Exhibit 10.2*
* Confidential treatment has been granted or requested with respect to
portions of this exhibit, and such confidential portions have been deleted
and separately filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 or Rule 406.
AMENDMENT TO HP/EMS MANUFACTURING AGREEMENT
This Amendment (the "AMENDMENT") to the HP/EMS MANUFACTURING AGREEMENT
entered into as of May 26, 2000 by and between Enhanced Memory Systems, a
Delaware corporation ("EMS") and Hewlett-Packard Company, a Delaware
corporation ("HP"), is effective as of February 8, 2002.
WHEREAS, HP and EMS entered into a Manufacturing Agreement effective May 26,
2000 for the design of an HP Product generally described as an Embedded-DRAM
for manufacture in Infineon's 0.17 um Embedded-DRAM process;
WHEREAS, HP has concerns regarding EMS's solvency, and desires additional
assurance of project continuation in the event of insolvency;
WHEREAS, HP and EMS wish to amend the MANUFACTURING AGREEMENT to provide for
the payment of $1,279,341 for the transfer of title and possession rights of
certain Necessary Software and Hardware required to ensure successful
completion of the development of HP Products in the event of EMS's
insolvency, and restate the requirements of the remaining Deliverable,
Delivery Schedule.
NOW THEREFORE, HP and EMS agree to amend the MANUFACTURING AGREEMENT as
follows:
1. The following Section 2.22 will be added to the MANUFACTURING AGREEMENT:
2.22 "Necessary Software and Hardware" means the software and hardware
listed on Exhibit N.
2. Section 4.2.5 of the MANUFACTURING AGREEMENT shall be deleted and
restated in its entirety to read as follows:
4.2.5 Subject to the right to cure set forth in the Agreement, in the
event that EMS fails to deliver the HP Products, or fails to
deliver a Deliverable by the Delivery Date in the Delivery
Schedule in accordance with the terms of this Agreement as
amended, EMS hereby grants, within the limits of any licenses or
confidentiality agreements with third parties, an automatic
license to HP under EMS' Intellectual Property Rights, a non-
transferable, worldwide, royalty-free, paid-up license to make,
have made, [and] use and sell the HP Product for HP's sole and
exclusive use and sale in HP systems incorporating such HP
Product, including HP OEM daughter cards. In the event that HP
must use this license, EMS shall pay the mutually agreed upon NRE
costs for getting the HP product designed into a third party
process. In no event shall EMS pay mutually agreed upon NRE
costs in excess of those NRE payments made to EMS by HP.
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3. The following Section 4.6 will be added to the MANUFACTURING AGREEMENT:
4.6 To ensure that the HP Product development will be completed in time
for manufacturing and deployment in HP systems, EMS agrees to, upon
execution of this AMENDMENT, transfer title and within 30 days
complete the transfer of physical possession of copies of Necessary
Software and Hardware (if possible without substantial impact on
EMS's development schedule as mutually agreed by HP and EMS) to HP.
If transfer cannot be effected, and subject to any right to cure
set forth in the Agreement, then: (i) such Necessary Software and
Hardware shall be tagged as HP Property solely for the purposes of
Sections 4.2.5 and 23.2; (ii) EMS appoints HP as its attorney-in-
fact for the sole purpose of executing and filing, on EMS's behalf,
UCC-1 financing statements (and any appropriate amendments
thereto), as required by HP for protective purposes to evidence
HP's continuing right, title and ownership of the Necessary
Software and Hardware; and, (iii) HP may, from time to time,
inspect the Necessary Software and Hardware. Upon delivery of all
Deliverables to HP, the Necessary Software and Hardware shall no
longer be considered HP Property. HP agrees to grant back to EMS,
a paid-up, royalty-free license to make, use and sell such
Necessary Software and Hardware for any EMS product.
4. The following Section 23.7 will be added to the MANUFACTURING AGREEMENT:
23.7 In the event of breach under 22.2 EMS agrees that HP may,
subsequent to the period of time within which EMS may cure an
alleged breach, forward the letter agreements as set forth in
Exhibit O, and agrees to support HP's direct negotiation with such
suppliers to provide assurances of the supply of HP Product.
5. Exhibit D of the MANUFACTURING AGREEMENT is hereby amended by the
deletion of all text following the line:
"L2 Cache DRAM A1 Prototypes (800 units) October 18, 2001"
(inclusive), and the substitution of the following in lieu thereof:
L2 Cache DRAM A1 Prototypes* (100 Each) March 25, 2002
L2 Cache DRAM A1 Prototypes* (100 Each) April 7, 2002
L2 Cache DRAM A1 Prototypes* (200 Each) April 25, 2002
L2 Cache DRAM A2 Prototypes (500 Each) June 1, 2002
L2 Cache DRAM A2 Prototypes (300 Each) July 15, 2002
L2 Cache DRAM A2 Prototypes (400 Each) - Skewed Lots July 24, 2002
L2 Cache DRAM Conditional Qualification test report September 2, 2002
L2 Cache DRAM A2 Risk Production Units (2000 Each) October 1, 2002
L2 Cache DRAM A3 Prototypes if required** (1000 Each) October 15, 2002
L2 Cache DRAM A2 Risk Production Units (2000 Each) November 1, 2002
L2 Cache DRAM A2 Risk Production Units (2000 Each) December 1, 2002
L2 Cache DRAM Initial A2 Production Units January 1, 2003
L2 Cache DRAM Full Qualification test report January 1, 2003
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---------
* To achieve additional A1 prototypes, units (maximum available is total
number of units from 12 engineering wafers) will be tested to a mutually
agreed upon subset of the specifications including reduced address fields
** A3 revision required if the A2 revision of the product fails to meet the
specifications of the data sheet.
6. Exhibit K of the MANUFACTURING AGREEMENT is hereby amended by the
deletion of the line:
"27% On A1 prototype Delivery ($1,279,341) Note: Third payment will not
be contingent on HP testing of the prototypes.", and the substitution
of the following in lieu thereof:
($1,279,341) within 30 days of execution of this AMENDMENT.
7. The following Exhibit N will be added to the MANUFACTURING AGREEMENT:
EXHIBIT N
Necessary Software and Hardware
- Design databases (schematics, artwork, package design documentation).
- Input decks and simulation files for Spice analysis.
- Contact/revision information for s/w tools (Smartspice, Cadence).
- DUT board (the physical object and vendor information and documentation).
- Probe card (the physical object and vendor information and documentation).
- All test software - char/ver/test programs.
- Redundancy programming documentation.
- Existing/purchased prototype material (at EMS and in Infineon fab
pipeline).
- Test chip (design files and existing/purchased material).
- Tester access information and documentation.
- All other Pegasus hardware, materials, documentation owned by EMS.
7. The following Exhibit O will be added to the MANUFACTURING AGREEMENT:
Authorization to Negotiate Directly with Sub-Contractors
Supplier Name
Address
February 19, 2002
Dear Supplier,
The purpose of this letter is to notify you that Enhanced Memory
Systems (EMS) consents to and authorizes Hewlett-Packard Company
(HP) to deal directly with you as the purchaser of the L2 Cache DRAM
product and supplies for the L2 Cache Dram product. EMS hereby
waives any and all rights it may have under contract or otherwise to
contest such dealings.
EMS has no objection to HP purchasing directly from you the L2 Cache
DRAM product and supplies for the L2 Cache Dram product. EMS hereby
assigns and transfers to HP all rights it has to any of the
supplies, including but not limited to work in process, tool sets
and databases required to manufacturer the tool set.
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This letter is considered effective upon the date HP mails it to
you.
Sincerely,
Hewlett-Packard Company Enhanced Memory Systems
Signature: Signature:
Title: Title:
Date: Date:
8. The parties acknowledge and agree that this AMENDMENT fully and finally
resolves all outstanding issues between the parties, and that no party
may be charged with, or be deemed in default of the MANUFACTURING
AGREEMENT as of the date of this AMENDMENT.
9. All other provisions of the MANUFACTURING AGREEMENT shall remain
unchanged.
AGREED AND APPROVED:
EMS HEWLETT-PACKARD COMPANY
By: /S/ Xxxx Xxxxx By: /S/ **
------------------------ ------------------------
Name: Xxxx Xxxxx Name: **
Title President Title: **
By: /S/ Xxxxx X. Xxxxxxx By: /S/ **
-------------------------- ------------------------
Name: Xxxxx X. Xxxxxxx Name: **
Title C.O.O. Title: **
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