Exhibit 10
AMENDMENT NO. 3 TO JOINT VENTURE FORMATION AGREEMENT ("Amendment No
of August 21, 1997, by and among Lucent Technologies Inc., a Delaware corpo
("Lucent"), as assignee and successor in interest, by duly acknowledged ass
AT&T Corp., a New York Corporation ("AT&T"), ATOR Corp., a New York corpora
Cirrus Logic, Inc., a California corporation ("Cirrus"), and Ciror, Inc., a
corporation ("CIROR").
WHEREAS, the parties now desire to modify and supplement certain of
Agreements among them referenced in the Joint Venture Formation Agreement (
Agreement"), dated as of October 23, 1995, by and among AT&T (now Lucent),
and CIROR, as amended by Amendments Nos. 1 and 2 to said JV Agreement, by a
parties, dated May 1 and July 31, 1996, respectively, specifically, the Gen
Partnership Agreement, the IC Wafer Supply Agreement, and the Technical Tra
Agreement, as well as to further amend said JV Agreement hereby as necessar
consistent therewith;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements hereinafter set forth, and intending to be legally bound hereby,
hereto agree, subject to the terms and conditions contained herein, as foll
1. Definitions. Capitalized terms or terms with initial capitals
not otherwise defined herein will have the meanings assigned to them in the
2. The JV Agreement. The JV Agreement is deemed, and hereby is, a
following respects:
(a) Section 3.02 (Annual Plan), subsection (a) is amended to change the
fiscal year of the Partnership for general accounting purposes from a calen
year period to an annual period commencing October 1 of each year, effectiv
as of October 1, 1996, and the quarterly dates for review and update of the
Annual Plan by the Board of Governors of the Partnership are hereby changed
accordingly. The annual date for ratification or amendment of the Annual P
is hereby changed from January 1 to September 1 of each calendar year. In
addition, it is agreed hereby, by way of clarification, that the term "the
fiscal year next succeeding the last year then covered by the Annual Plan"
used in said Section 3.02(a) shall refer to the fiscal year immediately
following the current fiscal year covered by the Annual Plan. The Partners
will remain on a calendar year basis for tax purposes.
(b) Sections 3.02 (Annual Plan), 4.03 (Intellectual Property) and 4.04
(Operation of Plant and Business), as well as the Annual Plan itself, are
deemed, and hereby are, amended as necessary to effect the modifications an
supplements to the specific Material Agreements as set forth in Sections 4
5 below.
(c) Section 4.04 (c) (Costs) (ii)(a) (OR2 Working Capital) is amended to a
"Effective October 1, 1998, the working capital required with respect to OR
be provided by the Lucent Partner and the Cirrus Partner in proportion to t
respective Take or Pay obligations under the IC Wafer Supply Agreement, as
amended."
3. The General Partnership Agreement ("GPA"). The GPA, dated as o
between ATOR and CIROR, is deemed, and hereby is, amended in the following
(a) Section 1.01 (Definitions) is amended to change the Fiscal Year of the
Partnership as therein defined for general accounting purposes in accordanc
with Section 2(a) above of this Amendment No. 3 and all references to "Fisc
Year" in the GPA are deemed modified accordingly, effective as of October 1
1996. For tax purposes the Partnership will remain on a calendar year basi
(b) Section 5.02 is amended to add the following:
"Such agreement or consent shall not unreasonably be withheld with respect
sale of the transferring Partner's interest, provided, without limitation,
(a) Any such proposed sale must be of the transferring Partner's entire in
in the Partnership and include substitution of the new Partner for the
transferring Partner;
(b) In the case of CIROR, such interest shall not include any technologies
available pursuant to Amendment No. 3 to the Joint Venture Agreement, inclu
the Appendices thereto (other than 0.18 micron technology as defined in the
Technical Transfer Agreement, as amended, provided that available equivalen
versions, as therein defined, then exist); and
(c) Such transferring Partner shall not be in default of any of its paymen
other obligations under the Joint Venture Agreement, as amended, or any of
Material Agreements referenced therein, and in the case of CIROR and Cirrus
Inc., shall be in compliance with all requirements of the Cirrus Asset Leas
the Cirrus Guaranty, including the obtaining of any consents required there
4. The Technical Transfer Agreement ("TTA"). The TTA, effective a
1996, by and among Lucent, Cirent Semiconductor ("Cirent") and Cirrus, is d
hereby is, amended by incorporating therein, effective concurrently herewit
Supplemental Agreement, a copy of which is annexed hereto and made a part h
Appendix A.
5. The IC Wafer Supply Agreement ("WSA"). The WSA, made as of Aug
and among Lucent, Cirrus and Cirent, is deemed, and hereby is, amended as f
(a) Section 2.0(b) is amended to add the following:
"Such agreement by the other Purchaser to any such proposed foundry basis s
the original Purchaser shall not unreasonably be withheld; provided, howeve
such prior agreement shall not be required for foundry services within the
following requirements:
(i) Such foundry basis sale by Cirrus may not include Wafers produced
using any technologies made available pursuant to Amendment No. 3 to the
Joint Venture Agreement, including the Appendices thereto (other than 0.18
micron technology as defined in the Technical Transfer Agreement, as
amended, provided that available equivalent versions, as therein defined,
then exist);
(ii) The other Purchaser shall be entitled, upon request, to full prior
disclosure of the process, technology and audit terms of such proposed
foundry basis sale;
(iii) The original Purchaser shall hold harmless and indemnify the other
Purchaser and Supplier from and against all liabilities, losses, damages,
claims or demands arising out of or in any way related to any such foundry
basis sale and the transaction involved therein, except for those arising
from such other Purchaser's or Supplier's fault;
(iv) The original Purchaser shall be the exclusive interface for the
foundry basis sale and shall bear all additional costs arising from such
foundry transaction;
(v) Disclosure to the foundry customer of design rules or other technical
information necessary for such foundry basis sale shall be pursuant to a
non-disclosure agreement, agreed upon by Cirrus and Lucent, limiting use of
such information to fabrication of Supplier;
(vi) All foundry basis sale agreements shall include terms requiring
compliance with US Export Laws and Regulations; and
(vii) Information which Cirrus may provide to prospective or actual
foundry customers shall be limited to the following, unless otherwise
agreed by Lucent, such agreement not to be unreasonably withheld:
- - Design rules
- - Electrical parameters
- - Extraction Models (e.g. SPICE)
- - A coarse process flow to be mutually agreed upon by Cirrus and
Lucent
- - A physical cross section
(b) The Wafer Purchase obligations and the Take or Pay Principles
Section 2 and Exhibit A thereof, respectively, as well as the payment sched
in Exhibit B thereof, are modified by incorporating therein, effective conc
herewith, as Exhibit AB the Supplemental Take or Pay Principles and payment
copy of which is annexed hereto and made a part hereof as Appendix B.
6. Closing. The parties will execute this Amendment No. 3 by thei
authorized representatives, and Cirent will acknowledge same as indicated b
closing to be held at the offices of Cirent, 9333 South Young Parkway, Orla
32819, on August 21, 1997, at 10:00 a.m. local time, or at such other place
as the parties hereto mutually agree upon. Such execution, the obligations
ATOR and Cirent, individually and collectively, to close, and the continuat
of this Amendment No 3 are expressly conditioned upon the following payment
Cirent, representing the total amounts past or currently due from Cirrus un
the Material Agreements.
(a) The sum of $45.3 million, representing Wafer payments due unde
or before said closing date; and
(b) The sum of $25 million, representing the balance of Wafer paym
the WSA, installation cost obligations and working capital requirements, on
October 1, 1997.
Such payments will be made by wire transfer to a designated Cirent bank acc
be otherwise directed by Lucent, ATOR or Cirent.
7. General. Except as specifically amended or modified hereby, al
conditions of the JV Agreement and the Material Agreements remain in full f
effect.
IN WITNESS HEREOF, this Amendment No. 3 has been duly executed by a
each of the parties hereto, and duly acknowledged and agreed to by Cirent,
set forth above.
LUCENT TECHNOLOGIES INC.
By: /s/John T. Dickson
Name: John T. Dickson
Title: V.P., Integrated Circuits Division
ATOR CORP.
By: /s/Dennis M. Hill
Name: Dennis M. Hill
Title: President
CIRRUS LOGIC, INC.
By: /s/Michael L. Hackworth
Name: Michael L. Hackworth
Title: CEO and Chairman
CIROR, INC.
By: /s/Michael L. Hackworth
Name: Michael L. Hackworth
Title: CEO and Chairman
ACKNOWLEDGED AND AGREED TO:
CIRENT SEMICONDUCTOR G.P.
By: /s/Dennis M. Hill
Name: Dennis M. Hill
Title: Chairman of Board of Governors
SUPPLEMENTAL AGREEMENT
TO
TECHNICAL TRANSFER AGREEMENT
THIS SUPPLEMENTAL AGREEMENT ("TTA Supplement") is made and entered
August 21, 1997 by and among Lucent Technologies Inc., a Delaware corporati
Cirrus Logic, Inc., a California corporation ("CIRRUS"), and Cirent Semicon
New York general partnership ("LICENSEE"), as a supplement to the Technical
Agreement ("TTA"), effective as of June 30, 1996, by and among said parties
to Amendment No. 3 to the Joint Venture Formation Agreement ("Amendment No.
concurrently herewith, by and among LUCENT, CIRRUS, ATOR Corp. a New York c
("ATOR") and Ciror, Inc., a California corporation ("CIROR").
WHEREAS, the parties now desire, among other matters, to modify and
said TTA consistent with further agreements and understandings between them
NOW, THEREFORE, in consideration of the mutual covenants and agreem
hereinafter set forth, and intending to be legally bound hereby, the partie
subject to the terms and conditions contained herein and in said Amendment
follows:
1. Capitalized terms or terms with initial capitals used herein an
defined herein or in the Definitions Appendix hereto will have the meanings
them in this Amendment No. 3, the TTA or the Joint Venture Formation Agreem
context requires.
2. Article 1.01 (Furnishing of Information) and Article 2.01 (Tech
Information Grants) of the TTA are deemed, and hereby are, amended to provi
will furnish to LICENSEE and CIRRUS will have access to LUCENT TECHNICAL IN
relating to certain additional technologies, in accordance with Section 4 b
other terms and conditions hereof, provided that they are then (a) in PRODU
LUCENT in OR2, (b) offered in AVAILABLE EQUIVALENT VERSIONS from a THIRD PA
SOURCE, and (c) LICENSEE and CIRRUS are current with respect to their payme
under the Joint Venture Formation Agreement and the Material Agreements as
defined. The furnishing of said technologies and the TECHNICAL INFORMATION
thereto to LICENSEE and any access thereto by CIRRUS will be in accordance
and conditions of the TTA and this TTA Supplement.
3. Articles 3.02 (Transfer of 0.35 and 0.25 MICRON TECHNOLOGY) and
QUALIFICATION of 0.25 MICRON TECHNOLOGY) of the TTA are amended as follows:
"In lieu of the two payments of ten million dollars ($10,000,000) each for
0.25 MICRON TECHNOLOGY due on transfer and QUALIFICATION, respectively,
LICENSEE shall pay LUCENT the sum of twenty million dollars ($20,000,000) a
follows:
(a) One-third (1/3) upon written notice of election by Cirrus to convert
to 0.25 MICRON TECHNOLOGY in accordance with Sections A2 and 3 of
Exhibit AB to the IC Wafer Supply Agreement, as amended August 21,
1997; and
(b) Two-thirds (2/3) upon beginning of PRODUCTION using said TECHNOLOGY
for CIRRUS."
4. Article 3.04 (Fees on Wafers) of the TTA is amended to add the
"In additional part payment for the further rights granted hereunder by LUC
LICENSEE, LICENSEE shall pay LUCENT additional fees of (a) (i) thirty-five
United States dollars (U.S. $35,000,000) as the initial fee for TECHNICAL
INFORMATION relating to 0.18 MICRON TECHNOLOGY, and (ii) eighty United Stat
dollars (U.S. $80.00) for each such WAFER made by using said 0.18 MICRON
TECHNOLOGY; or alternatively, (iii) twenty million United States dollars (U
$20,000,000) as the initial fee for TECHNICAL INFORMATION relating to said
MICRON TECHNOLOGY, and (iv) one hundred United States dollars (U.S. $100.00
each such WAFER made by using said 0.18 MICRON TECHNOLOGY; (b) thirty Unite
States dollars (U.S. $30.00) for each such WAFER made using AVAILABLE EQUIV
VERSIONS of BiCMOS TECHNOLOGY; and (c) thirty United States dollars (U.S.
for each such WAFER made using AVAILABLE EQUIVALENT VERSIONS of the STANDAR
MODULE.
The initial fees provided in subsections (a) (i) and (iii) above shall beco
payable by LICENSEE to Lucent as follows:
(a) One-third (1/3) upon written notice of election by CIRRUS to convert
to said 0.18 MICRON TECHNOLOGY in accordance with Section A2 of Exhibit
AB to the IC Wafer Supply Agreement, as amended August 21, 1997; and
(b) Two-thirds (2/3) upon beginning of PRODUCTION using said TECHNOLOGY
for CIRRUS."
Additional fees for other technologies or modules (none of which wi
minimum feature size finer than that in 0.18 MICRON TECHNOLOGY) referenced
Section 2 above, which are offered in AVAILABLE EQUIVALENT VERSIONS from a
PARTY FOUNDRY SOURCE will be negotiated by the parties but will not exceed
additional sixty United States dollars (U.S. $60.00) per WAFER for each suc
individual technology or module used.
Additional fees for unique developments or modifications in the abo
or modules, and which LUCENT may agree to provide to LICENSEE, will be nego
by the parties but will not exceed an additional sixty United States dollar
$60.00) per WAFER for each such development or modification used."
5. Except as specifically amended or modified hereby, all terms an
the TTA remain in full force and effect.
IN WITNESS WHEREOF, this TTA Supplement has been duly executed by a
each of the parties hereto as of the date set forth above.
LUCENT TECHNOLOGIES INC.
By: /s/Michael R. Greene
Name: Michael R. Greene
Title: Vice President - Intellectual Property
CIRRUS LOGIC, INC.
By: /s/Michael L. Hackworth
Name: Michael L. Hackworth
Title: CEO and Chairman
CIRENT SEMICONDUCTOR G.P.
By: /s/Dennis M. Hill
Name: Dennis M. Hill
Title: Chairman of Board of Governors
DEFINITIONS APPENDIX
0.18 MICRON TECHNOLOGY means technology enabling the fabrication of
DEVICES having line widths (a measure of minimum feature size) as fine as 0
and includes DIGITAL TECHNOLOGY and LINEAR TECHNOLOGY.
AVAILABLE EQUIVALENT VERSIONS means technologies qualified for prod
available from a THIRD PARTY FOUNDRY SOURCE and which provide substantially
functionality with comparable characteristics (e.g., access time, parametri
substantially the same design/layout rules and using substantially the same
masks.
DIGITAL TECHNOLOGY means the basic digital process.
BiCMOS TECHNOLOGY means technology in which a SEMICONDUCTIVE DEVIC
bipolar and complementary metal oxide semiconductors.
LINEAR TECHNOLOGY means adaptation of the digital technology to inc
more of the following: threshold adjustments, capacitors, fuses, and preci
PRODUCTION means that LICENSEE is supplying WAFER outs of a particular tech
after QUALIFICATION of that technology.
STANDARD FLASH MODULE means an electrically erasable, programmable
DEVICE having non-volatile memory cells in which erasure is performed simul
blocks of said cells.
THIRD PARTY FOUNDRY SOURCE means TSMC, VMC, Chartered Semiconductor
semiconductor manufacturing companies or entities that have an annual reven
$75M per year from the sale of WAFERS to multiple customers none of which h
position in or above consultations will also include discussion of the pote
of various design rule changes on yields and latch-up. Cirrus agrees to pa
engineering lots used in testing the design rule modifications.
EXHIBIT AB
TO
IC WAFER SUPPLY AGREEMENT
Supplemental Take or Pay Principles
and
Payment Schedule
The undersigned parties agree, effective as of August 21, 1997, tha
Supply Agreement ("WSA"), made as of August 9, 1996 by and among said parti
be, and hereby is, amended by incorporating this Exhibit AB as a supplement
modification of the Take or Pay Principles and the payment schedules set fo
A and B, respectively, of said WSA.
A. Exhibit A
The "Take or Pay Principles" set forth in Exhibit A to the WSA are
supplemented as follows:
1. Lucent may convert up to 100% of its Capacity Allocation in OR2
Section C below, at any time and in its sole discretion, to run any silicon
technologies, whether or not covered or scheduled in the Annual Plan, provi
there is No Material Deviation, as defined in Section C below, caused by Lu
objectives and requirements of the Annual Plan then in effect and the devel
technologies as agreed to in said Annual Plan remains on schedule. Lucent
Cirrus harmless from loss or expense directly resulting from any Material D
caused by Lucent.
2. (a) Cirrus may convert any of its OR2 Capacity Allocation, as
Section C below, to run any additional technologies furnished pursuant to t
Agreement to the Technical Transfer Agreement (Supplemental TTA) between th
hereto, effective concurrently herewith, provided that (i) due allowance is
equipment line capacity, ordering lead times and the current technology mix
parties, and (ii) there is No Material Deviation, as defined in Section C b
Cirrus from the objectives and requirements of the Annual Plan then in effe
will hold Lucent harmless from loss or expense directly resulting from any
Deviation so caused by Cirrus.
(b) Up to one engineering lot of Wafers per month employing an
technologies described in Paragraph 2(a) above will, at Cirrus' request, be
by Supplier to Cirrus (from either OR1 or OR2), prior to any conversion of
price representing twice the Cost of Production, as defined in Section C be
Wafers or lot.
3. If Supplier does not provide for Cirrus, by July 1, 1999, Wafers
using a qualified 0.25 micron digital technology from OR2 which are Materia
(or better), as defined in Section C below and as measured by cost and perf
agreed on in writing by the parties, to that available from two or more thi
foundry sources, Cirrus upon 90 days' prior written notice to Lucent and Su
each quarter shift a portion of its take or pay obligations to Lucent, at t
per fiscal year quarter of the total capacity of OR2 as provided in the the
Annual Plan. Said action will not reduce any total amounts then owed to Su
Lucent or Cirrus, and Cirrus' right so to shift its obligations going forwa
immediately upon Supplier's compliance with the agreed metrics for such tec
such shift made pursuant hereto will be irrevocable.
4. The rights provided in Paragraphs 1, 2 and 3 above are exercisa
respective referenced party only if such party is then current with respect
obligations under the Joint Venture Formation Agreement and the Material Ag
therein defined.
5. Lucent will take Wafers from Cirrus' Allocated Capacity in OR2
with the quantities and periods specified in Table 1 attached.
6. Paragraph (A) of Exhibit A is deemed, and hereby is, amended to
from and after October 1, 1998, subject to Cirrus' compliance, as of the da
commencement of such purchases, with Paragraph 4 hereof, Lucent will purcha
percent (75%) and Cirrus will purchase twenty-five percent (25%) of OR2's t
output for Wafers, based on the forecasts provided in the Annual Plan, with
responsibilities determined pursuant to said Exhibit A as hereby amended an
and Supplier agrees to sell to each Purchaser accordingly. Such take or pa
percentages shall continue in effect for the remaining term of the Partners
however, that from and after October 1, 1998 Cirrus will have the right to
ten percent (10%) of said total production output on two (2) years' prior w
to Lucent and Supplier plus an additional six (6) month period for transiti
back to continue in effect for the remaining term of the Partnership. The
Allocation for each Purchaser will at all times be equivalent to such Purch
pay percentage.
7. It is agreed that 0.35 micron High Density Technology has been
production.
8. It is agreed that, to improve efficiencies in production by Sup
(a) Lucent and Cirrus will on an ongoing basis discuss and sha
and layout information that affects ESD and/or latch-up.
(b) For each of the 0.35, 0.25 and 0.18 digital technologies,
will be provided to Cirrus by Supplier as to which design rules could be mo
(without accompanying process changes) for SRAM cell designs, without causi
to other products in Supplier. The above consultations will also include
discussion of the potential impacts of various design rule changes on yield
latch-up. Cirrus agrees to pay for the engineering lots used in testing th
design rule modifications.
(c) Supplier will, from time to time, provide tightening of t
("shrinks") for 0.35, 0.25 and 0.18 micron technologies for the benefit of
purchasers, without additional payment.
9. The basis for take or pay cost calculations only (i.e., not act
with values shown for the particular fiscal year (quarter), shall be as fol
(a) It is agreed that neither Lucent nor Cirrus has a take
quarters up to and including June 30, 1997.
(b) It is agreed that, for the quarters beginning 7/1/97 a
or pay obligation of each Purchaser shall be calculated as follows:
i. The fixed cost per Wafer (FCPW) for the calculation
stated in the tables (A & B) below.
ii. Based on Table 1 (wafer outs assumed by Lucent) and
net wafer outs (WO) obligation is also shown.
iii. The Purchasers' total quarterly fixed cost obligati
is obtained by multiplying the above two items.
iv. The Beginning Fixed Inventory Value (BFIV) in a qua
number of wafers the Purchaser has in inventory multiplied by their
percentage completion multiplied by the fixed cost per wafer stated in Tabl
A or B. Percentage completion for a given lot is its value excluding the
starting material (Wafers) based on the then current cost standard divided
by the current standard cost value of a completed lot of the same technolog
excluding starting material (wafers).
v. Change in Beginning Fixed Inventory Value (CBFIV) i
from quarter to quarter of BFIV.
vi. Actual Wafers Out (WOA)
vii. The "take or pay" amount owed to Supplier by each Purchaser for the
quarter (starting with the quarter ending 3/31/98) is calculated as follows
Amount = FCO - CBFIV - FCPW * WOA
Amount cannot be negative
Table A (Numbers Applicable to Cirrus Logic)
Q497* Q198 Q298 Q398 Q498
FCPW 1500 1500 1200 1000 900
WO 5260 7604 11525 12673 13162
FCO** 7890 11406 13830 12673 11845.8
Table B (Numbers Applicable to Lucent)
Q497* Q198 Q298 Q398 Q498
FCPW N/A N/A 1200 1000 900
WO N/A N/A 22365 36506 39486
FCO** N/A N/A 26838 36506 35537.4
*7/1/97 - 9/30/97
**Thousands of dollars
viii. It is also agreed that when the financial true-ups
each quarter (starting with the quarter ending 3/31/98), the amounts
associated with the take or pay obligations will be included, and that:
(1) fixed cost variances be credited in proportion to actual fixed cost
billings (including take or pay) and (2) variable cost variances are
distributed in proportion to actual variable costs billings. The parties
will use best reasonable efforts to continue applying the methodologies set
forth in this subparagraph (b) for the remaining term of the Partnership.
B. Exhibit B
Exhibit B, which sets forth the parties' payment obligations, is su
1. Adding the following to Paragraph III thereof:
"During such period Cirrus shall pay to Supplier additional fees of
(a) (i) thirty-five million United States dollars (U.S. $35,000,000) for
technical information relating to 0.18 micron technology pursuant to the
Supplemental TTA, and (ii) eighty United States dollars (U.S. $80.00) for e
such Wafer made using 0.18 micron technology; or alternatively at Cirrus'
choice, (iii) twenty million United States dollars (U.S. $20,000,000) for
technical information relating to 0.18 micron technology, and (iv) one hund
United States dollars (U.S. $100.00) for each such Wafer made by using 0.18
micron technology; (b) thirty United States dollars (U.S. $30.00) for each
such Wafer made using standard BiCMOS technology; and (c) thirty United Sta
dollars (U.S. $30.00) for each such Wafer made using the standard flash
module.
The fees provided in subparagraphs (a) (i) and (iii) above shall be
payable to Supplier as follows:
(a) One-third (1/3) upon written notice of election by Cirrus to c
to 0.18 micron technology in accordance with Section A2 above; and
(b) Two-thirds (2/3) upon beginning of production using the techno
Cirrus as defined in the Supplemental TTA.
Additional fees for other technologies or modules (none of which ha
feature size finer than that in 0.18 micron technology) as referenced in th
Supplemental TTA, which are offered in available equivalent versions from a
party foundry source, will be negotiated by the Purchasers but will not exc
additional sixty United States dollars (U.S. $60.00) per Wafer for each suc
individual technology employed.
Additional fees for unique developments or modification in the above techno
or modules, and which Lucent may agree to provide to Supplier, will be nego
by the Purchasers but will not exceed an additional sixty United States dol
(U.S. $60.00) per Wafer for each such development or modification used.
A sample calculation of per Wafer fee payments based on the above is set fo
Table 2 attached."
2. Amending Paragraph IV as follows:
"In lieu of the two payments of ten million dollars ($10,000,000) each for
0.25 micron technology, due on or before June 30, 1999 and December 31, 199
respectively, Cirrus shall pay Supplier the sum of twenty million dollars
($20,000,000) as follows:
(a) One-third (1/3) upon written notice of election by Cirrus to convert t
0.25 micron technology in accordance with Sections A2 and A3 of this
Exhibit AB; and
(b) Two-thirds (2/3) upon beginning of production using the technology for
Cirrus as defined in the Supplemental TTA.
C. Definitions; General
1. (a) "Capacity Allocation" or "Allocated Capacity" means the planned ca
to which each Purchaser is then entitled plus the proportional share of any
which exists. The proportional share is equal to the percentage of the pla
to which each Purchaser is currently entitled (i.e., if one Purchaser is cu
entitled to 80% of the planned capacity of a technology, its proportional s
variation will be 80%).
(b) "No Material Deviation" means that the conversion will not cause any
material adverse change in the essential elements of the then current Annua
(c) "Cost of Production" means the total costs and associated expenses of
manufacturing (including, without limitation, equipment set-up and take-dow
handling and testing) for each Wafer or lot produced. Such total costs wil
(two) times the standards cost for a production wafer or lot of that size a
(d) "Materially Equivalent" means that the Wafers meet or exceed the Lucen
target metrics shown in Table 3 attached, recognizing that the Lucent 0.25
Features listed in said Table may be different from typical or other proces
employed elsewhere in the semiconductor industry.
2. Except as specifically amended or supplemented hereby, all terms and
conditions of the WSA and Exhibits thereto remain in full force and effect.
AGREED TO, as of the effective date set forth above.
Lucent Technologies, Inc. Cirrus Logic, Inc.
By: /s/ John T. Dickson By: /s/ Michael L. Hackwo
Name: John T. Dickson Name: Michael L. Hackworth
Title: V.P., Integrated Circuits Div. Title: CEO and Chairman
Supplier - Cirent
Semiconductor, G.P.
By: /s/Dennis M. Hill
Name: Dennis M. Hill
Title: Chairman of Board of Governors
Table 1
WAFER OUTS PER MONTH ASSUMED BY LUCENT
1997 1998
JAN. 1415
FEB. 1655
MAR. 2350
APR. 3403
MAY 4207
JUNE 4307
JULY 4304
AUG. 4304
SEPT. 4554
OCT. 255
NOV. 1101
DEC. 1176
Table 2
Example of Fee
Payments per Wafe
Basic 0.18 micron technology
(linear or digital) $80
Use of Flash Module 30
Use of BiCMOS Module 30
Use of additional Module
(to be negotiated) 40
Use of a unique modification
(to be negotiated) 35
$215
TABLE 3
Benchmark
Metric Lucent Target (merged 2.5V/3.3V Range
NMOS Ion (uA/um) 630/700 475-700
PMOS Ion (uA/um) 215/340 200-340
Vtn (V) 0.55 0.4-0.6
Vtp (V) 0.9 0.4-0.6
tox (A) 50 50-65
Drawn Gate 0.24 0.24-0.25
Number of metal levels 4-5 4-6
M1 contacted ptich 0.84 .064-0.94
M2 contacted pitch 0.88 0.76-1.1
Other metal levels contact 0.88 0.76-3.0
Lucent 0.25um Process Features
Thin epi
LOCOS Isolation
Thin Gate Oxide
N+ Poly with Wsix
HDP Gap Fill with Undoped Cap Oxide
CMP
W Plug
Unframed Contacts
DUV at Active, Gate and Contact
I-Line at all other critical levels
Both 2.5V and 3.3V Optimized Devices