EXHIBIT 10.28
DATED THIS 06TH DAY OF NOVEMBER 1998
BETWEEN
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
AND
OAK TECHNOLOGY, INC.
-------------------------------------------------------
AMENDMENT AGREEMENT (NO. 3)
TO
DEPOSIT AGREEMENT DATED 8 NOVEMBER 1995
-------------------------------------------------------
AMENDMENT AGREEMENT (NO. 3)
THIS AMENDMENT AGREEMENT (NO. 3) is made the 06th day of November 1998, by and
between:-
(1) CHARTERED SEMICONDUCTOR MANUFACTURING LTD, a company incorporated in
Singapore and having its place of business at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("CSM"); and
(2) OAK TECHNOLOGY, INC., a company incorporated in Delaware and having its
place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ of America ("Customer").
WHEREAS
(A) CSM and Customer had entered into a Deposit Agreement dated 8 November
1995 (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 had entered into an Amendment Agreement (No. 1) dated
25 September 1996 and subsequently into an Amendment Agreement (No. 2)
dated 7 April 1997 to effect the suspension and variation of certain
provisions of the Deposit Agreement upon the terms and conditions set
out therein.
(C) CSM and Customer are entering into this Amendment Agreement (No. 3) to
supersede the Deposit Agreement and the Amendment Agreement (No. 2)
upon the terms and conditions set out herein.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the Parties agree as follows :-
1. DEPOSIT AGREEMENT AND AMENDMENT AGREEMENT (NO. 2) SUPERSEDED
With effect from the date of this Amendment Agreement (No. 3), the
terms and conditions of the Deposit Agreement and Amendment Agreement
(No. 2) shall be superseded by the terms and conditions of this
Amendment Agreement (No. 3) and shall cease to have any force or
effect.
2. THE DEPOSIT
2.1 The Parties acknowledge that Customer has deposited with CSM the sum of
US$4,000,000, of which the amount that has not yet been credited to
Customer equals [US$3,511,350] (the "Deposit").
2.2 Upon the expiry of the term of this Agreement or the earlier
termination thereof in accordance with Clause 5 or Clause 6.2, CSM
shall be entitled to retain for itself the balance of the Deposit which
has not been credited to Customer, without interest.
3. CUSTOMER LOADING COMMITMENT
3.1 Customer agrees to place purchase orders with CSM for such quantity of
6-inch and 8-inch wafers for delivery during the calendar years set out
below (the "Customer Loading Commitment"). The quantity of wafers for
which orders are placed by Customer is hereinafter referred to as the
"Customer Actual Loading".
------------------------------------------------ --------- ---------- --------- ---------
Year 1999 2000 2001 2002
------------------------------------------------ --------- ---------- --------- ---------
Customer Loading Commitment 10 10 12 12
(US$/millions)
------------------------------------------------ --------- ---------- --------- ---------
3.2 The Customer Actual Loading for each calendar year during the term of
this Agreement shall be equal to the Customer Loading Commitment. In
addition, the year-to-year and month-to-month variation in the Customer
Actual Loading shall not exceed 20% without the prior written approval
of CSM.
3.3 With effect from a date to be agreed by the Parties, Customer shall
provide to CSM no later than the 5th day of each month, its rolling
6-monthly forecast of its monthly volume requirements for wafers for
each relevant Customer integrated circuit product to be manufactured
hereunder. The first 3 months of each 6-monthly forecast shall be
backed by purchase orders for such first 3 months.
3.4 The sale of wafers by CSM to Customer, the capacity of which is made
available to Customer under this Agreement, shall be governed by the
terms and conditions of CSM's Manufacturing Agreement to be entered
into by CSM and Customer (the "Manufacturing Agreement").
4. SET OFF AND MAINTENANCE OF DEPOSIT
4.1 CSM shall be entitled to debit from and set-off against the Deposit, a
wafer credit against the total net sales order of wafers sold to
Customer per calendar year, calculated in accordance with this Clause
4.
4.2 Within 30 days from the last day of each calendar year, CSM shall issue
a credit note to Customer stating the amount of credits to be deducted
against the Deposit.
Notwithstanding the foregoing, Customer shall continue to pay CSM for
all wafers manufactured for Customer and billed, in accordance with the
terms of payment as stated ion CSM's tax invoices to Customer.
4.3 CSM's right of deduction and set-off pursuant to Clause 4.2 shall be in
addition to CSM's right to claim any 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.
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4.4 For the period 01 JANUARY 1999 TO 31 DECEMBER 2002, if Customer fulfils
the Customer Loading Commitment for the calendar year 1999, 2000, 2001
and 2002, for every 6-inch and 8-inch wafer that CSM ships to Customer,
Customer is entitled to a credit of 8% of the total net sales order of
wafers for that calendar year.
For the purpose of clarity, if CSM ships to Customer orders amounting
to US$10,000,000 in calendar year 1999, Customer shall be entitled to a
credit of US$800,000.
4.5 In no event shall the aggregate amount of the refund or wafer credits
granted to Customer pursuant to this Clause 4 for the duration of this
Agreement exceed the Deposit.
4.6 Customer shall not be permitted to rollover any portion of the wafer
credit that was set aside for that calendar year, but was not credited.
The maximum amount of wafer credit claimable by Customer per calendar
year is set out in the table below. For the avoidance of doubt, any
unused credit set aside for any calendar year shall be cancelled and
forfeited.
------------------------------------------------ --------- ---------- --------- ---------
Year 1999 2000 2001 2002
------------------------------------------------ --------- ---------- --------- ---------
Maximum Wafer Credit 0.800 0.800 0.960 0.960
@ 8% of Customer Loading Commitment
(US$/millions)
------------------------------------------------ --------- ---------- --------- ---------
5. TERM AND TERMINATION
5.1 The term of this Agreement shall expire on 31 December 2002 and may be
earlier terminated in the following events:-
(a) 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;
(b) At the option of Customer, 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;
(c) At the option of either Party, in any of the following
events:-
(i) the inability of the other Party to pay its debts
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
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(iii) any encumbrance 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.
5.2 Termination of the Agreement pursuant to Clause 5.1 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 after such termination.
6. FORCE MAJEURE
6.1 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 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.
6.2 Notwithstanding anything in this Clause 6, upon the occurrence of a
force majeure event affecting either Party, and such force majeure
event continues for a period exceeding 6 consecutive months, 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.
7. WARRANTY AND INDEMNITY
7.1 Customer warrants that it has the right to use and license the use of
the design and processes provided by Customer or required for the
production of Customer's products under this Agreement and the
Manufacturing Agreement (when signed by the Parties) 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 Manufacture
Agreement.
7.2 Customer 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
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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.
7.3 CSM shall notify Customer 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. Customer 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.
7.4 CSM shall indemnify, hold harmless and defend Customer 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.
7.5 Customer 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.
7.6 CUSTOMER'S AGGREGATE CUMULATIVE LIABILITY TO CSM ARISING OUT OF THE
INDEMNIFICATION UNDER THIS CLAUSE 7 SHALL NOT EXCEED 5 PERCENT (5%) OF
THE TOTAL AMOUNT RECEIVED BY CSM FROM CUSTOMER IN RESPECT OF THE SALE
OF WAFERS BY CSM TO CUSTOMER. CSM'S AGGREGATE CUMULATIVE LIABILITY TO
CUSTOMER ARISING OUT OF THE INDEMNIFICATION UNDER THIS CLAUSE 13 SHALL
NOT EXCEED 5 PERCENT (5%) OF THE TOTAL AMOUNT RECEIVED BY CSM FROM
CUSTOMER IN RESPECT OF THE SALE OF WAFERS BY CSM TO CUSTOMER. THE
FOREGOING STATES EACH PARTY'S ENTIRE LIABILITY AND OBLIGATION (EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE) WITH RESPECT TO INTELLECTUAL PROPERTY
INFRINGEMENT OR CLAIMS THEREFOR REGARDING ANY OF THE WAFERS
MANUFACTURED OR SOLD OR TECHNOLOGY USED PURSUANT TO THIS AGREEMENT.
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.
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8.2 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.
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 Information 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 other of its change of address
or facsimile number in accordance with this Clause.
CSM
No. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile no: (▇▇) ▇▇▇▇▇▇▇
Attn: Legal Department
CUSTOMER
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile no: (▇▇▇) ▇▇▇ ▇▇▇▇
Attn: ▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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 pre-paid 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.
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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.
10.3 For the avoidance of doubt, nothing in this Agreement shall affect the
rights which have accrued to either Party since the date of this
Agreement.
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 constitutes the entire agreement between CSM and
Customer with respect to the subject matter hereof and shall supersede
all previous agreements and undertakings between Parties.
14. 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.
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IN WITNESS WHEREOF the Parties have hereunto entered into this Agreement the
date first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
For and on behalf of
OAK TECHNOLOGY, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
For and on behalf of
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
