Exhibit 10.23
* Omitted and filed separately with the SEC pursuant to a confidential treatment
request
ADVANCE PRODUCTION PAYMENT AGREEMENT
THIS ADVANCE PAYMENT AGREEMENT ("this Agreement"), is entered into this
March 17, 1997, by and among SEIKO EPSON CORPORATION, a Japanese corporation
having its principal place of business at 3-5, Owa 3-chome, Suwa-shi, Nagano-ken
392, Japan ("Epson"), S MOS Systems Inc., a California corporation, having a
place of business at 150 River Oaks Parkway, San Jose, California 95134-1951,
U.S.A. ("SMOS") and Lattice Semiconductor Corporation, a Delaware corporation,
having a place of business at 5555 N.E. Moore Ct., Hillsboro, Oregon 97124-6421,
U.S.A. ("Lattice").
1.
Background.
1.1
EPSON
EPSON IS IN THE BUSINESS OF DESIGNING, MANUFACTURING, TESTING AND SELLING
SEMICONDUCTOR DEVICES, AMONG OTHER PRODUCTS.
EPSON MANUFACTURES SUCH
SEMICONDUCTOR DEVICES AT ITS PLANT LOCATED AT 281 FUJIMI, FUJIMI-MACHI,
SUWA-GUN, NAGANO-KEN 399-02, JAPAN (THE "FUJIMI FACILITY") AND ITS PLANT LOCATED
AT 166-3 JURIZUKA, SAKATA-SHI, YAMAGATA-KEN 998-01, JAPAN (THE "SAKATA
FACILITY").
1.2
SMOS
SMOS IS AN AFFILIATE OF EPSON AND IS EPSON'S AUTHORIZED DISTRIBUTOR IN THE
UNITED STATES FOR SEMICONDUCTOR DEVICES.
SMOS IS IN THE BUSINESS OF DESIGNING,
TESTING AND SELLING SEMICONDUCTOR DEVICES.
SMOS CONDUCTS ITS BUSINESS AT ITS
OFFICE LOCATED AT 150 RIVER OAKS PARKWAY, SAN JOSE, CA 95134-1951, U.S.A.
1.3
LATTICE
LATTICE IS IN THE BUSINESS OF DESIGNING, DEVELOPING, MANUFACTURING AND MARKETING
AND SELLING BOTH HIGH- AND LOW-DENSITY E2-CMOS® PROGRAMMABLE LOGIC DEVICES AND
RELATED DEVELOPMENT SYSTEM SOFTWARE.
1.4
SCOPE OF AGREEMENT
EPSON AND SMOS HAVE AN ONGOING BUSINESS RELATIONSHIP WITH LATTICE WHEREBY EPSON
FABRICATES SEMICONDUCTOR DEVICES FOR LATTICE.
THE PARTIES ENTERED INTO AN
ADVANCE PRODUCTION PAYMENT AGREEMENT DATED JULY 5, 1994 FOR DEVELOPMENT AND
MANUFACTURE OF 0.8-0.5 MICRON, 2-3 METAL LAYER, 6 INCH CMOS SEMICONDUCTOR
WAFERS.
THE PARTIES DESIRE TO EXPAND THEIR RELATIONSHIP.
SPECIFICALLY, LATTICE
DESIRES TO DEVELOP AND SELL HIGH PERFORMANCE, ADVANCED ARCHITECTURE
SEMICONDUCTOR DEVICES, AND EPSON DESIRES TO CONSTRUCT [*], 8 INCH WAFER CMOS
PROCESS LINE INSTALLED IN THE SITE (AS HEREAFTER DEFINED) IN ORDER TO FABRICATE
SUCH
* Omitted and filed separately with the SEC pursuant to a confidential treatment
request
SEMICONDUCTOR WAFERS AND DISTRIBUTE THEM TO LATTICE THROUGH SMOS.
ACCORDINGLY,
THE PARTIES AGREE THAT LATTICE WILL PAY TO EPSON AN ADVANCE PRODUCTION PAYMENT
("APP") ONLY TO BE USED AS A CREDIT TO PURCHASE THE PRODUCTS FROM EPSON THROUGH
SMOS OVER A SPECIFIED PERIOD OF TIME IN ACCORDANCE WITH THIS AGREEMENT.
THE
PRODUCTS SHALL BE FIRST SOLD TO SMOS FROM EPSON, AND THEN BE SOLD TO LATTICE
FROM SMOS UNDER THE TERMS AND CONDITIONS OF THE PURCHASE AGREEMENT (AS HEREAFTER
DEFINED).
(IN THE EVENT THAT SMOS HAS FALLEN INTO A SITUATION WHERE IT IS
UNABLE TO PLAY THE ROLE REQUIRED UNDER THIS AGREEMENT FOR ANY REASON
SPECIFICALLY PRESCRIBED IN THIS AGREEMENT OR ANY OTHER REASON, EPSON AND LATTICE
WILL MUTUALLY CONSULT ABOUT THE SUBSTITUTE FORM OF THE TRANSACTION CONTEMPLATED
HEREIN.)
1.5
POSITION OF SMOS
NOTWITHSTANDING ANY PROVISION HEREIN TO THE CONTRARY, LATTICE, EPSON AND SMOS
ACKNOWLEDGES THAT ALTHOUGH THIS AGREEMENT IS EXECUTED BY EACH OF SUCH THREE (3)
PARTIES,