EXHIBIT 10.06
NATIONAL FOUNDRY SERVICES AGREEMENT
THIS NATIONAL FOUNDRY SERVICES AGREEMENT ("Agreement") is dated and
made effective this 11th day March, 1997 (the "Effective Date") by and between
NATIONAL SEMICONDUCTOR CORPORATION, a Delaware corporation, having its principal
place of business at 0000 Xxxxxxxxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx
00000-0000 ("National") and XXXXXXXXX SEMICONDUCTOR CORPORATION, a Delaware
corporation, having its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxx
Xxxxxxxx, Xxxxx 00000 ("Fairchild"). National and/or Fairchild may be referred
to herein as a "Party" or the "Parties" as the case may require.
WITNESSETH:
WHEREAS, the Parties have entered into a certain Asset Purchase
Agreement (hereinafter referred to as the "Purchase Agreement") under which
Xxxxxxxxx is acquiring certain of the assets of National's Logic, Memory and
Discrete Power and Signal Technologies Business Units as historically conducted
and accounted for (including Flash Memory, but excluding Public Networks,
Programmable Products and Mil/Aero Logic Products) (the "Business"); and
WHEREAS, National, using proprietary processes, has been
manufacturing silicon wafers containing certain integrated circuits for
Fairchild at the Facility; and
WHEREAS, National and Fairchild desire to enter into an agreement
under which National will continue to provide certain manufacturing services to
Xxxxxxxxx following the closing of the transactions contemplated by the Purchase
Agreement; and
WHEREAS, National and Xxxxxxxxx recognize that the prices Xxxxxxxxx
shall pay to National for silicon wafers manufactured pursuant to this Agreement
are determined based on the collateral transactions and ongoing relationship
between the Parties, as expressed in the Purchase Agreement, Revenue Side Letter
between National and Xxxxxxxxx of even date herewith (the "Revenue Side Letter")
and the Operating Agreements (as defined in Paragraph 6.2); and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the closing of the transactions contemplated by the Purchase
Agreement.
NOW, THEREFORE, in furtherance of the foregoing premises and in
consideration of the mutual covenants and obligations hereinafter set forth, the
Parties hereto, intending to be legally bound hereby, do agree as follows:
1.0 DEFINITIONS
1.1 "Acceptance Criteria" shall mean the electrical parameter
testing, process control monitor ("PCM") and other inspections for each Product
and/or Process as set forth in Exhibit F hereto, all of which are to be
performed by National prior to shipment of Wafers hereunder.
1.2 "Best Efforts" shall require that the obligated Party make a
diligent, reasonable and good faith effort to accomplish the applicable
objective. Such obligation, however, does not require any material expenditure
of funds or the incurrence of any material liability on the part of the
obligated Party, which expenditure or liability is unreasonable in light of the
related objective, nor does it require that the obligated Party act in a manner
which would otherwise be contrary to prudent business judgment or normal
commercial practices in order to accomplish the objective. The fact that the
objective is not actually accomplished is no indication that the obligated Party
did not in fact utilize its Best Efforts in attempting to accomplish the
objective.
1.3 "Confidential Information" shall have the meaning set forth in
Paragraph 16.1 below.
1.4 "Effective Date" shall mean the date first set forth above.
1.5 "Equivalent Wafers" shall mean the actual number of Wafers in a
given Process multiplied by the process complexity factor for that Process, as
set forth in Exhibit A hereto.
1.6 "Facility" shall mean National's existing wafer fabrication
facility located at Arlington, Texas.
1.7 "Fairchild" shall mean Xxxxxxxxx Semiconductor Corporation
and its Subsidiaries.
1.8 "National" shall mean National Semiconductor Corporation and
its Subsidiaries.
1.9 "National Assured Capacity" shall mean the capacity that
National agrees to supply Fairchild pursuant to Section 5 below.
1.10 "Masks" shall mean the masks and reticle sets, including the
mask holders and ASM pods, for the Products and Wafers used to manufacture
Products hereunder.
1.11 "Processes" shall mean those National proprietary
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wafer manufacturing processes and associated unit processes to be used in the
fabrication of Wafers hereunder which are set forth in Exhibit A hereto, as such
processes shall be modified from time to time as agreed by the Parties.
1.12 "Products" shall mean Xxxxxxxxx'x integrated circuit products
for which Wafers will be manufactured by National for Fairchild hereunder and
which are identified by Xxxxxxxxx'x part numbers listed in Exhibit B hereto,
which exhibit may be amended from time to time as the Parties may agree.
1.13 "Quality and Reliability Criteria" shall mean National's
manufacturing process quality and reliability specifications, as set forth in
the revision of National Specification CP0008 which is in effect as of the
Effective Date, and which are to be followed by National in manufacturing Wafers
hereunder.
1.14 "Specifications" shall mean the technical specifications as
listed in Exhibit B for each of the Products as provided in this Agreement.
1.15 "Subsidiary" shall mean any corporation, partnership, joint
venture or similar entity more than fifty percent (50%) owned or controlled by a
Party hereto, provided that any such entity shall no longer be deemed a
Subsidiary after such ownership or control ceases to exist.
1.16 "Wafers" shall mean six-inch (6") silicon wafers for any of the
Products to be manufactured by National hereunder.
1.17 "Wafer Module" shall mean any of the National six-inch (6")
wafer fabrication units in Arlington, Texas.
2.0 PROCESSES
2.1 All manufacturing hereunder shall take place at the Facility.
National shall not manufacture Wafers or transfer any Xxxxxxxxx-owned
intellectual property or technical information outside of the Facility other
than as may be permitted under this Agreement.
2.2 Exhibit A lists the Processes which National shall use in
manufacturing Wafers hereunder for Xxxxxxxxx. Exhibit A may be amended from time
to time by mutual agreement in writing of the Parties, as new processes are
developed and older Processes become obsolete.
2.3 National agrees to utilize Best Efforts to allow Fairchild to
source Wafers from Taiwan Semiconductor Manufac-
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turing Corporation ("TSMC") by means of the Joint Purchasing Arrangements as
provided in the Transition Services Agreement between the Parties of even date
herewith. Xxxxxxxxx'x target eight-inch Wafer process flow and expected
eight-inch Wafer requirements are set forth in Exhibit H hereto.
2.4 After qualification is successfully completed for any Product to
be manufactured under this Agreement, if National desires to make material
Process changes affecting form, fit or function, National will notify Xxxxxxxxx
of the intended change in accordance with National's process change procedures
then in effect. If the proposed changes are unacceptable to Xxxxxxxxx, Xxxxxxxxx
and National shall work together in efforts to resolve the problem and qualify
the changed Process for making Wafers. If during the first fifteen (15) fiscal
periods of this Agreement the Parties are unable to resolve the problem,
National shall continue to run the unmodified Process to supply Wafers pursuant
to this Agreement. After the first fifteen (15) fiscal periods of this
Agreement, if the Parties are unable to resolve the problem, National shall have
the right to make such Process changes upon the provision of ninety (90) days
prior written notice to Xxxxxxxxx.
2.5 Should National elect to discontinue a Process, it must give
Xxxxxxxxx written notice of no less than twelve (12) fiscal periods. In no
event, however, may National discontinue any Process during the first
thirty-nine (39) fiscal periods of this Agreement unless Xxxxxxxxx agrees.
Subsequent to National's notice of Process discontinuance, National will make
provisions with Xxxxxxxxx for Last Time Buys, and commit to ship all Wafers
requested in such Last Time Buys as the Parties may negotiate.
2.6 Just prior to the qualification of National's eight inch (8")
wafer fab in South Portland, Maine and National's 0.35 micron CMOS process
technology in that wafer fab, the Parties will undertake good faith negotiations
to make foundry capacity in said 8" wafer fab available to Xxxxxxxxx under terms
generally similar to those hereunder.
3.0 EXISTING PRODUCTS; SET UP AND QUALIFICATION OF NEW PRODUCTS; MODIFICATION OF
EXISTING PRODUCTS
3.1 For each new Product that Xxxxxxxxx proposes to have National
manufacture, Xxxxxxxxx will provide to National in advance the Specifications
and design layout of the Product for review and comment by National. The Parties
will also agree on the Acceptance Criteria, including electrical test
parameters, and Quality and Reliability Criteria for the prototype Wafers to be
manufactured for the new Product during the qualification
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process.
3.2 An initial data base for Mask generation or pattern generation,
or acceptable production Masks will be provided by Xxxxxxxxx to National, at
Xxxxxxxxx'x expense, for each new Product to be fabricated for Xxxxxxxxx. In the
alternative, Xxxxxxxxx may provide National with prime die design data and
National will provide the frame and fracture services and procure the Mask set
at Xxxxxxxxx'x expense. After receipt of the initial data base, or pattern
generation tape, or master or sub-master Mask set, additional and/or replacement
Mask sets shall be the responsibility and expense of National. All such data
bases, pattern generation tapes and Mask sets shall be the property of
Xxxxxxxxx, regardless of whether they were initially supplied by Xxxxxxxxx or
replaced by National.
3.3 As soon as practical following agreement on the items in
Paragraph 3.1 above, and following receipt of a written purchase order from
Xxxxxxxxx, National will begin manufacture of one or more lots of twelve (12)
prototype Wafers for such Product as is specified in the purchase order.
National will perform the electrical testing specified in the initial Acceptance
Criteria and supply the test data to Xxxxxxxxx with the prototype Wafers.
National's obligation shall be limited to providing Wafers that meet the
applicable PCM specifications and the associated test data. Xxxxxxxxx will
promptly inspect the prototype Wafers and notify National in writing of the
results. If the prototype Wafers do not meet the Acceptance Criteria and Quality
and Reliability Criteria, the Parties will cooperate in good faith to determine
the reason for such failure.
3.4 In connection with the completion of the qualification process
for any new Product, Xxxxxxxxx will deliver to National final Specifications for
the Product incorporating any changes agreed in writing by the Parties during
the qualification process. The Parties will also negotiate for each Product the
final Acceptance Criteria and Quality and Reliability Criteria to be used for
the commercial production lots of Wafers.
3.5 Unless otherwise agreed in writing, production quantities of
Wafers of a new Product will not be manufactured prior to completion of the
qualification process under this Section 3. In the event that Xxxxxxxxx desires
for National to manufacture production quantities, the Parties will agree in
writing on the terms before National accepts the purchase order.
3.6 If either Xxxxxxxxx or National desires to make any changes to
the final Specifications, Acceptance Criteria or Quality and Reliability
Criteria for any existing Product, that Party shall notify the other Party in
writing and negotiate the
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changes in good faith, including any changes in prices required by such
modifications. A modification to any of the foregoing will be binding only when
a writing to which such modification is attached has been signed by both Parties
as provided in this Agreement. The Parties will separately negotiate the price
and terms of any prototype Wafers required in connection with such change.
3.7 National may at its discretion declare a Product obsolete if
such Product has not been run in production for a minimum of six (6) fiscal
periods. National must provide Xxxxxxxxx with twelve (12) months prior written
notice of an obsolescence declaration and make reasonable provisions with
Xxxxxxxxx for a Last Time Buy for such Product. Within thirty (30) days after
completing production of Xxxxxxxxx'x Last Time Buy, National shall return all
data bases and Masks for such Product to Xxxxxxxxx.
4.0 CAPACITY; VOLUME COMMITMENTS; PRODUCTION PLANNING
4.1 All planning herein will be done under National's accounting
calendar which currently divides its fiscal year into four (4) equal fiscal
quarters, each of which consists of three (3) fiscal periods. The first two (2)
periods of each quarter are of four (4) weeks in duration and the third period
is of five (5) weeks duration.
4.2 Two (2) weeks prior to the end of each National fiscal period
Xxxxxxxxx will provide in writing to National a baseline quantity of Wafers, set
forth in terms of Wafer starts by Wafer Module, for the next eight (8) fiscal
periods (the "Capacity Request"). The Capacity Request shall clearly state each
Wafer in terms of six-inch (6") Equivalent Wafers. Equivalency factors are set
forth in Exhibit X. Xxxxxxxxx'x initial Capacity Request and National's Assured
Capacity response formats are set forth in Exhibit D.
4.3 Each fiscal period Xxxxxxxxx may change the Capacity Request in
accordance with the following table, provided that the maximum Capacity Request
does not exceed Xxxxxxxxx'x share of a Wafer Module's installed equipment
capacity as provided herein. Any changes outside those permitted under the
following table must be by mutual consent of the Parties.
Fiscal Periods in the Capacity Request Permitted Changes
-------------------------------------- -----------------
Period 1 Fixed
Period 2 +/-10%
Period 3 +/-15%
Period 4 +/-20%
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Period 5 +/-25%
Period 6 +/-30%
Period 7 +/-35%
Period 8 +/-40%
4.4 Xxxxxxxxx'x share of a Wafer Module's installed equipment
capacity will equal the previous National Assured Capacity for the Wafer Module,
plus that percentage of any excess capacity available in the Wafer Module equal
to Xxxxxxxxx'x percentage of the currently utilized capacity in said Wafer
Module. Installed equipment capacity is set forth below:
Wafer Module Annual Capacity
------------ ---------------
Arlington, TX 20,000 6" wafers
4.5 One (1) work week after receipt of the Capacity Request,
National shall provide Xxxxxxxxx with a response to such Capacity Request, the
"National Assured Capacity". The National Assured Capacity must guarantee the
amount requested in Xxxxxxxxx'x latest Capacity Request, provided that any
changes to Xxxxxxxxx'x latest Capacity Request are within the limits of
Paragraph 4.3. National shall utilize its Best Efforts to comply with any
requests by Xxxxxxxxx for capacity above those which are permitted under
Paragraph 4.3. In any case, National shall be obligated hereunder to provide
Xxxxxxxxx with the Wafer starts guaranteed in the National Assured Capacity
response. The initial National Assured Capacity response will be the last one
provided prior to the Effective Date. Set forth below are two examples of the
foregoing:
Example #1 The new Capacity Request is less than the last National
Assured Capacity response.
Period A B C D E F G H
------ - - - - - - - -
Last Capacity Request 100 100 100 100 100 100 100 100
Last National Assured Capacity 100 100 100 100 100 100 100 100
New Capacity Request 100 90 85 80 75 70 65 65
New National Assured Capacity 100 90 85 80 75 70 65 65
Example #2 The new Capacity Request is greater than the last National
Assured Capacity response.
Period A B C D E F G H
------ - - - - - - - -
Last Capacity Request 100 100 100 100 100 100 100 100
Last National Assured Capacity 100 100 100 100 100 100 100 100
New Capacity Request 100 110 115 120 125 130 135 135
New National Assured Capacity 100 110 115 120 125 130 135 135
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4.6 The timetable for the rolling eight fiscal period Capacity
Request, the National Assured Capacity response, purchase order release and
detailed device level Wafer starts request for the next fiscal period are set
forth in Exhibit D hereto.
5.0 PURCHASE ORDERS
5.1 All purchases and sales between National and Xxxxxxxxx shall be
initiated by Xxxxxxxxx'x issuance of written purchase orders sent by either
first class mail or facsimile. By written agreement of the Parties, purchase
orders may also be sent and acknowledged by electronic data exchange or other
mutually satisfactory system. Such "blanket" purchase orders shall be issued
once per fiscal quarter for Wafers to be delivered three (3) fiscal periods in
the future. They shall state the Wafer quantities (specifying whether
equivalents or actual) by Wafer Module, and shipping and invoicing instructions.
National shall accept purchase orders through a written or electronic
acknowledgment. Within a reasonable time after receipt of Xxxxxxxxx'x detailed
device level Wafer starts request for the next fiscal period, National shall
provide Xxxxxxxxx with a Wafer delivery schedule either on a weekly basis as the
Wafers are started or for the Wafer starts for the entire fiscal period, as the
parties may agree in writing. The purchase orders may utilize the first three
(3) fiscal periods forecast in the eight period rolling forecast supplied
pursuant to Section 4, as the embodiment of the purchase order for specifying
the Wafer quantity by Wafer Module and Process, and whether sorted or unsorted.
5.2 In the event of any conflict between the terms and conditions of
this Agreement and either Party's purchase order, acknowledgment, or similar
forms, priority shall be determined as follows:
(a) typewritten or handwritten terms on the face of a written
purchase order, acknowledgment or similar document or in the
main body of an electronic equivalent which have been
specifically accepted in writing by the other Party's Program
Manager;
(b) the terms of this Agreement;
(c) preprinted terms incorporated in the purchase order,
acknowledgment or similar document.
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5.3 Consistent with standard practices of issuing specific device
level details of part numbers to be fabricated on a weekly or periodic basis,
Xxxxxxxxx may unilaterally change the part number to be manufactured, provided
that National agrees that the change does not negatively impact National's
loadings and provided further that there is no change in the Process flow to be
used. A change that will negatively impact loading or alter the Process flow may
only be directed upon National's agreement; National shall utilize its Best
Efforts to comply with such requested change. The specific part number detail
shall be submitted by first class mail or facsimile. By written agreement of the
Parties, specific part number detail may also be sent by electronic data
exchange, or other mutually satisfactory system.
5.4 Fairchild shall request delivery dates which are consistent with
National's reasonable lead times for each Product as indicated at the time
Xxxxxxxxx'x purchase order is placed. Notwithstanding the foregoing, National
shall utilize its Best Efforts to accommodate requests by Xxxxxxxxx for quick
turnarounds or "hot lots", which includes prototype lots. Hot lot cycle times
and the premiums to be paid therefor are listed in Exhibit K.
5.5 National may manufacture lots of any size which satisfy the
requirements of effective manufacturing. However, Xxxxxxxxx must place orders
for full flow and prototype Products in increments of twelve (12) or twenty-four
(24) Wafers.
6.0 PRICES AND PAYMENT
6.1 Set forth herein in Exhibit M is the Forecasted Volume of Wafers
by Process that Xxxxxxxxx will purchase from National during the term of this
Agreement. Set forth in Exhibit N hereto are the prices which Xxxxxxxxx shall
pay to National for Wafers manufactured hereunder during the first six (6)
fiscal periods of this Agreement.
6.2 The Parties hereby acknowledge that the prices Xxxxxxxxx shall
pay to National for silicon wafers manufactured pursuant to this Agreement are
based on the collateral transactions and ongoing relationship between the
Parties as expressed in the Purchase Agreement, Revenue Side Letter and
corresponding Xxxxxxxxx Foundry Services Agreement, Xxxxxxxxx Assembly Services
Agreement, and Mil/Aero Wafer and Services Agreement of even date herewith
between the Parties (collectively the "Operating Agreements"). The prices which
Xxxxxxxxx shall pay to National for Wafers manufactured hereunder after the
first six (6) fiscal periods of this
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Agreement are set forth herein at Exhibit L. In addition, Products that qualify
will be subject to a die cost adjustment as provided in Exhibit E.
6.3 For purposes of Exhibit L, Xxxxxxxxx, or any "Big 6" accounting
firm designated by Xxxxxxxxx, shall have reasonable rights to audit not more
than twice each fiscal year the books and records of National relevant to the
pricing terms of this Agreement in order to come to agreement with National with
regard to National's actual manufacturing costs.
6.4 Prices are quoted and shall be paid in U.S. Dollars. Such prices
are on an FOB ship point basis. Payment terms are net thirty (30) from date of
invoice. Miscellaneous services may be invoiced separately.
6.5 Xxxxxxxxx shall pay, in addition to the prices quoted or
invoiced, the amount of any freight, insurance, special handling and duties.
Xxxxxxxxx shall also pay all sales, use, excise or other similar tax applicable
to the sale of goods or provision of services covered by this Agreement, or
Xxxxxxxxx shall supply National with an appropriate tax exemption certificate.
6.6 Xxxxxxxxx shall in no event be required to pay prices in excess
of those charged by National for other third party foundry customers, for
substantially similar products sold on substantially similar terms (e.g.,
volume, payment terms, manufacturing criteria, contractual commitments vs. spot
buys, etc.). In the event National desires to perform such foundry services for
other third party customers at such lower prices, National shall immediately
notify Xxxxxxxxx and Xxxxxxxxx shall begin receiving the benefit of such lower
price at the same time as such other third party customer. This Paragraph 6.6
shall not apply to the prices to be paid by Xxxxxxxxx hereunder for the first
twelve (12) fiscal periods of this Agreement, or for "spot buys" intended to
fill underutilized capacity thereby caused by Xxxxxxxxx.
7.0 OTHER MANUFACTURING SERVICES
7.1 At Xxxxxxxxx'x request, National will perform Wafer sort and
test services based on sort and test programs prepared, owned and otherwise
proprietary to Xxxxxxxxx. Towards that end, Xxxxxxxxx shall supply National with
Xxxxxxxxx-owned specific probe cards, load boards and test software in order
that National may provide such services. Wafer sort shall be priced by hours of
active sorting, with specific prices as set forth in Exhibit G.
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7.2 At Xxxxxxxxx'x request, National shall continue to provide
certain ongoing operational support services (the "Miscellaneous Support
Services") to Xxxxxxxxx at the same level of support that was in effect as of
the Effective Date on a purchase order basis at prices to be negotiated by the
Parties case-by-case.
7.3 In support of the Processes and those manufacturing processes
listed in Exhibit C, National will make available design support information
including the following items:
(a) Layout design rules.
(b) Industry standard models for active devices (BSIM3v3 for CMOS
devices and Xxxxxx-Xxxx with parasitics for bipolar devices)
representing nominal conditions and performance corners.
(c) Industry standard models, as stated in the Xxxxxxxxx NTPRS
document in effect as of the Effective Date, for parasitic
elements, such as interconnect resistances and capacitances,
sheet resistivities of all conducting layers, parasitic
capacitances for diffused areas, and so forth, including
additional elements or devices intended for mixed-signal
applications.
(d) Process cross sections, if not already available at
Fairchild.
(e) Sufficient sizing and PCM information to assure the integrity
of Masks ordered in support of Products to be manufactured.
(f) Yield models plus applicable current and forecast parameters
such as Ys and Do for those models.
This information should be in the form of at least one controlled paper copy or
electronic access to a controlled copy. Fairchild, at its discretion, may
request a controlled electronic copy of the required information in lieu of the
paper copy. National will provide the foregoing services at no charge to
Xxxxxxxxx, limited to those engineering services performed as of the Effective
Date. Any additional requests are subject to fees set forth in Exhibit J.
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8.0 DELIVERY; RESCHEDULING AND CANCELLATION
8.1 National shall make reasonable and diligent efforts to deliver
Wafers on the delivery dates specified in the Product delivery schedule provided
by National pursuant to Paragraph 5.1. Any shipment made within fifteen (15)
days before or after the shipment date(s) specified in said Product delivery
schedule shall constitute timely shipment. Partial shipments will be allowed and
may be invoiced separately. A delivery will be considered conforming if it
contains a quantity equal to plus or minus five percent (5%) of the quantity
ordered.
8.2 If National has not made shipment of Products within fifteen
(15) days after the shipment date specified in the Product delivery schedule
provided by National pursuant to Paragraph 5.1, Xxxxxxxxx shall have the right,
subject to Paragraph 18.2, to cancel that portion of its purchase order
pertaining to such Products, but only in the event that Xxxxxxxxx'x customer for
those Products has cancelled its order with Xxxxxxxxx for such Products.
Notwithstanding the foregoing, if National has not made shipment of Products
within thirty (30) days after the shipment date specified in the Product
delivery schedule, Xxxxxxxxx shall have the right, subject to Paragraph 18.2, in
its sole discretion, to cancel that portion of its purchase order pertaining to
such Products, regardless of whether Xxxxxxxxx'x customer has cancelled its
order with Xxxxxxxxx or not.
8.3 All Wafers delivered pursuant to the terms of this Agreement
shall be suitably packed for shipment in National's standard containers, marked
for shipment to Xxxxxxxxx'x address set forth in the applicable purchase order
and delivered to a carrier or forwarding agent chosen by Xxxxxxxxx. Should
Xxxxxxxxx fail to designate a carrier, forwarding agent or type of conveyance,
National shall make such designation in conformance with its standard shipping
practices. Shipment will be F.O.B. shipping point, at which time risk of loss
and title shall pass to Xxxxxxxxx. Shipments will be subject to incoming
inspection as set forth in Paragraph 9.2 below.
8.4 To facilitate the inspection of Product deliveries to Xxxxxxxxx,
lot integrity shall be maintained on all such deliveries, unless specifically
waived by mutual agreement of the Parties.
8.5 Subject to the provisions of Section 5 hereof, Xxxxxxxxx may
cancel any purchase order upon at least one (1) week's notice prior to the
commencement of manufacturing with-
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out charge, provided that Xxxxxxxxx reimburses National for the cost of any
unique raw materials purchased for such order.
8.6 Xxxxxxxxx may request that National stop production of Wafers in
process for Xxxxxxxxx'x convenience and National will consider stopping
depending on the point of process. In such event, Xxxxxxxxx shall pay for all
Wafers at the agreed price, subject to a negotiated adjustment based upon the
degree of completion of the Wafers and whether or not National is able to
utilize the unfilled capacity. National will, if reasonably practicable, restart
production of stopped Wafers one time within a reasonable time after receipt of
a written request from Xxxxxxxxx, subject to Xxxxxxxxx'x payment of any
additional expenses incurred. Sections 9, 10 and 11 of this Agreement shall not
apply to Wafers stopped under this Paragraph 8.6 for more than thirty (30) days,
nor shall National make any commitments of yield with respect to such Wafers.
8.7 In the event that Xxxxxxxxx elects to maintain an inventory of
partially finished Wafers, ownership of the partially finished Wafers will pass
to Xxxxxxxxx when they reach the holding point defined by the relevant Process
flow. National will invoice Xxxxxxxxx for such Wafers, but they will be stored
under clean-room conditions and remain in the Wafer processing WIP management
system. National will inform Xxxxxxxxx of the number and types of these Wafers
remaining in inventory at the end of each fiscal period. Further, the electronic
records and physical inventory shall be available for inspection by Fairchild at
any time. National shall credit Fairchild with the amount previously invoiced
for any such Wafers at such time as they are restarted in the Process flow.
8.8 As of 12:01 A.M. on the Effective Date, Xxxxxxxxx will own all
Wafers located at the Facility which National has commenced processing but which
have not yet been completed in accordance with the pertinent Process flow.
Unless expressly directed by Xxxxxxxxx otherwise, National shall continue to
process each Wafer to a normal state of completion in the applicable Wafer
Module. Xxxxxxxxx shall pay National for the accumulated additional processing
costs, plus a twenty-five percent (25%) xxxx up, for the additional processing
taking place on and after the Effective Date. The provisions of Sections 9, 10
and 11 hereof, shall specifically apply to all such Wafers.
9.0 QUALITY CONTROL AND INSPECTION; AND RELIABILITY
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9.1 National will manufacture Wafers in accordance with the Quality
and Reliability Criteria for the applicable Product. Prior to shipment, National
will perform the electrical parameter testing and other inspections specified to
be performed by it in the applicable Acceptance Criteria on each Wafer lot
manufactured. National will only ship those Wafer lots that successfully pass
the applicable Acceptance Criteria. National will electronically provide
Xxxxxxxxx with the electrical test data specified in the applicable Acceptance
Criteria. Wafers will be laser scribed with lot and wafer number for statistical
monitoring and lot number traceability.
9.2 Xxxxxxxxx shall promptly provide for inspection and testing of
each shipment of Wafers upon receipt in accordance with the Acceptance Criteria
and shall notify National in writing of acceptance of the Wafers. If Xxxxxxxxx
has not given written notice to National of rejection of all or part of a
shipment within thirty (30) days of receipt, Xxxxxxxxx will be deemed to have
accepted such Wafers. In the event any lot or Wafer is found to fail the
Acceptance Criteria prior to final acceptance, Xxxxxxxxx shall promptly return
it to National, together with all test data and other information reasonably
required by National. Upon confirmation by National that such Wafers fail the
Acceptance Criteria, National shall replace such lot or Wafer on a timely basis.
9.3 Xxxxxxxxx shall promptly provide for yield probe tests to be
conducted on the Wafers and communicate the results of the tests to National
within thirty (30) days of receipt of Wafers from National. The right to return
any Wafers for low yield shall be governed by Section 10 below.
9.4 MPS-3-000 (Material Procurement Specification) - General
Provisions and Quality Requirements for External (Non-National) Wafer Fab
Facilities and MPS-3-001 (Material Procurement Specification) - Technical
Requirements for CMOS Processing are the National policies for the purchase of
integrated circuits from independent suppliers. These policies as in effect at
the Effective Date shall provide criteria for the initial and continuing
qualification of the Facility and evaluation of Wafers manufactured by National
hereunder. To the extent that those policies are not inconsistent with the
provisions of this Agreement, Xxxxxxxxx shall not be required to accept delivery
of any Wafers hereunder if National fails to comply with said policies or such
other similar policies as may be mutually agreed to in writing by the Parties.
9.5 National hereby warrants that the Facility currently is, and
will remain throughout the term of this Agree-
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ment, ISO9000 certified.
10.0 MINIMUM YIELD ASSURANCES
10.1 National will guarantee a minimum yield assurance ("MYA") on a
per Product basis for those Wafers fabricated and probed by National. For Wafers
not sorted by National the MYA limits will apply only to Wafers whose
substandard yield is caused by materials or National's workmanship. MYAs shall
function as a reliability screen hereunder for maverick Wafers, via standard
sort test results and yield.
10.2 The baseline yield and initial MYA for each Product to be
manufactured by National hereunder is set forth in Exhibit B hereto.
10.3 For a new Product, the baseline yield and MYA will be
established after a minimum of twenty (20) Wafer lot runs have been tested to
production released test programs. A new baseline yield and MYA will be
calculated whenever Xxxxxxxxx makes any modifications to said test programs.
10.4 For Products that qualify for die cost sharing, as provided in
Exhibit E, the baseline Net Die Per Wafer (NDPW) for the Product will be used
for defining the MYA. For all other Products, each fiscal quarter, each
Product's baseline yield will be calculated using the previous fiscal quarter's
results, or the previous twenty (20) Wafer lot runs if less than twenty (20)
Wafer lot runs were processed in said previous quarter. The mean and standard
deviation (sigma) yield for a Product will be calculated using individual Wafer
data. Zero yielding Wafers will be excluded from such calculations. The results
of such calculations will be used in defining the MYA for that Product for the
quarter in which the calculations are made, but only if the mean yield changes
by more than +/-2%.
10.5 MYA will be determined as follows. For purposes of Wafers
manufactured in the Facility, Wafers which yield less than sixty percent (60%)
of the mean will be considered discrepant and may be returned for full credit at
Xxxxxxxxx'x discretion. In no event shall National accept returns of Wafers on
non-released products.
10.6 Xxxxxxxxx shall provide yield analysis information on Wafers
returned to National under this Section 10, in order to assist National in
continuous Process improvement.
-15-
10.7 In the event of an extended period of substandard yields on a
Product, National will utilize its Best Efforts to correct any Process related
causes and the Parties will negotiate in good faith to make up for the Process
related yield loss experienced by Xxxxxxxxx and its customers.
11.0 WARRANTY
11.1 National warrants that the Wafers delivered hereunder shall
meet the Quality and Reliability Criteria and shall be free from defects in
material and National's workmanship under normal use for a period of one (1)
year from the date of delivery. If, during the one year period:
(i) National is notified in writing promptly upon discovery with a
detailed description of any such defect in any Product
(at which time National shall issue a return material
authorization number to Xxxxxxxxx), and;
(ii) Xxxxxxxxx returns such Product to the applicable Facility at
Xxxxxxxxx'x expense for inspection; and
(iii) National's examination of such Product reveals that the
Product is indeed defective and does not meet the
applicable Quality and Reliability Criteria or is
defective in materials or National's workmanship and
such problems are not caused by accident, abuse, misuse,
neglect, improper storage, handling, packaging or
installation, repair, alteration or improper testing or
use by someone other than National
then, within a reasonable time, National, at its sole option, shall either
replace or credit Xxxxxxxxx for such defective Product. National shall return
any Products replaced under this warranty to Xxxxxxxxx transportation prepaid,
and shall reimburse Xxxxxxxxx for the transportation charges paid by Xxxxxxxxx
in returning such defective Products to National.
11.2 THE FOREGOING WARRANTY CONSTITUTES NATIONAL'S EXCLUSIVE
LIABILITY, AND XXXXXXXXX'X EXCLUSIVE REMEDY, FOR ANY BREACH OF WARRANTY. EXCEPT
AS SET FORTH HEREIN, NATIONAL MAKES AND XXXXXXXXX RECEIVES NO WARRANTIES OR
CONDITIONS ON THE PRODUCTS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND
-16-
NATIONAL SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
12.0 ON-SITE INSPECTION AND INFORMATION
12.1 National shall allow Xxxxxxxxx and/or Xxxxxxxxx'x customers to
visit and evaluate the Facility during normal business hours as part of
established source inspection programs, it being understood and agreed between
Xxxxxxxxx and National that Xxxxxxxxx must obtain the concurrence of National
for the scheduling of all such visits, which such concurrence shall not be
unreasonably withheld. It is anticipated that such visits will occur no more
than once per quarter on average.
12.2 Upon Xxxxxxxxx'x written request, National will provide
Xxxxxxxxx with process control information, to include but not be limited to:
process and electrical test yield results, current process specifications and
conformance to specifications; calibration schedules and logs for equipment;
environmental monitor information for air, gases and DI water; documentation of
operator qualification and training; documentation of traceability through
National's operation; and National verification information. Except for exigent
circumstances, such requests shall not be made more than twice per year for a
given category of information.
13.0 PRODUCT ENGINEERING SUPPORT
13.1 The Parties will cooperate in allowing Xxxxxxxxx employees to
have reasonable access to the Facility during the term of this Agreement (the
"Xxxxxxxxx Engineering Team"), in order to assist in Product developments and
improvements. National will provide reasonable office space to the Xxxxxxxxx
Engineering Team, if required on a temporary basis, not to exceed sixty (60)
days per occurrence, at no expense to Xxxxxxxxx. Should the Xxxxxxxxx
Engineering Team require long term, dedicated office space, Xxxxxxxxx agrees to
pay National the overhead cost associated with such space. The Xxxxxxxxx
Engineering Team will comply with all applicable National regulations in force
at the Facility and Xxxxxxxxx hereby agrees to hold National harmless for any
damages or liability caused by any member of the Xxxxxxxxx Engineering Team,
which are attributable to: (i) the negligence or willful malfeasance of such
member, and (ii) any failure by such member to comply with National's
regulations in force at the Facility or with applicable law.
-17-
13.2 National shall assist the efforts of the Xxxxxxxxx Engineering
Team and provide Xxxxxxxxx with reasonable and timely support.
13.3 National shall assist Xxxxxxxxx in any efforts to identify any
reliability problems that may arise in a Product. Xxxxxxxxx shall correct
Product related problems and National shall correct all Process related
problems.
14.0 TERM AND TERMINATION
14.1 The term of this Agreement shall be thirty-nine (39) fiscal
periods from the Effective Date, provided however that the Parties shall not
less than eight (8) fiscal periods prior to the end of such thirty-ninth (39th)
fiscal period determine in good faith a ramp-down schedule of production so as
to minimize disruption to both Parties. If the Parties are unable to agree on
the terms governing a ramp-down, Xxxxxxxxx shall be allowed to reduce its
purchase commitment by not more than twenty percent (20%) per fiscal quarter,
starting one fiscal quarter after the initial thirty-nine (39) fiscal period
term of this Agreement. Xxxxxxxxx will provide National with not less than
ninety (90) days prior written notice of any such reduction.
14.2 This Agreement may be terminated, in whole or in part, by one
Party sending a written notice to the other Party of its election to terminate,
which notice specifies the reason for the termination, upon the happening of any
one or more of the following events:
(a) the other Party is the subject of a petition filed in a
bankruptcy court of competent jurisdiction, whether voluntary
or involuntary, which petition in the event of an involuntary
petition is not dismissed within sixty (60) days; if a
receiver or trustee is appointed for all or a substantial
portion of the assets of the other Party; or if the other
Party makes an assignment for the benefit of its creditors; or
(b) the other Party fails to perform substantially any material
covenant or obligation, or breaches any material
representation or warranty provided for herein; provided,
however, that no right of termination shall arise hereunder
until sixty (60) days after receipt of written notice by the
Party who has failed to perform from the other Party,
-18-
specifying the failure of performance, and said failure having
not been remedied or cured during said sixty (60) day period.
14.3 Upon termination of this Agreement, all rights granted
hereunder shall immediately terminate and each Party shall return to the other
Party any property belonging to the other Party which is in its possession,
except that National may continue to retain and use any rights or property
belonging to Xxxxxxxxx solely for the period necessary for it to finish
manufacturing during any ramp-down period. Nothing in this Section 14 is
intended to relieve either Party of any liability for any payment or other
obligations existing at the time of termination.
14.4 The provisions of Sections 11, 15, 16 and Paragraphs 18.5 and
18.8 shall survive the termination of this Agreement for any reason.
15.0 EXPORT CONTROL
15.1 The Parties acknowledge that each must comply with all rules
and laws of the United States government relating to restrictions on export.
Each Party agrees to use its Best Efforts to obtain any export licenses, letters
of assurance or other documents necessary with respect to this Agreement.
15.2 Each Party agrees to comply fully with United States export
laws and regulations, assuring the other Party that, unless prior authorization
is obtained from the competent United States government agency, the receiving
Party does not intend and shall not knowingly export or re-export, directly or
indirectly, any Wafers, Products, technology or technical information received
hereunder, that would be in contravention of any laws and regulations published
by any United States government agency.
16.0 CONFIDENTIALITY
16.1 For purposes of this Agreement, "Confidential Information"
shall mean all proprietary information, including Xxxxxxxxx and/or National
trade secrets relating to the subject matter of this Agreement disclosed by one
of the Parties to the other Party in written and/or graphic form and originally
designated in writing by the disclosing Party as Confidential Information or by
words of similar import, or, if disclosed orally, summarized and confirmed in
writing by the
-19-
disclosing Party within thirty (30) days after said oral disclosure, that the
orally disclosed information is Confidential Information.
16.2 Except as may otherwise be provided in the Technology Licensing
and Transfer Agreement between the Parties of even date herewith, each Party
agrees that it will not use in any way for its own account, or for the account
of any third party, nor disclose to any third party except pursuant to this
Agreement, any Confidential Information revealed to it by the other Party. Each
Party shall take every reasonable precaution to protect the confidentiality of
said information. Each Party shall use the same standard of care in protecting
the Confidential Information of the other Party as it normally uses in
protecting its own trade secrets and proprietary information.
16.3 Notwithstanding any other provision of this Agreement, no
information received by a Party hereunder shall be Confidential Information if
said information is or becomes:
(a) published or otherwise made available to the public
other than by a breach of this Agreement;
(b) furnished to a Party by a third party without
restriction on its dissemination;
(c) approved for release in writing by the Party
designating said information as Confidential
Information;
(d) known to, or independently developed by, the Party
receiving Confidential Information hereunder without
reference to or use of said Confidential Information; or
(e) disclosed to a third party by the Party transferring said
information hereunder without restricting its subsequent
disclosure and use by said third party.
16.4 In the event that either Party determines on the advice of its
counsel that it is required to disclose any information pursuant to applicable
law or receives any demand under lawful process to disclose or provide
information of the other Party that is subject to the confidentiality provisions
hereof, such Party shall notify the other Party prior to disclosing and
providing such information and shall cooperate at the expense of the requesting
Party in seeking any reasonable
-20-
protective arrangements requested by such other Party. Subject to the foregoing,
the Party that receives such request may thereafter disclose or provide
information to the extent required by such law (as so advised by counsel) or by
lawful process.
17.0 REPORTS AND COMMUNICATIONS
17.1 Each Party hereby appoints a Program Manager whose
responsibilities shall include acting as a focal point for the technical and
commercial discussions between them related to the subject matter of this
Agreement, to include monitoring within his or her respective company the
distribution of Confidential Information received from the other Party and
assisting in the prevention of the unauthorized disclosure of Confidential
Information within the company and to third parties. The Program Managers shall
also be responsible for maintaining pertinent records and arranging such
conferences, visits, reports and other communications as are necessary to
fulfill the terms and conditions of this Agreement. The names, addresses and
telephone numbers of the Program Managers will be communicated between the
Parties from time to time.
18.0 GENERAL
18.1 AMENDMENT: This Agreement may be modified only by a written
document signed by duly authorized representatives of the Parties.
18.2 FORCE MAJEURE: A Party shall not be liable for a failure or
delay in the performance of any of its obligations under this Agreement where
such failure or delay is the result of fire, flood, or other natural disaster,
act of God, war, embargo, riot, labor dispute, unavailability of raw materials
or utilities (provided that such unavailability is not caused by the actions or
inactions of the Party claiming force majeure), or the intervention of any
government authority, providing that the Party failing in or delaying its
performance immediately notifies the other Party of its inability to perform and
states the reason for such inability.
18.3 ASSIGNMENT: This Agreement may not be assigned by any Party
hereto without the written consent of the other Party; provided that Xxxxxxxxx
may assign its rights but not its obligations hereunder as collateral security
to any bona fide financial institution engaged in acquisition financing in the
ordinary course providing financing to
-21-
consummate the transactions contemplated by the Purchase Agreement or any bona
fide financial institution engaged in acquisition financing in the ordinary
course through whom such financing is refunded, replaced, or refinanced and any
of the foregoing financial institutions may assign such rights in connection
with a sale of Xxxxxxxxx or the Business in the form then being conducted by
Xxxxxxxxx substantially as an entirety. Subject to the foregoing, all of the
terms and provisions of this Agreement shall be binding upon, and inure to the
benefit of, and shall be enforceable by, the respective successors and assigns
of the Parties hereto.
18.4 COUNTERPARTS: This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
18.5 CHOICE OF LAW: This Agreement, and the rights and obligations
of the Parties hereto, shall be interpreted and governed in accordance with the
laws of the State of California, without giving effect to its conflicts of law
provisions.
18.6 WAIVER: Should either of the Parties fail to exercise or
enforce any provision of this Agreement, such failure shall not be construed as
constituting a waiver or a continuing waiver of its rights to enforce such
provision or right or any other provision or right. Should either of the Parties
waive any provision or right under this Agreement, such waiver shall not be
construed as constituting a waiver of any other provision or right.
18.7 SEVERABILITY: If any provision of this Agreement or the
application thereof to any situation or circumstance shall be invalid or
unenforceable, the remainder of this Agreement shall not be affected, and each
remaining provision shall be valid and enforceable to the fullest extent.
18.8 LIMITATION OF LIABILITY: IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING
FROM THE OTHER PARTY'S PERFORMANCE OR FAILURE TO PERFORM UNDER THIS AGREEMENT,
OR THE FURNISHING, PERFORMANCE, OR USE OF ANY GOODS OR SERVICES SOLD PURSUANT
HERETO, WHETHER DUE TO BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE OR
OTHERWISE, REGARDLESS OF WHETHER THE NONPERFORMING PARTY WAS ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR NOT.
18.9 EFFECT OF HEADINGS: The headings and sub-
-22-
headings contained herein are for information purposes only and shall have no
effect upon the intended purpose or interpretation of the provisions of this
Agreement.
18.10 INTEGRATION: The agreement of the Parties, which is composed
of this Agreement and the Exhibits hereto and the documents referred to herein,
constitutes the entire agreement and understanding between the Parties with
respect to the subject matter of this Agreement and integrates all prior
discussions and proposals (whether oral or written) between them related to the
subject matter hereof.
18.11 PUBLIC ANNOUNCEMENT: Prior to the closing of the transactions
contemplated under the Purchase Agreement, neither Xxxxxxxxx nor National shall,
without the approval of the other Party hereto, make any press release or other
public announcement concerning the terms of the transactions contemplated by
this Agreement, except as and to the extent that any such Party shall be so
obligated by law, in which case the Party shall use its Best Efforts to advise
the other Party thereof and the Parties shall use their Best Efforts to cause a
mutually agreeable release or announcement to be issued; provided that the
foregoing shall not preclude communications or disclosures necessary to (a)
implement the provisions of this Agreement or (b) comply with accounting,
securities laws and Securities and Exchange Commission disclosure obligations.
Xxxxxxxxx shall provide National with a reasonable opportunity to review and
comment on any references to National made by Xxxxxxxxx (and shall not include
any such references to National without the written consent of National, which
consent shall not be unreasonably withheld or delayed) in any written materials
that are intended to be filed with the Securities and Exchange Commission in
connection with obtaining financing required to effect the transactions
contemplated in connection with the Purchase Agreement or intended to be
distributed to prospective purchasers pursuant to an offering made under Rule
144A promulgated under the Securities Act of 1933 in connection with obtaining
such financing.
18.12 NO PARTNERSHIP OR AGENCY CREATED: Nothing contained herein or
done pursuant to this Agreement shall constitute the Parties as entering upon a
joint venture or partnership, or shall constitute either Party the agent for the
other Party for any purpose or in any sense whatsoever.
18.13 BINDING EFFECT: This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the Parties hereto
and to their respective successors and assigns.
-23-
18.14 NOTICES: All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
delivery to a domestic address by a recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to:
National: National Semiconductor Corporation
0000 Xxxxxxxxxxxxx Xxxxx
X.X. Xxx 00000
M/S 00-000
Xxxxx Xxxxx, XX 00000-0000
Attn: General Counsel
FAX: (000) 000-0000
Fairchild: Xxxxxxxxx Semiconductor Corporation
M/S 01-00 (General Counsel)
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
FAX: (000) 000-0000
or to such other place as such Party may designate as to itself by written
notice to the other Party.
-24-
IN WITNESS WHEREOF, the Parties have had this Agreement executed by
their respective duly authorized officers on the day and date first written
above. The persons signing warrant that they are duly authorized to sign for and
on behalf of the respective Parties.
XXXXXXXXX SEMICONDUCTOR CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Title: Executive V.P.
NATIONAL SEMICONDUCTOR CORPORATION
By: /s/ Xxxx X. Xxxxx III
--------------------------------
Title: Senior V.P.
-25-
EXHIBIT A
PROCESSES
6-inch Wafer Process Flows: National Texas Fab
--------------------------------------------------------------------------------
Process Description and
Process Name Acceptance Specification Status
--------------------------------------------------------------------------------
CS200EE EEPROM variation of CS200 with single poly Prod
and double metal
Spec: XXXX XX-0000 and Xxxxxxxx files
mk410p19.lim and mk410t02.dsp
--------------------------------------------------------------------------------
CS160EE EEPROM variation of CS200 with single Prod
poly, reduced gate poly width, and double
metal
Spec. XXXX XX-0000 and Xxxxxxxx files
mk536p10.lim and mk536t06.dsp
--------------------------------------------------------------------------------
CS080A Standard 0.8(mu) core CMOS, with single Prod
poly, Tungsten Metal 1 and Aluminum Metal 2
Spec: XXXX XX-0000 and Xxxxxxxx files
mk612p10.lim and mk612102.dsp
--------------------------------------------------------------------------------
EXHIBIT B
PRODUCT LIST AND SUPPORTING DATA
Products manufactured in Texas
-------------------------------------------------------------------------------------------------------------------------------
Division Product ID Mask ID & Rev Process Flow Sort Test Sort W/hr MYA Date
-------------------------------------------------------------------------------------------------------------------------------
MEMORY NM66C57 NM66C57 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS200EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS200EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS200EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
MEMORY NM93C46 NM93C46 C CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
XXXXXX XX00X00 XX00X00 A CS160EE 50% 6-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTL16612 AAA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTL16612 ABA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTL16612 ACA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTL16616 AAA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTLP16612 AAA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTLP16612 ABA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTLP16612 ACA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTLP16612 ADA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTLP16612 BEA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
LOGIC GTLP16612 BFA3056E CS80A NA 8-Jan-97
-------------------------------------------------------------------------------------------------------------------------------
EXHIBIT D
CAPACITY REQUEST AND RESPONSE FORMATS
========================================================================
Arlington FY97 FY97 FY97 FY97 FY98 FY98 FY98 FY98
Per Per Per Per Per Per Per Per
9 10 11 12 1 2 3 4
------------------========================================================================
Workdays 34 27 28 35 27 27 35 27
===================================------------------------------------------------------------------------
Starts Forecast by Fab Details:
Raw by Size
===================================
MEMORY CS160EE 0 0 0 0 0 0 0 0
MEMORY CS200EE 0 0 0 0 0 0 0 0
LOGIC CS080A 0 0 0 0 0 0 0 0
Total TE 0 0 0 0 0 0 0 0
===================================
========================================================================
Outsourced FY97 FY97 FY97 FY97 FY98 FY98 FY98 FY98
Wafers Per Per Per Per Per Per Per Per
9 10 11 12 1 2 3 4
------------------========================================================================
Workdays 34 27 28 35 27 27 35 27
===================================------------------------------------------------------------------------
Starts Forecast by Fab Details:
Raw by Size
===================================
LOGIC TSMC 0.35(mu) 0 0 0 0 0 0 0 0
LOGIC Total TSMC 0 0 0 0 0 0 0 0
===================================
Section 6 1/10/97
Schedule `D'
Proposed Scheduling Table
(for flip agreement)
FORECAST TIMETABLE
Week
Day
---------------------------------------------------------------
Period 12 Period 1 Period 2 Period 3
---------------------------------------------------------------
1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
---------------------------------------------------------------
1
---------------------------------------------------------------
2 ZA A A ZA
---------------------------------------------------------------
3
---------------------------------------------------------------
4
---------------------------------------------------------------
5 R Y R Y R Y R Y
---------------------------------------------------------------
R=FSC PROVIDES 8 PD FORECAST TO NSC
Y=NSC PROVIDES CAPACITY RESPONSE TO FSC
Z=FSC PLACES BLANKET 3 PD PURCHASE ORDER WITH NSC
A=FSC RELEASES DETAIL OF WAFER STARTS FOR THE FOLLOWING PERIOD
EXHIBIT E
DIE COST IMPACT SHARING
1.0 GENERAL
1.1 Xxxxxxxxx and National will implement 50:50 sharing of yield gain and loss
implemented in accordance with the principles set forth in this Exhibit.
1.2 The yield adjustment amount will be calculated at the end of the first six
(6) fiscal periods ("Fiscal Half") from the Effective Date and each Fiscal Half
thereafter, retroactively. Xxxxxxxxx will pay National a yield premium fee in
the case of average yield improvement; National will reimburse Xxxxxxxxx in the
case of average yield degradation
1.3 Net Die Per Wafer (NDPW) will be used as the basis for the calculation.
2.0 ESTABLISHING YIELD BASELINE
2.1 In order to qualify for die cast sharing, Products must (i) have achieved a
minimum production volume of at least ninety-six (96) Wafers (i.e., the
equivalent of at least four 24-Wafer or eight 12-Wafer lots) per period for
three (3) of the preceding six (6) fiscal periods (a minimum of 288 Wafers) and
(ii) have a stable yield history (e.g., without known yield or test
sensitivities. The baseline NDPW of each qualifying Product as of the Effective
Date shall be the average NDPW of the preceding six (6) fiscal periods. Baseline
NDPWs will reset twelve (12) fiscal periods ("Fiscal Year") after the Effective
Date and at the end of each Fiscal Year thereafter.
2.2 A baseline NDPW will be established for a new Product after the Product has
achieved a minimum production volume of at least 96 Wafers per fiscal period
(i.e., the equivalent of at least four 24-Wafer of eight 12-Wafer lots) for
three (3) of the preceding six (6) fiscal periods (a minimum of 288 Wafers) and
(ii) has established a stable yield history (e.g., without known yield or test
sensitivities). Once a baseline NDPW has been established for a Product and
mutually agreed upon by the Parties, such baseline NDPW will remain in effect
until the next Fiscal Year reset point.
2.3 In case of a change in the sort program which affects the yield, a
new baseline NDPW will be mutually agreed upon based on the effect of the change
on the Product yield. The new baseline will apply to all lots measured after the
change has been implemented.
2.4 In the case of a Mask change which affects the yield, a new baseline NDPW
will be established as provided in Paragraph 2.2 of this Exhibit.
2.5 For Products that are not sorted by National the Parties will
agree on procedures to assure that production sort programs cannot be changed
without National's acknowledgment, and the provisions of Paragraph 2.3 of this
Exhibit shall apply to any such changes.
2.6 In order for a Product that is not sorted by National to qualify for die
cast sharing, Xxxxxxxxx must make wafer sort and yield data, and wafers (at
National's cost) as required for analysis, available to National on a timely
basis and in conformance with National's own internal requirements for such
data.
3.0 CALCULATIONS
3.1 At the end of each Fiscal Half, a Product list to be used for the yield
adjustment calculation will be mutually agreed by the Parties. Each Product in
this list shall (i) have an established baseline NDPW; (ii) have achieved a
minimum production volume of at least ninety-six (96) Wafers per period (i.e.
the equivalent of four 24-Wafer or 8 12-Wafer lots) for three (3) of the
preceding six (6) fiscal periods (a minimum of 288 Wafers); and (iii) have
established a stable yield history (e.g., without known yield or test
sensitivities).
3.2 The percent change in NDPW for the preceding Fiscal Half will be calculated
for each qualifying Product based on the difference between the baseline and
actual NDPW for the Product;
3.3 The semiannual adjustment for die cast sharing will equal:
(Base Wafer Price) X (NDPW Percent Change) X (0.5) X (Wafers Shipped)
3.4 The total adjustment will be the sum of the adjustments of the qualifying
Products.
3.5 National will perform the die cast sharing calculation and provide an
accounting to Xxxxxxxxx following the end of each Fiscal Half together with an
invoice of a credit for the die cost adjustment amount.
4.0 OTHER
4.1 MYA will be used in conjunction with die cost sharing for purposes of
identifying "Maverick" wafers that will be discarded (unless Xxxxxxxxx agrees to
accept). For Products that qualify for die cost sharing, the baseline NDPW will
be used as the basis for defining the MYA for the Product.
4.2 Wafer price adjustments to reflect changes in National's manufacturing cost
base are independent of die cost sharing.
EXHIBIT F
WAFER ACCEPTANCE CRITERIA
National Electrical Test Acceptance Method:
Acceptance of National Wafers for shipment to Xxxxxxxxx shall be determined per
mutually agreed upon electrical parameter test distribution performance with
standard test die. National's wafer acceptance methodology is detailed in
Arlington specification SP-0008. The method depends on two classes of Kiethley
files:
Limit files Identified as *.lim
Dispo (sition) files Identified as *.dsp
The former contain the electrical test limits, and the latter define the
accept/reject criteria per wafer, and in some cases per lot, by individual test.
The *.lim and *.dip files are identified in Exhibit A.
Arlington, Texas Wafer Acceptance and Wafer Sort:
1. Each lot will be sampled at PCM test prior to Wafer sort. Five wafers per
lot will be sampled and subjected to electrical test.
2. In the event that one of or more Wafers in the lot sample fail the
acceptance criteria, then 100% testing of the remaining Wafers in the lot
will be performed and the *.dsp acceptance criteria shall be applied to
each Wafer.
3. Electrical Test parameter distributions will be made available to National
on a monthly basis.
National Wafer Fabrication and Xxxxxxxxx Wafer Sort:
1. A ten (10) Wafer lot sample will be tested to the applicable PCM
specification prior to shipment to NSC. Xxxxxxx *.dsp and *.lim files will
govern the acceptances and rejections. In the event that one or more
sample wafers fails the PCM test, 100% testing of residual wafers will be
performed, and all Wafers which pass the PCB will be shipped to National.
2. Individual PCM SPECIFICATIONS (BY Process) are defined by the files called
out in Exhibit A.
3. Electrical Test parameter distributions will be made available on a
monthly basis.
EXHIBIT G
PRICES FOR WAFER SORT
Arlington Texas:
Wafer Sort Cost per Wafer
CS160EE $40.00 per wafer
CS200EE $40.00 per wafer
Non-recurring Costs:
Because of the planned evolution of the products currently sorted in Arlington,
it is not anticipated that the costs associated with new products will be
incurred.
EXHIBIT H
Eight Inch Wafer Detail
Eight inch Wafer Process Flow
--------------------------------------------------------------------------------
Process Description and
Process Name Acceptance Specification Status
--------------------------------------------------------------------------------
TSMC 0.35 Standard, 0.35 micron core CMOS, with gate polycide Qual
micron Polycide and two layers of aluminum metalization
--------------------------------------------------------------------------------
Eight Inch Wafer Demand
-------------------------------------------------------------------------------------
Q497 Q198 Q298 Q398 Q498 Q199 Q299 Q399 Q499 Q100 Q200 Q300 Q400
-------------------------------------------------------------------------------------
Starts 48 54 52 74 72 124 171 199 296 424 536 524 636
Eight Inch Wafer Price
TSMC wafer costs will be determined according to the National Master
Foundry agreement, which will be completed on or before February 1, 1997.
Xxxxxxxxx'x prices will be based on that agreement and adjusted as TSMC's
charges to National change
EXHIBIT K
CYCLE TIME AND EXPEDITED PROCESSING
Fiscal Year 1998 Wafer Processing Cycle Times (in Days)
Arlington, TE Fab:
Standard Hot Lot Super Hot
Process cycle time cycle time cycle time
------- ---------- ---------- ----------
CS160EE 40 32 28
CS200EE 40 32 28
CS080A 44 35 31
Charges for Expedited Processing
Xxxxxxxxx will be charged a premium per hot lot started as follows:
for Hot Lots, the premium will be $4,000. per lot
for Super Hot Lots' the premium will be $10,000. per lot
The standard lot sizes of 12 or 24 Wafers will apply.
EXHIBIT L
1. Shortly prior to the conclusion of the first six (6) fiscal periods of
this Agreement ("Fiscal Half"), the Parties shall meet in order to
determine new prices for the second Fiscal Half. At the meeting the
Parties will review the manufacturing history during such part of the
first Fiscal Half, for which such information shall be available, in order
to determine the Facility's actual manufacturing cost base, which shall be
consistent with National's standard cost accounting practices in effect as
of the Effective Date (the "Reference Cost Base"). If the Reference Cost
Base, plus a twenty-five percent (25%) xxxx up is less than the price
applicable for the first Fiscal Half, prices for the second Fiscal Half
will be equal to its Reference Cost Base, plus a twenty-five percent (25%)
xxxx up. Otherwise, the prices will remain the same as during the first
Fiscal Half.
The Reference Cost Base and second Fiscal Half prices will remain in
effect for the remaining term of this Agreement. Shortly prior to the conclusion
of the eighteenth (18th) fiscal period of this Agreement, and every six (6)
fiscal periods thereafter, the Parties shall meet in order to determine
National's actual manufacturing costs, which shall be consistent with National's
standard cost accounting practices in effect as of the Effective Date, for the
preceding Fiscal Half. If National's actual costs during the previous Fiscal
Half were lower than its Reference Cost Base, the Parties shall calculate what
Xxxxxxxxx would have paid if such actual costs had been used in originally
setting the prices, rather than the Reference Cost Base. National shall give
Xxxxxxxxx a credit equal to fifty percent (50%) of the savings Xxxxxxxxx would
have relaxed of it had paid the recalculated prices. No monies will be owing to
or from Xxxxxxxxx or to or from National if National's actual costs during the
preceding Fiscal Half were higher than the Reference Cost Base.
2. The prices for Wafers purchased during a National fiscal year in excess of
the Forecast Volumes will be negotiated by the Parties on a case by case
basis.
3. Pricing for any extension and/or ramp-down period beyond the first
thirty-nine (39) fiscal periods of this Agreement will be negotiated in
good faith by the Parties.
EXHIBIT M
THIRTY-NINE PERIOD FORECAST
Texas: Physical 6-inch starts
-------------------------------- ------------------------------------------------------
1H 2H 1H 2H
Family FY 97 FY 97 FY97 FY 98 FY 98 FY 98 FY 99 FY100
-------------------------------- ------------------------------------------------------
CS160EE & CS200EE 6,000 6,000 12,000 6,000 3,000 9,000 None None
-------------------------------- ------------------------------------------------------
CS080A 144 144 288 144 144 288 None None
-------------------------------- ------------------------------------------------------
EXHIBIT N
WAFER PRICING FOR FOUNDRY SERVICES
These prices, which reflect Wafers processed to commercial standards, shall be
in effect for the first six fiscal periods of this agreement:
Texas:
CS160EE $496 per 6-inch wafer
CS200EE $496 per 6-inch wafer
CS080A $875 per 6 inch wafer
