SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KA
AMENDMENT NO. 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ______________ to _____________
Commission File number 0-21154
CREE RESEARCH, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-1572719
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2810 Meridian Parkway, Suite 176
Durham, North Carolina 27713
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (919) 361-5709
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.005 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X].
The approximate aggregate market value of the Registrant's voting stock held by
nonaffiliates of the registrant, as of September 26, 1996, was approximately
$124,247,457 (based on the average bid and asked sales prices on that date of
$12.69).
Number of registrant's shares of Common Stock, par value $0.005 per share,
outstanding of September 26, 1996, was 12,300,858.
Documents incorporated by reference: Portions of Proxy Statement accompanying
the notice of the annual meeting of the shareholders of Cree Research, Inc. to
be held on November 12, 1996 (Part III).
The Exhibit Index Appears on Page 4 hereof.
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EXPLANATORY NOTE
This Amendment is being filed solely to provide the Contract between
the Company and Siemens A.G., dated September 11, 1996. Confidential treatment
for certain portions of the Contract was requested pursuant to Rule 24b-2.
Certain portions of the Contract that were not previously disclosed pending the
Securities and Exchange Commission's determination of the Company's request for
confidential treatment are included herein.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) (3) Exhibits (* filed herewith):
Exhibit No. Description
10.53* Contract between the Company and Siemens A.G., dated
September 11, 1996
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant duly caused this report on Form 10-K/A to be signed on its behalf
by the undersigned, thereunto duly authorized.
CREE RESEARCH, INC.
By: /s/ F. Neal Hunter
Name: F. Neal Hunter
Title: President and Chief Executive Officer
Date: November 18, 1996
3
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EXHIBIT INDEX
Exhibit No. Description Sequential Page No.
10.53* Contract between the
Company and Siemens A.G.,
dated September 11, 1996
4
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[*] -- Certain information omitted and filed separately with the Commission
pursuant to a confidential treatment request under Rule 24b-2 of the Commission.
PURCHASE AGREEMENT
between
CREE RESEARCH, INC.
Durham, North Carolina, USA
("Seller")
and
SIEMENS AKTIENGESELLSCHAFT
Berlin and Munich
Federal Republic of Germany
("Purchaser")
Dated September 6, 1996
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TABLE OF CONTENTS
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1. CONTRACT DOCUMENTS; DEFINITIONS................................................................................1
1.1. Documents...........................................................................................1
1.2. Definitions.........................................................................................1
2. PURCHASE AND SALE..............................................................................................2
2.1. Purchase Commitment.................................................................................2
2.2. Price...............................................................................................2
2.3. Payment Terms.......................................................................................2
3. DELIVERY.......................................................................................................3
3.1. Shipment Schedule...................................................................................3
3.2. Packaging...........................................................................................3
3.3. Manner of Shipment..................................................................................3
4. NON-CONFORMING SHIPMENTS.......................................................................................3
4.1. Reporting of Claims.................................................................................3
4.2. Remedies for Non-Conforming Shipments...............................................................4
4.3. Compliance with Instructions........................................................................4
5. TECHNICAL COOPERATION..........................................................................................4
6. WARRANTIES.....................................................................................................4
6.1. Limited Warranty....................................................................................4
6.2. Warranty Disclaimer.................................................................................5
7. INDEMNIFICATION................................................................................................5
7.1. By Seller...........................................................................................5
7.2. Conditions of Indemnification.......................................................................5
8. LIMITATIONS OF LIABILITY.......................................................................................5
9. FORCE MAJEURE..................................................................................................5
10. TERMINATION...................................................................................................6
10.1. Termination upon Default or Insolvency.............................................................6
10.2. Effect of Termination..............................................................................6
11. CONFIDENTIAL INFORMATION......................................................................................6
11.1. Definition.........................................................................................6
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11.2. Identification.....................................................................................6
11.3. Confidentiality Obligations........................................................................7
11.4. Terms of Agreement.................................................................................7
12. ADDITIONAL UNDERTAKINGS.......................................................................................7
12.1. Publicity..........................................................................................7
12.2. Use of Trademarks, Etc.............................................................................7
13. GENERAL.......................................................................................................8
13.1. Notices............................................................................................8
13.2. Authority; No Conflicting Obligations..............................................................8
13.3. Relationship of the Parties........................................................................8
13.4. Assignment.........................................................................................8
13.5. Dispute Resolution.................................................................................8
13.6. Severability.......................................................................................9
13.7. Amendments; Waiver.................................................................................9
13.8. No Implied License.................................................................................9
13.9. Export Regulation..................................................................................9
13.10. Enforcement Costs.................................................................................9
13.11. Governing Law.....................................................................................9
13.12. Construction......................................................................................9
13.13. United Nations Convention.........................................................................9
13.14. Entire Agreement..................................................................................9
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[*]-Certain information omitted and filed separately with the Commission
pursuant to a confidential treatment request under Rule 24b-2 of the Commission.
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement"), made and effective as of the 6th day of
September, 1996 (the "Effective Date"), by and between CREE RESEARCH, INC.
(hereinafter referred to as "Seller"), a corporation organized under the laws of
the State of North Carolina, the United States of America, and SIEMENS
AKTIENGESELLSCHAFT (hereinafter referred to as "Purchaser"), a corporation
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
WHEREAS, Purchaser is engaged in the business, among others, of manufacturing
LED's packaged in lamp form and desires to purchase a quantity of custom LED die
products from Seller; and
WHEREAS, the parties have agreed on the terms and conditions under which Seller
will sell such LED's 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
(b) Schedule 2 -- Price and Payment Schedule
(c) Schedule 3 -- Product Specifications
(d) Schedule 4 -- Technical Cooperation
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 (as such term is used in Articles 11 and 12)
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 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.
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(c) "Product Specifications" means the specifications set
forth in Schedule 3, as the same may be amended from time
to time by mutual written agreement of the parties or
pursuant to the terms and conditions set forth in such
schedule.
(d) "Products" mean LED chips conforming to the Product
Specifications.
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) Concurrently with the execution of this Agreement, Purchaser
shall issue a purchase order to Seller evidencing
Purchaser's commitment to purchase Products
hereunder. The terms and conditions of this Agreement
shall govern the purchase of Products hereunder
notwithstanding any contrary provisions of such
purchase order.
(c) Purchaser shall be entitled to reduce the quantity of
Products to be purchased under this Agreement only under the
terms and conditions and upon payment of the
cancellation charges specified in 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.
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(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.
3. DELIVERY
3.1. 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 ninety-five
percent (95%) of the cumulative quantity due to have
been shipped.
(c) In the event of a default by Seller as provided in
Section 3.1(b), Purchaser shall be entitled to
liquidated damages of *** percent (*%) per week of
the purchase price of the delayed Products, subject
to a maximum of *** percent (**%) 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 liquidated
damages Purchaser may claim damages actually
resulting from the delay up to ***** percent (**%) of
the purchase price of the delayed Products.
3.2. Packaging.
Seller will ship Products in Seller's standard packaging or
packaged in such other manner as the parties may mutually
agree in writing.
3.3. Manner of Shipment.
Products shall be shipped F.O.B. 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 thirty (30) days after shipment of the
Product to Purchaser. All other non-conformities in shipments
shall be reported in
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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.
5. TECHNICAL COOPERATION
Purchaser and Seller agree to cooperate in the development of
improvements to the Products in the manner set forth in and subject to
the terms and conditions of Schedule 4.
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 three hundred sixty (360) 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 Product
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.
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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 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
a 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 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
if liability is mandatory by law, as for example in cases of intent or
gross negligence.
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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 as 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 or any other
agreement between the parties (including but not
limited to the Development, License and Supply
Agreement dated October 25, 1995) 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.
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") 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.
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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 confidence and
neither use nor disclose such Confidential
Information, without the prior written approval of
the disclosing party, except as 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.
(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 for
five (5) years following any termination or
expiration 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. Publicity.
The parties agree to cooperate in the preparation of a
mutually acceptable joint press release, to be issued promptly
following execution of this Agreement, but shall otherwise
make no public announcement regarding the terms of this
Agreement.
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12.2. 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 mark, 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.
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 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
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
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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.
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.
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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.
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.
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<CAPTION>
CREE RESEARCH, INC. SIEMENS AKTIENGESELLSCHAFT
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By /s/ F. Neal Hunter By /s/ R. Mueller /s/ C. Hagan
Name F. Neal Hunter Name R. Mueller C. Hagan
Title President Title President Opto Semicond. VP Fin.&Adm.
Date Sept. 11, 1996 Date Sept. 11, 1996 Sept. 11, 1996
Address for Notices Address for Notices
Cree Research, Inc. Siemens AG
2810 Meridian Parkway, Suite 176 Semiconductor Group, Opto Semiconductors
Durham, North Carolina 27713 Wernerwerkstr. 2
USA 8400 Regensburg 1, Germany
Attention: President Attention: R. Mueller and C. Hagan
Fax No: (919) 361-4630 Fax No: 49 341 202 2951
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SCHEDULE 1
Quantity and Shipment Schedule
A. Quantity. Purchaser will purchase ********** units of the Product (one
unit being one LED die) from Seller under this Agreement.
2. Shipment Schedule. The shipment schedule for the Products is as
follows, with each monthly quantity commencing in ************* to be
shipped in approximately equal installments on a weekly basis during
the month:
------------------------------------ --------------------------
Month Quantity
------------------------------------ --------------------------
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
* *
------------------------------------ --------------------------
------------------------------------ --------------------------
Total *
------------------------------------ --------------------------
The shipment schedule above presupposes that Seller's supplier of epi
reactors will deliver and install an additional epi reactor system at
Seller's facilities not later than November 1, 1996. Seller's
obligations under this Agreement are subject to the condition that such
epi reactor system is delivered and installed not later than November
1, 1996. If installation is not completed to Seller's satisfaction by
such date, the shipment schedule above beginning with February 1997
shipments will be delayed until such time as installation is complete.
Installation will be considered complete only upon written acceptance
of the epi reactor by Seller. Purchaser and Seller agree to cooperate
in obtaining installation of the epi reactor system as promptly as
possible, but Seller shall be solely responsible for the costs of
purchasing and installing the system.
Seller will use all commercially reasonable efforts to ramp up its
manufacturing capacity as necessary meet the shipment schedule above.
Without limiting the foregoing, in order to provide a margin of safety
to meet such schedule, Seller will use all commercially reasonable
efforts to increase its capacity to manufacture Products available for
shipment under this Agreement to a minimum planned capacity of
********* units per month by the end of **************. If Seller
determines that such increase will not be completed by that date,
Seller will promptly notify Purchaser of the delay and Seller and
Purchaser shall in good faith negotiate and use their best efforts to
implement a mutually agreeable emergency program to rectify the delay.
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3. Delay and Cancellation of Shipments. Purchaser shall be entitled to
delay or cancel shipment of all or any portion of the quantities
scheduled to be shipped during the period from ************* through
***************** under the following terms and conditions:
(a) Purchaser may without charge reschedule shipment of such
quantities to a date not later than ***************** provided
Purchaser gives Seller written notice at least ninety (90)
days prior to the beginning of the calendar month in which
such quantities are scheduled to be shipped. Purchaser's
notice must specify the quantities to be deferred and the
calendar month in which shipment of such quantities is to be
made. In no event, however, shall Seller be obligated to ship
more than ********* units in any calendar month. Subject to
the foregoing, a shipment may be rescheduled any number of
times under this paragraph.
(b) Purchaser may cancel shipment of such quantities provided
Purchaser pays Seller a cancellation charge of $******* per
unit for all quantities canceled and gives Seller written
notice specifying the canceled quantities at least ninety (90)
days prior to the beginning of the calendar month in which
such quantities are scheduled to be shipped. The cancellation
charges shall be due and payable within thirty (30) days after
the date notice of cancellation is given. The parties agree
that the amount of such cancellation charges represents a
reasonable estimate of Seller's damages resulting from
cancellation of the shipments scheduled during the period from
*********** through *************** and shall be due and
payable as liquidated damages and not as a penalty.
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SCHEDULE 2
Price and Payment Schedule
1. Prices. The prices for Products purchased under this Agreement shall be
as follows:
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<CAPTION>
--------------------------------------- ------------------------- -------------------------
Incremental Quantities Shipped Unit Price (US$) Extended Price
--------------------------------------- ------------------------- -------------------------
<S> <C> <C>
* * *
* * *
* * *
* * *
--------------------------------------- ------------------------- -------------------------
--------------------------------------- ------------------------- -------------------------
Total $12,159,000.00
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Before shipment of more than ********** units under this Agreement,
representatives of Seller and Purchaser will meet to review the price
applicable to quantities in excess of ********** units. If mutually
agreed the parties may reduce the price stated above.
Purchaser acknowledges that the Products to be shipped hereunder have
different specifications than the standard products generally offered
by Seller and that the prices stated above may be higher than the
prices Seller charges for its standard products. If Seller commences
offering a standard product having the same specifications as the
Products to be purchased under this Agreement, and if the prices
charged by Seller for purchase of the standard product, under terms and
conditions comparable to those of this Agreement, are less than the
prices applicable to the Products not then shipped hereunder, Seller
will offer in writing to amend this Agreement to reduce the prices
applicable to Products not then shipped hereunder to the prices Seller
charges for the standard product.
2. Payment Terms.
The purchase price of the first ********* units, or $*********, shall
be due and payable in ********* equal installments on or before
*********************** and *******************. The purchase price of
the next ********** units, or $*********, shall be due and payable in
****** equal installments on
**********************************************************************.
The purchase price of the remaining units shall be invoiced to
Purchaser upon shipment and shall be due and payable within ten (10)
days from the date of the invoice.
If Seller fails to ship Products in accordance with the shipment
schedule set forth in Schedule 1 and Purchaser terminates this
Agreement on account of such failure in accordance with Section 10.1,
then upon such termination Seller refund to Purchaser any payment made
in advance for Products not then shipped. Seller agrees to grant
Purchaser a security interest in certain manufacturing equipment --
namely, two epi reactor systems to be ordered by Seller upon or
promptly after execution of this Agreement -- to secure such obligation
of Seller to refund any payment made in advance for Products not
shipped. The security interest shall be granted pursuant to a mutually
agreeable Security Agreement to be executed by the parties on or before
October 1, 1997.
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SCHEDULE 3
Product Specifications
1. Product Specifications for Products purchased under this Agreement
shall be the current published specifications for Seller's Model DH-85
LED die product (as set forth in Attachment A hereto), except that the
Products purchased under this Agreement shall have:
(a) ****************************************************************
(b) ****************************************************************
2. Seller may elect to substitute a version of the Products
************************************************
subject to Purchaser's approval which shall be given under the terms
and conditions set forth below. Commencing thirty (30) days after the
date of such approval, or such earlier date as may be agreed by the
parties, the Product Specifications applicable to shipments made
thereafter shall be the specifications of the new version supplied by
Seller as provided below, and Seller may not ship the original version
without Purchaser's prior written consent.
(a) The new version must meet the original specifications except
that
*************************************************************
*************************************************************
*************************************************************
*************************************************************
**************************.
(b) Seller will provide Purchaser with production prototypes of
the new version manufactured from wafers from at least three
different epi runs and will provide Purchaser the
specifications applicable to the new version and such
qualification data as may then be available to Seller.
(c) Purchaser will give Seller notice of Purchaser's approval or
disapproval within seventy-five (75) days after receipt of the
prototypes and specifications.
(d) Purchaser may withhold its approval only if new version does
not meet the minimum specifications described in (a) above.
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SCHEDULE 4
Technical Cooperation
1. Seller and Purchaser intend to work to improve the forward voltage,
brightness and ESD of the Product (with an ESD target of *********) and
to develop a conductive buffer layer version. Such efforts shall be
conducted as part of the Joint Development Program under the
Development, License and Supply Agreement dated October 25, 1995
between the parties (the "Development Agreement"), and all of the terms
and conditions of the Development Agreement (including without
limitation the provisions regarding joint ownership of inventions)
shall be applicable to such work.
2. To facilitate such additional work in the Joint Development Program,
Purchaser agrees with Seller as follows:
(a) Purchaser will make available to Seller, at Seller's
facilities for a period of six months beginning not later than
September 30, 1996, the full-time services of one scientist
and one specialist, each with expertise in epitaxial growth,
and two device fabrication engineers, all of whom shall be
Purchaser's employees with adequate qualifications.
(b) Purchaser will be responsible for all compensation, benefits
and expenses of such personnel.
(c) Purchaser's scientific personnel will work on tasks, in
accordance with the mutually agreed Joint Development Program,
which shall be directed to (i) improving device yields, (ii)
improving forward voltage, brightness and ESD, and (iii)
developing an improved product using a conductive buffer
layer.
(e) Purchaser's fabrication engineers will work on tasks, in
accordance with the mutually agreed Joint Development Program,
which shall be directed to the production of Products to be
purchased by Purchaser and to providing assistance to
Purchaser's scientific personnel in carrying out the work
described above.
(f) Purchaser agrees to hold Seller harmless from any claims by
Purchaser's personnel arising from work performed at Seller's
facilities, other than claims for intentional misconduct or
gross negligence of Seller.
(g) Purchaser's personnel assigned to Seller may be required by
Seller to execute an acknowledgment of confidentiality
obligations in the form annexed hereto as Attachment B.
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ATTACHMENT A
Information in attachment omitted in its entirety and
filed separately with the Commission pursuant to a confidential treatment
request under Rule 24b-2 of the Commission.
C430-DH85 PRODUCT SPECIFICATIONS
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ATTACHMENT B
ACKNOWLEDGMENT OF
CONFIDENTIALITY OBLIGATIONS
As a condition of being permitted access to premises of Cree Research, Inc.
("Cree"), and to induce Cree to disclose to the undersigned certain confidential
information, the undersigned, an employee of Siemens AG ("Siemens"), hereby
acknowledges and represents as follows:
1. The undersigned has been advised that:
(a) Siemens and Cree entered into a Development, License and Supply
Agreement dated as of October 25, 1995 (the "Development Agreement").
(b) The Development Agreement imposes certain obligations regarding
"Confidential Information" (as defined in the agreement) disclosed by
either party to the other.
(c) Siemens and Cree represented and warranted to each other in the
Development Agreement that their respective employees having access
to Confidential Information of the other party would be subject to a
valid, binding and enforceable agreement to maintain such information
in confidence.
(d) The Development Agreement defines Confidential Information, with
certain exceptions, to include "any information, including data,
diagrams, drawings, reports, samples, research results and in general
all information or know-how, whether in written form or oral and
whether on tape, diskette, paper, files or on whatever other
material, . . . which the receiving party has been informed or has a
reasonable basis to believe is confidential to the disclosing party
or is treated by the disclosing party as confidential . . . ."
(e) The Development Agreement further provides that: "In the event that
visiting personnel are present on the premises of the host party, all
information of the host Party received or learned by the visiting
personnel shall be treated as Confidential Information of the host
party, regardless of whether such information is related to the
Subject Technology [as defined in the agreement] or marked or
otherwise identified as confidential."
2. The undersigned hereby represents to Cree that he or she is subject to a
valid, binding and enforceable agreement to maintain in confidence all
Confidential Information of Cree disclosed to the undersigned pursuant to
the Development Agreement, including all Confidential Information of Cree
received or learned while present on Cree's premises.
Signed this the ___ day of __________, 19____.
Signature
Typed or Printed Name
