Common use of Minimum Quantity Requirements Clause in Contracts

Minimum Quantity Requirements. Years 1, 2 and 3. Intersil shall source one hundred percent (100%) of its requirements for both Packaging and Test Services and PDC Services for both Existing Packages (excluding hermetic Packages, which shall be provided pursuant to Section 7.9 of this Agreement) and New Packages (in accordance with the right of first refusal to provide such Services for New Packages set forth in Section 3.2) from ChipPAC during Year One, Year Two and Year Three. Intersil/ChipPAC Confidential Years 4 and 5. During Year Four, Intersil shall source from ChipPAC a minimum of ninety percent (90%) of its requirements for Packaging and Test Services and for PDC Services (determined by reference to Intersil’s aggregate purchases of all packaging and test services and of all product distribution center services related to such packaging and test services from all Persons during Year Four) for both Existing Packages (excluding hermetic Packages, which shall be provided pursuant to Section 7.9 of this Agreement) and New Packages (in accordance with the right of first refusal to provide such Services for New Packages set forth in Section 3.2). During Year Five, Intersil shall source from ChipPAC a minimum of eighty percent (80%) of its requirements for Packaging and Test Services and for PDC Services (determined by reference to Intersil’s aggregate purchases of all packaging and test services and of all product distribution center services related to such packaging and test services from all Persons during Year Five) for both Existing Packages (excluding hermetic Packages, which shall be provided pursuant to Section 7.9 of this Agreement) and New Packages (in accordance with the right of first refusal to provide such Services for New Packages set forth in Section 3.2).

Minimum Quantity Requirements. Years 1, 2 and 3. Intersil shall source one hundred percent (100%) ---------------- of its requirements for both Packaging and Test Services and PDC Services for both Existing Packages (excluding hermetic Packages, which shall be provided pursuant to Section 7.9 of this Agreement) and New Packages (in accordance with the right of first refusal to provide such Services for New Packages set forth in Section 3.2) from ChipPAC during Year One, Year Two and Year Three. ----------- Intersil/ChipPAC Confidential Years 4 and 5. During Year Four, Intersil shall source from ChipPAC a ------------- minimum of ninety percent (90%) of its requirements for Packaging and Test Services and for PDC Services (determined by reference to Intersil’s 's aggregate purchases of all packaging and test services and of all product distribution center services related to such packaging and test services from all Persons during Year Four) for both Existing Packages (excluding hermetic Packages, which shall be provided pursuant to Section 7.9 of this Agreement) and New Packages (in accordance with the right of first refusal to provide such Services for New Packages set forth in Section 3.2). During Year Five, Intersil shall source ----------- from ChipPAC a minimum of eighty percent (80%) of its requirements for Packaging and Test Services and for PDC Services (determined by reference to Intersil’s 's aggregate purchases of all packaging and test services and of all product distribution center services related to such packaging and test services from all Persons during Year Five) for both Existing Packages (excluding hermetic Packages, which shall be provided pursuant to Section 7.9 of this Agreement) and New Packages (in accordance with the right of first refusal to provide such Services for New Packages set forth in Section 3.2).. ----------- Other Services. Services other than Packaging and Test Services and -------------- PDC Services (i) shall only be provided at Intersil's request for such Services and (ii) shall not be included for purposes of determining whether Intersil has met it minimum quantity requirements set forth in this Section 3.1. ----------- Exclusion from Minimum Quantity Requirements. Notwithstanding the -------------------------------------------- foregoing, the minimum quantity requirements for Packaging and Test Services and PDC Services for Products to which the following conditions apply shall be excluded from the calculations of minimum requirements set forth in this Section ------- 3.1: --- (i) if ChipPAC does not offer Packaging and Test Services for any applicable New Package at the Facility, or at any other facility owned or operated by ChipPAC or any of its Affiliates, at the time such services are initially required by Intersil; it being agreed that if ChipPAC begins to offer Packaging and Test Services for one or more of such New Packages at any time during the Term, and ChipPAC exercises its right of first refusal, if any, on such New Packages in accordance with Section 3.2 (i.e., in the event Intersil ----------- has not entered into a long term third party supply agreement of the type described in Section 3.2 or ChipPAC has a right of first refusal on secondary ----------- source Packages), any such New Packages shall be subject to the minimum quantity requirements set forth in this Section 3.1 during the remainder of the Term; (ii) if ChipPAC declines to provide Packaging and Test Services for an applicable New Package (whether by expressly declining in writing to provide such Packaging and Test Services or by mutual determination thereof by the Parties within a reasonable time after Intersil's request for such Packaging and Test Services); (iii) if ChipPAC does not provide sufficient capacity on a reasonably timely basis to satisfy Intersil's end customers' requirements; Intersil/ChipPAC Confidential (iv) if Intersil is required by market conditions or Intersil customer delivery requirements to provide to the customer quick turn packaging or test of prototypes or design verification units or other exceptions mutually agreed to by the Parties (e.g., a mutually agreeable pilot program) before ramping to production quantities and ChipPAC cannot provide such services on a reasonably timely basis, it being agreed that production quantities of any such Products shall be subject to the minimum quantity requirements set forth in this Section 3.1 and the right of first refusal set forth in Section 3.2; (v) back-end packaging or test services provided by any Acquired Business (as defined below) for the internal use of such Acquired Business (as opposed to providing such services to third parties or to all or any part of Intersil's business, except for the Acquired Business), it being agreed that in the event Intersil Holding Corporation or any of its controlled Affiliates consummate the acquisition of an Acquired Business, the Parties shall confer and explore mutually beneficial opportunities to transfer such business from Intersil to ChipPAC (whether by purchase and sale of the relevant packaging or test business, by supply arrangements or otherwise) (for purposes of this Section 3.1, "Acquired Business" shall mean any business acquired by Intersil Holding Corporation or any of its controlled Affiliates, a portion of which may consist of the business of providing back-end packaging or test services only for the internal use of such business being acquired); or