DATED THIS 3RD DAY OF OCTOBER 1996
BETWEEN
(1) CHARTERED SEMICONDUCTOR MANUFACTURING LTD
(2) SIERRA SEMICONDUCTOR CORPORATION
AND
(3) PMC-SIERRA INC.
AMENDMENT AGREEMENT (NO. 1)
TO
DEPOSIT AGREEMENT DATED 15 AUGUST 1995
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission".
AMENDMENT AGREEMENT (NO. 1)
THIS AMENDMENT AGREEMENT (NO.1) is made the 3rd day of October 1996, by and
between:-
(1) CHARTERED SEMICONDUCTOR MANUFACTURING LTD (formerly known as Chartered
Semiconductor Manufacturing Pte Ltd), a company incorporated in
Singapore with its registered office at 00 Xxxxxxxxx Xxxxxxxxxx Xxxx X,
Xxxxxx 0, Xxxxxxxxx 000000 ("CSM");
(2) SIERRA SEMICONDUCTOR CORPORATION, a company incorporated in California
and having its place of business at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000, Xxxxxx Xxxxxx of America ("Customer"); and
(3) PMC-SIERRA, INC., a company incorporated in Canada and having its place
of business at 000-0000 Xxxxxx Xxxxx, Xxxxxxx, X.X. Xxxxxx X0X 0X0
("PMC").
WHEREAS
(A) CSM and Customer had entered into a Deposit Agreement dated 15 August
1995 (the "Deposit Agreement") for the purpose of Customer depositing
certain funds with CSM and procuring CSM to make available to Customer
certain wafer manufacturing capacity.
(B) Customer desires such wafer manufacturing capacity from CSM to be made
available to PMC, a subsidiary of Customer, and Customer collectively
and Customer is willing to guarantee the obligations of PMC under this
Agreement.
(C) PMC is willing to enter into this Amendment Agreement and to be bound
by the terms and conditions set forth herein and in the Deposit
Agreement.
(D) CSM, Customer and PMC are entering into this Amendment Agreement to
vary the Deposit Agreement with effect from the date hereof.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:-
1. INTERPRETATION
All terms and references used in the Deposit Agreement and which are
defined or construed in the Deposit Agreement but are not defined or
construed in this Amendment Agreement shall have the same meaning and
construction in this Amendment Agreement.
2. ADDITIONAL PARTY
PMC hereby agrees to, and CSM and Customer are willing that PMC, become
a party to the Deposit Agreement and this Amendment Agreement and to be
bound by the terms and conditions set forth in the same. CSM will, in
accordance with the terms and conditions set forth in the Deposit
Agreement and this Amendment Agreement, make available wafer capacity
to Customer and PMC collectively.
3. AMENDMENT TO THE DEPOSIT AGREEMENT
The Parties agree that with effect from the date of this Amendment
Agreement, the Deposit Agreement shall be amended as follows:-
3.1 CLAUSE 1 (THE DEPOSIT)
----------------------
CLAUSES 1.1, 1.2 AND 1.3 shall be deleted in their entirety
and replaced with the following:-
"1.1 As at the date of this Amendment Agreement, Customer
has deposited with CSM the sum of US Dollars
[REDACTED] (the "Deposit").
1.2 Upon the expiry of the term of this Agreement or the
earlier termination thereof in accordance with Clause
6 or Clause 7.2, CSM will return to Customer the
Deposit, without interest and subject to any
deductions or refunds made by CSM pursuant to the
terms of this Agreement.
1.3 Customer shall have the option to increase the
Deposit to the sum of US Dollars [REDACTED] provided
that:-
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission".
(a) Customer shall give CSM at least six (6)
months' written notice of such intention to
increase the Deposit;
(b) CSM has the right to request Customer to
increase the Deposit by a date ("Expiry
Date") to be determined by CSM in its sole
discretion, provided that CSM shall give
Customer at least six (6) to twelve (12)
months notice. In the event Customer does
not increase the Deposit to [REDACTED] by
the determined Expiry Date, Customer's
option to increase the Deposit shall expire;
(c) in the event Customer increases the Deposit
to [REDACTED] before the Expiry Date,
CSM's Supply Commitment shall be calculated
based on the following formula:-
CSM Supply Commitment per month =
[REDACTED]
where D = the amount of Deposit then with
CSM and
(d) the terms and conditions of such increase
shall be mutually agreed between the
parties.
3.2 CLAUSE 2 (CSM SUPPLY COMMITMEN)
-------------------------------
The provisions of Clause 2 shall be amended as follows:-
CLAUSES 2.1, 2.2, 2.3 and 2.4 shall be deleted in their
entirety and replaced with the following:-
"2.1 In consideration of the payment of the Deposit by
Customer, Customer's maintenance of the Deposit with
CSM and Customer's guaranteeing of PMC's obligations
under the terms of this Agreement, CSM will make
available to Customer and PMC, wafer manufacturing
capacity for 8-inch wafers (based on 15 mask level
wafers) in each calendar quarter commencing from the
first calendar quarter of 1997 until the expiry or
the earlier termination of the term of this
Agreement, in such quantities as set out in Annex A
(the "CSM Supply Commitment"). For the purposes of
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission"
clarity, the CSM Supply Commitment quantities as set
out in Annex A represent the aggregate of the wafer
manufacturing capacity available to Customer and PMC
in each quarter.
2.2 Unless otherwise expressly provided in this Agreement
the sale of wafers by CSM to Customer and PMC, the
capacity of which is made available to Customer and
PMC under this Agreement, shall be governed by the
terms and conditions of CSM's foundry agreement
("Foundry Agreement") to be entered into by CSM and
each of Customer and PMC.
2.3 CSM reserves the right to adjust the pricing of
wafers to be supplied by CSM from time to time
depending on prevailing market conditions, provided
however that CSM shall give Customer and PMC not less
than 3 months' prior written notice of such
adjustment. In any event, the price of wafers
supplied to Customer and/or PMC shall be no more than
[REDACTED] above CSM's pricing for similar products
and processes and similar quantities available to
CSM's equity investors."
3.3 CLAUSE 3 (CUSTOMER LOADING COMMITMENT)
--------------------------------------
The heading 3., and CLAUSES 3.1, 3.2 AND 3.3 shall be deleted
in their entirety and replaced with the followings
"3. CUSTOMER AND PMC LOADING COMMITMENT
3.1 Customer and PMC jointly and severally agree to place
purchase orders with CSM for such quantity of 8-inch
wafer equivalents (based on 15 mask level wafers) for
delivery during the calendar quarters set out in
Annex A (the "Customer and PMC Loading Commitment").
The aggregate quantity of wafers for which orders are
placed by Customer and PMC is hereinafter referred to
as the "Customer and PMC Actual Loading".
3.2 The Customer and PMC Actual Loading for each calendar
quarter during the term of the Agreement shall in
aggregate be equal to the Customer and PMC Loading
Commitment. In addition, the month to month variation
in the Customer and PMC Actual Loading shall not
exceed [REDACTED] without the prior written approval
of CSM.
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission".
3.3 Customer and/or PMC may elect to place purchase
orders for 6 inch wafers, on a two-for-one basis of
two 6-inch wafers for every one 8-inch wafer. In the
event of such election, the CSM Committed Capacity
quantities and the Customer and PMC Loading
Commitment quantities shall be adjusted accordingly.
By way of illustration, if in respect of 1Q97 (where
the CSM Committed Capacity and the Customer and PMC
Loading Commitment is [REDACTED] equivalents),
Customer or PMC elects to purchase (y) 6-inch wafers,
then:-
(i) the CSM Committed Capacity and the Customer
and PMC Loading Commitment for 1Q97 shall be
adjusted to be equal to [REDACTED]
(ii) for the purposes of Clauses 5.4 and 5.5
below, the Customer and PMC Loading
Commitment for 1Q97 shall be adjusted to be
equal to [REDACTED].
3.4 Customer and/ or PMC may elect which of CSM's Fab 1,
Fab 2 or Fab 3 such 6-inch or 8-inch wafers will be
manufactured in. Customer and PMC agree that such
election of Fabs, if any, must be notified to CSM six
(6) months in advance and be included in the rolling
6 month forecast to be given by Customer and/or PMC
in accordance with Clause 3.5 below.
3.5 With effect from the date of this Amendment
Agreement, Customer and PMC shall provide to CSM on a
monthly basis, each of their rolling 6-month forecast
of each of their monthly volume requirements for
wafers for each relevant product to be manufactured
hereunder and the Fab in which such wafers are to be
manufactured.
The first 3 months of each 6-month forecast shall be
backed by purchase orders for such first 3 months."
3.4 CLAUSE 4 (LIQUIDATED DAMAGES)
-----------------------------
The heading 4. and CLAUSES 4.1, 4.2, 4.3, 4.4 AND 4.5 shall be
deleted in their entirety and replaced with the following:-
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission".
"4. GUARANTEE
In consideration of CSM agreeing, at Customer's
request, to make available to PMC such wafer capacity
as set out in this Agreement, Customer hereby agrees
to guarantee the performance of PMC's obligations
under this Agreement."
3.5 CLAUSE 5 (SET OFF AND MAINTENANCE OF DEPOSIT)
---------------------------------------------
The provisions of Clause 5 shall be amended as follows:-
i) by deleting CLAUSES 5.1, 5.2 AND 5.3 in their
entirety and replacing them with the following:-
"5.1 CSM shall be entitled to deduct from and
set-off against the Deposit, any payment
falling due and remaining unpaid by Customer
and/or PMC under the Foundry Agreement.
5.2 At the end of each calendar quarter, CSM
shall issue a written notice to Customer
and/or PMC stating the amount of the overdue
payments and Customer and/or PMC shall pay
the relevant sum to CSM within 30 days of
the date of such notice, so as to maintain
the Deposit at [REDACTED] less such amounts
that may have been refunded by CSM to
Customer pursuant to Clause 5.4 or Clause
5.5 below.
5.3 CSM's right of deduction and set-off
pursuant to Clause 5.2 shall be in addition
to CSM's right to claim the aforesaid
overdue payments separately as a debt due
from Customer and/or PMC and shall not in
any way prejudice such right or any other
rights or remedies which CSM may have at law
or in equity."
ii) by inserting the following NEW CLAUSES 5.4 AND 5.5:-
"5.4 For the period [REDACTED], provided that the
Customer and PMC Actual Loading quantity for
each calendar year is equal to [REDACTED] or
more of the Customer and PMC Loading
Commitment for such calendar year (subject
to such adjustments as may be made in
accordance with Clause 3.3 above), CSM will
refund to
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission".
Customer the amount of [REDACTED] from
the Deposit within 30 days of [REDACTED] of
the year in which Customer has fulfilled the
condition stated in this Clause 5.4.
By way of illustration, if Customer and/or
PMC purchase an aggregate of [REDACTED] or
more of the quantities for [REDACTED] as
specified in Annex A (subject to such
adjustments as may be made in accordance
with Clause 3.3 above), then CSM will refund
[REDACTED] from the Deposit to Customer by
[REDACTED].
5.5 For the period [REDACTED] to [REDACTED],
provided that the Customer and PMC Actual
Loading quantity for each calendar year
[REDACTED] the Customer and PMC Loading
Commitment for such calendar year (subject
to such adjustments as may be made in
accordance with Clause 3.3 above) by more
than [REDACTED], then CSM will return to
Customer the amount of [REDACTED] from the
Deposit within 30 days of [REDACTED] of the
year in which Customer has fulfilled the
condition stated in this Clause 5.5.
By way of illustration, if Customer and/or
PMC purchase an aggregate of more than
[REDACTED] of the quantities for [REDACTED]
as specified in Annex A (subject to such
adjustments as may be made in accordance
with Clause 3.3 above), then CSM will refund
[REDACTED] from the Deposit to Customer by
[REDACTED]."
3.6 CLAUSE 6 (TERM AND TERMINATION)
-------------------------------
The provisions of Clause 6 shall be amended as follows:-
i) By deleting CLAUSE 6.1(A) in its entirety; and
ii) By renumbering CLAUSE 6.1(B), (C) AND (D) as Clause
6.1"(a)", "(b)" and "(c)" respectively.
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission".
3.7 CLAUSE 7 (FORCE MAJEURE)
------------------------
The provisions of Clause 7.1 shall be amended by inserting
after the word "Customer's" appearing in the second line, the
words "and PMC`s" and by inserting after the word 'CSM' in the
sixth line, the word "PMC".
3.8 CLAUSE 8 (WARRANTY AND INDEMNITY)
---------------------------------
The provisions of CLAUSES 8.1, 8.2, 8.3, 8.4, 8.5 AND 8.6
shall be deleted in their entirety and replaced with the
following :-
"8.1 Customer and PMC jointly and severally warrant that
each has the right to use and license the use of the
design and processes provided by Customer and/PMC and
each hereby grants to CSM the right to use the
aforesaid design and processes for the performance of
its obligations under this Agreement and the Foundry
Agreement.
8.2 Customer and PMC shall jointly and severally
indemnify, hold harmless and defend CSM against any
claims that Customer's and/or PMC's products or a
process or design licensed from or otherwise provided
by Customer and/or PMC and used by 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 and/or PMC or resulting from
the use of any equipment or process specified by
Customer and/or PMC.
8.3 CSM shall notify Customer and PMC 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
and PMC shall have the right in their sole discretion
and at their expense to participate in the defence of
any such claim, suit, action or proceedings and in
any and all negotiations with respect thereto.
8.4 CSM shall indemnify, hold harmless and defend
Customer and/or PMC 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.
8.5 Customer and PMC 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.
8.6 Customer and PMC hereby agree that in the event that
CSM is required to make any payments, including
without limitation, licence fees or royalty payments,
to any third party in respect of any of CSM's
manufacturing processes used by CSM in the
performance of its obligations under this Agreement,
CSM shall be entitled to adjust the pricing of the
wafers supplied to Customer and PMC accordingly. Such
adjustment shall be effective upon CSM giving to
Customer or PMC not less than 3 months' prior written
notice thereof."
3.9 CLAUSE 10 (NOTICES)
-------------------
CLAUSE 10.1 shall be amended as follows:-
(i) by deleting the address and facsimile number for CSM
in its entirety and replacing it with the following:-
"CSM
---
00 Xxxxxxxxx Xxxxxxxxxx Xxxx X, Xxxxxx 0
Xxxxxxxxx 000000
Facsimile no : (00) 0000000
Attn: Xx Xxx Xxxx Xxxx
President"
(ii) by inserting after the address and facsimile number
for Customer, the following:-
"PMC
---
000-0000 Xxxxxx Xxxxx,
Xxxxxxx, X.X.
Xxxxxx X0X 0X0
Facsimile no: (000) 0000000
Attn: Xx Xxxx Xxxxx
Chief Operating Officer"
3.10 ANNEX A (PAYMENT SCHEDULE)
--------------------------
ANNEX A shall be deleted in its entirety.
3.11 ANNEX B (CSM-SUPPLY COMMITMENT/CUSTOMER LOADING COMMITMENT)
----------------------------------------------------------
ANNEX B shall be deleted in its entirety and replaced by the
ANNEX A (CSM SUPPLY COMMITMENT / CUSTOMER AND PMC LOADING
COMMITMENT) attached.
4. SAVING AND INCORPORATION
4.1 Save as expressly amended by this Amendment Agreement, the terms and
conditions of the Deposit Agreement shall continue to be in full force
and effect in all other respects.
4.2 The Deposit Agreement and this Amendment Agreement shall be construed
as one document and this Amendment Agreement shall be deemed to be part
of the Deposit Agreement. Where the context so permits, references in
the Deposit Agreement and in this Amendment Agreement to "the Deposit
Agreement" or "this Agreement" shall be read and construed as
references to the Deposit Agreement as amended and supplemented by this
Amendment Agreement.
5. GOVERNING LAW
This Amendment Agreement shall be governed by and construed in
accordance with the laws of Singapore. The parties hereby irrevocably
submit to the nonexclusive jurisdiction of the courts of Singapore.
IN WITNESS WHEREOF the Parties have hereunto entered into this Agreement the
date first above written.
Signed by /s/ Xxx Xxxxxx )
)
)
CHARTERED SEMICONDUCTOR )
MANUFACTURING LTD )
in the presence of:- )/s/ signature unreadable
/s/ Xxxxxx Hon
Name: Xxxxxx Hon
Signed by /s/ Xxxxx X. Xxxxxx )
)
)
SIERRA SEMICONDUCTOR )
CORPORATION )
in the presence of:- )/s/ Xxxx Xxxxxxx
/s/ Xxxxx X. Xxxxxx
Name:
Signed by /s/ Xxxxx X. Xxxxxx )
)
)
PMC-SIERRA INC. )
in the presence of:- )/s/ Xxxx Xxxxxxx
/s/ Xxxxx X. Xxxxxx
Name:
ANNEX A
CSM SUPPLY COMMITMENT
---------------------
CUSTOMER AND PMC LOADING COMMITMENT
-----------------------------------
Number of 8-inch silicon wafer equivalents (based on 15 mask level)*
1Q97 2Q97 3Q97 4Q97 1Q98 2Q98 3Q98 4Q98 through 4Q2000
[REDACTED]
*subject to such adjustments as may be made in accordance with Clause 3.3
"The Confidential Portion has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission".
