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EXHIBIT 10.07
Agreement for Purchase and Sale of Custom Semiconductor Products
[*]
AGREEMENT NUMBER: TM-MFG-121297
This Agreement is entered into by and between International Business Machines
Corporation ("IBM"), incorporated under the laws of the State of New York and
with an address for purposes of this Agreement of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ and Transmeta Corporation ("Customer"), incorporated
under the laws of the State of California with an address for purposes of this
Agreement of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇. IBM and Customer agree
as follows:
The parties acknowledge that work required by this Agreement has occurred prior
to the date of execution of this Agreement. Both parties agree that the terms
and conditions of this Agreement shall apply to all such work.
This Agreement is a master purchase agreement for the manufacture and sale of
custom integrated circuit foundry products ("Products(s)"). Unless the parties
agree otherwise in writing, this Agreement, and its work orders ("Task Orders")
issued under this Agreement, shall define Product deliveries by part number and
shall solely govern IBM's manufacture and sale of Products to Customer. A Task
Order is not binding unless and until it has been mutually agreed upon and shall
become subject to this Agreement when it has been signed by IBM and Customer.
Task Orders shall describe the respective responsibilities of the parties (e.g.,
deliverable materials and specifications, Product description(s), manufacture
and qualification of Product prototypes, as well as technical responsibilities)
with regard to specific Product(s), as well as specific purchasing information
(e.g., manufacturing lead times, Product pricing and ordering, as well as
billing locations). Task Orders shall be in the form as set forth in Exhibit A.
The term of a Task Order shall run from the effective date on the Task Order
until the earlier of: 1) the completion of the Task Order; 2) the expiration
date stated in the Task Order; or 3) termination of this Agreement or the Task
Order. In the event of an inconsistency between the terms and conditions of this
Agreement and those of a Task Order, the Task Order will prevail.
1. TERM OF AGREEMENT: This Agreement is effective on December 12, 1997 (the
"Commencement Date"). This Agreement will expire on the later of December 30,
2003 or upon completion of the last Task Order, subject to Section 15
(Termination Rights).
2. FORECASTS:
[*].
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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[*]
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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3. ORDERS: After the parties have executed a Task Order, Customer will request
delivery of Products by issuing written purchase orders to IBM's Technical
Coordinator by the fifth (5th) day of each calendar month. As set forth in
Section 2, Customer will maintain a minimum of four (4) months rolling purchase
orders on IBM and may place purchase order(s) for months five (5) and six (6) of
each forecast. [*].
Purchase orders shall only specify the
following items on their face unless otherwise mutually agreed to in writing by
duly authorized representatives of the parties:
a) PO NUMBER
b) TAX STATUS - EXEMPT OR NON-EXEMPT
c) SHIP TO LOCATION - COMPLETE ADDRESS
d) ▇▇▇▇ TO LOCATION - COMPLETE ADDRESS
e) ORDER FROM LOCATION - COMPLETE ADDRESS
f) PRODUCT PART NUMBERS AND QUANTITIES BEING ORDERED;
g) THE PRODUCT'S APPLICABLE UNIT PRICE;
h) SHIPPING INSTRUCTIONS, INCLUDING PREFERRED CARRIER.
i) REQUESTED SHIPMENT DATES
j) THE AGREEMENT NUMBER OF THIS AGREEMENT.
k) NAME OF CUSTOMER CONTACT
In accordance with the above language in this Section 3, provided IBM accepts a
purchase order, IBM shall issue a written sales acknowledgment within a maximum
of ten (10) business days after IBM's receipt of Customer's purchase order,
which shall recite the Agreement Number, Product and Customer's shipping
instructions, as well as establish the quantities being sold, the Product's
applicable unit price and the estimated shipment dates.
This Agreement shall take precedence over and govern in case of any additional,
different or conflicting terms and conditions in any purchase order(s) or any
other form of either party. Purchase orders and other forms of either party may
not vary the terms of this Agreement. Additional, different or conflicting terms
and conditions on a purchase order or other form shall be of no effect unless
specifically agreed to in writing by the parties. This Agreement does not
constitute a purchase order. No verbal communications shall result in a
financial obligation by Customer or IBM.
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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4. LEAD TIMES, SHIPMENT, TITLE AND RISK OF LOSS: The Product's manufacturing
lead times shall be as set forth in the applicable Task Order. IBM will use
reasonable efforts to set shipment dates in accordance with the lead time
specified for Product as stated in the Task Order. Customer will keep at least a
rolling four (4) months worth of purchase orders placed on IBM to support IBM's
efforts to schedule and supply Product to Customer's requirements. Customer may
request shipment dates with lead times less than those agreed to in the relevant
Task Order, and IBM, at its option, may use reasonable efforts to set a shipment
date that is coincident with the shipment date requested by Customer. Customer
acknowledges that it may be required to pay additional charges for expedited
shipment.
[*].
Products shall be shipped from the manufacturing location FOB for domestic U.S.
destinations and ExWorks (as defined in the 1990 INCO Terms) for international
shipments. Title and risk of loss for a Product passes to Customer when IBM
delivers the Product to the Customer-specified carrier for shipment (said
carrier to be identified in Customer's purchase order). [*].
5. PRICES, INVOICING, PAYMENT TERMS AND TAXES: The engineering charges and the
price/quantity matrix in the applicable Task Order will apply to the Products.
IBM will invoice Customer for engineering charges associated with Products in
accordance with such Task Order. IBM will invoice Customer for Products upon
shipment. All payments owed by Customer to IBM under this Agreement, including,
without limitation, cancellation and engineering charges, as well as payment for
Products purchased, are payable in U.S. dollars and receipt of payment by IBM
will be due net thirty (30) days after the date of the invoice; provided,
however, that if Customer's account becomes in arrears or if Customer exceeds a
credit limit agreed to by IBM, in addition to any other right under this
Agreement, IBM reserves the right to cease manufacturing or stop shipment to
Customer or ship to Customer on a cash-in-advance basis until Customer's account
is again current. Customer will be liable for interest on any overdue payment
under this Agreement, up to the prime interest rate as reported by Citibank of
New York on the date the payment was due, plus three percent. Customer is
responsible for all taxes actually charged related to Products. However, in no
event will Customer be liable for taxes based on IBM's net income. [*].
6. ORDER CHANGES:
a) For a purchase order which is more than thirty (30) days, but less
than sixty (60) days, from its scheduled shipment date, Customer may request in
writing a onetime deferral of the scheduled shipment date not to exceed thirty
(30) days, with no cancellation charge imposed.
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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b) If Customer cancels an order or reduces an order or exceeds the
foregoing Product shipment rescheduling rights in this Section 6, Customer
agrees to pay the Product cancellation charges as described in the relevant Task
Order.
7. SUPPLY CONSTRAINTS: [*].
8. ENGINEERING CHANGES: IBM may implement engineering changes required to
satisfy governmental standards, or for environmental, health or safety reasons
("Mandatory Engineering Changes").
For all previously shipped Product not incorporating Mandatory Engineering
Changes, IBM may provide replacement Products (including parts, materials and
documentation) [*].
Customer must use reasonable efforts to install Mandatory
Engineering Changes on all Customer installed Products and Products in its
inventory. If IBM requests the return of Products displaced by installation of
replacement Products, Customer will promptly return any displaced Products to
IBM after installation of such replacement Products, [*].
In addition to Mandatory Engineering Changes, IBM may implement engineering
changes that result in cost reductions to the Product ("Elective Engineering
Changes") with prior approval from Customer. Such approval from Customer shall
not be unreasonably withheld. IBM shall give Customer prompt notice of proposed
Elective Engineering Changes.
IBM may make available other Engineering Changes ("Optional Engineering
Changes"). The cost of any Optional Engineering Changes that Customer desires to
implement will be borne by Customer and will be determined through a request for
quote process.
9. CONFIDENTIAL INFORMATION EXCHANGES: Information containing the confidential
information of either party shall be identified as that party's confidential
information and shall be exchanged pursuant to the terms of the agreement for
exchange of confidential information (agreement number: V1290-01), between IBM
and Customer dated September 30, 1996 and any amendments thereto, [*].
All other information exchanged by the parties shall be deemed non-confidential,
except that the parties agree that the specific terms and conditions of this
Agreement constitute mutual confidential information of the parties.
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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10. CUSTOMER REPRESENTATIONS: Customer warrants it is the originator, rightful
owner or licensee of all designs, information, and materials supplied to IBM
hereunder, and that no part of such materials knowingly infringes the
intellectual property rights of any third party. All computer data provided to
IBM by Customer will have gone through Customer's best efforts to ensure that it
is free from any virus, worm or other routines that would permit unauthorized
access or otherwise harm software, hardware or data. Best efforts shall include,
but not be limited to, establishing and following a documented process to
prevent its computer data from being infected with such virus, worm or other
routine. Customer will provide IBM with the process upon request. Customer will
be responsible for any damages caused by any virus, worm or other routine.
Customer will not utilize Products in conjunction with any medical implantation
or other direct life support applications where malfunction may result in
injury, harm or death to persons, or used in conjunction with aviation, nuclear
materials, or other ultra-hazardous activities (collectively, "Ultra-hazardous
Uses"). Customer agrees to incorporate the foregoing restriction in all
contracts or sale documents under which Customer sells the Product or a device
incorporating the Product to Customer's customers.
Customer agrees to defend, indemnify and hold IBM harmless from and against all
claims, whether based in contract, tort or otherwise for any losses, expenses,
damages and liabilities which may arise out of Customer's use, distribution or
sale of Products, except those caused solely by Product defects in materials or
workmanship as warranted under Section 13 (Limited Warranty) or by the sole
negligence of IBM .
11. INTELLECTUAL PROPERTY RIGHTS: For the purposes of this Agreement,
"intellectual property rights" shall mean all legally cognizable rights with
regards to applicable patent laws, copyright laws and trade secret laws. IBM
shall own any physical masks made by IBM using data provided by Customer.
Notwithstanding the foregoing sentence, unless otherwise agreed to in writing,
IBM's sole use of such physical masks shall be to perform its obligations under
this Agreement. IBM will use tangible GDS II (or any other file format as agreed
to by the parties) data received from Customer or generated exclusively for
Customer hereunder, and any masks made from such data, only to manufacture
Products for sale to Customer. In addition, to the extent that Customer has
ownership rights and excluding any rights IBM has in its semiconductor
technology or any IBM technology licensed to Customer under the Technology
License Agreement, the Customer retains and reserves to itself all rights in,
and ownership of, all intellectual property in and to the P95 Processor and
other Products manufactured pursuant to Task Orders under this Agreement.
The purchase, receipt or possession of Products from or through IBM carries no
license or immunity, express or implied, under any patent of IBM covering the
combination of such Products with other products purchased from others or the
use of any such combination, or under any patent or other intellectual property
right of any third party relating to such Products or their combinations with
any other products.
However, IBM intends that its sale of Products to Customer will, to the extent
under law, exhaust the patent rights of IBM as to such Products and the patent
rights of third party licensors to IBM.
Neither this Agreement, nor the sale of Products hereunder, shall be deemed to
give either party any right to use the other party's trademarks or any of the
other party's trade names without specific, prior written consent.
12. INTELLECTUAL PROPERTY INDEMNIFICATION: IBM shall indemnify Customer from and
against any damages finally settled or awarded by a court of competent
jurisdiction resulting from any direct
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infringement of any intellectual property rights of a third party in any country
in which IBM sells similar products, arising as a result of any of IBM's
manufacturing process, equipment or testing, that is not specifically required
by Customer's designs, specifications or instructions. IBM shall defend at its
own expense, including attorney's fees, any suit brought against Customer
alleging such infringement. In the event that Customer becomes enjoined from
using Product in its inventory or possession due to such infringement, IBM at
its option and expense, will secure for Customer the right to continue to use
and market the Product, or modify or replace the Product with a non-infringing
product. If IBM determines that neither of the foregoing alternatives is
reasonably available, Customer may return the Product in Customer's inventory or
possession to IBM for a credit equal to the price paid for units of Product
affected. IBM shall have no obligation regarding any claim based upon
modification of the Product by Customer or its customers, use of the Product in
other than its intended operating environment or the combination, operation or
use of the Product with non-IBM products or equipment.
Customer shall indemnify IBM from and against any damages finally settled or
awarded by a court of competent jurisdiction resulting from any direct
infringement of any intellectual property rights of a third party in any country
where Customer uses or distributes the Product, arising as a result of IBM's
compliance with any of Customer's design, specifications, instructions or
modifications of the Product by Customer and shall defend at its own expense,
including attorney's fees, any suit brought against IBM alleging any such
infringement.
The rights provided in this Section 12 are contingent upon the party seeking to
enforce indemnification giving prompt written notice to the indemnifying party
regarding any claim, demand or action for which the indemnified party seeks
indemnification. The indemnified party is required to fully cooperate with the
indemnifying party at the indemnifying party's expense and shall allow the
indemnifying party to control the defense or settlement of any such claim,
demand or action, including obtaining the written consent of the indemnifying
party prior to any settlement proposal or settlement. IBM shall have the right
to waive Customer's obligations under this Section 12 and provide for its own
defense, at IBM's sole discretion and expense.
Except as expressly stated in this Agreement, this Section 12 states the entire
liability of the parties and their exclusive remedies with respect to
infringement of third party rights and all other warranties against infringement
of any intellectual property rights, statutory, express or implied are hereby
disclaimed.
13. LIMITED WARRANTY: [*].
IBM warrants Product(s) to be free from defects in material and workmanship for
one (1) year after the date of delivery to Customer. Customer acknowledges that
the functionality of Products is contingent upon Customer's designs and,
therefore, no warranty applies to the functionality of Products manufactured for
or sold to Customer. [*].
This warranty applies only to Customer, as the original
purchaser from IBM, and Customer may not transfer this warranty to any third
party [*].
If Customer believes that a Product is not as
warranted, Customer will: 1) promptly notify IBM in writing; and 2) at IBM's
request, return the Product freight prepaid to IBM's designated location. If IBM
reasonably determines that the Product does not meet its warranty, IBM will, at
IBM's option, repair or replace the Product, or issue a
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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credit or refund of the purchase price. This warranty will not include credit,
repair, or replacement of a Product which has a defect due to Customer's or a
third party's actions or omissions.
PRODUCT PROTOTYPES PROVIDED TO CUSTOMER BY IBM ARE PROVIDED "AS IS" WITHOUT
WARRANTY OF ANY KIND, EXPRESS OR IMPLIED INCLUDING BUT NOT LIMITED TO ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS OR USE FOR A PARTICULAR PURPOSE.
THE FOREGOING PRODUCT WARRANTIES AS STATED IN THIS SECTION 13 (LIMITED WARRANTY)
ARE IN LIEU OF ALL OTHER PRODUCT WARRANTIES FROM IBM, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS OR USE FOR A PARTICULAR PURPOSE.
14. LIMITED LIABILITY: The following sets forth IBM's entire liability and
Customer's exclusive remedy:
a) [*].
b) IBM's liability for actual damages for any cause whatsoever (other
than as set forth in Section 14 a. above), shall be limited to the greater of
[*] or the applicable unit price for the specific units of Product that caused
the damages or that are the subject matter of, or are directly related to, the
cause of action. This limitation will apply, except as otherwise stated in this
Section, regardless of the form of action, whether in contract or in tort,
including negligence. This limitation will not apply to the payment of costs,
damages and attorney's fees referred to in Section 12 (Intellectual Property
Indemnification). This limitation will also not apply to claims by Customer for
bodily injury or damage to real property or tangible personal property caused by
IBM's negligence.
c) In no event will either party be liable to the other party for any
lost profits, lost savings, incidental damages or other consequential damages,
except as provided in Section 12. In addition, IBM will not be liable for any
claim based on any third-party claim, except as provided in Section 12. In no
event will a party be liable for any damages caused by the other party's failure
to perform its responsibilities hereunder.
d). In addition, IBM shall have no liability when the Products are used
in conjunction with any Ultra-hazardous Uses.
15. TERMINATION RIGHTS: If either party is in default of any material provision
of this Agreement, the party not in default may provide a termination notice to
the defaulting party. The termination notice shall specify:
a) the nature of the default;
b) the date, at least thirty (30) days from the date of such notice, by
which the defaulting party shall demonstrate a cure of the default; and
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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c) the date upon which the Agreement will terminate if the defaulting
party does not cure the default.
In addition, either party may terminate this Agreement immediately upon written
notice if the other party: becomes insolvent, files a petition in bankruptcy,
becomes dissolved or liquidated, files a petition for dissolution or
liquidation, makes an assignment for benefit of creditors, or has a receiver
appointed for its business; or is subject to property attachment or court
injunction or court order which has a substantial negative effect on its ability
to fulfill its obligations under this Agreement.
[*].
16. ASSIGNMENT: [*].
17. RELATIONSHIP OF THE PARTIES: Each party hereto is an independent contractor
and is not an agent of the other party for any purpose whatsoever. Neither party
shall make any warranties or representations on the other party's behalf, nor
shall it assume or create any other obligations on the other party's behalf.
[*].
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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18. COMPETITIVE PRODUCTS AND SERVICES: Neither this Agreement, nor any Task
Orders issued hereunder, will impair any right of IBM or Customer to design,
develop, manufacture, market, service, or otherwise deal in, directly or
indirectly, other products or services, including, without limitation, those
which are competitive with those offered by IBM or Customer; provided, however,
that nothing in this Agreement or any Task Order authorizes either party to use
any of the other party's intellectual property accept as expressly provided
herein.
19. PROMOTIONAL ACTIVITY: Press releases and other like publicity, advertising
or promotional material which mention the other party by name, this Agreement or
any term hereof shall not be released without the prior written consent of both
parties. [*].
20. NOTICES: All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be sent by a traceable means of
delivery. Such communications shall be deemed delivered when received by the
party's designee referenced below. Each party may change its designee upon
written notice to the other party's designee.
IBM Transmeta Corporation
Dept. VLZV/862-1 Dept.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Contract Administrator Attn: Chief Financial Officer
Day to day activities under Task Orders will be directed by technical
coordinators who will be responsible for maintaining technical liaison between
the parties ("Technical Coordinators"). Task Orders shall designate a Technical
Coordinator for each party. Either party may change its respective individual
designated for receipt of notices, and/or Technical Coordinator and their
addresses designated for notices by notifying the other party's Technical
Coordinator.
21. GENERAL: This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument when each party has
signed one such counterpart.
The activities of each party and its employees, agents or representatives while
on the other party's premises (including any design center) shall comply with
the host company's policies and procedures for such facilities, including
security procedures and visitation guidelines.
[*].
If any provision of this Agreement is found to be invalid, illegal or
unenforceable under any applicable statute or rule of law, they are to that
extent to be deemed omitted from this Agreement . The validity, legality and
enforceability of such provision and the remainder of this Agreement shall
continue in effect in every other respect, so long as the remaining provisions
of this Agreement still expresses the intent of the parties. If the intent of
the parties cannot be preserved, this Agreement shall be either renegotiated or
terminated.
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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Except for Customer's obligation to pay amounts due under this Agreement,
neither party will be responsible for any failure or delay in its performance
under this Agreement due to causes, including, without limitation, acts of God,
natural disasters, fire, acts of civil or military authority, insurrections,
epidemics, riots, wars, sabotage, labor shortages and governmental actions,
which are beyond such party's reasonable control, [*].
This Agreement shall be construed, and the legal relations between the parties
hereto shall be determined, in accordance with the substantive laws of the State
of New York, without regard to the conflict of laws principles thereof. Any
proceedings to resolve disputes relating to this Agreement shall be commenced in
the State of New York. The parties hereto expressly waive any right they may
have to a jury trial and agree that any proceeding under this Agreement shall be
tried by a judge without a jury.
[*].
Each party will comply with all applicable federal, state and local laws,
regulations and ordinances including, without limitation, the regulations of the
U.S. Government relating to the export of commodities and technical data insofar
as they relate to the activities under this Agreement. Customer agrees that
Products, and technical data provided under this Agreement are subject to
restrictions under the export control laws and regulations of the United States
of America and other country or country group, laws and regulations, including,
without limitation, the U.S. Export Administration Act and the U.S. Export
Administration Regulations. Customer hereby gives its written assurance that
neither Products nor technical data provided by IBM under this Agreement, nor
the direct product thereof, will be exported, or re-exported, directly or
indirectly, to prohibited countries or nationals thereof without first obtaining
applicable government approval. Customer agrees it is responsible for obtaining
required government documents and approvals prior to export of any Product, or
technical data.
All obligations and duties which by their nature survive the expiration or
termination of this Agreement shall remain in effect beyond expiration or
termination and remain in effect and apply to respective successors and assigns
until they have been fulfilled. A waiver or failure by a party to demand
performance or to exercise a right, when entitled, will not prejudice the
party's ability to enforce such performance or right.
The United Nations Convention on Contracts for the International Sale of Goods
does not apply to this Agreement.
The headings in this Agreement are for reference only. They will not affect the
meaning or interpretation of this Agreement.
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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This Agreement, as well as any Task Orders issued hereunder, may only be
modified by a written amendment signed by both parties. This Agreement shall not
be supplemented or modified by any course of dealing, course of performance or
trade usage. The term "this Agreement" as used herein includes any applicable
Attachments or future written amendment(s) made in accordance with this Section.
22. SOLE AGREEMENT: Each party acknowledges that it has read this Agreement,
understands it, and agrees to be bound by its terms and conditions. Further, the
parties agree that this Agreement, any mutually agreed to Confidentiality
Disclosure Agreements relating to this Agreement, Task Orders, amendments, [*],
represent the entire and complete agreement between the parties, which
supersedes all prior proposals, agreements , and all other communications
(whether oral or written) between the parties relating to the subject matter
hereof.
AGREED TO AND ACCEPTED BY:
INTERNATIONAL BUSINESS MACHINES CORPORATION TRANSMETA CORPORATION
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- ---------------------------------
NAME: ▇▇▇▇ ▇. ▇▇▇▇▇▇ NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: VP, ADVANCED STANDARD TITLE: PRESIDENT AND CEO
PRODUCTS IBM
MICROELECTRONICS
DATED: DECEMBER 17, 1997 DATED: DECEMBER 18, 1997
------------------------- -------------------------------
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
13
TASK ORDER
(TASK ORDER #TASK-121297-P95)
This Task Order is governed by the terms and conditions of Agreement Number:
TM-MFG-121297
1.0 TERM OF TASK ORDER: This Task Order will be effective on December 12 1997
and will expire on [*].
2.0 PRODUCT NAME AND DESCRIPTION:
Product Name: [*]
Description: [*].
3.0 DELIVERABLE ITEMS:
3.1 Customer
Item Date
----------------------------------------------------------
[*]
3.2 IBM
Item Date
----------------------------------------------------------
[*]
4.0 PRODUCT SPECIFICATIONS, PROCESS TECHNOLOGY, WAFER ACCEPTANCE CRITERIA, YIELD
AND COST REDUCTION INCENTIVES, ASSUMPTIONS:
4.1 Product Specifications:
[*]
4.2 Process Technology: [*].
4.3 Wafer Acceptance Criteria: Exhibit B
4.4 Module Acceptance Criteria:
[*].
5.0 SCHEDULE: ATTACHMENT 3
[*].
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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6.0 PRODUCT DEMAND FORECAST:
The Parties anticipate that they will meet approximately once per calendar
quarter to review forecasts under this Task Order. The forecast listed below is
for tested modules.
[*].
7.0 ENGINEERING EFFORT AND ENGINEERING CHARGES (NRE CHARGES):
Engineering Effort:
[*].
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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8.0 PROTOTYPE UNIT PRICING AND DELIVERY:
[*].
9.0 PRODUCTION PRICE/QUANTITY MATRIX (PRODUCT UNIT PRICE)
[*].
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
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10.0 MANUFACTURING LEAD TIME (PURCHASE ORDER LEAD TIME):
[*].
11.0 CANCELLATION CHARGES:
[*].
12.0 TASK ORDER TECHNICAL COORDINATORS:
International Business Machines Transmeta Corporation
Corporation Dept.
Dept. DZOV ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Essex Jct., VT 05452 PH: (▇▇▇) ▇▇▇-▇▇▇▇ ▇ ▇▇▇
PH: (▇▇▇) ▇▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇ EMAIL: ▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
EMAIL: ▇▇▇▇▇▇▇▇@▇▇.▇▇▇.▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇, VP VLSI
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Engineering
13.0 SHIPPING/BILLING/ORDERING LOCATIONS:
* Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with the
Securities and Exchange Commission.
17
Customer's Ship to Location: To be specified in individual purchase
orders
Customer's ▇▇▇▇ to Location:
Transmeta Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Attention: Accounts Payable
ph: (▇▇▇) ▇▇▇-▇▇▇▇
fax: (▇▇▇) ▇▇▇-▇▇▇▇
IBM's Ordering Location:
International Business Machines Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
AGREED TO AND ACCEPTED BY:
INTERNATIONAL BUSINESS MACHINES CORPORATION TRANSMETA CORPORATION
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------- ----------------------------------
NAME: ▇▇▇▇ ▇. ▇▇▇▇▇▇ NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: VP, ADVANCED STANDARD PRODUCTS TITLE: PRESIDENT AND CEO
IBM MICROELECTRONICS
DATED: DECEMBER 17, 1997 DATED: DECEMBER 18, 1997
-------------------------------- ------------------------------
18
EXHIBIT B
WAFER ACCEPTANCE CRITERIA (FOR TESTED WAFERS)
1. Nothing in this Exhibit modifies or expands Customer's warranty
rights under the Agreement.
2. IBM Products, with the reasonable cooperation of the Customer, will
be subject to the following quality standards.
A) Wafer Specifications
a. Wafer Size: IBM will ship 8 inch diameter wafers.
b. Wafer Thickness and Finish: IBM and Customer will agree upon
specifications for wafer thickness and back finish.
c. Die Layout: IBM will be responsible for the reticle layout
and stepping of the Customer's die, consistent with IBM's
normal defect monitoring strategy
d. Packing:
1. Tested wafers: [*].
2. Damaged Goods: [*].
B) Wafer Yields:
a. Circuit limited yield loss is solely the responsibility of
the Customer [*].
b. Minimum Yields: [*].
[*] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
19
EXHIBIT B
C) Visual Criteria: [*].
D) Electrical Criteria:
a. Parametrics: [*].
E) Prototypes:
a. Prototypes and other similar non-production material
will be accepted by the Customer and may not meet the
quality criteria described herein. Customer may not use
this material for production shipments.
F) Documentation:
a. [*].
G) Test: Electrical test using [*].
The details to be identified after the completion of the first
prototype wafers delivered 1Q98.
[*] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.