EXHIBIT 10.3
LICENSE AGREEMENT
BETWEEN
TEXAS INSTRUMENTS INCORPORATED
AND
LANSTAR SEMICONDUCTOR CORPORATION
TABLE OF CONTENTS
ARTICLE 1 .................................................................4
DEFINITIONS OF TERMS
SUBSIDIARY .........................................................4
EFFECTIVE DATE
PATENTS ............................................................4
LANSTAR PATENTS ....................................................5
TI PATENTS
INTEGRATED CIRCUIT .................................................6
LICENSED PRODUCTS ..................................................6
NET SALES BILLED ...................................................6
ROYALTY BEARING COUNTRY ............................................8
ROYALTY FREE COUNTRY ...............................................9
ARTICLE 2 ..................................................................10
MUTUAL RELEASES
ARTICLE 3 ..................................................................11
GRANT OF LICENSES
ARTICLE 4 ..................................................................17
SUBLICENSES TO SUBSIDIARIES
ARTICLE 5 ..................................................................20
ROYALTIES
ARTICLE 6 ..................................................................24
ACCOUNTING FOR ROYALTIES AND TAXES
ARTICLE 7 ..................................................................28
TERM & TERMINATION
ARTICLE 8 ..................................................................33
MISCELLANEOUS PROVISIONS
LICENSE AGREEMENT
THIS AGREEMENT is made by and between TEXAS INSTRUMENTS INCORPORATED
("TI") a Delaware corporation having a place of business at 00000 Xxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxx, Xxxxx 00000, U. S. A., and LANSTAR SEMICONDUCTOR CORPORATION
("LANSTAR"), a Texas corporation having a place of business at 0000 Xxxxxx X,
Xxx. 000, Xxxxxxxxx, Xxxxx 00000.
WITNESSETH:
WHEREAS, TI owns or controls and has or may have rights under various
patents and utility models and applications therefor in various countries of the
world as to which LANSTAR desires to acquire licenses as hereinafter provided;
WHEREAS, LANSTAR owns or controls and has or may have rights under
various patents and utility models and applications therefor in various
countries of the world as to which TI desires to acquire licenses as hereinafter
provided;
WHEREAS, TI and LANSTAR are engaged in continuing research, development
and engineering in regard to LICENSED PRODUCTS (as hereinafter defined) and
contemplate the possibility of filing applications for the patenting of
inventions resulting therefrom;
2
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the parties hereby agree as follows:
3
ARTICLE 1
DEFINITIONS OF TERMS USED IN THIS AGREEMENT
1.1 "SUBSIDIARY" means any corporation, company or other entity more
than fifty percent (50%) of the outstanding shares or stock entitled to vote for
the election of directors (other than any shares or stock whose voting rights
are subject to restriction) of which is owned or controlled by either party
hereto, directly or indirectly, now or hereafter during the term of this
Agreement.
Any corporation, company or other entity which would at any time be a SUBSIDIARY
of LANSTAR or TI, by reason of the foregoing shall be considered a SUBSIDIARY
for the purposes of this Agreement only so long as the ownership or control,
directly or indirectly, by LANSTAR or TI, as the case may be, meets the
conditions set forth above. "SUBSIDIARIES" of LANSTAR or TI means, respectively,
all corporations, companies or other entities which qualify as a SUBSIDIARY
under the foregoing.
1.2 The "EFFECTIVE DATE" of this Agreement shall be January 1, 1996.
1.3 "PATENTS" means patents, utility models, and applications therefor
of all countries of the world, which convey legally enforceable rights, in any
country, prior to the date of expiration or termination of this Agreement.
PATENTS includes Japanese applications for patents and utility models which have
4
been published for opposition ("Koukoku"), but does not include "laid-open"
applications, of any country, such as a Japanese "Kokai" (with the understanding
that neither LANSTAR nor TI shall take any steps to enforce such "laid-open"
applications against the other until and unless they become PATENTS as defined
herein) PATENTS does not include design patents, except for any design patents
which cover packaging, or housing, for LICENSED PRODUCTS. PATENTS does not
include any of the foregoing in this Article 1.3 for which payments or other
consideration to third parties is required, for the right to grant licenses and
releases of the scope of the rights granted herein, except for payments to a
SUBSIDIARY o f TI or LANSTAR as the case may be or payments made to said third
parties for inventions made while employed by LANSTAR or TI, as the case may be,
or by such party's SUBSIDIARY.
1.4 "LANSTAR PATENTS" means PATENTS which, at any time during the term
of this Agreement, LANSTAR owns or controls and under which LANSTAR has the
right to grant releases or licenses of the scope granted pursuant to Articles
2.1 and 3.2 of this Agreement.
1.5 "TI PATENTS" means PATENTS which, at any time during the term of
this Agreement, TI owns or controls and under which TI has ;,he right to grant
releases or licenses of the scope granted pursuant to Articles 2.2 and 3.1 of
this Agreement.
5
1.6 "INTEGRATED CIRCUIT" shall mean an integral unit including a
plurality of active and/or passive circuit elements formed at least in part of
semiconductor material and associated on or in one substrate comprising the
first level of packaging for such elements and including any enveloping, cooling
and fastening means, terminal members and leads, such unit forming, or
contributing to the formation of, a circuit for performing electrical or
electronic function.
1.7 "LICENSED PRODUCTS" means an INTEGRATED CIRCUIT of a type which is
commonly recognized in the industry by any of the following acronyms: DRAMs
(including but not limited to Dynamic Random Access Memory devices, Synchronous
Dynamic Random Access Memory devices, Video RAMs (VRAMs), and Field or Frame
memories commonly referred to in the industry as FRAMs); SRAMs; ROMs; PROMs;
EPROMs; FLASH EPROMs; or EEPROMs.
1.8 "NET SALES BILLED" means:
(a) the total amount billed to any third party by LANSTAR or by any of
its SUBSIDIARIES sublicensed hereunder (excluding transactions between LANSTAR
and any of its SUBSIDIARIES or between such SUBSIDIARIES) pursuant to a bona
fide, arms length transaction unaffected by reason of affiliation or any other
cause, in connection with the sale, lease or other disposition anywhere in
6
the world, of LICENSED PRODUCTS which are royalty bearing under the provisions
of Article 5 (including sales resulting from licensed activities permitted by
Article 3.4, for which royalties are not excluded under Article 5.3), less (i)
sales, excise taxes and other taxes (other than taxes measured by LANSTAR's or
such SUBSIDIARIES' income) levied in respect to such worldwide sales, leases or
other disposition, where such amounts are included in the amount billed, (ii)
returned sales, (provided that, upon termination or expiration of this
Agreement, the royalties previously paid for such returned sales shall be
refunded to LANSTAR; otherwise, such royalties shall be offset against future
royalties), (iii) trade* or quantity discounts but only if they are expressly
documented, (iv) transportation and insurance costs where such amounts are
included in the amount billed and (v) import duties; or
(b) the fair market value of such royalty bearing products not sold,
leased or otherwise disposed of to said unaffiliated third parties but used or
incorporated by LANSTAR, or any of its SUBSIDIARIES sublicensed hereunder,
anywhere in the world, in any product or in providing services or replacements
anywhere in the world. For purposes of this Article 1.8 (b), fair market value
of a particular royalty bearing product shall be determined as follows:
Total worldwide sales revenue, less the deductions specified above in
Article 1.8(a), for the applicable
7
calendar semi-annual reporting period for a product which is the same
or similar to said particular LICENSED PRODUCT, divided by the total
units of that product sold, leased or otherwise disposed of worldwide
during said calendar semi-annual reporting period 0 unaffiliated
third parties to determine the average sales price f or such same or
similar product. Such average sales price shall be multiplied by the
total units used by LANSTAR, or by any of its SUBSIDIARIES
sublicensed hereunder, in the instance of (b) above.
For each such same or similar product that has no sales revenue anywhere
in the world for the calendar semi-annual reporting period, f air market value
shall be the same as that reported for such same or similar product in the
immediately preceding calendar semi-annual reporting period or, if there were no
value established for the immediately preceding calendar semi-annual reporting
period, then the fair market value, as determined above, shall be applied for
the nearest related standard part offered by LANSTAR that substantially performs
the same functions as such same or, similar product.
1.9 "ROYALTY BEARING COUNTRY" means the United States, ,Japan, or any
country of Europe.
8
1. 10 "ROYALTY FREE COUNTRY" means any country of the world other than
the United States, Japan, or a country of Europe.
9
ARTICLE 2
MUTUAL RELEASES
2.1 LANSTAR hereby releases, acquits and forever discharges TI and all
of its SUBSIDIARIES sublicensed hereunder from any and all claims or liability
for infringement or alleged infringement of any LANSTAR PATENTS under which a
license is herein granted by LANSTAR with respect to performance by TI or any or
all of its SUBSIDIARIES sublicensed hereunder, prior to the EFFECTIVE DATE of
acts which if performed on or after the EFFECTIVE DATE would be acts licensed
hereunder.
2.2 TI hereby releases, acquits and forever discharges LANSTAR and all
of its SUBSIDIARIES sublicensed hereunder from any and all claims or liability
for infringement or alleged infringement of any TI PATENTS under which a license
is herein granted by TI with respect to performance by LANSTAR or any or all of
its SUBSIDIARIES sublicensed hereunder, prior to the EFFECTIVE DATE of acts
which if performed on or after the EFFECTIVE DATE would be acts licensed
hereunder.
10
ARTICLE 3
GRANT OF LICENSES
3.1 TI grants and agrees to grant to LANSTAR non-exclusive licenses under any
TI PATENTS to make LICENSED PRODUCTS. T I further grants to LANSTAR the right
to use, to lease, to sell, and otherwise to dispose of, LICENSED PRODUCTS made
only by LANSTAR or its SUBSIDIARIES sublicensed pursuant to Article 4. The
grant to make LICENSED PRODUCTS shall include the right, under any TI PATENTS,
for LANSTAR to use (i) manufacturing processes; and (ii) manufacturing
equipment and test equipment and systems, made by LANSTAR or any other party;
for the purpose of making such LICENSED PRODUCTS.
3.2 LANSTAR grants and agrees to grant to TI non-exclusive licenses
under any LANSTAR PATENTS to make LICENSED PRODUCTS.
LANSTAR further grants to TI the right to use, to lease, to sell, and otherwise
to dispose of, LICENSED PRODUCTS made only by TI or its SUBSIDIARIES
sublicensed pursuant to Article 4. The grant to make LICENSED PRODUCTS shall
include the right, under any LANSTAR PATENTS, for TI to use (i) manufacturing
processes; and (ii) manufacturing equipment and TEST EQUIPMENT AND SYSTEMS made
by TI or any other party; for the purpose of making such LICENSED PRODUCTS.
3 .3 Each party hereto shall ensure that each of its
SUBSIDIARIES, (excluding any existing company acquired by a party
hereto and to which the non-acquiring party withheld its consent
pursuant to Article 4.2.), whether sublicensed hereunder or not,
grants to the other party hereto licenses under any PATENTS of such
SUBSIDIARY, wherein such licenses are identical in scope as set
forth in Articles 3.1 and 3.2, without royalty payment, except as
provided in this Agreement. If a party hereto fails to so ensure,
that party shall indemnify and hold harmless the other party hereto
against any costs or damages incurred defending against a claim of
infringement asserted by any such SUBSIDIARY, including attorney's
fees.
3.4 (a) With respect to the licenses granted in Articles 3.1
through 3.3, a license to a party:
(i)does not include the right of a party licensed herein (a "Licensed Party")
under any TI PATENTS or LANSTAR PATENTS, as the case may be, to make
LICENSED PRODUCTS either in finished or semifinished form (by way of
example, "semifinished form" includes (i) semiconductor wafers at any
stage of their manufacture, (ii) foundry services, and (iii) assembly)
for, or f or sale to, any third party to use, to lease, to sell, or
otherwise to dispose of, such LICENSED PRODUCTS under the trademark, trade
name, or other commercial indicia, of such
12
third party in any instance where the manufacturing drawings and
specifications are originated by, or on behalf of such third party. In the
event of any such activity by a Licensed Party, the exclusive remedy for the
other party for any claim of patent infringement shall be against such third
party.
(ii)does include the right to have a third party make LICENSED PRODUCTS either
in finished or semifinished form (by way of example, "semifinished form"
includes (i) semiconductor wafers at any stage of their manufacture, (ii)
foundry services and (iii) assembly) for the sole account of a Licensed
Party, but only if said LICENSED PRODUCTS are to be sold, used or leased or
otherwise disposed of, by the Licensed Party under the trademark, tradename,
or other commercial indicia, of the Licensed Party, and are made by the
third party using manufacturing drawings and specifications originated by
the Licensed Party, or originated by any third party specifically and
exclusively for the Licensed Party, as work for hire; provided however that
such right shall not extend to standard off-the-shelf products of such third
party nor to products originally designed by such third party and to which
only minor revisions are made to conform to specifications of a
Licensed Party.
13
(b) With respect to the licenses granted in Articles 3. 1 through 3.3, and
notwithstanding anything in Article 3.4 (a) (ii) to the contrary, a license to
a Licensed Party " to use, to lease, to sell, and otherwise to dispose of
LICENSED PRODUCTS made" by the Licensed Party, does include the right of the
Licensed Party to use, to lease, to sell, and otherwise to dispose of,
standard, off-the-shelf products of any third party, which then shall be deemed
LICENSED PRODUCTS, provided that such LICENSED PRODUCTS are used, leased, sold,
or otherwise disposed of, under the trademark, tradename or other commercial
indicia, of the Licensed Party, or of any of its SUBSIDIARIES sublicensed
hereunder, and further provided that in the case of LANSTAR, the royalty
provisions of Article 5 are complied with fully.
(c)With respect to the licenses granted in Articles 3.1 through 3.3, and
except as provided otherwise in Article 3.4(b), a license to a Licensed
Party "to lease, to sell, and otherwise to dispose of" LICENSED
PRODUCTS:
(i)does not include any right for the Licensed Party to act as a sales
agent, commission agent, broker or factor of products made by third
parties; and
14
(i does not include any right for a Licensed Party to act as a distributor
or reseller of products made by third parties.
(d) A party shall have the right to terminate any license (the
"License") under TI PATENTS or LANSTAR PATENTS, as the case may be,
with respect to any products manufactured by the other party
according to manufacturing drawings and specifications originated
by, or on behalf of a third party, and where said products are
primarily for the sole account of said third party, upon the
occurrence of the following conditions
(i)such third party has brought a patent infringement action against said party
based upon an activity or product which would be a LICENSED PRODUCT,
or the manufacture thereof, if done under this Agreement; and
(ii)said party provides written notice of such termination,
to the other party.
3.5 Specifically excluded from the grants of licenses pursuant
to this Agreement, is any license, direct or implied, under the U.S.
Semiconductor Chip Protection Act of 1984, the Japanese Law
concerning Semiconductor Integrated Circuit Layouts of 1985, or
equivalents thereof in any other country.
15
3.6 Specifically excluded from the grants of licenses pursuant to this
Agreement, is any license, direct or implied, under any copyrights, trademarks,
trade names, or trade secrets.
3.7 Specifically excluded from the grants of licenses pursuant to this
Agreement is any license, direct or implied, under any design patents, except
for any design patents which cover packaging, or housing, for LICENSED
PRODUCTS.
16
ARTICLE 4
SUBLICENSES TO SUBSIDIARIES
4.1 Subject to compliance with the terms and conditions of the provisions of
Article 4.2, each party hereto shall have the right to grant to any of its
SUBSIDIARIES sublicenses under the licenses granted to it pursuant to this
Agreement but without any right to sublicense further.
4.2 Each party hereto shall have the right to grant sublicenses during the
term of this Agreement pursuant to Article 4.1 only to those of its
SUBSIDIARIES which (i) shall grant to such party licenses under all PATENTS of
each such SUBSIDIARY which relate to LICENSED PRODUCTS, and (ii) shall grant to
the other party hereto rights, under said PATENTS of such SUBSIDIARY, of a
nature which results in the inclusion of all such PATENTS of each such
SUBSIDIARY within the definitions of TI PATENTS or within the definitions of
LANSTAR PATENTS, as the case may be, for the purposes of this Agreement,
provided, however, that, in the case of an existing company acquired by either
party as a SUBSIDIARY after the execution date of this Agreement, which company
has at any time prior to acquisition by such party engaged in the manufacture
of LICENSED PRODUCTS, the consent of the non-acquiring party hereto shall be
required for the acquired company to receive a license under PATENTS of the
non-acquiring party. Any such consent by the
17
non-acquiring party shall not be unreasonably withheld. Such shall be in
writing upon request of the acquiring party.
For purposes of this Article 4.2, a SUBSIDIARY of either party which
satisfies all of the following conditions ("a Spin-off SUBSIDIARY" shall not be
deemed an existing company acquired by that party after the execution date of
this Agreement:
(a) It is a SUBSIDIARY in which that party owns or controls, directly, or
indirectly through a wholly-owned SUBSIDIARY, ninety-five percent (95%)
or more of the outstanding shares or stock entitled to vote for the
election of directors (other than any shares or stock whose voting
rights are subject to restriction); and
(b)It is a SUBSIDIARY all or substantially all of whose entire assets and other
properties are owned or controlled, directly or indirectly, by that
party immediately prior to the formation of said SUBSIDIARY, which
assets and other properties, at the time of said formation, primarily
are used for the manufacture, assembly and/or test of LICENSED
PRODUCTS; and
(c)It is a SUBSIDIARY which is not intended, nor is, at least within the
remaining term of this Agreement: (i)
18
to be utilized as a vehicle for joint venture, partnership or the
like, with a third party; or (ii) to be combined, consolidated or
merged, with any third party, corporation, company or other entity,
as a result of which the Spin-Off SUBSIDIARY no longer qualifies as a
SUBSIDIARY of that party.
4.3 In the event that the relationship of a SUBSIDIARY of a
party hereto changes so that a corporation, company, or other entity
ceases to be such a SUBSIDIARY, the sublicense extended to such
corporation, company or other entity under 'this Agreement shall
automatically terminate as of the date such relationship changes, but
the licenses granted either directly or indirectly by such
corporation, company or other entity to the other party hereto under
this Agreement shall continue until expiration or termination of this
Agreement; provided, however, that such sublicense shall not
terminate, if the sole reason that such corporation, company, or
other entity ceases to be such a SUBSIDIARY of such party, is that
the ownership or control of such party becomes fifty percent (50%) or
less by reason of a public offering, in which case such sublicense
shall continue in full force and effect so long as such party
continues to be the largest percentage shareholder or owner in such
corporation, company, or other entity and any royalties due are paid
and all other terms and conditions of this Agreement are
fulfilled by such corporation, company, or other entity.
19
ARTICLE 5
ROYALTIES
5.1 In partial consideration for the licenses granted hereunder by TI to
LANSTAR during the period commencing on January 1, 1996 through the date of
expiration or termination of this Agreement, LANSTAR shall pay to TI royalties,
in United States dollars, at the rate of ten percent (10%) of NET SALES BILLED,
for all DRAMs that are directly or indirectly: used, leased, sold, imported or
otherwise disposed of by LANSTAR or any of its SUBSIDIARIES sublicensed
hereunder, in any ROYALTY BEARING COUNTRY, and at the rate of five percent (5%)
of NET SALES BILLED, for all SRAMs, ROMs, PROMs, EPROMs, FLASH EPROMS, or
EEPROMs that are directly or indirectly: used, leased, sold, imported or
otherwise disposed of by LANSTAR or any of its SUBSIDIARIES sublicensed
hereunder, in any ROYALTY BEARING COUNTRY.
5.2 With respect to LICENSED PRODUCTS which are leased, sold or
otherwise disposed of by LANSTAR in any ROYALTY FREE COUNTRY and which are not
made totally or in substantial part in a ROYALTY BEARING COUNTRY, the following
provisions shall apply:
W subject to the provisions of Article 5.2 (ii), such LICENSED PRODUCTS
shall be presumed to be indirectly used,
20
leased, sold, imported or otherwise disposed of n a ROYALTY BEARING COUNTRY
and shall therefore be subject to royalty payments as provided in Article
5.1; however (ii) LANSTAR may render such sales non-royalty bearing by
providing TI with proof that such LICENSED PRODUCTS are not, subsequently
used, leased, sold, imported or otherwise disposed of in any ROYALTY BEARING
COUNTRY. Such proof may include a certification by LANSTAR's lessee,
customer or other recipient that the LICENSED PRODUCTS are not intended to
be, nor will they be, exported to any ROYALTY BEARING COUNTRY, either
standing alone or as a part of a larger equipment. Any such proofs provided
by LANSTAR are subject to audit in accordance with the provisions of Article
6.1.
By way of example, "made in substantial part" shall encompass the manufacture
or partial manufacture of semiconductor wafers, or the process of assembly.
5.3 Royalties shall not be due from LANSTAR to TI, under Articles 5.1 through
5.2, for any LICENSED PRODUCTS (i) the manufacture, use, lease, importation,
sale or other disposition of which is not licensed hereunder; (ii) which are
supplied directly to TI or any of its SUBSIDIARIES; (iii) which are
manufactured
21
under the "have made" right of a third party licensed by TI; or (iv) obtained
from a third party by LANSTAR pursuant to Article 3.4(b); provided, that, in
the cases of (iii) and (iv), LANSTAR obtains from TI (in the case of (iii) and
with respect to the period after the EFFECTIVE DATE: prior to such manufacture,
use, lease, sale, or other disposition, by LANSTAR) written confirmation that
such third party has a license from TI permitting such activities.
5.4 The parties acknowledge that the royalty amounts and rates specified in
Article 5.1 take into consideration the value of the licenses granted to TI in
this Agreement, and the method for calculating royalties.
5.5 All royalty payments shall be made to TI in U.S. dollars by telegraphic
transfer to TI's bank account at Nations Bank of Texas, Account 'No. 125 210
4040, Dallas, Texas, or to such other financial institution and account number
as TI may designate in writing to LANSTAR. If LANSTAR fails to make such
payments on or before the required dates, a supplemental royalty equal to one
percent (1%) of the amount due shall be paid by LANSTAR for each month, or part
of a month, that such payment is late.
5.6 LICENSED PRODUCTS shall be deemed to be put into use, or sold,
leased or otherwise disposed of, when billed by LANSTAR, or a
22
SUBSIDIARY of LANSTAR sublicensed hereunder, to a third party, or upon use by
LANSTAR or any of its SUBSIDIARIES sublicensed hereunder, whichever event
occurs first. once royalty has been accounted for, for any LICENSED PRODUCT, no
further royalty shall be payable thereon under this Agreement.
23
ARTICLE 6
ACCOUNTING FOR ROYALTIES AND TAXES
6.1 All computations relating to determination of the amounts of royalties
due and payable pursuant to this Agreement shall be made in accordance with
internationally recognized and generally accepted accounting principles as
reflected in the practice of certified independent public accountants of
international reputation. Upon the reasonable request of TI, LANSTAR and its
SUBSIDIARIES sublicensed pursuant to Article 4 hereof, shall permit access to
their books and. records by an independent accounting firm selected by TI and
approved by LANSTAR, which approval shall not be unreasonably withheld, for the
sole purpose of verifying the calculation of royalties due and payable pursuant
to this Agreement. TI shall seek permission for an audit no more than once each
calendar year with respect to royalties due and payable pursuant to Article 5
and no more than once after expiration of this Agreement with respect to any
royalties due and payable after such expiration, and shall bear the costs of
the independent accounting firm. All information concerning the use, lease,
sale or other disposition of LICENSED PRODUCTS, including without limitation,
sales prices and customers and other confidential business information of
LANSTAR shall be made available to the independent accounting firm to the
extent necessary to verify the calculation of royalties; provided such
24
information shall not be made available to TI by the independent accounting
firm. Neither LANSTAR nor any of its SUBSIDIARIES shall be required to keep and
maintain such books and records for the purpose of such access for more than
one (1) year after the termination or expiration of this Agreement.
6.2 All royalties payable pursuant to Articles 5.1 and 5.2 of this
Agreement, in respect of the licenses and sublicenses granted pursuant to this
Agreement, shall be paid in respect of each calendar semi-annual period
commencing on January 1st and ending on June 30th, and commencing on July 1st
and ending on December 31st, respectively, during the term of this Agreement,
provided, however, that, for the calendar semi-annual period (or fraction
thereof) commencing with January 1st or July 1st, as the case may be, in any
calendar year during the term of this Agreement immediately preceding the date
on which the term of this Agreement shall terminate pursuant to Article 7
hereof, and ending on the date of such termination of the term of this
Agreement as aforesaid, such royalties shall be paid in respect of such
semiannual period (or fraction thereof) concerned in each case.
6.3 All royalties payable pursuant to Articles 5.1 and 5.2 of this
Agreement, shall be made on or before sixty (60) days after June 30th and
December 31st of each calendar year during the term of this Agreement, or any
renewal or extension thereof, or after
25
the last day of any shorter period as provided for in Article 6.2. Royalties
accounted for in any currency other than United States Dollars shall be
converted to United States dollars by using the prevailing rate of exchange for
such currency and United States dollars quoted in the New York Foreign Exchange
Market on the last business day of the reporting period in question.
6.4 On or before the date by which each royalty payment is to be paid under
Articles 5.1 and 5.2, LANSTAR shall furnish to TI a written statement in the
English language, certified by an authorized representative of LANSTAR,
concerning the computation of royalties due and payable to TI in respect of the
applicable calendar semi-annual period in the case of royalties due under
Articles 5.1 and 5.2. Each such certified statement shall contain information in
sufficient detail to permit the accuracy of each royalty payment due and payable
under this Agreement to be readily determined, and, in particular, shall set
forth the following:
(a) in the case of royalties due under Articles 5.1 and 5.2, the total NET
SALES BILLED for such calendar semi-annual reporting period, including
an itemized listing of the NET SALES BILLED in the currency in which
it was billed, the exchange rates used and the final United States
dollar value; and
26
(b) such additional information as TI may reasonably prescribe from time
to time to enable TI to ascertain the computation of royalties.
27
ARTICLE 7
TERM & TERMINATION
7.1 Except as otherwise provided in Article 7, this Agreement and the
licenses granted pursuant hereto shall remain in force until December 31, 2000.
At any time subsequent to December 31, 1999, either party may request
negotiations to consider the possible renewal or extension of this Agreement. In
such event, both parties agree to enter into good faith negotiations to
determine whether a mutually acceptable extension or renewal can be agreed upon
prior to expiration of the Agreement. No extension or renewal shall be effective
until a definitive agreement is executed by both parties.
7.2 if a party fails to make any payment fully or timely as required by
this Agreement, or in the event of any other material breach of this Agreement
by either party or any of its SUBSIDIARIES sublicensed hereunder, and if such
failure or other material breach is not corrected within forty-five (45) days
after written notice complaining thereof is given to the defaulting party, then
this Agreement may be terminated forthwith in its entirety by written notice to
that effect from the complaining party, provided that such termination shall not
affect any royalty or other obligation arising prior to such termination.
28
7.3 at any time during the term of this Agreement: (1 either party
consolidates with or merges with or into another corporation, company or other
entity, notwithstanding that such party may be the surviving entity of such
consolidation or merger, unless immediately after such consolidation or merger,
shareholders of such party prior to the consolidation or merger continue to own
more than fifty percent (50%) of the outstanding shares of stock entitled to
vote for the election of directors of such new or surviving entity; or (2)
either party sells or otherwise transfers substantially all of its business or
assets relating to LICENSED PRODUCTS (other than to a Spin-Off SUBSIDIARY); then
the other party may terminate this Agreement by written notice, provided that
such party exercises such right no later than thirty (30) days after receiving
written notice from the other party of the event.
7.4 The licenses granted in Articles 3.1 through 3.4 are intended to
provide each party a license under PATENTS of the other party: (1) which it
needs in order to make, use, lease, sell, or otherwise dispose of LICENSED
PRODUCTS within the scope of the rights granted in those articles; and (2) which
include the right to analyze or evaluate the concepts or techniques embodied in
the "mask work" (as defined in the U.S. Semiconductor Chip Protection Act of
1984) or the circuitry, logic flow, or organization of components used in the
mask work of a product of the other party, and to incorporate the results of
such analysis or evaluation in
29
its own original mask work. SUBSIDIARIES sublicensed under Article 4. 1 shall
acquire the same rights The licenses granted in Articles 3.1 through 3.4, and
the sublicenses permitted under Article 4.1 are not intended to permit the
licensee to make a substantially similar copy of an original mask work of the
other party.
1-1 one party or its SUBSIDIARIES, makes, uses, leases, sells, or otherwise
disposes of a LICENSED PRODUCT that includes a mask work that is a substantially
similar copy of an original mask work of the other party, or its sublicensees,
and if said original mask work is entitled to be, or is, registered under the
Law Concerning Semiconductor integrated Circuit Layouts of Japan or the
Semiconductor Chip Protection Act of the United States or any other
corresponding legislation of any other country, as the case may be, then said
other party shall upon forty-five (45) days advance written notice have the
right to terminate all licenses and sublicenses granted pursuant to Articles 3.1
through 3.4 with respect to the product resulting from the mask work in
question.
In determining whether there is a substantially similar copy of an original
mask work, the provisions of the U.S. Semiconductor Chip Protection Act of 1984
shall govern.
30
7.5 Except as provided in Article 7. 6, all licenses and sublicenses
granted pursuant to this Agreement in respect of TI PATENTS and LANSTAR PATENTS
shall cease forthwith as of the date of expiration or termination for any reason
of this Agreement.
7.6 In the event of termination of this Agreement or any of the licenses
granted under this Agreement by one party ("the Terminating Party") pursuant to
Articles 7.2, or 7.3, licenses granted to the Terminating Party pursuant to
Article 3 and the sublicenses granted to SUBSIDIARIES by the Terminating Party
pursuant to Article 4 shall survive until December 3.1, 2000.
7.7 If at any time during the term of this Agreement, any government or
agency thereof takes any action against or makes recommendations to either or
both parties requiring, directly or indirectly, formally or informally,
alteration or modification of any term or condition of this Agreement or of the
performance of the parties that materially or adversely affects one party, then
if said one party makes written request to the other party within sixty (60)
days from said action or recommendation of the government or agency thereof, the
parties shall enter into good faith negotiations with the objective of
restructuring the relationship between the parties in a manner such that the
adverse effect of said alteration or modification of this Agreement will be
minimized. if the parties cannot reach an acceptable licensing
31
arrangement within six (6) months from the date of said written request, or
within such longer period of time as mutually agreed upon, either party shall
have the right to terminate this Agreement forthwith in its entirety by giving
written notice to that effect to the other party. All other provisions of this
Article 7 notwithstanding, in the event this Agreement is terminated pursuant to
this Article 7.8 all rights and licenses under TI PATENTS and LANSTAR PATENTS
shall cease and terminate. Each party agrees that in the event of such
termination, neither party will incur any liability to the other party for any
alleged default or breach in the performance of this Agreement arising from the
exercise of the termination right.
7.8 For the convenience of the parties hereto, this Agreement is made in
consideration of the exchange of patent licenses under a group of patents of
each party. A determination or action by a court of competent jurisdiction,
regulatory authority or governmental agency: (i) finding that one or more of the
patents of one party are invalid; or (ii) granting a temporary or permanent
injunction or restraining order under one or more of the patents; shall not give
rise to a right of termination by either party nor shall such determination or
action be regarded as justification for a change in the royalty rates.
32
ARTICLE 8
MISCELLANEOUS PROVISIONS
8.1 (a) Each party represents and warrants that it has the right to grant to
the other the licenses granted hereunder and to give the releases provided in
this Agreement.
(b) LANSTAR represents and warrants that, as set out in Articles 5 and
6 of this Agreement, royalties or other monies payable hereunder will be timely
paid directly to TI pursuant to such articles, and will not be paid to any
other person, firm or entity, including, without limitation, any court, court
clerk, escrow fund or escrow agent.
(c) The parties acknowledge that they have bargained f or the right to
use all of the PATENTS licensed herein but are free not to use any if they so
choose; LANSTAR's full royalty obligation, however, exists regardless of the
number of patents used.
(d) The representations and warranties set out in this Article 8.1
survive the execution and EFFECTIVE DATE of this Agreement and are binding on
both parties during the entire term of this Agreement. in addition to other
remedies available under law,
33
equity or this Agreement, breach of any such representations or warranties
constitutes a material breach of this Agreement.
8.2 Each party recognizes that this Agreement shall remain fully executory
until executed by both parties.
8.3 It is recognized that TI, LANSTAR or their SUBSIDIARIES may have
contracted, or may after the EFFECTIVE DATE, contract with a third party who is
not a party to this Agreement, such as a national or other sovereign
government, governmental agency or intergovernmental authority, to do work
financed. by such third party and to assign to such third party its/their right
to grant, or may now or hereafter be restrained by such third party from
granting, licenses (other than by a parent to its SUBSIDIARIES or by a
SUBSIDIARY to its parent or by a SUBSIDIARY to another SUBSIDIARY of the
parent) under patents for inventions arising out of such work. The inability,
for such a reason, of any of the parties hereto, or any one of their
SUBSIDIARIES, to grant 'the licenses herein agreed to be granted shall not be
considered a breach of this Agreement (but may result in application of various
provisions in Article 3).
34
8.4 Nothing contained 4 n this Agreement shall be construed as:
(a) a warranty or representation by any of the parties to this Agreement as
to the validity or scope of any PATENTS; or
(b) a warranty or representation that any manufacture, sale, lease, import,
use or other disposition of LICENSED PRODUCTS hereunder will be free
from infringement of patents, or utility models, copyrights, mask work
rights, trade secrets, trademarks, trade names, or the like, of third
parties; or
(c) an agreement to bring or prosecute actions or suits against third
parties for infringement or conferring any right to bring or prosecute
actions or suits against third parties for infringement; or
(d) conferring any right to use in advertising, publicity, or otherwise, any
trademark, trade name or names, or any contraction, abbreviation or
simulation thereof, of either party; or
(e) conferring by implication, estoppel or otherwise, upon any party
licensed hereunder, any license or other right under any patent or
utility model, copyright, mask work
35
right, trade secret, trademark, trade name or the like, except the
licenses and rights expressly granted hereunder. For example, no
release or license is granted by either party, or any SUBSIDIARY
sublicensed hereunder, either directly or by implication, estoppel or
otherwise, under any patent, release, waiver, license, or other right
hereunder, to either party or third parties acquiring product from
either party or any SUBSIDIARY sublicensed hereunder for the
combination of separate LICENSED PRODUCTS with each other or with any
other product. This is meant to exclude from the license granted,
products that utilize a LICENSED PRODUCT or which utilize a plurality
of separate LICENSED PRODUCTS; or
(f) an obligation to furnish any technical assistance or information or
knowhow.
9.5 This Agreement and the licenses granted herein shall inure to the benefit
of the parties and, insofar as is provided in this Agreement, to SUBSIDIARIES
of the parties hereto. Neither party nor any SUBSIDIARY sublicensed hereunder
shall assign or transfer any of its rights, privileges or obligations hereunder
without the prior written consent of a duly authorized representative of the
other party.
36
8.6 Neither party nor any of its SUBSIDIARIES sublicensed hereunder shall be
required by anything contained in this Agreement to file in any country an
application for patent on any invention, or to secure any patent, or once
having filed an application for patent or obtained a patent, to maintain the
patent application or patent in force.
8.7 This Agreement is in the English language only, which language shall be
controlling in all respects, and all versions hereof in any other language
shall be for accommodation only and shall not be binding upon the parties
hereto. All communications to be made or given pursuant to this Agreement shall
be in the English language.
8.8 All notices required or permitted to be given hereunder shall be in
writing and shall be valid and sufficient if dispatched by registered airmail,
postage prepaid, in any post office in the United States, or by facsimile with
receipt confirmed, addressed as follows:
If to TI: Texas Instruments Incorporated
13500 North Central Expressway
Post office -Box 000000
Xxxx Xxxxxxx 000
Xxxxxx, Xxxxx 00000
U. S. A.
Attention: Manager, Patent Licensing
If to LANSTAR: Lanstar Semiconductor Corporation
0000 Xxxxxx X, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
37
CONFIDENTIAL
Attention: President
Either party may change its address by a notice given to the other party in
the manner set forth above. Notices given as herein provided shall be
considered to have been given fourteen (14) days after the mailing thereof or
upon facsimile receipt confirmation, as the case may be.
8.9 No oral explanation or oral information by either party hereto shall
alter the meaning or interpretation of this Agreement.
No modification, alteration, addition or change in the terms hereof shall be
binding on either party unless reduced to writing and executed by a duly
authorized representative of each party.
8.10 This Agreement and matters connected with the performance thereof shall
be construed, interpreted, applied and governed in all respects in accordance
with the laws of the State of Texas, United States of America, applicable to
agreements made and to be performed entirely within that state.
8.11 Neither party nor its SUBSIDIARIES sublicensed hereunder shall commence
any litigation against the other arising out of this Agreement or the
termination thereof as to any matter except in a Federal Court located in the
State of Texas. Each party consents to jurisdiction over it by such court.
38
8.12 The parties shall keep the terms of this Agreement confidential and
shall not now or hereafter divulge the same or any part thereof to any third
party except:
(a) with the prior written consent of the other party; or
(b) to any governmental body or judicial entity having jurisdiction and calling
therefor; or
(c) as otherwise may be required by law and the rules or regulations,
pertaining to such laws, including but not limited to, the U.S. Securities
and Exchange Commission; or
(d) to legal counsel representing either party.
Prior notification of any disclosure under a court order shall be provided by
the disclosing party to the non-disclosing party.
All reasonable efforts to preserve the confidentiality of the terms of this
Agreement shall be expended by the disclosing party in complying with such an
order, including a protective order to the extent possible.
8.13 Should any clause, sentence, or paragraph of this Agreement judicially
be declared to be invalid, unenforceable, or void, such decision shall not have
the effect of invalidating or voiding the remainder of this Agreement. The
parties agree that the part or parts of this Agreement so held to be invalid,
39
unenforceable, or void shall be deemed to have been stricken, and the remainder
shall have the same force and effect as if such part or parts had never been
included herein.
8.14 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter of this Agreement and merges all
prior discussions between them. Neither of the parties shall be bound by any
modification of this Agreement, other than as expressly provided in this
Agreement or as duly set forth on or subsequent to the date hereof in writing
and signed by a duly authorized representative of both parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement, on the dates below indicated.
TEXAS INSTRUMENTS INCORPORATED LANSTAR SEMICONDUCTOR
CORPORATION
BY: BY:
------------------------- ---------------------
Xxxxxx Xxxxxxx Xxxxx X. Xxxxx
TITLE: Sr. Vice President Corp. Staff TITLE: President
DATE: 20 November 1995 DATE: 17 November 1995
40
