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CONFIDENTIAL TREATMENT REQUESTED
Exhibit 10.14
*Portions denoted with an asterisk have
been omitted and filed separately with
the Securities and Exchange Commission
pursuant to a request for confidential
treatment.
XICOR - SANYO
SEMICONDUCTOR MANUFACTURING FOUNDRY AGREEMENT
This Agreement is made and entered into this 1st day of May 1999 by and between
Xicor, Inc., a corporation established and existing under the laws of
California, USA and having its principal office at 0000 Xxxxxxx Xxxxx, Xxxxxxxx,
XX 00000 XXX (hereinafter called "Xicor"); and Sanyo Corporation, a corporation
established and existing under the laws of Japan and having its principal office
at 0-0, 0xxxxx, Xxxxxxx-Xxxxxxx, Xxxxxxxxx, Xxxxx, Xxxxx (hereinafter called
"Sanyo").
WHEREAS XICOR, designs and markets integrated circuit products, and desires to
obtain an additional manufacturing source for certain of its products, and
WHEREAS SANYO, manufactures integrated circuits designed and marketed by other
parties and possesses wafer fabrication facilities suitable for manufacturing
the Xicor products, and
WHEREAS XICOR, desires to entrust Sanyo with the manufacture of certain
integrated circuit products; and
WHEREAS SANYO, desires to manufacture and supply these products to Xicor and is
willing to undertake to manufacture such products with technical assistance and
cooperation from Xicor, and to deliver such Product to Xicor.
NOW, THEREFORE, in consideration of the above premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1.0 DEFINITIONS:
1.1 "Wafer[s]" shall mean 150 mm epitaxial silicon wafers carrying dice
designed by Xicor and built by Sanyo according to Xicor's C5 (1.2um
process) or C7 (0.6um process) process flows, or a generally similar
process flow, through pad mask and parametric test that meet the
Specifications as per Appendix C.
1.2 "Device[s]" shall mean individual die of Xicor designed integrated
circuits in Wafer form.
1.3 "Specifications" shall mean the parametric, electrical, reliability,
quality, yield and endurance specifications for each Wafer and Device
type as set forth in Appendix C.
1.4 "Good Device[s]" shall mean individual Devices that meet the
Specifications.
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CONFIDENTIAL TREATMENT REQUESTED
1.5 "Sanyo Process" shall mean the Sanyo process, and/or such other
processes or successor processes, qualified by Xicor in accordance with
Appendix D, or as modified and approved thereafter in accordance with
Paragraph 3.9 of this Agreement, that produce Wafers and Devices that
meet the Specifications.
1.6 "Design[s]" shall mean all Xicor integrated circuit designs for
systems, circuits and pattern layouts concerning the Wafers and Devices
contained thereon.
1.7 "Proprietary Information" shall mean (i) this Agreement, including
all appendixes, exhibits, attachments and any technical specifications,
prices, schedules, specifications and the like negotiated in
implementation of this Agreement, and (ii) any information including,
but not limited to, technical information, database tapes,
specifications, test tapes, masks and supporting documentation provided
either orally, in writing or in machine readable format and masks or
reticles generated by or for Sanyo using Xicor's database tapes,
provided that all such information is marked "Confidential" or
similarly, or, if oral, identified as proprietary within 30 days
following the time of disclosure. Notwithstanding the foregoing,
Proprietary Information does not include information generally available
to the public, information independently developed or known by the
receiving Party without reference to information disclosed hereunder,
provided that the receiving Party can demonstrate such independent
development or knowledge by substantial documentation, information
rightfully received from a third party without confidentiality
obligations, information authorized in writing for release by the
disclosing Party hereunder, or information required to be disclosed
pursuant to law or governmental regulation provided that the disclosing
Party gives reasonable notice to the other party prior to any such
disclosure.
1.8 "Yield" shall mean the number of good Devices to the total Devices
on a particular Wafer.
1.9 "Substrates" shall mean 150 mm silicon epitaxial substrates as per
the specification in Appendix C.
1.10 "Effective Date" shall mean the date of Japanese governmental
approval of this Agreement pursuant to Japanese laws and regulation in
effect on the date this Agreement is executed. If such approval is not
obtained within 30 days following execution, Xicor shall have the right
to terminate this Agreement by notice to Sanyo. Sanyo will make all
filings necessary for such approval within ten (10) business days
following execution of this Agreement.
1.11 "Forecast" shall mean a six (6) month rolling forecast of Xicor's
delivery requirements for Wafers and/or Devices by Device type.
1.12 "Order[s]" shall mean Xicor purchase orders or purchase order
releases for specific Wafer and/or Device types, quantities and delivery
dates.
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1.13 "Risk Starts" shall mean any Wafers and/or Devices ordered by Xicor
prior to full and complete qualification of Sanyo's process per Appendix
D.
1.14 "Process Change" shall mean any change in process chemicals, gases,
chemical or physical structures or impurities embedded in the silicon or
in layers above silicon, cross-sections, surface properties, physical or
chemical environment which the wafer encounter during processing or
storage, photolithographic and electrically charged processes and any
other change which could impact the yield, quality, reliability,
performance, physical structure and /or appearance of Wafers and/or
Devices.
2.0 PRODUCTION:
2.1 Sanyo agrees to manufacture and supply to Xicor Wafers and/or
Devices as described in this Agreement and Xicor agrees to purchase from
Sanyo, the Wafers and/or Devices under the terms and conditions set
forth herein.
2.2 Sanyo hereby assumes responsibility for the manufacture of Wafers
and/or Devices based on the Designs, and manufactured to the
Specifications, utilizing the Sanyo Process. Sanyo will produce Wafers
and/or Devices to fill Xicor's orders, as further outlined below.
2.3 Orders shall be provided by Xicor to Sanyo as follows:
2.3.1 Within thirty (30) days of successful qualification of the
Sanyo Process, Wafers and Devices produced therein, and
specifically conditioned upon successful agreement by the parties
to Lead-Times, Pricing, Specifications, and Monitoring Criteria
contained in Appendixes A, B, C and D respectively, Xicor shall
provide Orders to Sanyo for Wafers and/or Devices. Orders placed
by Xicor will be open purchase orders or releases for fixed
quantities of Wafers and/or Devices based upon the Xicor
forecast. Sanyo shall use its best efforts to fulfill said Orders
within the lead times outlined in Appendix A.
2.3.2 On the twentieth (20th) day of each month Xicor will
provide Sanyo a Forecast. The first two months of the Forecast
shall be firm and supported by released Orders. All subsequent
months shall be for planning purposes only and in no way
represent a firm commitment to purchase Wafers and/or Devices by
Xicor.
2.4 Defective Wafers and Devices: When a Wafer manufactured by Sanyo
fails to meet the Yield Specifications, or a Device manufactured by
Sanyo fails meet the Device Specifications, Xicor and Sanyo will work
together to investigate and determine the root cause of the defect. The
party which is found to be responsible for causing such failures will,
at its own cost and responsibility, remove such cause or causes with
minimum delay.
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If the root cause of the defect can not be determined the parties agree
to act in good faith to reach an equitable resolution acceptable to both
parties.
2.5 Partial Shipments. Xicor will accept deliveries of Wafers or Devices
made in timely installments from Sanyo. Any partial shipments will be
invoiced as made, and payments therefor are subject to the terms of
payment noted below.
2.6 Quantity Variance. If the monthly quantity shipped by Sanyo of each
Wafer and/or Device ordered by Xicor is within +/- 5 percent of the
quantity ordered, such quantity shall constitute compliance with Xicor's
order. Over shipments may be accepted at Xicor's discretion, in which
case the respective quantity of such over shipment may be subtracted
from the following months' quantity. Any under shipment may, at Xicor's
discretion, be added to the following months Order.
2.7 Modifications. If Xicor determines that modifications to the
Specifications are required, including modifications to mask tooling,
process or testing, Sanyo agrees to investigate to make such
modifications within a reasonable period of time after notification in
writing by Xicor. The parties will negotiate adjustment to price and
delivery schedule as well as charges for retooling costs if warranted by
such modifications.
2.8 Substitutions. Xicor may, at Xicor's sole discretion, add or
substitute Wafer and/or Device types as long as the Wafer and/or Device
type utilizes the same or similar Sanyo Process approved by Xicor and
Sanyo for existing production, provided that the agreed upon quantities
of Wafers and/or Devices required by Xicor do not exceed those
determined pursuant to Paragraph 2.3 and 2.6 except with the consent of
Sanyo. Such Wafer and/or Device types are those which can be
manufactured using the same process and in accordance with the same
qualification plan as Wafers and/or Devices currently manufactured by
Sanyo under this Agreement.
2.9 Parametric Failure. If a Devices fails to meet the agreed upon
Parametric Specifications, and in Xicor's reasonable opinion such
failure appears material, Xicor may request Sanyo to stop production. If
Sanyo is unable to correct such failures within a reasonable time, Xicor
may cancel such particular Orders at no charge to Xicor. Xicor will
notify Sanyo in writing of its intention to suspend or cancel such
Orders and will include any substantiating data.
2.10 Reports and Reviews: Sanyo shall provide Xicor with a weekly
delivery report. Sanyo will provide a system in 1999 that will be
capable of weekly updating of wafer fabrication work in process for each
Wafer and/or Device type. The details and format of such Reports shall
be as agreed upon by the parties. To enable Xicor to track process
control, Sanyo shall also provide weekly status and data summarizing the
DC parametric measurements for Sanyo Process. In addition, the parties
agree to meet quarterly or as frequently as necessary to discuss and
resolve issues that may, from time to time, arise and to review Sanyo
performance. Sanyo also agrees to provide Xicor with such data
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and/or reports required by Xicor to enable Xicor to maintain their
qualification to ISO9001 and QS 9000 quality standards. Sanyo shall
ensure that the computer system is Y2K compliant.
2.11 Order Cancellation.
2.11.1 If Xicor fails to make any payment hereunder when due or
fails to accept any material quantity of Wafers and/or Devices
properly furnished hereunder, and such default is not cured
within thirty (30) days after Sanyo gives Xicor written notice
thereof, Sanyo may decline to make further shipments and/or may
terminate Xicor's Orders without affecting any other rights or
remedies available to Sanyo. If Sanyo continues to make shipments
after such default, Sanyo's actions shall not constitute a waiver
nor affect Sanyo's remedies for such default.
2.11.2 If Xicor cancels an Order that is firm pursuant to Section
2.3.2, Xicor shall pay in full and complete satisfaction of any
claim arising therefrom, a cancellation charge per Wafer equal
to:
(number of mask steps completed)
------------------------------------ x (Wafer price)
(total number of mask steps)
Notwithstanding the above, if the parties mutually agree to
reschedule the Order, no claim shall arise unless the Order as
rescheduled is canceled. Claims for the canceling of rescheduled
Orders shall also be governed as set forth above on the date of
cancellation.
2.11.3 Xicor may cancel any Order in whole or in part if Sanyo
fails to deliver Wafers and/or Devices as covered by such Order
placed hereunder by Xicor, which failure is not corrected within
sixty (60) days after written notice thereof. If such failure is
not corrected within the above sixty-day period and is not
excused pursuant to Paragraph 19.0, Xicor shall have the right to
procure substitute goods ("cover") as provided by the California
Uniform Commercial Code, Section 2712. The foregoing shall not
affect any other right or remedy available to Xicor. If Xicor
continues to maintain or place Orders after such default, Xicor's
actions shall not constitute a waiver nor affect Xicor's remedies
for such default.
3.0 PROCESS TECHNOLOGY:
3.1 Xicor will provide to Sanyo the Xicor C5 and C7 process flows,
process parameters, design rules and other relevant information to
enable Wafers and Devices to be manufactured by Sanyo. It is understood
that the information listed above is the Proprietary Information of
Xicor and will remain the sole property of Xicor. Nothing in
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this Agreement grants or authorizes Sanyo to use this Proprietary
Information for any other purpose other than those specifically
authorized by this Agreement.
3.2 Sanyo will run the Sanyo Process pursuant to this Agreement, or any
process which is based on the Sanyo Process, for the purpose of
manufacturing Wafers and/or Devices exclusively for Xicor. All Wafers
and Devices produced by Sanyo shall meet the Specifications as per
Appendix C.
3.3 Sanyo will either (i) provide Xicor with a list of Sanyo's
acceptable mask vendors, to which, Xicor will select and provide one
mask vendors, as mutually agreed, with Device database tapes in GDS II
format, or (ii) Xicor will provide Sanyo with Device database tapes in
GDS II format and Sanyo may procure masks locally All such database
tapes, whether or not marked as confidential as per paragraph 1.7,
constitute confidential Proprietary Information of the highest level. No
such database tapes will be provided to any third party mask vendor or
to Sanyo unless and until a written agreement by the mask vendor is
executed protecting Xicor Proprietary Information from unauthorized
disclosure. Sanyo will provide the mask vendor with mask alignment and
test structure database, and oversee merging of device and mask
alignment databases by the mask vendor. Xicor will bear the cost of
original mask sets, subject to its advance approval of the cost. The
cost of subsequent mask layers or sets that are required due to use,
abuse or other damage by Sanyo will be the responsibility of Sanyo. The
cost of reticle changes required due to process or design changes
requested by Xicor will be the responsibility of Xicor. The cost for
reticle changes requested by Sanyo for process improvement or yield
enhancements shall be the responsibility of Sanyo. Upon termination of
this Agreement all mask sets shall be destroyed.
3.4 After Sanyo has provided Xicor with sufficient Wafers and Devices
for qualification, but prior to completion of full qualification, Xicor
may request that Sanyo provide a mutually agreed quantity of Risk
Starts. Sanyo will provide these Risk Starts to Xicor at the prices
determined pursuant to Appendix B.
3.5 During the production of Risk Starts per Paragraph 3.4, Xicor may
stop production of Wafers and/or Devices by giving notice to Sanyo. Upon
receipt of such notice, Sanyo will stop production following completion
of the process steps at which Wafers and/or Devices reside at the time
of notification. Xicor agrees to pay Sanyo for all Wafers and/or Devices
started prior to Sanyo receiving such notice. Prices for such Wafers or
Devices will be equitably prorated based on the last stage of production
completed as per Paragraph 2.11.2.
3.6 For Sanyo to become qualified, Wafers and/or Devices delivered for
qualification must meet all agreed Specifications per Appendix C. When
Wafers and/or Devices made by Sanyo successfully complete qualification,
then upon written notice from Xicor of successful completion, Sanyo will
proceed, as soon as possible after receipt of such notice, to
manufacture and deliver Wafers and/or Devices ordered by Xicor in
accordance with Paragraph 2.3.
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3.7 Prior to qualification, Sanyo and Xicor must agree upon
Specifications to be contained in Appendix C. If, in the reasonable
opinion of Xicor, such agreement on Specifications can not be reached,
Xicor may cancel or terminated this Agreement without any further
obligation to Sanyo whatsoever. Sanyo specifically agrees that it will
not modify Specifications in any way without the prior written consent
of Xicor.
3.8 Xicor shall conduct the qualification as per Appendix D and report
the result of such testing to Sanyo.
3.9 Process Change shall be handled in the following manner:
3.9.1 Prior to any Process Change which Sanyo desires to make in
the manufacturing process, Sanyo agrees to notify Xicor in
writing of each such proposed Process Change, and to get Xicor's
approval in advance of the desired implementation of such Process
Change. Such notice shall contain the following:
3.9.1.1 intent of the proposed Process Change.
3.9.1.2 detailed description of the proposed Process
Change.
3.9.1.3 the reason for the proposed Process Change.
3.9.1.4 the results of controlled experiments done to
support the proposed Process Change.
3.9.1.5 detailed and comprehensive analysis of potential
failure modes and their effects.
3.9.1.6 monitoring in place to verify the intended
improvements and to identify, as early as possible, any
unintended consequences of the proposed Process Change.
3.9.1.7 containment plan in case the proposed Process
Change produces undesired effects.
3.9.1.8 detailed plan for the implementation of the
proposed Process Change and labeling of affected Wafers
and/or Devices.
3.9.2 Xicor reserves the right to approve or reject any proposed
Process Change that, in Xicor's sole opinion, will materially
affect the form, fit, or function of the Device or Wafer or
reduce the yield, reliability, or quality thereof. Xicor agrees
to provide written notification of approval or disapproval of any
proposed Process Change within sixty (60) days of receipt of such
proposed Process Change request from Sanyo. In no case will Sanyo
implement a Process Change without Xicor's
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prior written approval. Notwithstanding the foregoing, the
process changes in ion implantation dose and energy, oxide,
thickness of film except the tunneling oxide less than +/- 5% of
default values does not require Xicor's approval, prior to
implementing the changes.
3.9.3 Notwithstanding the provisions of Paragraph 3.9.2 above, if
an emergency situation warrants a temporary Process Change, Sanyo
hereby agrees to notify Xicor within twenty-four (24) hours of
identification of the emergency situation. Sanyo shall provide to
Xicor, via fax, details relating to the emergency situation
including problem identification, proposed emergency Process
Change, expected results, expected duration of effectivity and
probable ramifications if said emergency Process Change is not
approved. Xicor shall provide approval/disapproval, via fax,
within forty-eight (48) hours of receipt of Sanyo notification.
Unless said emergency Process Change is approved by Xicor as a
permanent Process Change, the process will, within the specified
time authorization in the emergency process change notification,
but in no case greater than one (1) week, revert back to the
original process which was in effect prior to the emergency
Process Change.
4.0 FORECAST AND COMMITMENT:
4.1 On the twentieth (20th) day of each calendar month, Xicor shall
provide to Sanyo a Forecast per Paragraph 2.3.2. The Forecast shall be
used by Xicor to advise Sanyo of the Wafer and/or Device volumes
required by Xicor. The first two months of the each Forecast will be
detailed by week. The remaining months will be detailed by month. Sanyo
will provide Xicor with a response in the form of a confirmation in
writing to each Forecast by the last working day of each calendar month.
The response shall contain a commitment schedule for all Wafers and/or
Devices for the first two month periods.
4.2 Upon receipt of the commitment schedule, Xicor shall either accept
or reject the response within three (3) working days. If the committed
Wafer and/or Device quantities are acceptable to Xicor, Xicor will
provide Sanyo with Orders to support the agreed upon Wafers and/or
Devices. If the committed Wafer and/or Device quantities are
unacceptable to Xicor, both parties agree to negotiate in good faith
until an acceptable resolution is reached. The production schedule
agreed to by the parties, based on the Forecast and Sanyo's response,
shall be dated, in written form, signed by the parties and shall
represent a binding commitment for all firm Orders. Signature by
facsimile is acceptable as proof of execution.
4.3 Each Order shall obligate Xicor to purchase the Wafers and/or
Devices per Order. Xicor also agrees to limit the extent of change to
each subsequent Forecast for future months based on the parties previous
month's Orders as follows: not more than 30% for the third month, 50%
for the fourth month, 75% for the fifth month and 90% for the sixth
month.
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4.4 Sanyo will provide Xicor with actual weekly Wafer and/or Device
completion's and weekly Wafer and/or Device shipment reports to be
received at Xicor no later than 12:00 noon on the Monday for the
previous weeks Wafer and/or Device activity.
4.5 In case Yields drop below the minimum Yield rate as per Appendix C,
Sanyo will use all reasonable efforts to expeditiously make up for the
missing Wafer and/or Device deliveries.
5.0 YIELD, RELIABILITY AND QUALITY:
5.1 Xicor shall have the right to test, monitor or sample any and all
Wafers and Devices to ensure adherence to the Specifications contained
in Appendix C. Any Wafer or Device failing to meet such Specifications
may be returned to Sanyo in accordance with the procedure outlined below
in Paragraph 5.2. In addition, and in the sole discretion of Xicor,
Xicor may stop any or all further shipments of Wafer and/or Devices
until such time as Sanyo can successfully demonstrated to Xicor, and in
Xicor's sole determination, the root cause creating the non-adherence
has been eliminated and all further Wafers and/or Devices shipped will
meet the Specifications.
5.2 Xicor shall conduct an analysis of any Wafers and/or Devices that
fail to meet the Specifications contained in Appendix C. If the results
of the failure analysis indicate to Xicor that the cause of such failure
was the responsibility of Sanyo, then Xicor shall provide Sanyo with
written notification of the failure and a copy of the failure analysis
report. Upon completion of Sanyo's internal investigation, but no later
than thirty (30) days after receipt of written notification, Sanyo shall
provide Xicor with a Return Material Authorization (RMA) and Xicor may
return the failed Wafers and/or Devices to Sanyo. All costs associated
with the return of such defective Wafers or Devices, including but not
limited to transportation, customs, duties or any other such cost, shall
be the sole responsibility of Sanyo. Failure to return or give written
notice of rejection of the Wafers or Devices within one (1) year after
receipt of the Wafers or Devices by Xicor shall be considered to be an
acceptance of the Wafers or Devices by Xicor. If Xicor does not follow
the above outlined procedure, then the return period of failed Wafers
and/or Devises is limited to three (3) months from the date of receipt
of the Wafers and/or Devises by Xicor.
5.3 The parties agree that the prices identified in Appendix B are
specifically predicated upon (i) if Wafers are procured, then by the
expected average Wafer/Device Yield by Device type contained in Appendix
C, and (ii) if Devices are procured, then by the quantity of Good
Devices delivered to Xicor.
5.3.1 The price per Wafer (Appendix B) is based on an agreed upon
Yield per Device type contained in Appendix C. Should the actual
average Yield, as reported for all Wafers of the same Device type
and delivered during any
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particular Xicor accounting period exceed 5% or drop below 5% of
the Yield per Appendix C, the price per Wafer will be adjusted
upward or downward as per the formula in Appendix B.
5.3.2 The price per Device (Appendix B) are based solely on a per
Good Device basis.
6.0 PRICES, PAYMENTS AND TAXES:
6.1 All prices, payments or charges pursuant to this Agreement shall be
made in US dollars. Prices will be negotiated annually and will take
into consideration any material fluctuations in the currency exchange
rate that may have occurred. Agreed upon prices for Wafers and/or
Devices, and any other items requiring payment, shall be listed in
Appendix B.
6.2 All prices are FCA San Francisco Airport. Sanyo shall be responsible
for transportation charge from Sanyo Semiconductor to San Francisco
Airport and for Japanese Customs clearance. Title to Wafers and/or
Devices shall transfer to Xicor upon release from Japanese Customs to
the Xicor designated freight forwarder in Japan. Sanyo shall be
responsible for all freight charges prior to transfer of title. Xicor
agrees to supply Sanyo with an appropriate tax exemption certificate if
appropriate.
6.3 Payment terms shall be net sixty (60) days from receipt of a valid
invoice by Xicor. Sanyo shall not send such invoices until Sanyo has
shipped to Xicor the associated Wafers and/or Devices.
6.4 Xicor shall have the right to either; (a) offset the cost on any
future invoice, or (b) obtain a credit from Sanyo for any Wafer and/or
Device returned to Sanyo under Paragraph 5.1 which has previously been
invoiced and paid by Xicor.
6.5 Each party shall be solely responsible for any and all taxes, levies
or any other type of charges imposed upon them by their respective
sovereign governments.
6.6 During the course of this Agreement each party shall bear its own
costs and expenses. Expenses shall mean such expenses as engineering
materials, Fab costs, transportation and hotel expenses associated with
travel and any other expenses required by the parties to meet their
obligations under this Agreement.
7.0 ON-SITE INSPECTION: Xicor representatives shall be allowed to visit and tour
Sanyo's fabrication and electrical test facilities during normal working hours
upon reasonable notice to Sanyo. Sanyo shall keep electrical test records,
process run cards, equipment usage
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status and Q/A results concerning the Wafers and Devices for three (3) years
after such data is issued, and Xicor representatives shall be entitled to review
such materials during such visits.
8.0 PROPRIETARY INFORMATION:
8.1 Both Sanyo and Xicor agree that Proprietary Information of the other
will remain the property of the disclosing party and will be used by
them solely for the purpose of manufacturing Wafers and/or Devices
hereunder. Such Proprietary Information shall be maintained by each
party in confidence and to a degree equal to or higher than the parties
maintain their own proprietary information of a similar nature. The
parties agree that they will not disclose any Propriety Information to
any third party without the prior written permission of the disclosing
party and further agree that such Propriety Information will not be
maintained on any internal computer network that is unsecured and can be
accessed via the internet or any other outside computing system. The
parties agree that all of their respective employees and consultants
shall be subject to non-disclosure agreements no less protective of
Proprietary Information than the provisions of this Agreement prior to
such employees and consultants being allowed access to Proprietary
Information.
8.2 Upon termination or expiration of this Agreement for whatever
reason, the receiving Party must (i) return to the other Party the
original and all copies of any Proprietary Information of the disclosing
Party, or (ii) destroy the originals and all copies of any Proprietary
Information and provide certification of such destruction to the
disclosing party, and (iii) at the disclosing Party's request, have one
of its officers certify in writing that it will not make any further
disclosure or use of such Proprietary Information and specifically will
not manufacture or have manufactured for it any product incorporating
such Proprietary Information.
8.3 These confidentiality provisions as to any item of Proprietary
Information shall survive the termination of this Agreement for a period
of five (5) years from the date of termination of this Agreement.
8.4 If Sanyo develops any process modifications or new processes as a
result of this relationship with Xicor, and such process modifications
or new processes are useable by Xicor, Xicor shall have the right to
incorporate such process modifications or new processes in its C5 or C7
processes. The parties further agree that if such process modifications
or new processes developed by Sanyo or Xicor are patentable, and both
parties wish to pursue such patent, the parties shall equally share the
cost of filing such patent, whether in the United States or Japan, and
the parties shall become co-owners of such patents. If only one parties
wishes to pursue such patent, then the pursuing party shall bear all
costs and the non-pursuing party shall be granted a non-exclusive,
royalty free license for such patent.
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9.0 WARRANTY and ACCEPTANCE:
9.1 Sanyo warrants that Wafers and/or Devices delivered hereunder will
meet the mutually agreed Specifications and shall be free from defects
in material and workmanship under normal use and service for a period of
one (1) year from the date of receipt from Sanyo's facility. If, during
such one year period (i) Sanyo is notified with reasonable promptness in
writing upon discovery of any defect in the Wafers and/or Devices,
including a reasonably detailed description of such defect; (ii) and
when physically available such Wafers and/or Devices are returned to
Sanyo's facility, transportation prepaid; and (iii) Sanyo's reasonable
examination of such Wafers and/or Devices discloses that such Wafers
and/or Devices are defective and such defects are not caused by
accident, abuse, misuse, neglect, improper installation, repair or
alteration not authorized by Xicor, improper testing or use contrary to
any reasonable instructions issued by Xicor, then within a reasonable
time Sanyo shall, as mutually agreed, either repair, replace, or credit
Xicor for such Wafers and/or Devices. Sanyo shall reimburse Xicor for
the return transportation charges paid by Xicor for such Wafers and/or
Devices. Sanyo shall return any Wafers and/or Devices repaired or
replaced under this warranty to Xicor transportation prepaid. If
replacement of any Wafer and/or Device is not practical, then Sanyo
shall issue a credit to Xicor for the price paid by Xicor for the
defective Wafers. The performance of this warranty does not extend the
warranty period applicable to the Wafers and/or Devices originally
delivered.
9.2 Sanyo shall immediately advise Xicor whenever Sanyo has reason to
believe that Wafer and/or Devices may not conform to the applicable
Specifications.
9.3 Both parties agree that the foregoing states the entire liability
and obligations of Sanyo and the exclusive remedy of Xicor for breach of
the provisions of this Article 9.
10.0 NON-COMPETITION: Sanyo agrees that Sanyo will not compete with Xicor with
products or semiconductor devices similar in nature to those sold by Xicor with
the exception of those products listed in Appendix E. Sanyo specifically agrees
that it will not at any time use for its own purposes, or any other purpose
other than those specified by this Agreement, any Xicor Proprietary Information,
know-how of Xicor's, or the Xicor C5 or C7 process technology unless
specifically evidenced by a separate technology licensing agreement properly
executed by Xicor.
11.0 INDEMNIFICATION:
11.1 Each party (the "Indemnifying Party") agrees, at its own expense,
to defend or at its option to settle, any claim, suit or proceeding
brought against the other party (the "Indemnified Party") or its
customers on the issue of infringement of any United States or other
country patent, copyright, trade secret, trademark, or other
intellectual property right with respect to Xicor, the design of the
Wafer, Device or the C5 wafer process technology to the extent
contributed by Xicor, or, as to Sanyo, the wafer process to the
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extent contributed by Sanyo, subject to the limitations hereinafter set
forth. The Indemnifying Party shall have sole control of any such action
or settlement negotiations, and the Indemnifying Party agrees to pay,
subject to the limitations hereinafter set forth, any final judgment or
settlement entered against the Indemnified Party or its customer on such
issues in any such suit or proceeding defended by the Indemnifying
Party. The Indemnified Party agrees that the Indemnifying Party shall be
relieved of the foregoing obligations unless the Indemnified Party or
its customers notify the Indemnifying Party promptly in writing of such
claim, suit or proceeding and give the Indemnifying Party authority to
proceed as contemplated herein, and, at the Indemnifying Party's expense
(except for the value of the time of the Indemnified Party's employees),
gives the Indemnifying Party proper and full information and assistance
to settle and/or defend any such claim, suit or proceeding. The
Indemnifying Party shall not be liable for any costs or expenses
incurred by the Indemnified Party without its prior written
authorization.
11.2 The foregoing provisions of this Article state the entire liability
and obligations of the Indemnifying Party and the exclusive remedy of
the Indemnified Party, with respect to any alleged infringement of
patent, copyright, trade secret, trademark or other intellectual
property right by the Wafer, process, or any part thereof.
12.0 TERM:
12.1 This Agreement shall come into force on the Effective Date and
shall remain in force for a period of five (5) years from the Effective
Date, unless terminated earlier in accordance with Paragraph 16 below.
12.2 This Agreement may be renewed for an additional period under terms
and conditions agreeable to both parties hereof.
13.0 EXPORT CONTROLS: Sanyo will not export, re-export, transship, or transmit,
directly or indirectly, (collectively "Export"), any data, designs, programs,
hardware, or technical information of any kind acquired hereunder, or any direct
product thereof to any country to which such Export is limited, or prohibited by
the United States Government or any law, regulation, agency or executive
thereof, including without limitation, the Export Administration Regulations of
the US Department of Commerce. This Agreement is subject to compliance with all
applicable export and import laws and regulations and the parties agree to
cooperate in complying therewith. Sanyo agrees to indemnify Xicor for any fees,
fines or penalties imposed on Xicor by the United States Government as a result
of Sanyo's breach or violation of this provision. Xicor shall provide Sanyo with
information regarding the Export Administration Regulations of the U.S.
Department of Commerce.
14.0 PUBLICITY: No public announcement concerning this Agreement shall be made
by either party hereto without the prior written consent of the other which
shall not be unreasonably
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withheld. It is understood that Xicor may have obligations under financial and
United States Security and Exchange regulations to publicly announce this
Agreement.
15.0 NON-DISCLOSURE OF TERMS AND CONDITIONS: Neither party shall, without first
obtaining the written consent of the other party, disclose the terms, conditions
or subject matter of this Agreement, unless, in the good faith judgment of the
disclosing party, such disclosure is; (I) in response to a valid court order, in
which case the party making the disclosure pursuant to the valid court order
shall first have informed the other party and made reasonable efforts to obtain
a protective order requiring that the information or document so disclosed be
used only for the purpose for which the order was issued, or (ii) as may be
otherwise required by law, rules or government regulations or other governmental
body of the United States, Japan or any political subdivisions thereof; provided
that the disclosing party requests confidential treatment by the appropriate
governmental agency, or (iii) necessary to establish the parties rights under
this Agreement.
16.0 TERMINATION:
16.1 Either party may terminate this Agreement for default of any of the
terms and conditions of this Agreement by the other party, providing
proper notice of default is given and the defaulting party is provided
with sixty (60) days after receipt of the notice to correct the
defaulting condition.
16.2 The parties agree that each party shall have the right to terminate
this Agreement by giving written notice of termination to the other
party at any time on or after the filing by the other party of a
petition in bankruptcy or insolvency.
17.0. SURVIVAL OF PROVISIONS: The provisions of Paragraphs 8, 9, 10, 11, 13, 14,
15, 17, 23, 24, 25, 26, 27, 28, and 29 shall survive the termination or
expiration of this Agreement.
18.0. SEVERABILITY: If any provision of this Agreement, or the application
hereof to any situation or circumstance, shall be invalid or unenforceable, the
remainder of this Agreement or the application of such provision to situations
or circumstances other than those as to which it is invalid or unenforceable,
shall be intact; and each remaining provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by applicable law. In the event
of such partial invalidity the parties shall seek in good faith to agree on
replacing any such legally invalid provisions with provisions, which, in effect,
will, from an economic viewpoint, most nearly and fairly approach the effect of
the invalid provision.
19.0. FORCE MAJEURE:Neither of the parties shall be liable in any manner for
failure or delay in the fulfillment of all or any part of this Agreement
directly or indirectly owing to Acts of God, governmental orders or
restrictions, war, threat of war, war-like conditions, hostilities, sanctions,
mobilization, blockade, embargo, detention, revolution, riot, looting, strike,
lockout, plague, fire, flood, earthquake or any other cause or other
circumstances beyond the affected
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party's control. Each of the parties shall take all reasonable steps to minimize
the effect of force majeure upon it until such effect of force majeure has
abated. Notice of any occurrence of force majeure affecting either party shall
be given to the other party as soon as possible together with evidence thereof
and the expected duration of the period for which performance hereunder shall be
delayed.
20.0. ASSIGNMENT OR TRANSFER: This Agreement, and all rights and obligations
hereunder, shall not be assigned by a party hereto to any third party or parties
without a prior written consent of the others party hereto; provided, however,
that no such prior written consent shall be required for any assignment of this
Agreement in its entirety by one of the parties to a successor-in-interest of
such party as a result of any merger or consolidation involving such party or a
sale by such party of substantially all of its assets, provided, that such
successor shall promptly agree in writing to be bound by all of the terms and
conditions of this Agreement, or any modifications hereof.
21.0. RELATIONSHIP OF THE PARTIES:The parties to this Agreement have the
relationship of independent contractors. Nothing herein shall be construed to
create any form of agency relationship or to authorize either party to bind the
other in any matter.
22.0 NOTICES: Any notices hereunder shall be given in writing by registered or
certified mail at the respective addresses listed below or at another address
which is specified by written notice.
If to Xicor: If to Sanyo:
Xicor, Inc. Sanyo Corporation
0000 Xxxxxxx Xxxxx __________________________________
Xxxxxxxx, XX 00000, XXX __________________________________
Attn: Director of Contracts Attn: ______________________________
23.0 LANGUAGE: This Agreement is in the English language only, which language
shall be controlling for all purposes. All proceedings related to the
performance, enforcement, interpretation, termination or breach of this
Agreement, and all evidence presented therein, shall be in English.
24.0 GOVERNING LAW:This Agreement shall be governed by the laws of the State of
California, except for the resolutions of disputes as provided in Paragraph 25.0
hereof.
25.0 DISPUTE RESOLUTION: In the event of any dispute, claim or question arising
out of this Agreement or breach hereof, the parties hereto shall use their best
efforts to settle such dispute, claim, question or difference. To this effect
they shall mutually consult and negotiate in good faith and understanding to
reach a just and equitable solution with sincerity. In the event that the
dispute, controversy or difference is not so settled in the above manner within
three (3) months, then the matter shall be finally settled by arbitration (i) if
Sanyo demands arbitration, it
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shall be in Santa Clara, California, in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce and under
the laws of California, without reference to conflict of laws principles, or
(ii) if Xicor demands arbitration, it shall be in Tokyo, Japan, in accordance
with the Rules of Conciliation and Arbitration of the Japan Commercial
Arbitration Association and under the laws of Japan. In any such arbitration,
Xicor will appoint one arbitrator, Sanyo will appoint one arbitrator, and the
two arbitrators appointed will select a third arbitrator. Either party hereto
may object to any arbitrator who is an employee of or affiliated with any
competitor of either party hereto. The decision of the three arbitrators shall
be final and binding and may be entered as a judgment by a court of competent
jurisdiction. Each side shall bear half the cost of the arbitration.
26.0 TITLES:The titles of all Paragraphs contained in this Agreement are for
interpretation convenience and reference only and shall not in any way affect
the interpretation hereof.
27.0 ENTIRE AGREEMENT: This Agreement supersedes all documents or arrangements
in respect to the subject matter hereof, including any Letter of Intent
previously concluded by the parties, and evidences the entire Agreement of the
parties hereto. This Agreement cannot be changed, modified or supplemented
except in writing signed by the duly authorized officer or representative of
each of the parties hereto.
28.0 THIS AGREEMENT CONTROLS: The terms and conditions of this Agreement shall
control all sales of Wafers and/or Devices hereunder, and any additional or
different terms or conditions in either party's purchase order, Orders,
responses to Orders, acknowledgment, or similar document shall be of no effect.
29.0 GOVERNMENT APPROVALS: Sanyo represents and warrants that no consent or
approval of any governmental authority is required in connection with the valid
execution and performance of this Agreement except as set forth in Paragraph
1.10. Sanyo will be responsible for timely filings of this Agreement with all
necessary Japanese government agencies.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate, each of which shall be considered as an original, by their
respective duly authorized representatives as of the date first above written.
XICOR, INC. SANYO CORPORATION
BY: /s/ XXXXX XXXX BY: /s/ XXXXXXXX XXXXXX
TITLE: PRESIDENT, CHIEF OPERATING TITLE: PRESIDENT, SEMICONDUCTOR
OFFICER COMPANY
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DATE: MAY 1, 1999 DATE: 1 MAY 1999
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APPENDIX A
LEAD-TIMES
C5/C7 Cycle Time:
Total C5 Cycle Time = * + * Sigma must be less than or equal to * days.
Total C7 Cycle Time = * + * Sigma must be less than or equal to * days.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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APPENDIX B
PRICING
B1: Wafer Pricing: (including raw wafer costs)
C5 TECHNOLOGY: = $ * per unsorted wafer
C7 TECHNOLOGY: = (to be defined separately)
B2: WAFER PRICE CALCULATIONS:
TIMING: Once every 6 months. These calculations are inspired by two
things:
1. *
2. *
CALCULATION: Every 6 months, Xicor will calculate the actual yield
percentage and compare the actual yield percentage to the target as set
forth in Table 1.
Table 1: Starting "target" wafer sort yield percentages for Xicor
products to be used for price calculations.
Density Wafer Sort Yield Percentages
--------------------------------------------
64K * %
32K * %
16K * %
256K * %
- If the average wafer yield percentage of the total number of
wafers shipped in the previous 6 months is on target, the
wafer price for the next 6 months stay the same.
- If the actual wafer yield percentage is different than the
target values, the difference will be shared by Xicor and
Sanyo and a new wafer price will be established for the next 6
month period.
B3: Device Pricing: (to be defined separately in conjunction with wafer sort
costs)
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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APPENDIX C
SPECIFICATIONS
C1: Wafer Specifications: Xicor specification number 00-W-0007 (C5)
C2: Device Specifications: Xicor specification number 020512 (C5 E-test limits)
C3: Quality and Reliability Specifications: Xicor specification numbers:
06020110, 06020101, 06020311 and 06020324.
C4: Wafer Yield: Yield targets are established in Table 1, Appendix B. Any wafer
yielding less than minus 3 sigma from the demonstrated six month wafer sort
yield average will be scrapped.
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APPENDIX D
PROCESS, WAFER AND DEVICE QUALIFICATION & MONITORING CRITERIA
Xicor specification number 06020116.
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APPENDIX E
NON-COMPETITION EXCLUSIONS
The following Sanyo Products/Product Families are specifically excluded from the
provisions of paragraph 10.0:
EEPROM/Flash Memories;
#1:LE28C*** series (512k, 1meg), parallel
#2:LE28F*** series (512k, 1meg), parallel
#3:LexxF*** series (512k, 1meg), serial
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