Exhibit 99.7
TRANSITION BUY BACK DIE SUPPLY
AGREEMENT
This Transition Buy Back Die Supply
Agreement (this “Agreement”) is entered into and
effective as of the 1 st day of April, 2007 (the “Effective
Date”), by and between International Rectifier Corporation, a
corporation organized under the laws of the State of Delaware
(“IR”), and Vishay Intertechnology, a company organized
and existing under the laws of the State of Delaware (the
“Supplier”). IR and Supplier each may be referred
to herein as a “Party” and collectively, as the
“Parties.”
WHEREAS, IR and Supplier are parties
to that certain Master Purchase Agreement dated November 8, 2006
(the “Master Purchase Agreement”), pursuant to which
Supplier is purchasing from IR all of the capital stock of certain
IR subsidiaries and certain assets of IR and certain IR
subsidiaries contemporaneously with the execution and delivery of
this Agreement; and
WHEREAS, Supplier agrees to provide,
and IR desires to have Supplier provide, certain of
Supplier’s die products on a transitional basis on the terms
and conditions contained herein.
NOW, THEREFORE, the Parties agree as
follows:
ARTICLE 1
Die Supply.
1.1
General . In accordance with the provisions hereof,
Supplier shall sell to IR, and IR shall purchase from Supplier, the
types of die products set forth on Exhibit A in whole wafer form
(each a “Product” and collectively, the
“Products”). The Products shall be provided in
accordance with the applicable terms of this Agreement (including
without limitation Exhibit A, attached hereto and made a part
hereof). Exhibit A may be amended from time to time by written
agreement of the Parties.
1.2
Price . For all Product deliveries made prior to the
two year anniversary of the Closing, the price for the Products
shall be IR’s “standard cost” for such Products
as determined as of the Closing (“Product Standard
Cost”), as set forth in Exhibit A. For all Product
deliveries made following the second anniversary of the Closing,
the price for the Products shall be the Product Standard Cost as
adjusted pursuant to Section 3.1(b).
1.3
Volume . In each consecutive twelve month period
following Closing through the end of the term of this Agreement,
Supplier shall be obligated to supply only up to a maximum
aggregate quantity of each type of Product set forth in Exhibit A
(“Aggregate Annual Quantity”), properly ordered in
accordance with the forecasting procedures set forth in Article
2. Within any given calendar quarter, Supplier shall be
obligated to supply up to 1/3 of the Aggregate Annual Quantity for
each Product type, subject to the Aggregate Annual Quantity
limitation and IR having properly ordered the quantity in
accordance with the forecasting procedures set forth in Article
2.
1.4
Specifications . The specifications for the Products
shall be IR’s current product specifications. Supplier
shall produce the Products in accordance with IR’s current
internal quality procedures in effect for the facility at which the
Products are produced.
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1.5
Wafer Testing . IR shall be billed and pay for all
Products passing IR’s Maverick Product Elimination Program
(HOP-500-17) (“Maverick Protocol”).
ARTICLE 2
Administrative
Provisions.
2.1
Forecast and Loading Procedures for Products .
(a) The forecast and loading procedures for Products shall be
as set forth in Schedule 1.
(b)
Supplier shall use its good faith efforts to accommodate reasonable
changes timely requested by IR with respect to any Committed
Forecast (as defined in Schedule 1), but Supplier shall have no
obligation to do so. Supplier shall otherwise be required to
furnish Products in accordance with each Committed Forecast
furnished in accordance with the terms of this
Agreement.
(c)
IR shall have the right to cancel without penalty any order whose
delivery is delayed by more than three weeks from the date of
delivery specified in the relevant Loading Schedule (as defined in
Schedule 1), provided that such delay is not attributable to any
action or inaction of IR. Such cancellation shall be without
prejudice to any other rights that IR may have under this Agreement
or otherwise.
(d)
IR shall provide such purchase order documents with respect to each
Committed Forecast and Loading Schedule as are reasonably
requested by Supplier to support its financial accounting and
operational planning needs. The terms of this Agreement shall
control in the event of any conflict between this Agreement and any
purchase order documents.
(e)
Supplier shall provide notice to IR of scheduled maintenance of
equipment reasonably in advance of any Committed Forecast, so that
IR can take account of such scheduled maintenance in preparing its
forecasts. In the event of the need for any unscheduled
equipment maintenance, Supplier shall promptly so notify IR and
shall take commercially reasonable action to attempt to minimize
disruption of production and otherwise conform production as
reasonably practicable under the circumstances to the Committed
Forecasts.
2.2
Quality Control and Certification . The manufacturing
systems and protocols for the Products shall at all times qualify
with TS 16949 certification. Supplier shall produce the
Products in accordance with its current internal quality procedures
in effect for the facility at which the Products are produced, COP
800, facility quality certification (TS 16949) and customer quality
requirements currently in effect with respect to the Products and
reasonable quality requirements of IR’s customers as may
arise from time to time following the Effective Date (“Future
Customer Requirements”) (provided that IR shall be
responsible for any increased cost arising from the Future Customer
Requirements). Supplier will communicate any change in the
Products or their manufacture in accordance with IR’s Product
Change Notification (“PCN”) process; provided that if
IR reasonably believes that any such change would not be acceptable
to a customer, IR may elect pursuant to delivery of written notice
thereof to Supplier to have the provisions of product
discontinuation apply (Section 12.4 below) in which case the PCN
shall be deemed to be the Affected Products Notice and the
Products, without any such change, shall be the Affected
Products.
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2.3
Shipping . All Products shall have been deemed
delivered upon tender of the Product (Ex Works Supplier’s
applicable factory) at IR’s request to an IR inventory or
“bank” location established for IR. IR shall be
responsible, at its own cost and expense, for the shipment
(including, among other things transit/casualty insurance and third
party fees) of all processed materials by Supplier pursuant to this
Agreement. Supplier will cooperate with IR in assembling and
coordinating shipments, as reasonably requested by IR consistent
with the relevant Loading Schedule.
2.4
Consultation . At either Party’s reasonable
request, the Parties shall meet and discuss the nature, quality,
and quantity of Products contemplated by this Agreement and any
amendments a Party may wish to make to this Agreement, including to
the attached Exhibits and Schedules.
ARTICLE 3
Compensation;
Billing
3.1
Product Prices .
(a)
Supplier will charge IR the purchase prices for the Products
indicated in Exhibit A (each, a “Purchase Price”
and collectively, the “Purchase Prices”), as otherwise
adjusted hereunder.
(b)
The then applicable Purchase Prices for all Products provided
hereunder shall be adjusted on the two year anniversary of this
Agreement (“Anniversary Adjustment Date”) on the basis
of the change (increase or decrease) in Supplier’s costs
applicable to the Products to the extent necessary to reflect
Supplier’s fair market value for the cost of labor, overhead,
utilities, supply gases, materials and allocations (with
allocations being on a similar basis as the allocations used to
establish the business forecast for the PCS Business (as defined in
the Master Purchase Agreement) prepared in connection with sale to
Supplier). Supplier shall provide a breakdown of such
adjustment upon written request from IR (including upon reasonable
request copies of background supplier documents to verify material
costs). Supplier shall provide IR with not less than 30 days
advance notice of the proposed changes in the Purchase Prices
(“Changes”) pursuant to this Section 3.1(b),
including the basis for such Changes in reasonable detail. If
IR disputes any of the Changes, the Parties shall consult with each
other and negotiate in good faith in order to arrive at a mutually
agreeable determination of the appropriate Changes. In the
event that the Parties are unable to agree upon the Changes by the
Anniversary Adjustment Date, IR will be obligated to make payments
under this Agreement in accordance the Changes as proposed by
Supplier, without prejudice, however, to any contract or other
remedy available to IR for Supplier’s failure to comply with
the requirements of this Agreement with respect to the Changes
proposed by Supplier; provided however, any claim of dispute with
respect to Changes shall be filed within 60 days following the
Anniversary Adjustment Date.
(c)
Each Party shall be responsible for any bank charges that it incurs
in connection with the activities contemplated by this
Agreement.
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3.2
Invoices . Supplier shall send IR a weekly invoice
that includes in reasonable detail the Purchase Prices for Products
provided to IR for the week and any other amounts owing
hereunder. Payments of invoices shall be made by wire
transfer of immediately available United States funds to one or
more accounts specified in writing by Supplier. Payment shall
be made within 30 days after the date of IR’s receipt of
Supplier’s invoice.
3.3
Failure to Pay . In the event that IR fails to make
payment of an invoice when due, Supplier shall have the right, at
its sole option, upon 10 business days’ written notice (a
“Suspension Notice”) to suspend delivery of the
Products until payment has been received. Supplier may
terminate this Agreement in accordance with Article 12 in the
event an invoice is not paid within 30 days of IR’s receipt
of a Suspension Notice.
3.4
Late Payment Penalty . With respect to the unpaid
amount of any invoice not paid in full within 30 days of receipt, a
finance charge of 1% per month, payable from the date of the
invoice to the date payment is received, shall be due and payable
to Supplier. In addition, IR shall indemnify Supplier for its
costs, including reasonable attorneys’ fees and
disbursements, incurred to collect any unpaid amount.
ARTICLE 4
Cooperation
4.1
Generally . Each Party shall reasonably cooperate with
and provide assistance to the other Party in carrying out the
provisions of this Agreement.
ARTICLE 5
Confidentiality
5.1
Generally . In the course of the supply of the
Products, each Party may become aware of confidential and
proprietary information of the other Party or of a third party in
possession of such other Party (“Confidential
Information”). All Confidential Information disclosed
by a Party during the term of this Agreement shall remain the
property of the disclosing Party and shall be used by the receiving
Party only in accordance with the provisions of this
Agreement.
5.2
Identification; Term . (a) Except in the case of
(x) information that is subject to the confidentiality provisions
of Section 12.4 of the Master Purchase Agreement or (y)
information exchanged in furtherance of the supply of the Products
hereunder that is of a type that is generally regarded by the
Parties to be confidential information (such as pricing, customer
and production information), to which this subsection (a)
shall not apply, (i) if disclosed in written form,
Confidential Information shall be identified as Confidential
Information by an appropriate legend; and (ii) if disclosed
orally or visually, it shall be identified as Confidential
Information at the time of disclosure and shall be confirmed by
written outline mailed to the other Party by registered or
certified mail, return receipt requested, within 30 days of the
original disclosure. (b) For a period of 7 years from
the date of first receipt thereof, the receiving Party shall
(i) treat all such information in the same manner as it treats
its own confidential information, in any event exercising
reasonable precautions to prevent the disclosure of such
information to others; (ii) use such information only for the
purposes set forth herein; and
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(iii) disclose such information
only to its employees who have a need to know such information in
the performance of their duties hereunder.
5.3
Exceptions . The obligations of confidential treatment
under this Article 4 shall not apply to any Confidential
Information which (i) is or becomes publicly known through no
wrongful act, fault or negligence of the receiving Party;
(ii) was known by the receiving Party prior to disclosure or
is developed
