Exhibit 10.1
DESIGN AND LICENSE AGREEMENT
THIS AGREEMENT is made as of the 27th day of July, 1995 by and between:
MOSAID Technologies Incorporated, an Ontario corporation with principal
place of business at 2171 XxXxx Side Road, Carp, in the Xxxxxxxx xx
Xxxx Xxxxxxxx, Xxxxxxx, Xxxxxx (hereinafter referred to as "MOSAID"),
AND
LANSTAR SEMICONDUCTOR CORPORATION, a Texas corporation with its
registered head office at 0000 Xxxxxx X, Xxxxx 000, Xxxxxxxxx, Xxxxx,
XXX 00000 (Hereinafter referred to as "LANSTAR")
RECITALS
WHEREAS LANSTAR is engaged in the business of the development, design
and manufacture and sale of integrated circuits; and
WHEREAS MOSAID is engaged in the business of engineering and designing
integrated circuits for use by its clients; and
WHEREAS LANSTAR desires that MOSAID provide it with the engineering
design of a 4 Megabit Dynamic Random Access Memory (DRAM) chip in x1 and x4
format; and
WHEREAS MOSAID is willing to engineer and design the chip in accordance
with the manufacturing requirements as specified herein; and
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Ver. 1. 1
WHEREAS MOSAID has agreed to grant a license to LANSTAR to use certain
of MOSAID's intellectual property for the manufacture and sale of such chip
by LANSTAR in accordance with the terms and conditions contained herein; and
WHEREAS each of the parties hereto will disclose to the other certain
confidential information regarding its business and affairs which is
confidential and proprietary in nature including trade secrets, patents or
other intellectual property, as well as technical, financial, business, or
market-related information, data or plans, residing on any type of medium
whatsoever.
NOW THEREFORE in consideration of the premises and the mutual covenants
herein and other good and valuable consideration (the receipt and
sufficiency of which is hereby acknowledged by each of the parties) the
parties hereto covenant and agree as follows:
ARTICLE I
1. DEFINITIONS
In this Agreement, unless the context otherwise specifies or requires,
the following terms shall have the following meanings:
1.1 "Agreement", "hereto", "herein", "hereof", "hereunder"
and similar expressions refer to this Agreement and not to any
particular section, paragraph or particular portion of this Agreement
and include all schedules or exhibits attached to this Agreement;
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Ver. 1.1
1.2 "Chip" shall mean the chip described in Schedule "B" attached
hereto;
1.3 "Delivery Date" shall mean any date on which any part of the Work is
shipped from the MOSAID Canadian facility, currently located at 0000
XxXxx Xxxx Xxxx, Xxxx, Xxxxxxx;
1.4 "Derivative Chip" shall mean a chip the design of which is
substantially similar to the design of the Chip, including either
architecture or circuit techniques, which may be designed by MOSAID
LANSTAR or by any other party for LANSTAR;
1.5 "Effective Date" shall have the meaning ascribed thereto in
paragraph 6.1 hereof;
1.6 "Feel, shall have the meaning ascribed thereto in paragraph 2.8
hereof;
1.7 "Functional Specifications" shall have the meaning ascribed thereto
in Schedule "B" attached hereto;
1.8 "Licensed Product" shall mean the Chip or any versions of the Chip
described in Schedule "B" attached hereto;
1.9 "Manufacturing Specifications" shall have the meaning ascribed
thereto in Schedule "B" attached hereto;
1.10 "Milestone" shall have the meaning ascribed thereto in Schedule "A"
attached hereto;
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1.15 "Proprietary information" shall mean any and all data and
information relating to the business and affairs of either MOSAID or
LANSTAR, as the case may be, and disclosed by MOSAID or LANSTAR to the
other verbally, in writing or in machine readable form, but shall not
include data and information which:
1.15.1 was prior to the date hereof in the possession of either
MOSAID or LANSTAR as the receiving party without obligation of
secrecy, or was in the public domain, was common knowledge or was
in published literature at the time of receipt by the receiving
party;
1.15.2 following its disclosure to either MOSAID or LANSTAR as
the receiving party, it was received by the receiving party from a
third party source free to disclose such information or data,
without any obligation on the part of the receiving party hereto
not to disclose it;
1.15.3 has, through no fault on the part of either MOSAID or
LANSTAR as the receiving party, subsequently become part of the
public domain or is in published literature which is generally
available to the public;
1.15.4 was independently developed by either MOSAID or LANSTAR as
the receiving party; or
1.15.5 was provided to either MOSAID or LANSTAR as the receiving
party without notice by the party providing information and data
that the information is
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Ver. 1.1
proprietary or confidential information or that there are
any secrecy or confidentiality obligations relating to such
information;
1.16 "Rejection Notice" shall have the meaning ascribed thereto in
paragraph 2.5 hereof;
1.17 "Royalty Payment" shall have the meaning ascribed thereto in
paragraph 3.3 hereof;
1.18 "Specifications" shall include both the Functional
Specifications and the Manufacturing Specifications; and
1.19 "Work" shall have the meaning ascribed thereto in paragraph 2.1
hereof.
ARTICLE II
2. WORK AND PAYMENT
2.1 Subject to the provisions of this Agreement, MOSAID shall perform
the engineering and design services and shall deliver the data and
schematics as more specifically described in Schedule "A" attached
hereto (hereinafter referred to as the "Work") in order to provide
LANSTAR with a full and complete engineering design of the Chip.
2.2 The Chip shall be designed by MOSAID in accordance with the
Functional Specifications and the Manufacturing
Specifications.
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Ver. 1.1 1
2.3 The Work shall be divided into separate phases (a "Phase") as
described in Schedule "A" attached hereto, and each Phase of the Work
shall be performed as set forth in Schedule "All attached hereto.
2.4 Changes to any one or more of the Work , the Functional
Specifications or the Manufacturing Specifications during the term of
this Agreement may be made only upon the mutual written agreement of the
parties hereto.
2.5 LANSTAR shall, not later than 30 days following the achievement of a
Milestone by LANSTAR or the delivery by MASAID to LANSTAR of (a) written
notice of the achievement of a Milestone, or (b) a deliverable relating
to a Milestone, if any, give written notice to MASAID of LANSTAR's
acceptance or rejection of such Milestone. LANSTAR may reject any
Milestone solely on the basis that such Milestone fails to conform to
the Specifications, provided that LANSTAR does so in writing within the
30 day period referred to in this paragraph 2.5. Any such written notice
of rejection (a "Rejection Notice") shall include a complete list of
detailed and specific descriptions of each deficiency. In the event of
the failure by LANSTAR to deliver to MOSAID a Rejection Notice within
the 30 day period referred to in this paragraph 2.5, LANSTAR shall be
deemed to have accepted such Milestone. In the event that LANSTAR fails
to deliver to MASAID a notice indicating that it has achieved Milestone
5 or 6 and does not deliver a Rejection Notice relating to Milestone 5
or Milestone 6 as provided in paragraph 2.6 hereof, each of such
Milestones shall be deemed to have been achieved 12 months following the
achievement of the immediately preceding Milestone and the installment
of the Fee relating to Milestone 5 or
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Ver. 1.1
milestone 6, as the case may be, shall thereupon be due and payable by
LANSTAR to MOSAID immediately following the expiry of such 12 month
period.
2.6 Upon LANSTAR's rejection of any Milestone, MOSAID shall have a
period of 60 days from the date of receipt by MOSAID of the Rejection
Notice to correct any deficiency specified in the Rejection Notice,
unless such 60 day period is increased or decreased pursuant to
paragraph 2.4 hereof. In the event that MOSAID has remedied all of the
deficiencies set out in a Rejection Notice relating to Milestones 5 or
6, if any, and LANSTAR fails to fabricate the number of prototypes or
Chips required pursuant to Milestones 5 and 6, respectively, each of
Milestones 5 and 6 shall be deemed to have been achieved and accepted 12
months following the date on which MOSAID remedies such deficiencies, if
any, and the installment of the Fee relating to Milestone 5 or Milestone
6, as the case may be, shall thereupon be due and payable by LANSTAR to
MOSAID immediately following the expiry of such 12 month period.
2.7 The following shall not be allowed as criteria for the rejection by
LANSTAR of a Milestone:
2.7.1 the inability of LANSTAR to attain any specific yield or
performance standards, stated explicitly or not, by virtue of
deficiency of process implementation, process control, process
equipment, raw material, in-process materials or environment, test
and evaluation equipment or procedures including all human and
material issues;
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Ver. 1.1
2.7.2 the inability of LANSTAR to achieve the processing
performance as characterized by the Specifications;
2.7.3 the inability of LANSTAR to evaluate completely a
Milestone or a deliverable relating to a Milestone, if any, within
the time periods provided for in paragraph 2.5 of this Agreement;
or
2.7.4 the mutual agreement of the parties hereto to accept
changes to either the Work or the Specifications after Work has
commenced or after one or more Phases have been completed by
MOSAID resulting in the incompatibility between Phases already
completed and a subsequent Milestone.
2.8 LANSTAR shall pay to MOSAID a fee (the "Fee") in the total amount
of $500,000 US as provided in Schedule "C" attached hereto.
2.9 The Fee for Milestone I is to be transferred to the MOSAID bank
account as specified herein within 30 days of the execution of this
Agreement. milestones 2, 3, 4, 5, 6 are to be guaranteed via a letter of
credit to be established no later than 30 days after the execution of
this Agreement and is to be opened with a banking institution acceptable
to MOSAID All costs for the establishment of letters of credit are the
responsibility of LANSTAR As each Milestone is achieved MOSAID shall
invoice LANSTAR for the full amount of the Fee relating to such
Milestone, if any, as provided in Schedule "C" attached hereto. Such
invoices shall, subject to paragraph 2.5 hereof, be paid in full by
LANSTAR
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Ver. 1.1
within 30 days of the date of an invoice. Notwithstanding the provisions
of paragraph 2.5 hereof, the installment of the Fee relating to the
first Milestone shall be paid by LANSTAR to MOSAID within 30 days of the
Effective Date.
2.10 The payment of the Fee shall be exclusive of any and all tax, duty,
or tariffs levied by any foreign government including, but not limited
to withholding taxes, sales taxes, goods and services taxes and value
added taxes required to be paid directly or indirectly by MOSAID or by
LANSTAR on behalf of MOSAID and any such payment by LANSTAR shall be the
sole responsibility of LANSTAR. MOSAID shall be responsible for any tax,
duty, or tariffs levied by any Canadian taxing authority relating to the
Fee.
2.11 LANSTAR shall pay to MOSAID interest upon any and all installments
of the Fee that are at any time overdue and payable by LANSTAR to MOSAID
at the rate of 2% per month (24% per annum) from the date on which such
installment of the Fee is due and payable as provided herein to the date
of payment by LANSTAR.
2.12 Payment of the Fee and the Royalty Payments by LANSTAR to MOSAID
shall be made by wire transfer directly to MOSAID's account at the
following bank:
THE ROYAL BANK OF CANADA
00 Xxxxxx Xxxxxx, Xxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
XXXXXX
Account Number: 000-000-0
Transit Number: 00006
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2.13 LANSTAR shall provide and be responsible for any and all customs
clearances and approvals required in connection with the execution of
this Agreement.
ARTICLE III
3. INTELLECTUAL PROPERTY, LICENSES AND ROYALTIES 3.1 The ownership of the
intellectual property relating to the Work and the Chip shall be
governed by the following provisions:
3.1.1 Any and all copyrights, maskwork or equivalent rights, designs
(including integrated circuit designs), inventions (previously
patented, patentable or otherwise), schematics, know-how or other
intellectual property created, invented, or discovered by MOSAID other
than in the course of performing the Work (hereinafter referred to as
the "MOSAID Previous Results") shall be the sole and exclusive
property of MOSAID.
3.1.2 Any and a copyrights, maskwork or equivalent rights, designs
(including integrated circuit designs), inventions (patentable or
otherwise), schematics, know-how or other intellectual property
created, invented or discovered by LANSTAR other than in the course of
performing the Work (hereinafter referred to as the "LANSTAR Previous
Results") shall be the sole and exclusive property of LANSTAR.
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Ver. 1. 1
3.1.3 Any and all copyrights, maskwork or equivalent rights,
designs (including integrated circuit designs), inventions
(patentable or otherwise), schematics, know-how or other results
created, invented or discovered or otherwise disclosed by MOSAID to
LANSTAR regarding the Work or in the course of performing the Work
(hereinafter referred to as the "MOSAID Results") solely by MOSAID,
shall be the sole and exclusive property of MOSAID.
3.1.4 Any and all copyrights, maskwork or equivalent rights,
designs (including integrated circuit designs), inventions
(patentable or otherwise), schematics, know-how or other results
created, invented discovered or otherwise disclosed by LANSTAR to
MOSAID regarding the Work or in the course of performing the Work
solely by LANSTAR (hereinafter referred to as the "LANSTAR
Results"), shall be the sole and exclusive property of LANSTAR.
3.1.5 Any and all copyrights, maskwork or equivalent rights,
designs (including integrated circuit designs), inventions
(patentable or otherwise), schematics, know-how or other results
jointly created, invented, discovered or otherwise disclosed by
either party hereto to the other regarding the Work, or in the
course of performing the Work (hereinafter referred to as the
"Joint Results") shall be jointly owned by MOSAID and LANSTAR and
each of MOSAID and LANSTAR shall have a non-exclusive, independent,
royalty free, irrevocable, non-assignable world-wide right and
license to use, including the right to sub-license, the
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Joint Results in the ordinary course of their respective
businesses.
3.2 Subject to MOSAID's completion of the Work, LANSTAR's acceptance or
deemed acceptance thereof, 'LANSTAR's payment in full of the portion of
the Fee relating to each Milestone and the timely payment by LANSTAR to
MOSAID of the Royalty Payments in accordance with the terms hereof,
MOSAID hereby grants to LANSTAR a non-exclusive, non-assignable,
world-wide right and license to use the MOSAID Results and the MOSAID
Previous Results relating to the Work, for the term of this Agreement,
only to the extent such licensed use is necessary in the manufacture and
sale of the Chip by LANSTAR. The license granted by MOSAID to LANSTAR
pursuant to this paragraph 3.2 shall include the right to fabricate the
Chip at any fabrication facility whether owned by LANSTAR or third party
entities, but shall not include the right to sub-license.
3.3 Subject to LANSTAR establishing a letter of credit to guarantee
payment of the total production license fee, MOSAID will grant the right
to LANSTAR to produce and sell the Chip. LANSTAR shall pay to MOSAID a
royalty calculated at the royalty rate applicable to Year 1 as provided
in Schedule "D" attached hereto with respect to Net Sales of the first
10,000 Licensed Products. Commencing in the year in which LANSTAR
achieves Production Volume, LANSTAR shall pay to MOSAID the amounts
("Royalty Payments") calculated at the per year rates based on Net Sales
in accordance with the provisions of Schedule "D" attached hereto. The
Royalty Payments will be calculated and paid by LANSTAR within 30 days
following the end of each MOSAID fiscal quarter.
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Ver. 1.1
LANSTAR shall provide to MOSAID an estimate of the Royalty Payment for
each such MOSAID fiscal quarter within 5 business days of the end of
each such quarter. LANSTAR shall maintain complete and accurate
financial and production records of all Chips manufactured, sold, used
and returned in a manner and form which will enable the verification of
same by MOSAID. Once each calendar year, MOSAID shall have the right to
audit such records, without notice to LANSTAR and at MOSAID's own
expense by itself or through an independent accounting firm or such
other professional adviser or advisers as MOSAID in its sole discretion
may require, to verify compliance with the terms of this Agreement. Such
records shall be treated as Proprietary Information in accordance with
the provisions of this Agreement.
3.4 In the event that MOSAID conducts or has conducted an examination,
audit or inspection of the records of LANSTAR and, as a result of such
examination, audit or inspection of the records of LANSTAR, it is
determined that there are unreported Royalties payable to MOSAID, such
Royalties shall be deemed to have been payable when due and LANSTAR
shall immediately pay to MOSAID such Royalties and any interest due
thereon in accordance with the provisions of Paragraph 3.6. In addition,
if the unreported Royalties exceed either three percent (3%) of the
amount paid theretofore by LANSTAR to MOSAID in the twelve (12) month
period preceding the examination, audit or inspection, or aggregate
three thousand dollars ($3,000.00) or more, LANSTAR shall reimburse
MOSAID for its out-of-pocket expenses in conducting such examination,
inspection or audit, as well as any legal and accounting fees and
disbursements incurred by MOSAID in connection therewith.
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3.5 MOSAID shall be responsible for any tax, duty, or tariffs levied by
any Canadian or foreign taxing authority relating to the Royalty
Payments. In the event that withholding taxes are payable by LANSTAR,
LANSTAR shall withhold such withholding taxes and shall promptly remit
such taxes to the appropriate taxing authority. Upon making such
remittance, LANSTAR shall promptly provide MOSAID with documentation
evidencing such payment of taxes by LANSTAR and any other documentation
reasonably required by MOSAID in order to obtain a foreign tax credit in
Canada.
3.6 LANSTAR shall pay to MOSAID interest upon any and all Royalty
Payments that are at any time overdue and payable by LANSTAR to MOSAID
at the rate of 2% per month (24% per annum) from the date on which a
Royalty Payment is due and payable as provided herein to the date of
payment by LANSTAR.
3.7 LANSTAR shall xxxx the Chips produced by LANSTAR pursuant to this
Agreement with the following maskwork and copyright notices:
MOSAID, LANSTAR 199x
(where x denotes the earlier of the first year of commercial
exploitation or the year of registration under applicable maskwork or
copyright legislation)
3.8 LANSTAR shall take all such action as is necessary to protect the
copyright, maskwork, topography or equivalent rights in the Chip in the
joint names of MOSAID and LANSTAR, including all required filings and
registrations and the maintenance of such filings and registrations, and
shall be
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Ver. 1.1
responsible for all of the costs, fees and expenses relating thereto.
MOSAID shall cooperate with LANSTAR with respect to the protection of
the copyright, maskwork, topography and equivalent rights in the Chip in
the joint names of MOSAID and LANSTAR and LANSTAR shall, if so requested
by MOSAID, provide MOSAID with copies of all communications received
from or sent to the agency or agencies responsible for such matters.
3.9 LANSTAR shall supply the Chip, and subject to paragraph 3.10 hereof,
any Derivative Chip and any Next Generation Chip to MOSAID on a most
favored customer basis as follows:
3.9.1 LANSTAR grants to MOSAID the right, but MOSAID has no
obligation, to purchase from LANSTAR for resale by MOSAID up to 10%
of the monthly wafer output from any wafer fabrication facility
owned in whole or in part by LANSTAR at a cost of $950 U.S. per
wafer.
3.9.2 LANSTAR grants to MOSAID the right, but MOSAID has no
obligation, to purchase from LANSTAR for resale by MOSAID up to 10%
of LANSTAR's available monthly wafer output from a sub-contracted
fabrication facility for the amount of LANSTAR's U.S. dollar cost
per wafer plus 10% of the LANSTAR cost per wafer.
3.10 It is hereby acknowledged by LANSTAR that no rights to a Derivative
Chip or a Next Generation Chip are granted by MOSAID to LANSTAR and that
any use by LANSTAR of the MOSAID Previous Results or the MOSAID Results
as they relate to the Derivative Chip or the Next Generation Chip shall
require a separate agreement between MOSAID and LANSTAR.
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Ver. 1.1
3.11 MOSAID agrees to enter into similar agreements with LANSTAR for any
Derivative Chip and/or Next Generation Chip in substantially similar
form, and on the identical Royalty basis as this Agreement, however, the
terms and conditions relating to the work and the fees in any such
agreements shall be negotiated by the parties.
3.12 LANSTAR grants to MOSAID a non-exclusive , non-assignable, world-
wide right entitling MOSAID to manufacture and sell the Chip including
LANSTAR know-how and license others to do so. MOSAID shall pay to
LANSTAR a Royalty of 1.5% based on Net Sales of the Chip by MOSAID or a
Licensee.
ARTICLE IV
4. PROPRIETARY INFORMATION
4.1 MOSAID shall use LANSTAR's Proprietary Information only to the
extent such use is necessary in the design of the Chip.
4.2 Proprietary Information when provided in tangible form shall be
clearly labeled as such. Non-tangible disclosures including, but not
limited to, verbal communications, must be clearly indicated to be such
upon disclosure and must be defined as such by delivering written notice
within 30 days of the initial disclosure and before the information is
revealed to any third party. Notwithstanding the foregoing, disclosed
information shall be construed as Proprietary Information if in the
clear and obvious judgment of the recipient, the information is
prejudicial to the interests of the disclosure.
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Ver. 1. 1
4.3 The parties hereto shall take all reasonable steps to maintain the
confidentiality of the Proprietary Information, including advising their
employees and agents that such information is confidential and that it
is to be treated with the same care as would be taken to protect their
own confidential information.
4.4 The parties hereto shall not, either during or after expiration of
this Agreement, use, disclose, distribute, or otherwise disseminate or
communicate the Proprietary Information to third parties except as
provided herein. Disclosures of Proprietary Information to third parties
may be made only after the prior written approval of the disclosing
party has been obtained. The parties hereto shall return, upon the
completion of the development of the Chip, all tangible data, drawings,
specifications, tapes, samples, and documents disclosed or made
available to the other, and an officer of each of MOSAID and LANSTAR
shall certify to the effect that each party has not retained any copies
thereof. The parties shall assign and deliver to the disclosing party
any inventions, ideas, test results, data, or reports that are produced
or result directly from the Proprietary Information of the disclosing
party.
4.5 LANSTAR may provide Proprietary Information to its employees,
directors, officers and third party financial institutions in the normal
course of its business without the written approval of MOSAID, providing
that such employees, directors, officers and third party financial
institutions have entered into a "confidentiality" agreement whose terms
are substantially equal to the terms dealing with Proprietary
Information in this Agreement.
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Ver. 1.1
4.6 The obligations of the parties under this Article 4 shall continue
for a period of twenty-four (24) months after the termination of this
Agreement. Any disclosure made by one of the parties hereto to the other
subsequent to the expiration or termination hereof shall not be regarded
as Proprietary Information.
4.7 MOSAID and LANSTAR will make the existence of this Agreement known
through one or more press releases to be jointly approved in writing by
the presidents of both companies prior to public release. once the
content has been mutually approved for public release, MOSAID will be
free to use the subject matter in the press release in other corporate
documents. Press releases may include details indicating the nature of
the design activity between LANSTAR and MOSAID including basic operating
specifications but will not disclose the financial details or terms of
the Agreement or any other technical information. For this purpose basic
operating specifications means the clock speed of the Chip, access times
and number of megabits. No other information releases of any nature are
provided for unless such disclosure is directly or indirectly related to
the performance of this Agreement or LANSTAR's current or future funding
and approved in writing by the presidents of both companies.
4.8 Notwithstanding the provisions of paragraphs 4.1 through 4.7 hereof,
the parties hereto recognize that the government authorities or agencies
in the jurisdictions in which they carry on their respective businesses
may require disclosure to them of information or data which may
compromise the Proprietary Information. Such government authorities or
agencies shall be advised by each of the
Ver. 1.1 19 of 35
parties hereto that such information is commercially sensitive and is
subject to the provisions of this Agreement. The parties hereto shall
use their best efforts to resist the disclosure of such information to
such government agencies and shall take all reasonable action to ensure
the continued confidentiality of such information following the
disclosure of such information to a governmental agency.
ARTICLE V
5. WARRANTIES AND INDEMNIFICATION
5.1 MOSAID hereby warrants and represents to LANSTAR that
the Work is done in accordance with the Specifications and is based on
its own knowledge and expertise in the field of integrated circuit
design and analysis, and not upon confidential or proprietary data
received from a third party. MOSAID further warrants that the design of
the Chip, when manufactured by LANSTAR by a process conforming to the
Manufacturing Specifications, will meet or exceed the Functional
Specifications. Except for the foregoing express limited warranties,
MOSAID DISCLAIMS ANY AND ALL OTHER WARRANTIES OR CONDITIONS REGARDING
THE WORK, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES OR CONDITIONS,
STATUTORY, EXPRESS OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
5.2 In the event that MOSAID fails to remedy any substantial or
fundamental deficiency which is the cause of the rejection by LANSTAR of
any Phase, or in the event of a breach by MOSAID of any representation,
warranty, or
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Ver. 1.1
obligation contained herein or in the event of any third party claim
against LANSTAR relating to a representation or warranty made by MOSAID
in paragraph 5.1 hereof, the maximum aggregate liability of MOSAID to
LANSTAR hereunder, shall not exceed one-half of the aggregate of all
payments made by LANSTAR to MOSAID in respect of the Fee to the date of
the breach by MOSAID or the third party claim referred to in this
paragraph 5.2.
5.3 Except as herein provided, MOSAID shall not be liable to LANSTAR for
any damages whatsoever, including but not limited to, lost profits, lost
savings, or other special, indirect, incidental, or consequential
damages, legal fees, and court costs, arising out of or in any way
relating to the use or the inability to manufacture the Chip or use the
Work by LANSTAR, even if MOSAID has been advised of the possibility of
such damages.
5.4 LANSTAR shall indemnify and hold MOSAID harmless from and against
any and all claims and liabilities for damages, losses, expenses, or
costs (including legal, accounting and other professional fees and
expenses) arising out of or relating to the Work performed by MOSAID for
LANSTAR pursuant to the terms hereof, including:
5.4.1 any infringement or claim of infringement of patents,
trade-marks, maskwork or copyrights of Canada, the United States,
Japan or any foreign country;
5.4.2 misappropriation or claim of misappropriation of trade
secrets or other tangible or intangible proprietary information or
data delivered to MOSAID by LANSTAR;
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Ver. 1.1
5.4.3 any claim by way of product liability, negligence, or a claim
relating to any other defect in the Work or in any commercial or other
product produced or resulting from the Work.
ARTICLE VI
6. TERM AND TERMINATION
--------------------
6.1 This Agreement shall commence on the later of the date 30 days
from the date hereof (the "Effective Date"), and shall terminate upon
the first to occur of any of the events specified in Section 6.3
hereof.
6.2 The provisions of paragraphs 4.1 through 4.8 hereof shall survive
the termination of this Agreement for the period of time specified in
paragraph 4.6 hereof
6.3 This Agreement shall terminate:
6.3.1 30 days after MOSAID and LANSTAR have completely performed
all of their respective obligations hereunder, including the
obligation of LANSTAR to pay all Royalty Payments to MOSAID;
6.3.2 10 days after either party hereto gives written notice to
the other party that a material breach of its obligations hereunder
was not remedied within 30 days after receipt of notice of such
material breach, other than the delivery by LANSTAR to MOSAID of a
Rejection Notice; or
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Ver. 1.1
6.3.3 immediately upon either party hereto becoming insolvent or
voluntarily filing for or is being placed in involuntary bankruptcy
or receivership (whether court ordered or private) or after ceasing
to carry on business for a period of two consecutive calendar
months.
6.4 In the event that either party terminates this Agreement under
paragraph 6.3.3 hereof, the non-defaulting party may exercise all
remedies available to it under the applicable law.
ARTICLE VII
7. NOTICES
-------
7.1 Any notice or other written communication required or permitted
hereunder shall be in writing and:
7.1.1 delivered personally to the party or, if the party is a
corporation, an officer of the party to whom it is directed;
7.1.2 sent by registered mail, postage prepaid, return receipt
requested (provided that such notice or other written communication
shall not be forwarded by mail if on the date of mailing there
exists an actual or imminent postal service disruption in the city
from which such communication is to be mailed or in which the
address of the recipient is found); or
7.1.3 sent by confirmed telecopier.
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Ver. 1.1
7.2 All such notices shall be addressed to the party to whom it is
directed at the following addresses:
if to: MOSAID Technologies Incorporated
Post office Xxx 00000
Xxxxxx, Xxxxxxx XXXXXX
X0X 0X0
Attention: General Manager,
Semiconductor Division
Tel: (000) 000-0000
Fax: (000) 000-0000
if to: LANSTAR SEMICONDUCTOR CORPORATION
0000 Xxxxxx X, Xxxxx 000
Xxxxxxxxx, Xxxxx
XXX 00000
Attention: Xxxxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
by mail or personal delivery: same
7.3 Any such notice or other written communication shall, if mailed as
aforesaid be effective fourteen (14) days from the date of posting; if
given by telecopier, shall be effective on the first business day after
the sending thereof; and if given by personal delivery shall be
effective on the day of delivery.
7.4 Either party may at any time change its address by giving notice
of such change of address to the other party in the manner specified in
this paragraph.
24 of 35
Ver. 1.1
ARTICLE VIII
8. PROVISIONS OF GENERAL APPLICATION
---------------------------------
8.1 This Agreement shall be governed by and construed in accordance
with the laws of the Province of Ontario and the laws of Canada
applicable therein.
8.2 Nothing contained in this Agreement is intended (or to be
construed) to make MOSAID and LANSTAR partners or joint venturers, or
to make the employees, agents, or representatives of the respective
parties hereto into employees, agents, or representatives of the other
party hereto. It is intended that the relationship of MOSAID and
LANSTAR to each other be at all times that of an independent
contractor. No party to this Agreement shall have any express or
implied right or authority to assume or create any obligations on
behalf of or in the name of the other party or to bind the other party
to any contract, agreement, or undertaking with any third party.
8.3 This Agreement may not be assigned in whole or in part by either
party without the prior written consent of the other party.
8.4 The parties hereto shall do all further acts and things and
execute all further documents reasonably required in the circumstances
to effect the provisions and intent of this Agreement.
8.5 Time shall be of the essence hereof.
25 of 35
Ver. 1.1
8.6 All fees and other amounts referred to in and payments made under
this Agreement shall, unless otherwise specified, be in United States
dollars.
8.7 During the term of this Agreement and for a period of one year
following the termination of this Agreement LANSTAR shall not, directly
or indirectly, attempt to hire or encourage to leave MOSAID's employ,
any individual who will have been an employee of MOSAID at any time
during the previous one year period or who shall have been an employee
of MOSAID at any time during the one year period prior to the date of
the termination of this Agreement, whether for or on behalf of LANSTAR
or for any entity in which LANSTAR shall have a direct or indirect
interest.
8.8 It is the desire of the parties hereto that this Agreement be
accorded a liberal interpretation consistent with its declared intent
and purpose.
8.9 The headings appearing throughout this Agreement are inserted for
convenience only and form no part of the Agreement.
8.10 The invalidity or unenforceability of any provision of this
Agreement will not affect the validity or enforceability of any other
provision hereof and any such invalid or unenforceable provision will
be deemed to be severable.
8.11 This Agreement together with the Schedules attached hereto
constitutes the entire agreement between the parties and supersedes all
prior and contemporaneous agreements, understandings and discussions,
whether oral or written, and
26 of 35
Ver. 1. 1
there are no other warranties, agreements or representations between
the parties except as expressly set forth herein. The following
schedules are attached hereto and form an integral part of this
Agreement:
Schedule A - The Work
Schedule B - Specifications
Schedule C - Fees
Schedule D - Royalty Payments
8.12 No amendment, waiver or termination of this Agreement will be
binding unless executed in writing by the parties to be bound hereby.
No waiver of any provision of this Agreement will be deemed or will
constitute a waiver of any other provision, nor will any such waiver
constitute a continuing waiver unless expressly provided.
8.13 This Agreement may be executed in several counterparts, all of
which together shall constitute one and the same instrument.
8.14 This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted
assigns.
1
Ver. 1.1 27 of 35
IN WITNESS WHEREOF the parties hereto have executed this
Agreement.
SIGNED, SEALED AND DELIVERED
MOSAID Technologies Incorporated
Per:
-----------------
Title: Vice President CFO
Name: Xxxxxxxxx X. Xxxxxxx
Date: July 26, 1995
---------------
LANSTAR SEMICONDUCTOR CORP
Per:
-----------------
Title: President
Name: Xxxxx X. Xxxxx
Date:
-----------
Ver. 1.1 28 of 35
SCHEDULE "A"
------------
THE WORK
With regard to the Agreement dated July 27, 1995 by and between MOSAID
and LANSTAR, the Work to be performed by MOSAID shall be as described in
this Schedule "A" and shall be divided into the following phases (a "Phase")
and each Phase shall have the milestone or milestones (one or more of which
is referred to as a "Milestone" or "Milestones", respectively) described
below. The achievement of the Milestones described below as well as the
additional Milestones referred to in Schedule "C" attached hereto shall
result in the obligation of LANSTAR to pay to MOSAID that portion of the Fee
set forth opposite each Milestone in Schedule "C" attached hereto.
Phase
-----
1. Preliminary design Delivery by MOSAID of preliminary documentation
2. Layout design Delivery by MOSAID of layout database
3. Design optimization Delivery of related documentation
Ver. 1.1 29 of 35
MOSAID Technologies Incorporated - Semiconductor Division
ENGINEERING CHANGE REQUEST (ECR)
--------------------------------
CUSTOMER NAME:__________________________
PROJECT TITLE:_____________________________
Date:______________
Charge No:______________
ECR No:______________
1. TITLE OF CHANGE REQUESTED:_________________________________________
____________________________________________________________________
2. REASON FOR CHANGE:__________________________________________________
____________________________________________________________________
3. PERSON REQUESTING CHANGE:___________________________________________
____________________________________________________________________
4. DESCRIPTION OF CHANGE: (attach any additional documentation)
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
MOSAID'S RESPONSE TO THE ECR:
----------------------------
1. Feasibility:________________________________________________________
____________________________________________________________________
2. Impact:_____________________________________________________________
____________________________________________________________________
3. Estimated Extra Cost:_______________________________________________
____________________________________________________________________
COMMENTS: (attach any additional documentation)
________
Approval:
________
Client (if applicable) Technical:_________________ Date:____________
Administrative:_______________ Date:____________
MOSAID Technical:__________________ Date:____________
Administrative:______________ Date:____________
30 of 35
SCHEDULE "B"
------------
SPECIFICATIONS
With regard to the Agreement dated July 27, 1995 by and between MOSAID
and LANSTAR, the Functional and Manufacturing Specifications are set forth
below:
The following is a formal list of the functional and parametric
requirements of the Chip and the manufacturing and processing
characteristics pursuant to which LANSTAR shall manufacture the Chip. The
following items shall be completed and supplied to MOSAID prior to the
commencement of the Work by MOSAID.
1.0 FUNCTIONAL SPECIFICATION:
------------------------
1.1 Complete Functional Description of the device including descriptive
text, timing waveforms and discrete specifications.
1.2 Pinout diagram and pin description list.
1.3 DC operating conditions (including maximum values).
1.4 DC electrical characteristics.
1.5 AC characteristics.
1.6 Pin capacitance's.
1.7 Test features.
1.8 Metal mask or bond options.
1.9 A complete list of all versions of the circuit required for the
contract. 1
2.0 ELECTRICAL DEFINITION OF THE PROCESS (FAST, SLOW & TYPICAL):
------------------------------------------------------------
0.0X', XXX, XXXXX, XX, XX and NSUB for all types of MOSFET devices used
by the process.
2.2SPICE LEVEL 3 MOSFET models (DC and AC parameters) for all types of
MOSFET devices used by the process.
2.3Measured IDS-VDS curves for all types of MOSFET devices used by the
process including (a) a large square device and (b) an average
width, typical length device.
2.4Measured ring oscillator performance for all operating conditions plus an
accurate schematic for the ring oscillator.
ver. 1.1 31 of 35
2.5 Junction depths for the tub (s) xxx n+/p+ diffusions.
2.6 Junction breakdown voltages for the tub (s) and n+/p+ diffusions.
2.7 MOSFET punch-through voltage characteristics.
2.8 Process cross-section including dielectric material descriptions,
permitivities, thickness and interconnect layer thickness.
2.9 Resistance characteristics of interconnect layers and interlayer
contacts.
2.10 Capacitance of minimum width conductor layers per unit length for
various conditions of neighboring conductor layers (i.e. metal 1 over
substrate, Metal I over substrate and covered by Metal 2, Metal 2 over
Metal 1, etc. for the cases where there are adjacent tracks with typical
layer to layer spacing).
2.11 Capacitance values for (a) the wordline per 'In" cells, (b) the entire
bitline and (c) the memory cell.
2.12 DC and AC Metal migration guidelines.
2.13 Latch-up prevention guidelines.
2.14 Layout cell of a proven ESD protection structure.
2.15 Test wafer with sample transistors (if available).
3.0 GEOMETRICAL DEFINITION OF THE PROCESS:
3.1 A complete list of all layer names with layer definitions and numbering
convention.
3.2 A complete set of geometrical design rules (array and periphery rules).
3.3 A list highlighting the unusual geometrical design rules which require
more involved DRC checking procedures.
3.4 A diagram showing which layers are connected by which contacts.
3.5 Seal ring geometric design rules.
3.6 Minimum acceptable layout grid size.
Ver.1.1 32 of 35
3.7A GDSII tape containing the layout of (a) the memory cell layout, (b)
the "friendly" or "edge" memory cell layout, (c) the wordline shunt
layout and (d) the bitline sense amplifier layout (if available) plus
documentation describing how to construct the cell arrays.
3.8 DRACULA DRC layout verification input file (if available).
3.9 DRACULA ERC layout verification input file (if available).
3.10 DRACULA LPE layout verification input file (if available).
4.0 DIE REQUIREMENTS:
4.1 Maximum die size allowable.
4.2 A complete list of special marks required to be on the die (i.e. laser
alignment marks, logos, part numbers, etc.) with the layout cells or
cell dimensions supplied.
4.3 A detailed description of the required seal ring.
4.4 Bonding Pad and special xxxx rules.
4.5 Lead frame design and bonding pad position limitations.
4.6 A list of all proposed packages for the chip.
4.7 Space required for special marks such as laser alignment marks, logos,
part numbers, etc.
4.8 Any requirements for the inclusion of specific parametric test
structures (i.e. test MOSFET's, etc.).
5.0 MISCELLANEOUS:
5.1 A list of standard circuitry required on the die which is not directly
required by the active circuitry (i.e. special signature circuits,
special test circuits, etc.)
Changes to either the Functional Specifications or the Manufacturing
Specifications during the term of this Agreement may be made only upon the
mutual written agreement of the parties hereto.
33 of 35
Ver. 1
SCHEDULE "C"
------------
FEES
With regard to the Agreement dated July 27, 1995 by and between MOSAID and
LANSTAR,the following is the Fee payment schedule.
The following are the installments of the Fee payable to MOSAID by LANSTAR
upon the achievement of each of the following Milestones. The total Fee is
$500,000 U.S. The Fee for Milestone 1 is to be transferred to the MOSAID bank
account as specified herein within 30 days of the execution of this Agreement.
No work will be initiated until the full Fee of Milestone 1 is received by
MOSAID. Milestones 2,3,4,5,6 are to be guaranteed via a letter of credit to be
established no later than 30 days after the execution of this Agreement and is
to be opened with a banking institution acceptable to MOSAID. All costs for the
establishment of letters of credit are the responsibility of LANSTAR.
MILESTONE INSTALLMENT OF FEE
1. Execution of this Agreement $ 150,000 U.S.
2. Delivery of preliminary documentation $ 20,000 U.S.
3. Delivery of layout database $ 20,000 U.S.
4. Delivery of related documentation $ 20,000 U.S.
5. Upon achievement of 10 Working Prototypes $ 20,000 U.S.
6. Upon achievement of 10 Chips meeting
all Specifications $ 20,000 U.S.
7. Production license $ 250,000 U.S.
The production license will be paid to MOSAID in 6 equal installments. The
full amount of $250,000 U.S. is to be guaranteed via a letter of credit to be
established no later than January 1, 1996 and is to be opened with a banking
institution acceptable to MOSAID. Payments will be monthly beginning January 15,
1996 and finishing with the final payment on June 15, 1996.
Each of MOSAID and LANSTAR hereby recognize and acknowledge that it is
necessary for LANSTAR to fabricate 10 Working Prototypes of the Chip to achieve
Milestone 5 and ten Chips to achieve Milestone 6 and Production Volume to
achieve Milestone 7 and accordingly, in the event that MOSAID has remedied all
of the deficiencies set out in a Rejection Notice or Rejection Notices relating
to Milestone 5 or Milestone 6 and does not fabricate the prototypes of the Chip
or does not proceed to Volume Production, as the case may be, within 12 months
following the later of the achievement of Milestone 5 or Milestone 6 or the date
on which MOSAID remedies such deficiencies, if any, then each of Milestone 5 and
Milestone 6 and Milestone 7 shall be deemed to have been achieved and the Fee
relating to each such Milestone shall be immediately due and payable by LANSTAR
to MOSAID.
ver. 1.1 34 of 35
SCHEDULE "D"
------------
ROYALTY PAYMENTS
With regard to the Agreement dated July'27, 1995 by and between MOSAID
and LANSTAR, the Royalty Payments are set forth below:
Royalty Payments are calculated from information provided by LANSTAR of
the Net Sales of the Chip for the calendar quarter.
Royalty Payments shall be calculated by multiplying the Net Sales of
the Chip by the rates set forth in the following schedule:
----------------------------------------------------------------------------------------------------------------------
PRODUCT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6
And And
before after
----------------------------------------------------------------------------------------------------------------------
The Chip 1.5% 2.5% 3.0% 3.5% 4.0% 4.0%
----------------------------------------------------------------------------------------------------------------------
Year 1 shall mean the 12 month period commencing on the date on which
LANSTAR achieves Production Volume.
Ver. 1.1 35 of 35
