C-4 Technology Transfer & Licensing Agmt

EXHIBIT 10.48


A REDACTED COPY OF THIS AGREEMENT BETWEEN INTERNATIONAL BUSINESS MACHINES CORPORATION AND ADVANCED MICRO DEVICES, INC., EFFECTIVE JUNE 14, 1996, IS ATTACHED AS EXHIBIT 10.48 TO THE QUARTERLY REPORT OF ADVANCED MICRO DEVICES, INC. ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 29, 1996, PURSUANT TO THE REQUIREMENTS OF ITEM 6(A) OF FORM 10-Q AND ITEM 601(B)(10) OF REGULATION S-K REGARDING MATERIAL CONTRACTS.


C-4 TECHNOLOGY TRANSFER AND LICENSING AGREEMENT


by and between


INTERNATIONAL BUSINESS MACHINES CORPORATION


and


ADVANCED MICRO DEVICES


AMD/IBM CONFIDENTIAL June 11, 1996


TABLE OF CONTENTS
-----------------


Section 1 - Definitions............................................... -2-


Section 2 - Licenses.................................................. -11-


Section 3 - Transfer of LICENSED TECHNOLOGY........................... -16-


Section 4 - IMPROVEMENTS.............................................. -20-


Section 5 - Technical Assistance...................................... -22-


Section 6 - Compensation.............................................. -25-


Section 7 - Termination and Assignability............................. -29-


Section 8 - Confidentiality........................................... -33-


Section 9 - C-4 Foundry Services...................................... -40-


Section 10 - Management Process and Technical Coordinators............. -40-


Section 11 - Renewal of Patent Cross-License........................... -42-


Section 12 - General Provisions........................................ -42-


APPENDIX A LICENSED TECHNOLOGY Documentation Items..................... -55-


APPENDIX B LICENSED TECHNOLOGY Technical Assistance.................... -58-


APPENDIX C............................................................. -61-


APPENDIX D Sale and Purchase of C4 Foundry Services.................... -67-


AMD/IBM CONFIDENTIAL June 11, 1996


AGREEMENT
---------


This Agreement, having an EFFECTIVE DATE as defined herein, is entered into by and between ADVANCED MICRO DEVICES, a Delaware corporation having an office at Sunnyvale, California (hereinafter called "AMD"), and INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York corporation having an office at Burlington, Vermont (hereinafter called "IBM").


WHEREAS, IBM has developed certain wafer fabrication, bonding and assembly processes, collectively known as controlled collapse chip connection processes, and possesses certain proprietary rights in the valuable technology related thereto;


WHEREAS, AMD and IBM have previously discussed a "Semiconductor Technology Non- Binding Business Term Sheet" which set forth a framework for the technology licensing of controlled collapse chip connection processes of IBM to AMD;


WHEREAS, AMD desires to obtain licenses and other proprietary information and rights from IBM in order to become a user of such controlled collapse chip connection processes of IBM, upon the terms and conditions provided herein;


WHEREAS, IBM desires to obtain licenses and other information and rights from AMD concerning improvements AMD may make to the IBM processes, upon the terms and conditions provided herein;


WHEREAS, IBM wishes to make its licenses and other proprietary information and rights, along with other technical information and technical assistance, all relating to the controlled collapse chip connection processes of IBM, available to AMD; and


AMD/IBM CONFIDENTIAL June 11, 1996


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WHEREAS, IBM believes that AMD, and AMD believes that IBM, is a trustworthy company which will protect all proprietary rights licensed hereunder, upon the terms and conditions provided herein.


NOW, THEREFORE, IBM and AMD agree as follows:


Section 1 - Definitions
-----------------------


Words shall have their normally accepted meanings as employed in this Agreement. The terms "herein", "hereunder" and "hereof," unless specifically limited, shall have reference to the entire Agreement. The words "shall" and "will" are mandatory, the word "may" is permissive, the word "or" is not exclusive, the words "includes" and "including" are not limiting and the singular includes the plural. The following terms shall have the described meanings:


"AMD IMPROVEMENTS" shall mean any change, upgrade, modification or revision to the LICENSED TECHNOLOGY, actually introduced into, and practiced in production in, the manufacturing line of AMD or AMD's FACILITIES during the TERM of this Agreement. AMD IMPROVEMENTS shall also mean any change, upgrade, modification or revision to the LICENSED TECHNOLOGY, actually introduced into the manufacturing line of the another manufacturer authorized pursuant to Section 2.1.3 during the TERM of this Agreement (the another manufacturer's improvements). AMD IMPROVEMENTS shall not include any change, upgrade, modification or revision to the LICENSED TECHNOLOGY that AMD is contractually obligated to not provide to a third party. AMD IMPROVEMENTS shall not include any change, upgrade, modification or revision to the joining of an integrated circuit to an ORGANIC CHIP CARRIER.


"AMD IMPROVEMENT PATENTS" shall mean all AMD patents:
l) issuing prior to [*] from the EFFECTIVE DATE;
2) having claims directed to AMD IMPROVEMENTS; and


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3) which AMD or any of its SUBSIDIARIES now has, or hereafter obtains, the
right to grant immunities to IBM of or within the scope granted herein
without such grant or the exercise of rights thereunder resulting in the
payment of royalties or other consideration by AMD or its SUBSIDIARIES to
third parties (except for payments between AMD and its SUBSIDIARIES, and
payments to third parties for inventions made by said third parties while
employed by AMD or any of its SUBSIDIARIES).


"BA" shall mean BOND AND ASSEMBLY.


"BOND AMD ASSEMBLY" shall mean a process consisting of the following steps: [*] [*] [*] [*] [*] [*] [*] [*] [*]


"BOND AND ASSEMBLY PATENTS" shall mean all patents:
l) issuing prior to [*] from the EFFECTIVE DATE;
2) having claims directed to IBM IMPROVEMENTS to BOND AND ASSEMBLY; and
3) which IBM or any of its SUBSIDIARIES now has, or hereafter obtains, the
right to grant immunities to AMD of or within the scope granted herein
without such grant or the exercise of rights thereunder resulting in the
payment of royalties or


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other consideration by IBM or its SUBSIDIARIES to third parties (except
for payments between IBM and its SUBSIDIARIES, and payments to third
parties for inventions made by said third parties while employed by IBM
or any of its SUBSIDIARIES).


"BUMP" shall mean [*] limiting metal formed on an integrated circuit.


"BUMPING" shall mean a process of forming BUMPS, consisting of the following steps: [*] [*] [*] [*]


"BUMPING PATENTS" shall mean all patents:
l) issuing prior to [*] from the EFFECTIVE DATE;
2) having claims directed to IBM IMPROVEMENTS to BUMPING; and
3) which IBM or any of its SUBSIDIARIES now has, or hereafter obtains, the
right to grant immunities to AMD of or within the scope granted herein
without such grant or the exercise of rights thereunder resulting in the
payment of royalties or other consideration by IBM or its SUBSIDIARIES to
third parties (except for payments between IBM and its SUBSIDIARIES, and
payments to third parties for inventions made by said third parties while
employed by IBM or any of its SUBSIDIARIES).


"C-4" shall mean controlled collapse chip connection.


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"C-4 TECHNOLOGY" shall mean, collectively, BUMPING and BA.


"CHANGE OF CONTROL" shall mean, with respect to AMD, one (1) transaction or a series of related transactions which results in a third party obtaining, directly or indirectly, [*] or more of the ownership of the outstanding voting shares or other ownership interest of, or (ii) CONTROL of AMD.


"CERAMIC CHIP CARRIER" shall mean [*].


"CHIP CARRIER" shall mean CERAMIC CHIP CARRIER and ORGANIC CHIP CARRIER.


"CONTROL" shall mean the power to direct the affairs of a PERSON by reason of ownership of voting stock, by asset acquisition, contract or otherwise.


"EFFECTIVE DATE" shall mean the date three (3) days after the date of the last signature necessary to the formation of this Agreement provided the payment specified in Section 6.2.a. has been received by IBM.


"FACILITIES" shall mean the premises where AMD is licensed to practice the LICENSED TECHNOLOGY as set forth in Section 2.3.


"IBM IMPROVEMENTS" shall mean any change, upgrade, modification or revision to the LICENSED TECHNOLOGY actually introduced into, and practiced in production in, the manufacturing line of IBM's Microelectronics Division facilities performing work related to the LICENSED TECHNOLOGY during the TERM and subject to the Technical Coordinator awareness provision of Section 4.1.1. IBM IMPROVEMENTS shall not include any change, upgrade, modification or revision to the LICENSED TECHNOLOGY that IBM is contractually obligated to not provide to a third party. IBM IMPROVEMENTS shall not include the


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replacement or elimination of the process to [*] with a process which eliminates the [*] or the replacement or elimination of the process [*] with a process which eliminates the use of a [*]. IBM IMPROVEMENTS shall not include any change, upgrade, modification or revision: to the joining of an integrated circuit to an ORGANIC CHIP CARRIER, or to quality, yield management techniques, or to specifications for lids, capacitors, polyimide and CHIP CARRIERS, or to MATERIALS, or to the [*] or to the [*].


"IMPROVEMENTS" shall mean IBM IMPROVEMENTS and AMD IMPROVEMENTS.


"IMPROVEMENT LICENSEES" shall mean licensees of IBM with activities related to the LICENSED TECHNOLOGY.


"INTEGRATED CIRCUIT" shall mean a silicon chip.


"LICENSED PRODUCTS" shall mean:
[*]
[*]
[*]
[*]


"LICENSED TECHNOLOGY" shall mean a) know-how or other information contained in the documents specified in Appendix A relating to the C-4 TECHNOLOGY to be transferred to AMD, b) additional information transferred or otherwise disclosed in writing by IBM to AMD in providing technical assistance pursuant to Section 5, and/or c) IBM IMPROVEMENTS. LICENSED TECHNOLOGY shall not include any know- how or other information related to the MATERIALS (as defined in Section 3.3), or to the [*]


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[*]


[*]


[*] shall mean a single integrated circuit that contains [*].


[*] Set" shall mean a maximum of two integrated circuits that together contain a [*] that are to be joined to the same CHIP CARRIER by at least one BUMP on each of such integrated circuits, and that are to be used together as the central processing unit of a microcomputer.


[*] shall mean the [*].


[*] PRODUCT" shall mean a [*] joined to the same CHIP CARRIER by at least one BUMP on each of the two integrated circuits that comprise the [*].


[*] PRODUCT" shall mean a [*] having at least one BUMP and/or a [*] joined to a CHIP CARRIER by at least one BUMP.


[*] PRODUCT" shall mean a [*] having at least one BUMP and/or a [*] joined to a CHIP CARRIER by at least one BUMP.


[*] shall mean a single integrated circuit other than a [*] or a [*]


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or a [*]. [*] shall include, for example, [*].


[*] PRODUCT" shall mean a [*] having at least one BUMP and/or a [*] joined to a CHIP CARRIER by at least one BUMP.


"ORGANIC CHIP CARRIER" shall mean a printed circuit board; or other organic single-chip or multi-chip pin grid array substrate; or other organic single-chip or multi-chip ball grid array substrate.


"PERSON" shall mean any individual, corporation, partnership, joint venture, trust, business association, governmental entity or other entity.


"ROYALTY-BEARING BUMPS" shall mean:
i.) each BUMP on LICENSED PRODUCTS transferred to AMD's RELATED COMPANY,
and
ii.) each BUMP on [*] PRODUCTS and [*] PRODUCTS in excess of the sum of [*]
multiplied by the Yearly Average Number of BUMPS. The Yearly Average Number
of BUMPS shall mean the total number of BUMPS on [*] PRODUCTS and [*]
PRODUCTS first sold, or otherwise disposed of, in any year divided by the
total number of [*] PRODUCTS and [*] PRODUCTS first sold, or otherwise
disposed of, in such year. For purposes of this definition ii.), [*]
PRODUCTS and [*] PRODUCTS transferred to AMD's RELATED COMPANY shall not be
included.


"SUBSIDIARY" shall mean a corporation, company or other entity:
1) more than [*] of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing
authority) are,


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now or hereafter, owned or controlled, directly or indirectly, by a
party hereto, but such corporation, company or other entity shall be
deemed to be a SUBSIDIARY only so long as such ownership or control
exists; or


2) which does not have outstanding shares or securities, as may be the
case in a partnership, joint venture or unincorporated association, but
more than [*] of whose ownership interest representing the right to
make the decisions for such corporation, company or other entity is,
now or hereafter, owned or controlled, directly or indirectly, by a
party hereto, but such corporation, company or other entity shall be
deemed to be a SUBSIDIARY only so long as such ownership or control
exists.


"TERM" shall mean the period of time this Agreement is in effect which shall commence on the EFFECTIVE DATE and expires [*], unless sooner terminated pursuant to Section 7.


"TERM SHEET" shall mean the "Semiconductor Technology Non-Binding Business Term Sheet" between the parties of March 1996.


"TYPE I SUBSIDIARY" shall mean a corporation, company or other entity:


1) more than [*] of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing
authority) are, now or hereafter, owned or controlled, directly or
indirectly, by a party hereto, but such corporation, company or other
entity shall be deemed to be a TYPE I SUBSIDIARY only so long as such
ownership or control exists; or


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2) which does not have outstanding shares or securities, as may be the
case in a partnership, joint venture or unincorporated association, but
more than [*] of whose ownership interest representing the right to
make the decisions for such corporation, company or other entity is,
now or hereafter, owned or controlled, directly or indirectly, by a
party hereto, but such corporation, company or other entity shall be
deemed to be a TYPE I SUBSIDIARY only so long as such ownership or
control exists.


"RELATED COMPANY" shall mean a corporation, company or other entity:


1) more than [*] of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing
authority) are, now or hereafter, owned or controlled, directly or
indirectly, by a party hereto, but such corporation, company or other
entity shall be deemed to be a RELATED COMPANY only so long as such
ownership or control exists; or


2) which does not have outstanding shares or securities, as may be the
case in a partnership, joint venture or unincorporated association, but
more than [*] of whose ownership interest representing the right to
make the decisions for such corporation, company or other entity is,
now or hereafter, owned or controlled, directly or indirectly, by a
party hereto, but such corporation, company or other entity shall be
deemed to be a RELATED COMPANY only so long as such ownership or
control exists.


Section 2 - Licenses
--------------------


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2.1 IBM, on behalf of itself and its SUBSIDIARIES, hereby grants to AMD, to the extent it has the right to do so and subject to Section 6 of this Agreement, the nonexclusive, nontransferable, royalty-bearing, revocable right and license:


2.1.1 to use the LICENSED TECHNOLOGY (only in the FACILITIES specified in
Section 2.3) solely for AMD;


2.1.2 to manufacture solely for AMD and use solely for AMD LICENSED
PRODUCTS (only in the FACILITIES specified in Section 2.3) using the
LICENSED TECHNOLOGY;


2.1.3 after [*] years from the EFFECTIVE DATE, to have another
manufacturer (but only one manufacturer at any one time) do BA solely on
LICENSED PRODUCTS, and solely for AMD for resale under Section 2.1.4,
provided that:
-------------


2.1.3.1 such another manufacturer enters into an agreement with
AMD with terms and conditions acceptable to IBM regarding
confidentiality, reverse engineering of the MATERIALS per Section
3.3.2, such another manufacturer's improvements to the LICENSED
TECHNOLOGY, and the licensing of such another manufacturer's
improvements to the LICENSED TECHNOLOGY to IBM at no cost to IBM, and


2.1.3.2 such another manufacturer is either:
2.1.3.2.1 [*], or


2.1.3.2.2 with IBM's prior written approval, [*] IBM reserves
the right to grant written approval so that both parties are
assured that intellectual property licensed in this Agreement
will be accorded adequate protection or enforcement in the
geographic location of the proposed another manufacturer or
with respect to the potential partner(s), if any, with AMD in
the proposed another manufacturer. IBM will share with AMD
information that is considered to be objective, or
information available in the trade that IBM feels


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to be reliable, which reasonably identifies legitimate
concerns regarding the commercial and/or intellectual
property integrity and/or geographic location and/or
financial stability of the proposed another manufacturer;


2.1.4 to sell and have sold by other than the RELATED COMPANY in Section
2.1.5 (worldwide) LICENSED PRODUCTS solely under the AMD brand name using
the LICENSED TECHNOLOGY;


2.1.5 to transfer LICENSED PRODUCTS to AMD's RELATED COMPANY for sale
(worldwide) by AMD's RELATED COMPANY solely under such AMD RELATED COMPANY
brand name, provided that:
-------------


2.1.5.1 such LICENSED PRODUCTS must be manufactured by AMD according
to the terms of this Section 2;


2.1.5.2 the metallized and patterned silicon wafer used to make the
LICENSED PRODUCTS must be made in its entirety by AMD;


2.1.5.3 each BUMP on LICENSED PRODUCTS shall be deemed to be a
ROYALTY-BEARING BUMP and the royalty specified in Section 6.3 shall
accrue for all such LICENSED PRODUCTS transferred to such AMD RELATED
COMPANY; AMD shall have sole responsibility for payment, and shall
pay, such royalty to IBM;


2.1.5.4 LICENSED PRODUCTS transferred to such AMD RELATED COMPANY
shall not be considered part of the [*] PRODUCTS or [*] PRODUCTS used
in the calculation of the sum for ROYALTY-BEARING BUMPS;


2.1.5.5 for purposes of Section 6.6, transfer of LICENSED PRODUCTS
to AMD's RELATED COMPANY shall be considered to be transferred to a
third party; and 2.1.5.6 such AMD RELATED COMPANY brand name must be a
brand name which is currently not in existence; and


2.1.6 to manufacture (only in the FACILITIES specified in Section 2.3) and
have manufactured for internal use only, and solely for AMD, any apparatus
required to implement any


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hardware or process specifications contained in the LICENSED
TECHNOLOGY.


The license granted in this Section 2.1 to AMD is limited to the LICENSED TECHNOLOGY and no license or other right is granted in this Section 2.1, either directly or indirectly, by implication, estoppel or otherwise, to AMD with respect to any patents or patent applications, trademarks, copyrights, trade secrets (other than the LICENSED TECHNOLOGY), mask works or other intellectual property rights of IBM.


2.2 The license granted in Section 2 to AMD is revocable and shall not survive the termination or expiration of this Agreement except as specified in Section 7. IBM additionally shall have the right at any time, before or after the termination or expiration of this Agreement, to revoke such license for a breach by AMD of the terms and conditions of the license granted in Section 2, and/or for a breach by AMD of its royalty obligations under Section 6, and/or for a breach by AMD of AMD's confidentiality obligations under Section 8. Upon the completion of AMD's payment and royalty obligations of Section 6, AMD's license in Section 2 shall be revocable by IBM only for a breach by AMD of the terms and conditions of the license granted in Section 2 and/or a breach by AMD of AMD's confidentiality obligations under Section 8.


2.3 The FACILITIES at which AMD is licensed under Section 2.1 to practice the LICENSED TECHNOLOGY shall only be as follows:


2.3.1 AMD may do BUMPING in:


2.3.1.l any AMD wholly-owned facility [*](exclusive of any of AMD's
TYPE I SUBSIDIARIES' OR SUBSIDIARIES' facilities),


2.3.1.2 any AMD TYPE I SUBSIDIARY facility [*],


2.3.1.3 AMD's TYPE I SUBSIDIARY facility [*] and


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2.3.1.4 any other TYPE I SUBSIDIARY facility [*] with IBM's prior written
approval. IBM reserves the right to grant written approval so that both
parties are assured that intellectual property licensed in this Agreement
will be accorded adequate protection or enforcement in the [*] of the
proposed TYPE I SUBSIDIARY facility or with respect to the potential
partner(s) with AMD in the proposed TYPE I SUBSIDIARY facility. IBM will
share with AMD information that it considers to be objective, or
information available in the trade that IBM considers reliable, which
reasonably identifies legitimate concerns regarding the commercial and/or
intellectual property integrity and/or geographic location and/or
financial stability of the proposed TYPE I SUBSIDIARY facility.


2.3.2 AMD may do BA in:


2.3.2.l any AMD wholly-owned facility [*] (exclusive of any of AMD's TYPE
I SUBSIDIARIES' OR SUBSIDIARIES' facilities),


2.3.2.2 any AMD TYPE I SUBSIDIARY [*]


2.3.2.3 AMD's TYPE I SUBSIDIARY facility [*]


2.3.2.4 AMD's existing TYPE I SUBSIDIARY facility [*] and in AMD's
existing TYPE I SUBSIDIARY facility [*], and


2.3.2.5 any SUBSIDIARY facility [*] with IBM's prior written approval.
IBM reserves the right to grant written approval so that both parties are
assured that intellectual property licensed in this Agreement will be
accorded adequate protection or enforcement in the [*] of the proposed
SUBSIDIARY facility or with respect to the potential partner(s) with AMD
in the proposed SUBSIDIARY facility. IBM will share with AMD information
that it considers to


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be objective, or information available in the tra ...