Exhibit 10.3
CONFIDENTIAL TREATMENT IS REQUESTED FOR THE REDACTED PORTIONS OF THIS DOCUMENT.
THIRD AMENDMENT
TO
PRODUCT PURCHASE AGREEMENT
This THIRD AMENDMENT TO PRODUCT PURCHASE AGREEMENT (this "Amendment") is
made and entered into as of the 1st day of January , 2003 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) Amendment to
Product Purchase Agreement dated as of January 1, 2002 (the "First Amendment")
by and between Customer and Supplier, and (2) Amendment to Product Purchase
Agreement dated as of December 3, 2002 (the "Second Amendment") by and between
Customer and Supplier.
C. Supplier and Customer desire to further amend the Initial Agreement as
previously amended by the First Amendment and the Second Amendment (the Initial
Agreement, as so amended by the First Amendment and the Second 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. AMENDMENT.
(a) The Existing Agreement is hereby amended to delete Exhibit A thereto
and replace it with Exhibit A attached hereto.
(b) 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. [***].
[***] 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.
3. PUBLICITY. Customer and Supplier intend to issue a joint press release
regarding the general terms of this Amendment, provided, that no press release
shall be issued by either party with respect to this Amendment without the
consent of the other party. Each party shall treat the terms of this Agreement
as Confidential Information for purposes of the Agreement.
4. 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.
5. 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.
6. 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/ Xxxxxx Xxxxxxx
Name: [***] Name: Xxxxxx Xxxxxxx
Title: [***] Title: Vice President and General
Manager, Broadband Communications
Business Unit
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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 half-year and/or quarter through [***]:
[***]
The prices for the following Products would be no higher than as follows for
each half-year through [***]:
[***]
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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
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 [***]) for [***] for
the products of Customer and the Customer Affiliates, excluding (i) any
semiconductor devices which provide [***] and (ii) ancillary devices such as
Supplier's [***] devices (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
[***] [***]
For clarity, the parties agree that Supplier's [***], and 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 [***] 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.
As used in this Agreement, the term "Requirements" shall refer collectively to
the [***] Requirements and the [***] Requirements.
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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.
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 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 the relevant product for the period stated in the
Offer Notice. In the event that Supplier does not agree to meet the terms set
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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.
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.
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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.
