Semiconductor Products Purchase Agreement
This Agreement (this “Agreement”) is made and entered into effective as of the ____ day of
_____, 20__, by and between __________________ (“Manufacturer”) and
_____________________________ (“Buyer”).
RECITALS
A. Manufacturer desires to sell to Buyer, and Buyer desires to purchase from Manufacturer,
certain semiconductor products (“Components”), subject to the terms and conditions of this
Agreement.
NOW THEREFORE, in consideration of the mutual promises contained herein, it is hereby
agreed as follows:
1. Scope. This Agreement shall apply to sales of Components by Manufacturer to Buyer.
“Components” refers only to hardware, chips and chipsets. Software, reference designs,
developer’s kits, and documentation, if any, have been separately licensed for Buyer’s use in
integrating the Components as part of products developed by or for Buyer (“Licensee Products”).
1.1 Customizations. Buyer may request that certain customizations, such as the inclusion
of certain macros, be made to the Components, which Manufacturer may choose to implement,
subject to the following:
1.1.1 Process. If Buyer wishes Manufacturer to implement the customizations, Buyer and
Manufacturer shall in good faith prepare and execute a schedule, referencing this Agreement and
providing details on product pricing, non-recurring fees, customizations, and delivery schedule,
at a minimum.
1.1.2 Conditions. Manufacturer may unilaterally reject any request for customization on
commercially reasonable grounds, including but not limited to: the customizations do not fit into
the architectural design and physical limits of the applicable Component; or Buyer’s current
and/or projected purchases of the subject Component are insufficient to justify the request for
customizations; or Manufacturer has slated the subject Component to become a Legacy Product
(as defined in Section 2.2) within such proximity of the request for customization as to render
customization not commercially reasonable.
1.2 Continuity of Supply. Manufacturer agrees to use commercially reasonable efforts to
ship and deliver Components and customizations thereto (for orders accepted pursuant to
Section 1.1 and Section 2, respectively) based on commercially reasonable lead times, from
order to shipment, and to manage a die bank in support thereof.
2. Orders
2.1 Orders and Acceptance. Buyer, directly or via ODMs, assemblers and other third
parties acting on Buyer’s behalf (all of which comprise “Authorized Purchasers”), may procure
Components from Seller pursuant to orders issued to and accepted by Manufacturer.
Components purchased by ODMs, assemblers and other third parties for the benefit of Buyer
shall, once purchased, be deemed Components under this Agreement. Buyer will have no
obligation to purchase Components from Manufacturer, and Manufacturer will have no
obligation to sell Components to Buyer, except pursuant to orders accepted by Manufacturer. To
be accepted by Manufacturer, an order must set forth the type and quantity of the Components to
be purchased, the price, and the requested delivery dates, and may not otherwise be in
nonconformance with the terms of this Agreement. Orders shall be subject to written acceptance
by Manufacturer; any such acceptance may not be in nonconformance with the terms of this
Agreement, and delivery schedules shall be established in accordance with Component
availability and Buyer’s credit status.
2.2 Rescheduling and Cancellation. Manufacturer will promptly notify Buyer if any order
or part of an order cannot be filled or if there will be any delays in delivery. Manufacturer will
use commercially reasonable efforts to ship and deliver on indicated dates but will not be liable
for failure to do so. Alternatively, should Manufacturer find that the delivery date agreed on
cannot be met, Manufacturer shall notify Buyer in writing, stating the cause of the delay and an
estimated delivery date. Except with respect to Legacy Products (as defined in Section 2.3
below): For standard Components, Buyer may reschedule orders accepted by Manufacturer and
scheduled for delivery, subject to the following limitations:
Days until Manufacturer scheduled shipment of
an order Limits on order reschedules and cancellations
61 — 90 Rescheduling for a period of up to ___ days
later than the original scheduled ship date.
Two reschedules per order only. Rescheduled
orders may not be subsequently cancelled;
OR Cancellation of up to __% of original
order.
60 or less No cancellations or reschedules.
For Components having any customization, Buyer may reschedule orders accepted by
Manufacturer and scheduled for delivery, subject to the following limitations:
Days until Manufacturer scheduled shipment of
an order Limits on order reschedules and cancellations
31-90 No cancellations. Rescheduling for a period
of up to __ days later than the original
scheduled ship date. One reschedule per
order only.
30 or less No cancellations or reschedules.
2.3 For Legacy Products. This Section 2.3 applies to Legacy Products only and, with
respect to Legacy Products, supersedes any contrary provisions of this Agreement. Legacy
Products are defined as any Manufacturer products in their last stage of product life cycle, as
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designated by Manufacturer in its sole discretion. Legacy Products shall be designated by
Manufacturer in its discretion and shall be identified as such by Manufacturer to Buyer from
time to time in writing. Lead-times for Legacy Products are 12-14 weeks after receipt of order
and terms are non-cancellable and non-changeable). Additional fees and costs associated with
expedite requests will be added and passed to Buyer.
2.4 Precedence. This Agreement takes precedence over Buyer’s or Seller’s additional or
different terms and conditions which may be included on Buyer’s purchase order, Seller’s
quotation or purchase order acknowledgement, or otherwise, to which notice of objection is
hereby given, and any inconsistent or additional terms in such forms will be of no effect. Any
changes to this Agreement must be specifically agreed to in writing by Manufacturer and Buyer.
2.5 Obsolescence. If Manufacturer chooses to obsolete any Components, it shall give at
least six (6) months advance notice to Buyer. Buyer may place orders during the notification
period for shipment no later than twelve (12) months after the notice date.
3. Delivery; Title
3.1 Delivery. Components will be delivered Ex Works (Incoterms 2000), Manufacturer’
designated factory dock or distribution center dock. Buyer will pay all costs relating to
transportation, delivery, duties and insurance. Buyer will provide Manufacturer with shipping
instructions on its order and if it fails to do so, Manufacturer will determine the carrier and
means of transportation and will ship the Components freight collect. Buyer shall notify
Manufacturer in writing of any shortage in any shipment within thirty (30) days after Buyer’s
receipt of such shipment. All shipments shall be directed to a Buyer operated receiving location.
3.2 Risk of Loss. Risk of loss for the Components shall pass from Manufacturer to Buyer
at the Manufacturer shipping point, and Buyer will bear the risk of loss after the shipping point
and will be solely responsible for filing claims relating to any lost or damaged goods.
3.3 Title. For Components Delivered Outside of United States: Title to the Components
shall pass to Buyer as follows: Manufacturer reserves title in the Components until paid for in
full by Buyer, for the purpose of protecting Manufacturer’ right to receive payment under the
laws of various countries. This reservation of title does not affect Buyer’s ability to transfer title
to the Components in the ordinary course of its business, provided that Buyer hereby assigns in
advance to Manufacturer any proceeds from the disposition of such Components to the extent of
the amount owed to Manufacturer.
For Components Delivered within the United States. Title to the Components
shall pa