Exhibit 10
AMENDMENT NO. 3 TO JOINT VENTURE FORMATION AGREEMENT ("Amendment No. 3"),
dated as of August 21, 1997, by and among Lucent Technologies Inc., a
Delaware corporation ("Lucent"), as assignee and successor in interest, by
duly acknowledged assignment, to AT&T Corp., a New York Corporation
("AT&T"), ATOR Corp., a New York corporation ("ATOR"), Cirrus Logic, Inc.,
a California corporation ("Cirrus"), and Ciror, Inc., a California
corporation ("CIROR").
WHEREAS, the parties now desire to modify and supplement certain of
the Material Agreements among them referenced in the Joint Venture Formation
Agreement (the "JV Agreement"), dated as of October 23, 1995, by and among
AT&T (now Lucent), ATOR, Cirrus and CIROR, as amended by Amendments Nos. 1
and 2 to said JV Agreement, by and among said parties, dated May 1 and
July 31, 1996, respectively, specifically, the General Partnership Agreement,
the IC Wafer Supply Agreement, and the Technical Transfer Agreement, as well
as to further amend said JV Agreement hereby as necessary to be consistent
therewith;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, and intending to be legally
bound hereby, the parties hereto agree, subject to the terms and conditions
contained herein, as follows:
1. Definitions. Capitalized terms or terms with initial capitals
used herein and not otherwise defined herein will have the meanings assigned
to them in the JV Agreement.
2. The JV Agreement. The JV Agreement is deemed, and hereby is,
amended in the following respects:
(a) Section 3.02 (Annual Plan), subsection (a) is amended to change the
fiscal year of the Partnership for general accounting purposes from a calendar
year period to an annual period commencing October 1 of each year, effective
as of October 1, 1996, and the quarterly dates for review and update of the
Annual Plan by the Board of Governors of the Partnership are hereby changed
accordingly. The annual date for ratification or amendment of the Annual Plan
is hereby changed from January 1 to September 1 of each calendar year. In
addition, it is agreed hereby, by way of clarification, that the term "the
fiscal year next succeeding the last year then covered by the Annual Plan" as
used in said Section 3.02(a) shall refer to the fiscal year immediately
following the current fiscal year covered by the Annual Plan. The Partnership
will remain on a calendar year basis for tax purposes.
(b) Sections 3.02 (Annual Plan), 4.03 (Intellectual Property) and 4.04
(Operation of Plant and Business), as well as the Annual Plan itself, are
deemed, and hereby are, amended as necessary to effect the modifications and
supplements to the specific Material Agreements as set forth in Sections 4 and
5 below.
(c) Section 4.04 (c) (Costs) (ii)(a) (OR2 Working Capital) is amended to add:
"Effective October 1, 1998, the working capital required with respect to OR2
will be provided by the Lucent Partner and the Cirrus Partner in proportion
to their respective Take or Pay obligations under the IC Wafer Supply
Agreement, as amended."
3. The General Partnership Agreement ("GPA"). The GPA, dated as of
May 1, 1996, between ATOR and CIROR, is deemed, and hereby is, amended in the
following respects:
(a) Section 1.01 (Definitions) is amended to change the Fiscal Year of the
Partnership as therein defined for general accounting purposes in accordance
with Section 2(a) above of this Amendment No. 3 and all references to "Fiscal
Year" in the GPA are deemed modified accordingly, effective as of October 1,
1996. For tax purposes the Partnership will remain on a calendar year basis.
(b) Section 5.02 is amended to add the following:
"Such agreement or consent shall not unreasonably be withheld with respect to
a sale of the transferring Partner's interest, provided, without limitation,
that:
(a) Any such proposed sale must be of the transferring Partner's entire
interest in the Partnership and include substitution of the new Partner for
the transferring Partner;
(b) In the case of CIROR, such interest shall not include any technologies
made available pursuant to Amendment No. 3 to the Joint Venture Agreement,
including the Appendices thereto (other than 0.18 micron technology as
defined in the Technical Transfer Agreement, as amended, provided that
available equivalent versions, as therein defined, then exist); and
(c) Such transferring Partner shall not be in default of any of its payment
or other obligations under the Joint Venture Agreement, as amended, or any of
the Material Agreements referenced therein, and in the case of CIROR and Cirrus
Logic, Inc., shall be in compliance with all requirements of the Cirrus Asset
Lease and the Cirrus Guaranty, including the obtaining of any consents
required thereunder."
4. The Technical Transfer Agreement ("TTA"). The TTA, effective as of
June 30, 1996, by and among Lucent, Cirent Semiconductor ("Cirent") and
Cirrus, is deemed, and hereby is, amended by incorporating therein, effective
concurrently herewith, the Supplemental Agreement, a copy of which is annexed
hereto and made a part hereof as Appendix A.
5. The IC Wafer Supply Agreement ("WSA"). The WSA, made as of
August 9, 1996, by and among Lucent, Cirrus and Cirent, is deemed, and
hereby is, amended as follows:
(a) Section 2.0(b) is amended to add the following:
"Such agreement by the other Purchaser to any such proposed foundry basis sale
by the original Purchaser shall not unreasonably be withheld; provided,
however, that such prior agreement shall not be required for foundry services
within the following requirements:
(i) Such foundry basis sale by Cirrus may not include Wafers produced
using any technologies made available pursuant to Amendment No. 3 to the
Joint Venture Agreement, including the Appendices thereto (other than 0.18
micron technology as defined in the Technical Transfer Agreement, as
amended, provided that available equivalent versions, as therein defined,
then exist);
(ii) The other Purchaser shall be entitled, upon request, to full prior
disclosure of the process, technology and audit terms of such proposed
foundry basis sale;
(iii) The original Purchaser shall hold harmless and indemnify the other
Purchaser and Supplier from and against all liabilities, losses, damages,
claims or demands arising out of or in any way related to any such foundry
basis sale and the transaction involved therein, except for those arising
from such other Purchaser's or Supplier's fault;
(iv) The original Purchaser shall be the exclusive interface for the
foundry basis sale and shall bear all additional costs arising from such
foundry transaction;
(v) Disclosure to the foundry customer of design rules or other technical
information necessary for such foundry basis sale shall be pursuant to a
non-disclosure agreement, agreed upon by Cirrus and Lucent, limiting use of
such information to fabrication of Supplier;
(vi) All foundry basis sale agreements shall include terms requiring
compliance with US Export Laws and Regulations; and
(vii) Information which Cirrus may provide to prospective or actual
foundry customers shall be limited to the following, unless otherwise
agreed by Lucent, such agreement not to be unreasonably withheld:
- Design rules
- Electrical parameters
- Extraction Models (e.g. SPICE)
- A coarse process flow to be mutually agreed upon by Cirrus and
Lucent
- A physical cross section
(b) The Wafer Purchase obligations and the Take or Pay Principles
set forth in Section 2 and Exhibit A thereof, respectively, as well
as the payment schedules set forth in Exhibit B thereof, are modified
by incorporating therein, effective concurrently herewith, as Exhibit
AB the Supplemental Take or Pay Principles and payment schedule, a
copy of which is annexed hereto and made a part hereof as Appendix B.
6. Closing. The parties will execute this Amendment No. 3 by their
duly authorized representatives, and Cirent will acknowledge same as
indicated below, at a closing to be held at the offices of Cirent,
0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx 00000, on August 21, 1997,
at 10:00 a.m. local time, or at such other place, date or time as the
parties hereto mutually agree upon. Such execution, the obligations
of Lucent, ATOR and Cirent, individually and collectively, to close,
and the continuation in effect of this Amendment No 3 are expressly
conditioned upon the following payments by Cirrus to Cirent,
representing the total amounts past or currently due from Cirrus
under various ofthe Material Agreements.
(a) The sum of $45.3 million, representing Wafer payments due under
the WSA, on or before said closing date; and
(b) The sum of $25 million, representing the balance of Wafer payments
due under the WSA, installation cost obligations and working capital
requirements, on or before October 1, 1997.
Such payments will be made by wire transfer to a designated Cirent bank
account or as may be otherwise directed by Lucent, ATOR or Cirent.
7. General. Except as specifically amended or modified hereby, all
terms and conditions of the JV Agreement and the Material Agreements
remain in full force and effect.
IN WITNESS HEREOF, this Amendment No. 3 has been duly executed by and
on behalf of each of the parties hereto, and duly acknowledged and
agreed to by Cirent, as of the date set forth above.
LUCENT TECHNOLOGIES INC.
By: /s/Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: V.P., Integrated Circuits Division
ATOR CORP.
By: /s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: President
CIRRUS LOGIC, INC.
By: /s/Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: CEO and Chairman
CIROR, INC.
By: /s/Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: CEO and Chairman
ACKNOWLEDGED AND AGREED TO:
CIRENT SEMICONDUCTOR G.P.
By: /s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Chairman of Board of Governors
SUPPLEMENTAL AGREEMENT
TO
TECHNICAL TRANSFER AGREEMENT
THIS SUPPLEMENTAL AGREEMENT ("TTA Supplement") is made and entered into
as of August 21, 1997 by and among Lucent Technologies Inc., a
Delaware corporation ("LUCENT"), Cirrus Logic, Inc., a California
corporation ("CIRRUS"), and Cirent Semiconductor G.P., a New York
general partnership ("LICENSEE"), as a supplement to the Technical
Transfer Agreement ("TTA"), effective as of June 30, 1996, by and
among said parties, and pursuant to Amendment No. 3 to the Joint
Venture Formation Agreement ("Amendment No. 3"), effective
concurrently herewith, by and among LUCENT, CIRRUS, ATOR Corp. a New
York corporation ("ATOR") and Ciror, Inc., a California corporation
("CIROR").
WHEREAS, the parties now desire, among other matters, to modify and
supplement the said TTA consistent with further agreements and
understandings between them;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the
parties hereto agree, subject to the terms and conditions contained
herein and in said Amendment No. 3, as follows:
1. Capitalized terms or terms with initial capitals used herein and
not otherwise defined herein or in the Definitions Appendix hereto will
have the meanings assigned to them in this Amendment No. 3, the TTA or
the Joint Venture Formation Agreement, as the context requires.
2. Article 1.01 (Furnishing of Information) and Article 2.01
(Technical Information Grants) of the TTA are deemed, and hereby are,
amended to provide that LUCENT will furnish to LICENSEE and CIRRUS will
have access to LUCENT TECHNICAL INFORMATION relating to certain
additional technologies, in accordance with Section 4 below and the
other terms and conditions hereof, provided that they are then (a)
in PRODUCTION for LUCENT in OR2, (b) offered in AVAILABLE EQUIVALENT
VERSIONS from a THIRD PARTY FOUNDRY SOURCE, and (c) LICENSEE and CIRRUS
are current with respect to their payment obligations under the Joint
Venture Formation Agreement and the Material Agreements as therein
defined. The furnishing of said technologies and the TECHNICAL
INFORMATION pertaining thereto to LICENSEE and any access thereto by
CIRRUS will be in accordance with the terms and conditions of the TTA
and this TTA Supplement.
3. Articles 3.02 (Transfer of 0.35 and 0.25 MICRON TECHNOLOGY) and
3.03 (Fee at QUALIFICATION of 0.25 MICRON TECHNOLOGY) of the TTA are
amended as follows:
"In lieu of the two payments of ten million dollars ($10,000,000) each for
0.25 MICRON TECHNOLOGY due on transfer and QUALIFICATION, respectively,
LICENSEE shall pay LUCENT the sum of twenty million dollars ($20,000,000) as
follows:
(a) One-third (1/3) upon written notice of election by Cirrus to convert
to 0.25 MICRON TECHNOLOGY in accordance with Sections A2 and 3 of
Exhibit AB to the IC Wafer Supply Agreement, as amended August 21,
1997; and
(b) Two-thirds (2/3) upon beginning of PRODUCTION using said TECHNOLOGY
for CIRRUS."
4. Article 3.04 (Fees on Wafers) of the TTA is amended to add the
following:
"In additional part payment for the further rights granted hereunder by LUCENT
to LICENSEE, LICENSEE shall pay LUCENT additional fees of (a) (i) thirty-five
million United States dollars (U.S. $35,000,000) as the initial fee for
TECHNICAL INFORMATION relating to 0.18 MICRON TECHNOLOGY, and (ii) eighty
United States dollars (U.S. $80.00) for each such WAFER made by using said
0.18 MICRON TECHNOLOGY; or alternatively, (iii) twenty million United States
dollars (U.S.$20,000,000) as the initial fee for TECHNICAL INFORMATION
relating to said 0.18 MICRON TECHNOLOGY, and (iv) one hundred United States
dollars (U.S. $100.00) for each such WAFER made by using said 0.18 MICRON
TECHNOLOGY; (b) thirty United States dollars (U.S. $30.00) for each such
WAFER made using AVAILABLE EQUIVALENT VERSIONS of BiCMOS TECHNOLOGY; and
(c) thirty United States dollars (U.S. $30.00) for each such WAFER made using
AVAILABLE EQUIVALENT VERSIONS of the STANDARD FLASH MODULE.
The initial fees provided in subsections (a) (i) and (iii) above shall become
payable by LICENSEE to Lucent as follows:
(a) One-third (1/3) upon written notice of election by CIRRUS to convert
to said 0.18 MICRON TECHNOLOGY in accordance with Section A2 of Exhibit
AB to the IC Wafer Supply Agreement, as amended August 21, 1997; and
(b) Two-thirds (2/3) upon beginning of PRODUCTION using said TECHNOLOGY
for CIRRUS."
Additional fees for other technologies or modules (none of which will
have a minimum feature size finer than that in 0.18 MICRON TECHNOLOGY)
referenced in Section 2 above, which are offered in AVAILABLE EQUIVALENT
VERSIONS from a THIRD PARTY FOUNDRY SOURCE will be negotiated by the parties
but will not exceed an additional sixty United States dollars (U.S. $60.00)
per WAFER for each such individual technology or module used.
Additional fees for unique developments or modifications in the above
technologies or modules, and which LUCENT may agree to provide to LICENSEE,
will be negotiated by the parties but will not exceed an additional sixty
United States dollars (U.S. $60.00) per WAFER for each such development or
modification used."
5. Except as specifically amended or modified hereby, all terms and
conditions of the TTA remain in full force and effect.
IN WITNESS WHEREOF, this TTA Supplement has been duly executed by and
on behalf of each of the parties hereto as of the date set forth above.
LUCENT TECHNOLOGIES INC.
By: /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President - Intellectual Property
CIRRUS LOGIC, INC.
By: /s/Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: CEO and Chairman
CIRENT SEMICONDUCTOR G.P.
By: /s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Chairman of Board of Governors
DEFINITIONS APPENDIX
0.18 MICRON TECHNOLOGY means technology enabling the fabrication of
SEMICONDUCTIVE DEVICES having line widths (a measure of minimum feature size)
as fine as 0.18 microns, and includes DIGITAL TECHNOLOGY and LINEAR TECHNOLOGY.
AVAILABLE EQUIVALENT VERSIONS means technologies qualified for
production and available from a THIRD PARTY FOUNDRY SOURCE and which provide
substantially the same functionality with comparable characteristics (e.g.,
access time, parametrics) under substantially the same design/layout rules
and using substantially the same numbers of masks.
DIGITAL TECHNOLOGY means the basic digital process.
BiCMOS TECHNOLOGY means technology in which a SEMICONDUCTIVE DEVICE
includes bipolar and complementary metal oxide semiconductors.
LINEAR TECHNOLOGY means adaptation of the digital technology to
include one or more of the following: threshold adjustments, capacitors,
fuses, and precision resistors.
PRODUCTION means that LICENSEE is supplying WAFER outs of a particular
technology after QUALIFICATION of that technology.
STANDARD FLASH MODULE means an electrically erasable, programmable
SEMICONDUCTIVE DEVICE having non-volatile memory cells in which erasure is
performed simultaneously on blocks of said cells.
THIRD PARTY FOUNDRY SOURCE means TSMC, VMC, Chartered Semiconductor
and other semiconductor manufacturing companies or entities that have an
annual revenue in excess of $75M per year from the sale of WAFERS to multiple
customers none of which has an equity position in or above consultations will
also include discussion of the potential impacts of various design rule changes
on yields and latch-up. Cirrus agrees to pay for the engineering lots used
in testing the design rule modifications.
EXHIBIT AB
TO
IC WAFER SUPPLY AGREEMENT
Supplemental Take or Pay Principles
and
Payment Schedule
The undersigned parties agree, effective as of August 21, 1997, that
the IC Wafer Supply Agreement ("WSA"), made as of August 9, 1996 by and among
said parties is deemed to be, and hereby is, amended by incorporating this
Exhibit AB as a supplement to and modification of the Take or Pay Principles
and the payment schedules set forth in Exhibits A and B, respectively, of
said WSA.
A. Exhibit A
The "Take or Pay Principles" set forth in Exhibit A to the WSA are
modified and supplemented as follows:
1. Lucent may convert up to 100% of its Capacity Allocation in OR2,
as defined in Section C below, at any time and in its sole discretion, to run
any silicon-based technologies, whether or not covered or scheduled in the
Annual Plan, provided only that there is No Material Deviation, as defined in
Section C below, caused by Lucent from the objectives and requirements of the
Annual Plan then in effect and the development of technologies as agreed to
in said Annual Plan remains on schedule. Lucent will hold Cirrus harmless
from loss or expense directly resulting from any Material Deviation so caused
by Lucent.
2. (a) Cirrus may convert any of its OR2 Capacity Allocation, as
defined in Section C below, to run any additional technologies furnished
pursuant to the Supplemental Agreement to the Technical Transfer Agreement
(Supplemental TTA) between the parties hereto, effective concurrently
herewith, provided that (i) due allowance is made for equipment line capacity,
ordering lead times and the current technology mixes of both parties, and (ii)
there is No Material Deviation, as defined in Section C below, caused by
Cirrus from the objectives and requirements of the Annual Plan then in effect.
Cirrus will hold Lucent harmless from loss or expense directly resulting from
any Material Deviation so caused by Cirrus.
(b) Up to one engineering lot of Wafers per month employing any
of the additional technologies described in Paragraph 2(a) above will, at
Cirrus' request, be made available by Supplier to Cirrus (from either OR1 or
OR2), prior to any conversion of capacity, at a price representing twice the
Cost of Production, as defined in Section C below, of such Wafers or lot.
3. If Supplier does not provide for Cirrus, by July 1, 1999, Wafers
processed using a qualified 0.25 micron digital technology from OR2 which are
Materially Equivalent (or better), as defined in Section C below and as
measured by cost and performance metrics agreed on in writing by the parties,
to that available from two or more third party foundry sources, Cirrus upon
90 days' prior written notice to Lucent and Supplier, may each quarter shift
a portion of its take or pay obligations to Lucent, at the rate of 5% per
fiscal year quarter of the total capacity of OR2 as provided in the then
current Annual Plan. Said action will not reduce any total amounts then
owed to Supplier by Lucent or Cirrus, and Cirrus' right so to shift its
obligations going forward will cease immediately upon Supplier's compliance
with the agreed metrics for such technology. Any such shift made pursuant
hereto will be irrevocable.
4. The rights provided in Paragraphs 1, 2 and 3 above are
exercisable by the respective referenced party only if such party is then
current with respect to its payment obligations under the Joint Venture
Formation Agreement and the Material Agreements as therein defined.
5. Lucent will take Wafers from Cirrus' Allocated Capacity in OR2
in accordance with the quantities and periods specified in Table 1 attached.
6. Paragraph (A) of Exhibit A is deemed, and hereby is, amended to
provide that from and after October 1, 1998, subject to Cirrus' compliance,
as of the date of commencement of such purchases, with Paragraph 4 hereof,
Lucent will purchase seventy-five percent (75%) and Cirrus will purchase
twenty-five percent (25%) of OR2's total production output for Wafers, based
on the forecasts provided in the Annual Plan, with cost responsibilities
determined pursuant to said Exhibit A as hereby amended and supplemented,
and Supplier agrees to sell to each Purchaser accordingly. Such take or
pay purchase percentages shall continue in effect for the remaining term of
the Partnership; provided, however, that from and after October 1, 1998
Cirrus will have the right to call back up to ten percent (10%) of said total
production output on two (2) years' prior written notice to Lucent and
Supplier plus an additional six (6) month period for transition, such call
back to continue in effect for the remaining term of the Partnership. The
Capacity Allocation for each Purchaser will at all times be equivalent to
such Purchaser's take or pay percentage.
7. It is agreed that 0.35 micron High Density Technology has been
qualified for production.
8. It is agreed that, to improve efficiencies in production by
Supplier:
(a) Lucent and Cirrus will on an ongoing basis discuss and share
methodology and layout information that affects ESD and/or latch-up.
(b) For each of the 0.35, 0.25 and 0.18 digital technologies,
consultation will be provided to Cirrus by Supplier as to which design rules
could be modified (without accompanying process changes) for SRAM cell designs,
without causing harm to other products in Supplier. The above consultations
will also include discussion of the potential impacts of various design rule
changes on yields and latch-up. Cirrus agrees to pay for the engineering
lots used in testing the design rule modifications.
(c) Supplier will, from time to time, provide tightening of the
design rules ("shrinks") for 0.35, 0.25 and 0.18 micron technologies for the
benefit of both purchasers, without additional payment.
9. The basis for take or pay cost calculations only (i.e., not
actual costs), with values shown for the particular fiscal year (quarter),
shall be as follows:
(a) It is agreed that neither Lucent nor Cirrus has a take
or pay obligation for the quarters up to and including June 30, 1997.
(b) It is agreed that, for the quarters beginning 7/1/97
and ending 9/30/98, the take or pay obligation of each Purchaser shall be
calculated as follows:
i. The fixed cost per Wafer (FCPW) for the calculation
is agreed to be as stated in the tables (A & B) below.
ii. Based on Table 1 (wafer outs assumed by Lucent) and
the annual plan, partner net wafer outs (WO) obligation is also shown.
iii. The Purchasers' total quarterly fixed cost obligation
(FCO) for each quarter is obtained by multiplying the above two items.
iv. The Beginning Fixed Inventory Value (BFIV) in a
quarter is equal to the number of wafers the Purchaser has in inventory
multiplied by their percentage completion multiplied by the fixed cost per
wafer stated in Table A or B. Percentage completion for a given lot is its
value excluding the starting material (Wafers) based on the then current cost
standard divided by the current standard cost value of a completed lot of
the same technology excluding starting material (wafers).
v. Change in Beginning Fixed Inventory Value (CBFIV) is
equal to the change from quarter to quarter of BFIV.
vi. Actual Wafers Out (WOA)
vii. The "take or pay" amount owed to Supplier by each Purchaser for the
quarter (starting with the quarter ending 3/31/98) is calculated as follows:
Amount = FCO - CBFIV - FCPW * WOA
Amount cannot be negative
Table A (Numbers Applicable to Cirrus Logic)
Q497* Q198 Q298 Q398 Q498
FCPW 1500 1500 1200 1000 900
WO 5260 7604 11525 12673 13162
FCO** 7890 11406 13830 12673 11845.8
Table B (Numbers Applicable to Lucent)
Q497* Q198 Q298 Q398 X000
XXXX X/X X/X 1200 1000 900
WO N/A N/A 22365 36506 39486
FCO** N/A N/A 26838 36506 35537.4
*7/1/97 - 9/30/97
**Thousands of dollars
viii. It is also agreed that when the financial true-ups
are done at the close of each quarter (starting with the quarter ending
3/31/98), the amounts associated with the take or pay obligations will be
included, and that: (1) fixed cost variances be credited in proportion to
actual fixed cost xxxxxxxx (including take or pay) and (2) variable cost
variances are distributed in proportion to actual variable costs xxxxxxxx.
The parties will use best reasonable efforts to continue applying the
methodologies set forth in this subparagraph (b) for the remaining term
of the Partnership.
B. Exhibit B
Exhibit B, which sets forth the parties' payment obligations,
is supplemented by:
1. Adding the following to Paragraph III thereof:
"During such period Cirrus shall pay to Supplier additional fees of
(a) (i) thirty-five million United States dollars (U.S. $35,000,000) for
technical information relating to 0.18 micron technology pursuant to the
Supplemental TTA, and (ii) eighty United States dollars (U.S. $80.00) for
each such Wafer made using 0.18 micron technology; or alternatively at
Cirrus' choice, (iii) twenty million United States dollars (U.S. $20,000,000)
for technical information relating to 0.18 micron technology, and (iv) one
hundred United States dollars (U.S. $100.00) for each such Wafer made by
using 0.18 micron technology; (b) thirty United States dollars (U.S. $30.00)
for each such Wafer made using standard BiCMOS technology; and (c) thirty
United States dollars (U.S. $30.00) for each such Wafer made using the
standard flash module.
The fees provided in subparagraphs (a) (i) and (iii) above shall
become payable to Supplier as follows:
(a) One-third (1/3) upon written notice of election by Cirrus to
convert to 0.18 micron technology in accordance with Section A2 above; and
(b) Two-thirds (2/3) upon beginning of production using the
technology for Cirrus as defined in the Supplemental TTA.
Additional fees for other technologies or modules (none of which has
a minimum feature size finer than that in 0.18 micron technology) as
referenced in the Supplemental TTA, which are offered in available
equivalent versions from a third party foundry source, will be negotiated by
the Purchasers but will not exceed an additional sixty United States dollars
(U.S. $60.00) per Wafer for each such individual technology employed.
Additional fees for unique developments or modification in the above
technologies or modules, and which Lucent may agree to provide to Supplier,
will be negotiated by the Purchasers but will not exceed an additional sixty
United States dollars (U.S. $60.00) per Wafer for each such development or
modification used.
A sample calculation of per Wafer fee payments based on the above is set
forth in Table 2 attached."
2. Amending Paragraph IV as follows:
"In lieu of the two payments of ten million dollars ($10,000,000) each for
0.25 micron technology, due on or before June 30, 1999 and December 31, 1999,
respectively, Cirrus shall pay Supplier the sum of twenty million dollars
($20,000,000) as follows:
(a) One-third (1/3) upon written notice of election by Cirrus to convert to
0.25 micron technology in accordance with Sections A2 and A3 of this
Exhibit AB; and
(b) Two-thirds (2/3) upon beginning of production using the technology for
Cirrus as defined in the Supplemental TTA.
C. Definitions; General
1. (a) "Capacity Allocation" or "Allocated Capacity" means the planned
capacity to which each Purchaser is then entitled plus the proportional share
of any variation which exists. The proportional share is equal to the
percentage of the planned capacity to which each Purchaser is currently
entitled (i.e., if one Purchaser is currently entitled to 80% of the planned
capacity of a technology, its proportional share of the variation will be 80%).
(b) "No Material Deviation" means that the conversion will not cause any
material adverse change in the essential elements of the then current Annual
Plan.
(c) "Cost of Production" means the total costs and associated expenses of
manufacturing (including, without limitation, equipment set-up and take-down
time, special handling and testing) for each Wafer or lot produced. Such
total costs will not exceed 2 (two) times the standards cost for a production
wafer or lot of that size and technology.
(d) "Materially Equivalent" means that the Wafers meet or exceed the Lucent
target metrics shown in Table 3 attached, recognizing that the Lucent 0.25 um
Process Features listed in said Table may be different from typical or other
process features employed elsewhere in the semiconductor industry.
2. Except as specifically amended or supplemented hereby, all terms and
conditions of the WSA and Exhibits thereto remain in full force and effect.
AGREED TO, as of the effective date set forth above.
Lucent Technologies, Inc. Cirrus Logic, Inc.
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title: V.P., Integrated Circuits Div. Title: CEO and Chairman
Supplier - Cirent
Semiconductor, G.P.
By: /s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Chairman of Board of Governors
Table 1
WAFER OUTS PER MONTH ASSUMED BY LUCENT
1997 1998
JAN. 1415
FEB. 1655
MAR. 2350
APR. 3403
MAY 4207
JUNE 4307
JULY 4304
AUG. 4304
SEPT. 4554
OCT. 255
NOV. 1101
DEC. 1176
Table 2
Example of Fee
Payments per Wafe
Basic 0.18 micron technology
(linear or digital) $80
Use of Flash Module 30
Use of BiCMOS Module 30
Use of additional Module
(to be negotiated) 40
Use of a unique modification
(to be negotiated) 35
$215
TABLE 3
Benchmark
Metric Lucent Target (merged 2.5V/3.3V Range
NMOS Ion (uA/um) 630/000 000-000
PMOS Ion (uA/um) 215/000 000-000
Vtn (V) 0.55 0.4-0.6
Vtp (V) 0.9 0.4-0.6
tox (A) 50 00-00
Xxxxx Xxxx 0.24 0.24-0.25
Number of metal levels 4-5 4-6
M1 contacted ptich 0.84 .064-0.94
M2 contacted pitch 0.88 0.76-1.1
Other metal levels contact 0.88 0.76-3.0
Lucent 0.25um Process Features
Thin epi
LOCOS Isolation
Thin Gate Oxide
N+ Poly with Wsix
HDP Gap Fill with Undoped Cap Oxide
CMP
W Plug
Unframed Contacts
DUV at Active, Gate and Contact
I-Line at all other critical levels
Both 2.5V and 3.3V Optimized Devices
