Letter Amendment to TCC Master License Agreement, dated as of September 23, 2003



 Exhibit 10.9 
  

		
	 Department Manager,
	  	 September 23, 2002


  
 Business Development Department

 Semiconductor & Integrated Circuits 
 Hitachi, Ltd.

 Nippon Building, 6-2, Otemachi 2-chome, Chiyoda-ku, 
 Tokyo,
100-0004 Japan 
  

	Re:	 	Letter Amendment, dated September 23, 2002, to TCC Master License Agreement, dated July 7, 1994, between Hitachi, Ltd., and Tessera, Inc. (the “TCC License”)


  
 Dear Mr. Sugiura: 
  
 The purpose of this letter is to explain the background for the Letter Amendment and to
clarify the business compromise reached between Hitachi and Tessera. During negotiation of the Letter Amendment, the Parties attempted to take into account the possible package variations covered under the scope Tessera’s patent claims,
examining such items as substrate thickness, solder ball diameter and pitch, size of semiconductor chips, etc. However, the Parties were unable to reach agreement on certain types of F-μBGA Packages and whether such packages are covered by
Tessera’s patents and thus by the proposed license grant to Hitachi under the Letter Amendment. 
  
 In order to resolve the dispute and avoid litigation, the Parties have agreed to disagree and, instead, have arrived at a business arrangement which will allow Hitachi to make, have made, use, sell and offer for sale
certain devices without breaching the Letter Amendment. In order to better allow perfunctory adherence to the Letter Amendment, TCC License and the terms set forth in this letter, the Parties have agreed to simplify the identification of the royalty
bearing F-μBGA Packages to the following information in combination with the definition of “F-μBGA Package” in the Letter Amendment: 
  

	 	•	 	The Parties agree that Type 2 F-μBGA Packages having a package substrate thickness [*] are within the scope of the Letter Amendment and that Hitachi will pay royalties for
such packages; 

  

	 	•	 	The Parties disagree that certain Type 2 F-μBGA Packages having a package substrate thickness of [*] are within the Tessera Patent claims. However, such packages are being
shipped in comparatively lower volumes by Hitachi; and therefore, [*]; 

  

	 	•	 	The Parties could also not reach agreement on whether Type 2 F-μBGA Packages having a package substrate thickness [*] are within the Tessera Patent claims. However, such
disagreement is merely theoretical since Hitachi does not currently produce Type 2 F-μBGA Packages using substrates in this thickness range. Therefore, if Hitachi ever makes a Type 2 F-μBGA Package using a package substrate having a
thickness [*] Hitachi will contact Tessera and both Parties agree to negotiate a license in good faith to resolve coverage under the Letter Amendment; and 

  

	 	•	 	Lastly, the Parties agree that unintentional variations in the thickness of the package substrate in Type 2 F-μBGA Packages due to normal process variances that alter the
thickness in an insignificant manner, will not be considered when determining substrate package thickness to the thickness ranges set forth above. 

  

On another matter, as a further business consideration, Tessera agrees not to assert any claims against Hitachi (including its sublicensees, subcontractors and
customers) under Tessera US Patents 5,679,977 and USP 5,852,326 (including re-issue, re-examination, continuation, continuation-in-part and divisional applications, and foreign counterparts of either of these patents) for manufacture, use, sale, or
offer for sale by Hitachi (including its sublicensees) or under its “have made” right under the Letter Amendment of: 
  
  

	 	•	 	[*] 

  

	 	•	 	[*] 

  
 If the terms of this Side Letter are acceptable, please sign below and return one enclosed copy to us, retaining the second copy for your files. 
  

	TESSERA, INC.	 	 	 	HITACHI, LTD.
					
	By:	 	 /s/ Christopher Pickett

	 	 	 	By:	 	 [ILLEGIBLE]


					
	Title:	 	 SVP, LICENSING BUSINESS

	 	 	 	Title:	 	 DEPT MANAGER
 BUSINESS DEVT DEPT. SIC


					
	Date:	 	 SEPT 26, 2002

	 	 	 	Date:	 	 9/26/02


	 	 	 	 	 	 	 	 	 

 Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the
information subject to the confidentiality request. Omissions are designated as [*]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. 
  







 September 23, 2002 
  
 Department Manager, 
 Business Development Department 
 Semiconductor & Integrated Circuits 
 Hitachi, Ltd. 
 Nippon Building, 6-2, Otemachi 2-chome, Chiyoda-ku, 
 Tokyo, 100-0004 Japan

  

	Re:	 	TCC Master License Agreement, dated July 7, 1994, between Hitachi, Ltd., and Tessera, Inc. (the “TCC License”) 

  
 Dear Mr. Sugiura: 
  
 This letter (the “Letter Amendment”) amends the TCC License based on our agreements during my recent visits to Hitachi. Generally,
the purpose of the amendments is to expand the scope of the TCC License to include TCC packages having a semiconductor die in a “face-up” orientation, and to establish a royalty rate Hitachi will pay for such face-up packages. 

 
 Definitions 
  
 The terms used herein that are defined in the TCC License shall have the same
meaning when used herein unless the context hereof shall otherwise require or provide. The following additional definitions apply to this letter: 
  
 The term “F-μBGA Package” means a [*]: 
  

	 	1.	 	Fine Pitch F-μBGA Package [*] (“Type 1 F-μBGA”), 

  

	 	2.	 	Fine Pitch F-μBGA Package [*] (“Type 2 F-μBGA”). 

  
 The term “Licensed Package Assembler” means a party licensed by Tessera to assemble, use and sell TCC packages for others. Tessera agrees to
periodically provide Licensee a list of such parties. 
  
 The term
“Billable Pin” means [*] 
  
 F-μBGA License
Grant 
  
 Subject to the terms and conditions hereinafter set forth and
Licensee’s payment of the royalties stated herein, Tessera hereby grants Licensee a non-exclusive license to the Technology to manufacture, package and/or assemble ICs into Type 1 and Type 2 F-μBGA Packages and use, import, offer to sell
or sell such Type 1 and Type 2 F-μBGA Packages world wide. In addition, Licensee is granted the right to have Type 1 and Type 2 F-μBGA Packages made for Licensee by any Licensed Package Assembler for sale under Licensee’s indicia.
Licensee may, at its option, exercise this “have made” right with such Licensed Package Assembler 
  


			
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and pay royalties due hereunder for the assembly of Type 1 and Type 2 F-μBGA Packages by such Licensed Package Assembler directly to Tessera instead of
having such Licensed Package Assembler pay the royalties to Tessera. When Licensee exercises this right to pay royalties directly to Tessera, it shall provide written notice to such Licensed Package Assembler and to Tessera. Notwithstanding the
foregoing, Licensee may exercise this “have made” right (1) [*], (2) with an assembler not included in the Licensed Package Assemblers for one (1) year after the date Licensee provides Tessera with notification of its intent to use such
unlicensed assembler, during which time Tessera will make good faith business efforts to license to such assembler to assemble TCC packages, and (3) with an assembler that becomes excluded from the definition of Licensed Package Assemblers, for a
grace period of one (1) year after such exclusion is effective. 
  
 F-μBGA Package Royalty 
  
 For its exercise
of the rights granted herein after June 30, 2002, Licensee shall pay running royalties of [*] (US$ [*]) per Billable Pin for Type 1 or Type 2 F-μBGA Packages sold by or for Licensee, provided [*]. 
  
 In its exercise of the rights granted herein for the Type 1 or Type 2
F-μBGA Packages sold by or for Licensee up to and through June 30, 2002, Licensee shall pay the following amounts within sixty (60) days of the last signing date of this letter: 
  
 1. for Type 1 F-μBGA Packages, Licensee shall pay royalties of [*] (US$[*]) per Billable Pin for F-μBGA
Packages, provided that [*]. Licensee shall further include a written report supporting this amount including the number of Type 1 F-μBGA Packages sold by or for Licensee, the contract assembler of such Type 1 F-μBGA Packages (if
applicable), and the number of Billable Pins per such Type 1 F-μBGA Package; and 
  
 2. for Type 2 F-μBGA Packages, Licensee shall pay royalties equaling the lesser of [*]. Licensee shall further include a written report supporting this amount including the number of Type 2 F-μBGA Packages
sold by or for Licensee, the contract assembler of such Type 2 F-μBGA Packages (if applicable), and the number of Billable Pins per such Type 2 F-μBGA Package. 
  
 [*] 
  
 Release for Prior F-μBGA Package Assembly 
  
 Solely with regard to the Type 1 and Type 2 F-μBGA Packages sold by or for Licensee (“Licensee” in this paragraph includes its
sublicensees if applicable) up to and through June 30, 2002 and reported and paid for as provided above, Tessera agrees not to make any claims against either (i) Licensee for its manufacture, use, sale, or offer for sale of such F-μBGA
Packages, (ii) any other party for its manufacture or sale of such F-μBGA Packages for Licensee’s use, sale, or offer for sale, or (iii) any Licensee customer for its use, sale, offer for sale or incorporation into products of such
F-μBGA Packages purchased from Licensee. 
  


			
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 Royalty Reports and Payment 
  
 Beginning July 1, 2002, royalties for Type 1 and Type 2 F-μBGA Packages hereunder and TCC packages granted in under
the TCC License shall be calculated and paid in full in quarter annual payment periods ending March 31, June 30, September 30 and December 31 of each year, provided that calculation and payment for the periods ending June 30 and December 31 may be
based on good faith estimation by Licensee and that any underpayment or overpayment will be adjusted at the next payment. Beginning with the first such royalty payment, Licensee shall deliver the following written reports for each payment period:

  

	 	•	 	Attachment A: Royalty Report for Type 1 and Type 2 F-μBGA Packages Sold by or for Licensee, 

  

	 	•	 	Attachment B: Purchase Report for Type 1 and Type 2 F-μBGA Packages Purchased by Licensee, 

  

	 	•	 	Attachment C: Purchase Report for Type 1 and Type 2 F-μBGA Packages Made for Licensee by a Licensed Package Assembler Under Licensee’s Have Made Rights, and


  

	 	•	 	Attachment D: Royalty Report for Type 1 and Type 2 F-μBGA Packages sold by a Licensee Affiliate who is a contract package assembler. 

  
 No royalties will be due from Licensee for Type 1 and Type 2 F-μBGA Packages reported
under Attachment B. Payment of royalties for Type 1 and Type 2 F-μBGA Packages reported under Attachments C and D will not be due until such Packages are sold by or for Licensee or a License Affiliate, respectively. All payments under this
Paragraph shall be made in US Dollars by wire transfer to Union Bank of California, 99 Almaden Blvd., San Jose, CA 95113, Account Name: Tessera, Account No.: 6450148359, Routing No. 122000496, International Swift Code: BOFCUS33MPK, or such other
bank or account as Tessera may from time to time designate in writing. The payments of royalties and submission of such reports from Licensee to Tessera under this Paragraph shall be made within sixty (60) days from the end of each quarter annual
payment period and shall be considered to be made as of the day on which such payments are received in Tessera’s designated bank account. 
  
 Extension of F-μBGA License 
  
 [*] 
  
 Notice 
  
 The Notice section of the TCC License, Paragraph XVI.C, is amended by changing the contact information for Licensee to read as follows: 
  

	 	Licensee:	 	Hitachi, Ltd. 


	 	    	 	Nippon Building, 6-2 Otemachi 2-chome, 


	 	    	 	Chiyoda-ku, Tokyo 100-0004 Japan 


	 	    	 	Facsimile: +81-3-3270-5010 


	 	    	 	Attn: Department Manager, 

 Business
Development Department, 
 Semiconductor & Integrated Circuits 
  


			
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 Duration 
  

This Letter Amendment shall become effective on July 1, 2002 after it has been signed by both parties. Solely with respect to the F-μ BGA Packages, unless
earlier terminated as provided for in the TCC License, this Letter Amendment (including [*]) shall remain in full force until [*], and this provision is intended to supersede Paragraphs X.A and X.B of the TCC License for purposes of this Letter
Amendment. 
  
 Representation 
  
 Tessera represents and warrants that the F-μ BGA licenses granted
herein shall, notwithstanding the foregoing, include a license under USP 5,679,977 and USP 5,852,326 and under any reexaminations, reissues, or foreign counterparts of either of these patents and under any patents issuing from divisional,
continuation, request for continuation examination applications or continuation in part applications citing, for purpose of priority, either of these patents, or any patents or patent applications cited by either of these patents for purpose of
priority. 
  
 In the event any of the provisions of the TCC
License and this Letter Amendment conflict, the provisions contained in this Letter Amendment shall supersede the conflicting provisions of the TCC License. 
  
 Except as modified by this Letter Amendment, the remaining terms and conditions of the TCC License are unchanged and apply with equal force and effect.

  
 If the terms of this Letter Amendment are acceptable, please
sign below and return one executed copy to us, retaining the second copy for your files. 
  

	TESSERA, INC.	 	 	 	HITACHI, LTD.
					
	By:	 	 [ILLEGIBLE]

	 	 	 	By:	 	 [ILLEGIBLE]


					
	Title:	 	 SVP, LICENSING BUSINESS

	 	 	 	Title:	 	 DEPT. MANAGER
 BUSINESS DEVELOPMENT SIC


					
	Date:	 	 SEPT 26, 2002

	 	 	 	Date:	 	 9/26/02


	 	 	 	 	 	 	 	 	 

  


			
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 Attachment A 
  
 F-μBGA ROYALTY REPORT UNDER TCC MASTER LICENSE AGREEMENT: 
 F-μBGA PACKAGES SOLD BY OR FOR LICENSEE 
  
 Reporting Period: From                      through
                     
  

	 TYPE OF IC
 DEVICE

	 	 NUMBER OF
 F-μBGA
 PACKAGES

	 	 NUMBER OF
 BILLABLE PINS

	  	ROYALTY RATE

	  	ROYALTY (US$)


	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 

  
 TOTAL ROYALTY:
US$                                 
  

	LESS TAX:	 	US$                                
		
	ACTUAL REMITTANCE:	 	US$                                

  
  
  


			
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 Attachment B 
  
 F-μBGA PACKAGE PURCHASE REPORT UNDER TCC MASTER LICENSE AGREEMENT: 
 F-μBGA PACKAGES PURCHASED BY LICENSEE 
  
 Reporting Period: From                      through
                     
  

	 LICENSED PACKAGE
ASSEMBLER

	 	 TYPE OF IC
 DEVICE

	 	 NUMBER OF F-μBGA PACKAGES

	  	 NUMBER OF
 BILLABLE PINS


	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 

  


			
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 Attachment C 
  
 F-μBGA PACKAGE PURCHASE REPORT UNDER TCC MASTER LICENSE AGREEMENT: 
 F-μBGA PACKAGES MADE FOR LICENSEE UNDER LICENSEE’S HAVE MADE RIGHTS 
  
 Reporting Period: From
                     through
                     
  

	 LICENSED
 PACKAGE
 ASSEMBLER

	 	 TYPE OF IC
 DEVICE

	 	 NUMBER OF F-μBGA
 PACKAGES

	  	 NUMBER OF BILLABLE
 PINS


	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 
	 	 	 	 	 	  	 

  


			
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 Attachment D 
  
 F-μBGA PACKAGE ROYALTY REPORT UNDER TCC MASTER LICENSE AGREEMENT: 
 F-μBGA PACKAGES SOLD BY              (A LICENSEE AFFILIATE) 
  
 Reporting Period: From
                     through
                     
  

	 TYPE OF IC
 DEVICE

	 	 NUMBER OF F-
 μBGA PACKAGES

	 	 NUMBER OF
 BILLABLE
 PINS

	  	 ROYALTY
 RATE

	  	 ROYALTY
 (US$)


	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 
	 	 	 	 	 	  	 	  	 

  


			
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