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JAZZ SEMICONDUCTOR INC
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S-1/A
Jun 21, 9:36 PM ET
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JAZZ SEMICONDUCTOR INC S-1/A
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34
2. PURCHASE AND SUPPLY OBLIGATIONS.
(a) Forecast. Within […***…] prior to the […***…] during the term of this Supply Agreement, RFMD shall submit in writing or electronically to JAZZ a rolling […***…] forecast setting forth the number of Wafers for which the Company shall commence a specified fabrication process (SiGe or CMOS) during each month of the forecast (a “Forecast”).
(b) RFMD Volume Commitments. RFMD shall purchase, at the Contract Price, 100% of the Wafers for which JAZZ is required to commence the SiGe or CMOS fabrication process as specified by RFMD for the […***…] month of the Forecast and for the […***…] of the initial Forecast (a “Guaranteed Month”). The number of Wafers set forth in a Forecast with respect to a Guaranteed Month that RFMD is obligated to purchase pursuant to this section shall be referred to herein as the “Wafer Volume Commitment.” RFMD may decrease, by the percentages set forth in the following table, the number of Wafers for any month (other than for a Guaranteed Month) of the then current Forecast in the next subsequent Forecast, but in no event shall JAZZ be obligated to supply Wafers for any calendar year in excess of its capacity commitment set forth in Section 2.1(c) of this Agreement:
(c) JAZZ Capacity Commitments. JAZZ, shall accept each Purchase Order, which is consistent with the Forecast, and fulfill all the amounts in RFMD’s then-current Forecasts up to the baseline amount for each year of the term of this Supply Agreement referenced in Exhibit B (the “Baseline Commitment”). If the amount forecasted in any calendar year exceeds the Baseline Commitment (the amount of such excess being referred to herein as the “Excess Demand”), provided such Excess Demand does not exceed […***…] the Baseline Commitment then JAZZ shall use its commercially best efforts to satisfy the Excess Demand, and JAZZ shall not fulfill the demands of any other customers of JAZZ in excess of JAZZ’s minimum commitment to such other customers unless and until JAZZ has fully satisfied the Excess Demand. Regardless of Baseline or subsequent forecast, Jazz shall at all times agree, upon […***…] advance notice by RFMD, to start […***…] per day during the term of this Agreement.
(d) Preferred Vendor Status. RFMD shall give JAZZ the first right of refusal to supply all RFMD silicon demand, provided JAZZ is competitive in pricing, technology, quality and delivery, and further provided no material breach as reasonably determined in good faith by RFMD, by Jazz or other Jazz board members, of the Confidentiality Agreement or confidentiality provisions of the Company Second Amended and Restated Stockholder Agreement signed contemporaneously herewith occur.
(e) Lead-Times. Jazz shall not revise any Lead-time without providing RFMD with […***…] advanced written notice, and in no event shall any Lead-time exceed […***…] of the then current industry average for like processes.
3. WAFER PURCHASES.
(a) Purchase Order. Simultaneously with providing each Forecast to JAZZ required by Section 2.1 (a), FRMD shall submit to JAZZ a non-cancelable Purchase Order for the number of Wafers for which the fabrication process is to be commenced during the […***…] month of such Forecast, except
that the initial Forecast shall be accompanied by a noncancelable Purchase Order for the number of Wafers for which the fabrication process is to be commenced during the […***…] months of such Forecast.
(b) Delivery Schedule. JAZZ will acknowledge each Purchase Order with an acknowledgement (a “Purchase Order Acknowledgment”), which shall include a schedule by Wafer part number and quantity, within […***…] of the date of such Purchase Order.
4. WAFER DELIVERY AND LOGISTICS.
5. PRICING; CREDITS; AND PAYMENTS.
(a) Shipped Wafers. JAZZ will invoice RFMD for Wafers delivered hereunder upon shipment of each Lot, at the applicable Basic Wafer price. The Contract Price shall mean the price calculated pursuant to the Basic Price applicable to such Wafers in effect on the date of the invoice, less any applicable Wafer Credits (as defined in Section 5.2 (Wafer Credits) below). RFMD shall pay any amounts due on such invoices within forty (40) days of receipt thereof. Notwithstanding any other provision hereof, neither Party may offset any amounts owed by such Party to the other Party against any amounts from such other Party, without such other Party’s express written agreement to such offset in each case.
(b) Shortfalls. The amounts of the Wafer Volume Commitment not purchased by RFMD (“Shortfalls”), if any, will be reconciled and invoiced at the end of each month, subject to the allowances provided for in Section 2.1.(b) attributable to that month, and amounts due in respect thereof, after applying the Wafer Credits, shall be paid by RFMD within forty (40) days thereafter RFMD’s payment of the foregoing amounts in respect to Shortfalls shall be JAZZ’s sole and exclusive remedy, and RFMD’s entire liability, for RFMD’s failure to meet any Forecast hereunder or to release or purchase any Wafers ordered in Purchase Orders.
6. TRACKING; REPORTING; AND AUDITS.
7. WARRANTY AND DISCLAIMER.
8. INDEMNIFICATION.
9. CONFIDENTIALITY.
10. LIMITATIONS OF LIABILITY.
11. TERM; TERMINATION.
(a) by written agreement of the Parties;
(b) by either Party, at its discretion upon written notice to the other Party, if the other Party materially breaches any provision of this Supply Agreement and such breach is not cured within sixty (60) days after written notice of such breach is furnished by the non-breaching Party;
(c) by either Party, at its discretion, if (i) the other Party becomes insolvent, admits in writing its inability to pay its debts as they become due, or files or has filed against it any proceeding in bankruptcy or for reorganization under any federal bankruptcy law or similar state law, or has any receiver appointed for all or a substantial part of such Party’s assets or business, or makes any assignment for the benefit of its creditors, or enters into any other proceeding for debt relief, and such proceeding is not dismissed within sixty (60) days of filing or (ii) the other Party dissolves, liquidates, or institutes any proceedings for the liquidation or winding up of its business.
12. GENERAL.
(a) Upon the written request (a “Request”) of a Party, the other Party shall commence good faith negotiations with the goal of resolving the Dispute on a mutually satisfactory basis. If the Dispute has not been resolved to the satisfaction of the Parties within fifteen (15) days after the date on which the Request is delivered, the Dispute shall immediately be referred to senior officers of each Party. The senior officers of each Party (e.g., chief executive officer) shall meet immediately, and in no case later than thirty (30) days after the date on which the Request is delivered, for a minimum of two (2) Business Days with a mutually selected mediator and attempt in good faith to negotiate a resolution of the Dispute. If the Parties are unable to resolve the Dispute within thirty-five (35) days after the date on which the Request is delivered, then any relevant Party may submit the Dispute to arbitration as the exclusive means of resolving it in accordance with the procedures set forth in this Section 12.3.
(b) Except as otherwise specified in this Section 12.3, any Dispute not resolved through the procedure set forth above shall be finally settled by arbitration in accordance with the International Rules and Procedures of the American Arbitration Association (the “Arbitration Rules”), which are deemed to be incorporated by reference herein except as otherwise modified herein.
(c) The arbitration situs shall be Wilmington, Delaware, and the laws of the State of Delaware shall be applied.
(d) In the event of arbitration, there shall be one arbitrator who shall be jointly nominated by such parties. If the Parties fail to so nominate the arbitrators within thirty (30) days from the date when the Dispute is submitted to arbitration pursuant to this Section 13.3, at the request of any Party, the arbitrator(s) shall be appointed in accordance with the Arbitration Rules.
(e) The arbitration hearing shall commence no later than ninety (90) days following the appointment of the sole arbitrator, as the case may be, and the final award shall be rendered no later than thirty (30) days following the close of the hearing.
(f) Consistent with the expedited nature of arbitration, each Party will, upon the written request of the other Party, provide the other with copies of documents relevant to the issue raised by any claim or counterclaim. Other discovery may be ordered by the arbitrator to the extent the arbitrator deems additional discovery relevant and appropriate, and any dispute regarding discovery, relevance or scope thereof, shall be determined by the arbitrator, which determination shall be conclusive.
(g) By agreeing to arbitration, the Parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment, injunctive or other equitable relief or an order in aid of arbitration proceedings and the enforcement of any award. Without prejudice to such provisional remedies in aid of arbitration as may be available under the jurisdiction of a national court, the arbitral tribunal shall have full authority to grant provisional remedies and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.
(h) The award shall be final and binding upon the Parties, and shall be the sole and exclusive remedy between the Parties regarding any claims, counterclaims, issues, or accounting presented to the arbitral tribunal in connection with the Dispute. Judgment upon any award may be entered in any court having competent jurisdiction thereof.
(i) The costs of the arbitration shall be borne as determined in accordance with the Arbitration Rules; provided, however, that to the extent a Party is non-prevailing or unsuccessful on a claim in an arbitration proceeding under this Section 12.3 as determined by the arbitrator, that Party shall pay the prevailing or successful Party’s costs and expenses incurred in connection with the arbitration of that Dispute, including attorneys’ fees and arbitration expenses, whether or not such Dispute is prosecuted to award or judgment.
(j) Subject to the receipt of any applicable governmental approval, any monetary award shall be made and promptly payable in U.S. dollars, if due in U.S. dollars, free of any deduction or offset, and the arbitral tribunal shall be authorized in its discretion to grant pre-award and post-award interest at commercial rates. The arbitral tribunal shall have the authority to award any remedy or relief proposed by the claimants or respondents pursuant to this Supply Agreement, including without limitation, a declaratory judgment, specific performance of any obligation created under this Supply Agreement or the issuance of an injunction.
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