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EXHIBIT 10.20
TESSERA, INC.
SECOND ADDENDUM TO
TCC MASTER LICENSE AGREEMENT
This Second Addendum Agreement ("Second Addendum") entered into between TESSERA,
INC., a corporation organized under the laws of Delaware ("Tessera") and SHINKO
ELECTRIC INDUSTRIES CO., LTD. a corporation organized under the laws of Japan
("Licensee") shall be effective as of the last date signed below. The parties
to this Second Addendum agree to the following terms:
I. SUPPLEMENT TO AGREEMENT: This Second Addendum merely supplements certain
provisions of the TCC Master License Agreement ("Agreement"), entered into
on January 20, 1994 and the Addendum to the TCC Master License Agreement,
entered into on November 22, 1994 ("First Addendum"). All provisions,
including Definitions, contained within the Agreement and the First
Addendum are therefore incorporated herein. In the event any of the
provisions of the Agreement, the First Addendum and this Second Addendum
conflict, the provisions contained in this Second Addendum shall supersede
the conflicting provisions set forth in the Agreement or the First
Addendum.
II. DEFINITIONS:
A. The term "Packaging-Related" as applied to any item (including any
information, idea, invention or know-how), means that such item is
substantially related to the physical structures, components and/or stages of
assembly of any IC chip package, including methods for packaging, mounting or
connecting such IC chips. Notwithstanding, any items used for making multi-chip
modules or assemblies ("MCMs") using TCCs, including electrical substrates,
sockets for TCCs, along with heat spreaders and/or related thermal structures
or items which do not relate to said physical structures, components or
assembly stages of IC chip packages are not Packaging-Related.
B. The term "Wafer Level Packaging services" means Technology for
manufacturing TCCs using a batch assembly process to attach a plurality of
flexible leads to a corresponding plurality of bond pads on an IC chip, an
array of IC chips, or an undiced wafer by simultaneously gang bonding and
forming such plurality of leads.
C. The term "Low Pin Count" applied to any device (TCC, uBGA, or related
packaged IC) means a device with less than one hundred (100) IC bond pad
connections.
D. The term "Moderate Pin Count" applied to any device (TCC, uBGA, or
related packaged IC) means a device with IC bond pad connections numbering
greater than those of a Low Pin Count device and less than two hundred and
twenty-five (225).
E. The term "High Pin Count" applied to any device (TCC, uBGA, or
related packaged IC) means a device with IC bond pad connections numbering
greater than those of a Moderate Pin Count device and less than five hundred
(500).
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F. The term "High Performance" applied to any device (TCC, (u)BGA, or
related packaged IC) means a device with IC bond pad connections numbering
greater than those of a High Pin Count device and less than one thousand (1000).
G. The term "Ultra High Performance" applied to any device (TCC, (u)BGA,
or related packaged IC) means a device with IC bond pad connections numbering
one thousand (1000) or greater.
H. The term "(u)BGA" is an IC device comprising an IC die and a miniature
chip-sized or chip-scale package made with the possible incorporation of a
protective case surrounding the back and sides of said IC die, including
integral heat spreaders or heat sinks attached to said IC die or case therefor.
A (u)BGA is a type of TCC.
III. ROYALTIES:
A. TLS and MCM Royalties. Tessera and Licensee agree that all royalties
due under the Agreement for TLS products remain unchanged. Tessera and Licensee
further agree that any royalties for MCMs due under the Agreement shall now be
calculated as the [*] (as calculated under Section III.B., below) for the TCCs
or (u)BGAs incorporated into such MCM.
B. Running Royalties. Licensee shall pay running royalties for the
license of Technology, including applicable Tessera Patents, twice annually (as
called out under "Licensee's Payments and Reports" in the Agreement) to Tessera
during the term of the Agreement. Licensee's total base royalty (subject to the
adjustments of Paragraphs C. and D., below) shall be calculated as the sum of
the following royalties:
(i). TCMT. There is [*] for any sale of TCMT permitted hereunder.
(ii). Low Pin Count. For sales or other transfers of Low Pin Count
devices, whether manufactured for sale or internal use, the payable royalty
shall be calculated on Licensee's total unit volume of IC bonds, leads, or
equivalent connections made or bonded in Low Pin Count (u)BGAs, TCCs or related
devices. Said base royalty shall be paid in the amount of [*].
(iii). Moderate Pin Count. For sales or other transfers of Moderate
Pin Count devices, whether manufactured for sale or internal use, the payable
royalty shall be calculated on Licensee's total unit volume of IC bonds, leads,
or equivalent connections made or bonded in Moderate Pin Count (u)BGAs, TCCs or
related devices. Said base royalty shall be paid in the amount of [*].
(iv). High Pin Count. For sales or other transfers or High Pin
Count Devices, whether manufactured for sale or internal use, the payable
royalty shall be calculated on Licensee's total unit volume of IC bonds, leads,
or equivalent connections made or bonded in High Pin Count (u)BGAs, TCCs or
related devices. Said base royalty shall be paid in the amount
* 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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of [*] (US$[*]) [*].
(v). High Performance. For sales or other transfers of High
Performance devices, whether manufactured for sale or internal use, the payable
royalty shall be calculated on Licensee's total unit volume of IC bonds, leads,
or equivalent connections made or bonded in High Performance (u)BGAs, TCCs or
related devices. Said base royalty shall be paid in the amount of [*].
(vi). Ultra-High Performance. For sales or other transfers of Ultra
High Performance devices, whether manufactured for sale or internal use, the
payable royalty shall be calculated on Licensee's total unit volume of IC bonds,
leads, or equivalent connections made or bonded in Ultra High Performance
(u)BGAs, TCCs or related devices. Said base royalty shall be paid in the amount
of [*] (US$[*]) [*].
C. Adjustments for High Volumes. Royalty payments due Tessera hereunder
shall be adjusted by multiplying Licensee's total base royalty calculated under
Paragraph B. above, by a factor of [*] ([*]) until Licensee has paid Tessera [*]
US DOLLARS (US$[*]) in aggregate royalties, and then by a factor of [*] ([*])
[*] US DOLLARS (US$[*]) [*]. Tessera and Licensee agree that at least once every
three years the parties will review the royalty rates set forth above in the
context of evaluating whether the market price of such products made by Licensee
under the Technology have remained competitive.
D. Adjustments for Exchange Rates and Inflation. Tessera and Licensee
agree that in conjunction with the review of royalty rates called for in
Paragraph III., C., above, the parties shall in good faith, jointly determine
equitable adjustments, if any, in Licensee's royalty payments to compensate the
parties solely for the effects of changes in currency exchange rates and/or
inflation in any countries in which Licensee sells items licensed hereunder.
IV. QUICK TURNS AND PROTOTYPES: Tessera hereby waives any requirement in the
Agreement for quick turns and prototypes TCC and (u)BGA parts to be built
exclusively by Tessera. Tessera and Licensee agree that Licensee may take
and satisfy orders for quick turn and prototype business and that the
existing royalty reporting requirements under the Agreement shall apply to
any such satisfied orders.
V. WAIVER OF OPTIONAL CUSTOMER STRATEGIC PARTNERSHIP PLAN: Tessera hereby
grants Licensee a waiver of the requirement that Licensee advise and
distribute to Licensee's Customers the Strategic Partnership Plan (Schedule
B in the First Addendum).
VI. SUPPLYING WAFER SCALE PACKAGING SERVICES. Tessera and Licensee agree that
the "High Performance" classification of Wafer Scale Packaging Services is
hereby deemed null and void, and that the pin based schedule of royalties
set forth in this Second Addendum shall apply to any Wafer Scale Packaging
Services.
* 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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VIII. ENTIRE UNDERSTANDING: This Second Addendum embodies the entire
understanding between the parties relating to the subject matter hereof,
whether written or oral, and there are no prior representations,
warranties or agreements between the parties not contained in this Second
Addendum. Any amendment or modification of any provision of this Second
Addendum must be in writing, dated and signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Second
Addendum as of the last date signed below.
TESSERA, INC. SHINKO ELECTRIC INDUSTRIES CO., LTD.
By: /s/ XXXX X. XXXXX By: /s/ SUGIO UCHIDA
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Name: Xxxx X. Xxxxx Name: Sugio Uchida
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Title: President Title: Executive Managing Director
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Date: 7-7-95 Date: 7-13-95
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