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EXHIBIT 10.7
TESSERA CONFIDENTIAL
SECOND ADDENDUM TO
LIMITED TCC LICENSE AGREEMENT
This Second Addendum is entered into as of the last date of each party's
execution, below, (Second Addendum Effective Date) between TESSERA INC., a
corporation organized under the laws of Delaware ("Tessera") and AMKOR
ELECTRONICS, INC. a corporation organized under the laws of Pennsylvania and its
Affiliates ("Licensee") and modifies the Limited TCC License Agreement
("Agreement") entered into by and between the parties having an Effective Date
of May 9, 1996, with reference to the following facts:
1. SUPPLEMENT TO THE AGREEMENT. This Second Addendum merely supplements
certain provisions of the Agreement. All provisions, including Definitions,
contained within the Agreement are therefore incorporated herein. In the event
any of the provisions of the Agreement or any previous Addendum thereto and this
Second Addendum conflict, the provisions contained in this Second Addendum shall
supersede the conflicting provisions.
II. DEFINITIONS.
A. The term "Billable Pin" means any electrical connection to an IC bond
pad made or contained in any TCC or related IC package licensed hereunder.
III. FEE AND ROYALTY.
A. Transfer Fee. The parties agree to reschedule Licensee's obligations
in the Agreement to pay Tessera the sum of [*] US DOLLARS ($[*]) license and
Transfer Fee. Tessera acknowledges that it has already received [*] US dollars
(US$[*]) of this [*] US DOLLAR Transfer Fee pursuant to Licensee's earlier
obligations under the Agreement. Licensee agrees to pay such remaining [*] US
DOLLARS as follows:
i.) [*] US DOLLARS (US$[*]) shall be paid by Licensee in five payments
of [*] US DOLLARS (US$[*]) each on or before the following respective dates:
March, 21 1998, June 21, 1998, September 21, 1998, December 21, 1998, and March
21, 1999, and
ii.) Tessera shall accept Licensee's note obligation for payment of the
remaining [*] US DOLLARS,(US$[*]); hereinafter "Note" (hereinafter "Note", the
terms of which are in Attachment A herein) due Tessera secured by pledge of all
Licensee's rights whatsoever in the Agreement and any Addendum thereto. Said
Note shall bear an [*] PERCENT ([*]%) [*], shall require Licensee to repay a
minimum of [*] US DOLLARS (US$[*]) by the end of the first and second
anniversary (exclusive of interest payments), and shall be pre-payable at any
time by Licensee without penalty.
* 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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TESSERA CONFIDENTIAL
B. Royalty. In addition to the Transfer Fee, Licensee shall pay running
royalties for the license granted in Paragraph II.A. (of the Agreement) twice
annually (as set forth in Paragraph IV. herein) to Tessera during the term of
the Agreement. The royalties due Tessera are as follows:
1. Base Royalty: Licensee shall pay a royalty to Tessera in the
amount of [*] US [*] (US$[*]) per Billable Pin for TCC or related IC packages
made by or for Licensee under the Agreement and shipped or transferred to a
third party or incorporated into a assemblage for internal use by Licensee.
Notwithstanding, Licensee may deduct from its royalty payments royalties due or
previously paid on royalty-bearing products under this Agreement that have been
rejected and returned to Licensee by a Licensee customer and destroyed by
Licensee or certified (in writing) by such Licensee customer as having been
actually destroyed by such customer so long as Licensee complies with the
reporting requirements listed in Paragraph IV.A. herein.
2. Note Reduction Fee: Licensee shall repay the Note by paying a
royalty premium. Licensee agrees that the royalty payments due Tessera under
this Second Addendum shall be adjusted by multiplying Licensee's total base
royalty calculated under Paragraph III.B.1 above by a factor of [*] ([*]) until
such Note is repaid in full. Any such adjusted royalty payments over and above
the royalties set forth in Paragraph III.B.1. and paid by Licensee to Tessera
shall be offset and paid against any remaining, unpaid Note balance.
IV. LICENSEE REPORTS AND PAYMENT:
A. Quarterly Royalty Calculation Reports. Beginning on the Effective
Date of this Agreement, royalties shall be calculated quarterly by January 1,
April 1, July 1 and October 1 of each year. Beginning with the first such
royalty calculation, Licensee shall deliver a written report describing the
basis upon which royalties have been calculated (at a minimum, (1) the total
number of royalty bearing TCC or related IC packages manufactured under this
Agreement and shipped or transferred to a third party or incorporated into a
assemblage for internal use by Licensee and the total Billable Pins per such
packages, and (2) the number of TCC or related IC packages rejected, returned
and destroyed by Licensee or certified as having been destroyed by a Licensee
customer (copies of such written certificates being provided to Tessera with
each calculation report), the number of Billable Pins per such rejected TCC
packages and thus the total deducted royalties for such rejected TCC packages
from a Licensee customer) and the total royalty due Tessera for the applicable
payment period to Tessera within forty-five (45) days after the end of each such
quarterly calculation period. Each of Licensee's written reports shall further
set forth an estimate of the production of TCC or related IC packages for the
immediately ensuing two quarters.
B. Semi-Annual Payments of Royalties. Beginning on the Effective Date of
this Agreement, royalties shall be paid in full in semi-annual payment periods
ending June 30 and December 31 of each year in an amount corresponding to the
sum of the royalties set forth in the currently due and immediately preceding
unpaid quarterly royalty calculation reports. Said royalty payments shall be due
with the June 30 and December 31 calculation reports. Licensee
* 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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TESSERA CONFIDENTIAL
will further submit, with each such semiannual payment, an accounting of the
total quantity of TCC or related IC packages sold by Licensee to other Tessera
assembly licensees under such other Tessera assembly licensee's license
agreements with Tessera (if applicable). All payments under this Paragraph shall
be made in US Dollars by wire transfer to Union Bank of California, 00 Xxxxxxx
Xxxx., Xxx Xxxx, XX 00000, Account Name: Tessera, Account No.: 6450148359,
Routing No. 000000000, International Swift Code: XXXXXX00, or such other bank or
account as Tessera may from time to time designate in writing. Payments shall be
considered to be made as of the day on which they are received in Tessera's
designated bank or account.
V. ENTIRE UNDERSTANDING. This Second Addendum embodies the entire
understanding between the parties relating to the subject matter hereof, whether
written or oral, and there are no prior representations, warranties or
agreements (except those specifically set forth in the First Addendum to the
Agreement or in the Agreement itself) between the parties not contained in this
Second Addendum. Any amendment or modification of any provision of this Second
Addendum must be in writing, dated and signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Second
Addendum as of the date first above written.
For TESSERA INC.: For AMKOR ELECTRONICS, INC.:
By: /S/ XXXX X. XXXXX By: /s/ XXXX XXXXXX
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Name: Xxxx X. Xxxxx Name: Xxxx Xxxxxx
Title: President & CEO Title: President
Date: 2-19-98 Date: 2-04-98
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For ANAM INDUSTRIAL CO., LTD.:
By: /s/ JENGIHL XXX
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Name: Jengihl Xxx
Title: Corp Vice President
Date: 3/3/98
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For AMOR ANAM PILIPINAS, INC.:
By: /s/ XXXXXXX X. X'XXXXX
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Name: Xxxxxxx X. X'Xxxxx
Title: Corp Vice President
Date: 2/26/98
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