __% of Customer's
Loading Commitment (as hereinafter defined) for 6-inch and 8-inch
wafers in each calendar quarter as set out in Annex C (as may be
revised in accordance with Clause 3.2 below) with no deposit required
("CHARTERED Supply Commitment"). However, any additional capacity above
the CHARTERED Supply Commitment will require a deposit of US$___ per
wafer for additional capacity guarantee per quarter in accordance with
Clause 2.2 below.
2.2 In consideration of the payment of the Deposit by Customer and
Customer's maintenance of the full deposit amount for each year with
CHARTERED, CHARTERED will make available to Customer, wafer
manufacturing capacity for 6-inch and 8-inch wafers in each calendar
quarter commencing from the January 01, 2000 until the expiry or
earlier termination of this Agreement, in such quantities as set out in
Annex D (as may be revised in accordance with Clause 3.6 below) (the
"CHARTERED Additional Supply Commitment").
2.3 The Parties agree that the technology mix of the CHARTERED Supply
Commitment and the CHARTERED Additional Supply Commitment will be as
follows :-
Technology
2.4 Unless otherwise expressly provided in this Agreement, the sale of
wafers by CHARTERED to Customer, the capacity of which is made
available to Customer under this Agreement, shall be governed by the
terms and conditions of CHARTERED's manufacturing agreement to be
entered into by CHARTERED and Customer (the "Manufacturing Agreement").
2.5 The Deposit amount for the CHARTERED Additional Supply Commitment for
each calendar year is calculated based on the following formulae :-
US$__ x the CHARTERED Additional Supply Commitment for that
year set out in Annex D (as may be revised in
accordance with Clause 3.6 below)
2.6 CHARTERED reserves the right to adjust the selling price of wafers to
be supplied by CHARTERED from time to time depending on prevailing
market conditions, provided however that CHARTERED shall give Customer
not less than __ months' prior written notice of such adjustment.
3. CUSTOMER LOADING COMMITMENT
3.1 Customer agrees to place purchase orders with CHARTERED for such
quantity of 6-inch and 8-inch wafers for delivery during the calendar
quarters set out in Annex B (as may be revised in accordance with
Clause 3.2 below) (the "Customer Loading Commitment"). The quantity of
wafers for which orders are placed by Customer is hereinafter referred
to as the "Customer Actual Loading."
3.2 Every calendar quarter, Customer agrees to provide to CHARTERED a
rolling __-month loading forecast and thereafter, CHARTERED and
Customer shall negotiate and mutually agree in writing on the forecast
("Forecast"). In the event the Parties agree on a Forecast which
differs from the quantities for the relevant period set out in the
Customer Loading Commitment in Annex B, then :-
(a) such Forecast shall supersede the quantities set out in Annex B and
shall be the Customer Loading Commitment for the period stated therein;
and
(b) the quantities set out in Annex C shall be revised to be __% of the
quantities in such Forecast which shall be the CHARTERED Supply
Commitment for the period stated therein.
In the event the Parties are unable to agree on the Forecast, then the
quantities set out in the Customer Loading Commitment in Annex B for
the relevant period shall apply and be the Customer Loading Commitment.
3.3 Customer shall place purchase orders with CHARTERED as follows :-
(1) for __% of the quantity for the __ quarter of each Forecast;
(2) for plus or minus __ of the quantity for the __ quarter of each
Forecast;
(3) for plus or minus __% of the quantities for the __ quarters of each
Forecast; and
(4) no purchase orders as the __ quarters of each Forecast are not
binding commitments to purchase.
3.4 The Customer Actual Loading for each calendar quarter 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 __% without the prior written consent of CHARTERED in
the form of the agreed Forecast.
3.5 As a separate requirement from the quarterly Forecast as set out in
Clause 3.1, by June 1st of each calendar year during the term of this
Agreement, Customer shall review its loading forecast for the following
calendar year and Customer may, with CHARTERED's written consent,
increase or reduce the quantities set out in the CHARTERED Additional
Supply Commitment in Annex D.
3.6 In the event the Parties mutually agree on any increase or reduction in
the CHARTERED Additional Supply Commitment for any calendar year, the
Deposit amount for such year shall be calculated in accordance with
Clause 2.5 above.
4. DEPOSIT RETENTION AND REFUND
4.1 The quantity of wafers for which orders are placed by Customer that is
in excess of __% of the Customer Loading Commitment is hereinafter
referred to as the "Customer Actual Additional Loading".
4.2 In the event that the Customer Actual Additional Loading for any
calendar year is less than the CHARTERED Additional Supply Commitment
(as may be revised in accordance with Clause 3.6 above) for that year,
CHARTERED shall be entitled to retain a deposit retention amount
("Deposit Retention Amount") from the Deposit paid for that calendar
year calculated as follows :-
ADP x (CASC - CAAL)
Where :-
ADP = CHARTERED's Average Deposit Price of US$__ per wafer
CASC = the CHARTERED Additional Supply Commitment (as may be
revised in accordance with Clause 3.6 above) for that
calendar year
CAAL = Customer Actual Additional Loading for that calendar
year
4.3 CHARTERED shall refund Customer the Deposit paid to secure additional
capacity for each calendar year less any Deposit Retention Amount for
that year that may have been retained by CHARTERED pursuant to Clause
4.2 above (the "Refund"), provided always that the Deposit paid to
secure capacity for a calendar year shall be refunded only in the year
following such calendar year in accordance with Clause 4.4 below.
4.4 The Refund for each calendar year shall be made by CHARTERED to
Customer within sixty (60) days after the calendar year-end.
4.5 All Refunds of the Deposit shall cease upon either (a) the depletion of
the Deposit with CHARTERED; or (b) the expiry or earlier termination of
this Agreement, whichever occurs earlier.
4.6 Upon the expiry of this Agreement or the earlier termination thereof in
accordance with Clause 6 or Clause 7.2 below, :-
(a) CHARTERED shall return to Customer, without any interest, any
Deposit remaining with CHARTERED at the time of such expiry or
termination, subject to any deductions, refunds and/or set-off
made pursuant to Clause 5.1 of this Agreement; or
(b) Customer may at their option, subject to CHARTERED's agreement,
roll over any remaining amount of the Deposit to secure wafer
capacity in the calendar year following such expiry or
termination, and the terms and conditions of such wafer capacity
shall be mutually agreed by the Parties in writing.
5. DEDUCTION AND SET OFF
5.1 CHARTERED shall be entitled to deduct and/or set-off against the
Deposit any payment falling due and remaining unpaid by Customer under
the Manufacturing Agreement.
5.2 CHARTERED's right of deduction and set-off pursuant to Clause 5.1 shall
be in addition to CHARTERED'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
CHARTERED may have at law or in equity.
6. TERM AND TERMINATION
6.1 Unless renewed in accordance with Clause 14 below, this Agreement shall
expire on 31 December 2003 and may be terminated earlier in the
following manner :-
(a) At the option of CHARTERED, in the event that Customer does not
deposit with CHARTERED any portion of the Deposit in accordance
with the terms of this Agreement;
(b) At the option of CHARTERED, in the event that the Customer Actual
Loading is in aggregate less than __% of the Customer Loading
Commitment for __ calendar months;
(c) At the option of Customer, in the event that CHARTERED fails to
deliver to Customer in aggregate at least __% of the Customer
Actual Loading for __ calendar months;
(d) At the option of either Party, in any of the following events:-
(i) the inability of the Party to pay in the normal course
of business; or
(ii) the other Party 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 Party; 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 Party or any company controlling
the other Party, otherwise than for the purpose of a
reconstruction or amalgamation without insolvency.
6.2 Termination of this Agreement pursuant to Clause 6.1 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
obligations or rights of either 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 such termination.
7. FORCE MAJEURE
7.1 CHARTERED's obligation to provide the CHARTERED Supply Commitment and
the CHARTERED Additional Supply Commitment and Customer's obligation to
place purchase orders 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, labour
disputes affecting CHARTERED or Customer as the case may be, for such
period as such 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.
7.2 Notwithstanding anything in this Clause 7, 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.
8. CONFIDENTIALITY
8.1 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 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.
8.2 The Parties and shall take all reasonable steps to minimize 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.
8.3 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 enters the public domain as set out above.
9. NOTICES
9.1 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.
CHARTERED
00 Xxxxxxxxx Xxxxxxxxxx Xxxx X
Xxxxxx 0
Xxxxxxxxx 000000
Attn: The Legal Department
Customer
000-0000 Xxxxxx Xxxxx
Xxxxxxx, X.X.
Xxxxxx, X0X0X0
Attn: Xx. Xxx Xxxxxx
President
9.2 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 prepaid registered post.
10. WAIVER AND REMEDIES
10.1 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.
10.2 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.
11. 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.
12. ENTIRE AGREEMENT
This Agreement and the Manufacturing agreement constitute the entire
agreement between CHARTERED and Customer with respect to the subject
matter hereof and shall supersede all previous agreements and
undertakings between Parties.
13. 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.
14. RENEWAL OPTION
One year before the expiration of this agreement, Customer will have
the option to renew this agreement for a period of up to four years,
with the terms of the renewal to be negotiated by the parties.
IN WITNESS WHEREOF the Parties have hereunto entered into this Agreement
effective the date first above written.
Signed by Xxxxxx Xxxxxx, )
Senior Vice President, Business Operations )
CHARTERED SEMICONDUCTOR )
MANUFACTURING LTD )
in the presence of:- ) ______________________________
--------------------------------
Signature and name of witness
Signed by Xxx Xxxxxx, )
President )
PMC-SIERRA, INC. )
in the presence of:- ) ______________________________
-------------------------------
Signature and name of witness
ANNEX A
Deposit Amount and Payment Schedule
--------------- ------------------------------ --------------------------------
Deposit Amount To secure additional capacity Payable on
in calendar year
--------------- ----------------------------- --------------------------------
US$__ 2000 Date of signing of this Agreement
---------------------------------
--------------- ---------------------------- ----------------------------------
US$__ 2001 Date of signing of this Agreement
--------------- --------------------------- ----------------------------------
US$__ 2002 2 January 2001
--------------- --------------------------- -----------------------------------
US$__ 2003 2 January 2002
--------------- --------------------------- -----------------------------------
Total = US$__
--------------- --------------------------- ------------------------------------
PMC-SIERRA, INC.
ANNEX B
CUSTOMER LOADING COMMITMENT
Number of 8-inch and 6-inch silicon wafers
1Q00 2Q00 3Q00 4Q00 Yr. 2000
---------------- ------------- -------------- ------------- -------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
-------------------------------------------------------------------------------
1Q01 1Q01 3Q01 4Q01 Yr. 2001
---------------- ------------- -------------- ------------ -------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
--------------------------------------------------------------------------------
1Q02 2Q02 3Q02 4Q02 Yr. 2002
---------------- ------------- ------------- ------------- -------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
--------------------------------------------------------------------------------
1Q03 2Q03 3Q03 4Q03 Yr. 2003
---------------- ------------ ------------- ------------ -------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
--------------------------------------------------------------------------------
ANNEX C
CHARTERED SUPPLY COMMITMENT
Number of 8-inch and 6-inch silicon wafers
1Q00 2Q00 3Q00 4Q00 Yr. 2000
--------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
-----------------------------------------------------------------------------
1Q01 1Q01 3Q01 4Q01 Yr. 2001
-------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
----------------------------------------------------------------------------
1Q02 2Q02 3Q02 4Q02 Yr. 2002
-------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
---------------------------------------------------------------------------
1Q03 2Q03 3Q03 4Q03 Yr. 2003
---------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
--------------------------------------------------------------------------
ANNEX D
CHARTERED ADDITIONAL SUPPLY COMMITMENT
Number of 8-inch and 6-inch silicon wafers
1Q00 2Q00 3Q00 4Q00 Yr. 2000
---------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
---------------- -------------- --------------- -------------- --------------
1Q01 1Q01 3Q01 4Q01 Yr. 2001
---------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
---------------- -------------- --------------- -------------- --------------
1Q02 2Q02 3Q02 4Q02 Yr. 2002
---------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
1Q03 2Q03 3Q03 4Q03 Yr. 2003
---------------- -------------- --------------- -------------- --------------
8" 8" 8" 8" Total 8"
-- -- -- -- --
6" 6" 6" 6" Total 6"
-- -- -- -- --
---------------- -------------- --------------- -------------- --------------
