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CONFIDENTIAL TREATMENT REQUESTED
Exhibit 10.29
Amended* Equipment Acquisition Agreement
*Reflects changes made by letter amendment dated August 22,
2007
Introduction
This
Amended Equipment Acquisition Agreement (this
“Agreement”) is entered into by and between
California Micro Devices Corporation, a Delaware corporation
(“CMD”), and SPEL Semiconductor Limited, a public
limited company incorporated under the provisions of the
Indian Companies Act, 1956 (“SPEL”), effective
upon the later of the dates (the “Effective Date”)
that it is signed on behalf of each party under
Authorized Signatures
below.
Background
A.
SPEL has been packaging and testing semiconductor devices for
CMD (the “Services”). The packaging involved has
been primarily for TDFN packages and the parties desire to
expand the Services to include UDFN and uUDFN
packages.
B.
SPEL has requested that CMD purchase and consign to SPEL
certain equipment in order to help provide the infrastructure
necessary to render increased amounts of
Services. In exchange, SPEL has agreed to provide
CMD with lower prices for the Services to repay the purchase
price.
Agreement
Based
upon the facts and premises contained in the above
Background , and the mutual promises
below, SPEL and CMD hereby agree as follows:
0. Definitions.
0.1
“Packaging Process” means TDFN, UDFN, uUDFN, or
other packaging for semiconductors which uses the Equipment as
defined in Section 1.3.
0.2 “Total
Equipment Cost” means the cost of all of the Equipment
purchased on Schedule 1 as listed on Schedule 1 pursuant to
Section 1.
0.3 “Consignment
Period” means that period of time from when the first
piece of Equipment is received by SPEL until the Total
Equipment Cost has been paid pursuant to Section
5 The Consignment Period can be terminated as
provided in Section 7.
1. Pricing and the Equipment.
1.1.
The prices listed on Schedule 3 under the heading SPEL Base
shall be the mutually agreed price at which SPEL typically
offers the Services to its customers, which shall be no more
than the price SPEL affords other customers with similar (or
lesser) volumes. The initial version of Schedule 3
contains the SPEL Base prices as of the Effective
Date. The parties shall get together every **
months to review the SPEL Base prices and possibly revise the
SPEL Base prices. The expectation of the parties is
that over time the SPEL Base prices will decline due to a
corresponding decline in price of commodities (e.g. gold and
copper). However, CMD acknowledges that if the price of
commodities (e.g. gold and copper) should unexpectedly rise
then the prices for the Services may have to increase
accordingly and SPEL agrees that such commodity price
increases are the only reason that the SPEL Base prices may
increase.
** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
CERTAIN PORTIONS OF THIS AGREEMENT AND THE CONFIDENTIAL PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
1.2.
Schedule 3 will also be revised from time to time by the
parties to add rows corresponding to differing numbers of
leads or pitches or differing Packaging
Processes.
1.3.
SPEL has determined with CMD’s concurrence that the
equipment to be subject to this Agreement should comprise of
those items listed on Schedule 1, either new or used, with the
estimated prices listed on Schedule 1. Though
estimated prices will remain the same, the number of items of
each piece of Equipment may vary depending on the type of
Equipment purchased provided that the Equipment purchased
shall have a ** piece monthly capacity. Within two
weeks of the Effective Date, as CMD’s agent, SPEL shall
obtain firm price quotations, including length and scope of
warranty coverage (which SPEL shall ensure is available for
consigned equipment) and available delivery dates, to purchase
the items listed on Schedule 1 with a targeted delivery date
of March or April 2007. The price shall include the
charges to deliver such equipment to SPEL’s location
listed in Schedule 2 (the “Facility”), along with
any taxes and duties, whether imposed on SPEL or
CMD. CMD will review such quotations and if such
quotations differ from the estimates shown in Schedule 1 by
more than 10% in the aggregate, the parties shall negotiate
mutually acceptable changes to Schedule 3 to preserve the
economics and shall revise Schedule 1 accordingly or else this
Agreement shall terminate. The equipment listed on
the final Schedule 1 is referred to in this Agreement as the
“Equipment”. Once the parties have
completed the negotiations of Schedules 1 and 3, then CMD
shall place purchase orders for the Equipment for delivery to
the Facility as soon as possible. In this manner,
CMD will consign to SPEL, and SPEL will accept in consignment,
the Equipment.
2. Consignment of the Equipment.
2.1.
CMD agrees to make available the Equipment to SPEL on a
consignment basis at the Facility during the Consignment
Period for the use by SPEL solely in order to improve and
support SPEL’s Services to CMD and for no other
purpose. The date that the Equipment vendor ships
each particular Equipment item to the Facility shall be its
“Consignment Date”. In no event during
the Consignment Period may SPEL use the Equipment other than
as set forth in this Section 2.1; thus for example, SPEL may
not use the Equipment to manufacture, assemble, process,
package, or test wafers for another customer without
CMD’s express, prior written consent.
2.2.
SPEL will assist CMD in obtaining any import licenses and
other approvals and permits required for the importation of
the Equipment and shall arrange the custom clearance of the
Equipment as importer. When obtaining the import
licenses, SPEL will inform the authorities that the Equipment
will remain the property of CMD indefinitely and shall arrange
to the extent possible for CMD to be able to ship the
Equipment elsewhere upon termination of this
Agreement.
2.3.
Along with the Equipment, CMD shall supply to SPEL technical
documentation from the manufacturer relating to the
installation and operation of the Equipment in the English
language. SPEL shall use and operate the Equipment
only in accordance with the instructions as laid down in the
documentation or as otherwise given by CMD.
3. Facility Preparation and Installation.
3.1.
SPEL will prepare the Facility in accordance with the
Equipment manufacturers’ requirements and will properly
install the Equipment at the Facility. The
Equipment will be installed and fully operational no later
than July 1, 2007.
3.2.
CMD reserves the right to inspect the Facility and to request
SPEL to make reasonable changes to the Facility to accommodate
the Equipment.
** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
CERTAIN PORTIONS OF THIS AGREEMENT AND THE CONFIDENTIAL PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
4. Custody and Ownership; Obligations During Consignment
Period.
4.1.
During the Consignment Period, CMD shall keep the sole and
full title to the Equipment; thus, the Equipment shall remain
the property of CMD.
4.2.
Risk of loss or damage to, and custody of, the Equipment shall
transfer to SPEL immediately following when risk of loss
passes from the vendor of the Equipment to
CMD. SPEL acknowledges the good quality of the
Equipment upon delivery to the Facility, unless SPEL notifies
CMD within two weeks of receipt of the
Equipment. In such event, SPEL shall cooperate with
CMD to file appropriate documentation with the Equipment
vendor in order to make a claim.
4.3.
SPEL shall comply with following obligations as to each item
of Equipment until the expiration or termination of the
Consignment Period:
(a)
SPEL shall take all necessary steps to protect the Equipment
and avoid the Equipment being subject to any damage and to
safeguard CMD’s property rights, including without
limitation intellectual property rights, in the
Equipment.
(b)
SPEL shall not sell, rent, lease, assign, donate, transfer,
mortgage, or grant a security interest in or allow a lien to
exist with respect to, the Equipment, or any of SPEL’s
right to possession or use of the Equipment, to any third
party under whatsoever conditions. Thus, the
Equipment and SPEL’s rights to use the Equipment under
this Agreement shall be free from third party security
interest or lien.
(c)
SPEL shall be responsible for any damage to the
Equipment. Upon the termination of the Consignment
Period as defined in Section 7, SPEL shall return the
Equipment to CMD in the same condition it was in on the
Consignment Date, ordinary wear and tear
excepted. Thus, for example, SPEL will be
responsible for any damage to the Equipment as a result of
improper use, negligence, gross negligence or willful acts or
omissions, by SPEL or by its employees. Moreover,
SPEL shall be responsible for the maintenance and repair
of the Equipment and keeping the Equipment in good operating
condition.
(d)
The Equipment shall not be transported from the Facility to
any other location without first having obtained CMD’s
prior consent in writing;
(e)
SPEL shall at its sole expense maintain insurance insuring the
Equipment against loss, theft, fire, and damage in an amount
sufficient to cover the full value of the Equipment. SPEL
shall provide CMD with all such copies of insurance, each of
which shall name CMD as an additional insured and provide that
the policy may not be cancelled or not renewed except upon 30
days prior written notice to CMD.
(f)
SPEL will comply with all applicable laws, rules and
regulations in exercising its rights and performing its
obligations under this Agreement. SPEL shall pay
all taxes imposed on the Equipment and its use including,
without limitation, VAT and personal property taxes, whether
such taxes are imposed on CMD or SPEL.
(g)
SPEL shall prominently label the Equipment as belonging to CMD
and shall take appropriate steps and make any necessary
filings with the government to ensure that the government and
third parties know that the Equipment does not belong to SPEL
and do not extend credit to SPEL on the basis of the
Equipment.
(h)
SPEL agrees to make any and all appropriate public filings in
order to inform the public or government that the Equipment is
the property of CMD and not SPEL and is merely on consignment
to SPEL. SPEL agrees to provide CMD with a copy of
each such filing when made.
(i)
SPEL shall perform Services using the Packaging Processes
requested by CMD at the prices shown under the heading
“Base Price”on Schedule 3. SPEL commits
to make ** units per month capacity of Packaging Services
available to CMD using the Equipment and shall
provide turn-around time, testing and quality control,
and warranty for CMD that are comparable to or better than
that provided to other customers of SPEL.
** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
CERTAIN PORTIONS OF THIS AGREEMENT AND THE CONFIDENTIAL PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
5. No payment.
In
view of the fact that the Equipment is provided by CMD to SPEL
to support SPEL’s Services to CMD, SPEL and CMD agree
that the Equipment shall be given on
consignment. Notwithstanding the foregoing, SPEL
shall pay CMD $58,200 prior to the last day of each month for
35 months beginning with September, 2007. During
August, 2010, SPEL shall pay CMD the difference between the
Total Equipment Cost and the cumulative amount previously paid
pursuant to the prior sentence..
6. Liability Limitation and Disclaimer.
6.1.
CMD shall not be liable for any damages or losses in connection
with this Agreement in excess of fifty US Dollars (US $50.00) and
in particular CMD shall not be responsible or liable for bodily
injury or damage to property or other loss sustained by third
parties or SPEL which may arise in consequence of the use of the
Equipment. In addition, in no event shall CMD be liable
for any indirect, special, incidental or consequential damages of
any nature whatsoever, including without limitation loss of profit
and/or revenue.
6.2.
SPEL shall defend, indemnify and hold CMD harmless from and
against any and all suits, claims, actions, proceedings,
costs, damages, liabilities and expenses (including without
limitation reasonable attorneys’ fees) arising out of or
related to SPEL’s use of the Equipment, including
without limitation damage or personal injury arising from
SPEL’s use of the Equipment, including substandard
Services. Notwithstanding the foregoing, this section 6.2
shall not apply to damages or personal injury to customers or
other users of CMD’s products which arise due to their
purchase or use of CMD products in which Services were a part
of the manufacturing, assembly, or packaging
process.
6.3. CMD
is providing the Equipment “AS IS” without
warranties of any kind except those provided by the Equipment
vendor which CMD shall permit SPEL to assert on its behalf
during the Consignment Period. If the Consignment
Period expires rather than terminates, then CMD shall assign
the warranties to SPEL.
7. Consignment Period Exp
iration .
If
and once the Consignment Period has expired (rather than
terminated), CMD shall transfer all right, title, and interest
to the Equipment to SPEL. Upon request, CMD will
assist SPEL as reasonably requested so that SPEL may take
appropriate steps and make any necessary filings with the
government to ensure that the government and third parties
know that the Equipment no longer belongs to CMD.
8. Agreement Term and Termination.
8.1.
This Agreement shall become effective upon the Effective Date
and shall expire immediately after the Consignment Period
expires unless earlier terminated (1) by either party upon
ninety (90) days notice that it desires to terminate this
Agreement without cause for its convenience or (2) by either
party pursuant to Section 8.2.
8.2.
In the event of a material breach of the terms and conditions
of this Agreement by either party, the other party shall have
the right to terminate this Agreement by notice in writing, if
such breach or failure is not remedied by the breaching party
within thirty (30) days after written notice describing such
breach has been given by terminating party except that the
cure period for payments due under Section 5 shall be ten (10)
days for the first breach and two (2) business days for
subsequent breaches..
** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
CERTAIN PORTIONS OF THIS AGREEMENT AND THE CONFIDENTIAL PORTION HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED
8.3.
In the event that CMD shall terminate this Agreement for cause or
SPEL shall terminate this Agreement without cause, then SPEL shall
stop the use of the Equipment and return the Equipment which is
listed as test equipment to CMD. CMD may if it desires
inspect the Equipment at the Facility before the return of the
Equipment. SPEL shall pay for the cost of returning the
Equipment from SPEL to CMD, including without limitation, shipping
and insurance costs. As to the Equipment which is listed
as assembly equipment, CMD shall have the option of requesting that
such Equipment be shipped as CMD directs at its cost or to cause
SPEL to purchase such Equipment from CMD. The purchase
price shall be equal to the original price of such Equipment less
an amount equal to the cumulative amount previously paid under
Section 5 times the ratio of the original cost of that assembly
Equipment being purchased to the original cost of all Equipment
listed on Schedule 1.
8.4.
In the event that SPEL shall terminate this Agreement for cause or
CMD shall terminate this Agreement without cause, then SPEL shall
stop the use of the Equipment and return the Equipment which is
listed as test equipment to CMD and CMD shall owe SPEL an amount
equal to the cumulative amount previously paid under Section 5
times the ratio of the original cost of such test Equipment to the
original cost of all Equipment listed on Schedule 1 plus, as to the
Equipment which is test equipment, the cost of replacement internal
circuit boards unless caused by SPEL’s negligence, accident,
or failure of periodic maintenance schedule provided that SPEL has
informed CMD during the term of the Agreement whenever a
replacement internal circuit
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