[*] -- Certain information omitted and filed separately with the Commission
pursuant to a confidential treatment request under Rule 24b-2 of the Commission.
SECOND AMENDMENT
TO PURCHASE AGREEMENT
SECOND AMENDMENT (this "Amendment"), dated and effective as of the 9th day of
December, 1997 (the "Effective Date"), to the PURCHASE AGREEMENT dated September
6, 1996 , as amended by the FIRST AMENDMENT dated April 22, 1997 (as thus
amended, the "Purchase Agreement" or "Agreement"), between CREE RESEARCH, INC.
("Seller"), a corporation organized under the laws of the State of North
Carolina, the United States of America, and SIEMENS AKTIENGESELLSCHAFT
("Purchaser"), a corporation organized under the laws of the Federal Republic of
Germany. As used in this Amendment, capitalized terms not defined herein which
are defined in the Purchase Agreement shall have the meaning defined in the
Purchase Agreement.
In consideration of the mutual provisions below the parties hereby agree as
follows:
1. The Purchase Agreement is amended by incorporating SUPPLEMENT NO. 1 TO
SCHEDULE 1 annexed hereto as an addendum to the FIRST AMENDED SCHEDULE
1.
2. The Purchase Agreement is amended by incorporating SUPPLEMENT NO. 1 TO
SCHEDULE 2 annexed hereto as an addendum to the FIRST AMENDED SCHEDULE
2.
3. The Purchase Agreement is amended by replacing the FIRST AMENDED
SCHEDULE 3 in its entirety with the SECOND AMENDED SCHEDULE 3 annexed
hereto.
4. Purchaser acknowledges that all Products delivered under the Purchase
Agreement prior to the Effective Date of this Amendment conformed to the
then applicable Product Specifications.
5. Seller and Purchaser will continue to work to improve the ESD
sensitivity of the Product, as provided in SCHEDULE 4 of the Purchase
Agreement, with a goal developing a mutually acceptable improved Product
with a minimum RAET rating of ******* (as measured using the RAET method
described in the Product Specifications contained in SECOND AMENDED
SCHEDULE 3) for all shipments to be made on and after October 1, 1998.
6. Seller represents to Purchaser that the Product version described by the
Product Specifications contained in SECOND AMENDED SCHEDULE 3 was sample
tested as having Class 2 ESD sensitivity (i.e., greater than 2kVolts and
less than or equal to 4kVolts) based on the results of testing conducted
by Seller during the week of October 20, 1997 in accordance with the
procedures of MIL-STD-883C, Notice 5, Method 3015.4, entitled
"Electrostatic Discharge Sensitivity Classification."
7. Except as amended hereby, the terms and conditions of the Purchase
Agreement shall continue in effect.
IN WITNESS WHEREOF, the parties, through their respective duly authorized
officers, have executed this Amendment to be effective as of the Effective Date
set out in the preamble hereto.
CREE RESEARCH, INC. SIEMENS AKTIENGESELLSCHAFT
By /s/ F. Xxxx Xxxxxx By /s/ X. Xxxxx
------------------------- -------------------------------------------
F. Xxxx Xxxxxx, President X. Xxxxx, Vice President-Finance and Admin.
By /s/ X. Xxxxxx
-------------------------------------------
X. Xxxxxx, Marketing Manager
Date December 9, 1997 Date December 9, 1997
----------------------- -------------------------------------
11206-F1
SUPPLEMENT NO. 1 TO SCHEDULE 1
Quantity and Shipment Schedule
1. QUANTITY AND SELECTION. During the period commencing ******************
and ending ******* ********, Purchaser will purchase a total of
***************** units of the Product.
2. SHIPMENT SCHEDULE. The shipment schedule for the units to be shipped
under this SUPPLEMENT NO. 1 is set out below. Subject to the provisions
of this Agreement, each monthly quantity shown below shall be shipped
on the last day of the month unless otherwise mutually agreed. The
target Product versions noted in the schedule below reflect current
development goals as of November 1997 but are not intended as
contractual commitments.
------------------------ ------------------------- -------------------------
Month Quantity Target Version
------------------------ ------------------------- -------------------------
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
************************ *********************** ************************
------------------------ ------------------------- -------------------------
3. RESCHEDULING OF SHIPMENTS. Purchaser may without charge reschedule shipments
as follows:
(a) for quantities scheduled to be shipped more than 24 weeks but
within 52 weeks following Seller's receipt of written notice
from Purchaser requesting rescheduling, up to thirty percent
(30%) of the quantity originally scheduled to be shipped
during such period;
(b) for quantities scheduled to be shipped more than 12 weeks but
within 24 weeks following Seller's receipt of written notice
from Purchaser requesting rescheduling, up to fifteen percent
(15%) of the quantity originally scheduled to be shipped
during such period.
In all other cases Purchaser may reschedule shipments only with Seller's
mutual written agreement. Purchaser's notice requesting rescheduling
must specify the quantity to be deferred and the date on which shipment
is to be made. In no event, however, shall Purchaser be entitled to
reduce shipments in any calendar month to less than ********** units,
nor shall Seller be obligated to ship more than ************ units in
any calendar month. No shipment shall be delayed beyond June 30, 1999.
Subject to the foregoing, a shipment may be rescheduled any number of
times under this paragraph.
4. CANCELLATION OF SHIPMENTS. Purchaser shall be entitled to cancel
shipment of all or any portion of the monthly quantities scheduled as
shown above, provided Purchaser pays Seller a cancellation charge of
$**** per unit for all quantities canceled and Seller receives written
notice specifying the canceled quantities at least five (5) calendar
months prior to the first day of the calendar month in which such
quantities are scheduled to be shipped. The cancellation charges shall
be due and payable within thirty (30) days after the date notice of
cancellation is given. The parties agree that the amount of such
cancellation charges represents a reasonable estimate of Seller's
damages resulting from cancellation and shall be due and payable as
liquidated damages and not as a penalty.
Page 2
5. PURCHASE ORDERS. Purchaser will submit written purchase orders
evidencing its commitment to purchase Products under this SUPPLEMENT NO.
1 TO SCHEDULE 1 prior to each scheduled shipment date. Such purchase
orders may be submitted by through Purchaser's offices in Regensburg,
Germany, or through any other Siemens Semiconductor location authorized
by Purchaser. In the event Purchaser requests delivery of shipments to a
Siemens Semiconductor location other than Regensburg, Germany,
Purchaser's personnel at such location shall be authorized to act on
Purchaser's behalf with respect to scheduling and acceptance of
shipments and other matters relating thereto. The terms and conditions
of this Agreement shall govern the purchase of Products hereunder
notwithstanding any contrary provisions of any purchase order submitted
by Purchaser.
Page 3
SUPPLEMENT NO. 1 TO SCHEDULE 2
Price and Payment Schedule
1. PRICES.
(a) Prices of units shipped pursuant to SUPPLEMENT NO. 1 TO
SCHEDULE 1 shall be as follows, subject to adjustment as
provided in paragraph (b) below:
---------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
---------------------------------- ------------------------
************************** ********
************************** ********
************************** ********
************************** ********
---------------------------------- ------------------------
The reduction in per unit prices for larger quantities
reflects Seller's expectation that it will improve
manufacturing yields and reduce per unit costs as the
quantities manufactured increase. Nonetheless, the above
prices are firm and are not subject to any adjustment on
account of lower than expected manufacturing yields, increased
costs or other factors.
(b) Purchaser and Seller will share the risk of currency exchange
rate fluctuations, as provided in this paragraph, for units
shipped pursuant to SUPPLEMENT NO. 1 TO SCHEDULE 1. The unit
price for such shipments shall be adjusted by the applicable
percentage below according to the value of the "DM-Dollar
Exchange Rate" on the shipment date. For purposes of this
paragraph, the "DM-Dollar Exchange Rate" means the average of
the foreign exchange selling rates for German Marks per U.S.
Dollar, as published in the Wall Street Journal during the
thirty (30) calendar days preceding the date of shipment, for
rates quoted in New York the preceding business day for
trading among banks in amounts of $1 million or more.
------------------------------------------------------------- -------------------------
DM-Dollar Exchange Rate Percentage Price
Adjustment
------------------------------------------------------------- -------------------------
Equal to or greater than 1.95 *****************
Equal to or greater than 1.85 and less than 1.95 *****************
Greater than 1.65 and less than 1.85 *****************
Equal to or less than 1.65 and greater than 1.55 *****************
Equal to or less than 1.55 *****************
------------------------------------------------------------- -------------------------
(c) Prices of units shipped pursuant to SCHEDULE 1 (as previously
amended) shall continued to be determined as set forth in
SCHEDULE 2 (as previously amended), subject to adjustment as
provided therein.
2. PAYMENT TERMS.
(a) Units shipped pursuant to SUPPLEMENT NO. 1 TO SCHEDULE 1 will
be invoiced upon shipment and such invoices shall be due and
payable within twenty (20) days from the invoice date.
(b) Prices of units shipped pursuant to SCHEDULE 1 (as previously
amended) shall be paid in accordance with SCHEDULE 2 (as
previously amended).
Page 4
SECOND AMENDED SCHEDULE 3
Product Specifications
1. Product Specifications for units shipped on and after November 1, 1997
shall be those set forth in Attachment A. Product Specifications for
units shipped prior to that date shall be those set forth in SCHEDULE 3
as previously amended.
2. Seller may elect to substitute a version of Product which uses a
conductive buffer layer, subject to Purchaser's approval which shall be
given under the terms and conditions set forth below. Commencing thirty
(30) days after the date of such approval, or such earlier date as may
be agreed by the parties, the Product Specifications applicable to
shipments made thereafter shall be the specifications of the new
version supplied by Seller as provided below, and Seller may not ship
the original version without Purchaser's prior written consent.
(a) The new version must meet the original specifications except
that *********************************************************
**************************************************************
***************************************.
(b) Seller will provide Purchaser with production prototypes of
the new version manufactured from wafers from at least three
different epi runs and will provide Purchaser the
specifications applicable to the new version and such
qualification data as may then be available to Seller.
(c) Purchaser will give Seller notice of Purchaser's approval or
disapproval within seventy-five (75) days after receipt of the
prototypes and specifications.
(d) Purchaser may withhold its approval only if new version does
not meet the minimum specifications described in (a) above.
3. Prior to shipping a conductive buffer Product version as permitted
above or any other changed version as may be mutually agreed by the
parties, Seller will conduct a test of the new Product version in
accordance with the procedures of MIL-STD-883C, Notice 5, Method
3015.4, entitled "Electrostatic Discharge Sensitivity Classification"
and inform Purchaser of the results of such testing. The changed
version shall not be shipped unless it is sample tested as having at
least Class 2 ESD sensitivity according to the results of such test.
Seller is only obligated to qualify new Product versions using the
MIL-STD-883C method and is not obligated to test individual units using
such method.
4. Seller will test and inspect all Product units in accordance with
Seller's quality assurance procedures described in Seller's document
CPT-026 dated July 17, 1997 and will ship only units passing such
procedures.
Page 5
ATTACHMENT A TO
SECOND AMENDED SCHEDULE 3
Information in attachment omitted in its entirety and
filed separately with the Commission pursuant to a
confidential treatment request under Rule 24b-2 of the Commission.
Page 1
ATTACHMENT A TO
SECOND AMENDED SCHEDULE 3
Information in attachment omitted in its entirety and
filed separately with the Commission pursuant to a
confidential treatment request under Rule 24b-2 of the Commission.
Page 2
