1
EXHIBIT 10.43
ALL SECTIONS MARKED WITH TWO ASTERISKS ("**") REFLECT PORTIONS WHICH HAVE BEEN
REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION BY
▇▇▇▇ TECHNOLOGY, INC. AS PART OF A REQUEST FOR CONFIDENTIAL TREATMENT.
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement"), effective as of March 31,
1997, (the "Effective Date"), is entered into by and between FUJITSU LIMITED, a
Japanese corporation, with its registered office at 1-1 Kamikodanaka 4-chome,
▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇-▇▇▇, ▇▇▇-▇▇ ▇▇▇▇▇ ("Fujitsu"), and ▇▇▇▇
TECHNOLOGY, INC., a Delaware corporation with its principal office at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇.▇.▇. ("▇▇▇▇").
RECITALS
WHEREAS, ▇▇▇▇ is a designer and developer of microprocessor technology,
including the Colorado 4 hyperSPARC superscalar microprocessor architecture (the
"Colorado 4 Architecture");
WHEREAS, Fujitsu desires to manufacture and sell an embedded
microcontroller based upon the Colorado 4 Architecture;
WHEREAS, ▇▇▇▇ has agreed to develop and deliver and license to Fujitsu,
along with certain related technology, a microprocessor core based upon the
Colorado 4 Architecture for use as an embedded microcontroller;
NOW THEREFORE, in consideration of the foregoing and on the terms and
conditions set forth herein, the parties hereby agree as follows:
AGREEMENT
1. DEFINITIONS
"Additional Specifications" shall have the meaning given such term in
Section 5.1.
"Affiliate" means a business entity in which either party owns or controls
more than fifty (50%) of the voting equity.
"Aggregate Net Sales" as to a Fujitsu Product, means (1) with respect to
any sale or other distribution by the Electronics Devices Group (EDG) to another
division of Fujitsu or by Fujitsu to an Affiliate of Fujitsu, the amount
received by the EDG or Fujitsu, as applicable, accounted for as if such sale or
distribution was made to an unrelated third party on an arms-length basis for
fair market value, or (2) with respect to any sale or other distribution by
Fujitsu to a third party, the actual amount received by Fujitsu less (a) one
percent (1%) (representing the allocated cost for freight, handling, service,
insurance and other delivery charges for the Fujitsu Product), (b) sales, use,
excise, value added and other taxes applicable to the sale or other distribution
(other than taxes on Fujitsu's net income), and (c) amounts actually paid or
credited by Fujitsu for returns and exchanges and similar items.
"Confidential Information," with respect to a party, means technical,
business, marketing, planning and other information, ideas, materials or subject
matter of such party, whether disclosed orally, in writing, in magnetic,
photographic or other tangible form or otherwise, and whether disclosed by such
party or a third party, and designated (at the time of disclosure or, if
disclosed orally, within 30 days thereafter) as confidential or proprietary,
2
including any information designated as "Confidential Information" pursuant to
the Non Disclosure Agreement. "Confidential Information" also includes, with
respect to both parties, the terms and conditions of this Agreement and the
Specifications and Deliverables. "Confidential Information" does not include
information, ideas, materials or other subject matter that (i) is or becomes
generally known or available by publication, through commercial use or otherwise
through no fault of the receiving party; (ii) was known by the receiving party
before receipt from the disclosing party; (iii) is independently developed by
the receiving party without use of or access to the disclosing party's
Confidential Information; (iv) is lawfully obtained from a third party that has
the right to make such disclosure; or (v) is required to be disclosed by a
judicial order or decree of governmental law or regulation, provided that the
receiving party promptly notifies the disclosing party of such requirement and
reasonable opportunity is allowed by the receiving party for the disclosing
party to file for or obtain a protective order or otherwise proceed to protect
under applicable law the interests of the disclosing party. Without limitation
of the generality of, and notwithstanding, the foregoing, "Confidential
Information" includes information related to product and marketing plans,
designs, costs, business opportunities, personnel, research and development and
knowhow of a party or any subsidiary, affiliate, customer or supplier of such
party.
"Deliverables" means the deliverables described in Exhibit B and other
information, materials and subject matter that may be disclosed or provided by
▇▇▇▇ to Fujitsu in furtherance of this Agreement, provided that, with respect to
documentation, only the documents expressly referred to in Exhibit B shall be
considered a "Deliverable" for the purposes of Section 6.
"Derivative Work" means any modification, correction, addition, extension,
upgrade, improvement or other form in which any Product, or any idea, concept,
technique, invention, creation, work, process, design or method embodied
therein, may be recast, transformed or adapted, including, but not limited to,
all works that, if made, used, sold, reproduced, distributed, modified or
disclosed by a person other than ▇▇▇▇, would infringe or misappropriate any
Intellectual Property Rights in any Product.
"Engineering Change Request" or "ECR" means a request by Fujitsu to add or
modify a functional, electrical or physical aspect of the ▇▇▇▇ Microprocessor
Core, Test Vehicle or System Development Board, other than due to an Error.
"ES Silicon" means the initial engineering sample silicon chips, and any
additional silicon turns delivered Fujitsu in accordance with Section 6.2.
"Error" means (i) a defect in a Product that causes it not to conform to
the Specifications; or (ii) an error or deficiency in a documentation
Deliverable that renders it materially inaccurate, materially erroneous,
materially unreliable or not in material conformance with the Specifications.
"Existing Core" means the schematics, functional model (M language) and
GDS-II physical database for ▇▇▇▇'▇ existing CS-60 Colorado 4 microprocessor
core without floating point unit (FPU) and the documents relating thereto,
including user manuals.
"Features" means a power management feature and a debugging feature, both
as developed by or on behalf of ▇▇▇▇ in accordance with the Additional
Specifications.
-2-
3
"Fujitsu Derivative" means any material enhancement, material extension or
material modification to the Product made by Fujitsu including, by way of
example, by the addition of new instruction sets, a change to cell libraries
resulting from a change in the number of metal layers or technology conversion
involving a re-layout of the core, but excluding a modification of the cache
configuration.
"Fujitsu Derivative Products" means any microprocessors sold or otherwise
transferred by or on behalf of Fujitsu or a Fujitsu sublicensee that incorporate
a Fujitsu Derivative.
"Fujitsu Products" means any microprocessors sold or otherwise transferred
by or on behalf of Fujitsu or a Fujitsu sublicensee that incorporate the ▇▇▇▇
Microprocessor Core, including any derivatives of the ▇▇▇▇ Microprocessor Core
unless such derivatives constitute Fujitsu Derivatives.
"Inventions" means all ideas, inventions or technology arising out of, or
as a result of work done under this Agreement.
"Intellectual Property Rights" means all intellectual property, industrial
property and other intangible rights arising under the laws of any country,
including without limitation all rights with respect to (i) patents and patent
applications and similar rights (including utility patent, design patent and
utility model rights and applications therefor), (ii) copyrights (including any
renewals and extensions thereof), databases and mask works, and any
applications, registrations and other rights with respect thereto, (iii) trade
secrets, confidential information, and technology, and (iv) trademarks, service
marks and tradenames (including goodwill).
"Internal Die Area" means the area inside the I/O ring of a die upon which
the ▇▇▇▇ Microprocessor Core has been laid.
"Letter Agreement" means the letter agreement, dated February 12, 1997,
between Fujitsu and ▇▇▇▇.
"Manufacturing Test Vector Suite" means a test vector suite, together with
any available collateral materials, developed in accordance with the
Specifications, that can be used by Fujitsu to test Fujitsu Products during
manufacturing.
"Non Disclosure Agreement" means the non-disclosure agreement, dated July
1, 1993, between Fujitsu and ▇▇▇▇.
"Product" means the ▇▇▇▇ Microprocessor Core and all Deliverables.
"▇▇▇▇ ▇▇▇▇▇▇" means ▇▇▇▇ Semiconductors (Israel) Limited, a wholly-owned
subsidiary of ▇▇▇▇.
"▇▇▇▇ Microprocessor Core" means the microprocessor core based upon the
Existing Core and incorporating the Features, developed in accordance with the
Specifications, including all functional models, prototypes, work in progress,
documentation and other materials related thereto.
"Schedule" means the timetable for services and delivery set forth in
Exhibit A.
-3-
4
"Services" means the services to be performed hereunder including, without
limitation, the development of the ▇▇▇▇ Microprocessor Core and the delivery of
the Deliverables.
"Specifications" means the specifications, including those as to
functionality, performance and interoperability for the Services and Product and
the design of the ▇▇▇▇ Microprocessor Core, including (i) the specifications set
forth and the documents referenced in Exhibit C, as modified from time to time
in accordance with Section 5, (ii) the Additional Specifications.
"System Development Board(s)" shall mean one or more system boards
allowing the Test Vehicle to be evaluated in a system environment and to verify
software compatibility.
"Test Vehicle" means a silicon test chip, developed in accordance with the
Specifications comprising the ▇▇▇▇ Microprocessor Core in combination with
certain external logic, packaged in a ceramic PGA unit, with each internal pin
of the ▇▇▇▇ Microprocessor Core brought out as an external pin. The Test Vehicle
shall be designed as a stand-alone unit to be used for either hardware emulation
systems or hardware development platforms for debugging.
2. ▇▇▇▇ DEVELOPMENT SERVICES
2.1. Development of ▇▇▇▇ Microprocessor Core. ▇▇▇▇ hereby agrees to
perform the Services in accordance with the Schedule and to develop and complete
the ▇▇▇▇ Microprocessor Core in conformance with the Specifications, in each
case on the terms and conditions set forth in this Agreement. ▇▇▇▇ may
subcontract for the performance of the Services, to with ▇▇▇▇ ▇▇▇▇▇▇ and, after
receiving Fujitsu's prior written consent, with other third parties, in each
case in accordance with a written agreement incorporating the relevant material
obligations of ▇▇▇▇, and any restrictions on ▇▇▇▇, under this Agreement.
2.2. Deliveries. Pursuant to ▇▇▇▇' commitment under Section 2.1, ▇▇▇▇
hereby agrees to deliver to Fujitsu (i) the Deliverables in accordance with the
Schedule and (ii) at Fujitsu's request from time to time, copies of any work in
progress, prototypes, internal documentation and other materials related to the
Services or Product. ▇▇▇▇ acknowledges that time is of the essence in providing
the Deliverables to Fujitsu in accordance with the Schedule. Except as provided
in Section 8.3(a)(ii), Fujitsu shall use the Deliverables relating to the
Existing Core for information and evaluation purposes only and shall not
reproduce the Existing Core or incorporate the Existing Core into any Fujitsu
Product or Fujitsu Derivative Product or any other product of Fujitsu or its
Affiliates. Fujitsu shall use the Deliverables relating to the ▇▇▇▇
Microprocessor Core only for the design of products and derivatives to be used
as embedded microcontrollers and in connection with Fujitsu's license rights
pursuant to Section 8.3.
2.3. Testing Materials and Documentation.
(a) ▇▇▇▇ hereby agrees to develop and complete the Manufacturing
Test Vector Suite, Test Vehicle and the initial System Development Board in
accordance with the Schedule and in conformance with Specifications. Fujitsu may
request that ▇▇▇▇ develop and deliver additional System Development Boards in
accordance with a schedule to be agreed between the parties. Any such additional
System Development Board shall be an ECR.
-4-
5
(b) Except as described in subsection (a) above, unless otherwise
agreed to by the parties in writing, each Deliverable shall include any and all
design documentation and all other diagnostic and testing materials relating to
the Deliverable and other materials and information reasonably requested by
Fujitsu, including, without limitation, any and all materials or information
necessary for the design, development, implementation, assembly, testing,
operation, modification or other use of the Deliverable.
2.4. Review. Fujitsu may conduct a reasonable number of periodic reviews,
including reviews at ▇▇▇▇' premises, of the Product and performance of the
Services. At Fujitsu's reasonable request, ▇▇▇▇ will provide Fujitsu with
written reports regarding its work on the Product in form and substance
acceptable to Fujitsu and with copies of any work in progress, prototypes,
internal documentation and related materials. Additionally, at Fujitsu's
reasonable request, ▇▇▇▇ will make presentations to Fujitsu regarding such work.
Fujitsu will pay ▇▇▇▇' reasonable travel expenses if Fujitsu requests that the
presentation be made at a location outside the Austin, Texas area, provided that
such expenses are approved in advance by Fujitsu.
3. PAYMENT
3.1. Development Fee. Fujitsu shall pay a total of Four Million Five
Hundred Thousand Dollars ($4,500,000) to ▇▇▇▇ for the performance of the
Services and the delivery of the Deliverables hereunder (the "Development Fee"),
which shall accrue as follows:
(a) $3.5 million on acceptance by Fujitsu of the Existing Core and
agreement between Fujitsu and ▇▇▇▇ as to the additional functionality to be
incorporated into the ▇▇▇▇ Microprocessor Core (which agreement shall become
part of the "Specifications");
(b) $0.2 million on acceptance by Fujitsu of the Verilog Model and
Simulation Environment and the Additional Specifications;
(c) $0.3 million on acceptance by Fujitsu of the Tapeout-Ready
Database; and
(d) $0.5 million on acceptance by Fujitsu of the ▇▇▇▇ Microprocessor
Core.
Once due and payable by Fujitsu, each of the foregoing amounts shall, subject to
the terms hereof, be non-refundable notwithstanding ▇▇▇▇' failure to deliver, or
Fujitsu's failure to accept, any subsequent Deliverable.
3.2. Advance. ▇▇▇▇ hereby acknowledges that, in accordance with the
Letter Agreement, Fujitsu has paid to ▇▇▇▇ an advance ("Advance") in the amount
of Three Million Five Hundred Thousand Dollars ($3,500,000) towards the amounts
that would otherwise be payable to ▇▇▇▇ hereunder, including as provided in
Section 3.1. ▇▇▇▇ agrees that the Advance shall be applied to reduce, dollar for
dollar, the first amounts otherwise payable to by Fujitsu to ▇▇▇▇ hereunder,
including amounts accruing to ▇▇▇▇ under Section 3.1, until the outstanding
amount of the Advance has been reduced to zero through such accruals or through
repayment of the Advance by ▇▇▇▇. Once the outstanding amount of the Advance has
been reduced to zero, Fujitsu shall promptly release any security interests held
by it, under the Letter Agreement or otherwise, relating solely to the Advance.
-5-
6
3.3. Payment. Payment of the Development Fees shall be made in the
following manner:
(a) ▇▇▇▇ shall forward to Fujitsu an invoice for each portion of the
Development Fee after ▇▇▇▇'▇ receipt of Fujitsu's written notice of acceptance
of the corresponding Deliverables described in Section 3.1.
(b) Fujitsu shall forward to ▇▇▇▇ a statement of the outstanding
amount of the Advance, if any, to be credited against the amounts invoiced under
Section 3.3(a) and shall pay the remaining invoiced amounts, if any, by the
twentieth (20th) day of the calendar month following the month in which Fujitsu
receives the ▇▇▇▇ invoice, provided that if such invoice is received after the
twentieth (20) day of any calendar month Fujitsu shall pay any remaining
invoiced amount by the twentieth (20th) day of the calendar month which is two
months after the month in which Fujitsu receives the ▇▇▇▇ invoice.
3.4. Other Fees.
(a) Fujitsu shall bear all mask charges and silicon costs (subject
to Section 6.2(a)) and the cost of PGA packages for all prototype units. Fujitsu
shall also pay the cost of the test fixture hardware to be used by ▇▇▇▇ to
verify the Test Vehicle at rated speed, provided that the purchase of any such
hardware has been pre-approved by Fujitsu in writing.
(b) Any ECRs will be charged separately to Fujitsu by ▇▇▇▇ on an
itemized statement at the rate of $20,000 per man-month (or a pro rata charge
for any fraction thereof) plus materials at cost and travel expenses, if any. If
special CAD tools or other software or hardware applicable to the ECR must be
acquired by ▇▇▇▇ for the implementation of the ECR, the cost of such tools or
hardware will also be charged separately, provided that the purchase of any such
tools or hardware has been pre-approved by Fujitsu in writing.
(c) ▇▇▇▇ shall forward to Fujitsu invoices referencing this
Agreement and setting forth the amount of charges attributable to ECRs and
related expenses after ▇▇▇▇'▇ receipt of Fujitsu's written notice of acceptance
of the corresponding ECRs. Fujitsu shall forward to ▇▇▇▇ a statement of the
outstanding amount of the Advance, if any, to be credited against the invoiced
amounts and shall pay any remaining invoiced amounts by the twentieth (20th) day
of the calendar month following the month in which Fujitsu receives the ▇▇▇▇
invoice, provided that if such invoice is received after the twentieth (20) day
of any calendar month Fujitsu shall pay any remaining invoiced amount by the
twentieth (20th) day of the calendar month which is two months after the month
in which Fujitsu receives the ▇▇▇▇ invoice.
4. ROYALTIES
4.1. Royalty. As consideration for the grant of the license hereunder,
Fujitsu agrees to pay ▇▇▇▇ royalties as follows:
(a) With respect to Fujitsu Products, an amount determined by
multiplying (i) five percent (5%) of the Aggregate Net Sales of all Fujitsu
Products, by (ii) the percentage of the Internal Die Area of such Fujitsu
Products occupied by the ▇▇▇▇ Microprocessor Core.
-6-
7
(b) With respect to Fujitsu Derivative Products, an amount
determined by multiplying (i) three percent (3%) of the Aggregate Net Sales of
all Fujitsu Derivative Products, by (ii) the percentage of the Internal Die Area
of such Fujitsu Derivative Product occupied by the Fujitsu Derivative providing
functionality corresponding to the functionality of the ▇▇▇▇ Microprocessor
Core, as reasonably determined by Fujitsu.
(c) Fujitsu agrees to undertake diligent efforts in good faith to
pursue alpha and beta site opportunities with high volume embedded control
businesses, such as telecommunications equipment and computer games, at the
earliest reasonable date and to make Fujitsu Products and Fujitsu Derivative
Products available to customers in a timely manner.
4.2. Payment.
(a) Royalties shall be payable for each of Fujitsu's semi-annual
fiscal periods. Within sixty (60) days after the end of each such semi-annual
fiscal period, Fujitsu shall submit to ▇▇▇▇ a complete and accurate report
setting forth for such semi-annual fiscal period (i) the number of Fujitsu
Products and Fujitsu Derivative Products sold or otherwise transferred by
Fujitsu and sublicensees of Fujitsu, (ii) the Internal Die Area data for such
Fujitsu Products and Fujitsu Derivative Products and (iii) the yen royalty
amount owed by Fujitsu. Within sixty (60) days after the end of such semi-annual
fiscal period Fujitsu shall pay the royalty amount set forth in such report.
(b) All Aggregate Net Sales shall be calculated in Japanese yen. The
royalties shall be calculated on such rounded Japanese yen amounts, and then
converted on the same day to and paid in equivalent U.S. Dollars at the
then-current TTS rate quoted by The Tokyo Mitsubishi Bank at its Tokyo
Headquarters. Fujitsu shall be responsible for all bank transfer charges.
4.3. Forecast of Royalties. No later then the last day of each of
Fujitsu's fiscal quarters, Fujitsu shall submit to ▇▇▇▇ a nonbinding forecast of
the royalties that will be payable to ▇▇▇▇ hereunder with respect to the next
succeeding fiscal quarter.
4.4. Audit of Records. ▇▇▇▇ shall have the right, once each year during
the term of the Agreement, to have a mutually acceptable, independent accounting
firm inspect the books and records of Fujitsu and its sublicensees relating to
the Fujitsu Products and Fujitsu Derivative Products to verify the accuracy of
Fujitsu's royalty payments to ▇▇▇▇ hereunder. The accounting firm may not be
paid on a contingency or other basis related to the outcome of the inspection,
and shall execute a confidentiality agreement with Fujitsu in a form mutually
acceptable to the parties that prohibits the accounting firm from disclosing
information obtained in connection with the inspection other than disclosure to
▇▇▇▇ of the amount of any underpayment or overpayment. ▇▇▇▇ shall maintain in
confidence any information obtained in connection with the inspection. Any such
inspection shall be conducted during Fujitsu's regular business hours, in such a
manner as not to interfere with Fujitsu's normal business activities, and shall
be at ▇▇▇▇'▇ expense; provided, however, that if such inspection reveals that
Fujitsu has underpaid ▇▇▇▇ by five percent (5%) or more for the period
inspected, Fujitsu shall reimburse ▇▇▇▇ for the reasonable fees and costs
including travel expenses within Japan charged by the accounting firm for such
audit. Prompt adjustment shall be made to correct for any underpayments or
overpayments disclosed by such inspection. Fujitsu shall maintain its
-7-
8
financial records relating to the Fujitsu Products for a minimum of two (2)
years after the occurrence of the transaction to which such records relate, but
shall be under no obligation (in connection with the foregoing provisions or
otherwise) to maintain records for any longer period.
4.5. Taxes. Fujitsu shall withhold or deduct from payments hereunder,
including any payments pursuant to Section 4, any amount required by applicable
tax authorities to be withheld or deducted, and shall promptly provide a
certificate or other evidence thereof to ▇▇▇▇.
5. SPECIFICATIONS
5.1. Specifications for Testing Materials and Features. The parties shall
develop and agree on the Specifications for the Manufacturing Test Vector Suite,
Test Vehicle and the initial System Development Board and for the Features (the
"Additional Specifications") in accordance with the Schedule. ▇▇▇▇ shall have
primary responsibility for identifying and documenting all features which are to
incorporated into the detailed Additional Specifications. Fujitsu agrees to
provide ▇▇▇▇ with reasonable assistance and input regarding the development of
the Additional Specifications and to approve the Additional Specifications in
accordance with the Schedule.
5.2. Other Specifications. ▇▇▇▇ and Fujitsu each acknowledges that the
Specifications, other than the Additional Specifications, are final in all
material respects as of the date of this Agreement, subject to such minor
modifications as may be required to efficiently implement the intended functions
and performance characteristics of the ▇▇▇▇ Microprocessor Core. ▇▇▇▇' budget
for performance of the Services hereunder includes the cost of implementing such
minor modifications from time to time, but does not include the cost of
implementing any material changes to the Specifications, which costs shall be
agreed upon by the parties in advance of any material change in the
Specifications and paid separately by Fujitsu.
6. ACCEPTANCE AND REJECTION OF DELIVERABLES
6.1. General. The following procedures shall apply for the acceptance or
rejection of any Deliverable other than the Test Vehicle:
(a) Initial delivery of a Deliverable (the "Initial Deliverable")
will occur when ▇▇▇▇ delivers to a site designated by Fujitsu a Deliverable that
▇▇▇▇ reasonably determines to conform to the applicable Specifications therefor,
accompanied by a written statement listing the items delivered. Fujitsu, with
the assistance of ▇▇▇▇ if requested by Fujitsu, will review each Deliverable
upon delivery to determine whether the Deliverable conforms to the
Specifications for such Deliverable. Within the period specified for review of
each Deliverable by Fujitsu on attached Exhibit B, Fujitsu will provide ▇▇▇▇
with either written acceptance of such Deliverable or a statement of Errors to
be corrected or changed.
(b) ▇▇▇▇ will promptly correct the Errors in any Deliverable set
forth in the statement of Errors and redeliver the Deliverable (a "Subsequent
Deliverable") to Fujitsu within twenty (20) Fujitsu business days, or such
longer period as Fujitsu and ▇▇▇▇ agree is reasonable under the circumstances.
Fujitsu will, within twenty (20) business days after such redelivery, provide
▇▇▇▇ with either written acceptance or another statement of Errors. The
-8-
9
procedure set forth in Section 6.1(a) and this Section 6.1(b) will be repeated
until Fujitsu accepts the Deliverable or terminates this Agreement pursuant to
Section 6.3.
(c) Fujitsu's design or tapeout of a Fujitsu Product or a Fujitsu
Derivative Product prior to its acceptance of the ▇▇▇▇ Microprocessor Core shall
not constitute acceptance thereof but such design or tapeout shall be at
Fujitsu's sole risk.
6.2. Acceptance of Test Vehicle.
(a) ▇▇▇▇ shall complete the Test Vehicle tapeout in accordance with
the Schedule. Within five weeks after receipt of the Test Vehicle tapeout,
Fujitsu shall provide the initial ES Silicon to ▇▇▇▇. Within eight weeks after
receipt of the initial ES Silicon, ▇▇▇▇ shall provide the ES Silicon test report
and tapeout-ready core design to Fujitsu with either Error corrections or a
certification that no Errors have been found. In the event that ▇▇▇▇ has
provided Fujitsu with Error corrections, Fujitsu shall provide an additional ES
Silicon, incorporating such Error corrections, to ▇▇▇▇ within five weeks after
receipt of such Error corrections. Within eight weeks after receipt of such
modified ES Silicon, ▇▇▇▇ shall provide the ES Silicon test report and
tapeout-ready core design with Error corrections, if any, to Fujitsu. Such
report shall be a Subsequent Deliverable for the purpose of Section 6.3. below.
The procedure set forth in the two preceding sentences will be repeated until
▇▇▇▇ certifies to Fujitsu that no Errors have been found or Fujitsu terminates
this Agreement pursuant to Section 6.3.
(b) After receipt of the certification by ▇▇▇▇ that no Errors exist
in the ES Silicon, ▇▇▇▇ and Fujitsu shall each conduct system tests, using the
Test Vehicle and initial System Development Board. Such tests shall be completed
within sixty (60) days after delivery of such certification. If any Errors are
found by either party, such party shall promptly advise the other of the Error
and the parties shall discuss the optimal correction or OS/software workaround
for the Error. ▇▇▇▇ shall promptly redeliver such the Test Vehicle,
incorporating such corrections or workarounds. Such Test Vehicle shall be a
Subsequent Deliverable for the purpose of Section 6.3. below. The procedure
shall be repeated until each party certifies that no Errors have been found or
Fujitsu terminates this Agreement pursuant to Section 6.3.
6.3. Rejection.
(a) ▇▇▇▇ will have at least two opportunities to correct Errors in a
Deliverable, including the Test Vehicle. If ▇▇▇▇ fails to deliver a Deliverable
without Errors or otherwise acceptable to Fujitsu after two attempts, Fujitsu
may terminate this Agreement for cause pursuant to Section 13.2, or may continue
to permit ▇▇▇▇ to correct the Deliverable. Fujitsu's election to continue
permitting ▇▇▇▇ to correct a Deliverable will not affect Fujitsu's right to
terminate this Agreement in accordance with this Section 6.3(a) if thereafter a
Subsequent Deliverable has Errors.
(b) ▇▇▇▇ will inform Fujitsu as soon as possible if it believes it
will not be able to deliver a Deliverable, whether an Initial Deliverable or a
Subsequent Deliverable, on time. For each Deliverable that is delivered more
than thirty (30) days late for which there is an applicable milestone payment,
Fujitsu will reduce the applicable milestone payment by a ten
-9-
10
percent (10%) of such milestone payment. In addition, if such a Deliverable is
more than ninety (90) days late, the applicable milestone payment shall be
reduced by an additional ten percent (10%) and Fujitsu may, in its discretion,
terminate this Agreement pursuant to Section 13.2. For purposes of this Section
6.3(b), a Deliverable will not be deemed delivered until accepted by Fujitsu
after any corrections required pursuant to Section 6.1 or Section 6.2 but the
time required for such corrections shall not be counted in the respective
thirty-day and ninety-day periods.
(c) Fujitsu shall be obligated to act reasonably and in good faith
in failing to accept or rejecting any Deliverable pursuant to this Agreement.
6.4. Modification of Schedule.
(a) If ▇▇▇▇ believes that a modification of the Schedule is
appropriate because of problems or events beyond ▇▇▇▇' reasonable control, ▇▇▇▇
may request a modification of the Schedule. Fujitsu will consider such a request
in good faith, taking into account all relevant factors, including the reasons
for the requested modification, Fujitsu's own schedule requirements and ▇▇▇▇'▇
diligence in performing the Services. In no event, however, will Fujitsu be
obligated to agree to any such request (or to a related waiver of or
modification in the reduction of milestone payments) or to consider increasing
the milestone payments to ▇▇▇▇.
(b) If Fujitsu submits an ECR to ▇▇▇▇ which ▇▇▇▇ reasonably believes
will require a modification to the Schedule, the parties shall discuss in good
faith the required modification. Fujitsu acknowledges that the implementation of
an ECR may result in schedule changes due to design changes and dependencies and
resource conflicts.
6.5. Post-Acceptance Obligations. Upon Fujitsu's acceptance of a
Deliverable hereunder, ▇▇▇▇ shall have no further responsibility with respect
thereto except for any responsibilities specifically provided in this Agreement.
7. SUPPORT
7.1. Error Correction and Support. ▇▇▇▇ will provide Fujitsu with
technical assistance relating to the Deliverables and the ▇▇▇▇ Microprocessor
Core from the delivery of the first Deliverable until three years after final
acceptance by Fujitsu of the last of the Deliverables accepted by Fujitsu. The
first man-month of such assistance will be provided free of charge and any
remaining assistance will be provided on ▇▇▇▇' standard terms for the provision
of comparable technical support to third parties, as in effect from time to
time. Such support will include correcting promptly any Errors in the ▇▇▇▇
Microprocessor Core and supplying corrections to Fujitsu in a timely fashion,
correcting and updating any documentation, conducting failure analysis,
providing software patches and answering questions that Fujitsu may have
regarding the Deliverables and the ▇▇▇▇ Microprocessor Core.
7.2. Disclosure. At any time after final acceptance by Fujitsu of the
last of the Deliverables accepted by Fujitsu, ▇▇▇▇ will promptly disclose to
Fujitsu in writing at no charge any Errors, including, but not limited to,
problems with functionality or performance, in such Deliverables or the ▇▇▇▇
Microprocessor Core of which ▇▇▇▇ becomes aware.
-10-
11
8. INTELLECTUAL PROPERTY RIGHTS; LICENSE
8.1. Intellectual Property.
(a) Fujitsu hereby acknowledges and agrees that, as between Fujitsu
and ▇▇▇▇, subject to the licenses expressly granted to Fujitsu herein, ▇▇▇▇ owns
all Intellectual Property Rights in and to the Deliverables and the ▇▇▇▇
Microprocessor Core.
(b) ▇▇▇▇ hereby acknowledges and agrees that, as between ▇▇▇▇ and
Fujitsu, subject to the licenses expressly granted to ▇▇▇▇ herein, Fujitsu owns
all Intellectual Property Rights in and to and any materials delivered by
Fujitsu hereunder.
8.2. Inventions.
(a) All right, title, and interest in all Inventions made, created,
developed, written, or conceived solely by Ross personnel in the course of,
arising out of, or as a result of work done under this Agreement, and all
associated Intellectual Property Rights, shall be the sole and exclusive
property of ▇▇▇▇.
(b) All right, title, and interest in all Inventions made, created,
developed, written, or conceived solely by Fujitsu personnel in the course of,
arising out of, or as a result of work done under this Agreement, and all
associated Intellectual Property Rights, shall be the sole and exclusive
property of Fujitsu.
(c) Although the parties do not anticipate joint development of
Inventions hereunder, in the event of joint development of an Invention, the
parties will meet in good faith to discuss, on a case-by-case basis, ownership
and license rights with respect thereto.
8.3. License.
(a) ▇▇▇▇ hereby grants to Fujitsu, under all of its Intellectual
Property Rights, an irrevocable, worldwide, nonexclusive, non-transferable,
perpetual, royalty-bearing license, with a right to grant sublicenses in
accordance with Section 8.4 below (i) to use the Existing Core and the
Manufacturing Test Vector Suite for the limited purposes set forth herein, (ii)
to use, reproduce, modify, translate and distribute the ▇▇▇▇ SPARC User Guide,
and (iii) to make, have made, use, sell, reproduce, modify, improve, market,
prepare Derivative Works of, distribute or disclose the Specifications,
Deliverables (other than the Existing Core) and the ▇▇▇▇ Microprocessor Core for
limited use as an embedded microcontroller and, to the extent necessary or
helpful to the design, development, implementation, assembly, compilation,
testing, operation, modification or other use of Fujitsu Products, any ideas,
concepts, techniques, inventions, creations, works, processes, designs or
methods embodied therein.
(b) Fujitsu shall document all Fujitsu Derivatives and deliver to
▇▇▇▇ a copy of such promptly after development, but in no event later than first
commercial shipment of a Fujitsu Derivative Product implementing such Fujitsu
Derivatives. Fujitsu hereby grants to ▇▇▇▇, under all of its Intellectual
Property Rights, an irrevocable, worldwide, nonexclusive, non-transferable,
perpetual, royalty-free license (with unlimited rights to sublicense) to make,
have made, use, sell, reproduce, modify, improve, market, prepare Derivative
Works of, distribute or disclose any Fujitsu Derivatives.
-11-
12
8.4. Sublicenses.
(a) Fujitsu shall have the right to grant sublicenses to its
Affiliates under the license set forth in Section 8.3(a) without any additional
payment of fees but subject to the royalty provisions of Section 4.1 with
respect to all licensed products sold or otherwise transferred by such
Affiliates.
(b) Fujitsu shall have the right to grant sublicenses to non-Fujitsu
affiliates under the license set forth in Section 8.3(a) with the prior written
approval of ▇▇▇▇. Prior to commencing negotiation of a prospective sublicense
with a non-Fujitsu affiliate, Fujitsu shall give advance written notice of the
proposed negotiation to ▇▇▇▇. Upon such notice from Fujitsu, ▇▇▇▇ and Fujitsu
shall negotiate the terms and conditions of such sublicense in good faith,
including but not limited to the terms and conditions of license fees and
further sublicense rights. Fujitsu acknowledges that ▇▇▇▇ has the exclusive
right to license Sun Microsystems and its Affiliates with respect to the ▇▇▇▇
Microprocessor Core or any derivative thereof. In addition, ▇▇▇▇ shall have no
obligation to negotiate sublicense terms with Fujitsu if, at the time it
receives the notice referred to above from Fujitsu, ▇▇▇▇ itself is negotiating
or intends promptly to negotiate a license with the non-Fujitsu affiliate of the
▇▇▇▇ Microprocessor Core or any derivative thereof.
(c) Unless ▇▇▇▇ and Fujitsu otherwise agree in advance in writing
with respect to any particular sublicense agreement, Fujitsu shall be obligated
to pay ▇▇▇▇ the royalties provided in Section 4.1 with respect to all Fujitsu
Products and Fujitsu Derivative Products sold or otherwise transferred by the
sublicensee.
8.5. Right of First Refusal to Manufacture. In the event that ▇▇▇▇
desires to produce any embedded microcontroller products based upon the ▇▇▇▇
Microprocessor Core design or derivatives thereof, Fujitsu shall have a right of
first refusal to manufacture such products (provided that Fujitsu is able to
supply such products in the requisite quantities and timeframe and at prices and
on other terms at least as favorable to ▇▇▇▇ as are then available from
alternate manufacturing sources of the same product in similar quantities) and
the parties shall promptly negotiate in good faith the terms and conditions of a
supply agreement to that effect.
8.6. Marketing Cooperation and Assistance. The parties agree to
reasonably cooperate with and assist each other in the marketing of embedded
microcontroller products based upon the ▇▇▇▇ Microprocessor Core and
derivatives, provided, however, that each party agrees not to solicit
independently the business of a prospective customer for any such product if
such customer's prospective need for the product was not previously known to the
first party and was made known to it by the other party for purposes of
requesting cooperation and assistance pursuant to the provisions of this Section
8.6. The restriction on independent solicitation shall apply for the greater of
(a) 180 days from the date of first notification by the other party or (b) the
period during which the first party is actively cooperating with and assisting
the other party in the prospective sale. At the time that a party requests such
cooperation and assistance, the parties will agree on the nature and amount of
the consideration, if any, to be provided by the requesting party in return for
such cooperation and assistance by the other. Nothing in this Section 8.6 shall
obligate either party to disclose any of its business information to the other
party.
-12-
13
9. RIGHT TO DEVELOP INDEPENDENTLY
Nothing in this Agreement will impair Fujitsu's right to acquire, license,
develop for itself or have others develop for it similar products or technology
performing the same or similar functions as the product or technology
contemplated by this Agreement, or to market and distribute such similar
products or technology in addition to, or in lieu of, the Fujitsu Product;
provided, however, that Fujitsu shall at all times comply fully with the
confidentiality and limited use provisions and the other covenants contained in
this Agreement.
10. WARRANTIES AND INDEMNIFICATION
10.1. ▇▇▇▇ Warranties. ▇▇▇▇ represents and warrants that it has the
unrestricted right to disclose, use, and grant and assign (without liability to
others) all the subject matter, including ideas, concepts, techniques,
inventions, creations, works, processes, designs and methods, that ▇▇▇▇ will
disclose or use in its performance of the Services or that ▇▇▇▇ will grant and
assign under this Agreement. ▇▇▇▇ further represents and warrants that: (a) ▇▇▇▇
has full power and authority to enter into this Agreement, to carry out its
obligations under this Agreement and to grant the rights granted to Fujitsu
hereunder; (b) this Agreement has been duly executed and delivered by ▇▇▇▇ and
constitutes a legally valid and binding obligation of ▇▇▇▇, enforceable against
▇▇▇▇ in accordance with its terms; (c) the execution and delivery by ▇▇▇▇ of,
and the performance by ▇▇▇▇ of its obligations under, this Agreement do not and
will not (i) conflict with or contravene the certificate of incorporation or
bylaws of ▇▇▇▇ or (ii) result in a breach of or constitute a default under any
agreement, instrument or order to which ▇▇▇▇ or any of its assets is subject;
(d) the Deliverables and the ▇▇▇▇ Microprocessor Core are and will be original
with ▇▇▇▇ and will not incorporate any ideas, concepts, techniques, inventions,
creations, works, processes, designs or methods of, or developed by ▇▇▇▇ for,
any third party; and (e) the Deliverables and the ▇▇▇▇ Microprocessor Core do
not and will not infringe any Intellectual Property Rights of others other than
patent rights and, to ▇▇▇▇' knowledge, do not and will not infringe any patent
rights of others.
10.2. Fujitsu Warranties. Fujitsu represents and warrants that: (a)
Fujitsu has full power and authority to enter into this Agreement, to carry out
its obligations under this Agreement and to grant the rights granted to ▇▇▇▇
hereunder; (b) this Agreement has been duly executed and delivered by Fujitsu
and constitutes a legally valid and binding obligation of Fujitsu, enforceable
against Fujitsu in accordance with its terms; and (c) the execution and delivery
by Fujitsu of, and the performance by Fujitsu of its obligations under, this
Agreement do not and will not (i) conflict with or contravene the certificate of
incorporation or bylaws of Fujitsu or (ii) result in a breach of or constitute a
default under any agreement, instrument or order to which Fujitsu or any of its
assets is subject.
10.3. Indemnity and Duty to Correct.
(a) Indemnity. ▇▇▇▇ will indemnify, hold harmless and, at Fujitsu's
request, defend Fujitsu and any divisions, subsidiaries, affiliates, directors,
officers, employees, agents, distributors, customers, assignees and licensees of
Fujitsu from and against any claim, action or suit to the extent based on (i) a
claim that the Services or the Product infringes or misappropriates any
Intellectual Property Right of a third party, or (ii) any breach or alleged
breach by ▇▇▇▇ of any representation, warranty or covenant made, or obligation
assumed, by ▇▇▇▇ pursuant to this Agreement, including, but not limited to, all
liabilities, costs,
-13-
14
judgments, expenses and the reasonable fees of attorneys and other professionals
that are attributable to such claim, action or suit. Fees of attorneys and other
professionals and related costs will be payable when and as incurred. Fujitsu
will give ▇▇▇▇ reasonably prompt notice in writing of any such claim, action or
suit. Each party will provide the other with reasonable cooperation and
information to assist in defense of the claim, action or suit. If Fujitsu elects
to have ▇▇▇▇ defend such claim, action or suit, Fujitsu nonetheless will have
the right, at Fujitsu's expense, to appoint separate counsel to participate in
such claim, action or suit. If Fujitsu elects to defend itself, ▇▇▇▇ will
nonetheless have the right, at ▇▇▇▇'▇ own expense, to appoint separate counsel
to participate in any such claim, action or suit. ▇▇▇▇ will not enter into any
settlement of any claim, action or suit described in this Section 10.2(a)
without the prior written consent of Fujitsu, which consent will not be
unreasonably withheld.
(b) Duty to Correct. If the ▇▇▇▇ Microprocessor Core becomes or is
likely to become the subject of a claim, action or suit described in Section
10.2(a), ▇▇▇▇ will, at ▇▇▇▇'▇ election and expense: (i) procure for Fujitsu the
past and future right to make, have made, use, sell, reproduce, modify, prepare
Derivative Works of, distribute, and disclose the ▇▇▇▇ Microprocessor Core, with
full rights to authorize others to do the same; (ii) replace or modify the ▇▇▇▇
Microprocessor Core with another product that is noninfringing, provides the
same functionality, performance, quality and interoperability as the infringing
▇▇▇▇ Microprocessor Core and is reasonably satisfactory to Fujitsu; or (iii) if
such past and future rights cannot be procured or the ▇▇▇▇ Microprocessor Core
cannot be replaced or modified at reasonable expense, reimburse Fujitsu for the
total amount paid under this Agreement. The obligations of this Section 10.2(b)
are in addition to the warranty and other rights that may otherwise be available
to Fujitsu under this Agreement or under applicable law.
10.4. Limitation of Liability. EXCEPT AS PROVIDED IN THIS SECTION 10 OR
OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY IS MAKING (OR WILL
BE DEEMED TO MAKE) ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFIT
OR LOSS OF USE, WITH RESPECT TO ANY CLAIMS ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT UNLESS OTHERWISE SPECIFICALLY AND EXPLICITLY PROVIDED HEREIN,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO
EVENT SHALL EITHER PARTY'S AGGREGATE CUMULATIVE LIABILITY FOR CLAIMS BASED UPON
BREACH OF REPRESENTATION OR WARRANTY AND CLAIMS OF INDEMNITY UNDER THIS
AGREEMENT EXCEED THE SUM OF $4.5 MILLION. THIS LIMITATION OF LIABILITY SHALL
APPLY TO ANY CLAIM OR CAUSE OF ACTION, WHETHER IN CONTRACT OR TORT, UNDER ANY
THEORY.
11. CONFIDENTIALITY
11.1. Use Restrictions. Each party will protect the other's Confidential
Information from unauthorized dissemination and use with the same degree of care
that such party uses to protect its own like information. Neither party will use
the other's Confidential Information for purposes other than those necessary to
further the purposes of this Agreement, or disclose to third parties the other's
Confidential Information, except to the extent specified in the prior
-14-
15
written consent of the other party, necessary to comply with applicable law or
the valid order of a court of competent jurisdiction, provided that such party
will promptly inform the other party of such obligation to disclose and
cooperate with the other party in minimizing the disclosure, including seeking a
protective order, necessary to exercise or enforce its rights pursuant to this
Agreement, or specified in Section 11.2.
11.2. Limited Disclosure. Notwithstanding the terms of Section 11.1,
Fujitsu hereby consents to ▇▇▇▇'▇ disclosure of Fujitsu Confidential Information
to ▇▇▇▇ ▇▇▇▇▇▇ to the extent necessary to carry out ▇▇▇▇'▇ obligations hereunder
and to ▇▇▇▇' disclosure of the terms, conditions or text of this Agreement to
the extent required by law or the regulations of any governmental agency. In
addition, the parties anticipate that ▇▇▇▇ may issue a press release describing
its agreement to provide the Services. Fujitsu will have the right to
pre-approve in writing any such press release or other communications with third
parties relating to the Services or ▇▇▇▇ Microprocessor Core, which approval
will not be unreasonably withheld.
12. TERM
This Agreement will commence on the Effective Date and will continue until
terminated as provided in this Agreement.
13. TERMINATION
13.1. Termination by Either Party. Either party will have the right to
terminate this Agreement immediately upon written notice at any time if:
(a) The other party is in material breach of any warranty, term,
condition or covenant of this Agreement other than those contained in Section 11
and fails to cure the breach within thirty (30) days after written notice of the
breach;
(b) The other party is in material breach of any warranty, term,
condition or covenant of Section 11; or
(c) The other party (i) becomes insolvent; (ii) fails to pay its
debts or perform its obligations in the ordinary course of business as they
mature; (iii) admits in writing its insolvency or inability to pay its debts or
perform its obligations as they mature; or (iv)becomes the subject of any
voluntary or involuntary proceeding in bankruptcy, liquidation, dissolution,
receivership, attachment or composition or general assignment for the benefit of
creditors that is not dismissed with prejudice within sixty (60) days after the
institution thereof.
13.2. Termination by Fujitsu. In addition, subject to the provisions of
Section 6, Fujitsu may terminate this Agreement if ▇▇▇▇ fails to timely deliver
or correct any Deliverable or if Fujitsu reasonably concludes that such a
failure is likely. Any such termination shall become effective upon thirty (30)
days' prior written notice from Fujitsu to ▇▇▇▇.
13.3. Effect of Termination.
(a) Fujitsu's Breach. In the event of termination of this Agreement
due to a breach by Fujitsu, the rights and licenses granted by ▇▇▇▇ to Fujitsu
will immediately terminate and Fujitsu will have no further right to use the
▇▇▇▇ Microprocessor Core or Deliverables or to
-15-
16
manufacture, market, sell or sublicense Fujitsu Products. Except for termination
pursuant to subsection (b) below, any sublicense granted by Fujitsu pursuant to
Section 8.4 will expire or terminate contemporaneously with the expiration or
termination of this Agreement. The license from Fujitsu to ▇▇▇▇ with respect to
Fujitsu Derivatives (including the right to grant sublicenses) under Section
8.3(b) will survive the termination of this Agreement as a result of a breach by
Fujitsu. Such continuing license is subject to ▇▇▇▇' continuing compliance with
the terms of this Agreement.
(b) ▇▇▇▇'▇ Breach. The grant of rights from ▇▇▇▇ to Fujitsu made in
this Agreement (including the right to grant sublicenses pursuant to Section
8.4) will survive the termination of this Agreement as a result of a breach by
▇▇▇▇ as, and to the extent, necessary for Fujitsu and its sublicensees to
continue the manufacture and support of the Fujitsu Products. Such continuing
rights are subject to Fujitsu's continued compliance with the terms of this
Agreement (including payment of royalties pursuant to Section 4). Nothing will
require ▇▇▇▇ to provide any Error corrections or support or maintenance to
Fujitsu after termination. Upon any such termination, ▇▇▇▇ immediately will
deliver to Fujitsu all work in progress with respect to the Services and
Product, including all versions and components thereof, and at Fujitsu's
request, will confirm in writing Fujitsu's license rights with respect thereto.
Without limitation of the generality of the rights set forth in this Section
13.3(b), in the event of any termination of this Agreement, Fujitsu will have
the option to complete development of the Product.
(c) In General. Upon the expiration or earlier termination of this
Agreement, each party will be released from all obligations and liabilities to
the other occurring or arising after the date of such expiration or earlier
termination, except that the provisions of Sections 1, 4, 8.1, 8.2, 8.3 and 8.4,
and 9 through 14 will survive expiration or earlier termination. Expiration or
earlier termination will not relieve ▇▇▇▇ or Fujitsu from any liability arising
from any breach of this Agreement. Neither party will be liable to the other for
damages of any kind solely as a result of terminating this Agreement in
accordance with its terms, and termination of this Agreement by a party will be
without prejudice to any other right or remedy of such party under this
Agreement or applicable law.
(d) Offset Payment. In the event of a termination by Fujitsu
pursuant to Section 13.2 resulting directly from Fujitsu's final rejection of
the Verilog Model, Simulation Environment, Additional Specifications or the
Tapeout-Ready Database under Section 6.3, ▇▇▇▇ shall pay to Fujitsu the
applicable one (but not both) of the following amounts as a partial offset to
the research, development and other expenses (other than the Development Fee)
that will be incurred by Fujitsu in connection with this development program and
to compensate Fujitsu for the delay in its embedded control program that the
parties recognize and agree may occur as a result of the rejection: (i) in the
case of a rejection of the Verilog Model, Simulation Environment and Additional
Specifications, $1.5 million; or (ii) in the case of a rejection of the
Tapeout-Ready Database, $0.7 million.
13.4. Payments by Fujitsu; Refund by ▇▇▇▇. In the case of termination
prior to completion of the Services, Fujitsu's sole monetary obligation will be
to pay ▇▇▇▇ the fee set forth in Section 3.2 for all milestones fully completed
by ▇▇▇▇ and Deliverables accepted by Fujitsu pursuant to the terms of this
Agreement. In the event that the Advance exceeds such the amount of such fee,
▇▇▇▇ shall promptly refund the difference to Fujitsu.
-16-
17
14. GENERAL
14.1. No Other Obligations. Fujitsu has no obligation or duty to ▇▇▇▇
with respect to the matters described herein except as expressly set forth in
this Agreement. Without limitation of the generality of the foregoing, Fujitsu
may market, or not market at all, the Fujitsu Product, or any components
thereof, in any manner that Fujitsu chooses.
14.2. Relationship of Parties. ▇▇▇▇ is an independent contractor. Neither
▇▇▇▇ nor ▇▇▇▇'▇ employees, consultants, contractors or other personnel are
agents, employees or joint venturers of Fujitsu, nor do they have any authority
to bind Fujitsu by contract or otherwise to any obligation. They will not
represent to the contrary, either expressly, implicitly, by appearance or
otherwise. ▇▇▇▇ will determine, in ▇▇▇▇'▇ sole discretion, the manner and means
by which the Services are accomplished, subject to the express condition that
▇▇▇▇ will at all times comply with applicable law and the terms of this
Agreement.
14.3. Taxes and Benefits. It is ▇▇▇▇'▇ obligation to report as income and
pay all taxes with respect to all compensation received by ▇▇▇▇ pursuant to this
Agreement and pay all taxes due on such compensation. ▇▇▇▇ will indemnify
Fujitsu against and hold it harmless from any obligation imposed on Fujitsu to
pay any sales or use taxes, withholding taxes, social security, unemployment
insurance, workers' compensation insurance, disability insurance or similar
items, including interest and penalties thereon, in connection with any payments
made to ▇▇▇▇ by Fujitsu pursuant to this Agreement.
14.4. Assignment. The rights and liabilities of the parties hereto will
bind and inure to the benefit of their respective assignees and successors,
provided that, as Fujitsu has specifically contracted for ▇▇▇▇'▇ services, ▇▇▇▇
may not assign or delegate its obligations under this Agreement either in whole
or in part, whether voluntarily, by operation of law or otherwise, except to the
extent expressly provided for in this Agreement or otherwise agreed in writing
by Fujitsu. Any attempted assignment in violation of the provisions of this
Section 14.4 will be void.
14.5. Equitable Relief. Because in connection with the performance of
this Agreement each party will have access to and become acquainted with
confidential and proprietary information of the other party, the unauthorized
use or disclosure of which would cause irreparable harm and significant injury
which would be difficult to ascertain and which would not be compensable by
damages alone, each party hereby agrees that the other party will have the right
to enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief without prejudice to any other rights or
remedies that such party may have for breach of this Agreement.
14.6. Bankruptcy Provisions. All rights and licenses granted under or
pursuant to Sections 8.3 and 8.4 of this Agreement by ▇▇▇▇ to Fujitsu are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101 of the U.S. Bankruptcy Code. The parties agree that Fujitsu, as a
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the U.S. Bankruptcy Code. The
parties further agree that, in the event of the commencement of a bankruptcy
proceeding by or against ▇▇▇▇ under the U.S. Bankruptcy Code, Fujitsu shall be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property (including, without
-17-
18
limitation, any items to be delivered pursuant to Section 2.2) and the same, if
not already in its possession, shall be promptly delivered to Fujitsu upon
Fujitsu's written request (i) upon any such commencement of a bankruptcy
proceedings, unless ▇▇▇▇ elects to continue to perform all of its obligations
under this Agreement, or (ii) if not delivered under (i) above, upon the
rejection of this Agreement by or on behalf of ▇▇▇▇. Such intellectual property
shall be used by Fujitsu only for the purposes otherwise permitted under this
Agreement.
14.7. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the United States and the State of California as
applied to agreements entered into and to be performed entirely within
California between California residents.
14.8. Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement or the subject matter hereof, or the interpretation,
enforceability, validity, performance, breach or termination hereof or thereof,
including, without limitation, this arbitration clause, shall be solely and
finally settled by arbitration in Los Angeles, California in accordance with the
commercial arbitration rules of the American Arbitration Association, as
modified by the provisions of this Section 14.8. Each party waives any rights to
bring any such dispute, controversy or claim in any other forum or proceeding,
including, without limitation, the International Trade Commission of the United
States or any other administrative or judicial forum. The arbitration shall be
conducted in accordance with such rules by three arbitrators selected by the
parties (if the parties are able to agree within thirty (30) days) and otherwise
selected in accordance with such rules. Each of the arbitrators appointed shall
have at least five (5) years' experience in the field that is the principal
subject matter of the dispute. After soliciting the views of the parties, the
arbitrators shall order such discovery as they may deem reasonable for a full
and fair understanding of the facts and issues raised in the arbitration. The
arbitration, including the proceedings, pleadings and evidence in connection
therewith, shall be maintained as confidential. An award rendered in connection
with the arbitration shall be final and binding on the parties, and any judgment
upon such an award may be entered in any court of competent jurisdiction. The
award shall be in writing and shall provide written reasons in detail for the
award unless the parties agree otherwise. The award shall also provide for the
fees and expenses of the arbitrators and for the reasonable attorneys' fees and
expenses of the prevailing party, as determined by the arbitrators, all to be
borne by the non-prevailing party.
14.9. Severability. If any provision of this Agreement, or portion
thereof, shall be held to be unenforceable, that provision of the Agreement will
be enforced to the maximum extent permissible so as to effect the intent of the
parties, and the remainder of this Agreement will continue in full force and
effect.
14.10. Notices. All notices required or permitted under this Agreement
will be in writing, will reference this Agreement and will be deemed given: (a)
when delivered personally; (b) when sent by confirmed facsimile; (c) ten (10)
days after having been sent by registered or certified air mail, return receipt
requested, postage prepaid; or (d) the third business day after deposit with a
commercial overnight carrier specifying next-day delivery, with written
verification of receipt. All communications will be sent to the address set
forth below (or to such other address as may be designated by a party by giving
written notice to the other party pursuant to this Section 14.10):
-18-
19
Fujitsu:
Fujitsu Limited
1-1 Kamikodanaka 4-chome,
▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇▇▇▇-▇▇▇,
▇▇▇▇▇▇▇▇-▇▇▇, ▇▇▇-▇▇
▇▇▇▇▇
Facsimile: (044) 754-3786
Attention: Manager
Processor Design Dept.
Applied System LSI Div.
▇▇▇▇:
▇▇▇▇ Technology, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇.▇.▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
14.11. No Waiver. No obligation of a party hereunder shall be deemed
waived unless the other party has expressly agreed in writing to a waiver of
such obligation. The failure of a party to enforce a provision of this Agreement
shall not be deemed a waiver thereof. Waiver by a party of any provision will
not be deemed a waiver of future enforcement of that or any other provision.
14.12. No Rights in Third Parties. This Agreement is made for the benefit
of Fujitsu and ▇▇▇▇ and not for the benefit of any third parties.
14.13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but which collectively
will constitute one and the same instrument.
14.14. Headings and References. The headings and captions used in this
Agreement are for convenience only and are not to be considered in construing or
interpreting this Agreement.
14.15. Construction. This Agreement has been negotiated by the parties
and their respective counsel. This Agreement will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either party.
14.16. Complete Agreement. This Agreement, including all exhibits,
together with the Letter Agreement and Non-Disclosure Agreement, constitutes the
entire agreement between the parties with respect to the subject matter hereof,
and supersedes and replaces all prior or contemporaneous understandings,
agreements, representations or warranties, written or oral, regarding such
subject matter, including without limitation the Letter Agreement and the Non
Disclosure Agreement which are each hereby terminated. No amendment to or
modification of this Agreement will be binding unless in writing and signed by a
duly authorized representative of the party against which enforcement is sought.
-19-
20
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives:
FUJITSU LIMITED ▇▇▇▇ TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. May
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. May
Title: Member of the Board Title: Chairman and Acting
and CEO Electronics President and CEO
Device Group
-20-
21
EXHIBIT A
SCHEDULE
**
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
DELIVERABLES
**
B-1
23
EXHIBIT C
**
C-1
