[ * ] - Certain information omitted and filed separately with the Commission
pursuant to a confidential treatment request under Commission Rule 24b-2.
PURCHASE AGREEMENT
between
CREE, INC.
Durham, North Carolina, USA
("Seller")
and
OSRAM OPTO SEMICONDUCTORS GMBH & CO. OHG
Regensburg
Federal Republic of Germany
("Purchaser")
Dated July 27, 2000
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement"), made and effective as of the 24th day of
July, 2000 (the "Effective Date"), by and between CREE, INC. (hereinafter
referred to as "Seller"), a corporation organized under the laws of the State of
North Carolina, the United States of America, and OSRAM OPTO SEMICONDUCTORS GMBH
& CO. OHG (hereinafter referred to as "Purchaser"), a joint venture organized
under the laws of the Federal Republic of Germany.
Recitals
WHEREAS, Seller is engaged in the business, among others, of manufacturing and
selling LED's in die form and silicon carbide (SiC) wafers; and
WHEREAS, Purchaser is engaged in the business, among others, of manufacturing
LED's packaged in lamp form and desires to purchase a quantity of LED die
products and SiC wafers from Seller; and
WHEREAS, the parties have agreed on the terms and conditions under which Seller
will sell such LED's and wafers to Purchaser and desire to memorialize such
terms in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the mutual obligations
undertaken in this Agreement, the parties agree as follows:
1. CONTRACT DOCUMENTS; DEFINITIONS
1.1. Documents.
The following documents are annexed to and made a part of this
Agreement:
(a) Schedule 1 - Quantity and Shipment Schedule (with
Attachment A thereto)
(b) Schedule 2 - Price and Payment Schedule
(c) Schedule 3 - Product Specifications
1.2. Definitions.
For purposes of this Agreement, the terms defined in this Section
1.2 shall have the meaning specified and such definitions shall
apply to both singular and plural forms:
(a) "Affiliates" of a designated corporation, company or other
entity means all entities which control, are controlled by,
or are under common control with the named entity, whether
directly or through one or more intermediaries. For
purposes of this definition "controlled" and "control" mean
ownership of securities representing more than fifty
percent (50%) of the voting capital stock or other interest
having voting rights with respect to the election of the
board of directors or similar governing authority.
(b) "Confidential Information" shall have the meaning defined
in Section 11.1.
(c) "Product Specifications" means the specifications set forth
or referenced in Schedule 3, as the same may be amended
from time to time by mutual written
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July 27, 2000 Purchase Agreement Page 1
agreement of the parties or pursuant to the terms and
conditions set forth in such schedule.
(d) "Products" mean LED chips and silicon carbide substrates
which conform to the applicable Product Specifications.
Products supplied under this Agreement will be "GaN LEDs,"
"InGaN LEDs" and "SiC Wafers" as described in Schedule 3.
2. PURCHASE AND SALE
2.1. Purchase Commitment.
(a) Purchaser will purchase from Seller and Seller will sell to
Purchaser the quantity of Products shown in Schedule 1,
subject to and in accordance with the terms and conditions
of this Agreement.
(b) Purchaser shall be entitled to cancel or otherwise reduce
its purchase commitment under this Agreement, or to
reschedule shipments of Products under this Agreement, only
to the extent expressly permitted by Schedule 1.
2.2. Price.
(a) The purchase price of the Products is set forth in Schedule
2.
(b) The prices stated in this Agreement do not include
transportation or insurance costs, or any sales, use,
excise or other taxes, duties, fees or assessments imposed
by any jurisdiction.
(c) All applicable taxes, duties, fees or assessments imposed
by any jurisdiction with respect to the purchase of the
Products (other than taxes on Seller's net income) will be
paid by Purchaser. Any taxes, duties, fees or assessments
at any time paid by Seller which are to be paid by
Purchaser under this Agreement shall be invoiced to
Purchaser and reimbursed to Seller.
2.3. Payment Terms.
(a) Purchaser will pay for Products to be purchased under this
Agreement in accordance with the payment terms in Schedule
2.
(b) Payment will be made in U.S. dollars by wire transfer to an
account designated in writing by Seller, without reduction
for any currency exchange or other charges.
(c) Seller will provide Purchaser an invoice and/or shipping
documentation for each shipment showing the quantity
shipped, the applicable price, any amounts prepaid by
Purchaser for the shipment, and any taxes, duties, fees or
other assessments due from Purchaser with respect to the
shipment.
(d) Amounts not paid when due under this Agreement shall accrue
interest at the rate of twelve percent (12%) per annum or,
if less, the maximum rate permitted by law.
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July 27, 2000 Purchase Agreement Page 2
3. DELIVERY
3.1. Purchase Orders; Forecasts.
(a) Purchaser will submit written purchase orders evidencing
its commitment to purchase Products prior to each scheduled
shipment date set forth in Schedule 1. Purchase orders will
specify the particular quantity of each Product type to be
shipped. Purchase orders must be received at least sixty
(60) days prior to the monthly period in which shipment is
scheduled according to Schedule 1.
(b) Purchase orders may be submitted by Purchaser or by its
Affiliates acting on Purchaser's behalf and in its name. If
Purchaser requests delivery of shipments to a location
other than Regensburg, Germany, the personnel at such
location shall be regarded as authorized to act on
Purchaser's behalf with respect to scheduling and
acceptance of shipments and other matters relating thereto.
(c) The terms and conditions of this Agreement shall govern the
purchase of Products under this Agreement notwithstanding
any contrary provisions of any purchase order, order
acknowledgment or other similar document issued by either
party. Purchase orders issued under this Agreement are
intended as an administrative convenience and, in the case
of InGaN LEDs, to specify the selection of such Products,
but the obligation to purchase Products under this
Agreement is not conditioned upon issuance of a purchase
order.
(d) Together with each purchase order, Purchaser shall furnish
Seller a nonbinding forecast of the mix of Products
expected to be to ordered for delivery during the three
months following the period covered by the purchase order.
(e) Seller will, within ten (10) days after receipt of a
purchase order submitted in accordance with the foregoing,
issue a written order acknowledgment advising Purchaser of
the scheduled shipment date(s) for the quantities ordered.
3.2. Shipment Schedule.
(a) Seller will use all commercially reasonable efforts to ship
Products in accordance with the shipment schedule set forth
in Schedule 1. Seller reserves the right to ship quantities
prior to the scheduled dates; provided, however, that no
shipment shall be made such that Purchaser receives the
shipment earlier than the calendar month immediately
preceding the month such quantity was originally scheduled
to be shipped.
(b) Seller shall be deemed in default due to a delay in meeting
the shipment schedule set forth in Schedule 1 only if,
immediately after the last day of any calendar month
specified therein, the cumulative quantity actually shipped
by Seller is less than eighty-five percent (85%) of the
cumulative quantity due to have been shipped.
(c) In the event of a default by Seller as provided in Section
3.2((b)), Purchaser shall be entitled to liquidated damages
of one percent (1%) per week of the purchase price of the
delayed Products, subject to a maximum of ten percent (10%)
of such purchase price. If Product shipments are delayed
six weeks or more due to circumstances within Seller's
reasonable control, then in lieu of the foregoing
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July 27, 2000 Purchase Agreement Page 4
liquidated damages Purchaser may claim damages actually
resulting from the delay up to forty percent (40%) of the
purchase price of the delayed Products. This paragraph
states Purchaser's sole claim for damages resulting from
Seller's delay in delivering Products.
3.3. Packaging.
Seller will ship Products in Seller's standard packaging or
packaged in such other manner as the parties may mutually agree in
writing.
3.4. Manner of Shipment.
Unless otherwise mutually agreed Products shall be shipped F.C.A.
Seller's manufacturing facilities by delivery to a transportation
company designated by Purchaser. Products shall be deemed
delivered to Purchaser when delivered to the transportation
company at the shipping point. Title and risk of loss or damage
shall pass to Purchaser upon delivery. All transportation charges
and expenses, including the cost of insurance against loss or
damage in transit, shall be Purchaser's sole responsibility. Any
such amounts paid by Seller will be invoiced to and paid by
Purchaser.
4. NON-CONFORMING SHIPMENTS
4.1. Reporting of Claims.
Except for warranty claims under Article 6, in the event any
shipment does not conform to the ordered amount and type of
Product or suffers other faults or defects clearly discernible
upon reasonable inspection, such non-conformity will be reported
in writing to Seller as soon as possible and in any event no later
than forty-five (45) days after shipment of the Product to
Purchaser. All other non-conformities in shipments shall be
reported in writing to Seller promptly upon discovery. If not so
reported, the non-conformity shall be deemed waived.
4.2. Remedies for Non-Conforming Shipments.
Seller's sole obligation with respect to shipments determined to
be non-conforming shall be, at its option, to replace the
non-conforming Products (with shipment at Seller's expense) or to
issue a credit to Purchaser in the amount of the price paid for
such Products with interest calculated at the rate of twelve
percent (12%) per annum from the date of payment to the date of
credit. This paragraph states Seller's sole obligations with
respect to non-conforming shipments. After acceptance of any
shipment Purchaser's sole remedies for defects in such shipment
shall be as provided in the warranty provisions of this Agreement.
4.3. Compliance with Instructions.
In addition to such other duties as may be imposed by law,
Purchaser will comply with all of Seller's reasonable instructions
regarding rejected goods. If Purchaser incurs any expenses in
complying with such instructions, Seller shall reimburse Purchaser
for such expenses promptly upon receipt of Purchaser's written
request therefor.
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July 27, 2000 Purchase Agreement Page 4
5. TECHNICAL COOPERATION
Seller and Purchaser agree to have their representatives meet in person
from time to time, at mutually agreed upon times and locations but not
more frequently than once each calendar quarter,
X to discuss potential improvements in and the markets for the InGaN LEDs.
6. WARRANTIES
6.1. Limited Warranty.
(a) Seller warrants to Purchaser that Products purchased from
Seller under this Agreement will conform to and perform in
accordance with the applicable Product Specifications.
(b) This warranty is extended only to Purchaser and does not
constitute a warranty to Purchaser's customers or any other
person. This warranty shall not apply to any defect or
failure to perform resulting in whole or in part from
improper use, application, installation or operation, and
Seller shall have no liability of any kind for failure of
any equipment or other items in which the Products are
incorporated.
(c) All claims under this warranty must be reported in writing
to Seller (with such report accompanied by the Product
claimed to be defective, including the die "package" in the
case of Products sold in die form) as soon as possible, but
in any event no later than ***** days after shipment of the
Products to Purchaser. If not so reported, such claims
shall be waived.
(d) Seller's sole obligation with respect to Products
determined not to meet the terms of this warranty shall be,
at its option, to replace such Products or to issue a
credit or refund to Purchaser in the amount of the price
received by Seller for the Products. This paragraph states
the exclusive remedy against Seller with respect to breach
of the warranty given herein or other alleged defects in
the Products.
6.2. Warranty Disclaimer.
THE WARRANTY IN SECTION 6.1 ABOVE IS GIVEN IN LIEU OF ALL OTHER
WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR
IMPOSED BY STATUTE OR OTHERWISE. ALL IMPLIED WARRANTIES OF FITNESS
FOR A PARTICULAR PURPOSE AND MERCHANTABILITY ARE EXPRESSLY
DISCLAIMED BY SELLER.
7. INDEMNIFICATION
7.1. By Seller.
(a) Seller at its expense will defend any claim or judicial
action brought against Purchaser by a third party, and
indemnify Purchaser against any liability for infringement
damages finally awarded in any such action, insofar as the
same is based on a claim that Products purchased under this
Agreement infringe any patent of such third party.
(b) If any Products are held to be infringing and their use or
sale enjoined, or if in the opinion of Seller any Products
are likely to become the subject of such a claim of
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July 27, 2000 Purchase Agreement Page 5
infringement, Seller may, in its sole discretion and at its
own expense, procure a license which will protect Purchaser
against such claim without cost to Purchaser, replace
Seller's inventory of Products with non-infringing
Products, or require return of Products in Seller's
inventory and refund the price paid by Purchaser for such
Products.
(c) Seller shall have no obligation hereunder for or with
respect to claims, actions or demands alleging infringement
that arise by reason of combination of noninfringing items
with any items not supplied by Seller.
(d) This Section 7.1 states the entire liability of Seller with
respect to any claim of infringement.
7.2. Conditions of Indemnification.
Seller's obligations under the foregoing indemnity are subject to
the condition that the Purchaser give the Seller: (1) prompt
written notice of any claim or action for which indemnity is
sought; (2) complete control of the defense and settlement thereof
by Seller; and (3) cooperation of the Purchaser in such defense.
The obligations under the foregoing indemnity are also subject to
the condition that the Purchaser not enter into any compromise or
settlement or make any admission of liability without the prior
written consent of the Seller.
8. LIMITATIONS OF LIABILITY
Except as provided in article 7, neither Seller nor Purchaser will have
any liability to the other for any consequential, incidental, indirect or
special damages arising out of or in connection with this agreement or
the use or performance of any Products, even if advised of the
possibility of such damages. This limitation applies regardless of
whether such claim is based on tort, contract, warranty, negligence,
strict liability or any other theory. This limitation shall not apply to
the extent liability is mandatory by law, as for example in cases of
intent or gross negligence, and cannot be lawfully disclaimed.
Additionally this limitation shall not apply to the extent Seller has a
valid, enforceable and collectable claim against Seller's (Product)
Liability Insurer to recover such damages under its product liability
insurance coverage and is otherwise liable under the laws mentioned in
Article 13.11. Nothing herein shall be construed to impose any obligation
on Seller with respect to such insurance.
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July 27, 2000 Purchase Agreement Page 6
9. FORCE MAJEURE
Seller shall not be in default or liable for any delay or failure in
performance of this Agreement due to strike, lockout, riot, war, fire,
act of God, accident, delays caused by Purchaser or compliance with any
law, regulation, order or direction, whether valid or invalid, of any
governmental authority or instrumentality thereof or due to any causes
beyond its reasonable control, whether similar or dissimilar to the
foregoing and whether or not foreseen. Seller shall use all commercially
reasonable efforts to avoid or remove such causes of non-performance or
to limit the impact of the event on Seller's performance and shall
continue performance with the utmost dispatch whenever such causes are
removed.
10. TERMINATION
10.1. Termination upon Default or Insolvency.
Either party may terminate this Agreement by giving written notice
of termination to the other:
(a) if the other party commits a material breach of its
obligations under this Agreement and does not cure such
breach within thirty (30) after receipt of written notice
of the breach from the non-breaching party; or
(b) if the other party becomes insolvent, or any voluntary or
involuntary petition for bankruptcy or for reorganization
is filed by or against the other party, or a receiver is
appointed with respect to all or any substantial portion of
the assets of the other party, or a liquidation proceeding
is commenced by or against the other party; provided that,
in the case of any involuntary petition or proceeding filed
or commenced against a party, the same is not dismissed
within sixty (60) days.
10.2. Effect of Termination.
Nothing in this Article 10 shall affect, be construed or operate
as a waiver of any right of the party aggrieved by any breach of
this Agreement to recover any loss or damage incurred as a result
of such breach, either before or after the termination hereof,
subject, however, to the limitations expressly set forth in other
Articles of this Agreement.
11. CONFIDENTIAL INFORMATION
11.1. Definition.
"Confidential Information" means any information received by one
party or its Affiliates (the "receiving party") from the other
party or its Affiliates (the "disclosing party") which relates to
the subject matter of this Agreement and which the receiving party
has been informed or has a reasonable basis to believe is
confidential to the disclosing party, unless such information: (1)
was known to the receiving party prior to receipt from the
disclosing party; (2) was lawfully available to the public prior
to receipt from the disclosing party; (3) becomes lawfully
available to the public after receipt from the disclosing party,
through no act or omission on the part of the receiving party; (4)
corresponds in substance to any information received in good faith
by the receiving party from any third party without restriction as
to confidentiality; or (5) is independently developed by an
employee or agent of the receiving party who has not received or
had access to such information.
11.2. Identification.
Information which the disclosing party wishes to have treated as
Confidential Information under this Agreement shall be identified
at the time of disclosure as "confidential" by marking, or in the
case of oral disclosures, shall be confirmed as such in writing
within thirty (30) days following the oral disclosure.
11.3. Confidentiality Obligations.
(a) Each party agrees to maintain Confidential Information
received from the other in
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July 27, 2000 Purchase Agreement Page 7
confidence and neither use for any unauthorized purpose nor
disclose such Confidential Information, without the prior
written approval of the disclosing party, except for such
disclosures as are required to comply with any order of a
court or any applicable rule, regulation or law of any
jurisdiction or as provided in Section 11.4. Confidential
Information may be used only in the performance of this
Agreement and for such other purposes as the disclosing
party may authorize in writing.
(b) In the event that a receiving party is required by judicial
or administrative process to disclose Confidential
Information of the disclosing party, it shall promptly
notify the disclosing party and allow the disclosing party
a reasonable time to oppose such process.
(c) Within each party and their respective Affiliates,
Confidential Information shall be disclosed only on a
need-to-know basis. Each party shall protect Confidential
Information of the other by using the same degree of care,
but not less than a reasonable degree of care, to prevent
unauthorized disclosure or use as that party uses to
protect its own confidential information of like nature.
(d) The foregoing obligations shall remain in force with
respect to each item of Confidential Information for five
(5) years following the date such information is first
disclosed under this Agreement, notwithstanding any earlier
termination of this Agreement.
(e) Each party represents and warrants to the other that its
employees, agents or consultants having access to any
Confidential Information of the other party shall be
subject to a valid, binding and enforceable agreement to
maintain such Confidential Information in confidence.
(f) Each party agrees upon request of the other party to return
all Confidential Information received from the other party
under this Agreement.
11.4. Terms of Agreement.
Purchaser and Seller agree that the terms of this Agreement shall
be treated as Confidential Information of each other subject to
this Article 11; provided, however, that either party may, upon
notice to the other, make such public disclosures regarding this
Agreement as in the opinion of counsel for such party are required
by applicable securities laws or regulations.
12. ADDITIONAL UNDERTAKINGS
12.1. Use of Trademarks, Etc.
Neither party will, without the prior written consent of the
other, (a) use in advertising, publicity or otherwise in
connection with any Products sold under this Agreement, any trade
name, trademark, trade device, service ▇▇▇▇, or symbol owned by
the other party or its Affiliates; or (b) represent, either
directly or indirectly, that any product of such party or its
Affiliates is a product manufactured by the other party or its
Affiliates, or vice versa.
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July 27, 2000 Purchase Agreement Page 8
12.2. Use of SiC Wafers.
Purchaser agrees that it will not, without Seller's prior written
consent, use SiC Wafers supplied under this Agreement in the bulk
growth of silicon carbide or in the development of processes for
bulk growth of silicon carbide, nor sell or otherwise transfer or
make available any SiC Wafers to any other person or entity,
including Purchaser's Affiliates, except as provided below.
Purchaser may transfer SiC Wafers supplied under this Agreement to
its Affiliates that are not engaged in the bulk growth of silicon
carbide or in the development of processes for bulk growth of
silicon carbide provided the Affiliate agrees to be bound by the
restrictions stated in this paragraph. Purchaser will be
responsible for any breach of the restrictions by its Affiliate.
12.3. Resale of Products.
Purchaser agrees that it will not, without Seller's prior written
consent, sell or otherwise transfer or make available LED Products
supplied under this Agreement to any other person or entity,
including Purchaser's Affiliates, in the form of LED die or in any
form other than lamp or other packaged form, except as provided
below or permitted with respect to the sale of LED die for
chip-on-board solutions by the Development, License and Supply
Agreement between the Seller and Siemens AG dated October 25, 1995
(which agreement was assigned to and assumed by Purchaser pursuant
to the Transformation Agreement between Siemens AG, Seller and
Purchaser effective January 1, 1999). Purchaser may transfer such
LED Products to its Affiliates in die form for packaging provided
the Affiliate agrees to be bound by the restrictions stated in
this paragraph. Purchaser will be responsible for any breach of
the restrictions by its Affiliate. If Purchaser's inventories of
LED Products supplied under this Agreement exceed its demand for
packaged LEDs, or if due to technical reasons Purchaser is unable
to supply packaged LEDs in a form that meets a particular
customer's requirements, then at Purchaser's request Seller will
in good faith discuss with Purchaser the possibility of giving its
consent to the resale of LED Products in die form in that
circumstance.
13. GENERAL
13.1. Notices.
All notices under this Agreement shall be in writing and sent by
prepaid airmail post, by reputable courier service, or by
facsimile or electronic message (with a confirmation copy
concurrently dispatched by prepaid airmail post or courier
service), to the addresses of the respective parties as set forth
by their signatures below or to such other address as the party
may hereafter specify by written notice so given. Notices shall be
effective upon receipt at the location of the specified address.
13.2. Authority; No Conflicting Obligations.
Each party warrants that its has all requisite power and authority
to enter into and perform this Agreement, and that it has no
agreement with any third party or commitments or obligations which
conflict in any way with its obligations hereunder.
13.3. Relationship of the Parties.
The relationship of Purchaser and Seller under this Agreement is
intended to be that of independent contractors. Nothing herein
shall be construed to create any partnership, joint
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July 27, 2000 Purchase Agreement Page 9
venture or agency relationship of any kind. Neither party has any
authority under this Agreement to assume or create any obligations
on behalf of or in the name of the other party or to bind the
other party to any contract, agreement or undertaking with any
third party.
13.4. Assignment.
Except as expressly provided for in this Agreement, neither this
Agreement nor any right or obligations hereunder shall be
assignable by either party without the prior written consent of
the other party and any purported assignment without such consent
shall be void. Either party may assign this Agreement without such
consent in connection with the sale or transfer of all or
substantially all of the assets of the assigning party. Any
permitted assignee shall assume all obligations of its assignor
under this Agreement. No assignment shall relieve any party of
responsibility for the performance of its obligations hereunder.
13.5. Dispute Resolution.
Any disputes or claims arising from this Agreement or its breach
shall be submitted to and resolved exclusively by arbitration
conducted in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce. The
arbitration shall be conducted by three (3) arbitrators appointed
in accordance with such rules. The place of arbitration shall be
in Geneva, Switzerland. An award rendered in the arbitration shall
be final and binding upon the parties and judgment may be entered
thereon in any court of competent jurisdiction.
13.6. Severability.
If any provision of this Agreement is found invalid or
unenforceable, the remaining provisions will be given effect as if
the invalid or unenforceable provision were not a part of this
Agreement.
13.7. Amendments; Waiver.
This Agreement may not be amended except in a writing signed by
the authorized representatives of both parties. No waiver of any
provision of this Agreement shall be effective unless made in
writing and signed by the party sought to be charged therewith.
The failure of either party to enforce any provision of this
Agreement shall not constitute or be construed as a waiver of such
provision or of the right to enforce it at a later time.
13.8. No Implied License.
Nothing in this Agreement shall be construed to convey any license
under any patent, copyright, trademark or other proprietary rights
owned or controlled by either party, whether relating to the
Products sold or any other matter.
13.9. Export Regulation.
Purchaser shall comply in all respects with all laws and
regulations of the United States government or any agency thereof
pertaining to exports.
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July 27, 2000 Purchase Agreement Page 10
13.10. Enforcement Costs.
The prevailing party in any arbitration or judicial action brought
to enforce the provisions of this Agreement shall be entitled to
recover its costs and expenses, including reasonable attorneys'
fees, incurred in filing and prosecuting or defending such action.
13.11. Governing Law.
This Agreement shall be governed by and construed in accordance
with the internal laws of Switzerland, without regard to conflicts
of laws principles.
13.12. Construction.
The captions contained in this Agreement are for reference only
and shall not be used in its construction or interpretation. The
provisions of this Agreement shall be construed and interpreted
fairly to both parties without regard to which party drafted the
same.
13.13. United Nations Convention.
The United Nations Convention on Contracts for the International
Sale of Goods shall not apply to this Agreement.
13.14. Entire Agreement.
This Agreement sets forth the entire agreement between the parties
with respect to the subject matter hereof and supersedes all
previous agreements and understandings between the parties,
whether oral or written, relating to such subject matter.
* * * * *
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July 27, 2000 Purchase Agreement Page 11
IN WITNESS WHEREOF, the parties, through their respective duly authorized
officers, have executed this Agreement to be effective as of the Effective Date
set out in the preamble hereto.
CREE, INC. OSRAM OPTO SEMICONDUCTORS GMBH & CO.
By By
-------------------------------- --------------------------------
F. ▇▇▇▇ ▇▇▇▇▇▇, Chairman & CEO ▇. ▇▇▇▇▇▇▇, President & CEO
Date Date
-------------------------------- --------------------------------
By
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CFO
Date --------------------------------
Address for Notices Address for Notices
Cree, Inc. OSRAM Opto Semiconductors GmbH & Co.OHG
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇. ▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 93049 Regensburg
USA Germany
Attention: President Attention: President
Fax No: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ Fax No: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
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July 27, 2000 Purchase Agreement Page 12
SCHEDULE 1
Quantity and Shipment Schedule
A. Quantity Commitment.
1. During the period commencing October 1, 2000 and ending September
23, 2001, Purchaser will purchase from Seller the quantities of
each Product type shown below:
GaN LEDs *****
InGaN LEDs - Standard size *****
InGaN LEDs - Small size *****
InGaN LEDs - Aton technology *****
SiC Wafers ***** (50 mm dia.)
2. The InGaN LED - Aton technology part referenced above has not been
developed by Seller nor qualified by Purchaser. Purchaser's
obligation to buy and Seller's obligation to sell such Product
under this Agreement are subject to the condition that the parties
mutually agree in writing on specifications for the Product. The
parties shall cooperate diligently and in good faith with the goal
of Seller developing the Product, Purchaser qualifying the Product
and the parties reaching mutual agreement on specifications for
the Product such that shipments of the Product may commence under
this Agreement beginning October 1, 2000. Seller will endeavor to
deliver engineering samples and preliminary specifications by
August 31, 2000. Failure of the parties to agree on specifications
for such Product shall not give either party the right to
terminate this Agreement.
B. Shipment Schedule.
1. The shipment schedule is as follows:
------------------------------------------------------------------
Quarterly (13-Week) Period Ending
-------------------------------------
Product 12/24/00 3/25/01 6/24/01 9/23/01
==================================================================
GaN LEDs ***** ***** ***** *****
InGaN LEDs - Standard size ***** ***** ***** *****
InGaN LEDs - Small size ***** ***** ***** *****
InGaN LEDs - Aton technology ***** ***** ***** *****
SiC Wafers ***** ***** ***** *****
------------------------------------------------------------------
2. Subject to the provisions of this Agreement, unless otherwise
mutually agreed the quarterly amounts shown above will be shipped
in three shipments on the last day of the fourth, eighth and final
week of each quarterly period. The mix of Products for each
shipment shall be in accordance with Attachment A to this Schedule
1 except that Purchaser may, by written notice to Seller given not
less than ninety (90) days prior to the scheduled shipment date,
specify a different mix of InGaN LEDs, provided that: (a) the
aggregate purchase price for all InGaN LEDs to be shipped in each
quarterly period is not less than the aggregate for such quarter
under Attachment A; and (b) Seller has manufacturing capacity
available to produce the requested mix. Seller will advise
Purchaser in writing, within fifteen (15) days after receipt of
Purchaser's notice specifying a different mix, whether Seller has
manufacturing capacity available to produce the
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July 27, 2000 Purchase Agreement Page 13
requested mix. Seller will use its best commercially reasonable
efforts to supply the requested mix.
C. Rescheduling.
1. Purchaser may without charge reschedule shipments of quantities of
GaN LEDs under the following terms:
(a) for quantities scheduled to be shipped more than
twenty-four (24) weeks following Seller's receipt of
written notice from Purchaser requesting rescheduling,
Purchaser may reschedule up to thirty percent (30%) of such
quantity for up to ninety (90) days after the originally
scheduled shipment date but not later than December 23,
2001; and
(b) for quantities scheduled to be shipped more than twelve
(12) weeks but within twenty-four (24) weeks following
Seller's receipt of written notice from Purchaser
requesting rescheduling, Purchaser may reschedule up to ten
percent (10%) of such quantity for up to ninety (90) days
after the originally scheduled shipment date but not later
than December 23, 2001.
2. Purchaser may without charge reschedule shipments of quantities of
InGaN GaN LEDs under the following terms:
(a) for quantities scheduled to be shipped more than
twenty-four (24) weeks following Seller's receipt of
written notice from Purchaser requesting rescheduling,
Purchaser may reschedule up to twenty-five percent (25%) of
such quantity for up to ninety (90) days after the
originally scheduled shipment date but not later than
December 23, 2001; and
(b) for quantities scheduled to be shipped more than twelve
(12) weeks but within twenty-four (24) weeks following
Seller's receipt of written notice from Purchaser
requesting rescheduling, Purchaser may reschedule up to ten
percent (10%) of such quantity for up to ninety (90) days
after the originally scheduled shipment date but not later
than December 23, 2001.
3. In all other cases Purchaser may reschedule shipments only with
Seller's mutual written agreement.
4. Purchaser's notice requesting rescheduling must specify the
quantity to be deferred and the date on which shipment is to be
made. Subject to the foregoing, a shipment may be rescheduled any
number of times under this Paragraph (C).
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July 27, 2000 Purchase Agreement Page 14
SCHEDULE 1 - ATTACHMENT A CONFIDENTIAL TREATEMENT
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July 27, 2000 Purchase Agreement Page 15
SCHEDULE 2
Price and Payment Schedule
A. Prices. Prices shall be determined as follows, subject to Paragraph (B)
of this Schedule 2:
1. GaN LEDs (Part No. *****)
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
0 to ***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
2. InGaN LEDs - Standard size
(a) Blue: Part Nos. ***** and *****
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
(b) Green: Part Nos. ***** and *****
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
3. InGaN LEDs - Small size
(a) Blue: Part No. *****
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
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July 27, 2000 Purchase Agreement Page 16
(b) Green: Part No. ****** *
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
*Specifications for the ***** part shall be mutually agreed upon
in writing by the parties.
4. InGaN LEDs - Aton technology*
(a) Blue (part no. to be determined)
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
(b) Green (part no. to be determined)
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
*Specification for the Aton technology parts shall be mutually
agreed upon in writing by the parties.
5. SiC Wafers
------------------------------------- ------------------------
Incremental Quantities Unit Price (US$)
===================================== ========================
***** *****
***** to ***** *****
***** to ***** *****
***** and greater *****
------------------------------------- ------------------------
The parties acknowledge that the reduction in per unit prices reflects
Seller's expectation that it will improve manufacturing yields and reduce
per unit cost.
B. Exchange Rate Adjustments.
Purchaser and Seller will share the risk of currency exchange rate
fluctuations, as provided in this paragraph, for units shipped pursuant
to Schedule 1. The unit price for such shipments shall be adjusted by the
applicable percentage below according to the value of the "Euro-Dollar
Exchange Rate" calculated as of the last day of Seller's fiscal month in
which the units were shipped.
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July 27, 2000 Purchase Agreement Page 17
(Seller's fiscal months are the periods ending on Sunday of the fourth,
eighth and final week of each of Seller's fiscal quarters. Seller's
fiscal quarters in which shipments are scheduled under this Agreement are
the 13-week periods ending on the dates shown in Paragraph (B)(2) of
Schedule 1.) For purposes of this paragraph, the "Euro-Dollar Exchange
Rate" means the average of the foreign exchange rates for Euros per U.S.
Dollar, as published in the Wall Street Journal during the thirty (30)
calendar days preceding the date as of which the calculation is to be
made, for rates quoted in New York the preceding business day for trading
among banks in amounts of $1 million or more.
-------------------------------------------------------------------------
Euro-Dollar Exchange rate Percentage Price
Adjustment
=========================================================================
Equal to or greater than ***** -*****
Equal to or greater than ***** and less than ***** -*****
Equal to or greater than ***** and less than ***** -*****
Greater than ***** and less than ***** no adjustment
Equal to or less than ***** and greater than ***** +*****
Equal to or less than ***** and greater than ***** +*****
Equal to or less than ***** +*****
-------------------------------------------------------------------------
C. Payment Terms.
Products will be invoiced upon shipment at the prices determined under
Paragraph (A) of this Schedule 2, prior to any adjustment pursuant to
Paragraph (B). Invoices shall be due and payable within twenty (20) days
from the invoice date. Within fifteen (15) days after the end of each
fiscal quarter of Seller, Seller will issue Purchaser a credit or debit
memorandum, as the case may be, reflecting all adjustments required by
Paragraph (B) with respect to shipments made during the quarter.
Purchaser may apply the amount of any such credit memoranda against
unpaid invoices due to Seller and shall pay Seller the amount of such
debit memoranda in the same manner as invoices.
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July 27, 2000 Purchase Agreement Page 18
SCHEDULE 3
Product Specifications
A. GaN LEDs. The GaN LEDs subject to this Agreement are Seller's part number
*****, and the applicable product specifications are those set forth in
Seller's ISO 9000-controlled specifications for such Product as in effect
on the Effective Date of this Agreement, copies of which have been
provided to Purchaser prior to execution of this Agreement.
B. InGaN LEDs.
1. The standard size and small size InGaN LEDs subject to this
Agreement are identified by Seller's part numbers shown below. The
applicable product specifications are those set forth in Seller's
ISO 9000-controlled specifications for such Products as in effect
on the Effective Date of this Agreement, copies of which have been
provided to Purchaser prior to execution of this Agreement, except
as otherwise noted below.
****** **
****** **
******
****** **
******
****** *
*The specifications for the ***** part shall be mutually agreed
upon in writing by the parties.
**The minimum radiant flux of *****, ***** and ***** parts shall
be as shown below for the period in which the unit is shipped:
------------------------------------------------------------------
Minimum Radiant Flux
-------------------------------------------------
Quarterly (13-Week) Period Ending
-------------------------------------------------
Part No. 12/24/00 3/25/01 6/24/01 9/23/01
==================================================================
***** ***** ***** ***** *****
***** ***** ***** ***** *****
***** ***** ***** ***** *****
------------------------------------------------------------------
2. Product Specifications for the Aton technology InGaN LED shall be
mutually agreed upon in writing by the parties, with a target of
***** increase in radiant flux and a ***** increase in forward
voltage (Vf) from Seller's standard specifications for the
corresponding non-Aton technology Products, as set forth in
Seller's ISO 9000-controlled specifications as in effect on the
Effective Date of this Agreement.
C. SiC Wafers. The SiC Wafers subject to this Agreement are Seller's part
number ***** and the applicable product specifications are those set
forth in Seller's ISO 9000-controlled specifications for such Product as
in effect on the Effective Date of this Agreement, copies of which have
been provided to Purchaser prior to execution of this Agreement.
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July 27, 2000 Purchase Agreement Page 19
The parties will cooperate in evaluating the substitution of Purchaser's
internal specifications as the Product Specifications applicable under
this Agreement and will negotiate in good faith a mutually acceptable
written agreement effecting such substitution and any necessary
adjustments to Purchaser's specifications. Failure of the parties to
agree on such substitute specifications for any Products, or on any other
Product Specifications required to be mutually agreed upon pursuant to
this Agreement, shall not give either party the right to terminate this
Agreement.
D. Seller acknowledges Purchaser's desire that Seller reduce the forward
voltages (Vf max.) for all colors from ***** to *****. Seller shall use
its best commercially reasonable efforts to develop such improved parts
prior to *****.
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July 27, 2000 Purchase Agreement Page 20