Exhibit 10.158
[***] DENOTES CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
INTEL/MICRON CONFIDENTIAL
BOISE SUPPLY
AGREEMENT
This BOISE SUPPLY AGREEMENT (the
“ Agreement ”), is made and entered into as of
this 6 th day of January, 2006 (the “ Effective
Date ”), by and between IM Flash Technologies, LLC, a
Delaware limited liability company (the “ Joint Venture
Company ”) and Micron Technology, Inc., a Delaware
corporation (“ Micron ”).
RECITALS
A.
The Joint Venture Company is engaged
in the manufacture, assembly and test of NAND Flash Memory Products
(as defined hereinafter) and desires additional capacity of NAND
Flash Probed Wafers;
B.
Micron possesses the ability to
manufacture Probed Wafers for NAND Flash Memory Products;
and
C.
Micron desires to provide and the
Joint Venture Company desires Micron to supply Probed Wafers to the
Joint Venture Company upon the terms and subject to the conditions
set forth in this Agreement (each, a “ Party ”
and collectively, the “ Parties ”).
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties intending to be legally bound do
hereby agree as follows.
ARTICLE 1
DEFINITIONS; CERTAIN INTERPRETIVE MATTERS
1.1
Definitions
. In
addition to the terms defined elsewhere in this Agreement,
capitalized terms used in this Agreement shall have the respective
meanings set forth in Exhibit A .
1.2
Certain
Interpretive Matters .
(a)
Unless the
context requires otherwise, (1) all references to Sections,
Articles, Exhibits, Appendices or Schedules are to Sections,
Articles, Exhibits, Appendices or Schedules of or to this
Agreement, (2) each of the Schedules will apply only to the
corresponding Section or subsection of this Agreement,
(3) each accounting term not otherwise defined in this
Agreement has the meaning commonly applied to it in accordance with
GAAP, (4) words in the singular include the plural and visa
versa, (5) the term “ including ” means
“ including without limitation ,” and
(6) the terms “ herein ,” “
hereof ,” “ hereunder ” and words
of similar import shall mean references to this Agreement as a
whole and not to any individual Section or portion hereof. All
references to $ or dollar amounts will be to lawful currency of the
United States of America. All references to “ day
” or “ days ” will mean calendar days and
all references to “ quarter(ly) ”, “
month(ly) ” or “ year(ly) ” will
mean Fiscal Quarter, Fiscal Month or Fiscal Year, respectively,
unless specifically identified otherwise.
(b)
No provision of
this Agreement will be interpreted in favor of, or against, any of
the Parties by reason of the extent to which any such Party or its
counsel participated in the drafting thereof or by reason of the
extent to which any such provision is inconsistent with any prior
draft of this Agreement or such provision.
ARTICLE 2
MICRON’S SUPPLY OBLIGATIONS
2.1
Micron’s
Supply Obligations .
(a)
General
. Micron will
manufacture, sell and deliver to the Joint Venture Company Probed
Wafers in accordance with the Specifications, Performance Criteria
and the Manufacturing Plan as provided in the terms and conditions
contained herein.
(b)
Micron
Manufacturing Location . Unless otherwise
agreed to by the Parties, all manufacture of Probed Wafers by
Micron under this Agreement shall be performed at Micron’s
NAND product line in Boise, Idaho (“ NAND Product Line ”).
2.2
Specifications
. The Joint
Venture Company shall provide the Specifications for the Probed
Wafers supplied hereunder.
2.3
Performance
Criteria . The Joint Venture
Company and Micron shall develop mutually agreed Performance
Criteria to evaluate Micron’s performance hereunder.
The initial Performance Criteria are set forth on
Schedule 2.3 and the Parties shall further define such
Performance Criteria within sixty (60) days of the Effective
Date.
2.4
Micron’s
Manufacturing Process and Control . The Joint Venture Company
and Micron will review Micron’s control and process
mechanisms, including but not limited to such mechanisms that are
designed to be utilized in meeting or exceeding all parameters of
the Specification and the Performance Criteria with respect to the
supply of Probed Wafers hereunder for the Joint Venture
Company. The Parties agree to work together in good faith to
define mutually agreeable control and process mechanisms relating
to the following areas: [***].
2.5
[***]. In
addition to the quarterly review and monthly report requirements
set forth in ARTICLES 3 and 5 , Micron will promptly notify
the Joint Venture Company of all [***].
2.6
Equipment
. Micron
shall utilize certain existing equipment to provide the
manufacturing capacity to support the initial Manufacturing Plan as
defined in the LLC Operating Agreement. Micron will procure
additional manufacturing equipment as specified in
Schedule 2.6 (“Additional Equipment”),
which is required to meet the Manufacturing Plan
hereunder.
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2.7
Maskworks
. Masks
required to manufacture the Probed Wafers will either be provided
by the Joint Venture Company or purchased by Micron
hereunder. Such masks will only be used to produce Probed
Wafers for the Joint Venture Company. If the Joint Venture
Company does not provide the masks required hereunder, then the
Joint Venture Company shall provide to Micron in a timely manner
all of the information, in the form typically required, for Micron
to purchase the required masks. Masks will be repaired and
replaced solely at mask operations which have been approved by the
Joint Venture Company, which approval shall not be unreasonably
withheld. [***].
2.8
Materials
. Unless
otherwise provided by the Joint Venture Company, Micron shall be
responsible for providing all materials required for the
manufacture and supply the Probed Wafers hereunder. All such
materials procured by Micron shall be included in the pricing set
forth on Schedule 4.6 . Micron shall endeavor to
manage the entire supply chain hereunder, including equipment,
materials, systems, and subcontractors, if any, to create
efficiency and maximize the Performance Criteria. To the extent
that the Joint Venture Company desires to provide certain materials
hereunder, the Parties shall work together in good faith on the
timing and manner of providing such materials so as it can be
accommodated within Micron’s business and manufacturing
systems.
2.9
Traceability
and Data Retention . Micron and the Joint
Venture Company shall review Micron’s traceability systems in
regards to manufacturing processing information [***]. The
Parties shall agree upon the data to be traced through such system
and which data shall be available with real-time access or
otherwise. Micron agrees to maintain such data for a minimum
of [***] from the date of manufacture of the Probed Wafer
lot. [***] to the same extent that such access is available
to Micron, subject to system limitations related to the exclusion
of non-NAND data. The Joint Venture Company may provide its
customers with such data, subject to any confidentiality
requirements.
2.10
Business
Continuity Plan . Micron and the Joint
Venture Company will review Micron’s Business Continuity Plan
as it relates to Micron’s supply of Probed Wafers
hereunder. If the Joint Venture Company requests any changes
or additions to Micron’s existing Business Continuity Plan,
the Parties shall work together in good faith to resolve any such
requests. The Joint Venture Company may provide
Micron’s Business Continuity Plan to its customers, subject
to any confidentiality requirements.
2.11
Compliance
with Customer Requirements . The Joint Venture
Company will inform Micron in writing of any auditable supplier
requirements for Probed Wafers supplied hereunder, which are
requested by the Joint Venture Company’s customers.
Micron and the Joint Venture Company shall work together in good
faith to resolve any such requests.
2.12
Equivalency of
Operations . [***].
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2.13
Secondary
Silicon . To the extent any
Secondary Silicon is produced in the course of Micron’s
supplying the Probed Wafers under this Agreement, it shall be
provided by Micron to the Joint Venture Company, which shall
provide the Secondary Silicon to the Members in accordance with the
Sharing Interests at the time. Micron shall provide forecast
and quantity reports on Secondary Silicon to the Joint Venture
Company, to the extent that such are reasonably available. ALL
SECONDARY SILICON PROVIDED HEREUNDER IS PROVIDED
“AS IS,” “WHERE IS” WITH ALL FAULTS
AND DEFECTS BASIS WITHOUT WARRANTY OF ANY KIND.
2.14
Option to
Designate WIP . [***].
ARTICLE 3
PLANNING MEETINGS, FORECASTS AND MANUFACTURING
PLAN
3.1
Planning and
Forecasting .
(a)
Micron shall
furnish the Joint Venture Company with a forecast on a Fiscal
Quarter basis, on a schedule agreed by the Parties, which
includes the following information, collectively the
(“ Planning
Forecast ”):
[***].
(b)
Proposed
Loading Plan . Based on the Planning
Forecast, the Joint Venture Company shall develop a [***] Proposed
Loading Plan, which will be a proposed loading plan for Probed
Wafers for such period (“ Proposed Loading Plan ”). The Joint Venture
Company shall provide Micron with the Proposed Loading Plan at
least [***] ([***]) days prior to its review by the Manufacturing
Committee.
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(c)
Quarterly
Review of Manufacturing Plan . The Joint Venture
Company will submit the Proposed Loading Plan, the Planning
Forecast and other requested information to the Manufacturing
Committee for endorsement. Once endorsed by the Manufacturing
Committee, the Proposed Loading Plan shall become the adopted
Manufacturing Plan for provision of Probed Wafers
hereunder.
3.2
Performance
Reviews and Reports . Micron and the Joint
Venture Company shall meet each Fiscal Quarter to discuss the
Performance Criteria and the most recent monthly report.
Micron shall provide the Joint Venture Company a monthly report, on
a date to be agreed by the Parties, which will include the
following information:
(a)
Describes
[***];
(b)
Describes
[***];
(c)
Describes [***];
and
(d)
Identifies
[***].
3.3
Performance
Reviews . The Parties shall
hold monthly meetings on dates agreed by the Parties, with the
primary purpose of such monthly meetings to be the
[***].
ARTICLE 4
PURCHASE AND SALE OF PRODUCT
4.1
Product
Quantity . The intent of the
Parties is that the Joint Venture Company shall order and purchase
from Micron [***]
of Probed
Wafers [***]
.
[***] .
4.2
Placement of
Purchase Orders . Prior to the
commencement of every Fiscal Quarter or another time period agreed
by the Parties, the Joint Venture Company shall place a
non-cancelable blanket purchase order in writing (via e-mail or
facsimile transmission) for the Probed Wafers to be supplied by
Micron in the following Fiscal Quarter as indicated in the
Manufacturing Plan (each such order, a “ Purchase Order ”). The Joint
Venture Company may issue change orders to such Purchase Orders to
reflect changes in the Manufacturing Plan, provided that such
changes can be reasonably accommodated within Micron’s NAND
operations, without disrupting the on-going production in a manner
that negatively impacts the previously placed Purchase
Orders. The Joint Venture Company and Micron will work
to
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accommodate any such changes and minimize the
impact upon the Micron’s NAND operations. The Joint
Venture Company may also request special engineering or hot lots in
accordance with Section II (e) of
Schedule 4.6 . In the case of any conflict between
the terms and conditions of this Agreement and the terms and
conditions of any Purchase Order or other document issued by the
Joint Venture Company or Micron in connection with this Agreement
or any addition to any terms and condition in this Agreement in any
such documents, the terms and conditions of this Agreement shall
control.
4.3
Shortfall
. Micron
shall promptly notify the Joint Venture Company in writing of any
inability to meet a Purchase Order commitment to the Joint Venture
Company.
4.4
Acceptance of
Purchase Order . Each Purchase Order
that corresponds to the Manufacturing Plan in the manner
contemplated by Section 4.2 and, and is otherwise free
of errors, shall be deemed accepted by Micron upon receipt and
shall be binding on the Parties, to the extent not inconsistent
with the Manufacturing Plan.
4.5
Content of
Purchase Orders . Each Purchase Order
shall specify the following regarding the Probed
Wafers:
(a)
Purchase Order
number;
(b)
Description and
part number for each Probed Wafer;
(c)
Ordered quantity
of each different product for the period;
(d)
Projected Price
for period covered by the Purchase Order;
(e)
Requested
delivery date;
(f)
Place of
delivery; and
(g)
Other terms (if
any).
4.6
Pricing
. Pricing for the
Probed Wafers shall be pursuant to Schedule 4.6 ,
attached hereto and incorporated herein by this
reference.
4.7
Taxes .
(a)
General
. All
sales, use and other transfer taxes imposed directly on or solely
as a result of the sale of products and payments therefore provided
herein shall be stated separately on Micron’s invoice,
collected from he Joint Venture Company and shall be remitted by
Micron to the appropriate tax authority (“
Recoverable Taxes
”), unless
the Joint Venture Company provides valid proof of tax exemption.
When property is delivered and/or services are provided or the
benefit of services occurs within jurisdictions in which collection
and remittance of taxes by the Joint Venture Company is required by
law, Micron shall have sole responsibility for payment of said
taxes to the appropriate tax authorities. In the event such taxes
are Recoverable Taxes and Micron does not collect tax from the
Joint Venture Company or pay such taxes to the appropriate
governmental entity on a timely basis, and is subsequently audited
by any tax authority, liability of the Joint Venture Company will
be limited to the tax assessment for such Recoverable Taxes, with
no reimbursement for penalty or interest charges or other amounts
incurred in connection therewith. Notwithstanding anything herein
to the contrary, taxes other
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than Recoverable Taxes shall
not be reimbursed by the Joint Venture Company, and each Party is
responsible for its own respective income taxes (including
franchise and other taxes based on net income or a variation
thereof), taxes based upon gross revenues or receipts, and taxes
with respect to general overhead, including but not limited to
business and occupation taxes, and such taxes shall not be
Recoverable Taxes.
(b)
Withholding
Taxes . In the event that the
Joint Venture Company is prohibited by law from making payments to
Micron unless the Joint Venture Company deducts or withholds taxes
therefrom and remits such taxes to the local taxing jurisdiction,
then the Joint Venture Company shall duly withhold and remit such
taxes and shall pay to Micron the remaining net amount after the
taxes have been withheld. Such taxes shall not be Recoverable
Taxes and the Joint Venture Company shall not reimburse Micron for
the amount of such taxes withheld.
4.8
Invoicing
. Micron
shall invoice the Joint Venture Company on a monthly basis in
accordance with the pricing provided in Schedule 4.6
. All amounts owed under this Agreement are stated,
calculated and shall be paid in United States Dollars. Except
as otherwise specified in this Agreement, the Joint Venture Company
shall pay Micron for the amounts due, owing, and duly invoiced
under this Agreement within [***] ([***]) days following delivery
of an invoice therefore to such place as Micron may reasonably
direct therein.
4.9
Payment to
Vendors . Micron shall be
responsible for and shall hold the Joint Venture Company harmless
for any and all payments to Micron’s vendors or suppliers
utilized in the performance of this Agreement.
4.10
Delivery,
Title and Risk of Loss . The Joint Venture
Company shall hold title to all Prime Wafers prior to Wafer Start
and all WIP and Probed Wafers thereafter. Micron shall hold
risk of loss or damage to Prime Wafers, WIP and Probed Wafers until
the Probed Wafers are tendered to the carrier for shipment or
transferred to the assembly location, if Micron is performing the
assembly services.
4.11
Packaging and
Shipping . The packaging of the
Probed Wafers supplier hereunder shall be in conformance with:
(i) the Specifications, as applicable; (ii) the Joint
Venture Company’s reasonable instructions; (iii) general
industry standards to ensure resistance to damage that may occur
during transportation. Micron shall mark all shipping containers
with necessary lifting, handling, and shipping information,
Purchase Order number, date of shipment, and the names of the Joint
Venture Company and applicable customer, is any. If no
instructions are given, Micron shall select the most cost effective
carrier, given the time constraints known to Micron. At the
Joint Venture Company’s request, Micron will provide
drop-shipment of Probed Wafers to the Joint Venture Company’s
customers or as otherwise directed by the Joint Venture
Company.
4.12
Shipment
Charges . In order to ensure
timely and complete shipment of Probed Wafers to the Joint Venture
Company, Micron shall arrange for shipping to the Joint Venture
Company’s customer or assembly services provider. To
the extent that the shipping charges, insurance, taxes, customs
charges and any fees and duties in connection with such shipment
are not charged to directly to a Joint Venture Company account,
Micron shall pay such costs and invoice them to the Joint Venture
Company under the appropriate services agreement between the
Parties.
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4.13
Customs
Clearance . Upon the Joint
Venture Company’s request, Micron will promptly provide the
Joint Venture Company with a statement of origin for all Probed
Wafers and with applicable customs documentation for Probed Wafers
wholly or partially manufactured outside of the country of
import.
ARTICLE 5
VISITATIONS, AUDITS AND MANAGEMENT REVIEWS
5.1
Visits
. Micron
will support the Joint Venture Company’s and its
customers’ reasonable requests for visits to the NAND Product
Line utilized hereunder for the supply of Probed Wafers for the
purpose of reviewing performance of production of Probed Wafers,
including requests for further information and assistance in
troubleshooting performance issues. Such requests shall be
reasonably granted by Micron so long as such visits and meetings do
not unduly interfere with Micron’s operations and business
affairs.
5.2
Inventory
Audit . Micron will grant
reasonable access to the Joint Venture Company’s personnel or
appointed auditors to conduct an annual inventory audit of the
inventory of WIP and Probed Wafers. Such annual audit shall
be coordinated by Micron according to its standard inventory
procedures and shall be conducted in such a manner as to minimize
disruptions to the performance Micron’s operations and
business affairs. Any such annual audit will be pre-scheduled
to coincide with a monthly, quarterly or yearly cut-off as reported
by Micron or as otherwise agreed to by both Parties.
5.3
Performance
Audit . The Joint Venture
Company representatives shall be allowed to visit Micron’s
NAND Product Line during normal working hours upon reasonable
advanced written notice to Micron for the purposes of auditing the
processes and compliance with any requirements set forth in this
Agreement. Upon completion of the audit, Micron and the Joint
Venture Company shall work in good faith to agree to an audit
closure plan, which will be documented in the audit report issued
by the Joint Venture Company. If the Joint Venture Company
requests any changes or additions to Micron’s existing
process and control mechanisms, the Parties shall work together in
good faith to resolve any such requests.
5.4
Audit of
Pricing and Additional Equipment . The Joint Venture
Company reserves the right to have Micron’s books and records
related to the pricing of Probed Wafers and the purchase of
Additional Equipment hereunder inspected and audited not more than
[***] during any Fiscal Year to ensure compliance with Schedules
2.6 and 4.6 of this Agreement in regards to pricing of the
Probed Wafers. Such audit will be performed by an independent
third party auditor acceptable to both Parties at the Joint Venture
Company’s expense. If the Parties cannot agree, the
Joint Venture Company may select one of the major internationally
recognized audit firms, which is not the auditor for either of the
Joint Venture Company’s customers. The Joint Venture
Company shall provide [***] ([***]) days advance written notice to
Micron of its desire to initiate an audit and the audit shall be
scheduled so that it does not adversely impact or interrupt
Micron’s business operations. If the audit reveals any
material discrepancies, Micron or the Joint Venture Company shall
reimburse the other, as applicable, for any material discrepancies
within [***] ([***]) days after completion of the audit. The
results of such audit shall be kept confidential by the auditor and
only the discrepancies shall be reported to the Parties
and
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its customers, and be limited to the
(i) discrepancies identified by the audit, (ii) results
of the physical inspection of the Additional Equipment; and,
(iii) subject to any limitations imposed by law, results
regarding purchase and utilization of such Additional
Equipment. Notwithstanding the foregoing, any auditor reports
shall not disclose any Micron pricing or terms of purchase for any
purchases of materials or equipment hereunder to the Joint Venture
Company’s customers other than Micron, absent written
agreement from the customers’ respective legal counsel.
If any audit reveals a material discrepancy, the Joint Venture
Company may increase the frequency of such audits to quarterly for
the subsequent [***] ([***]) month period.
ARTICLE 6
REPRESENTATIONS; WARRANTIES; HAZARDOUS MATERIALS;
DISCLAIMER
6.1
Product
Warranty . Micron warrants that
the Probed Wafers supplied hereunder:
(a)
conform in all
material aspects to the agreed Specification;
(b)
are free from
defects in materials or workmanship; and
(c)
free of liens and
encumbrances, not including any express or implied warranty of
non-infringement and Micron has the necessary right, title, and
interest to provide the Probed Wafers to the Joint Venture
Company.
Each of the warranties Sec
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