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EXHIBIT 10.5.2
1995 AMENDMENT TO
TECHNOLOGY TRANSFER AND FOUNDRY AGREEMENT
AND
CO-DEVELOPMENT AGREEMENT
This 1995 Amendment to Technology Transfer and Foundry Agreement
and Co-Development Agreement ("Agreement") is entered into as of August 16, 1995
between SEEQ Technology Incorporated ("SEEQ"), a Delaware corporation having a
place of business at Fremont, California, and Hualon Microelectronics
Corporation, a Taiwanese corporation ("HMC") that has a place of business at
Hsinchu, Taiwan. This Agreement shall become effective on the date (the
"Effective Date") of execution of the Settlement Agreement, Release and Tolling
Agreement dated the date hereof entered into between SEEQ and HMC ("Settlement
Agreement").
RECITALS
A. SEEQ and HMC entered into a Technology Transfer and Foundry
Agreement dated as of July 16, 1990 (the "1990 Foundry Agreement") pursuant to
which HMC served as a foundry for SEEQ to manufacture certain logic and other
ICs.
B. The Parties entered into a Co-Development Agreement dated February
24, 1992 (Co-Development Agreement.")
C. SEEQ and HMC have entered into the Settlement Agreement pursuant
to which SEEQ and HMC have agreed to settle certain
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disputes under the 1990 Foundry Agreement and the Co-Development Agreement.
D. In connection with the implementation of the Settlement Agreement,
the parties desire to amend the terms and conditions of the 1990 Foundry
Agreement and the Co-Development Agreement with respect to Products and
Processes;
Accordingly, SEEQ and HMC agree to the following terms and conditions:
1. INTRODUCTION
1.1 This Agreement amends and modifies the 1990 Foundry Agreement
and the Co-Development Agreement. Except as amended hereby, each of said
agreements shall each remain in full force and effect. In the event of any
inconsistency or other conflict between this Agreement and either or both of the
1990 Foundry Agreement or the Co-Development Agreement, the terms of this
Agreement shall prevail, and the other agreement is deemed amended by this
Agreement.
1.2 Except as otherwise defined herein, capitalized terms
shall have the meanings given to them in the 1990 Foundry Agreement.
1.3 Products means SEEQ's , and
products.
1.4 Process means the CMOS 1.2-micron Process
that was delivered by SEEQ to HMC and subsequently
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modified and developed by HMC and that is now known as .
2. FOUNDRY SERVICES
2.1 Minimum Wafer Foundering. Upon the terms and
conditions set forth herein, at SEEQ's request, HMC shall manufacture Articles
of Products for delivery to SEEQ. HMC may also, but shall not be
obligated to, manufacture wafers for Products Developed by SEEQ in addition to
the Products, as determined by the PARTIES. After execution of the
Settlement Agreement, HMC shall, upon request from SEEQ, based on a four (4)
week month, make wafer starts available to SEEQ at a minimum of (a)
125-millimeter wafers (or equivalents in other size wafers) started during the
period from the Effective Date through August 31, 1995, (b) 125-millimeter
wafer starts (or equivalents in other size wafers) started per month (at the
rate of approximately wafers per week) during the period from September 1,
1995 until the earlier of (i) the end of the term of the 1990 Foundry Agreement
, or (ii) the date in which the Products have been qualified by SEEQ for
manufacture on the Stepper, and (c) 125-millimeter wafer starts
(or equivalents in other size wafers) started per month (at the rate of
approximately wafers per week) during the period following the date on
which the Products have been qualified by SEEQ for manufacture on the
Stepper.
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2.2 Pricing. The initial prices per wafer of Products
foundered by HMC shall be as set forth in Appendix B to the 1990 Foundry
Agreement, which appendix is modified to read as set forth in Appendix B
hereto.
3. ROYALTIES
Neither HMC nor SEEQ shall be required to pay any royalty to the
other with respect to the sale of any of the Products, including any
HMC-Improved or SEEQ-Improved version(s) of each such product, as the case may
be.
4. NOTICES
All notices given under the 1990 Foundry Agreement shall be in
writing and shall be sufficient if delivered in person or mailed, postage
prepaid, registered or certified mail, return receipt requested, or
transmission by telecopier with confirmation of receipt, to the PARTIES at the
following addresses:
SEEQ: SEEQ Technology Incorporated
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: President and Chief Executive Officer
Telecopier: (000) 000-0000
With a copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx
Xxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
HMC: Hualon Microelectronics Corporation
6th Floor, Kua Hua Life Insurance Building
00 Xxxxx Xxxx Xxxxx Xxxx, Xxxxxxx 0
0
Xxxxxx, Xxxxxx
Attn: President and CEO
Telecopier: 886-2-531-3241
With a copy to: Xxxxxx, Xxxxxxxx, Marcus, Xxxxxx & Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
5. YIELD IMPROVEMENT
HMC and SEEQ agree that both Parties shall work together
immediately following the Effective Date of this Agreement (a) to enable HMC to
return probe yields to the levels achieved during 1994 (i.e., in excess of
die per wafer for the ) and (b) to thereafter continue to work
together to further improve yields in the manufacture of the SEEQ Products.
6. PAYMENTS FOR FOUNDRIED PRODUCTS
SEEQ shall pay for foundried Products, and shall pay for Mask
Generation Costs, all in accordance with Appendix B. SEEQ shall pay HMC all
amounts due under this Agreement within thirty (30) days after the receipt by
SEEQ of an invoice for such charges. HMC reserves the right to modify such
payment terms if any amount payable is sixty (60) days past due (unless such
amount is being contested in good faith), or if SEEQ has become insolvent or is
not able to pay its debts as they become due.
7. MINIMUM WAFER PURCHASE REQUIREMENTS
The Parties acknowledge that Paragraph 7.2 of the 1990 Foundry
Agreement which deals with minimum wafer purchase
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requirements for SEEQ shall no longer be applicable.
IN WITNESS WHEREOF, authorized officers or representatives of the
Parties have executed this Agreement on the dates entered below.
SEEQ TECHNOLOGY INCORPORATED HUALON MICROELECTRONICS CORPORATION
By By
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Date Date
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APPENDIX B
FOUNDRY DETAIL AND PRICING
1. EVALUATION, QUALIFICATION, RISK AND PRICING
1.1 Initial Pricing Terms. The initial prices for the , the
and the new design shall be as set forth below:
1.1.1 Initial Pricing. Initial pricing for the
shall be per wafer.
1.1.2 Initial Pricing. Initial pricing for the
shall be (i) per sorted die (or per
die if sorted at SEEQ) for all die invoiced prior to
December 31, 1995, and (ii) per sorted die (or
per die if sorted at SEEQ) for all die invoiced after
January 1, 1996.
1.1.3 Initial Pricing. Initial pricing for SEEQ's
new design shall be based on actual sort
yields, when available, and negotiated against an
effective wafer price target of per wafer.
1.2 Yield Improvements; Future Price Reductions. The PARTIES
agree that they will work diligently and with their respective
best efforts to achieve yield improvements in the manufacture
of the Products hereunder. HMC agrees that, in
consideration for SEEQ's efforts in the attempt to improve
such yields, HMC will negotiate in good faith with SEEQ to
reduce the prices set forth above (i) for the Product
manufactured hereunder so that SEEQ may obtain a share of the
benefits of yield improvements in excess of die per wafer,
and (ii) for the and Products, the Parties shall
share the benefits over the base line yields to be agreed upon
once mass production of such Products commences.
1.3 Stepper. HMC shall take all required actions
to bring the Stepper on-line as soon as possible
following the Effective Date to enable HMC to manufacture
Products utilizing the Stepper and to enable
HMC to achieve increased
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manufacturing capacity for the Products to be purchased
by SEEQ. SEEQ and HMC agree to develop a program immediately
following the Effective Date to accomplish this capacity
increase. SEEQ agrees to take all necessary actions to assist
HMC to accomplish this capacity increase.
1.4 HMC Engineering Services.
1.4.1 HMC agrees to provide the engineering services to
build the mask sets and process engineering lots
required to update the mask set and to bring
the Stepper on-line to achieve increased
capacity. The new mask sets are to be used for the
manufacture of products for both SEEQ and HMC.
1.4.2 HMC agrees to provide the engineering services to
build the mask sets and process engineering lots
required to bring up the latest revision of the
in HMC's manufacturing facility. The new mask
sets are to be used for the manufacture of products
for both SEEQ and HMC.
1.4.3 HMC agrees to provide the engineering services to
build the mask sets and process engineering lots
required to bring up the new design in HMC's
manufacturing facility. The new mask sets are to be
used for the manufacture of products for both SEEQ
and HMC.
1.5 Database Update. SEEQ shall update the and
databases for use by HMC in accordance with its contractual
rights. Such updates shall incorporate any present or future
design improvements completed by SEEQ during the term of this
Agreement and shall accommodate the use of the
Stepper, if technically feasible.
1.6 The . SEEQ shall also provide to HMC the initial
database of the Product, once it has been developed,
and shall provide database updates for the Product
during the term of this Agreement. HMC shall not sell the
Product outside of the Permitted Territories prior to
the end of the term of
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the 1990 Foundry Agreement, provided, however, that prior to
the end of such term HMC may sell the Product to its
sakes agent or representative who may not be located within
the Permitted Territories if such sale is solely for resale in
the Permitted Territories.
1.7 NRE Payments. SEEQ shall pay Non-recurring Engineering
("NRE") charges as follows:
1.7.1 SEEQ shall pay to HMC all NRE charges incurred to
establish manufacturing in HMC's Facility, and
shall pay such charges within thirty (30) days after
receipt of an invoice therefor, as follows:
(a) SEEQ shall pay to HMC
upon delivery to HMC of a completed
mask set by the mask vendor;
(b) SEEQ shall pay to HMC
upon delivery by HMC to SEEQ of eight
(8) or more wafers from the first engineering
lot under this Agreement;
(c) SEEQ shall pay to HMC
upon delivery by HMC to SEEQ of eight
(8) or more wafers from the second
engineering lot under this Agreement.
1.7.2 SEEQ shall pay to HMC all NRE charges incurred to
transfer the product for manufacturing in HMC's
Facility, and shall pay such charges within thirty
(30) days after receipt of an invoice therefor, as
follows:
(a) SEEQ shall pay to HMC
upon delivery to HMC of a completed
mask set by the mask vendor;
(b) SEEQ shall pay to HMC
upon delivery by HMC to SEEQ of eight
(8) or more wafers
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from the first engineering lot under this
Agreement;
(c) SEEQ shall pay to HMC
upon delivery by HMC to SEEQ of eight
(8) or more wafers from the second
engineering lot under this Agreement.
1.7.3 SEEQ shall pay to HMC all NRE charges incurred to
transfer and for start-up of the product for
manufacturing in HMC's Facility, and shall pay such
charges within thirty (30) days after receipt of an
invoice therefor, as follows:
(a) SEEQ shall pay to HMC
upon delivery to HMC of a completed
mask set by the mask vendor;
(b) SEEQ shall pay to HMC
upon delivery by HMC to SEEQ of eight
(8) or more wafers from the first engineering
lot under this Agreement;
(c) SEEQ shall pay to HMC
upon delivery by HMC to SEEQ of eight
(8) or more wafers from the second
engineering lot under this Agreement.
1.7.4 It is the intent of SEEQ and HMC that all NRE work to
be performed under this Agreement will be completed
by December 31, 1995, and that all NRE charges to be
paid by SEEQ under this Agreement will be paid by
December 31, 1995.
1.8 Other Matters.
1.8.1 HMC acknowledges that SEEQ expects that the
Process will be rapidly brought into control and will
yield consistently at wafer sort. HMC agrees to use
its best efforts, and SEEQ agrees to cooperate with
HMC, to ensure this is achieved.
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1.8.2 Wafer acceptance is to be subject to normal e-test,
visual and workmanship criteria. The PARTIES shall
cooperate to determine these matters.
1.8.3 Scrap criteria and RMA policy on misprocessed wafers
must be competitive. The PARTIES shall cooperate to
determine these matters.
1.9 E-Sort.
1.9.1 E-sort will be done either at SEEQ's facility in
Fremont, or at HMC's facility in Taiwan, and each
PARTY will have auditing rights for the E-sort
facility of the other PARTY during normal working
hours and with reasonable notice. Proposed changes
of software or hardware will follow the same
procedure as fab process changes.
1.9.2 All E-sort documentation will be maintained for 24
months. Each week, the E-sort area will provide the
following information to both PARTIES:
- wafers received by lot number, product and date
received
- wafers E-sorted by lot number and date E-sorted
- die yield by lot number and product
- wafers waiting to be E-sorted by lot number and
product.
1.9.3 At HMC's option, E-sort can be transferred to a
SEEQ-qualified HMC facility. Any change in die price
for HMC's E-sort will be determined by the PARTIES.
