*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY
REQUEST. OMISSIONS ARE DESIGNATED AS [****]. A COMPLETE VERSION OF THIS EXHIBIT
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.3
AMENDMENT NO. 1 TO MAXTOR STANDARD VOLUME PURCHASE AGREEMENT
This Amendment ("Amendment") amends the Maxtor Standard Volume Purchase
Agreement, dated January 1, 2002 ("Agreement"), is effective July 1, 2004
("Effective Date"), and is made by and between Maxtor Corporation, a Delaware
corporation, having a principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇. ("Maxtor"), on behalf of itself and its
subsidiaries, and Agere Systems Inc., a Delaware corporation, having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Agere USA"), Agere Systems Singapore Pte. Ltd. d/b/a Agere Systems Asia
Pacific, a Singapore corporation, having a place of business at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, #▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Agere Singapore") and Agere
Systems Limited, having a place of business at Kingswood, Kings Ride, Ascot,
SL5 8AD,UK ("Agere UK"). Each Agere entity is referred to herein as ("Seller").
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH IS HEREBY ACKNOWLEDGED, AND IN CONSIDERATION OF THE ABOVE PREMISES AND
THE MUTUAL PROMISES CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE TO AMEND THE
AGREEMENT AS FOLLOWS:
1. The second (2nd) Recital on page 1 of the Agreement shall be deleted in
its entirety and replaced with the following:
"Whereas, "Maxtor" shall include Maxtor Peripherals (S) Pte Ltd,
having a place of business at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇;
2. The fourth (4th) Recital on page 1 of the Agreement shall be deleted in
its entirety and replaced with the following:
"Whereas, Maxtor may place orders for Product either on Agere USA,
Agere Singapore or Agere UK;"
3. The eighth (8th) Recital on page 1 of the Agreement shall be deleted in
its entirety and replaced with the following:
"Whereas, this Agreement commences on the Effective Date and
terminates on December 31,2006 ("Termination Date") unless
terminated earlier;"
4. The seventh (7th) sentence (which begins with "Nothing in this
Agreement...") of Section 1.1.1 (Purchase and Supply) shall be deleted in
its entirety and replaced with the following:
"Nothing in this Agreement shall be construed as an obligation for
Maxtor to purchase any Products, except as expressly provided in any
Order (as defined below) issued by Maxtor or as expressly set forth
in a mutually agreed Statement of Work ("SOW'') under the
Development Agreement entered into by Maxtor and Agere and bearing
an effective date of March 18, 2002 (the "Development Agreement")."
Maxtor Confidential
1
5. The second (2nd) sentence of Section 1.1.2 (Specifications) shall be
deleted in its entirety and replaced with the following:
"Specifications for custom integrated circuits or ASIC Products
shall be mutually agreed to in mutually agreed SOWS under the
Development Agreement."
6. Section 1.1.6 (Design and Development Terms for ASIC Product) shall be
deleted in its entirety, and replaced with the following:
"Design and Development Terms for ASIC Product. This Agreement does
not cover the design and development of ASIC Products. From time to
time Maxtor and Agere may enter into an SOW under the Development
Agreement for the purpose of the design and development of ASIC
Products.
7. Clause (i) (commencing with "Maxtor notifies Seller . . .") of the seventh
(7th) sentence of Section 1.2.2 (Product Warranty) shall be deleted and
replaced with the following:
"(i) Maxtor notifies Seller in writing of the claimed Defect within
ninety (90) days after Maxtor knows or reasonably should know of the
claimed Defect;"
8. Section 1.4.1 (Prices) shall be deleted in its entirety and replaced with
the following:
"1.4.1 Prices. The purchase price for Product will be determined in
accordance with price quotations which shall be mutually agreed upon
by Maxtor and Seller from time to time during the term of this
Agreement."
9. The attached document entitled "Pricing 2004" reflects the agreed upon
purchase prices for Products effective as of January 1,2004. These prices
may be changed at any time upon mutual agreement of Maxtor and Seller.
10. Section 2.2 shall be deleted in its entirety and replaced with the
following:
"2.2 Committed Stock. Agere agrees to maintain SOC finished goods
inventory called "Committed Stock" for managing flexibility to
Maxtor demand upsides within SOC lead-time and/or other
circumstances that would cause supply disruption of JIT deliveries
to the Agere hub. During the first fiscal week of the then-current
quarter the parties shall agree on the quantity of "Committed
Stock" by part to be maintained for the subsequent quarter. The
"Committed Stock" will be stored as Agere Consigned Product located
at Maxtor Designated Contractors per Exhibit D. At the beginning of
each quarter, Maxtor Singapore will place a quarterly Purchase
order to include the Committed Stock as agreed by both parties. At
the end of each quarter, Committed Stock not used during the
current quarter will be purchased by Maxtor or, if mutually agreed,
rolled over to the succeeding quarter at the most recent price
established for that quarter pursuant to Section 1.4.1 of this
Agreement. If at any time during the quarter Maxtor and Agere
agree to disposition any or all of the Committed Stock, Agere shall
replenish such Committed Stock to the pre-determined level within
the then available lead-time, with the goal to achieve the current
lead-time as published on the weekly "Maxtor WIP Report".
Maxtor Confidential
2
*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY
REQUEST. OMISSIONS ARE DESIGNATED AS [****]. A COMPLETE VERSION OF THIS EXHIBIT
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
11. The following shall be inserted at the end of section 2.3.2 b. (Flexible
Delivery; Upside capability) of the Agreement:
"Seller shall use its good faith efforts to exceed the Upside
Quantity percentages set forth above."
12. The fifth (5th) sentence (commencing with "The preprinted terms and
conditions . . .") of Section 2.4.2 of the Agreement shall be deleted in
its entirety and replaced with the following:
"The preprinted terms and conditions of purchase orders,
acceptances, confirmations and similar business documents, including
without limitation documents exchanged electronically, shall have no
effect as amendments of, objections to, or modifications of this
Agreement."
13. The following sentence is added at the end of Section 2.13.1 Rescheduling
of Orders:
"Seller shall use its reasonable commercial efforts to accept all
requests for reschedules made by Maxtor in accordance with this
Section."
14. Section 2.8 (Acceptance) is deleted in its entirety and replaced with the
following:
"2.8 Effect of Inspection and/or Payment. Inspection and acceptance
of Product by Maxtor and/or payment therefore shall not affect the
Product warranty or any related remedy.
15. The following shall be deleted from Section 6.1.3 (Termination for
Convenience):
"(ii) under the terms of any ASIC Quotation,"
16. Exhibit A shall be deleted in its entirety.
17. The following shall be added to the "List of Consigned Products" set forth
at the end of Exhibit D to the Agreement:
Device Maxtor Part Number Description
[****] 040112600 [****]
[****] 040111300 [****]
[****] 040108000 [****]
[****] 040119900 [****]
[****] 040111600 [****]
[****] 040116500 [****]
[****] 040116600 [****]
[****] 040117900 [****]
[****] 040118900 [****]
[****] 040117700 [****]
[****] 040118800 [****]
[****] 040110300 [****]
[****] 040113800 [****]
[****] 040115500 [****]
Maxtor Confidential
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THIS AMENDMENT, INCLUDING THE AGREEMENT OF WHICH IT IS A PART, IS A COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES, WHICH SUPERSEDED ALL
PRIOR OR CONCURRENT PROPOSALS AND UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, AND
ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING TO ITS SUBJECT MATTER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE AGREEMENT, IN THE EVENT OF A
CONFLICT BETWEEN THIS AMENDMENT AND THE AGREEMENT, THIS AMENDMENT SHALL PREVAIL.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED AND ARE RATIFIED HEREBY.
In witness whereof, the parties have executed this Amendment as of its Effective
Date.
MAXTOR CORPORATION AGERE SYSTEMS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇
-------------------------------- ---------------------------------
(signature) (signature)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇'▇▇▇▇
----------------------------------- ------------------------------------
(print name) (print name)
V.P. WW Commodity Mgmt. VP, Storage Division
----------------------------------- ------------------------------------
(title) (title)
AGERE SYSTEMS SINGAPORE PTE LTD. AGERE SYSTEMS LIMITED
By: By:
-------------------------------- ---------------------------------
/s/ ▇▇▇▇ ▇▇▇▇▇ /s/ N. Stables
----------------------------------- ------------------------------------
(signature) (signature)
▇▇▇▇ ▇▇▇▇▇ N. Stables
----------------------------------- ------------------------------------
(print name) (print name)
VP & Managing Director Finance Director
----------------------------------- ------------------------------------
(title) (title)
Maxtor Confidential
4