CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
September 4, 1997
Agreement for Purchase and Sale of Custom Semiconductor Products
(Purchase Order Based)
AGREEMENT NUMBER: X0468
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 Quantum Effect Design, Inc. ("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:
This Agreement is a master purchase agreement for the manufacture and sale of
custom integrated circuit products ("Products(s)"). This Agreement, and its
mutually agreed upon work orders ("Task Orders") issued under this Agreement,
shall solely govern IBM's manufacture and sale of Products to Customer. A
Task Order 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 expiration
date stated in the Task Order; or 2) 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.
DEFINITIONS:
"PRE-PRODUCTION UNIT" means a preliminary version of any Product fabricated
under IBM's usual manufacturing cycle, including usual manufacturing
inspections and which may use a design and mask set that has not been
verified by Customer. (Pre-production is also known within IBM as "PQ-level".)
"PRODUCTION" means a unit of a Product manufactured after receipt of
Customer's Prototype Acceptance. (Production is also known within IBM as
"Q-level".)
"PROTOTYPE" means a preliminary version of any Product fabricated under an
expedited manufacturing cycle without all usual manufacturing inspections
which may or may not be functional and which are not suitable for production
in commercial quantities. (Prototype is also known within IBM as "P-level")
PROTOTYPE ACCEPTANCE means Customer's written approval that Customer is
satisfied with its Prototype qualification results and its evaluation process
has demonstrated (by lot number) which Prototypes are satisfactory to
Customer. Prototype Acceptance will serve as Customer's authorization to IBM
to manufacture the Product in production.
1. TERM OF AGREEMENT: This Agreement is effective on July 30, 1997 (the
"Commencement Date"). This Agreement will expire on the later of May 1, 2000
(the "Expiration Date") or upon completion of the last Task Order entered
into prior to the Expiration Date, subject to Section 16 (Termination Rights).
2. FORECASTS: Each Task Order shall contain a forecast of Customer's
anticipated demand for Product for the first twelve (12) month period of the
Task Order's term. For each Task Order Customer shall provide an updated
forecast to IBM in writing no later than the fifteenth (15th) day of each
month which shall cover a rolling twelve (12) month period (not to exceed the
term of this Agreement), which will be subject to acceptance by IBM's
Technical Coordinator. IBM's Technical Coordinator shall make a
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
determination regarding acceptance, in writing, within five (5) business days
after receipt by IBM. All forecasts shall be in the same format as set forth
in the Task Order. Forecasts shall be provided to IBM's Technical Coordinator
identified in the applicable Task Order.
The initial forecast set forth in a Task Order shall constitute good faith
estimates of Customer's anticipated requirements for Products for the periods
indicated based on current market conditions, and IBM's acceptance shall
constitute IBM's good faith intention to quote and supply such requirements
if requested and ordered by Customer in accordance with Section 3.0. IBM has
no obligation to accept any portion of a purchase order for a quantity of
Products (a) which results in a cumulative quantity of Products that exceeds
the lesser of 1) the forecasted shipment quantity for such period (plus an
additional quantity not to exceed fifty percent (50%) of the monthly average
quantity of Product purchased within the prior three (3) months) or 2) a
quantity not to exceed one hundred-fifty (150) wafers in addition to the
average quantity of Product purchased within the prior three (3) months) or
(b) if Customer fails to meet the terms and conditions of this Agreement,
including, without limitation, requesting delivery dates that are
inconsistent with the minimum purchase order lead times set forth in the Task
Order.
IBM agrees to provide Customer with twelve (12) month's prior written notice
in the event that IBM voluntarily determines that IBM shall discontinue
practicing the process technology used to manufacture Products under this
Agreement, where IBM is under no compulsion of any nature to do so.
3. ORDERS: After the parties have executed a Task Order, Customer will
request delivery of Products by issuing written purchase orders to the IBM
ordering location set forth in the Task Order. Purchase orders are subject
to, and IBM will accept purchase orders that comply with: 1) the terms and
conditions of this Agreement and the applicable Task Order. Purchase orders
shall only specify:
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
(IN INCREMENTS OF THE MINIMUM ORDER QUANTITY ("MOQ");
g) THE PRODUCT'S APPLICABLE UNIT PRICE;
h) SHIPPING INSTRUCTIONS, INCLUDING PREFERRED COURIER.
i) REQUESTED SHIPMENT DATES
j) THE AGREEMENT NUMBER OF THIS AGREEMENT.
k) NAME OF CUSTOMER CONTACT
Customer's first purchase order for Products shall serve as Customer's
written notice of Prototype Acceptance. Thereafter Product supplied to
Customer will be warranted as set forth in Section 13.
Within ten (10) business days after IBM's receipt of Customer's purchase
order IBM shall issue a written sales acknowledgment 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 scheduled shipment dates for the Product(s). Scheduled shipment dates
will be adjusted by IBM to account for any Customer caused delay, including,
without limitation, Customer issued Stop Production Notices ("SPN's").
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
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.
4. LEAD TIMES, SHIPMENT, TITLE AND RISK OF LOSS: IBM will schedule each
Product for delivery in accordance with the Product's manufacturing lead
times, as set forth in the applicable Task Order. 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 carrier for shipment to Customer.
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. Task Orders will include non-binding prices provided as budgetary
estimates. All estimated prices shall be specifically designated as budgetary
estimates. 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 IBM reserves the right to
modify such credit terms in the event that Customer's account balances exceed
Customer's credit limit with IBM. IBM may discontinue work and may not ship
Product if Customer's account becomes in arrears. Customer will be liable for
interest on any overdue payment under this Agreement, up to the maximum legal
rate in the jurisdiction where the claim is being asserted. Customer is
responsible for all taxes related to Products except for taxes based on IBM's
net income. No payments owed by Customer to IBM under this Agreement are
subject to any right of setoff by Customer.
6. PRODUCT SHIPMENT RESCHEDULING RIGHTS: 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. If Customer cancels an order after wafer start or exceeds the
foregoing Product shipment rescheduling rights in this Section 6, Customer
agrees to pay the cancellation charge set forth in the Task Order upon
receipt of IBM's invoice.
7. ORDER CHANGES: If IBM's ability to supply Product(s) to Customer is
constrained for any reason, including, without limitation, availability of
manufacturing materials or tools, and any IBM agreed-to Product shipment date
will be missed, IBM will reduce the quantities of Product(s) supplied to
Customer in proportion to the reduction in quantities of products of the same
technology or utilizing the same manufacturing process to be supplied to
satisfy others, which shall include IBM's internal customers. Receipt of such
allocated supply and later delivery of all undelivered ordered quantities
after the constraint ends constitutes IBM's entire liability and Customer's
exclusive remedy in the event of such Product supply constraint.
8. ENGINEERING CHANGES: IBM may implement Engineering Changes required to
satisfy governmental standards, protect Product, system or data integrity, or
for environmental, health or safety reasons ("Mandatory Engineering
Changes"). IBM shall provide Customer with notice that Mandatory Engineering
Changes are required as soon as reasonably practicable under the
circumstances. For all previously shipped Product not incorporating Mandatory
Engineering Changes, IBM may provide replacement Products (including parts,
materials and documentation) at the expense of the party at fault. 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
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
replacement Products, Customer will promptly return any displaced Products to
IBM after installation of such replacement Products, at IBM's expense. 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 shall not be
unreasonably withheld. IBM shall give Customer prompt notice of 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: The disclosures of IBM Confidential
Information to Customer pursuant to Amendment 1 (dated January 10, 1997) and
Amendment 2 (dated March 27, 1997) to the Confidential Information Exchange
Agreement shall be subject to and governed by the Confidential Information
Exchange Agreement (CIEA PCC960507), dated September 3, 1996. Other
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: V1397),
between IBM and Customer dated November, 21, 1996, which is hereby
incorporated by reference. All other information exchanged by the parties
shall be deemed non-confidential.
Neither party shall disclose the terms and conditions or subject matter of
this Agreement, except as may be required by law or government rule or
regulation, or except as might otherwise be agreed to by the other party in
writing, which shall not be unreasonably withheld.
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 of any third party. All computer data
provided to IBM by Customer will be free from any virus, worm or other
routines that would permit unauthorized access or otherwise harm software,
hardware or data.
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 in conjunction with aviation
or nuclear materials (collectively, "Ultra-hazardous Uses"). Customer agrees
to require the same commitment from its own customers in all contracts or
sale documents, if any, under which Customer sells the Product or a device
incorporating the Product.
Customer agrees to defend, indemnify and hold IBM harmless from and against
all claims, whether based in contract, tort (including, without limitation,
negligence), 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 to the extent caused by the
negligence or intentional wrongful acts of IBM. IBM shall tender to Customer
the defense of any claim made against IBM hereunder and Customer shall defend
same with counsel subject to the prior approval of IBM.
11. INTELLECTUAL PROPERTY RIGHTS: IBM shall own any physical masks made by
IBM using data provided by Customer. 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. IBM will perform an
incoming inspection on masks. Thereafter IBM, at its expense, will be
responsible for replacing masks that exhibit defects solely as a result of
manufacturing processes. Subject to section 7 of this Agreement, IBM will
expedite the manufacture of wafers to replace the defective wafers that were
manufactured using such masks. Upon written request from Customer, IBM will
promptly destroy masks for Products and provide Customer with a written
certification to document that the destruction has occurred.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
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.
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 infringement of any patents
or copyrights of a third party in any country in which IBM sells
semiconductor 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 reasonable attorney's fees, any suit brought against
Customer alleging such infringement. In the event that Customer becomes
enjoined from using Product in its inventory 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 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. 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
patents or copyrights 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 reasonable
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, which
shall not be unreasonably withheld. 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 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, except
insofar as functional defects result solely from defects in materials and
workmanship. Once IBM receives Customer's Prototype Acceptance for
Pre-production Units, the applicable Pre-production Units (as identified by
lot numbers in the Prototype Acceptance) will be warranted as Production
Products. Except as provided in the foregoing sentence, Prototypes are
provided on an "AS IS" basis, without warranty of any kind. For warranty
purposes only, Products will be deemed delivered five (5) days after the date
of shipment. This warranty applies only to Customer, as the original
purchaser from IBM, and Customer may not transfer this warranty to any third
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
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 (subject to Customer's option in 14.a.), repair or replace the
Product, or issue a 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 IBM WARRANTIES AS STATED IN THIS SECTION 13 (LIMITED WARRANTY)
ARE IN LIEU OF ALL OTHER 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. In all situations involving warranty claims, Customer's exclusive remedy
is the replacement of the Products or a credit to Customer of the purchase
price paid for such units by Customer, at IBM's sole discretion, provided,
however, that if a Product is in production and if Customer has no overdue
accounts receivable owed to IBM, Customer may elect whether it prefers a
replacement or a credit.
b. IBM's liability for actual damages under any given Task Order hereunder,
for any cause whatsoever (other than as set forth in a. above), shall be
limited to the greater of two hundred thousand dollars ($200,000) or the
applicable unit price paid 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 reasonable 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 Sections 12. In
no event will IBM be liable for any damages caused by Customer's failure to
perform Customer's responsibilities.
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
from the other party, by which the defaulting party shall demonstrate a cure
of the default; and
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:
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
a) 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
b) 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.
IBM shall have the right to terminate this Agreement upon twelve (12) month's
written notice if Customer transfers substantially all of its business or
assets to a third party
IBM may temporarily cease manufacturing Product with respect to the relevant
Task Order(s) if IBM receives a charge or claim that any of Customer's
deliverable items (which include, without limitation, GDS II tape,
specifications, instructions, test data, as well as those items described
under "Customer Deliverable Items" of the applicable Task Order) infringes
third party intellectual property rights. IBM shall thereafter provide
Customer's Technical Coordinator with a written statement of the reasons why
IBM has ceased production. If Customer fails to reach a resolution
satisfactory to IBM regarding such actual or potential infringement within
ninety (90) days after receipt of such notice, IBM may terminate the relevant
Task Order(s) or this Agreement upon written notice.
If this Agreement is terminated, all Task Orders still in effect shall be
deemed terminated on the effective date of the Agreement's termination.
Products under this Agreement and the applicable Task Order are
non-cancelable after wafer start and Customer agrees to pay the Production
Price (as stated in the applicable Task Order) for such Product upon receipt
of IBM's invoice in the event that this Agreement or Task Order(s) are
terminated.
16. ASSIGNMENT: Neither party to this Agreement may assign its obligations
or delegate its duties in whole or in part without the prior written consent
of the other except (a) to a purchaser or transferee of substantial all of
its assets or business to which this Agreement pertains and (b) IBM may
freely assign its right to payment hereunder without prior notice or consent.
Any other assignments or delegations will be void.
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. Customer shall not solicit for employment any IBM
employee who is directly engaged in performing activities under this
Agreement.
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. This Agreement
is nonexclusive.
19. 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 Quantum Effect Design, Inc.
Dept. LJGV / 965-3J Director of Manufacturing
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FAX: ▇▇▇-▇▇▇-▇▇▇▇ FAX: ▇▇▇- ▇▇▇-▇▇▇▇
Attn: Contract Administrator Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
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.
20. GENERAL: 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 deeded 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.
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, acts of civil or military authority, epidemics,
riots, wars, sabotage, and governmental actions, which are beyond such
party's reasonable control, provided that the affected party: (a) gives the
other party prompt written notice of such cause; and (b) uses its reasonable
efforts to correct such failure or delay in its performance.
The laws of the State of New York shall govern this Agreement, 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 waive their respective rights to a jury trial and agree
that any proceeding under this Agreement shall be tried by judge without a
jury.
Neither Customer nor IBM will bring a legal action against the other more
than three (3) years after the cause of action arose, except for actions for
non-payment and enforcement of intellectual property rights or
indemnification.
Customer agrees to comply with its obligations under all applicable United
States, and other country or country group, laws and regulations, including,
without limitation, those relating to the export of commodities and technical
data as they relate to the activities under this Agreement. Customer agrees
that Products, and technical data provided under this Agreement may be
subject to restrictions under the export control laws and regulations of the
United States. Customer hereby gives its written assurance that neither
Products or technical data provided by IBM under this Agreement, nor the
direct product thereof, will be exported, or re-exported, directly or
indirectly by Customer or any party under its control, to prohibited
countries or nationals thereof without first obtaining applicable government
approval. Customer further agrees it is responsible for obtaining required
government documents and approvals prior to export of any Product or
technical data by Customer or any party under its control.
Customer agrees that it shall not sell Products or technical data to third
parties which Customer has reason to believe may allow such Products or
technical data to be exported contrary to the terms of this paragraph.
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.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
The headings in this Agreement are for reference only. They will not affect
the meaning or interpretation of this Agreement.
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.
21. 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 and any mutually
agreed to Task Orders and amendments, represents 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. Customer's purchase order
number Q10430, dated June 24, 1997 shall be governed by this Agreement and
shall be treated as issued under this Agreement.
AGREED TO AND ACCEPTED BY:
INTERNATIONAL BUSINESS MACHINES QUANTUM EFFECT DESIGN, INC.
CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /a/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------- ---------------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
NAME: ▇▇▇▇▇ ▇▇▇▇▇▇ NAME: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
TITLE: VP, North American Sales TITLE: C.O.O.
DATE: November 12, 1997 DATE: 9/4/97
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
Exhibit A
(Page 1 of 4)
Task Order
(Task Order # X0468-1)
This Task Order is solely governed by the terms and conditions of Agreement
Number: X0468
1.0 TERM OF TASK ORDER: This Task Order will be effective on June 30, 1997
and will expire on May 1, 2000.
2.0 PRODUCT NAME AND DESCRIPTION:
Sierra, CMOS 5SF, 3LM, 7.4 x 8.4mm, Tested modules (5 second test).
3.0 PRODUCT SPECIFICATIONS:
Sierra, 208 Power Quad 4 package (28mm sq.) lead form 1.30 mm /
standoff 0.33 mm
4.0 DELIVERABLE ITEMS:
CUSTOMER: GDS II Tape
Sierra Test Tape (working test program for Teradyne
J971 tester, including all test vector files identified as part of the
wafer and module test. Test vectors must compile without error using
the standard Teradyne J971 tester tools and libraries).
Chip I/O pad coordinates (X/Y coordinates for GDS II
data with probe metal layer) with a functional description of the pads
(i.e., I/O, Vdd, Gnd, etc.)
Physical package outline drawing of the module
(AMKOR/ANAM drawing number 32536).
Two (2) hand-plug loadboard and test sockets to be
used for test program debug and verification activities. The
loadboard channel I/O mappings and power supply requirements must be
compatible with IBM's test systems. Each loadboard must include a
socket that is compatible with the Sierra module package.
IBM: CMOS 5SF Spice models
CMOS 5SF Process Ground Rules Probe cards, as
described in Section 6, below Deltaflex Handler Kit
to support Sierra package dimensions
5.0 PRODUCT DEMAND FORECAST:
12 month rolling forecast covering the period beyond the Purchase Order Lead
Time.
Year: 1998
Month: Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.
[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
Exhibit A (continued)
(Page 2 of 4)
Year: 1999
Month: Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.
[*]
Minimum Order Quantity ("MOQ") is one (1) twenty four (24) wafer lot.
6.0 ENGINEERING CHARGES (NRE CHARGES):
NRE Charges include the following: [*]
1. Spice models (CMOS 5SF simulation models)
2. Process Ground Rules (CMOS 5SF ES# 77H9983, dated
June 1997)
3. Processing Customer's GDS II tape
4. Processing Customer's Test Tape
5. Mask build
6. Minimum of two (2) wafers/maximum of six (6) wafers,
subject to yield.
BURN-IN NRE Charges: [*]
Design and build of burn-in boards (BIB's) (quantity of 16) 10 week
lead time.
Design and build of sockets, if design exists lead time is 10 weeks,
otherwise lead time is 16 weeks.
Burn-in test implementation, 2 weeks duration.
IBM will provide a separate quotation for additional burn-in
services if requested by Customer.
NRE Charges payable 50% upon placement of purchase order and 50% upon
delivery of Prototypes.
NRE Services not included in NRE Charges noted above: Probe testing NRE
charges per part number as described below.
Price Leadtime
1. Probe cards (quantity of two (2)): $10,000.00 6 weeks
2. Test program installation on
Teradyne J971 and verification
by IBM:
wafer test $5,000 3 weeks
module test $5,000 3 weeks
3. Delta flex handler kit for
manufacturing test: $15,000 12 weeks
Total $35,000
These NRE Charges are payable 100% upon placement of purchase order
therefore.
7.0 PROTOTYPE PRICING:
Two (2) prototype wafers included in the NRE Charge of [*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
Prototype modules: [*] per module
Exhibit A (continued)
(Page 3 of 4)
8.0 PRODUCT PRICE/QUANTITY MATRIX (PRODUCT UNIT PRICE):
SIERRA Per Unit Prices
Pre-production
[*]
SIERRA Per Unit Prices
Production
[*]
Price Adders: [*] per module for modules tested using Teradyne
J971 tester.
[*] per module for 24 hour built-in
[*] per module for 6 hour burn-in
Prices are based on the die image and package combination described
above. IBM reserves the right to re-quote Product prices if changes in
the Product design require a different die image size, package option,
or other similar change from the Product description above.
Customer agrees to pay any price adjustments due as a result of its
failure to purchase the quantity of Products upon which the initial
invoiced prices were based.
Minimum Order Quantity for Production units: one lot of twenty-four
(24) wafers, Customer must purchase all modules that yield from
wafer lots under this Agreement.
9.0 MANUFACTURING LEAD TIME (PURCHASE ORDER LEAD TIME):
Prototype modules: 70 days
Pre Production and Production: 70 days
10.0 MODULE ACCEPTANCE CRITERIA:
IBM production of Product in module format shall meet IBM's standing
quality, reliability, defect density and yield practices for the
applicable process and packaging technologies. The Product will be
tested according to Customer's Sierra Test Tape, as identified in
Section 4 of this Exhibit A. The Product will be packaged according to
the AMKOR/ANAM physical outline drawing for the 208 pin PowerQuad 4
package, AMKOR/ANAM drawing number 32536.
11.0 ORDER CHANGES / CANCELLATION CHARGES:
The following percentages of unit price will be due to IBM for
any units cancelled or scrapped at Customer's request or units
scrapped as a result of yield deficiencies caused in whole or
part by Customer's design and for units deemed cancelled due
to Customer exceeding the rescheduling rights set forth in
Section 6 of the Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
September 4, 1997
Exhibit A (continued)
(Page 4 of 4)
Number of days of notice
prior to scheduled shipment date Percent of unit price due to IBM
Between wafer start and [*]
[*] days prior to
scheduled shipment
less than [*] days prior [*]
to scheduled shipment
12.0 TASK ORDER TECHNICAL COORDINATORS:
IBM Microelectronics Quantum Effect Design, Inc.
Director of Manufacturing
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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FAX: ▇▇▇-▇▇▇-▇▇▇▇ FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
13.0 SHIPPING/BILLING/ORDERING LOCATIONS:
Customer's Ship to Location: Customer's ▇▇▇▇ to Location:
Per purchase orders Per purchase orders
IBM's Ordering Location:
International Business Machines Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
AGREED TO AND ACCEPTED BY:
INTERNATIONAL BUSINESS MACHINES QUANTUM EFFECT DESIGN, INC.
CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------- ----------------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
NAME: ▇▇▇▇▇ ▇▇▇▇▇▇ NAME: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
TITLE: VP, North American Sales TITLE: C.O.O.
DATE: November 12, 1997 DATE: 9/4/97
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.