EXHIBIT 10.17

 

AMENDMENT NO. 2 TO PURCHASE AND SUPPLY AGREEMENT

 

This Amendment No. 2 to Purchase and Supply Agreement (“Amendment No. 2”) is
entered into by and between Spectrian Corporation, a Delaware corporation
(“Spectrian”) and UltraRF, Inc., a North Carolina corporation (“UltraRF”)
formerly known as Zoltar Acquisition, Inc. and a wholly-owned subsidiary of
Cree, Inc., effective as of March 31, 2002 (“Amendment Effective Date”).

 

Recitals

 

A. Spectrian and UltraRF previously have entered into a Purchase and Supply
Agreement dated December 29, 2000 and with an effective date of January 1, 2001
(the “Supply Agreement”), which was amended by the Amendment of Purchase and
Supply Agreement dated October 19, 2001 (“Amendment No. 1”). (As used herein,
“Agreement” refers to the Supply Agreement, as amended by Amendment No. 1 and by
this Amendment No. 2.)

 

B. Under the Supply Agreement and Amendment No. 1, UltraRF agreed to supply to
Spectrian certain electronic components, and Spectrian agreed to purchase a
number of those components equal to a minimum price within a defined time
period.

 

C. The parties wish to, among other things, adjust the minimum purchase amounts,
to extend the term of the Agreement, to revise which products will be delivered
under existing purchase orders, and to modify and clarify certain provisions
regarding future deliveries and adjustments in the minimum purchase commitments,
on the terms and conditions of this Amendment No. 2.

 

Agreement

 

In consideration for the mutual covenants set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

 

1. Term of Agreement. Section 1.1 of the Supply Agreement is amended to extend
the term by replacing Section 1.1 in its entirety with the following:

 

Section 1.1 Term. The term of this Agreement commences on January 1, 2001 (the
“Effective Date”) and ends at the conclusion of a thirty (30) month period
following the Effective Date, which is June 30, 2003 (the “Term”).

 

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2. Minimum Commitments.

 

(a) Section 1.2 of the Supply Agreement, as modified by Section 1 of Amendment
No. 1, is amended by revising the table of Minimum Commitments to read as
follows:

 

Calendar Quarter Ending

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   Minimum Commitment

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March 31, 2001 (Q1’01)

   $ 6,800,000

June 30, 2001 (Q2’01)

   $ 7,500,000

September 30, 2001 (Q3’01)

   $ 8,300,000

December 31, 2001 (Q4’01)

   $ 7,500,000

March 31, 2002 (Q1’02)

   $ 3,400,000

June 30, 2002 (Q2’02)

   $ 5,000,000

September 30, 2002 (Q3’02)

   $ 5,000,000

December 31, 2002 (Q4’02)

   $ 5,000,000

March 31, 2003 (Q1’03)

   $ 5,000,000

June 30, 2003 (Q2’03)

   $ 1,250,000

 

(b) UltraRF acknowledges that Spectrian has satisfied the Minimum Commitment for
each of the five calendar quarters from the Effective Date of the Supply
Agreement through March 31, 2002.

 

(c) For each of the calendar quarters beginning on or after October 1, 2002, if
the aggregate purchase price for Components delivered in any such calendar
quarter exceeds the Minimum Commitment, then up to $[***] of such excess will be
carried forward and used to reduce the Minimum Commitment for the immediately
succeeding calendar quarter. Notwithstanding anything in the Agreement to the
contrary, including, without limitation, the provisions of Sections 1.2, 2.2 and
3.1 of the Supply Agreement, and Section 2 of Amendment No. 1, unless otherwise
agreed to in writing by the parties, during each of the calendar quarters ending
June 30, 2002, September 30, 2002 and December 31, 2002, UltraRF will not and is
not obligated to ship Components to Spectrian having an aggregate purchase price
that exceeds the respective Minimum Commitment amount referred to above in
Section 2(a) of this Amendment No. 2 for such calendar quarters.

 

3. Certain Defined Terms.

 

(a) For purposes of this Agreement, “New Components” are discrete Components
that incorporate devices based on UltraRF’s LDMOS 8 or LDMOS 8.5 process
technology.

 

(b) For purposes of this Agreement, “Older Components” are discrete Components
that incorporate devices based on UltraRF’s LDMOS 7 process technology, or on
its bi-polar process technology.

 

(c) For purposes of this Agreement, “Development Period” means the nine-month
period referred to in Section 1.4(a) of the Supply Agreement as such period may
be modified or extended by the terms of this Amendment No. 2.

 

4. Revisions to Existing Firm Orders for Delivery in Q1 2002.

 

(a) Section 5, Section 6 and Section 7 of Amendment No. 1 are deleted in their
entirety. To the extent any credit would have been earned by UltraRF from
Spectrian pursuant to Section 7 of Amendment No. 1, that credit is considered
cancelled.

 

[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

 

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(b) Spectrian previously delivered to UltraRF and UltraRF accepted (pursuant to
Sections 2.2 and 2.4 of the Supply Agreement) Firm Orders for Components to be
delivered during Q1 2002 having an aggregate purchase price of approximately
$7,500,000 (inclusive of the $[***] of Components referred to in Section 3 of
Amendment No. 1). Those orders were for New Components with an aggregate
purchase price of $[***] and Older Components with an aggregate purchase price
of $[***].

 

(c) In Q1 2002, UltraRF delivered and Spectrian accepted Older Components
pursuant to the Firm Orders described in paragraph (b) above with an aggregate
purchase price of approximately $3,400,000. All remaining portions of the Firm
Orders for Components for delivery in Q1 2002 are cancelled and neither party
has any further obligation therefor with respect to products not delivered prior
to the execution date of this Amendment No. 2.

 

5. Revisions to Existing Firm Orders for Delivery in Q2 2002.

 

(a) Spectrian previously delivered to UltraRF and UltraRF accepted (pursuant to
Sections 2.2 and 2.4 of the Supply Agreement) Firm Orders for Components to be
delivered during Q2 2002 having an aggregate purchase price of $[***]. Those
orders were for New Components with an aggregate purchase price of $[***] and
Older Components with an aggregate purchase price of $[***]. All such Firm
Orders are cancelled and neither party has any further obligation therefor.

 

(b) Within five business days after the execution of this Amendment No. 2
Spectrian will deliver, and UltraRF will accept, new Firm Orders for Components
to be delivered during Q2 2002 for which the aggregate purchase price will be
$[***], based on the Component prices separately agreed upon by the parties, in
accordance with the following, subject to adjustment pursuant to Section 8
below:(i) New Components will represent no more than $[***] of the $[***] total
aggregate purchase price, of which 30 Watt New Components will represent at
least $[***] of the total aggregate purchase price, and (ii) Older Components
will represent at least $[***] of the $[***] total aggregate purchase price, of
which approximately $[***] will be for LDMOS 7 Components and approximately
$[***] will be for bi-polar Components (with the exact mix of those Older
Components as agreed upon by the parties).

 

6. Qualification of Drop-in Compatible Parts.

 

(a) Section 8 and Section 9 of Amendment 1 are deleted in their entirety.

 

(b) UltraRF shall use all commercially reasonable efforts to produce and fully
qualify (i.e., successfully passing the 1000 hour burn-in test) by June 30,
2002, and to deliver to Spectrian by June 30, 2002 in the quantities ordered
pursuant to Section 5 above, New Components that are Drop-in Compatible Parts
(as defined below). Each party shall provide timely access to each other’s
personnel and relevant technical information and equipment as necessary or
helpful to produce and fully qualify Drop-in Compatible Parts and shall
cooperate in good faith to produce and fully qualify New Components that are
Drop-in Compatible Parts by June 30, 2002. UltraRF’s sole liability and
Spectrian’s sole remedy for delay or failure in delivery of New Components
ordered for delivery in Q2 2002 is the reduction of the Minimum Commitments set
forth in Section 8 below.

 

(c) (i) For purposes of this Agreement, a Component will be considered to be a
“Drop-in Compatible Part” and will be deemed to meet the “Competitive”
requirements within the meaning of Section 1.4(a) of the Supply Agreement (other
than subparagraphs (iii), (iv) and (v) thereof) if it can be placed into a
Spectrian product and meets all of the following requirements: (A) it must have
comparable yield (equal to or greater) and consistency required by the system
which would be achieved using the other vendor’s Locked-in Component, (B) it
must have mechanically compatible packages and (C) it meets performance
requirements as specified in the Spectrian Source Control Document (“SCD”) in
the application circuit, as designed using the Locked In Components (it being
understood that the SCD must reflect the system and application requirements and
be met by the Locked-in Component). Should it be necessary, Spectrian agrees to
allow limited circuit changes to the application circuit to achieve the system
and application performance relative to the above requirements. These limited
changes may include changes to the printed circuit pattern, re-positioning of
components and transistors and/or changes of component values, provided those
changes

 

[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

 

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conform to currently employed design practices. These limited changes shall not
include: (x) changes to the printed circuit board substrate material (either
manufacturer or specification) or (y) changes to the absolute external
dimensions of the product subassembly. The SCD must be delivered to UltraRF
within a two-week period after Spectrian provides UltraRF with the lock-in
notice and may change after that date without extending the Development Period.
However, if Spectrian makes significant changes to the SCD during the last three
months of the Development Period, then the Development Period shall be extended
by a period of up to three months from the effective date of the change to allow
for adaptation to accommodate the significant change. UltraRF acknowledges that
Spectrian will be deemed to have timely delivered the SCD to UltraRF within the
required two weeks after the lock-in date for Locked In Components [***] and
[***] (which are listed in Section 7(a)), if such SCD is delivered within five
days after the date that this Amendment No. 2 is signed. For all other Locked In
Components listed in Sections 7(a) and 7(b), Spectrian will be deemed to have
timely delivered the SCD to UltraRF within the required two weeks after the
lock-in date, if such SCD is delivered within 15 days after this Amendment No. 2
is signed.

 

(ii) In the event that the parties, acting in good faith, are unable to agree on
whether a Component supplied by UltraRF meets all of the criteria in Section
6(c)(i), then the Component will be considered a “Drop Compatible Part” only if
it meets the “Competitive” requirements established in accordance with Section
1.4(a) of the Supply Agreement.

 

(iii) The parties shall cooperate in good faith to timely determine whether an
UltraRF device qualifies as a “Drop-in Compatible Part” hereunder.

 

(d) A “Replacement Part” is either (i) a Locked In Component identified in
Section 7(b) of this Amendment No. 2 that is not available from UltraRF as a
Drop In Compatible Part at any time after the expiration of the Development
Periods set forth in Section 7 below, or (ii) a Drop In Compatible Part
available from a third party to replace a Component that UltraRF had been
delivering regularly (whether a New Component or an Older Component), but that
it no longer delivers or that is no longer a Drop in Compatible Part (other than
End of Life Components covered under Section 1.5 of the Supply Agreement, which
continue to be subject to that Section 1.5), provided that Spectrian furnishes
written notice to UltraRF of the lack of compatibility and UltraRF has a 30 day
period thereafter to cure or, if the SCD should change as described in Section
6(c), the Development Period shall be extended for the period therein stated.
The Minimum Commitment will be reduced by the aggregate invoice purchase price
of all like Replacement Parts ordered by Spectrian for delivery in that quarter,
with the reduction effective in the quarter that Spectrian accepts delivery of
the Replacement Parts from the vendor, provided that the reduction shall not
exceed Spectrian’s internally forecasted demand as approved by Spectrian’s Board
of Directors or senior management, a copy of which shall be furnished to UltraRF
upon request. If UltraRF later makes available a fully qualified Drop-in
Compatible Part to replace the Replacement Part, then Spectrian will order those
Components from UltraRF, for delivery after (x) a reasonable design-in time in
the case of Locked In Components (taking into account the type of Component and
customary industry design-in standards) plus (y) a reasonable lead time;
provided that if the lead time is greater than UltraRF’s lead time and
cancellation or rescheduling of the order would require payment of a fee,
UltraRF may (at its option) pay that fee and deliver Components under this
Agreement beginning as soon as the end of the design-in time.

 

(e) Locked In Components identified in Section 7(a) below are not eligible to
become Replacement Parts under this Section 6.

 

[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

 

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7. Identification of Locked In Components.

 

(a) For all purposes under this Agreement except Section 6(d) of this Amendment
No. 2, the parties acknowledge that, to the extent the following Components are
based on the Motorola equivalent process to UltraRF’s LDMOS 8.0 or 8.5 process,
the following parts are Locked In Components as of July 1, 2001, with a
Development Period ending on April 1, 2002:

 

[***]

[***]

[***]

[***]

 

(b) For all purposes under this Agreement, the parties acknowledge that
following parts are Locked In Components, with a Notice or Lock In Date and an
expected end of Development Period set forth below:

 

Part

--------------------------------------------------------------------------------

   Notice or Lock In Date

--------------------------------------------------------------------------------

  Expected End of Development Period

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[***]

   [***]   [***]

[***]

   [***]   [***]

[***]

   [***]   [***]

[***]

   [***]   [***]

[***]

   [***]   [***]

[***]

   [***]   [***]

[***]

   [***]   [***]

[***]

   [***]   [***]

[***]

   [***]   [***]

 

(c) Notwithstanding Section 1.4 of the Supply Agreement, after the Amendment
Effective Date a component will be considered a Locked In Component pursuant to
Section 1.4(b) of the Supply Agreement: (i) if production parts of such
component are commercially available, then upon written notice given by
Spectrian to UltraRF identifying the particular component, provided that
Spectrian provides UltraRF substantially complete Source Control Documents for
such component within two weeks thereafter, and (ii) if production parts of such
component are not commercially available, then when Spectrian has provided
UltraRF a substantially complete Source Control Document for such component.

 

8. Effect on Firm Orders in Q2 2002 of Failure to Produce and Qualify New
Components Drop-in Compatible Parts. If UltraRF does not deliver the fully
qualified New Component Drop-in Compatible Parts (including either or both of
the 30 Watt versions and 45 Watt versions) on or before June 30, 2002, then the
Firm Orders for Q2 2002 will be modified as follows:

 

(a) If by June 30, 2002 UltraRF delivers 30 Watt versions of New Component
Drop-in Compatible Parts but not 45 Watt versions of New Component Drop-in
Compatible Parts, then Spectrian’s orders for delivery in Q2 2002 will be
amended by canceling the orders for the 45 Watt versions and by adding an
additional amount of 30 Watt versions of New Components (but only to the extent
UltraRF is capable of supplying such Components) and Older Components based on
the LDMOS 7 process such that the aggregate purchase price of Components
delivered in Q2 2002 will be $[***], or Spectrian may alternatively pay UltraRF
cash in an amount equal to the Shortfall Surcharge as defined in Section 1.2 of
the Supply Agreement. In other words, assuming the foregoing mix is delivered,
the Minimum Commitment for Q2 2002 will be reduced to $[***] and the total
Minimum Commitments will be reduced by $[***].

 

[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

 

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(b) If by June 30, 2002 UltraRF does not deliver any New Component Drop-in
Compatible Parts, then Spectrian’s orders for delivery in Q2 2002 will be
amended by canceling the orders for the New Components and by adding an
additional amount for Older Components based on the LDMOS 7 process such that
the aggregate purchase price of Components delivered in Q2 2002 will be $[***],
or Spectrian may alternatively pay UltraRF cash in an amount equal to the
Shortfall Surcharge as defined in Section 1.2 of the Supply Agreement. In other
words, assuming the foregoing mix is delivered, the Minimum Commitment for Q2
2002 will be reduced to $[***] and the total Minimum Commitments will be reduced
by $[***].

 

(c) Spectrian is not required to purchase additional components from another
vendor to obtain a reduction in the Minimum Commitment under this Section 8.

 

9. Effect on Firm Orders in Q3 2002 and Thereafter of Failure to Produce and
Qualify New Component Drop-in Compatible Parts.

 

(a) If UltraRF does not deliver any fully qualified New Component Drop-in
Compatible Parts on or before June 30, 2002, then for orders for delivery in Q3
2002 and thereafter, the Minimum Commitment will be reduced by $[***] for each
calendar month thereafter in which fully qualified New Component Drop-in
Compatible Parts are not delivered on or before the last day of that month.
Reductions in the Minimum Commitment under this paragraph may be up to $[***]
per quarter, up to a maximum of the total Minimum Commitment for that quarter.

 

(b) If UltraRF does not deliver fully qualified 45 Watt versions of New
Component Drop-in Compatible Parts on or before June 30, 2002, then for orders
for delivery in Q3 2002 and thereafter, Spectrian will accept delivery of fully
qualified 30 Watt versions of New Component Drop-in Compatible Parts up to the
greater of (i) $[***] or (ii) the purchase order amount of 30 Watt versions in
each calendar month thereafter that the 45 Watt versions are not available. The
Minimum Commitment will be reduced by $[***] less the amount of delivered fully
qualified 30 Watt versions for each month in which fully qualified 45 Watt
versions of New Component Drop-in Compatible Parts are not delivered on or
before the last day of the month. Reductions in the Minimum Commitment may be up
to $[***] per quarter, up to a maximum of the total Minimum Commitment for that
quarter. Spectrian is not required to order any 30 Watt versions of New
Components for delivery after September 30, 2002, or to accept delivery of any
30 Watt versions after that date if the 45 Watt versions remain unavailable.

 

(c) Spectrian is not required to purchase additional components from another
vendor to obtain a reduction in the Minimum Commitment under this Section 9.

 

10.   Payment Terms. Section 1.8 of the Supply Agreement is deleted and replaced
in its entirety with the following:

 

Section 1.8 Payment. Spectrian shall pay UltraRF the applicable price for the
Components that UltraRF ships to Spectrian hereunder within [***] days after the
date of the invoice for those Components. Payments due to UltraRF must be made
in U.S. Dollars by Spectrian by wire transfer to an account designated in
writing by UltraRF from time to time. All amounts not paid when due bear
interest at the rate of one percent per month (or such other percentage, if
lower, as shall not exceed the maximum rate permitted by law), commencing
immediately upon the due date (i.e., the date [***] days after the invoice
date). Spectrian shall be responsible for reasonable attorneys’ fees and other
reasonable expenses incurred by UltraRF in connection with the collection of any
amounts due and payable hereunder.

 

11. Cancellation. All Firm Orders canceled pursuant to this Amendment No. 2 are
considered canceled pursuant to Section 2.2 of the Supply Agreement. No
penalties, restocking fees, or any other fees that otherwise might apply to
cancellation, rescheduling, failure to accept, or failure to submit an order
apply to those cancellations.

 

[***] Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

 

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12. Entire Agreement. The Supply Agreement, as modified by, and together with,
Amendment No. 1 and this Amendment No. 2, is the entire agreement between the
parties with respect to the subject matter, and references to “Agreement” in
this Amendment No. 2, and in Amendment No. 1 or the Supply Agreement are
references to the Supply Agreement, as modified by, and together with, Amendment
No. 1 and this Amendment No. 2.

 

13. Supply Agreement Remains in Effect. Except as otherwise specified, all terms
used in this Amendment have the same meaning as such terms have in the
Agreement. Except as specifically set forth in this Amendment, the relationship
between the parties with respect to the subject matter of the Supply Agreement,
and the rights and obligations of the parties thereunder, continues to be
governed by the terms of the Supply Agreement (as amended by Amendment No. 1),
the provisions of which remain in full force and effect, including, without
limitation, Spectrian’s rights and obligations under Section 1.2 of the Supply
Agreement with respect to the Shortfall Shortage. In the event of a conflict
between the terms of the Supply Agreement (as amended by Amendment No. 1) and
the terms of this Amendment, the terms of this Amendment control.

 

(signature page follows)

 

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(signature page to Amendment No. 2 to Purchase and Supply Agreement)

 

Accepted and Agreed:

 

SPECTRIAN CORPORATION

     

ULTRARF, INC.

By:  

/s/    MICHAEL D. ANGEL        

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      By:  

/s/    M. TODD TUCKER        

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Michael Angel,

Executive Vice President and Chief Financial Officer

         

M. Todd Tucker,

President

Date:

 

April 5, 2002

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Date:

 

April 5, 2002

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