* CONFIDENTIAL TREATMENT - EDITED COPY
EXHIBIT 10.19
DATED THIS 7TH DAY OF APRIL 1997
BETWEEN
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
AND
OAK TECHNOLOGY, INC.
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AMENDMENT AGREEMENT (NO. 2)
TO
DEPOSIT AGREEMENT DATED 8 NOVEMBER 1995
-----------------------------------------------------------
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
[ * ] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
AMENDMENT AGREEMENT (NO. 2)
THIS AMENDMENT AGREEMENT (NO. 2) is made the 7th day of April 1997, by and
between:-
(1) CHARTERED SEMICONDUCTOR MANUFACTURING LTD, a company incorporated in
Singapore and having its place of business at 00 Xxxxxxxxx Xxxxxxxxxx
Xxxx X, Xxxxxx 0, Xxxxxxxxx 000000 ("CSM"); and
(2) OAK TECHNOLOGY, INC., a company incorporated in Delaware and having its
place of business at 000 Xxxxx Xxxxx, Xxxxxxxxx, XX 00000, Xxxxxx Xxxxxx
of America ("Customer").
WHEREAS
(A) CSM and Customer had entered into a Deposit Agreement dated 8 November
1995 (the "Deposit Agreement") for the purpose of Customer depositing
certain funds with CSM and to procure CSM to make available to Customer
certain wafer manufacturing capacity.
(B) CSM and Customer had entered into an Amendment Agreement (No. 1) dated
25 September 1996 to effect the suspension and variation of certain
provisions of the Deposit Agreement upon the terms and conditions set
out therein.
(C) CSM and Customer are entering into this Amendment Agreement (No. 2) to
supersede the Amendment Agreement (No. 1) and to effect the suspension
and variation of certain provisions of the Deposit Agreement upon the
terms and conditions set out herein.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the Parties agree as follows:-
1. INTERPRETATION
All terms and references used in the Deposit Agreement and which are
defined or construed in the Deposit Agreement but are not defined or
construed in this Amendment Agreement (No. 2) shall have the same
meaning and construction in this Amendment Agreement (No.2).
2. AMENDMENT AGREEMENT (NO. 1) SUPERSEDED
With effect from the date of this Amendment Agreement (No. 2), the terms
and conditions of Amendment Agreement (No. 1) shall be superseded by the
terms
[ * ] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
and conditions of this Amendment Agreement (No. 2) and shall cease to
have any force or effect.
3. CONDITION PRECEDENT
The provisions of Clause 5 herein, are subject to and conditional upon
each of the following condition precedents being satisfied, and the
provisions of Clause 5 herein shall cease to have any force or effect if
any of the following condition precedents are not satisfied:
3.1 by [ * ] Customer shall tape out a [ * ] Logic "[ * ]" product
("[ * ] Product") at CSM's wafer fabrication facilities situated in
Singapore; and
3.2 During the period commencing from the date of this Amendment
Agreement (No. 2) to [ * ], Customer shall place purchase orders
with CSM and take delivery of an aggregate total of [ * ] wafers for
any [ * ] logic products (including but not limited to the "[ * ]"
Product) from CSM; and
3.3 by [ * ], Customer shall tape out a [ * ] Logic product ("[ * ]
Logic Product") at CSM's wafer fabrication facilities situated in
Singapore.
4. EFFECTIVE DATE
The Parties agree that the term "Effective Date" shall refer to [ * ], if
Customer fulfills each of the condition precedents set out in Clauses
3.1, 3.2 and 3.3 above.
5. SUSPENSION OF CERTAIN TERMS OF DEPOSIT AGREEMENT
The Parties agree that subject to the terms of this Amendment Agreement
(No. 2) and provided that each of the condition precedents set out in
Clauses 3.1, 3.2 and 3.3 above are satisfied, for the period from the
Effective Date until [ * ] (hereinafter known as the "Suspension
Period"), certain provisions of the Deposit Agreement shall be suspended
and shall not apply to the Parties and in place of the same, the
following provisions shall apply during the Suspension Period instead:
5.1 CLAUSE 1 (THE DEPOSIT)
(a) Clause 1.1 shall be suspended and in its place, the following
provision shall apply:
[ * ] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
"1.1 As at the date of this Agreement, Customer has deposited
with CSM the sum of [ * ] (the "Deposit").
(b) Clause 1.2 shall be suspended.
(c) Clause 1.3 shall be suspended and in its place, the following
provision shall apply:
"1.3 Upon the expiry of the term of this Agreement or the
earlier termination thereof in accordance with Clause 6
or Clause 7.2, CSM will return to Customer the Deposit,
without interest and subject to any deductions or refunds
made by CSM pursuant to the terms of this Agreement."
5.2 CLAUSE 2 (CSM SUPPLY COMMITMENT)
(a) Clause 2.1 shall be suspended and in its place, the following
provision shall apply:
"2.1 CSM agrees that for the duration of the Suspension Period,
CSM will make available to Customer wafer manufacturing
capacity for [ * ] wafers of a sufficient quantity so that
Customer is able to utilise the [ * ] Deposit amount given
the credit rate set forth in Clause 5.4 below during the
Suspension Period."
(b) Clause 2.3 shall be suspended and in its place, the following
provision shall apply:
"2.3 CSM reserves the right to adjust the pricing of wafers to
be supplied by CSM from time to time depending on
prevailing market conditions, provided however that CSM
shall give Customer not less than 3 months' prior written
notice of such adjustment. In any event, the price of
wafers supplied to Customer shall be based upon then
prevailing market conditions as compared to prices
provided by other independent wafer foundries for similar
products, processes and quantities. An "independent wafer
foundry" means a company which engages in the business of
manufacturing semiconductor integrated circuits for sale
only to third parties. Accordingly, a company which
manufactures semiconductor integrated circuits for use in
its own proprietary semiconductor
[ * ] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
products or end-products is not considered an independent
wafer foundry."
5.3 CLAUSE 3 (CUSTOMER LOADING COMMITMENT)
Clauses 3.1, 3.2 and 3.3 shall be suspended.
5.4 CLAUSE 4 (LIQUIDATED DAMAGES)
Clauses 4.1, 4.2, 4.3, 4.4 and 4.5 shall be suspended.
5.5 CLAUSE 5 (SET OFF AND MAINTENANCE OF DEPOSIT)
Clauses 5.1, 5.2 and 5.3 shall be suspended and in their place, the
following provisions shall apply:
"5.1 CSM shall be entitled to deduct from and set-off against the
Deposit, any payment falling due and remaining unpaid by
Customer under the Foundry Agreement.
5.2 At the end of each calendar quarter, CSM shall issue a written
notice to Customer stating the amount of the overdue payments
and Customer shall pay the relevant sum to CSM within 30 days
of the date of such notice, so as to maintain the Deposit at
[ * ] less such amounts that may have been refunded by CSM to
Customer pursuant to Clause 5.4 below.
5.3 CSM's right of deduction and set-off pursuant to Clause 5.2
shall be in addition to CSM's right to claim the aforesaid
overdue payments separately as a debt due from Customer and
shall not in any way prejudice such right or any other rights
or remedies which CSM may have at law or in equity.
5.4 For the period:
(a) the date of this Amendment Agreement (No. 2) to [ * ], for
every [ * ] logic [ * ] wafer that CSM ships to Customer,
CSM will refund to Customer the sum of [ * ] from the
Deposit within 30 days from [ * ];
(b) [ * ] to [ * ] (i) for every [ * ] Logic [ * ] wafer (up
to [ * ] wafers) that CSM ships to Customer, Customer is
entitled to a wafer credit of the
[ * ] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
sum of [ * ] from the Deposit; and (ii) for every [ * ]
Logic [ * ] wafer in excess of [ * ] wafers that CSM
ships to Customer, Customer is entitled to a wafer credit
of the sum of [ * ] from the Deposit;
(c) [ * ] to [ * ], (i) for every [ * ] Logic [ * ] wafer (up
to [ * ] wafers) that CSM ships to Customer, Customer is
entitled to a wafer credit of the sum of [ * ] from the
Deposit; and (ii) for every [ * ] Logic [ * ] wafer in
excess of [ * ] wafers that CSM ships to Customer,
Customer is entitled to a wafer credit of the sum of [ * ]
from the Deposit;
For the purpose of clarity, the provisions set out in Clauses
5.4(b) and (c) above are represented in the following table:
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Period No. of wafers Amount
purchased deductible
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[ * ] to [ * ] [ * ] to [ * ] [ * ] per wafer
[ * ]
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[ * ] and more [ * ] per wafer
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[ * ] to [ * ] [ * ] to [ * ] [ * ] per wafer
[ * ]
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[ * ] and more [ * ] per wafer
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(d) The wafer credits referred to in Clauses 5.4(b) and (c)
above will be paid out of the Deposit. CSM shall issue
Customer a credit note for such wafer credits within 30
days of the date of the invoices for [ * ] Logic [ * ]
wafer purchases made in accordance with Clauses 5.4(b)
and (c), save that for any [ * ] Logic [ * ] wafer
purchases made by Customer for the period from [ * ] to
[ * ] pursuant to Clause 5.4(b), CSM shall issue a credit
note for the wafer credits relating to such purchases
within 30 days of [ * ];
(e) In no event will the aggregate amount of the refunds or
wafer credits granted to Customer pursuant to the
provisions set out in Clauses 5.4(a), (b) or (c) above
exceed the existing Deposit of [ * ]; and
(f) In the event that Embedded Memory technology is available
at CSM's wafer fabrication facilities situated in
Singapore, Customer is entitled to elect to purchase
[ * ] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
wafers in either [ * ] Logic or [ * ] Embedded Memory or
both, on the provisions set out in Clauses 5.4(b) and (c)
above. CSM shall use best efforts to make CSM's [ * ]
libraries available to Customer and Customer shall be
permitted to access and utilise CSM's [ * ] libraries
provided that such access and utilisation shall be only to
the extent that is permitted by the relevant licensors
who may have granted CSM a license over such libraries."
5.6 CLAUSE 6 (TERM AND TERMINATION)
Clauses 6.1(a), (b) and (c) shall be suspended.
5.7 ANNEX A (PAYMENT SCHEDULE)
Annex A shall be suspended.
5.8 ANNEX B (CSM SUPPLY COMMITMENT/CUSTOMER LOADING COMMITMENT)
Annex B shall be suspended except as provided in Clause 2.1 of the
Deposit Agreement.
5.9 In addition to the suspension of Clause 1.1 and Annex A of the
Deposit Agreement, provided that each of the condition precedents
set out in Clause 2 of this Amendment Agreement (No. 2) are
satisfied, the Deposit amounts due and payable by Customer on 2
January 1996, 2 January 1997 and 2 January 1998 as specified in
Annex A, shall be suspended for the duration of the Suspension
Period.
5.10 The provisions of Clauses 11.1, 11.2 and 11.3 of the Deposit
Agreement are subject to the provisions of this Amendment Agreement
(No. 2).
6. ASSISTANCE TO TAPE OUT
CSM shall use its best efforts to provide reasonable assistance to
Customer to tape out [ * ] logic products, as well as a [ * ] Logic
Product at CSM's wafer fabrication facilities situated in Singapore.
7. TERMINATION OF DEPOSIT AGREEMENT
7.1 Provided that each of the condition precedents in Clauses 3.1, 3.2
and 3.3 above have been fulfilled, the Deposit Agreement shall be
automatically
[ * ] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
BRACKETED PORTIONS WHICH HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.
terminated on [ * ] if the Deposit is reduced to zero by [ * ] as a
result of Customer obtaining refunds or utilising the Deposit
towards payment of wafers in accordance with the provisions in
Clause 5.5 above.
7.2 In the event the Deposit is not reduced to zero by [ * ], all the
terms of the Deposit Agreement shall apply for the period [ * ] to
the expiry of the Deposit Agreement, in full force and effect
without any amendments or suspensions.
8. SAVING AND INCORPORATION
8.1 Save as expressly varied by the terms of this Amendment Agreement
(No. 2), the terms and conditions of the Deposit Agreement shall
continue to be in full force and effect in all other respects.
8.2 The Deposit Agreement and this Amendment Agreement (No. 2) shall be
construed as one document and this Amendment Agreement (No. 2) shall
be deemed to be part of the Deposit Agreement. Where the context so
permits, references in the Deposit Agreement and in this Amendment
Agreement (No. 2) to "the Deposit Agreement" or "this Agreement"
shall be read and construed as references to the Deposit Agreement
as amended and supplemented by this Amendment Agreement (No. 2).
9. GOVERNING LAW
This Amendment Agreement (No. 2) shall be governed by and construed in
accordance with the laws of Singapore. The Parties hereby irrevocably
submit to the non-exclusive jurisdiction of the courts of Singapore.
IN WITNESS WHEREOF the Parties have hereunto entered into this Amendment
Agreement (No. 2) the date first above written.
Signed by Tan Xxxx Xxxx, )
President & CEO, )
CHARTERED SEMICONDUCTOR )
MANUFACTURING LTD ) /s/ Tang Xxxx Xxxx
in the presence of: ) --------------------------------
/s/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx, Legal Officer
Signed by Xxxxx X. Xxxxx, )
President, )
OAK TECHNOLOGY, INC. ) /s/ Xxxxx X. Xxxxx
in the presence of: ) --------------------------------
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx,
General Counsel
