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Exhibit 10.23
MANUFACTURING AND
PURCHASE AGREEMENT
BETWEEN
TEXAS INSTRUMENTS INCORPORATED,
ANAM INDUSTRIAL CO., LTD.
AND
AMKOR ELECTRONICS, INC.
DATED AS OF JANUARY 1, 1998
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TABLE OF CONTENTS
Page
Article 1. Definitions.......................................................1
Article 2. Items and Cooperation to be Supplied by Anam and/or Amkor.........3
Article 3. Specifications, Quality Inspection, Testing and Customer Service..5
Article 4. Manufacturing Changes............................................11
Article 5. TI Loading Obligations and Option................................12
Article 6. TI Forecasts and Purchase Orders.................................14
Article 7. Pricing .........................................................17
Article 8. Shipping, Payment and Packaging .................................20
Article 9. Warranties and Liability Limitations.............................22
Article 10. Amendment of Certain Prior Agreements...........................25
Article 11. Term............................................................25
Article 12. Confidentiality.................................................25
Article 13. Termination and Dispute Resolution..............................25
Article 14. Miscellaneous...................................................29
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MANUFACTURING AND PURCHASE AGREEMENT
This Manufacturing and Purchase Agreement (this "Agreement") dated as of January
1, 1998 (the "Effective Date") is made by and among TEXAS INSTRUMENTS
INCORPORATED, a Delaware, U.S.A. corporation, with its principal place of
business at 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxxx, Xxxxx 00000, X.X.X. ("TI"),
ANAM INDUSTRIAL CO., LTD., a corporation of the Republic of Korea, with its
principal place of business at Seoul, Republic of Korea ("Anam"), and AMKOR
ELECTRONICS INC., a Pennsylvania, U.S.A. corporation, with its principal place
of business at 0000 Xxxxxxxxxx Xxxxx, Xxxx Xxxxxxx, Xx 00000 ("Amkor"). TI, Anam
and Amkor are hereinafter referred to individually by their respective names or
as Party and collectively as Parties.
RECITALS
WHEREAS, Anam is engaged in the business of, among other things, operating
a semiconductor foundry in Korea;
WHEREAS Amkor is in the business of, among other things contracting with
third parties to sell semiconductor wafers and die manufactured by Anam;
WHEREAS, the Parties desire to implement certain provisions of the
Technical Assistance Agreement dated as of January 28, 1997 ("Phase 1 TAA")
between TI and Anam and the Technical Assistance Agreement of even date herewith
("Phase 2 TAA") between TI and Anam for the purchase by TI from Amkor, and the
sale by Amkor to TI, of TI Products (as hereinafter defined) to be manufactured
by Anam;
WHEREAS, TI and Anam desire to amend and supersede certain provisions of
the Phase 1 TAA related to matters covered by this Agreement; and
WHEREAS, the Parties desire to address manufacturing requirements,
loading, pricing and other purchase-related terms and conditions for both Phase
1 Products, Phase 2 Products;
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, the Parties, intending to be legally bound, hereby
agree as follows:
ARTICLE 1.
DEFINITIONS
For purposes of this Agreement, the following words, terms and phrases shall
have the meanings assigned to them in this Article 1 unless specifically
otherwise stated. Furthermore, any defined term herein shall have a constant
meaning regardless of whether it is used in its singular or plural form.
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ADVANCED AVAILABLE TECHNOLOGY means, as the context herein requires, "Advanced
Available Technology" as defined in the Phase 1 TAA and/or "Advanced Available
Technology" as defined in the Xxxxx 0 XXX.
CUSTOMER QUALIFICATION means that a TI customer has qualified a particular TI
Product device manufacturable by Anam hereunder for sale by TI to such customer,
as reflected in TI's written notification thereof to Anam.
FACILITY means the completed wafer fabrication plant known as Anam Fabrication
Buchon (AFB) 1, located at 000, Xxxxxx-xxxx, Xxxxx-xx, Xxxxxx, Xxxxxxx-xx, Xxxxx
420-130 which Anam constructed, in connection with the Phase 1 TAA, which
Facility includes only a single 60 meter by 100 meter clean room. The term
Facility includes a wafer fabrication facility and equipment only, and shall not
include facilities or equipment for assembly and testing of Products.
PHASE 1 means that portion of the clean room within the Facility, the process
capability of which, as currently contemplated by the Parties, is sufficient to
manufacture approximately 15,000 wafer starts per month under the provisions of
the Phase 1 TAA.
PHASE 1 PRODUCTS means "TI Products," as defined in the Xxxxx 0 XXX.
XXXXX 0 means that portion of the clean room within the Facility, the process
capability of which, as currently contemplated by the Parties, is sufficient to
manufacture approximately 10,000 wafer starts per month under the provisions of
the Phase 2 TAA.
PHASE 2 PRODUCTS means "TI Products," as defined in the Xxxxx 0 XXX.
PROCESS QUALIFICATION means TI's written certification that a unique process
flow within the broader C10-node or C07-node (e.g., the split-gate C10 process
flow and the split-gate C07 process flow) in operation at the Facility, which
unique process flow cannot be qualified by similarity to another already
qualified process flow, is qualified per the standards referred to within TI as
the "QSS standards."
PROCESS QUALIFICATION COSTS means all costs incurred during the period of
operation preceding Process Qualification relating to (i) the fabrication of
prototype wafers, (ii) the Process Qualification testing of those wafers,
including but not limited to costs relating to the acquisition, production,
testing (including but not limited to final test, life test and environmental
test), assembly and/or qualification testing of sample materials (including but
not limited to wafers), and (iii) the failure analysis of failed units.
PRODUCTS means Phase 1 Products and Phase 2 Products, as defined herein.
PRODUCT QUALIFICATION means, with respect to TI Products, the process, as
described herein, resulting in TI issuing its written certification that such TI
Products and their
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manufacture have achieved a level of quality, consistency and reliability that
meets or exceeds the Specifications in accordance with this Agreement.
PRODUCT QUALIFICATION COSTS means all costs incurred during Product
Qualification relating to (i) the fabrication of prototype wafers, (ii) the
Product Qualification testing of those wafers, including but not limited to
costs relating to the acquisition, production, testing (including but not
limited to final test, life test and environmental test), assembly and/or
qualification testing of sample materials (including but not limited to wafers),
and (iii) the failure analysis of failed units; provided, however, that Product
Qualification Costs shall not in any event include Process Qualification Costs.
QUALIFICATION COSTS means Product Qualification Costs and Process Qualification
Costs.
SPECIFICATIONS means specifications related to a specific process flow which are
supplied to Anam in writing by TI to describe, characterize, circumscribe and
define the design characteristics, quality and performance of TI Products,
manufacturing processes, manufacturing equipment or Product Qualification and
which are consistent with Specifications which are applicable to the same
process flow manufactured by a TI facility comparable to the Facility.
TERM means the period during which this Agreement is in effect, as more
specifically set forth in Article 11 of this Agreement.
TI PRODUCTS means TI Products as defined in the Phase 1 TAA and as defined in
the Xxxxx 0 XXX.
Unless otherwise provided herein, other capitalized terms herein shall have the
meaning assigned to them in either or both the Phase 1 TAA or the Phase 2 TAA,
as the context herein requires.
ARTICLE 2.
ITEMS AND COOPERATION TO BE SUPPLIED BY ANAM AND/OR AMKOR
2.1 MANUFACTURE. In accordance with the Phase 1 XXX, Xxxxx 0 TAA, or any other
applicable Technical Assistance Agreement ("TAA") executed between the Parties,
Anam shall manufacture the TI Products to be sold by Amkor to TI hereunder.
2.2 COSTS, EXPENSES AND FEES. Except as otherwise expressly provided for in
this Agreement, any applicable TAA or as may otherwise be agreed between the
Parties, Amkor and Anam shall be solely responsible for any and all costs,
expenses, fees and the like for equipment, labor, facilities, materials and
other items required in connection with Anam's and Amkor's performance of their
obligations hereunder or under any applicable TAA.
2.3 QUALIFICATION COSTS. TI shall bear all Product Qualification Costs
associated with the initial Product Qualification of each TI Product other than
those costs relating to mask sets that, pursuant to Section 2.04 below, shall be
borne by either Anam or TI. Without limiting the application of Section 2.02
above, Anam shall bear all Process Qualification
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Costs.
2.4 MASK SETS.
2.4.1 For each TI Product which is to be manufactured by Anam for TI
and which requires a specific mask design, TI agrees to
provide to Anam the design data base and Technical Information
necessary for Anam to manufacture or have manufactured mask
sets, including any such additional mask sets (or portions
thereof) as may be redesigned by TI from time to time, to be
used for manufacturing such product.
2.4.2 Subject to Sections 2.04.03, 2.04.04 and 5.04, Anam shall bear
the costs of all mask sets ordered prior to January 1, 1999
relating to Phase 1 Products.
2.4.3 TI shall bear the costs of (i) the initial mask set relating
to each Phase 2 Product and (ii) the initial mask set ordered
on or after January 1, 1999 for each Phase 1 Product. Anam
shall bear the cost of the mask sets used solely in connection
with Process Qualification under the Xxxxx 0 XXX xxx xxx Xxxxx
0 XXX; provided, however, that if, and to the extent (i) the
same mask set used in Process Qualification is used in
production, and (ii) TI would otherwise be obligated to have
paid for such production mask set under this Section 2.04.03,
then Anam and TI shall share equally the cost of purchasing
such qualification mask set.
2.4.4 Notwithstanding anything to the contrary set forth in this
Section 2.04, TI shall bear the cost of any reasonable mask
redesign and mask manufacturing costs associated with
modifications or changes to the original mask sets which are
necessitated by design errors or changes by TI or TI's
Customers with respect to the initial mask sets. For any
wafers that have been manufactured in whole or in part that
are required to be scrapped due to any such design error or
change of TI or TI's customers, TI shall pay Amkor an amount
(the "Wafer Termination Amount") equal to:
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*
2.4.5 Anam shall be responsible for the costs of all masks and mask
sets for which TI is not otherwise responsible pursuant to
Sections 2.04.03, 2.04.04 and 5.04.04.
2.5 TI MASK SET PROTECTION. Anam shall protect all mask sets as Trade and
Industrial Secrets of TI according to Article 10 of the applicable TAA. When any
mask set is no longer usable by Anam for the purposes of this Agreement, Anam
shall either return the mask set to TI immediately, or, upon TI's instructions,
destroy the mask set and provide TI with written certification of any such
destruction.
2.6 MATERIAL QUALITY REQUIREMENTS AND EQUIPMENT USAGE. TI will provide to Anam
the most current version of TI's manufacturing Specifications, test programs and
other test procedures needed by Anam to manufacture TI Products. In the process
of qualifying the Facility and the manufacture of each TI Product, Anam shall,
unless it obtains TI's consent to the contrary, use the same materials, recipes,
processes, specifications and equipment directly relating to the manufacture of
TI Products that TI uses in its commercial production of such TI Products as may
have been disclosed by TI to Anam or as otherwise instructed by TI.
Notwithstanding the foregoing, where required by local availability of materials
and supplies, with the consent of TI, which consent shall not unreasonably be
withheld or delayed, Anam may use materials, recipes, processes, specifications
and equipment that are different from those used by TI.
ARTICLE 3.
SPECIFICATIONS, QUALITY INSPECTION, TESTING AND CUSTOMER SERVICE
3.1 CHANGE TO SPECIFICATIONS. TI has the right to modify, change or alter the
Specifications from time-to-time, at its sole discretion and upon reasonable
written notice to Anam. In the event TI makes a change to the Specifications,
the Parties, through good faith negotiations, shall agree upon the delivery
schedule of the TI Products resulting from said change and TI's and Anam's
respective responsibilities, in accordance with Section 3.02 for the costs
incurred by Anam in connection with such changes, within thirty (30) days
following any such notice. All Specification changes shall be consistent with
TI's own Specification changes and shall not require Anam to perform changes not
otherwise generally performed by TI with respect to comparable process flows
under comparable circumstances.
3.2 SPECIFICATION CHANGE COSTS.
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3.2.1 In the event TI changes the Specifications pursuant to Section
3.01, then:
(a) If the change results in an improvement in the
manufacture of Products in general, including the
process for manufacturing the Products in general, then
Anam shall bear all costs associated with the change to
the extent that they relate to such improvements and
result in savings to Anam; or
(b) Subject to Section 3.02.01(a), TI shall bear all costs
associated with the change.
3.2.2 TI shall give Anam reasonable notice prior to exercising its
option to change Specifications, and TI and Anam shall
exercise reasonable efforts to resolve any hardships which
Anam would suffer from such change in the Specifications. For
purposes of this Section 3.02, "costs" shall include, but not
be limited to, costs relating to wafers, assembly, testing,
Qualification Costs, engineering for failure analysis,
incremental equipment to run qualification lots, and the like.
3.3 TI RESIDENT INSPECTOR. Anam agrees that TI employee safety and well-being,
product quality and reliability assurance, and the protection of TI's
intellectual property, including but not limited to Technical Information, are
of material importance to TI. Therefore, throughout the Term, TI shall have the
right to maintain at the Facility, at TI's sole discretion, one or more resident
representatives, as reasonably approved by Anam, for the purpose of monitoring
compliance with this Agreement, the Specifications, and TI safety and
environmental standards for the protection of TI personnel, and protecting TI's
intellectual property, including but not limited to Technical Information. Anam
shall provide suitable office space for use by such representatives, and shall
provide reasonable access to the manufacturing processes for the TI Products as
may be required for monitoring said compliance. Such representatives shall not
interfere with Anam's operation of the Facility.
3.4 TI CUSTOMER RIGHT OF INSPECTION. Upon reasonable notice, Anam agrees to
allow TI customer representatives (who have been approved by TI), to conduct
quality control and Specification audits and certification/qualification of the
Facility, and manufacturing process, provided that, where requested by Anam, a
TI employee accompanies such customer during its audit in the Facility, subject
to reasonable rules of Anam relating to visitors.
3.5 TI RIGHT TO MONITOR PRODUCTION. Throughout the Term, during completion of
production lots for TI, TI may perform monitoring tests and may recommend
disposition or corrective action where variance to the Specifications exists.
Anam will support this activity with quality trend reports and such other
documentation as shall be reasonably requested by TI from time-to-time. In
addition, if at any other time TI detects variances or deviations from
Specifications, TI may recommend corrective actions to Anam.
3.6 VISITS AND SECRECY AGREEMENT. Anything to the contrary in this Article 3
notwithstanding, each and every personnel of TI or TI's customers who shall be
given
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access to the Anam Facility pursuant to this Agreement, including, without
limitation, pursuant to Section 3.03, 3.04 and 3.05 shall execute an agreement,
which shall include reasonable terms governing the protection of Anam
confidential information, as a condition precedent to admission or access to
such Facility or receipt of technical information of Anam pursuant to this
Agreement. All such personnel shall fully abide by all Facility rules and
regulations. TI shall be fully liable for any personal injury or property damage
resulting from any act or omission of TI's personnel while on the premises of
Anam. All transitory visits of TI and TI customers shall be arranged at such
times and in such manner as to minimize interference with the activities of
Anam.
3.7 ANAM CORRECTIVE ACTIONS. During the Term, Anam agrees to use reasonable
commercial efforts to make corrective actions as may be reasonably recommended
by TI as soon as practicable, after written notification of the problem;
provided, however, that TI shall use reasonable commercial efforts to assist
Anam in taking such action recommended by TI or in solving problems.
3.8 CYCLE TIME. Anam agrees to supply TI Products to TI in cycle times which
shall be competitive with merchant world-class foundry companies. In any event,
Anam agrees that the maximum production cycle time (i.e., the period from the
start date for production specified in the TI Start Plan (as defined below) by
TI to Anam's shipment of TI Products) shall be [*] except where otherwise
expressly provided for herein.
3.9 EXPEDITED PRODUCTION. On production lots specified by TI, Anam shall
expedite cycle time to a [*], or such other cycle time as may be agreed (such
expedited lots herein referred to as "Hot Lots"). Regardless of the stage of the
production process at which a normal lot is converted into a Hot Lot, for each
such Hot Lot shipped within such cycle time, TI shall pay Anam a fee of [*];
provided, however, that:
(a) Unless otherwise agreed, Anam shall not be obligated to so expedite
production, through March 31, 1998, on more than [*] at any one
time; from April 1, 1998 through June 30, 1998, on more than [*] at
any one time; and thereafter, on more than [*] at any one time; and
(b) Any lots required to be expedited pursuant to Section 8.05, below
shall not count against the limits described in Section 3.09.00(a)
above.
3.10 TESTING. Anam shall perform multi-probe testing in a manner consistent with
TI practice, to the extent disclosed by TI to Anam, at Anam's Buchon, Republic
of Korea site on all TI Products delivered to TI hereunder and, without limiting
its obligations elsewhere provided for herein, shall be responsible, at its sole
expense, for having sufficient facilities, test equipment, labor, test programs
and other items in place on such site to meet required quantities and cycle
times. Notwithstanding the foregoing, TI shall be responsible, solely at its
expense, for furnishing to Anam in a timely manner copies of the multi-probe
test
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programs necessary for Anam to perform multiprobe testing on the required
quantities and within the required cycle times; provided, however, that TI shall
be under no obligation to furnish test programs compatible with any test
equipment other than the test equipment TI uses in its wholly-owned facilities
for comparable wafers. All test programs required to be implemented by Anam in
accordance with this Section 3.10 shall be consistent with TI's own test
programs and shall not require Anam to perform testing not otherwise generally
performed by TI with respect to comparable products. Anam shall use no other
test programs on TI Products other than those furnished or approved by TI. TI
agrees to purchase any testers used by Anam for TI Products at the end of Anam's
use of such testers on TI Products. TI's purchase price for such equipment shall
be equal to Anam's original purchase price for such equipment depreciated on a
five-year straight line basis and subject to a discount in price for excessive
wear and tear.
3.11 TI INCOMING TESTING AND INSPECTION.
3.11.1 TI shall furnish to Anam from time to time, as required,
quality and reliability Specifications applicable to TI
Products. Among other things, those Specifications will
specify the quality standards referred to within TI as the
"Category 1" standards. Such Specification shall be consistent
with specifications applicable to the Category 1
specifications met by TI's own facilities. Following receipt
of each shipment, TI may perform incoming tests on each
shipment of TI Products. In the event such tests demonstrate
that such TI Products fail to conform to the then-applicable
quality and reliability Specifications furnished by TI and
such Specifications conform to the foregoing, TI shall have
the right to return, after confirmation of failures, such TI
Products to Anam for rework or replacement at no cost to TI.
TI has the right to recommend corrective action to address
variances from Specifications. Such return shipments shall be
made by TI, F.O.B. the destination from which they were
originally shipped by Anam. A return material authorization
("RMA") form previously issued by Anam must accompany any such
returned TI Products.
3.11.2 TI agrees to perform incoming inspection of TI Products for
conformance with applicable Specifications within ninety (90)
days of delivery, and to advise Anam and Amkor of rejections
by written or electronic notice within five (5) business days
after inspection. If any delivery of products by Anam or Amkor
does not conform in any material respect to TI's order for
such TI Products or is found to fail applicable inspection, TI
shall have the right to reject such delivery by giving timely
notice to Anam and Amkor to that effect. TI will thereupon
return the non-conforming TI Products to Amkor or Anam (as the
case may be) at Amkor's or Anam's cost and risk, for, as may
be agreed between Amkor and TI, credit or rescreen and
replacement. If it is agreed that such TI Products shall be
rescreened, Anam and Amkor shall use reasonable efforts to
rescreen and replace such non-
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conforming wafers or dies and to do so, if at all, within
forty-five (45) days after the receipt thereof. TI will
provide Anam and Amkor with a report specifying the reason for
any rejection. All rejected products may be subjected to
inspection by Anam or Amkor to confirm that they are
defective. Any TI Product not rejected by TI within ninety
(90) days plus five (5) business days after receipt by TI
shall be deemed accepted. In the event that it determined that
TI's rejection of a TI Product was not justified in accordance
with the foregoing, TI shall reimburse Anam or Amkor, as the
case may be, for all costs incurred in connection with such
rejection, including without limitation in connection with the
shipping and testing of such TI Product.
3.11.3 Nothing in this Section 3.11 shall limit TI's rights under
Section 3.12 below.
3.12 CONFORMANCE TO QUALITY AND RELIABILITY STANDARDS; STOP SHIPMENTS.
3.12.1 Prior to any shipment of TI Products to TI, Anam shall:
(a) Visually inspect such outgoing TI Products in accordance
with applicable Specifications; and
(b) electrically test such TI Products to determine whether:
(i) such TI Products conform to the relevant Category
1 standards (as defined in Section 3.11 above), as
may be applicable to such TI Products in
accordance with Section 3.11; and
(ii) the defective parts per million ("DPPM") levels of
such shipment (as determined under then-current TI
practice applied by TI to comparable products
manufactured by TI) for such TI Products conform
to the DPPM levels agreed upon by the Parties
provided that such DPPM levels shall not be lower
than those demonstrated by the manufacturing
process, as qualified, in use at a TI wholly-owned
facility, which process is most comparable to the
one in use at the Facility.
3.12.2 Unless otherwise permitted by TI, Anam shall assure that the
TI Products meet, and shall not ship TI Products to TI that do
not meet, the standards set forth in Section 3.12.01 above.
3.12.3 If it is determined by TI within 90 days of the shipment of TI
Products to TI that such TI Products do not conform to the
standards set forth in Section 3.12.01, above, then
notwithstanding anything to the contrary contained herein and
upon written notice by TI, Anam shall stop all
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further shipments of such TI Products to TI, and TI shall be
under no obligation to accept or pay for any such shipments,
until TI shall be reasonably satisfied that appropriate
corrective actions have been taken by Anam to address the
nonconformance to such Category 1 standards and/or DPPM levels
in accordance with Section 3.12.01 above.
3.12.4 Notwithstanding Section 3.11 above, or Sections 3.12.03 and
3.12.02 above, TI shall discuss with Anam in good faith the
disposition of those TI Products produced and held hereunder
that fail to satisfy Category 1 standards [*].
3.13 SECURITY AND DESTRUCTION OF SCRAP. Anam shall not assign, consign, deliver,
transfer or otherwise provide TI Products, and shall undertake security measures
(including but not limited to scrap and non-conforming TI Product destruction)
sufficient to prevent TI Products (including all defective TI Products which do
not meet Specifications) from being sold, assigned, consigned, delivered,
transferred or otherwise provided, to any third party without the express
written consent of TI. Unless otherwise specified in writing by TI, (a) all
defective TI Products which cannot be repaired economically shall be scrapped
and destroyed and (b) such defective TI Products shall not be transferred to any
third party. TI shall have the right, from time-to-time, to review (i) Anam's
security and scrap destruction procedures and (ii) Anam's compliance with such
procedures.
3.14 PRODUCTION HOLDS. At TI's request, Anam shall hold production on any lot
without charging TI an extra fee for that service for the [*]. With respect to
lots for which the hold is made prior to the backgrind stage and which hold
exceeds [*], TI will pay Anam [*]. TI shall not be required to pay Anam a hold
fee with respect to lots for which the hold is made from and following the
backgrind stage. If any hold on a lot exceeds [*], TI, at its option, will
thereupon either (i) release the lot for cancellation pursuant to Section 8.06,
or (ii) release the lot for further processing. In the event that a lot which is
on hold is canceled in accordance with Section 8.06, TI shall pay Anam only the
cancellation charge provided under Section 8.06.
3.15 WAFER BANK. Upon TI's request Anam agrees to store, at no additional
expense to TI, up to [*] (or such other amount as may be agreed from time to
time) unfinished wafers that have been processed up to the contact or "via"
stage of processing for a period not to exceed 365 days. After Anam has stored
such wafer for 60 days, Amkor shall have the right to invoice TI for, and TI
shall purchase, such wafers at the Fixed Wafer Price therefor; provided that, in
such case, Anam shall complete the processing of, and
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delivery of, such wafers upon TI's request at no additional cost.
Notwithstanding the foregoing, upon shipment of such wafer to TI, the Price for
such wafer shall be recalculated in accordance with Article 7 and if such
recalculated Price is different from the Fixed Wafer Price paid, Amkor shall
issue a credit or debit to TI, as the case may be, for such difference. Any
wafers so purchased by TI, while in the possession of Anam, shall be owned by TI
and retained by Anam on a consignment basis and Anam shall continue to be
responsible for any loss or damage to such wafers while they are in Anam's
possession. In the event that either Anam or Amkor is responsible for a wafer
for which TI has paid in accordance with the foregoing not being ultimately
saleable to TI in accordance with this Agreement, Amkor shall credit TI the
amount paid for such wafer.
3.16 IMPLEMENTATION OF TECHNICAL INFORMATION.
3.16.1 Unless otherwise instructed by TI, and except as provided in
Section 2.06, Anam shall, in accordance with this Agreement
and the applicable TAA, implement all Technical Information
provided under the applicable TAA as well as any manufacturing
improvements (including TI Product performance improvements)
as and when the Technical Information is furnished by TI to
Anam.
3.16.2 Anam shall establish failure analysis capability reasonably
satisfactory to TI, prior to Product Qualification.
3.17 TEST CORRELATION PROCEDURES. TI and Anam agree that quality and reliability
assurance are of prime importance to TI's customers; therefore, both companies
agree to establish test correlation procedures to assure compliance with TI
customer requirements.
3.18 ANAM PROCESS RECORDS. Anam shall maintain, for a period of three (3) years
from each date of origin, accurate records describing processing detail on a per
die-lot basis.
3.19 OBSOLETE PRODUCTS. Notwithstanding anything to the contrary contained
herein, if over any six-month period the quantity of TI's orders for TI Products
falling within any particular process flow (e.g., the 33C10.c3 process flow)
constitutes less than the lower of (i) one percent (1%) of the Anam total wafer
manufacturing capacity in such period or (ii) 1,500 wafers, then Anam may notify
TI in writing of its intention to exercise its rights under this Section 3.19,
and after two and one-half years following such notice, Anam may refuse any
further order for TI Products so falling within such process flow; provided,
however, that if TI has (i) the same process flow qualified at a TI wholly-owned
facility and (ii) available capacity for the manufacturing of such TI Products
at such facility, then Anam may refuse any such further order after nine (9)
months following such notice.
3.20 PERFORMANCE METRICS. TI and Anam shall share with each other, on a periodic
basis, their respective data under the performance metrics as may be agreed
between them and reports of their respective performance against such metrics.
ARTICLE 4.
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MANUFACTURING CHANGES
Both TI and Anam understand that the particular TI Product to be provided to TI
for initial Product Qualification and as qualified by TI will define the
applicable manufacturing process with respect to the manufacture of TI Products.
After Product Qualification is successfully completed, Anam shall not make any
changes to said manufacturing process(es) or the Specifications without the
prior written instruction and consent of TI. Any unauthorized manufacturing
changes by Anam which affect the form, fit, function or reliability of the TI
Products shall render them unqualified. TI assumes no liability for the
manufacture of unqualified TI Products. Any particular TI Product and its
manufacture can become unqualified after Product Qualification if such formerly
qualified TI Product subsequently falls below applicable Specifications. Changes
to a particular TI Product or its manufacture may necessitate re-qualification.
TI or Anam shall bear the costs associated with the foregoing as determined
under the applicable TAA and this Agreement.
ARTICLE 5.
TI LOADING OBLIGATIONS AND OPTION
5.01 LOADING OBLIGATIONS.
5.1.1 Throughout the Term, TI and/or TI's Affiliates (individually
or collectively) shall, subject to only the conditions set
forth in Section 5.03, purchase from Amkor, and Amkor shall
sell (subject, inter alia, to Section 6.03) to TI, no less
than the quantities of TI Products provided in this Section
5.01, as follows:
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5.1.2 For the purpose of the foregoing the term "month" means
calendar month; provided, however, that if the Phase 2
Qualification Date does not occur at the beginning of a
calender month, the Parties shall adjust the time periods set
forth in Section 5.01.01 above accordingly.
5.1.3 TI shall purchase TI Products in accordance with Article 6
below. Such purchases shall be at such prices and upon such
terms as are set forth in this Agreement.
5.1.4 Notwithstanding the foregoing, TI shall not be deemed to be in
breach of Sections 5.01.01(a) and 5.01.01(d) for so long as TI
meets its minimum purchases obligations under such sections as
determined on a rolling six-month average basis.
5.1.5 Anam and Amkor agree to take all reasonable commercial efforts
to work with TI with respect to this Section 5.01.
5.02 CAPACITY. Regardless of Anam's actual manufacturing capacity, "Capacity"
means, with respect to Phase 1, 15,000 wafer starts per month, and, with respect
to Phase 2, 10,000 wafer starts per month, unless otherwise agreed.
5.03 CONDITIONS TO TI PURCHASE OBLIGATIONS. TI shall be relieved by Anam and
Amkor of TI's obligation to purchase TI Products from Amkor pursuant to Section
5.01 only during the period and to the extent that: (i) Amkor and Anam have
failed to achieve a sufficient number of Customer Qualifications to support such
purchase obligations, such failure is the fault of Amkor or Anam and TI has used
reasonable commercial efforts to obtain such Customer Qualifications; or (ii)
Anam has materially failed to meet Specifications and TI Product performance
specifications (e.g., cycle time, yield and delivery targets), and provided that
in such case Anam and TI shall work together to remedy such failure.
5.4 C12 PRODUCTS.
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5.4.1 Anam shall manufacture the 33C12X3L devices listed on Annex C
that TI has redesigned for manufacture with the 25C10 process
node ("C12 Products"). TI shall purchase from Amkor and Amkor
shall sell to TI such C12 Products manufactured by Anam in
quantities of, in 1998, [*], at a Fixed Wafer Price for wafers
started through the first half of 1998 of [*], and for wafers
started from and after the second half of 1998, [*], provided
that the second half 1998 the Fixed Wafer Price will be
increased as needed to maintain a 1998 average amount payable
for all C12 Products of [*].
5.4.2 [*]
5.4.3 The C12 Products purchased pursuant to this Section 5.04 shall
not apply to TI's loading obligations set forth in Section
5.01.01.
5.4.4 Notwithstanding anything to the contrary set forth herein,
including in Section 2.04, TI shall be responsible for the
cost of any mask set used in the Product Qualification for any
C12 Product and the initial mask set used in the manufacture
of a C12 Product.
5.4.5 Except as otherwise provided in this Section 5.04, all C12
Products will be treated as Phase 1 Products are treated
hereunder.
ARTICLE 6.
TI FORECASTS AND PURCHASE ORDERS
6.1 ANNUAL QUANTITY PROJECTIONS. By the 15th of May of each year during the
Term, TI shall provide to Amkor the annual quantities of Wafer Outs by
technology node (e.g., C10, C07) estimated to be purchased from Amkor by TI for
the upcoming three (3) to five (5) year time period (the "Annual Quantity
Projections"). For purposes of this Agreement, "Wafer Outs" means finished
wafers. Such Annual Quantity Projections shall be a good faith estimate by TI
but shall be for informational purposes only and not constitute a binding
purchase obligation of TI. The Annual Quantity Projections may be issued
electronically.
6.2 FIXED LOADINGS. Subject to Article 5 above, TI shall purchase from Amkor,
Amkor shall sell, and Anam shall manufacture, quantities and types of TI
Products to the extent such quantities and types are deemed fixed in Forecasts
and TI Start Plans issued in
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accordance with the following provisions of this Article 6.
6.3 MONTHLY FORECASTS.
6.3.1 At least two weeks prior to the start of each month, TI shall
issue to Amkor a forecast (the "Forecast") of the monthly
quantity of wafer starts by technology node (e.g., C10, C07)
and process flow (e.g., 33c10x4L) to be purchased by TI from
Amkor during the next twelve months. The first three months
included in each Forecast shall be deemed fixed as to the
quantity of wafer starts and the related technology nodes.
Accordingly, the quantities of wafer starts and technology
nodes specified for the first and second months of each
Forecast shall be the same as the quantities of wafer starts
and technology nodes specified for the second and third months
of the immediately preceding Forecast.
6.3.2 The last nine months included in each Forecast shall be deemed
fixed as to the quantity of wafer starts, except that in each
Forecast, TI may increase or decrease the quantity of wafer
starts specified for any of the last nine months of such
Forecast (a "Subject Month") by up to an amount equal to five
(5) percentage points of the Capacity specified in such
Forecast for the corresponding month immediately preceding the
Subject Month. Such forecasted amount, adjusted in accordance
with the foregoing, shall be deemed fixed as to the quantity
of wafer starts, unless further varied in subsequent Forecasts
issued in accordance with this Section 6.03.02.
6.3.3 Nothing in this Section 6.03 shall restrict TI from specifying
in its Forecasts quantities less than its minimum loading
requirements under Section 5.01, provided TI satisfies those
requirements on a six-month rolling average basis as set forth
in Section 5.01.04.
6.4 DAILY LOADING REQUIREMENTS AND WEEKLY FORECAST.
6.4.1 On a daily basis, Monday through Friday, TI shall issue to
Amkor a seven-day TI Start Plan (the "TI Start Plan"). The TI
Start Plan shall specify device types, and quantities in terms
of wafer starts for TI Products the production of which is to
commence for each of the seven days covered by the TI Start
Plan. TI shall issue each TI Start Plan at least 24 hours in
advance of the first date (Korea time) covered by such TI
Start Plan. The TI Start Plan will be issued electronically.
The following table sets forth the day of the week (determined
on the basis of Dallas, U.S., local time) on which each TI
Start Plan is issued and the corresponding day (or days) of
the week ("Fixed Days"), determined on the basis of Korean
local time, for which the quantities set forth in such TI
Start Plan shall be deemed fixed as to device
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types and quantities in terms of wafer starts:
TI Start Plan issuance Date, by Fixed Days
5:00pm Dallas, U.S. Local Time:
Monday Wednesday
Tuesday Thursday
Wednesday Friday
Thursday Saturday
Friday Sunday, Monday and
Tuesday
6.4.2 Anam shall commence production of such device types
in such quantities as specified for each such Fixed
Day. The remaining days of each TI Start Plan shall
be for informational purposes only and shall not be
deemed fixed to any extent.
6.4.3 Anam shall produce TI Products, through the third
quarter of 1998, in lots of 6, 12 or 24 wafers, as
specified in TI Start Plans, and after such period,
in lot sizes to be agreed upon by the Parties, which
agreement shall be based in part on whether Anam
incurs materially higher per-die costs in the
production of smaller lot sizes.
6.5 SHIPPING INSTRUCTIONS. On Monday of each week, TI shall provide Amkor a
Shipping Instruction Report identifying wafer shipments (including
shipment destinations) that need to be made in the current week
starting on that Monday.
6.6 FURTHER AGREEMENT. Nothing in this Article 6 shall restrict the Parties
from agreeing from time to time on quantities and types of TI Products
different from those deemed fixed pursuant to the foregoing provisions.
6.7 YIELD ESTIMATES.
6.7.1 Anam shall provide to TI accurate multi-probe yield
("MPY") and process yields estimates for Anam's
production of each TI Product device on a weekly
basis, or more frequently if there is a material
change in the estimated MPY or process yield last
communicated to TI.
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6.7.2 Anam acknowledges that the quantities of Wafer Outs TI specifies
in TI Forecasts and of wafer starts TI specifies in the TI
Start Plans are dependent on the accuracy of such MPY and
process yield estimates, as provided by Anam. Therefore, if
with respect to any particular TI Product device type, Anam's
actual integrated yield (i.e., the cumulation of the MPY and
the process yield) exceeds the integrated yield estimate last
furnished by Anam to TI in time to allow TI to adjust its
Forecast or the TI Start Plan accordingly, then the other
provisions of this Article 6 notwithstanding, but subject to
TI's rights elsewhere provided in this Agreement relating to
inspection, quality, reliability, warranty and the like, TI
shall purchase such excess of such device type, but only up to
the Acceptable Yield Variance. For purposes hereof, the
"Acceptable Yield Variance" means, through 1998, [*] and,
after December 31, 1998, [*] Any such excess so purchased by
TI shall count against TI's loading requirements elsewhere
provided for hereunder.
6.8 UNNECESSARY VARIATIONS. TI and Anam shall each use commercially reasonable
efforts to minimize unnecessary variations in order to achieve as nearly as
possible linear weekly shipments.
6.9 PURCHASE ORDER PROCESS. Two weeks prior to the start of each quarter, at
the same time as the Quarterly Forecast, TI shall supply to Amkor a written
blanket purchase order. The purchase order shall be issued solely for
administrative/invoicing purposes and shall only provide the estimated amount
payable by TI to Amkor in U.S. Dollars. The purchase order shall not be binding
in any respect. Any terms and conditions expressed in any purchase order or
acknowledgment shall have no force and effect between the Parties.
6.10 REVISIONS. The Parties may agree in writing from time to time to revise the
periods covered by the rolling forecasts, the forecasting and ordering process,
the forecast and ordering data, and/or the technology by which the forecasts and
orders are communicated to take advantage of more efficient and effective means
of transacting business. During the Phase 1 node start-up period and until March
31, 1998, TI shall provide forecasted volume by device name. These data are for
informational purposes only and do not constitute a formal start plan commitment
by TI.
ARTICLE 7.
PRICING
7.1 PRICING.
7.1.1 For TI Products delivered to TI in accordance with this
Agreement, TI shall pay Amkor an amount (the "Price")
calculated in accordance with this Article 7. [*]
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[*]
ARTICLE 8.
SHIPPING, PAYMENT AND PACKAGING
8.1 SHIPMENTS. Shipments shall be made FCA (INCO Terms), Facility (the "FCA
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Point"), in accordance with the routing and "ship to" instructions in TI's
shipping instructions. All title and risk of loss or damage shall pass from
Amkor to TI upon Anam's delivery to the FCA Point, provided Anam has shipped the
TI Products in accordance with TI's reasonable routing and "ship to"
instructions and any other packing and shipping instructions. TI shall be
responsible for all shipping, handling and insurance costs from the FCA Point to
the destination of the shipment.
8.2 PAYMENT PROCEDURES.
8.2.1 On the day Anam makes shipment, Amkor shall send to TI a shipping
notice containing the number of TI Products shipped, estimated
amount payable, lot number, and purchase order number. Amkor
shall also provide, at the end of each week, a weekly invoice and
reconciliation statement showing all shipments made during the
week and any special or incidental fees incurred that week as
authorized by this Agreement (e.g., Hot Lot fees).
8.2.2 TI's payment shall be net thirty (30) days of each such weekly invoice
and reconciliation statement.
8.3 DELIVERY.
8.3.1 Anam shall ship TI Products to TI's designated delivery points on the
dates required to meet the cycle time requirements hereunder from
the production start dates specified in TI Start Plans (the
"Scheduled Shipment Date"), but in no event shall Anam ship TI
Products sooner than three (3) days in advance of the Scheduled
Shipment Date. Except for those TI Products which are subject to
delays caused by holds or storage at the wafer bank, as described
in Sections 3.14 and 3.15 respectively, in the event that any TI
Products are not shipped in accordance with such delivery dates,
Anam agrees to ship via air freight (or as directed by TI) and to
pay for all extra costs.
8.3.2 In addition to the TI packing and shipping instructions, the TI
Products shall be packaged in accordance with applicable TI
Specifications and Korean Laws and U.S. laws to ensure safe
arrival at TI's designated delivery point.
8.4 PACKING AND SHIPPING INSTRUCTIONS.
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8.4.1 Anam will properly pack and describe shipments in accordance with TI
Specifications and applicable carrier and legal regulations.
Shipments will be made at the lowest possible freight charges. TI
may assist Anam by providing freight classifications or
classifying material. Anam will insure or declare value on
shipments except on parcel post, unless TI specifies otherwise.
On shipment where value is declared, Anam will ship prepaid
insured for a minimum of the equivalent of Fifty U.S. Dollars
(U.S. $50.0) to facilitate tracing. If shipping by air carrier,
Anam will ship freight prepaid. Anam shall consolidate the air
and surface shipments on single bills of lading insofar as
possible so as to avoid premium freight costs unless instructed
otherwise by TI.
8.4.2 In case any shipment does not correspond to normal practice in the
industry (e.g., require special handling shipments or air ride
suspension, or air shipment over five hundred (500) pounds, or
over one hundred twenty (120) inches long or wide or over
fifty-six (56) cubic feet, etc.), Anam agrees to notify TI's
appropriate traffic department seventy-two (72) hours prior to
shipment for special shipping instructions.
8.4.3 Each box, crate or carton will show TI's full street address and TI
Start Plans lot number regardless of how shipped. On air carrier
shipments, a packing list shall accompany each container and
shall describe the contents of such container. On all other
shipments, Anam will provide a packing list to accompany each
shipment, referencing the appropriate TI Start Plans lot number
and purchase order number. The xxxx of lading also will reference
the TI Start Plan lot number and purchase order number.
8.4.4 Anam is responsible for packing shipments correctly based on the
carrier/mode utilized. Charges for packing and crating shall be
deemed part of the Price and no additional charges will be made
therefor unless specifically requested by TI on the TI Start
Plans. Anam agrees to ship via the carrier specified by TI.
8.5 RETURN MATERIALS AUTHORIZATION. TI Products returned to Anam or Amkor
pursuant to Sections 9.2 or 3.11 or as otherwise permitted hereunder shall be
returned freight collect. To the extent reasonably practicable, replacement
service by Anam or Amkor shall be made on an expedited, "courier", basis, to the
extent practicable, not to exceed [*], from the date of return, at no additional
expense to TI. Anam agrees to provide RMA as soon as reasonably possible, but
not exceeding five (5) business days after return by TI.
8.6 CUSTOMER CANCELLATION. Upon a cancellation of an order by a TI customer on
the basis of which customer order TI ordered a lot in production hereunder, of a
lot already in production at the Facility, TI shall have the right to cancel
such lot; provided, however that TI shall pay Amkor an amount equal to the Wafer
Termination Amount (as defined in
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Section 2.4.4).
ARTICLE 9.
WARRANTIES AND LIABILITY LIMITATIONS
9.1 PRODUCT WARRANTY. Anam warrants to TI that the TI Products as delivered to
TI hereunder will conform to the relevant Specifications and shall be free from
any defects in material or workmanship for a period of [*] from the
date of delivery to TI (hereinafter, the "Warranty Period").
9.2 PRODUCT WARRANTY REMEDY.
9.2.1 If, within the Warranty Period, any TI Products are in breach of the
warranty set forth in Section 9.1, TI shall notify Anam promptly
in writing of such breach, and Anam shall promptly, at TI's
option, either (i) if Anam still has the capability to
manufacture such TI Products, repair or replace such TI Products
at no cost to TI or TI's customers, or (ii) credit to TI's
account [*]. A Return Materials Authorization ("RMA") form
previously issued by Anam must accompany any such returned TI
Products. Such return shipment shall be made by TI, F.O.B. TI's
shipping dock or such other shipping location as may be
designated by TI.
9.2.2 If it is determined that a TI Product returned to Anam in accordance
with the foregoing has not breached the warranty set forth in
Section 9.1, TI shall reimburse Anam the costs incurred by Anam
in connection with Anam's treatment of such TI Product as a
product subject to Section 9.2.1, including the return of such TI
Product and the testing thereof.
9.3 ANAM AND TI INDEMNITY.
9.3.1 Anam will hold TI harmless from, and indemnify it against, all costs
and damages, up to the total amount paid by TI to Amkor for a
particular TI Product to which this indemnity relates, incurred
by TI resulting from any claims made by third parties arising out
of such TI Products manufactured by Anam, to the extent that such
TI Product breached the warranty set forth in Section 9.1,
provided the liability for such claims is not due to any
intentional misconduct or gross negligence by TI (including
without limitation, that of any TI employee or agent).
9.3.2 TI will hold Anam and Amkor harmless from, and indemnify them
against,
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all costs and damages in excess of the total amount paid by TI to
Anam or Amkor for a particular TI Product to which this indemnity
relates, incurred by Anam or Amkor as a result of any claim
against Anam or Amkor by any customer of TI with respect to such
TI Product; provided, however, that in no case shall TI be
obligated to hold Anam or Amkor harmless or indemnify Anam or
Amkor against any claim arising out of the intentional misconduct
or gross negligence of Anam or Amkor (including without
limitation, that of any Anam or Amkor employee or agent).
9.4 SOLE WARRANTY.
9.4.1 WITH RESPECT TO TI PRODUCTS, THE WARRANTY SET FORTH IN SECTION 9.1
STATES ANAM'S AND AMKOR'S SOLE WARRANTY, AND SECTION 9.2.1 STATE
TI'S SOLE REMEDIES FOR THE BREACH OF SUCH WARRANTY.
9.4.2 WITH RESPECT TO TI PRODUCTS, THE WARRANTIES IN THIS ARTICLE 9 ARE
EXCLUSIVE AND STATED IN LIEU OF, AND ANAM AND AMKOR HEREBY
DISCLAIM, ALL OTHER WARRANTIES, WHETHER EXPRESS, STATUTORY, OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND, EXCEPT
AS PROVIDED IN SECTION 8 ("INDEMNITY BY XXXX") XX XXX XXXXX 0
XXX, XXX-XXXXXXXXXXXX. THE PARTIES NEITHER ASSUME NOR AUTHORIZE
ANY OTHER PERSON TO ASSUME FOR THE PARTIES ANY OTHER LIABILITIES
IN CONNECTION WITH THE MANUFACTURE OR SALE OF SUCH PRODUCTS. THE
WARRANTIES SHALL NOT APPLY TO ANY OF SUCH PRODUCTS WHICH HAVE
BEEN REPAIRED OR ALTERED BY TI, EXCEPT AS AUTHORIZED BY ANAM, OR
AMKOR, OR WHICH SHALL BE SUBJECTED TO MISUSE, NEGLIGENCE,
ACCIDENT OR ABUSE BY TI OR ITS CUSTOMERS.
9.5 WARRANTY DISCLAIMER. ANAM AND AMKOR MAKE NO WARRANTY OR REPRESENTATION THAT
THE TI PRODUCTS DELIVERED HEREUNDER ARE, OR WILL BE, SUITABLE FOR USE AS
COMPONENTS IN LIFE SUPPORT DEVICES OR SYSTEMS OR ANY AVIATION, NUCLEAR, OR OTHER
APPLICATION THAT PROTECTS, SUPPORTS, OR SUSTAINS LIFE, WHERE THE FAILURE OF SUCH
COMPONENT TO PERFORM MAY RESULT IN SIGNIFICANT BODILY INJURY, CAUSE THE FAILURE
OF, OR AFFECT THE SAFETY OR EFFECTIVENESS OF SUCH DEVICE, SYSTEM OR APPLICATION.
NOTHING IN THIS SECTION 9.5 SHALL LIMIT THE WARRANTY UNDER SECTION 9.1.
9.6 LIABILITY LIMITATION. ANAM'S AND AMKOR'S TOTAL AGGREGATE LIABILITY TO TI
ARISING OUT OF OR RELATING TO THIS AGREEMENT, INCLUDING UNDER THIS
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ARTICLE, SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY TI TO AMKOR HEREUNDER.
EXCEPT FOR TI'S OBLIGATION TO PURCHASE AND PAY FOR TI PRODUCTS, TI'S TOTAL
AGGREGATE LIABILITY TO ANAM AND AMKOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT, INCLUDING UNDER THIS ARTICLE, SHALL NOT EXCEED THE AGGREGATE AMOUNTS
PAID BY TI TO ANAM HEREUNDER.
IN NO EVENT SHALL ANY PARTY BE LIABLE FOR LOST PROFITS, COST OF PROCUREMENT OF
SUBSTITUTE GOODS OR ANY OTHER SPECIAL, DIRECT, INDIRECT, RELIANCE, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY, WHETHER
BASED IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE.
THE FOREGOING LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER THE PARTY AGAINST
WHOM LIABILITY IS ASSERTED HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES
AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
ARTICLE 10.
AMENDMENT OF CERTAIN PRIOR AGREEMENTS
The Parties agree that (i) Articles 5, 6, 7 and 8 and Sections 2.4 and 2.5 of
the Xxxxx 0 XXX, (xx) Sections III and IV of Annex A of the Phase 1 TAA, and
(iii) the Amendment to the Phase 1 TAA, dated September 29, 1997, each in their
entirety, shall be of no further force or effect and shall be replaced and
superseded by the terms and conditions of this Agreement. Except as stated in
the foregoing, the Phase 1 TAA shall not be considered revised or amended in any
way by this Agreement. The Amkor Marketing Agreement dated as of August 1997
among TI, Anam and Amkor shall be of no further force and effect and shall be
replaced and superseded by Section 10.1.2 and Annexes B and C of the Phase 2
TAA.
ARTICLE 11.
TERM
This Agreement shall be effective upon its execution by the Parties and shall
continue in effect, with respect to Phase 1 Products, throughout the Term of the
Phase 1 TAA and with respect to Phase 2 Products, throughout the Term of the
Phase 2 TAA (as defined therein) and throughout the term of any other TAA
between TI and Anam to the extent those Parties agree.
ARTICLE 12.
CONFIDENTIALITY
This Agreement incorporates Article 10 of the Phase 2 TAA in its entirety herein
by reference, and such article shall be considered as part of this Agreement so
long as this Agreement is effective, provided, however, that nothing herein
shall limit the survival of such obligations as set forth therein. Both Anam and
Amkor expressly agree to be bound by Article 10 of the Xxxxx 0 XXX.
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ARTICLE 13.
TERMINATION AND DISPUTE RESOLUTION
13.1 TERMINATION. Where the following grants to a Party the right to terminate
this Agreement, such Party may exercise such right in accordance with this
Article 13. For the purpose of this Article 13, Anam and Amkor on the one hand,
and TI on the other hand, shall each be considered a Party.
13.1.1 Expiration or Termination of TAA. Unless extended, upon the
expiration of the term or the termination of the last
effective TAA, this Agreement shall terminate automatically
but in accordance with any terms set forth in such TAA; or
13.1.2 Mutual Agreement of the Parties. The Parties may mutually
terminate this Agreement, in which event the future
relationship of the Parties shall be determined by the
Parties; or
13.1.3 An Uncured Material Breach. Subject to Sections 13.2, 13.3 and
13.4 of this Agreement, a Party may terminate this
Agreement, and at its option, any TAAs, in the event of an
uncured material breach hereof by the other Party. A
material breach includes without limitation a curable breach
that is not cured in accordance with Section 13.3.
13.2 RESOLUTION OF DISPUTES. It is the intent of the Parties that any breach of
this Agreement be resolved in an amicable manner, to the fullest extent
possible, and that any such resolution be reasonable in light of the rights and
obligations of the Parties. If any breach should arise which cannot be resolved
by the personnel of each Party directly involved, the following procedures of
Sections 13.3 through 13.4 inclusive shall apply in each of the circumstances
described below.
13.3 CURE. If either Party (the "Breaching Party") shall at any time breach this
Agreement, without any material causative fault on the part of the other Party
(the "Non-Breaching Party"), by failing to perform any provision of this
Agreement, the Non-Breaching Party may advise of its intention to terminate this
Agreement by providing formal written notice of breach pursuant to Section 14.13
to the Breaching Party specifying the breach. Notice for purposes of the
foregoing provided other than in strict accordance with Section 14.13 will not
be effective. Notwithstanding the foregoing, this Agreement will not be
terminable if: (i) the breach specified in the notice is remedied within the
sixty (60) day period following receipt of the notice by the Breaching Party or
(ii) if the breach reasonably requires more than sixty (60) days to correct, the
Breaching Party has, within thirty (30) days from receipt of the notice of
breach, begun substantial corrective action to cure the breach and submitted a
written remediation plan to the Non-Breaching Party pursuant to Section 14.13
providing a detailed explanation of the steps to be taken to cure the breach as
quickly as practicable, the Breaching Party diligently pursues such corrective
action, and such breach is actually cured within ninety (90) days following
receipt of the notice of breach. If any breach is not cured within the time
permitted, the Non-Breaching Party shall have the right to issue a notice of
termination of this Agreement within 90 days
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of the expiration of the foregoing cure period by giving written notice thereof
to the Breaching Party. The Non-Breaching Party shall state in its notice of
termination whether it intends to exercise its option to terminate any TAAs.
Upon the giving of such notice of termination this Agreement shall terminate in
accordance with Section 13.6. The Party receiving notice shall have the right to
cure any such breach up to the date of the notice of termination. In the event
of a material breach, the Non-Breaching Party shall have the right to suspend
further implementation or effectuation of its obligations under this Agreement
affected by such breach, and shall not be obligated to resume such activities
until such breach has been cured. This Section 13.3 shall run concurrently with
the conciliation process set forth in Section 13.4 below.
13.4 CONCILIATION PROCESS. At any time during the Term, upon the occurrence of
one or more breaches under this Agreement, the Non-breaching Party shall
promptly deliver written notification to the alleged Breaching Party setting out
in reasonable detail and in clear and concise language the good faith basis for
and the specifics of such breach. Within the applicable cure period provided in
Section 13.3, either Party has the right to demand the following meetings:
13.4.1 Upon fourteen (14) calendar days' notice, a meeting of the
project coordinators for the purposes of, among other
things:
(a assessing the good faith basis for the claimed breach;
(b defining, assessing and prioritizing the
alternatives reasonably available to cure
such breach or to correct the circumstances
or situations that gave rise to such breach
so as to make its reoccurrence unlikely; and
(c adopting by unanimous vote, one or more curative or
corrective courses of action.
13.4.2 If, after meeting in accordance with Section 13.4.1,
the project coordinators are unable to resolve the breach, a
meeting of an advisory committee consisting of the
Presidents of Amkor, Anam and the TI Executive Vice
President responsible for the Semiconductor Group and two
additional personnel of their choice, one of each from TI
and Anam or Amkor for further attempts at resolution, upon
fourteen (14) calendar days' notice.
13.4.3 If, after meeting in accordance with Section 13.4.2, such
advisory committee is unable to resolve the dispute, a
meeting of the respective Chief Executive Officer of each of
TI and Anam or Amkor for the purpose of attempting to
resolve the breach, upon fourteen calendar days' notice.
13.5 REMEDIES, INJUNCTIVE AND OTHER EQUITABLE RELIEF. Upon the failure to cure
a
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material breach by either Party of any provision of this Agreement, the
Non-Breaching Party shall have the right to pursue all available remedies at law
or in equity that it may elect, including but not limited to specific
performance or injunctive relief, in order to obtain the benefits which have
been provided pursuant to this Agreement and the TAAs, or to obtain adequate
recourse or compensation in the event the same are not so provided.
13.6 TERMINATION PROCEDURE. Following the issuance of a notice of termination
by the Non-Breaching Party in accordance with Section 13.3, the Parties shall
promptly meet and establish, in good faith, a reasonable transition plan that
will permit for a period not to exceed two years: (i) Anam, subject to the
payment of royalties under any TAA (including Section 5.3.1 of the Phase 2
TAA), to continue to use the technology provided to it under such TAA so that it
will have the ability to continue in the foundry business using TI technology
and at the same time transition to another process technology by the end of such
period, and (ii) TI to continue to purchase TI Products from Amkor in the manner
provided in this Agreement so that TI's supply of products will not be
interrupted in such period while TI transitions to another source for such
products. If during the transition period, Amkor or Anam repeatedly and
materially fails to fulfill TI's reasonable requirements for TI Products, TI may
terminate the transition period upon sixty days' notice.
13.7 FORCE MAJEURE.
13.7.1 Should either Party be prevented from performing its contractual
obligations under this Agreement due to the cause or causes of
force majeure such as new acts of war or aggression (declared or
undeclared) by North Korea or other third country or economy,
fire, storm, flood, typhoon or other severe weather conditions,
earthquake, strike, student unrest, legal restraints, government
or like interference, judicial action, accidental damage to
equipment, as well as any other cause outside the control of that
Party, that Party shall not be liable to the other Party for any
delay or failure of performance caused by any of the above
events. "Force majeure" shall include the failure to obtain such
license(s) and other approvals, including export licenses, as are
required by U.S. law or other applicable law for the equipment,
software, technology and Products to be provided pursuant to the
terms of this Agreement, except where such failure is due to a
Party's breach of this Agreement.
13.7.2 In addition to providing notice in the manner set out in Section
14.13, the Party affected by Force Majeure shall notify the other
Party of the occurrence of any of the events set out in Section
14.16.1 in writing by cable, telex, facsimile, or electronic mail
within the shortest possible time.
13.7.3 Should the delay caused by any of the above events continue for
more than ninety (90) days, the Parties shall settle the problem
of further performance of the Agreement through friendly
negotiations as soon
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as possible with the objective of restructuring the
relationship among them such that the effects of such
delay are minimized. If the Parties cannot agree on a
mutually acceptable solution within six (6) months of
any Party request for such negotiations either Party
may terminate this Agreement and any TAAs to the
extent permitted by, and in accordance with, Section
13.06.
ARTICLE 14.
MISCELLANEOUS
14.1 ANNEX. Annexes A, B and C of this Agreement are an integral part hereof.
All amendments, supplements and alterations to this Agreement shall be made in
written form and signed by the authorized representative of the Parties, and
such shall thereafter form an integral part of this Agreement.
14.2 SEVERABILITY. In the event that any of the provisions of this Agreement,
or portions thereof, or documents referenced herein are held to be unenforceable
or invalid by any court of competent jurisdiction, the validity and
enforceability of the remaining provisions, or portions thereof, shall not be
affected thereby. If the purposes of this Agreement are substantially frustrated
by any events contemplated by this Section 14.02, a Party may terminate this
Agreement in the manner and as if the conditions of Section 13.01.02 existed.
14.3 CONFIDENTIALITY OF THIS AGREEMENT. No Party, without the prior written
consent of the other, shall either issue or cause the issuance of a press
release or public announcement or disclose to any third party the contents of
this Agreement or the transactions contemplated hereby. Under this requirement a
Party shall be permitted to disclose, under confidentiality and use
restrictions, such terms of this Agreement as are reasonably required to be
disclosed in response to reasonable requests made by governmental authorities or
potential investors or lenders not affiliated with any semiconductor developer
or manufacturer in the ordinary course of seeking governmental approvals or for
obtaining debt or equity financing, bank credit or the like.
Notwithstanding the foregoing or anything to the contrary set forth in the TAAs,
each party may disclose the existence of this Agreement and the general fact
that the Parties have entered into a technology transfer agreement and this
Agreement.
14.4 HEADINGS. The headings of the Articles and Sections of this Agreement are
for reference purposes only and shall not be deemed to affect in any way the
meaning or interpretation of the Articles to which they refer.
14.5 WAIVER. The failure on the part of any Party to exercise or enforce any
rights conferred on it hereunder shall not be deemed to constitute a waiver of
any rights nor operate to bar the exercise or enforcement of any rights at any
time or at times thereafter.
14.6 FURTHER ACTIONS. The Parties agree to execute and deliver to each other all
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additional instruments, to provide all information, and to do or refrain from
doing all further acts and things as may be necessary or as may be reasonably
requested by any Party hereto, more fully to vest in, and to assure each Party
of, all rights, powers, privileges, and remedies herein intended to be granted
to or conferred upon such Party.
14.7 ASSIGNMENT. A Party shall not assign or delegate this Agreement or any
right or duty under this Agreement or portion thereof (including an assignment
or delegation by operation of law, other than in connection with a
reincorporation) without the prior written consent of the other Parties.
Notwithstanding the foregoing, TI may assign this Agreement or any obligation
hereunder to any Subsidiary of TI upon written notice to Anam. In such event, TI
shall guarantee such Subsidiary's performance of its obligations under this
Agreement and such assignment obligation shall not release TI of any of its
obligations hereunder. Notwithstanding the foregoing, Amkor and Anam may assign
or delegate their rights and duties hereunder among themselves or to their
respective Affiliates, provided that such assignment or delegation does not
cause TI to incur any additional obligations or costs. In the event of such
delegation or assignment, Amkor and Anam shall guarantee such Affiliate's
performance of their obligations under this Agreement and such assignment
obligation shall not release Amkor or Anam of any of their obligations
hereunder. Amkor and Anam shall be jointly and severally liable for the
obligations and liabilities of either of them under this Agreement. Any
attempted assignment or delegation, other than the delegation expressly
permitted in this Section 14.07, shall be null and void.
14.8 AMKOR-ANAM AGREEMENT. Amkor and Anam represent and warrant to TI that they
will enter into and cause to remain in effect an agreement providing for, inter
alia, Amkor and its Affiliates to sell all of Anam's wafer manufacturing
capacity to third parties, including TI as contemplated by this Agreement.
14.9 NO THIRD PARTY BENEFICIARIES. Except as specifically set forth or referred
to herein, nothing express or implied in this Agreement is intended to or shall
be construed to confer upon or to give any person other than the Parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
14.10 ENGLISH. All correspondence of which any Party is a recipient or sender
shall be in English. All documents which are issued in Korea pursuant to this
Agreement shall be provided to TI in English translation.
14.11 INSURANCE. Anam shall obtain and maintain throughout the Term such kinds
and amounts of insurance as are reasonable and customary in the trade, including
but not limited to insurance covering product liability, theft, fire, worker's
compensation, etc.
14.12 INTEGRATION. This Agreement, and the Phase 1 TAA and Phase 2 TAA, contain
the entire understanding and agreement among the Parties with respect to the
subject matter hereof and thereof and supersedes all prior oral and written
understandings and agreements relating thereto, and may not be modified,
discharged or terminated except by the written consent of the Parties. In the
event of any conflict between this Agreement and either the Phase 1 TAA or the
Phase 2 TAA, the terms of this Agreement shall prevail.
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14.13 NOTICES. All notices, orders and other communications related to the
operations and transactions contemplated by this Agreement shall be transmitted
to the appropriate Party in the manner set forth in the sections governing such
notices, orders or communications, or as otherwise may be agreed. Any formal
communications pursuant to this Agreement, including without limitation notices
under Article 13 shall be served on each Party in writing via facsimile
transmission (confirmed by registered letter), registered letter, telex or
prepaid cable to the following persons at the following addresses and fax
numbers:
if to TI:
Mr. Xxxxx Xxxxxxx
00000 Xxxxx Xxxx, X/X 000
Xxxxxx, Xxxxx 00000
Fax: 000 000-0000
with a copy to:
General Counsel
0000 Xxxxxxxxx Xxx X/X 0000
Xxxxxx, Xxxxx 00000
Fax: 000 000-0000
if to either Anam or Amkor, both to:
Xx. Xxxxx X. Park
222, Dodang-dong
Wonmi-gu, Buchon
Kyunggi-do, Korea 420-130
Fax: 000 000-0000
and
Xx. Xxxx X. Xxxxxx
XX Plaza
000 Xxxx Xxxxxxxxx #000
Xxxxx, XX 00000
Fax: 000 000-0000
with copies to:
Mr. Ki Xxxxx Xxx, Esq.
Hanol Law Offices
14th Floor, Oriental Chemical Xxxxxxxx
00 Xxxxxx-Xxxx, Xxxxx-Xx
Xxxxx, Xxxxx 100-718
Fax: 00 00 000 0000
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and
Xxxxx Xxxxx, Esq.
General Counsel
Amkor Technology, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx, Xx 00000
Fax: 000 000-0000
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xx.
Xxxx Xxxx, Xx 00000
Fax: 000 000-0000
14.14 GOVERNING LAW. This Agreement shall be governed by, construed and enforced
in accordance with the laws of Texas, U.S.A., as applicable to contracts made
and fully performed in Texas. The United Nations Convention on the International
Sales of Goods shall not apply to this Agreement or any transactions
contemplated by this Agreement. Anam and Amkor hereby irrevocably consent to the
jurisdiction of the courts of the State of Texas and of Federal courts of the
U.S.A. located in the State of Texas.
14.15 REMEDIES. The Parties acknowledge that no specified remedies, such as
liquidated damages, are provided for in this Agreement for breaches of several
of the obligations hereunder, such as the minimum purchase, forecasting,
manufacturing and cycle time performance obligations. The Parties agree to
review each Party's historical performance hereunder from time to time during
the Term and discuss the appropriateness of agreeing on specified remedies in
light of such performance. The Parties contemplate that the first such review
shall take place in or around October 1998. The absence of any specified
remedies herein shall in no event limit either Party's rights in law or in
equity for breaches by the other.
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14.16 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
in English, each of which shall be enforceable by or against the Parties
executing such counterparts, and all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, and intending to be legally bound hereby, TI, Anam and Amkor
have caused their duly authorized representatives to execute this Agreement.
ANAM INDUSTRIAL CO., LTD. TEXAS INSTRUMENTS INCORPORATED
By:________________________ By:___________________________
Name: _____________________ Name: ________________________
Title: ______________________ Title: __________________________
Date: ______________________ Date: _________________________
AMKOR ELECTRONICS, INC.
By:________________________
Name: _____________________
Title: ______________________
Date: ______________________
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ANNEX A
[*]
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* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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ANNEX B
PERCENTAGE COMPLETION TABLE EXAMPLE:
[*]
-----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
1
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[*]
-----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
2
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[*]
-----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
3
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[*]
-----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
4
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[*]
-----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
5
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[*]
-----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
6
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[*]
-----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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ANNEX C
C12 DEVICES
LC541
LC545
LC546
LC548
F452654
F452659
8
