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.
2
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. While Micron
will have possession of masks hereunder, the Joint Venture Company
or one of its Members will retain title to such masks and of any
underlying copyrights, maskworks, or other intellectual
property.
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 . Micron will cooperate in
good faith with the Joint Venture Company in connection with any
transfer of Semiconductor Manufacturing Technology by the Joint
Venture Company to Micron for Micron’s use in connection with
the production of Probed Wafers as such technology transfers
may be required pursuant to other Joint Venture Documents and,
to the extent applicable hereto, to establishing similar baseline
performance for common Products at facilities operated or
subcontracted by the Joint Venture Company. Such efforts will
include the provision of up to date equivalency materials
(including correlation wafers), data and information, as
applicable.
3
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 . As soon as practicable
following the Joint Venture Company’s written request, Micron
will ensure that WIP in the NAND Line will be designated for
specified customers from Wafer Start. If the Joint Venture Company
does not elect to have WIP so designated, Micron will designate the
WIP for specified customers after Probe Testing. Custom product, if
any, shall be designated by Micron for the Joint Venture
Company’s specified customers from Wafer Start.
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.
4
(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
5
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
6
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.
7
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
8
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 Sections 6.1 (a),
(b) and (c) shall survive any delivery, inspection,
acceptance, payment, or resale of the Probed Wafers.
6.2
Warranty
Claims . Within a period of time,
[***] for the NAND Flash Memory Product produced from the Probed
Wafers at issue [***] of the Probed Wafers at issue to the Joint
Venture Company (“ Warranty Notice Period ”), the Joint Venture
Company shall notify Micron if it believes that any Probed Wafers
do not meet the Probed Wafers warranty set forth in
Section 6.2 . The Joint Venture Company shall return
such Probed Wafers to Micron as directed by the Joint Venture
Company. If a Probed Wafer is determined not to be in compliance
with such warranty, then the Joint Venture Company shall be
entitled to return such Probed Wafer and cause Micron to replace at
Micron’s expense or, at the Joint Venture Company’s
option, receive a credit or refund of any monies paid to Micron in
respect of such Probed Wafer, [***]. The basis for such refund or
credit shall be [***]. TH
|
