exv10w14



 




Exhibit 10.14



Amendment to




Corporate Purchase Agreement

Contract No. 2171-080101

(“CPA”)




     This Amendment to Corporate Purchase Agreement — Contract No. 2171-080101 (this
“Amendment”) is made effective September 1, 2004, between SMART Modular Technologies, Inc.
(“SMART”) and Hewlett Packard Company (“HP”).



     WHEREAS, HP acquired Compaq Computer Corporation (“Compaq”); and



     WHEREAS, HP and SMART desire to amend certain terms and conditions of the CPA dated May 1,
2001, between Compaq and SMART.



     Therefore, SMART and HP agree to amend the CPA as follows:



1. Preamble.




     a. Hewlett Packard Company, a Delaware corporation (“HP”) shall replace Compaq Computer
Corporation, a Delaware corporation (“Compaq”).



     b. 4211
Starboard Drive shall replace 4305 Cushing Parkway.



     c. Insert and named affiliates after the word “Subsidiaries”.


2. Section 4.1. Four (4) years and four (4) months shall replace three (3) years in the
1st and 2nd sentences.



3. Section 7.6. Insert the following two sentences at the end of the paragraph: Change
orders for Product quantities and schedule dates above only apply to Product manufactured by SMART.
For Products manufactured by other OEM suppliers, but for which SMART provides kitting and/or
logistics services, change orders for rescheduling will be accepted if SMART receives change orders
at least one business day before the scheduled ship date and the revised ship date is within 90
calendar days of the original ship date. Change orders for cancellations will be accepted by SMART
if HP and its other OEM suppliers directly negotiate and agree on such cancellations.



4. Section 7.10. Replace it entirely with the following: Within twelve (12) months of the
date in which HP receives SMART-manufactured Product, HP may request the return, at HP’s expense,
of unused standard SMART-manufactured Product to SMART for credit. Product may be returned and
credited at a then negotiated price.



5. Section 12.1. Insert the following two sentences at the end of the paragraph: Product
warranties above only apply to Product manufactured by SMART. For Products manufactured




 









 







by other OEM suppliers, but for which SMART provides kitting and/or logistic services, a
pass-through warranty from the respective OEM supplier shall apply.



6. Section 17.1. Remove the word “Associate”.



7. Exhibits A, B, C, E, F, G and I. The attached Exhibits A, B, C, E, F, G and I shall
replace the existing ones.



8. All other terms and conditions in the CPA shall remain in full force and effect.




	 	 	 	 	 	 	 	 	 	 	 
	
 Hewlett Packard
Company 
 	 	 	 	

SMART Modular Technologies, Inc.
 
	 
	 
	By:

	 	/s/ Stephen A Decker
 

	 	 	 	By:
	 	/s/ Jack Pacheco
 

	 	 
	Name:

	 	Stephen A Decker
	 	 	 	Name:
	 	Jack Pacheco	 	 
	Title:

	 	Procurement Director
	 	 	 	Title:
	 	VP / CFO	 	 






 









 






EXHIBIT A




Subsidiaries and Named Affiliates




SMART Modular Technologies, Inc.

4211 Starboard Drive

Fremont, CA 94538




Regional subsidiaries and named affiliates:




SMART Modular Technologies (Europe) Limited

Unit 312 and 312A

Nasmyth Building

Scottish Enterprise Technology Park

East Kilbride

G75 0QD




SMART Modular Technologies Sdn. Bhd (458945-M)

Plot 18, Lorong Jelawat 4

Kawasan Perindustrian

Seberang Jaya, 13700

Prai, Penang, Malaysia




SMART Modular Technologies (Puerto Rico) Inc.

Industrial Park

Street 115, KM 22.6

Aguada, Puerto Rico 00602 USA




Dominican Branch:




Edificio Antiguo GFS

Zona Franca San Isidro

Carrerera San Isidro, KM 17

Santo Domingo, Dominican Republic




Brazilian Branch:




Rodovia Presidente Dutra, KM 214

Portaria 2 — Bloco 4

07210-901- Guarulhos — SP

Brasil




 









 





EXHIBIT B




PRODUCTS, PRICING AND LEADTIME SCHEDULE:




B.1. Product Pricing Procedures





	1.	 	HP Contract Pricing Model: Applies to high volume, mainstream and New Product
Introductions SKUs as agreed upon quarterly by HP and SMART. Pricing is as necessary to
reflect memory supplier pricing changes in the Options Pricing Matrix
	 
	2.	 	Modules are loaded into the pricing matrix at HP current contract price with the
respective memory suppliers.
	 
	3.	 	HP does not provide price protection beyond the
reconciliation process as defined in B.2.7.
unless HP in writing directs SMART to position material as a “Risk-Build” or “Strategic-Buy”
in SMART’s inventory. Any further price protection is handled on a case-by-case basis and both
parties must agree to terms in writing.
	 
	4.	 	All Memory Option SKUs carry a flat service fee equal to 3.0% of module level-costs.
	 
	5.	 	See Exhibit I for rebate requirements based on number of memory modules built by Smart.
	 
	6.	 	Price Effective Date. Following a DRAM / Module pricing change, SMART will be price protected
by HP for 2 full working days (excluding weekends) in order to position material in inventory
and WIP.
	 
	7.	 	Reconciliation. There is no change to the reconciliation process as defined in B.2.7. Prices
are fixed per the above agreement.




 









 












B2. Reconcile Formulas




	 	 	 	 	 
	Supplier A	 	Supplier B	 	Formulas
	$A with A% Allocation

	 	$B with B% Allocation
	 	Weighted Average Price = Wt Avg. = $A * A% + $B * B%
	$A>Wt Avg.

	 	$B < Wt Avg.
	 	Smart purchase from A, Smart credited $A — Wt Avg.
	$A > Wt Avg.

	 	$B < Wt Avg.
	 	Smart purchase from B, HP credited
Wt Avg. — $B
	Wt Avg. < spot

	 	Wt Avg. < spot
	 	Smart purchase from spot, Smart credited spot — Wt Avg.
	spot < Wt Avg.

	 	spot >= $B
	 	Smart purchase from spot, Smart credited 1/2 * (Wt Avg. — spot)
	$A > $B > Spot

	 	2 * $B — Wt Avg. < spot
	 	Smart purchase from spot, HP credited Wt Avg. — $B + 1/2 * ($B -
	$A > $B > Spot

	 	2*$B-Wt Avg. >= spot
	 	Smart Purchase from spot, HP credited 1/2 * (Wt Avg. — spot)






Purchase Price:





	B2.1.	 	“HP’s Contract Price” shall be defined as the contract pricing for semiconductor memory
devices and memory modules as documented by HP to Smart Modular.
	 
	B2.2.	 	The parties shall reconcile the amounts owed due for the previous month based on the
formulas in Table B2: Reconcile Formulas using the reconciliation report as identified in
Exhibit J: Reports.
	 
	B2.3.	 	HP reserves the right to make changes to the Approve HP Contract Suppliers for this
Agreement.
	 
	B2.4.	 	HP will be responsible for providing Smart Modular with the HP Approved Vendor List (AVL)
and for providing Smart Modular with updates to the AVL as corrections and additions are made
every 2 weeks.
	 
	B2.5.	 	The “Spot” price shall be defined as the price Smart Modular pays for semiconductor memory
devices from the “spot” market.
	 
	B2.6.	 	Smart Modular further agrees to provide price in US$ as per Section 14.2 of the CPA.
	 
	B2.7.	 	Reconciliation formulas in Table B.2. shall use the below procedures when more information
is needed.






	 	B2.7.1	 	Reconciliation applies to Fremont and Scotland shipments only. R-Block transactions
are excluded from Reconciliation process.
	 
	 	B2.7.2	 	Modules purchased which are based on a purchased module kit cost are reconciled using
the formula in Table B.2. based on the order date.
	 
	 	B2.7.3	 	For Modules purchased which are not based on a purchased module kit cost, are
reconciled based on the order date.




 









 











B3. Worldwide Memory Option Kitting Cost




	 	 	 	 	 	 	 	 	 
	 	 	Total Cost	 	 	Total Cost	 
	Kitting Assembly	 	(ISS)	 	 	(non-ISS)	 
	1 Module per Kit
	 	$	2.27	 	 	$	2.12	 
	2 Modules per Kit
	 	$	2.50	 	 	$	2.32	 
	4 Modules per Kit
	 	$	3.15	 	 	$	2.95	 






 









 






EXHIBIT C




SPECIFICATIONS



HP’s Memory Module specifications shall be provided to Smart Modular upon release. For each
device specification the following referenced specifications shall apply and are listed below.




	 	 	 
	SPECIFICATION	 	 
	NUMBER	 	PROCEDURE & SPECIFICATION DESCRIPTION
	HP PART NUMBER
	 	MEMORY DEVICE SOURCE CONTROL DRAWING
	CU-105075CL
	 	Procedure, Tape & Reel Packaging for Surface Mountable Components
	CU-106797J
	 	Standard Marking Requirements, Custom Large Scale Integrated Device
	CU-114971C
	 	Procedure, IC Fabrication, Assembly, Packaging, and Test Process Change Notification
	CU-137063-N
	 	Specification, Bar Code Rev. N
	CU-109329CM
	 	Specification, Packaging, Device Tray, SMT Components
	CU-106350DC
	 	Procedure, Specification, Package Outlines







 









 








EXHIBIT E




QUALITY PROCESSES AND MANAGEMENT HANDBOOK



Smart Modular agrees that all of its part numbers, processes, and manufacturing sites relating to
products in this Agreement shall be certified as deemed necessary by HP using HP’s Five Step
Process and HP’s World Class Supplier Process (W.C.S.P.) tools.



In addition, Smart Modular’s Management Handbook (80py00l rev K) is attached. Subsequent revisions
to the Quality Manual will be submitted for HP’s review and insertion into this Agreement as per
Section 9.4.




 









 








EXHIBIT F




FORECAST PLAN



HP shall provide a monthly forecast of its fiscal quarter Material Positioning Plan to SMART at the
beginning of each month and as necessary to allow for significant changes in the forecast(s).
Significant changes shall mean any increases or decreases greater than 20% of previous forecast.




 









 








EXHIBIT G




AUTHORIZED HP AFFILIATES AND SUBCONTRACTORS




HP Authorized Affiliates Include:




Hewlett Packard Company — Houston

20555 State Highway 249

Houston, TX 77269-2000




HP Computer Manufacturing Ltd.

Erskine Ferry Road

Bishopton

Renfrewshire, Scotland PA7-5PP




HP Asia Pte Ltd.

1 Yishun Avenue 7

Singapore 2776




Q-Hub/CA HP Distribution

1220 S, Baker

Ontario, CA 91761




Q-Hub/NE HP Distribution

13900 Chalco Valley Parkway

Omaha, NE 68138




Q-Hub/IN HP Distribution

7520 Georgetown Road

Indianapolis, IN 46268




HP Authorized Sub-Contractors:



HP’s authorized Sub-Contractors will be identified from time to time by HP in a specific
letter of authorization of limited duration and scope. Smart Modular reserves the right to assess
the credit worthiness of sub-contractors whose credit standing is not guaranteed by HP.




 









 








EXHIBIT I




REBATE STRUCTURE



Rebate Structure based on number modules built by Smart per quarter. Smart will report number of
modules built on a monthly basis to HP.





Quarters defined by Smart’s fiscal year: Sep-Nov, Dec-Feb, Mar-May, Jun-Aug.




The incentive to HP for modules built by Smart, per quarter, is as follows:




	 	•	 	Additional 0.15% Service fee rebate if > 200K ISS units are built by Smart WW
	 
	 	•	 	Additional 0.20% Service fee rebate if > 250K ISS units are built by Smart WW
	 
	 	•	 	Additional 0.25% Service fee rebate if > 300K ISS units are built by Smart WW