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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-1
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Fiscal Year Ended December 31, 1995
| | Transition Report Pursuant to Section 13 or 15(b) of the Securities
Exchange Act of 1934
Commission File Number 0-19084
---------------------
SIERRA SEMICONDUCTOR
CORPORATION
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-2925073
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
2075 NORTH CAPITOL AVENUE
SAN JOSE, CALIFORNIA 95132
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (408) 263-9300
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, no par value
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period as the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant, based upon the closing sale price of the Common Stock on January 31,
1996 as reported on the Nasdaq National Market System, was approximately
$379,064,627. Shares of Common Stock held by each executive officer and director
and by each person who owns 5% or more of the outstanding voting stock have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.
As of January 31, 1996, the Registrant had 26,764,135 shares of
Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following document are incorporated by reference in Part III of
this Form 10-K Report:
(1) Proxy Statement for Registrant's 1996 Annual Meeting of Shareholders--Items
10, 11, 12 and 13
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<PAGE>
EXPLANATORY NOTE
This amendment to the Annual Report on Form 10-K for the year ended
December 31, 1995 is being filed solely for the purpose of submitting revised
copies of Exhibit 10.18, 10.19(a) and 10.19(b) under Item 14(c) attached hereto.
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: May 15, 1996 SIERRA SEMICONDUCTOR CORPORATION
By: /S/ JAMES V. DILLER
----------------------------------------
James V. Diller, Chief Executive Officer
<TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
this amendment has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated
<CAPTION>
Name Title Date
------------------------- ----------------------------------------------- ------------
<S> <C> <C>
/S/JAMES V. DILLER Chairman of the Board, Chief Executive Officer May 15, 1996
------------------------- and Director (Principal Executive Officer)
James V. Diller
President, Chief Operating Officer and Director May 15, 1996
-------------------------
Richard J. Koeltl
By: /S/JAMES V. DILLER
----------------------
James V. Diller
Attorney-in-Fact
Senior Vice President, Finance and Chief May 15, 1996
------------------------- Financial Officer (Principal Financial Officer)
Glenn C. Jones
By: /S/JAMES V. DILLER
---------------------
James V. Diller
Attorney -in-Fact
------------------------- Director May 15, 1996
Michael L. Dionne
By: /S/JAMES V. DILLER
--------------------
James V. Diller
Attorney-in-Fact
------------------------- Director May 15, 1996
Donald T. Valentine
By: /S/JAMES V. DILLER
---------------------
James V. Diller
Attorney-in-Fact
------------------------- Director May 15, 1996
Alexandre Balkanski
By: /S/JAMES V. DILLER
---------------------
James V. Diller
Attorney-in-Fact
</TABLE>
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<PAGE>
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. Consolidated Financial Statements
The financial statements (including the notes thereto) listed in the
accompanying index to financial statements and financial statement schedules are
filed within this Annual Report on Form 10-K.
2. Financial Statement Schedules
The financial statement schedule listed in the accompanying index to
financial statements and financial statement schedule is filed within this
Annual Report on Form 10-K.
3. Exhibits
The exhibits listed under Item 14(c) are filed as part of this Form
10-K Annual Report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the fourth
fiscal quarter ended December 31, 1995.
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<PAGE>
<TABLE>
(c) Exhibits
<CAPTION>
Exhibit Page
Number Description Number
---------- --------------------------------------------------------------------------------- ---------
<S> <C> <C>
2.1 Exchange Agreement dated September 2, 1994 between Sierra and PMC. (D)
2.2 Amended and Restated Shareholders Agreement dated September 2, 1994 among (D)
the Shareholders of PMC-Sierra, Inc.
2.3 Amendment to Exchange Agreement effective August 9, 1995 (G)
3.1 Restated Articles of Incorporation, as amended (H)
4.1 Specimen of Common Stock Certificates (A)
4.3 Terms of PMC-Sierra, Inc. Special Shares (E)
10.1B 1987 Incentive Stock Plan, as amended (C)
10.2 1991 Employee Stock Purchase plan, as amended (A)
10.4 Form of Indemnification Agreement for directors and officers (A)
10.7 VTI-Sierra Software and Product Agreement dated December 11, 1984, with (A)
amendments dated July 15, 1986 and June 12, 1987
10.8 Warrants to Purchase Common Stock (A)
10.9A* Joint Venture Agreement dated November 17, 1987, with amendments dated
April 21, 1988, March 2, 1986, January 16, 1990 and July 17, 1990
10.9C Technology Transfer Agreement dated November 17, 1987, as amended July 17, (A)
1990
10.9D Technology License Agreement dated November 18, 1987, as amended July 17, (A)
1990
10.9E International Distributor Agreement dated November 18, 1987, as amended (A)
July 17, 1990
10.11 Net Building Space Lease dated July 12, 1985, with amendments dated (A)
August 19, 1985, December 22, 1986 and June 30, 1987
10.14* Compass Design Automation, Inc. Software License Agreement dated (B)
December 2, 1991
10.17 1994 Incentive Stock Plan (F)
10.18 Deposit Agreement with Chartered Semiconductor Pte. Ltd.** --
10.19(a) Option Agreement between Sierra Semiconductor Corporation and Taiwan --
Semiconductor Manufacturing Corporation**
10.19(b) Option Agreement between PMC-Sierra, Inc. and Taiwan Semiconductor --
Manufacturing Corporation**
11.1 Calculation of earnings per share --
22.1 Subsidiaries --
23.1 Consent of Ernst & Young LLP, Independent Auditors --
24.1 Power of Attorney --
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<PAGE>
<FN>
* Confidential Treatment has been granted as to a portion of this Exhibit.
** Confidential Treatment has been requested as to portions of this Exhibit.
(A) Incorporated by reference from the same-numbered Exhibit filed with the
Registrant's Registration Statement on Form S-1 (No. 33-39406).
(B) Incorporated by reference from the same-numbered Exhibit filed with the
Registrant's Form 10-K Annual Report for the fiscal year ended December
29, 1991.
(C) Incorporated by reference from the same-numbered Exhibit filed with the
Registrant's Form 10-K Annual Report for the fiscal year ended January
3, 1993.
(D) Incorporated by reference from the same-numbered Exhibit filed with the
Registrant's Current Report on Form 8-K, filed on September 16, 1994,
as amended.
(E) Incorporated by reference from the same-numbered Exhibit filed with the
Registrant's Registration Statement Form S-3 (No. 33-97110).
(F) Incorporated by reference from the same-numbered Exhibit filed with the
Registrant's Form 10-K Annual Report for the fiscal year ended January
2, 1994.
(G) Incorporated by reference from Exhibit 2.1 filed with the Registrant's
Current Report on Form 8-K, filed on September 6, 1995, as amended on
October 6, 1995.
(H) Incorporated by reference from Exhibit 3.1 filed with Form 10-Q, filed
November 16, 1995.
</FN>
</TABLE>
-47-
<PAGE>
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit Page
Number Description Number
-------------- --------------------------------------------------------------------- ---------
<S> <C> <C>
10.18 Deposit Agreement with Chartered Semiconductor Pte. Ltd.** AA
10.19(a) Option Agreement between Sierra Semiconductor Corporation BB
and Taiwan Semiconductor Manufacturing Corporation**
10.19(b) Option Agreement between PMC-Sierra, Inc. and Taiwan CC
Semiconductor Manufacturing Corporation**
11.1+ Calculation of Earnings Per Share --
22.1+ List of Subsidiaries --
23.1+ Consent of Ernst & Young LLP, Independent Auditors --
<FN>
** Confidential treatment has been requested as to portions of this Exhibit.
+ Previously filed
</FN>
</TABLE>
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EXHIBIT 10.18
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
Dated this 15 day of August 1995
Between
CHARTERED SEMICONDUCTOR MANUFACTURING PTE LTD
And
SIERRA SEMICONDUCTOR CORPORATION
---------------------------------
DEPOSIT AGREEMENT
---------------------------------
-AA-
<PAGE>
DEPOSIT AGREEMENT
THIS AGREEMENT is made the 15 day of August 1995 by and between:-
(1) CHARTERED SEMICONDUCTOR MANUFACTURING PTE LTD, a company incorporated
in Singapore with its registered office at No. 2 Science Park Drive
Singapore Science Park, Singapore 0511 (hereinafter referred to as
"CSM"); and
(2) SIERRA SEMICONDUCTOR CORPORATION, a Company incorporated in California.
and having its place of business at 2075 North Capitol Avenue San Jose
CA 95132, United States of America (hereinafter referred to as
"Customer").
WHEREAS:
(A) CSM is engaged primarily in the business of the development,
manufacturing, assembly, marketing and selling of semiconductors, with
its 2 wafer fabrication facilities situated in Singapore. CSM intends
to establish a third wafer fabrication facility in Singapore.
(B) Customer desires to deposit certain funds with CSM to enable CSM to
procure increased wafer fabrication capacity and to make available to
Customer certain wafer manufacturing capacity, on the terms and
conditions of this Agreement.
IT IS HEREBY AGREED as follows:-
1. THE DEPOSIT
1.1 In consideration of CSM agreeing to make available to Customer certain
wafer manufacturing capacity, Customer will deposit with CSM the sum of
[ REDACTED ] (the "Deposit") on such dates and in such amounts as
specified in Annex A.
1.2 The Deposit shall be paid by telegraphic transfer to an account
designated by CSM and such Deposit shall be maintained by Customer to
the full amount of [ REDACTED ] during the term of this Agreement.
1.3 Upon the expiry of the term of this Agreement or the earlier
termination thereof in accordance with Clause 6, CSM will return to
Customer the Deposit, without interest and subject to any deductions
made by CSM pursuant to the terms of this Agreement
2. CSM SUPPLY COMMITMENT
2.1 In consideration of the payment of the Deposit by Customer and
Customer's maintenance of the full deposit amount of [ REDACTED ] with
CSM, CSM will make available to Customer, wafer manufacturing capacity
for 8-inch wafers (based on 15 mask level wafers) in each calendar
quarter commencing from the fourth calendar quarter of 1995 until the
expiry or the earlier termination of the term of this Agreement, in
such quantities as set out in Annex B (the "CSM Supply Commitment").
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
2.2 The Parties agree that the technology mix of the CSM Supply Commitment
for each calendar month will be in direct proportion to the technology
mix of CSM's total wafer output to customers in such months.
Example
If CSM's total wafer output in a month is 10,000 wafers and the CSM
Supply Commitment to Customer constitutes 10% of CSM's total wafer
output, then the wafer capacity committed by CSM to Customer shall be
in the following mix:-
CSM's Total Output Customer's Entitlement (10%)
------------------ ----------------------------
5000 in 0.6um 500
3000 in 0.5um 300
2000 in 0.35um 200
------------- -----
10,000 wafers 1000
------------- -----
2.3 Unless otherwise expressly provided in this Agreement, the sale of
wafers by CSM to Customer, the capacity of which is made available to
Customer under this Agreement, shall be governed by the terms and
conditions of CSM's foundry agreement to be entered into by CSM and
Customer (the "Foundry Agreement" ).
2.4 CSM reserves the right to adjust the pricing of wafers to be supplied
by CSM from time to time depending on prevailing market conditions
and/or subject to the provisions of Clause 8.6, Provided however that
CSM shall give Customer not less than 3 months' prior written notice of
such adjustment. In any event, the price of wafers supplied to Customer
shall be no more than [ REDACTED ] above CSM's pricing for similar
products and processes and similar quantities available to CSM's equity
investors.
3. CUSTOMER LOADING COMMITMENT
3.1 Customer agrees to place purchase orders with CSM for such quantity of
8-inch wafers (based on 15 mask level wafers) for delivery during the
calendar quarters set out in Annex B (the "Customer Loading
Commitment"). The quantity of wafers for which orders are placed by
Customer is hereinafter referred to as the "Customer Actual Loading".
3.2 The Customer Actual Loading for each calendar quarter during the term
of the Agreement shall be equal to the Customer Loading Commitment. In
addition, the month to month variation in the Customer Actual Loading
shall not exceed [ REDACTED ] without the prior written approval of
CSM.
3.3 Notwithstanding the provisions of Clause 3.2, CSM agrees to waive
payment of liquidated damages under Clause 4 if the Customer Actual
Loading for any calendar quarter is in aggregate not less than
[ REDACTED ] of the Customer Loading Commitment for that quarter.
4. LIQUIDATED DAMAGES
4.1 The Parties acknowledge that in the initial period, CSM and Customer
would work together to qualify Customer's products at CSM's wafer
fabrication facility. Accordingly, the provisions of Clause 4 for the
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
payment of liquidated damages shall be effective in respect of the CSM
Supply Commitment and the Customer Loading Commitment from the first
calendar quarter of 1997 onwards. In addition, CSM shall not be liable
for any losses or damages whatsoever incurred by Customer Actual
Loading for the period prior to the first calendar quarter of 1997.
4.2 In the event that the Customer Actual Loading for any calendar quarter
is less than [ REDACTED ] of the Customer Loading Commitment for that
quarter, Customer shall pay to CSM liquidated damages calculated based
on the shortfall from 100% of the Customer Loading Commitment for that
quarter, at CSM's average selling price per wafer for such quarter. The
formula for calculation of such liquidated damages shall be as
follows:-
ASP x (Customer Loading Commitment - Customer Actual loading) where
ASP = CSM's average selling price per wafer for that quarter
4.3 In the event that CSM fails to deliver at least [ REDACTED ] of the
Customer Actual Loading for any calendar quarter, CSM shall pay to
Customer liquidated damages calculated based on the shortfall from 100%
of the Customer Actual Loading, based on CSM's average selling price
per wafer for that quarter. The formula for calculation of such
liquidated damages shall be as follows:-
ASP x (Customer Actual Loading - Actual quantity delivered by CSM)
where ASP = CSM's average selling price per wafer for that quarter
4.4 CSM and Customer agree and acknowledge that the amount payable as
liquidated damages pursuant to Clauses 4.1 and 4.2 is a genuine
pre-estimate of the loss which would be suffered by the non-defaulting
Party as a consequence of the failure of the defaulting Party to
fulfill its respective obligations under Clauses 2 and 3 of this
Agreement.
4.5 CSM and Customer each agrees that their respective liability, in CSM's
case to fulfill the CSM Supply Commitment under Clause 2 and in
Customer's case to fulfill the Customer Loading Commitment under Clause
3, shall be limited to the liability expressly specified in clause 4
and that neither party shall be liable for any indirect, special or
consequential damages even if such Party had or should have had any
knowledge, actual or constructive, of the possibility of such damages.
5. SET OFF AND MAINTENANCE OF DEPOSIT'
5.1 CSM shall be entitled to deduct from and set-off against the Deposit,
the following sums due from Customer:-
(a) the amount of liquidated damages as they fall due pursuant to
Clause 4; and
(b) any payment falling due and remaining unpaid under the Foundry
Agreement.
5.2 At the end of each calendar quarter, CSM shall issue a written notice
to Customer stating the amount of the liquidated damages and/or overdue
payments and Customer shall pay the relevant sum to CSM so as to
maintain the Deposit at [ REDACTED ], within 30 days of the date of
such notice.
5.3 CSM's right of deduction and set-off pursuant to Clause 5.2 shall be in
addition to CSM's right to claim the aforesaid liquidated damages and
overdue payments separately as a debt due from Customer and shall not
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
in any way prejudice such right or any other rights or remedies which
CSM may have at law or in equity.
6. TERM AND TERMINATION
6.1 The term of this Agreement shall expire on 31 December 2000 and may be
earlier terminated in the following events:-
(a) At the Option of CSM, in the event that the amount of the
Deposit falls below [ REDACTED ] and Customer fails to make
payment of the shortfall up to [ REDACTED ] to CSM within the
period set out in Clause 5.2;
(b) At the option of CSM, in the event of the Customer Actual
Loading is in aggregate less than 50% of the Customer Loading
Commitment for 12 consecutive calendar months;
(c) At the option of Customer, in the event that CSM fails to
deliver to Customer in aggregate at least 50% of the Customer
Actual Loading for 12 consecutive calendar months;
(d) At the option of either Party, in any of the following events:-
(i) the inability of the other Party to pay its debts in
the normal course of business; or
(ii) the other Party ceasing or threatening to cease
wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or
amalgamation without insolvency; or
(iii) any encumbrancer taking possession of or a receiver,
manager, trustee or judicial manager being appointed
over the whole or any substantial part of the
undertaking, property or assets of the other Party;
or
(iv) the making of an order by a court of competent
jurisdiction or the passing of a resolution for the
winding-up of the other Party or any company
controlling the other Party, otherwise than for the
purpose of a reconstruction or amalgamation without
insolvency.
6.2 Termination of the Agreement pursuant to Clause 6.1 shall take effect
immediately upon the issue of a written notice to that effect by the
Party terminating the Agreement to the other. The termination of this
Agreement howsoever caused shall be without prejudice to any
obligations or rights of either Party which have accrued prior to such
termination and shall not affect any provision of this Agreement which
is expressly or by implication provided to come into effect on or to
continue in effect after such termination.
7. FORCE MAJEURE
7.1 CSM's obligation to provide the CSM Supply Commitment and Customer's
obligation to place purchase orders in accordance with the terms of
this Agreement shall be suspended upon the occurrence of a force
majeure event such as act of God, flood, earthquake, fire, explosion,
act of government, war, civil commotion, insurrection, embargo, riots,
lockouts, labour disputes affecting CSM or Customer as the case may be,
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
for such period as such force majeure event may subsist. Upon the
occurrence of a force majeure event, the affected Party shall notify
the other Party in writing of the same and shall by subsequent written
notice after the cessation of such force majeure event inform the other
Party of the date on which that Party's obligation under this
Agreement shall be reinstated.
7.2 Notwithstanding anything in this Clause 7, upon the occurrence of a
force majeure event affecting either Party, and such force majeure
event continues for a period exceeding 6 consecutive months without a
prospect of a cure of such event, the other Party shall have the
option, in its sole discretion, to terminate this Agreement. Such
termination shall take effect immediately upon the written notice to
that effect from the other Party to the Party affected by the force
majeure event.
8. WARRANTY AND INDEMNITY
8.1 Customer warrants that it has the right to use and license the use of
the design provided by Customer and processes provided by Customer and
hereby grants to CSM the right to use the aforesaid design and
processes for the performance of its obligations under this Agreement
and the Foundry Agreement.
8.2 Customer shall indemnify, hold harmless and defend CSM against any
claims that Customer's products or a process or design licensed from or
otherwise provided by Customer and used by CSM for the performance of
its obligations under this Agreement is an infringement of any letters
patent or other intellectual property rights, including, without
limitation, any infringement based on specifications furnished by
Customer or resulting from the use of any equipment or process
specified by Customer.
8.3 CSM shall notify Customer of any claim of infringement or of
commencement of any suit, action, or proceedings alleging infringement
of any intellectual property rights of any third party forthwith after
receiving notice thereof. Customer shall have the right in its sole
discretion and at its expense to participate in the defence of any such
claim, suit, action or proceedings and in any and all negotiations with
respect thereto.
8.4 CSM shall indemnify, hold harmless and defend Customer against any
claims that the wafers manufactured by CSM pursuant to this agreement
or any of CSM's manufacturing processes used by CSM for the performance
of its obligations under this Agreement is an infringement of any
letters patent or other intellectual property rights of any third
party.
8.5 Customer shall notify CSM of any claim of infringement or of
commencement of any suit, action, or proceedings alleging infringement
of any intellectual property rights of any third party forthwith after
receiving notice thereof. CSM shall have the right in its sole
discretion and at its expense to participate in the defence of any such
claim, suit, action or proceedings and in any and all negotiations with
respect thereto.
8.6 Customer hereby agrees that in the event that CSM is required to make
any payments, including without limitation, licence fees or royalty
payments, to any third party in respect of any of CSM's manufacturing
processes used by CSM in the performance of its obligations under this
Agreement, CSM shall be entitled to adjust the pricing of the wafers
supplied to Customer accordingly. Such adjustment shall be effective
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
upon CSM giving to Customer not less than 3 months' prior written
notice thereof.
9. CONFIDENTIALITY
9.1 All Confidential Information shall be kept confidential by the
recipient unless or until the recipient Party can reasonably
demonstrate that any such Confidential Information is, or part of it
is, in the public domain through no fault of its own, whereupon to the
extent that it is in the public domain or is required to be disclosed
by law this obligation shall cease. For the purposes of this Agreement,
"Confidential Information" shall mean all communications between the
Parties, and all information and other materials supplied to or
received by either of them from the other (a) prior to or on the date
of this Agreement whether or not marked confidential; (b) after the
date of this agreement which is marked confidential with an appropriate
legend, marking, stamp or other obvious written identification by the
disclosing Party, and (c) all information concerning the business
transactions and the financial arrangements of the Parties with any
person with whom any of them is in a confidential relationship with
regard to the matter in question coming to the knowledge of the
recipient.
9.2 The Company and the Parties and shall take all reasonable steps to
minimise the risk of disclosure of Confidential Information, by
ensuring that only they themselves and such of their employees and
directors whose duties will require them to possess any of such
information shall have access thereto, and will be instructed to treat
the same as confidential.
9.3 The obligation contained in this Clause shall endure, even after the
termination of this Agreement, for a period of 5 years from the date of
receipt of the Confidential Information except and until such
Confidential Information enters the public domain as set out above.
10. NOTICES
10.1 Addresses
All notices, demands or other communications required or permitted to
be given or made under or in connection with this Agreement shall be
in writing and shall be sufficiently given or made (a) if delivered by
hand or commercial courier or (b) sent by pre-paid registered post or
(c) sent by legible facsimile transmission (provided that the receipt
of such facsimile transmission is confirmed and a copy thereof is sent
immediately thereafter by pre-paid registered post) addressed to the
intended recipient at its address or facsimile number set out below. A
Party may from time to time notify the others of its change of address
or facsimile number in accordance with this Clause.
CSM
No. 2 Science Park Drive
Singapore Science Park,
Singapore 0511
Facsimile no: (65) 777 3981
Attn: Mr Tan Bock Seng
President
Customer
2075 North Capitol Avenue
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
San Jose , CA 95132,
United States of America
Facsimile no: (408) 263-1969
Attn: Mr Jim Diller
Chairman
10.2 Deemed Delivery
Any such notice, demand or communication shall be deemed to have been
duly served (a) if delivered by hand or commercial courier, or sent by
pre-paid registered post, at the time of delivery; or (b) if made by
successfully transmitted facsimile transmission, at the time of
dispatch (provided that the receipt of such facsimile transmission is
confirmed and that immediately after such dispatch, a copy thereof is
sent by pre-paid registered post.
11. WAIVER AND REMEDIES
11.1 No delay or neglect on the part of either Party in enforcing against
the other Party any term or condition of this Agreement or in
exercising any right or remedy under this Agreement shall either be or
be deemed to be a waiver or in any way prejudice any right or remedy of
that Party under this Agreement.
11.2 No remedy conferred by any of the provisions of this Agreement is
intended to be exclusive of any other remedy which is otherwise
available at law, in equity, by statute or otherwise and each and every
other remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law, in
equity, by statute or otherwise. The election of any one or more of
such remedies by either of the Parties hereto shall not constitute a
waiver by such Party of the right to pursue any other available remedy.
12. SEVERANCE
If any provision or part of this Agreement is rendered void, illegal or
unenforceable in any respect under any enactment or rule of law, the
validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
13. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between CSM and
Customer with respect to the subject matter hereof and shall supersede
all previous agreements and undertakings between Parties.
14. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of Singapore. The Parties hereby irrevocably submit to the
non-exclusive jurisdiction of the courts of Singapore.
IN WITNESS WHEREOF the Parties have hereunto entered into this Agreement the
date first above written.
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
Signed by Tan Bock Seng, President )
CHARTERED SEMICONDUCTOR )
MANUFACTURING PTE LTD )
in presence of:- ) /s/ Tan Bock Seng
/s/ Choong Chan Gong
Name
Signed by Jim Diller, Chairman )
SIERRA SEMICONDUCTOR )
CORPORATION )
in the presence of:- ) /s/ Jim Diller
/s/ Alice Bata
Name
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
ANNEX A
Payment Schedule
Deposit Amount [ REDACTED ]
1. Upon signing of Deposit Agreement [ REDACTED ]
2. 2 January 1996 [ REDACTED ]
3. 2 January 1997 [ REDACTED ]
4. 2 January 1998 [ REDACTED ]
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
ANNEX B
CSM SUPPLY COMMITMENT
CUSTOMER LOADING COMMITMENT
Number of 8-inch silicon wafers (based on 15 mask level)
4Q95 1Q96 2Q96 3Q96 4Q96 1Q97 2Q97
[REDACTED][REDACTED][REDACTED][REDACTED][REDACTED][REDACTED][REDACTED]
3Q97 4Q97 1Q98 2Q98 3Q98 4Q98 through 4Q2000
[REDACTED][REDACTED][REDACTED][REDACTED][REDACTED] [REDACTED]
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
EXHIBIT 10.19(a)
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
OPTION AGREEMENT
Between
Sierra Semiconductor Corp.
And
Taiwan Semiconductor Manufacturing Co., Ltd.
March 19, 1996
-BB-
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS 4
2. VOLUME COMMITMENT 5
3. WAFER PRICE 5
4. OTHER PURCHASE TERMS AND CONDITIONS 6
5. OBLIGATION TO PAY OPTION FEE FOR OPTION CAPACITY 6
6. FAILURE TO PURCHASE THE OPTION CAPACITY 7
7. TERM AND TERMINATION 8
8. BOARD APPROVAL 9
9. LIMITATION OF LIABILITY 9
10. NOTICE 9
11. ENTIRE AGREEMENT 10
12. GOVERNING LAW 10
13. ARBITRATION 10
14. ASSIGNMENT 11
15. CONFIDENTIALITY 11
16. FORCE MAJEURE 11
EXHIBIT A 12
EXHIBIT B 13
EXHIBIT C 14
EXHIBIT D 15
EXHIBIT E 16
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
OPTION AGREEMENT
THIS AGREEMENT is made and becomes effective as of March 19, 1996 (the
"Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a
company organized under the laws of the Republic of China with its registered
address at No. 121, Park Ave. 3, Science-Based Industrial Park, Hsinchu, Taiwan,
and, SIERRA SEMICONDUCTOR, INC., a company organized under the laws of
California, with its registered address at 2075 N. Capital Avenue, San Jose, CA
95132 ("Customer").
RECITALS
WHEREAS, TSMC currently supplies Customer with wafers and Customer
wishes to increase the volume of wafers to be purchased from TSMC;
WHEREAS, in order to increase its output, [ REDACTED ]
WHEREAS, as a condition to TSMC's acceleration of these facilities,
TSMC has asked that Customer make a capacity commitment and advance payment for
the right to buy additional capacity, and Customer is willing to do so:
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties agree as follows:
3
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
1. DEFINITIONS
(a) "Base Capacity" used in this Agreement shall mean the Contract
Capacity as defined in this Section 1 (c) below, plus the Best
Effort Capacity as defined in this Section 1 (c) below.
(b) "Best Effort Capacity" used in this Agreement shall mean the
capacity commitment made by Customer on the best effort basis
pursuant to an existing agreement, if any.
(c) "Customer Committed Capacity" used this Agreement shall mean
the total capacity that Customer agrees to purchase from TSMC
pursuant to this Agreement, and is set forth in Exhibit B.
(d) "Option Capacity" used in this Agreement shall mean the firm
capacity commitment made by Customer pursuant to this
Agreement, for which Capacity Customer agrees to pay the
Option Fee as defined in this Section 1(f) below.
(e) "Option Fee" used in this Agreement shall mean the deposit
that Customer agrees to place with TSMC as the advance payment
for the Option Capacity.
(f) "TSMC Committed Capacity" used in this Agreement shall mean
the total capacity that TSMC agrees to provide to Customer
pursuant to this Agreement, and is set forth in Exhibit B.
(g) [ REDACTED ]
4
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
2. VOLUME COMMITMENT
(a) Customer agrees to purchase from TSMC the Customer Committed
Capacity, and subject to the payment of the Option Fee by
Customer under Section 5 below, TSMC agrees to provide to
Customer the TSMC Committed Capacity, as set forth in Exhibit
B. [ REDACTED ]
(b) Each month, Customer agrees to provide to TSMC a six-month
rolling forecast of the number of wafers that Customer will
purchase,[ REDACTED ]. The forecast must be based on wafers
out or deliveries expected to be made by TSMC.
(c) TSMC will use its reasonable effort to cause its fabs to be
capable of producing wafers of more advanced specifications,
as set forth in the TSMC Technology Road Map attached as
Exhibit C.
3. WAFER PRICE
(a) The wafer prices for the Customer Committed Capacity shall
[REDACTED] for the same technology, the same fab and the same
period of time. In the event that the wafer prices for the
Customer Committed Capacity do not comply with the preceding
sentence, TSMC will make proper price changes for the unfilled
orders, upon Customer's notice in writing.
5
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
(b) The parties shall negotiate in good faith each year the wafer
prices for the Customer Committed Capacity of the following
year, [ REDACTED ]
4. OTHER PURCHASE TERMS AND CONDITIONS
The Customer/TSMC Foundry Wafer Agreement dated to be completed will
apply to all purchases of wafers by Customer from TSMC, except that the
provisions of this Agreement will supersede the above Agreement with
respect to the subject matter hereof.
5. OBLIGATION TO PAY OPTION FEE FOR OPTION CAPACITY
(a) Customer agrees to pay to TSMC the Option Fee in the amount of
[ REDACTED ] for the right to purchase the Option Capacity
pursuant to this Agreement. The Option Fee is set forth in
Exhibit D. Except that TSMC exercises its first right of
refusal and accepts the Customer's offer pursuant to Section 6
below, the Option Fee for any calendar year, once paid, shall
be non-refundable for any cause other than breach, and will be
credited against the wafer prices for the Option Capacity
provided by TSMC for that particular year under this
Agreement.
(b) Customer further agrees to deliver to TSMC, within seven (7)
days following the Effective Date, two (2) promissory notes
each in an amount of the Option Fee due and payable to TSMC
which promissory notes are in the form of Exhibit E. The
promissory notes shall be returned by TSMC to Customer within
seven (7) days upon receipt of the corresponding Option Fee by
TSMC.
6
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
6. FAILURE TO PURCHASE THE OPTION CAPACITY; FIRST RIGHT OF REFUSAL
(a) [ REDACTED ]
(b) Customer may assign its TSMC Committed Capacity to PMC-Sierra
Corporation.
(c) Any of Customer's right or obligation set forth in Section
6(a) shall not affect its obligation to pay the Option Fee
pursuant to Section 5 above, except that if this Agreement is
assigned to any third parties acceptable to TSMC pursuant to
this Section 6(a) above, such third parties shall pay the
Option Fee and abide by the terms and conditions of this
Agreement.
7
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
7. TERM AND TERMINATION
(a) The term of this Agreement shall commence from the Effective
Date, and continue until December 31, 2000.
(b) TERMINATION BY TSMC FOR CUSTOMER'S FAILURE TO PAY THE OPTION
FEE TSMC may terminate this Agreement if Customer fails to pay
the Option Fee pursuant to Section 5 above, and does not cure
or remedy such breach within thirty (30) days of receiving
written notice of such breach.
(c) TERMINATION FOR OTHER BREACH OR FOR BANKRUPTCY
Either party may terminate this Agreement if, the other party
breaches any material provisions of this Agreement (other than
the breach of Section 5 above), and does not cure or remedy
such breach within sixty (60) days of receiving written notice
of such breach, or (ii) becomes the subject of a voluntary or
involuntary petition in bankruptcy or any proceeding relating
to insolvency, receivership or liquidation, if such petition
or proceeding is not dismissed with prejudice within sixty
(60) days after filing.
(d) EFFECT OF TERMINATION
Both parties shall remain liable to the other party for any
outstanding and matured rights and obligations at the time of
termination, including all outstanding payments of the Option
Fee and for the wafers already ordered and/or shipped to
Customer.
In addition, if this Agreement is terminated by Customer due
to a breach by TSMC, then TSMC shall refund to Customer any
portion of the Option Fee already paid by Customer to TSMC but
not yet credited to the purchase prices of wafers in
accordance with Section 5 above.
8
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
8. BOARD APPROVAL
Customer shall obtain the approval by its Board of Directors of this
Agreement, and submit to TSMC, at the time of executing this Agreement,
an authentic copy of it's board resolution authorizing the
representative designated below to execute this Agreement.
9. LIMITATION OF LIABILITY
In no event shall either party be liable for any indirect, special,
incidental or consequential damages (including loss of profits and loss
of use) resulting from, arising out of or in connection with either
party's performance or failure to perform under this Agreement, or
resulting from, arising out of or in connection with either party's
producing, supplying, and/or sale of the wafers, whether due to a
breach of contract, breach of warranty, tort, negligence, or otherwise.
10. NOTICE
All notices required or permitted to be sent by either party to the
other party under this Agreement shall be sent by registered mail
postage prepaid, or by personal delivery, or by fax. Any notice given
by fax shall be followed by a confirmation copy within (10) days.
Unless changed by written notice given by either party to the other,
the addresses and fax numbers of the respective parties shall be as
follows:
To TSMC:
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
No. 121, Park Avenue 3
Science-Based Industrial Park
Hsinchu, Taiwan
Republic of China FAX: 886-35-781545
9
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
To Customer:
SIERRA SEMICONDUCTOR, INC,
2075 N. Capital Avenue
San Jose, CA 95132 FAX: 408-946-7523
11. ENTIRE AGREEMENT
This Agreement including Exhibits A-E, constitutes the entire agreement
between the parties with respect to the subject matter hereof, and
supersedes and replaces all prior or contemporaneous understandings,
agreements, dealings and negotiations, oral or written, regarding the
subject matter hereof. No modification, alteration or amendment of this
Agreement shall be effective unless in writing and signed by both
parties. No waiver of any breach or failure by either party to enforce
any provision of this Agreement shall be deemed a waiver of any other
or subsequent breach, or a waiver of future enforcement of that or any
other provision.
l2. GOVERNING LAW
This Agreement will be governed by and interpreted in accordance with
the laws of the Republic of China.
13. ARBITRATION
Each party will make best efforts to resolve amicably any disputes or
claims under this Agreement among the parties. In the event that a
resolution is not reached among the parties within thirty (30) days
after written notice by any party of the dispute or claim, the dispute
or claim shall be finally settled by binding arbitration in Taipei
under The Rules of Arbitration of the International Chamber of Commerce
by three (3) arbitrators appointed in accordance with such rules. The
arbitration proceeding shall be conducted in English. Judgment on the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
10
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
14. ASSIGNMENT
This Agreement shall be binding on and inure to the benefit of each
party and its successors, and except that Customer may assign this
Agreement under Section 6 above, neither party shall assign any of its
rights hereunder, nor delegate its obligations hereunder, to any third
party, without the prior written consent of the other.
15. CONFIDENTIALITY
Neither party shall disclose the existence or contents of this
Agreement except as required by Customer's assignment of this Agreement
to any third parties pursuant to Section 6 above, in confidence to its
advisers, as required by applicable law, or otherwise without the prior
written consent of the other party.
16. FORCE MAJEURE
Neither party shall be responsible for delays or failure in performance
resulting from acts beyond the reasonable control of such party. Such
acts shall include but not limited to acts of God, war, riot, labor
stoppages, governmental actions, fires, floods, and earthquakes.
IN WITNESS WHEREOF, the parties, have executed this Agreement as of the
date first stated above.
TAIWAN SEMICONDUCTOR SIERRA SEMICONDUCTOR, INC.
MANUFACTURING CO., LTD.
BY:____________________ BY:____________________
Donald Brooks James V. Diller
President CEO
11
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT A
CAPACITY FACTOR TABLE
[TABLE OMITTED]
12
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT B
SIERRA SEMICONDUCTOR, INC./TSMC
COMMITTED CAPACITY
[TABLE OMITTED]
13
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT C
TSMC CMOS Technology Roadmap
[TABLE OMITTED]
14
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT D
OPTION FEE (Option I)
Year Option Capacity Option Fee Due Date
(Unit: Wafer (Unit: US$)
Equivalent)
[ REDACTED ] [ REDACTED ] [ REDACTED ] [ REDACTED ]
[ REDACTED ] [ REDACTED ] [ REDACTED ]
15
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT E
STANDARD FORM OF PROMISSORY NOTE
Amount: US $______________ Due Date:_______________
The Undersigned, ____________________ (the "Maker"), unconditionally
promise to pay to Taiwan Semiconductor Manufacturing Co., Ltd. or its order the
[ REDACTED ] annum on any unpaid portion of the principal amount stated herein,
and said payment will be made at _______________ (Place of Payment).
This Note shall be governed in all respects by the laws of the Republic
of China.
The Maker of this Note agrees to waive protests and notice of whatever
kind.
Issue Date: ________________________
Issue Place: ________________________
Maker's Signature: ________________________
Maker's Address: ________________________
________________________
16
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
EXHIBIT 10.19(b)
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
OPTION AGREEMENT
Between
PMC-Sierra, Inc.
And
Taiwan Semiconductor Manufacturing Co., Ltd.
March 19, 1996
-CC-
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS 4
2. VOLUME COMMITMENT 5
3. WAFER PRICE 5
4. OTHER PURCHASE TERMS AND CONDITIONS 6
5. OBLIGATION TO PAY OPTION FEE FOR OPTION CAPACITY 6
6. FAILURE TO PURCHASE THE OPTION CAPACITY 7
7. TERM AND TERMINATION 8
8. BOARD APPROVAL 8
9. LIMITATION OF LIABILITY 9
10. NOTICE 9
11. ENTIRE AGREEMENT 10
12. GOVERNING LAW 10
13. ARBITRATION 10
14. ASSIGNMENT 11
15. CONFIDENTIALITY 11
16. FORCE MAJEURE 11
EXHIBIT A 12
EXHIBIT B 13
EXHIBIT C 14
EXHIBIT D 15
EXHIBIT E 16
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
OPTION AGREEMENT
THIS AGREEMENT is made and becomes effective as of March 19, 1996 (the
"Effective Date") by Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC"), a
company organized under the laws of the Republic of China with its registered
address at No. 121, Park Ave. 3, Science-Based Industrial Park, Hsinchu, Taiwan,
and, PMC-SIERRA CORPORATION, a company organized under the laws of California,
with its registered address at 8501 Commerce Court, Burnaby, B.C. Canada V5A4N3
("Customer").
RECITALS
WHEREAS, TSMC currently supplies Customer with wafers and Customer
wishes to increase the volume of wafers to be purchased from TSMC;
WHEREAS, in order to increase its output, TSMC [ REDACTED ]
WHEREAS, as a condition to TSMC's acceleration of these facilities,
TSMC has asked that Customer make a capacity commitment and advance payment for
the right to buy additional capacity, and Customer is willing to do so:
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties agree as follows:
3
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
1. DEFINITIONS
(a) "Base Capacity" used in this Agreement shall mean the Contract
Capacity as defined in this Section 1(c) below, plus the Best
Effort Capacity as defined in this Section 1(c) below.
(b) "Best Effort Capacity" used in this Agreement shall mean the
capacity commitment made by Customer on the best effort basis
pursuant to an existing agreement, if any.
(c) "Customer Committed Capacity" used this Agreement shall
mean the total capacity that Customer agrees to purchase from
TSMC pursuant to this Agreement, and is set forth in Exhibit
B.
(d) "Option Capacity" used in this Agreement shall mean the firm
capacity commitment made by Customer pursuant to this
Agreement, for which Capacity Customer agrees to pay the
Option Fee as defined in this Section 1(f) below.
(e) "Option Fee" used in this Agreement shall mean the deposit
that Customer agrees to place with TSMC as the advance payment
for the Option Capacity.
(f) "TSMC Committed Capacity" used in this Agreement shall mean
the total capacity that TSMC agrees to provide to Customer
pursuant to this Agreement, and is set forth in Exhibit B.
(g) [ REDACTED ]
4
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
2. VOLUME COMMITMENT
(a) Customer agrees to purchase from TSMC the Customer Committed
Capacity, and subject to the payment of the Option Fee by
Customer under Section 5 below, TSMC agrees to provide to
Customer the TSMC Committed Capacity, as set forth in Exhibit
B. [ REDACTED ]
(b) Each month, Customer agrees to provide to TSMC a six-month
rolling forecast of the number of wafers that Customer will
purchase [ REDACTED ]. The forecast must be based on wafers
out or deliveries expected to be made by TSMC.
(c) TSMC will use its reasonable effort to cause its fabs to be
capable of producing wafers of more advanced specifications,
as set forth in the TSMC Technology Road Map attached as
Exhibit C.
3. WAFER PRICE
(a) The wafer prices for the Customer Committed Capacity shall
[ REDACTED ] technology, the same fab and the same period of
time. In the event that the wafer prices for the Customer
Committed Capacity do not comply with the preceding sentence,
TSMC will make proper price changes for the unfilled orders,
upon Customer's notice in writing.
(b) The parties shall negotiate in good faith each year the wafer
prices for the Customer Committed Capacity of the following
year, [ REDACTED ].
5
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
4. OTHER PURCHASE TERMS AND CONDITIONS
The Customer/TSMC Foundry Wafer Agreement dated (to be completed) will
apply to all purchases of wafers by Customer from TSMC, except that the
provisions of this Agreement will supersede the above Agreement with
respect to the subject matter hereof.
5. OBLIGATION TO PAY OPTION FEE FOR OPTION CAPACITY
(a) Customer agrees to pay to TSMC the Option Fee in the amount of
US$280 [ REDACTED ] for the right to purchase the Option
Capacity pursuant to this Agreement. The Option Fee is set
forth in Exhibit D. Except that TSMC exercises its first right
of refusal and accepts the Customer's offer pursuant to
Section 6 below, the Option Fee for any calendar year, once
paid, shall be non-refundable for any cause other than breach,
and will be credited against the wafer prices for the Option
Capacity provided by TSMC for that particular year under this
Agreement.
(b) Customer further agrees to deliver to TSMC, within seven (7)
days following the Effective Date, two (2) promissory notes
each in an amount of the Option Fee due and payable to TSMC
which promissory notes are in the form of Exhibit E. The
promissory notes shall be returned by TSMC to Customer within
seven (7) days upon receipt of the corresponding Option Fee by
TSMC.
6
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
6. FAILURE TO PURCHASE THE OPTION CAPACITY; FIRST RIGHT OF REFUSAL
(a) [ REDACTED ]
(b) Customer may assign its TSMC Committed Capacity to Sierra
Semiconductor, Inc.
(c) Any of Customer's right or obligation set forth in Section
6(a) shall not affect its obligation to pay the Option Fee
pursuant to Section 5 above, except that if this Agreement is
assigned to any third parties acceptable to TSMC pursuant to
this Section 6(a) above, such third parties shall pay the
Option Fee and abide by the terms and conditions of this
Agreement.
7
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
7. TERM AND TERMINATION
(a) The term of this Agreement shall commence from the Effective
Date, and continue until December 31, 2000.
(b) TERMINATION BY TSMC FOR CUSTOMER'S FAILURE TO PAY THE OPTION
FEE TSMC may terminate this Agreement if Customer fails to pay
the Option Fee pursuant to Section 5 above, and does not cure
or remedy such breach within thirty (30) days of receiving
written notice of such breach.
(c) TERMINATION FOR OTHER BREACH OR FOR BANKRUPTCY
Either party may terminate this Agreement if, the other party
breaches any material provisions of this Agreement (other than
the breach of Section 5 above), and does not cure or remedy
such breach within sixty (60) days of receiving written notice
of such breach, or (ii) becomes the subject of a voluntary or
involuntary petition in bankruptcy or any proceeding relating
to insolvency, receivership or liquidation, if such petition
or proceeding is not dismissed with prejudice within sixty
(60) days after filing.
(d) EFFECT OF TERMINATION
Both parties shall remain liable to the other party for any
outstanding and matured rights and obligations at the time of
termination, including all outstanding payments of the Option
Fee and for the wafers already ordered and/or shipped to
Customer.
In addition, if this Agreement is terminated by Customer due
to a breach by TSMC, then TSMC shall refund to Customer any
portion of the Option Fee already paid by Customer to TSMC but
not yet credited to the purchase prices of wafers in
accordance with Section 5 above.
8. BOARD APPROVAL
Customer shall obtain the approval by its Board of Directors of this
Agreement, and submit to TSMC, at the time of executing this Agreement,
an authentic copy of it's board resolution authorizing the
representative designated below to execute this Agreement.
8
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
9. LIMITATION OF LIABILITY
In no event shall either party be liable for any indirect, special,
incidental or consequential damages (including loss of profits and loss
of use) resulting from, arising out of or in connection with either
party's performance or failure to perform under this Agreement, or
resulting from, arising out of or in connection with either party's
producing, supplying, and/or sale of the wafers, whether due to a
breach of contract, breach of warranty, tort, negligence, or otherwise.
10. NOTICE
All notices required or permitted to be sent by either party to the
other party under this Agreement shall be sent by registered mail
postage prepaid, or by personal delivery, or by fax. Any notice given
by fax shall be followed by a confirmation copy within ten (10) days.
Unless changed by written notice given by either party to the other,
the addresses and fax numbers of the respective parties shall be as
follows:
To TSMC:
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY, LTD.
No. 121, Park Avenue 3
Science-Based Industrial Park
Hsinchu, Taiwan
Republic of China FAX: 886-35-781545
To Customer:
PMC-SIERRA CORPORATION
8501 Commerce Court
Burnaby, B.C. Canada V5A4N3 FAX: 604-668-7301
9
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
11. ENTIRE AGREEMENT
This Agreement, including Exhibits A-E, constitutes the entire
agreement between the parties with respect to the subject matter
hereof, and supersedes and replaces all prior or contemporaneous
understandings, agreements, dealings and negotiations, oral or written,
regarding the subject matter hereof. No modification, alteration or
amendment of this Agreement shall be effective unless in writing and
signed by both parties. No waiver of any breach or failure by either
party to enforce any provision of this Agreement shall be deemed a
waiver of any other or subsequent breach, or a waiver of future
enforcement of that or any other provision.
12. GOVERNING LAW
This Agreement will be governed by and interpreted in accordance with
the laws of the Republic of China.
13. ARBITRATION
Each party will make best efforts to resolve amicably any disputes or
claims under this Agreement among the parties. In the event that a
resolution is not reached among the parties within thirty (30) days
after written notice by any party of the dispute or claim, the dispute
or claim shall be finally settled by binding arbitration in Taipei
under The Rules of Arbitration of the International Chamber of Commerce
by three (3) arbitrators appointed in accordance with such rules. The
arbitration proceeding shall be conducted in English. Judgment on the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
10
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
14. ASSIGNMENT
This Agreement shall be binding on and inure to the benefit of each
party and its successors, and except that Customer may assign this
Agreement under Section 6 above, neither party shall assign any of its
rights hereunder, nor delegate its obligations hereunder, to any third
party, without the prior written consent of the other.
15. CONFIDENTIALITY
Neither party shall disclose the existence or contents of this
Agreement except as required by Customer's assignment of this Agreement
to any third parties pursuant to Section 6 above, in confidence to its
advisers, as required by applicable law, or otherwise without the prior
written consent of the other party.
16. FORCE MAJEURE
Neither party shall be responsible for delays or failure in performance
resulting from acts beyond the reasonable control of such party. Such
acts shall include but not limited to acts of God, war, riot, labor
stoppages, governmental actions, fires, floods, and earthquakes.
IN WITNESS WHEREOF, the parties, have executed this Agreement as of the
date first stated above.
TAIWAN SEMICONDUCTOR PMC-SIERRA CORPORATION
MANUFACTURING CO., LTD.
BY: ________________________ BY: _______________________
Donald Brooks James V. Diller
President CEO
11
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT A
CAPACITY FACTOR TABLE
[TABLE OMITTED]
12
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT B
PMC-SIERRA CORPORATION/TSMC
COMMITTED CAPACITY
[TABLE OMITTED]
13
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT C
TSMC CMOS Technology Roadmap
[TABLE OMITTED]
14
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT D
OPTION FEE (Option I)
Year Option Capacity Option Fee Due Date
(Unit: Wafer (Unit: US$)
Equivalent)
[ REDACTED ] [ REDACTED ] [ REDACTED ] [ REDACTED ]
[ REDACTED ] [ REDACTED ] [ REDACTED ]
15
CONFIDENTIAL TREATMENT REQUESTED
--------------------------------
<PAGE>
EXHIBIT E
STANDARD FORM OF PROMISSORY NOTE
Amount: US $ _______________________ Due Date: ________________________
The Undersigned, ____________________ (the "Maker"), unconditionally
promise to pay to Taiwan Semiconductor Manufacturing Co., Ltd. or its order the
[ REDACTED ] annum on any unpaid portion of the principal amount stated herein,
and said payment will be made at _______________ (Place of Payment).
This Note shall be governed in all respects by the laws of the Republic
of China.
The Maker of this Note agrees to waive protests and notice of whatever
kind.
Issue Date: ________________________
Issue Place: ________________________
Maker's Signature: ________________________
Maker's Address: ________________________
________________________
16
