<PAGE> 1
EXHIBIT 10.23
CONFIDENTIAL
AMENDMENT TO LICENSE AGREEMENT
TO REVISE ROYALTY PAYMENT FORMULA
AND MODIFY CERTAIN GENERAL TERMS OF LICENSE AGREEMENT
This Amendment to License Agreement to Revise Royalty Payment Formula and
Modify Certain General Terms of License Agreement (this "Amendment") serves to
amend that certain License Agreement, Number PL2028, dated November 30, 1997,
as amended (the "License Agreement"), by and between Artisan Components, Inc.,
a Delaware corporation, with its principal place of business at 1195 Bordeaux
Drive, Sunnyvale, California 94089-1210 (hereinafter referred to as "Artisan
Components"), and Taiwan Semiconductor Manufacturing Company Ltd., duly
incorporated under the laws of the Republic of China and having its registered
office at N. 121, Park Ave. 3, Science-Based Industrial Park, Hsin-Chu, Taiwan,
R.O.C. (hereinafter referred to as "Licensee" and "TSMC"). Except where
explicitly stated otherwise, the terms and conditions of this Amendment shall
be effective as of January 1, 2000 ("Amendment Effective Date").
RECITALS
The parties desire to amend the License Agreement to provide for a different
royalty payment calculation effective as of January 1, 2000 and to add and/or
clarify certain additional terms and conditions.
This Amendment supersedes, as of January 1, 2000, Paragraphs 1, 2, 3 and 6 of
the "Addendum Dated September 30, 1999 To License Agreement To Revise Royalty
Payment Formula" (the "Prior Addendum"). Otherwise, the Prior Addendum
continues in full force and effect.
The parties agree the below terms and conditions are added to and made a part
of the License Agreement:
AMENDMENT
1. NEW ROYALTY PAYMENT CALCULATION. Appendix C of the License Agreement sets
forth the royalty payment calculation that applies to all 0.25(micron) Licensed
Products and Appendix C-1 (from the Amendment Dated March 27, 1998) sets forth
the royalty payment calculation that applies to all 0.18(micron) Licensed
Products. Appendix C and Appendix C-1 of the License Agreement are amended to
read in their entirety as follows:
"a) Licensee shall pay to Artisan Components the following percentage, as
running royalties, of all Revenue received from any and all 0.25(micron)
LIC/Wafers (as defined below) manufactured by or for Licensee:
<TABLE>
<CAPTION>
Year* 1998 1999 2000 2001 2002 2003 2004 2005
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Royalty [**] [**] [**] [**] [**] [**] [**] [**]
Compensation
</TABLE>
[**]
** 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.
<PAGE> 2
CONFIDENTIAL
*Where Year is the calendar year in which Revenue is received for any and
all 0.25(micron) LIC/Wafers.
**The Royalty Compensation Percent is subject to a multiplier as set forth
in subsection (d) below depending upon what is used in the LIC/Wafer.
b) Licensee shall pay to Artisan Components the following percentage, as
running royalties, of all Revenue received from any and all 0.18(micron)
LIC/Wafers (as defined below) manufactured by or for Licensee:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year* 1999 2000 2001 2002 2003 2004 2005 2006
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Royalty [**] [**] [**] [**] [**] [**] [**] [**]
Compensation
Percent**
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
[**]
</TABLE>
*Where Year is the calendar year in which Revenue is received for any and
all 0.18(micron) LIC/Wafers.
**The Royalty Compensation Percent is subject to a multiplier as set forth
in subsection (d) below depending upon what is used in the LIC/Wafer.
c) Licensee shall pay to Artisan Components the following percentage, as
running royalties, of all Revenue received from any and all 0.15(micron)
LIC/Wafers (as defined below) manufactured by or for Licensee:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year* 2000 2001 2002 2003 2004 2005 2006 2007
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Royalty [**] [**] [**] [**] [**] [**] [**] [**]
Compensation
Percent**
--------------------------------------------------------------------------------
</TABLE>
*Where Year is the calendar year in which Revenue is received for any and
all 0.15(micron) LIC/Wafers."
**The Royalty Compensation Percent is subject to a multiplier as set forth
in subsection (d) below depending upon what is used in the LIC/Wafer.
d) Each of the above Royalty Compensation Percentages in the above subsections
(a), (b) and (c) are subject to a multiplier, by LIC/Wafer, based on which
standard cell library, memories and/or I/Os are used in the LIC/Wafer (or the
LIC/Wafer's design) by multiplying the Royalty Compensation Percentage by a
fraction multiplier in accordance with the below chart(s). The below charts [**]
that a [**] would always have some [**] and [**] (but not necessarily [**]),
there would not be a [**] between [**] and [**] used on any one [**], there
would not be a [**] between [**] and [**] ([**] owned) [**] used on any one
[**], but that a [**] might not include [**], and if it did include [**], the
[**] could come from [**]. In the event any of these [**] in the [**] to be
[**], at the [**] of either [**], the [**] will in [**] an appropriate [**] to
the [**]:
** 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.
<PAGE> 3
Multiplier Chart CONFIDENTIAL
[**]
Below is a chart of Examples indicating how royalties will be calculated:
------------------------------------------------------------------------
EXAMPLE SCENARIO HOW ROYALTY IS CALCULATED
------------------------------------------------------------------------
Ex 1: [**] [**]
** 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.
<PAGE> 4
CONFIDENTIAL
<TABLE>
<S> <C>
Ex 2: [**] [**]
</TABLE>
e) Artisan and Licensee shall hold quarterly meetings to review the progress
of the actual royalty payments against forecasts.
f) Except as set forth in the License Agreement as amended by this Addendum
and except as the parties may otherwise agree, [**] will [**] royalty payments
for any [**] or [**], [**] for individual [**].
2. LIC/WAFERS. The parties confirm and clarify that "LIC/Wafer" shall mean
any single integrated circuit die and/or piece of silicon wafer designed and/or
manufactured Using all or any portion of the (i) Licensed Products and/or any
[**], [**] or [**] of Licensed Products made by or for Licensee or [**] of the
foregoing, (ii) any of the [**] provided [**] and/or [**] distributed by and
through Artisan through its Free Library Program and Third Party Relationship
Programs ("TSMC Cells"), and/or (iii) any [**] and/or [**] (e.g., [**], etc.)
that can be used to manufacture at [**] for the TSMC 0.25(micron), 0.18(micron)
and/or 0.15(micron) processes and developed by Artisan for [**].
"0.25(micron) LIC/Wafers" means all LIC/Wafers that are manufactured for any of
the TSMC 0.25(micron) processes and TSMC 0.25(micron) derivative processes,
except [**] and [**].
"0.18(micron) LIC/Wafers" means those LIC/Wafers that are manufactured for any
of the TSMC 0.18(micron) processes and TSMC 0.18(micron) derivative processes,
except [**] and [**].
"0.15(micron) LIC/Wafers" means those LIC/Wafers that are manufactured for any
of the TSMC 0.15(micron) processes and TSMC 0.15(micron) derivative processes,
except [**] and [**].
** 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.
<PAGE> 5
CONFIDENTIAL
"[**]" means an [**] set of wafers (not to exceed [**]) manufactured for [**]
the [**] and [**] of the [**] for a particular [**].
3. RESTRICTED CREDITS.
3.1 Artisan Components will accrue restricted credits ("Restricted Credits")
for Licensee based on royalty fees paid to Artisan Components when due
hereunder as follows. A percentage of a Restricted Credit will accrue for each
$1.00 of royalty fees paid to Artisan Components when due hereunder in
accordance with the following table.
Restricted Credit Percentages For Royalties Paid Against 0.25(micron)
LIC/Wafers
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year 1998 1999 2000 2001 2002 2003 2004 2005
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage [**] [**] [**] [**] [**] [**] [**] [**]
of Royalty
$$ =
Restricted
Credit
--------------------------------------------------------------------------------
</TABLE>
For example, if [**] of royalties is paid to Artisan for calendar year 1998 for
0.25(micron) LIC/Wafers when due, Licensee will accrue [**] of Restricted
Credits.
Restricted Credit Percentages For Royalties Paid Against 0.18(micron)
LIC/Wafers
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year 1999 2000 2001 2002 2003 2004 2005 2006
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage [**] [**] [**] [**] [**] [**] [**] [**]
of Royalty
$$ =
Restricted
Credit
--------------------------------------------------------------------------------
</TABLE>
Restricted Credit Percentages For Royalties Paid Against 0.15(micron)
LIC/Wafers
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year 2000 2001 2002 2003 2004 2005 2006 2007
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage [**] [**] [**] [**] [**] [**] [**] [**]
of Royalty
$$ =
Restricted
Credit
--------------------------------------------------------------------------------
</TABLE>
3.2 One Restricted Credit will be applied by Artisan Components only towards
$1.00 of new license fees and/or development fees for such products and/or
services, and not royalty fees, for new/additional Licensed Products ("New
Orders") ordered by Licensee under the License Agreement; provided, however,
that (i) the maximum amount of Restricted Credits to accrue will be capped (by
process, as set forth below), and (ii) the Restricted Credits may be applied
only against New Orders set forth in a firm order from Licensee within [**] of
the date the Restricted Credits were accrued (date of accrual shall be the date
Artisan Components
** 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.
<PAGE> 6
CONFIDENTIAL
receives the royalty fees that earned the Restricted Credits). Restricted
Credits will be utilized on a [**] basis. Any Restricted Credits which are not
applied by Artisan Components towards New Orders as set forth above, for any
reason, shall be deemed void.
3.3 The total amount of Restricted Credits that can accrue for any process (and
process derivatives) may exceed the total amount of Licensed Product
(development/service/license) orders placed by Licensee hereunder for such
process (and process derivatives). For example, if the total amount of orders
placed by Licensee for the 0.25(micron) process (including Enhanced
0.25(micron)) equals $3,000,000, then the maximum amount of Restricted Credits
to accrue hereunder from royalties paid on the 0.25(micron) LIC/Wafers is
$3,000,000. The foregoing does not prohibit Licensee from applying Restricted
Credits earned from one process to purchases of products for another process.
3.4 Restricted Credits have no cash value or refund value, and they may not be
used for any purpose except as specifically set forth above as a credit to be
applied by Artisan Components and authorized by Licensee towards New Orders in
accordance with all of the above.
3.5 The ability to accrue Restricted Credit does not mean that Licensee will
not have to pay out cash monies for New Orders. Whether or not Licensee has to
pay out cash monies for New Orders will depend upon the amount of Restricted
Credits accrued and available for Licensee, if any, to use at the time payment
is due for such New Orders.
For example, if Licensee has accrued $500,000 of Restricted Credits and $750,000
of payments is due and payable under a New Order, such $750,000 payment may be
satisfied in part by applying the $500,000 of Restricted Credits, in which case
Licensee must pay Artisan an additional $250,000 by way of cash monies to
satisfy the full $750,000 payment obligation.
3.6 Restricted Credits will be earned for all royalties paid hereunder from
July 20, 1998 forward. Notwithstanding the above requirement that Restricted
Credits may be applied against New Orders only, the parties confirm that any
Restricted Credits earned from July 20, 1998 forward under the following
Amendments, may be applied against the payments owed under such Amendments to
the License Agreement:
ADDENDUM DATED DECEMBER 23, 1998 TO LICENSE AGREEMENT (SAGE)
ADDENDUM NO. 6 TO LICENSE AGREEMENT DATED JUNE 30, 1999
ADDENDUM DATED AUGUST 4, 1999 TO LICENSE AGREEMENT
ADDENDUM DATED SEPTEMBER 22, 1999 TO LICENSE AGREEMENT SAGE LOW POWER.
ADDENDUM DATED SEPTEMBER 30, 1999 TO LICENSE AGREEMENT TO ADD 0.15(micron)
PRODUCTS
ADDENDUM DATED DECEMBER 2, 1999 TO LICENSE AGREEMENT FOR LOW POWER
RECHARACTERIZATION AND ENHANCED PROCESS RECHARACTERIZATION
4. REVISION OF [**] AND PARAGRAPH 6 OF PRIOR ADDENDUM.
The parties hereby agree to replace Paragraph 6 of the Prior Addendum with the
following, the
** 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.
<PAGE> 7
CONFIDENTIAL
purpose of which is to revise the list of [**] set forth therein. The terms
and conditions of this Paragraph 4 shall be effective as of the date of this
Addendum is executed by an authorized representative of each party.
FRONT END DISTRIBUTION. To enable wider distribution to promote better market
acceptance of the TSMC/Artisan products (as that term is defined in the Prior
Addendum), and as a result of Artisan changing its Front-End Views License
Agreement as described below, the parties agree that the [**] on Artisan [**]
the Front-End Views of the Licensed Products to [**] of [**] is [**] (with the
sole exception of the [**] in Appendix A to this Addendum ("[**]"), which
Appendix A may be revised from time to time by mutual agreement), and that the
[**] of the Front-End Views no longer need to be verified as [**] being a [**]
of [**]. Artisan [**] the Front-End Views without [**] the [**],
provided that Artisan may [**] the Front-End Views to any [**] . The [**] of
this [**], however, requires Artisan to add to its Front-End View License
Agreement, the sentences substantially similar to "Your receipt of the Front-End
Views of the TSMC/Artisan library does not guarantee a business relationship
with TSMC. Signing a separate agreement with TSMC is the mechanism to secure a
business relationship with TSMC."
5. MODIFICATION OF CERTAIN GENERAL TERMS OF LICENSE AGREEMENT.
(a) Test Chips. Artisan agrees in general that test chips are a requirement for
library development programs. Precise obligations for test chip
development will be identified in each product order.
(b) No Bit Cell Standalone Distribution. Artisan agrees that TSMC bit cells
may only be shipped with memory compilers developed specifically for the
TSMC bit cell and shall not be distributed by themselves.
(c) Return of TSMC Cells. Artisan agrees that upon any termination of the
License Agreement, that except as set forth below, it shall cease to use
and shall either destroy or return to TSMC, all GDS data, information and
documentation of the TSMC Cells and related data stored in any kinds or
forms, and any related documentation and copies thereof in whole or in
part, together with Artisan's written certification by a duly authorized
officer that all of the foregoing has been destroyed or returned.
Notwithstanding the foregoing, except as the parties may agree otherwise,
to the extent Artisan has any continuing obligations with any third parties
to provide support for the TSMC Cells, Artisan may keep a reasonable number
of copies of the TSMC Cells and related data solely for the purpose of
meeting its support obligations with respect to existing designs, and
Artisan shall either destroy or return such copies upon satisfaction of
Artisan's support obligations.
(d) TSMC's Ability to Maintain and Support Customers. The parties reconfirm the
licenses granted to TSMC to the Licensed Products under the License
Agreement, which include the right to distribute and support the Licensed
Products in accordance with the terms and conditions of the License
Agreement. In the event Artisan is acquired by (i) a [**] listed in
Appendix A, as such list may be revised from time to time by mutual
agreement, or (ii) another 3rd party, which third party does not intend to
continue Artisan's library business and support of Artisan's library
customers, Artisan will provide to TSMC, as soon as reasonably possible but
in no event later than sixty (60) days following closing of the
acquisition, and at no additional charge to TSMC, source level library
schematics and GDSII data, as well as any QA and correlation data which
Artisan has developed for the TSMC
** 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.
<PAGE> 8
CONFIDENTIAL
libraries, and documentation describing Artisan's characterization
methodology. Documentation will be provided to TSMC in hardcopy form, and
library data will be provided to TSMC in electronic form.
6. GENERAL. Except as set forth herein, all terms and conditions of the
License Agreement shall remain in full force and effect. Unless otherwise
defined in this Amendment, capitalized terms used in this Agreement shall have
the same meaning as set forth in the License Agreement.
Accepted and Agreed To:
ARTISAN COMPONENTS, INC. TAIWAN SEMICONDUCTOR
MANUFACTURING COMPANY LTD.
(Licensee)
By: /s/ MARK TEMPLETON By: /s/ [**]
------------------------ ---------------------------
Name: MARK TEMPLETON Name: [**]
---------------------- -------------------------
Title: President & CFO Title: [**]
---------------------- -------------------------
Date: 6/30/2000 Date: 06/30/2000
---------------------- -------------------------
** 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.
<PAGE> 9
CONFIDENTIAL
APPENDIX A
TO
AMENDMENT TO LICENSE AGREEMENT
TO REVISE ROYALTY PAYMENT FORMULA
AND MODIFY CERTAIN GENERAL TERMS OF LICENSE AGREEMENT
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
** 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.
