Fujitsu/SMIC Confidential
Exhibit 10.4
License Agreement
FUJITSU & SMIC
THIS LICENSE AGREEMENT (the "Agreement") is made and entered into as of the 14th
day of August, 2002 (the "Effective Date") by and between FUJITSU LIMITED, a
corporation organized and existing under the laws of Japan with its principal
office at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇ ( "FUJITSU") and
Semiconductor Manufacturing International Corporation, duly organized and
existing under the laws of Cayman Islands (British), having its registered
office at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, B.W.I. and Semiconductor Manufacturing
International (Shanghai) Corporation, duly organized and existing under the laws
of the People's Republic of China, having its principal place of business at ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, the People's Republic of China
(hereinafter collectively "SMIC").
WITNESSETH THAT:
WHEREAS, FUJITSU and SMIC entered into certain Foundry Agreement on September
26, 2001 (the "Foundry Agreement"), in which FUJITSU transferred and SMIC
brought up the wafer process technology equivalent to FUJITSU'S 0.22um DRAM
("[ ]") wafer process technology under said Agreement.
WHEREAS, SMIC desires to make better use of such [ ] wafer process technology
to enhance its productivity by producing certain DRAM products and foundry
products for third party customers, and
WHEREAS, FUJITSU is willing to grant SMIC a license to do so under certain
intellectual property rights and technical information of FUJITSU,
NOW THEREFORE, in consideration of the above premises and mutual covenants
contained herein, both parties hereto agree as follows:
Article 1. Definitions
1.1 "FUJITSU Process Technology" shall mean the front-end manufacturing process
technology of 0.22-micron (what FUJITSU calls "[ ]") for manufacturing
Licensed Products (hereinafter defined) and Foundry Products (hereinafter
defined) which is owned or developed by FUJITSU, which FUJITSU has the
right to grant a license to SMIC without payment of any compensation to
third parties, and which is described in the Deliverables (hereinafter
defined) and has been brought up by SMIC under the Foundry Agreement.
1.2 "FUJITSU Product Design" shall mean the product design data for Licensed
Products which is owned or developed by FUJITSU, which FUJITSU has the
right to grant a license to SMIC without payment of any compensation to
third parties, and which is described in the Deliverables.
1.3 "Licensed Products" shall mean certain 64Mbit synchronous dynamic
random-access memory (SDRAM) devices, part number of which are listed in
Exhibit A, using FUJITSU Process Technology and FUJITSU Product Design
whether in a die form or in a wafer form.
1.4 "Foundry Products" shall mean semiconductor devices incorporating DRAM Cell
Array (hereinafter defined) therein, whether in a die or in a wafer form,
which are designed by SMIC's customer ("Foundry Customer") excluding
FUJITSU and manufactured by SMIC on behalf of the Foundry Customer by using
FUJITSU Process Technology, the photo-masks or data for making
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photo-masks in a completed form provided by the Foundry Customer. The
number of Foundry Customers shall be limited to eight (8) concurrently. Any
additional Foundry Customers exceeding eight (8) will be discussed by the
parties.
1.5 "DRAM Cell Array" shall mean certain portion of Foundry Product which
portion consists of memory cell, boundary cell, sense amplifier and word
decoder/driver, using memory cell, boundary cell, sense amplifier and word
decoder/driver portion of FUJITSU Product Design based on FUJITSU Process
Technology provided by FUJITSU (hereinafter called "FUJITSU DRAM Cell
Design").
1.6 FUJITSU Technology shall mean the FUJITSU Process Technology, FUJITSU
Product Design and FUJITSU DRAM Cell Design.
1.7 "FUJITSU Intellectual Property Rights (IPR)" shall mean all patents, patent
applications, maskwork rights, copyrights, trade secrets, know-how and
other intellectual property rights in all countries of the world which are
incorporated or embodied in FUJITSU Technology, and which are acquired by
FUJITSU or under which FUJITSU has the right to grant a license to
SMIC hereunder without payment of any compensation to third parties as of
Effective Date or thereafter during the term of this Agreement.
1.8 "Net Sales" shall mean the actual sales price charged by SMIC to (1) its
customers for Licensed Products and (2) its Foundry Customers for Foundry
Products, but the following items may be excluded: amounts invoiced to its
customers and/or Foundry Customers for returned goods for which a refund is
given, normal sales discounts actually granted, insurance fees and packing
and transportation charges, and taxes levied on lease or sale of such
Foundry Products and actually incurred and paid by SMIC and in case of
Foundry Products, any verified market testing costs and packaging cost to
be confirmed by the parties and actually borne by SMIC for testing and/or
packaging of the Foundry Products, if applicable.
1.9 "Deliverables" shall mean the documents, data, or any other form of the
FUJITSU Technology defined in Article 1.6 above to be delivered by FUJITSU
to SMIC hereunder. The details of the Deliverables are set forth in Exhibit
B attached hereto.
Article 2. Grant of License
2.1 Subject to the terms and conditions of this Agreement and the payments by
SMIC as specified in Article 4, FUJITSU hereby grants to SMIC during the
term of this Agreement a non-transferable, non-exclusive, worldwide and
royalty-bearing license to use FUJITSU Process Technology. FUJITSU Product
Design and FUJITSU IPR incorporated or embodied in FUJITSU Process
Technology and FUJITSU Product Design, to manufacture Licensed Products at
SMIC's own facilities and to market and sell such manufactured Licensed
Products.
2.2 Subject to the terms and conditions of this Agreement and payment by SMIC
under Article 4 below, FUJITSU, hereby grants to SMIC during the term of
this Agreement a non-transferable, non-exclusive, worldwide and
royalty-bearing license (i) to use FUJITSU Process Technology and FUJITSU
IPR incorporated or embodied in FUJITSU Process Technology to manufacture
the Foundry Products on behalf of the Foundry Customer at SMIC's own
facilities and to supply such manufactured Foundry Products to the Foundry
Customer, (ii) to use FUJITSU DRAM Cell Design and FUJITSU IPR incorporated
or embodied therein to manufacture DRAM Cell Array incorporated in the
Foundry Products on behalf of the Foundry Customer at SMIC's own facilities
and to supply such manufactured DRAM Cell Array to the Foundry Customer.
2.3 Prior to engaging in any foundry arrangements with any Foundry Customer,
SMIC shall inform FUJITSU in writing of such Foundry Customer's identity by
filling out an application form
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provided by FUJITSU. FUJITSU shall have the right to approve or disapprove
within five (5) working days after the receipt of the application form
filled out by SMIC. In the event of denial, FUJITSU shall provide a
thorough explanation of the disapproval to SMIC. Upon delivery to SMIC of
FUJITSU'S prior written approval, SMIC may disclose the FUJITSU DRAM Cell
Design to the approved Foundry Customers for the sole purpose of their
design of Foundry Products for exclusive manufacture at SMIC, provided that
SMIC shall require such Foundry Customers prior to disclosure to enter into
and comply with a written confidentiality agreement which FUJITSU deems
reasonable and appropriate enough to protect and keep the confidentiality
of the FUJITSU Technology. SMIC shall be responsible for the compliance by
such Foundry Customers with such written confidentiality agreement.
2.4 It is confirmed and acknowledged by the parties that licenses granted under
the Articles 2.1 and 2.2 shall not extend (i) to any design, circuit,
specification, instruction or information of Licensed Products other than
that incorporated in the DRAM Product Design or of Foundry Products other
than that incorporated or embodied in DRAM Cell Array or (ii) to any
back-end process of Licensed Products or Foundry Products.
2.5 Subject to the terms and conditions of this Agreement and payment by SMIC
under Article 4 below, FUJITSU hereby grants to SMIC during the term of
this Agreement a non-transferable, non-exclusive and worldwide license to
reproduce, translate into English language and/or revise. Deliverables in
whole or in part only as necessary for SMIC to exercise its license or
perform its obligations under this Agreement subject to prior written
consent of FUJITSU; provided that SMIC acknowledges that the copyright and
any other proprietary right on such reproductions, translations and/or
revisions shall remain proprietary to FUJITSU and further that FUJITSU
shall not be responsible in any manner for whatever claims, liabilities,
losses or damages arisen in connection with such reproductions,
translations and/or revisions. SMIC shall affix the same copyright notice
and proprietary notice as contained in the original Deliverables delivered
to SMIC hereunder to all reproductions, translations and/or revisions made
by SMIC.
2.6 The rights granted to SMIC hereunder shall not include any right to grant
sublicenses to any third party or to have Licensed Products or Foundry
Products made by any third party (except for SMIC's wholly-owned
subsidiaries located in the People's Republic of China (or Mainland China)
from time to time subject to prior written notice by SMIC to FUJITSU).
2.7 All rights not expressly granted under this Agreement are reserved to
FUJITSU and, except as expressly set forth in this Agreement, no
manufacturing, distribution or other rights are granted to SMIC with
respect to the FUJITSU Technology, the FUJITSU IPR or any other
technologies, products, or FUJITSU's name or trademarks. It is further
agreed and acknowledged by the parties that no license, copyright or other
interest is granted directly or indirectly by FUJTSU to SMIC as a result of
conveying the technical information for reference purpose only to SMIC.
2.8 SMIC further acknowledges and agrees that nothing in this Agreement is
intended to grant any license or right to any FUJITSU technical information
that has been provided to SMIC by FUJITSU, including, but not limited to,
sort test program whether in source code or object code, sort test
specification or Product specific information under the Foundry Agreement,
except otherwise specifically authorized by FUJITSU under this Agreement.
2.9 In the event any one of Foundry Customers brings or institute actions or
suits against FUJITSU for FUJITSU's alleged infringement of any
intellectual property rights of it, then all license and granted to SMIC by
FUJITSU hereunder shall terminate upon SMIC's receipt of FUJITSU's notice
for such particular Foundry Customer and any of its Foundry Product.
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Article 3. Deliverables and Technical Assistance
3.1 After Effective Date, FUJITSU shall deliver to SMIC those Deliverables not
previously delivered, including those relating to FUJITSU Product Design
and FUJITSU DRAM Cell Design in accordance with the schedule set forth in
Exhibit B attached hereto.
3.2 With respect to for Licensed Products, FUJITSU will provide the following
technical assistance with respect to FUJITSU Product Design and/or Licensed
Products.
a. [
]
b. It is agreed by the parties that they will separately enter into a
certain sort test program source code agreement under which FUJITSU
will grant license to FUJITSU sort test program to SMIC.
c. SMIC agree that the technical assistance to be provided by FUJITSU is
limited to the following area.
- To answer questions SMIC may have with respect to Device
Information Materials
- To summarize probe test results and to answer questions SMIC may
have with respect the probe test (excluding Licensed Product
with configuration of x 4 comparable to FUJITSU's [ ]) till
evaluation samples are produced, but no more than thirty (30)
days after the evaluation samples are delivered to FUJITSU
- To summarize engineering data log for evaluation samples for only
once and to answer questions SMIC may have with respect the
engineering data log about evaluation samples (excluding
Licensed Product with configuration of x 4 comparable to
FUJITSU'S [ ]) but no more than thirty (30) days after FUJITSU
provides summary of such engineering data log.
- To give consulting about process integration till evaluation
samples are produced
3.3 With respect to Foundry Products, FUJITSU will provide the following
technical assistance. SMIC agrees to minimize the technical assistance to
be provided by FUJITSU with respect to FUJITSU DRAM Cell Design. It is
expected that the technical assistance to be provided by FUJITSU to SMIC
will be mainly through tele-conferences, facsimile or e-mails within thirty
(30) days after the delivery of each Deliverables for FUJITSU DRAM Cell
Design.
3.4 At SMIC's written request and FUJITSU'S written consent, FUJITSU may
additionally provide other technical information which is not included in
the Deliverables, but which FUJITSU and SMIC agree is necessary for SMIC
for the purpose of this Agreement. Such additional technical information to
be provided by FUJITSU shall be deemed FUJITSU Technology.
3.5 SMIC agrees to minimize the technical assistance to be provided by FUJITSU
with respect to any possible additional technical information mentioned
above in Article 3.4. It is expected that the technical assistance to be
provided by FUJITSU to SMIC will be mainly through tele-conferences,
facsimile or e-mails within thirty (30) days after the delivery of each
additional technical information. Beyond the abovementioned thirty (30)
days period of time, if deemed necessary by FUJITSU for SMIC to carry out
the licenses granted hereunder, FUJITSU may provide such technical
assistance in good faith upon SMIC's request. FUJITSU will support any
reasonable requests from SMIC. No other FUJITSU technical support, such as
failure analysis, mask making, test programs, except otherwise mutually
agreed upon the parties, will be provided to SMIC with respect to Foundry
Customers designs or products or Licensed Products.
Article 4. License Fee
4.1 In consideration of the rights and licenses granted in Article 2, SMIC
shall pay FUJITSU the
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following running royalty corresponding to the following three business
arrangement:
(1) [ ]of Net Sales of all Licensed Products to its customers, and/or
(2) [ ]of Net Sales of all Foundry Products to Foundry Customers who
used to be the customers of other similarly situated FUJITSU's
licensee of FUJITSU Process Technology and FUJITSU DRAM Cell Design,
and/or
(3) [ ]of Net Sales of all Foundry Products to any new Foundry Customers
who have never be the customers of other similarly situated FUJITSU's
licensee of FUJITSU Process Technology and Fujitsu DRAM Cell Design up
to an accumulated royalty amount of [ ] thereafter. [ ] of Net Sales
of all Foundry Products to such new Foundry Customers.
4.2 Within thirty (30) days after June 30 and December 31 of each year during
the term of this Agreement, SMIC shall furnish to FUJITSU a sales statement
which FUJITSU will keep in strict confidence certified by an officer or
authorized representative of SMIC specifying the number of units and the
total amount of sales of Licensed Products to third parties and the number
of units and the total amount of sales of Foundry Products per Foundry
Customer sold to its Foundry Customers by SMIC during the preceding
calendar half-year and the total amounts of the running royalty for
Licensed Products and Foundry Products payable to FUJITSU hereunder for
such calendar half year.
4.3 Within sixty (60) days after June 30 and December 31, SMIC shall make
payments of the running royalty in U.S. dollar calculated in accordance
with Article 4.2 above to FUJITSU.
4.4 SMIC shall keep true and accurate records and books of accounts relating to
the sales and manufacture of the Licensed Products and Foundry Products
with accounting principles appropriate enough for FUJITSU to verify the
sales and other statement provided by SMIC for any particular half-year
period as set for the in Article 4.2 above for three (3) years after the
end of such half-year period ("Auditing Period"). FUJITSU shall have the
right, through a certificate independent public accountant designated by
FUJITSU and acceptable to SMIC, provided that SMIC shall not unreasonably
withhold its acceptance, to make an examination and audit at most once per
year. If such an examination reveals an underpayment of running royalty
which is more than [ ] of the total running royalty reported for each
applicable reporting period. SMIC shall be responsible for the costs of
such an examination. In case of such underpayment, SMIC shall pay the cost
of such auditing and the deficiency plus the interest calculated at the
rate set forth in Section 4.6 below.
4.5 Payments hereunder shall be made without deductions of taxes, assessments,
or other charges of any kind which may be imposed on FUJITSU with respect
to any amounts due to FUJITSU pursuant to this Agreement, and such taxes,
assessments or other charges shall be paid by SMIC. However, income taxes
or taxes of similar nature imposed on FUJITSU on account of the fixed fee
payment and the running royalty payment hereunder by the Government of the
Cayman Islands and/or the People's Republic of China or any political
subdivision thereof and paid by SMIC for the account of FUJITSU shall be
deductible from the fixed fee payment and the running royalty payment due
to FUJITSU. To assist FUJITSU in obtaining such credit, SMIC shall furnish
FUJITSU with such evidence as may be required by taxing authorities of the
Government of Japan to establish that any such taxes have been paid.
4.6 SMIC shall be liable for interest on any overdue payments, at the rate of
[ ] whichever is less, commencing on the date such payments are due until
paid.
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Article 5. Warranties and Limitation of Liability
5.1 Nothing contained in this Agreement shall be construed as :
a) a warranty or representation by FUJITSU as to the validity or scope of any
FUJITSU IPR or FUJITSU Technology;
b) conferring upon SMIC any license, right or privilege under any intellectual
property rights or other technical information of FUJITSU except the
licenses, rights and privileges expressly granted hereunder;
c) a warranty or representation that any acts licensed hereunder will be free
from infringement of patent, copyrights, maskwork rights or any other
intellectual property rights;
d) an agreement to bring or institute actions or suits against third parties
for infringement or conferring any right to bring or institute actions or
suits against third parties for infringement;
e) conferring upon SMIC any right to use in advertizing, publicity, or
otherwise any trademark, trade name or names or any contraction,
abbreviation or simulation thereof, of FUJITSU; or
f) an obligation of FUJITSU to furnish any technical information or know-how
except the obligation expressly provided in this Agreement
5.2 Notwithstanding the foregoing, in the event any claim, action, lawsuit or
proceeding is threatened, made or brought by a third party against SMIC
based on alleged infringement by Licensed Products manufactured by SMIC
arising directly from SMIC's use in accordance with and within die scope of
this Agreement of FUJITSU Technology, Deliverables and/or FUJITSU IPR
provided and/or licensed to SMIC hereunder, of any intellectual property
rights owned by any third party, FUJITSU will, at SMIC's written request
and cost, use its commercially reasonable efforts to provide SMIC with
technical assistance in connection with the defense and settlement of such
claim or action, including but not limited to providing the technical
information, provided that SMIC promptly advises FUJITSU in writing of any
such claim or action. Notwithstanding the foregoing, in no event shall
FUJITSU be required to provide any assistance for any intellectual property
right infringement claim or action by third parties arising from the
combination of the FUJITSU Technology, Deliverables and/or FUJITSU IPR
provided and/or licensed to SMIC hereunder with other technology, designs,
instructions, specification or any other information not provided by
FUJITSU where such alleged infringement would not have occurred but for
such combination.
5.3 FURTHERMORE, EXCEPT AS SPECIFIDED IN THIS AGREEMENT, FUJITSU DOES NOT MAKE
ANY WARRANTIES, WHETHER EXPRESS OR OTHERWISE, CONCERNING FUJITSU IPR OR
FUJITSU TECHNOLOGY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR WARRANTIES OF
FREEDOM FROM ERRORS OF DEFECTS OR NON-INFRINGEMENT.
5.4 IN NO EVENT SHALL FUJITSU BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL,
INDIRECT, OR INCIDENTAL DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY
AND WHETHER OR NOT FUJITSU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, ARISING IN ANY WAY OUT OF THIS AGREEMENT OR THE FUJITSU TECHNOLOGY
OR LICENSED PRODUCTS OR FOUNDRY PRODUCTS OR OTHERWISE PROVIDED PURSUANT TO
THIS AGREEMENT. IN NO EVENT SHALL FUJITSU'S LIABILITY HEREUNDER EXCEED THE
AMOUNT OF FEES ACTUALLY PAID TO FUJITSU HEREUNDER.
Article 6. Confidential Information
6.1 SMIC shall keep all and any technique, know-how, and other information,
including FUJITSU Technology, furnished or disclosed to SMIC by FUJITSU
hereunder, which are marked as
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confidential or proprietary in case such information is disclosed in
documentary or other tangible form or which are first identified as
confidential at the time of disclosure by FUJITSU in case of intangible
disclosures, such as verbal or machine readable, and are summarized in
writing for confirmation and sent to SMIC within thirty (30) days after
such disclosure and designated as confidential or proprietary (hereinafter
collectively called "FUJITSU Confidential Information") in strict
confidence and use FUJITSU Confidential Information only for the purpose
permitted under this Agreement. It is agreed and acknowledged by the
parties that the confidential information disclosed between the partied
under the NON-DISCLOSURE AGREEMENT of January 12th, 2001 by FUJITSU and
SMIC and/or the Foundry Agreement shall be deemed Confidential Information
under this Agreement.
6.2 SMIC shall not disclose any FUJITSU Confidential Information to any party
except for its officers or employees who have a need-to-know to exercise
the license or perform its obligations under this Agreement or except as
necessary for SMIC to exercise its license or perform its obligations under
this Agreement; provided that (a) SMIC shall require such its officers or
employees and any third party to whom disclosure of FUJITSU Confidential
Information is necessary to agree prior to disclosure in writing to comply
with the confidentiality obligations which FUJITSU deems reasonable and
appropriate enough to protect the FUJITSU Confidential Information under
this Agreement; a copy of which must be provided to FUJITSU by SMIC prior
to their access to FUJITSU Confidential Information, (b) SMIC shall
exercise the same degree of care to safeguard the confidentiality of such
FUJITSU Confidential Information as it would exercise in protecting the
confidentiality of similar property of its own (but in no event less than a
reasonable degree of care ); and (c) agrees to use its diligent efforts to
prevent inadvertent or unauthorized disclosure, publication or
dissemination of any FUJITSU Confidential Information.
6.3 SMIC further ensures and warrants to FUJITSU that it maintains reasonable
security and safety practices and controls in its premises sufficient to
prevent any unauthorized disclosure or use of the FUJITSU Confidential
Information or unauthorized use or misappropriation with respect to the
FUJITSU Confidential Information or direct products thereof. Such practices
shall include, but not limited to, to cause any visitor to sign in and out
each time it visits SMIC's premises, or to inspect its employees to check
if they do not bring any FUJITSU Confidential Information, direct products
including Licensed Products and/or Foundry Products with them when they
leave from SMIC's premises, or to maintain in its premises a secure
location in which any FUJITSU Confidential Information shall be stored and
which is accessible only by SMIC's employees who have a absolute need to
know the same for the performance of this Agreement
6.4 Each party hereto shall keep the existence and terms of this Agreement in
strict confidence, and shall not, directly or indirectly, disclose any of
the existence and terms of this Agreement to any third party.
6.5 Nothing in this Agreement shall prohibit SMIC from disclosing the FUJITSU
Confidential Information or the existence and terms and conditions of this
Agreement if legally required to do so by judicial or governmental order or
deposition, interrogatory, request for documents subpoena, civil
investigative demand or similar process in judicial or governmental
proceeding ("Required Disclosure"): provided that SMIC shall (i) give
FUJITSU prompt notice of such Required Disclosure prior to disclosure, (ii)
cooperative with FUJITSU in the event that it elects to contest such
disclosure or seek a protective order with respect thereto and/or (iii) in
any event only disclose the exact the FUJITSU Confidential Information or
the terms and conditions of this Agreement, or portion thereof,
specifically required by the Required Disclosure.
6.6 SMIC acknowledges that unauthorized disclosure of FUJITSU Confidential
Information would
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subject to irreparable injury and that FUJITSU shall be entitled, without
waiving any other rights or remedies to such injunctive or equitable relief
as may be deemed proper by a court of competent jurisdiction.
6.7 SMIC shall keep true and accurate books and records relating to the
disclosure of FUJITSU Confidential Information to the extent authorized
hereunder, manufacture and supply of Licensed Products and/or Foundry
Products sufficient and appropriate enough for FUJITSU to verify SMIC's
compliance with the terms and conditions of this Agreement FUJITSU has the
right, with a reasonable prior notice and during normal business hours and
SMIC's approval thereof which shall not be unreasonably withheld, to visit
the SMIC premises and conduct an audit for the purpose of verifying SMIC's
compliance with the terms and conditions, including but not limited to
confidentiality obligations, hereunder, provided that SMIC shall hot be
required, in connection with such audit, to violate its confidentiality
obligations with any third party. If any such audit should disclose
improper conduct by SMIC of the terms and condition of this Agreement, SMIC
shall immediately bring itself into compliance with this Agreement and
FUJITSU has the right to enforce SMIC and its employees the terms and
conditions of this Agreement
6.8 Notwithstanding the foregoing provision of this Article 6, the following
information shall not be deemed FUJITSU Confidential Information:
a) information that is in the public domain at the time of FUJITSU'S
release thereof to SMIC;
b) information that falls into the public domain through no act or
failure of act on the part of SMIC subsequent to the time of FUJITSU'S
release thereof to SMIC;
c) information that is already in the possession of SMIC at the time of
FUJITSU'S release thereof to SMIC;
d) information that is independently developed by SMIC without having an
access to FUJITSU Confidential Information on or after FUJITSU'S
release thereof to SMIC; or
e) information that is rightfully received by SMIC from any third party
and not under obligation of confidentiality on or after FUJITSU'S
release thereof to SMIC
6.9 The confidentiality obligation under this Article shall continue during the
term of this Agreement and for five (5) years after the cancellation or
termination of this Agreement.
Article 7. Term
7.1 This Agreement shall come into force and effect on Effective Date and shall
continue to be effective for five (5) years after Effective Date.
7.2 Subsequent to the five (5) years set forth in Article 7.1 above, the term
of this Agreement shall be extended on an annual basis, subject to the
governmental authorizations required for the extension, unless either party
hereto gives to the other party a notice to terminate this Agreement in
writing at least six (6) months prior to the end of the then current
five-year or one-year term of this Agreement
7.3 Both parties hereto may terminate this Agreement at any time for the
purpose of mutual benefit upon the mutual agreement
Article 8. Cancellation of this Agreement
8.1 Notwithstanding Article 7 above, FUJITSU may cancel this Agreement
forthwith by giving a written notice to SMIC in the event of one or more of
the following :
a) the filing by SMIC of a petition in bankruptcy or insolvency ;
b) the filing by any third party of a petition in bankruptcy or
insolvency against SMIC, unless such filing is set aside, dismissed or
withdrawn or ceased to be in effect within thirty (30) days
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from the date of such filing; -
c) the filing by SMIC of any legal action or document seeking
reorganization, readjustment or arrangement of SMIC's business under
any law relating to bankruptcy or insolvency;
d) the appointment of a receiver or bankruptcy trustee for all or
substantially all of the property of SMIC;
e) the making by SMIC of any assignment for the benefit of creditors;
f) the institution of any proceedings for the liquidation or winding up
of SMIC's business or for the termination of its corporate charter; or
g) failure to correct or cure any material breach by SMIC of any covenant
or obligation under this Agreement within thirty (30) days after
receipt by such other party of a written notice from FUJITSU
specifying such breach.
8.2 In addition to Article 8.1 above, in the event that:
a) SMIC consolidates with or mergers with or into another corporation,
partnership, or other entity, whether or not SMIC is the surviving
entity of such transaction;
b) SMIC sells, assigns or otherwise transfers all or substantially all of
SMIC's assets or semiconductor business to a third party; or
c) any substantial change takes place in controlling the ownership or
management of SMIC which affects the decision-making of SMIC's
management or operations;
and such event(s) is judged by FUJITSU after careful consideration to be
detrimental to FUJITSU, FUJITSU may cancel this Agreement upon thirty (30)
days' advance written notice to SMIC.
Article 9. Effect of Termination or Cancellation
9.1 All licenses and rights granted to SMIC under Article 2 hereof shall cease
on the date of termination or cancellation of this Agreement. (The ceasing,
under this Article 9.1, of the licenses and rights granted to SMIC under
Article 2 hereof is hereinafter called License Ceasing.)
9.2 In case of License Ceasing, SMIC shall, in accordance with the instruction
of FUJITSU, return to FUJITSU all FUJITSU Confidential Information
including Deliverables received from FUJITSU under this Agreement including
all copies, or extractions or translations thereof. The confidentiality
obligation of SMIC under Article 6 shall survive cancellation or
termination of this Agreement.
9.3 No termination or cancellation of this Agreement shall disturb or revoke
any rights or licenses with respect to any Licensed Products and/or Foundry
Products which has been manufactured or whose manufacture is completed of
the date of termination or cancellation, provided such manufactured
Licensed Products and/or Foundry Products shall be sold in accordance with
the terms and conditions of this Agreement within six (6) months after the
date of termination or cancellation of this Agreement. Sales of such
manufactured Licensed Products and/or Foundry Products shall be subject to
the running royalty payments as set forth in Article 4. Such final payment
shall be made by SMIC within thirty (30) days after the last day of such
six (6) months.
9.4 No termination or cancellation of this Agreement shall release either party
from any liability which at the time of termination or cancellation has
already accrued, or shall in any way affect the survival of any right, duty
or obligation of either party which is contemplated to be performed as of
the date of or after such termination or cancellation.
Article 10. Export/Import License
SMIC hereto shall not export or re-export, directly or indirectly, any technical
information disclosed hereunder or direct product thereof to any destination
prohibited or restricted by the export control
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regulations of Japan, People's Republic of China, the United States and any
other relevant governments, including the U.S. Export Administration
Regulations, without the prior authorization from the appropriate governmental
authorities SMIC hereby certifies that SMIC will not use technical information
supplied by FUJITSU hereunder for any purpose to develop or manufacture nuclear,
chemical, biological weapons or missiles (hereinafter "weapon of mass
destruction"). SMIC further certifies that it will not sell any products
manufactured using FUJITSU'S technical information supplied hereunder to any
third party if it knows or has reason to know that the end-user of the products
will use them for the development and/or manufacture of the weapons of mass
destruction.
Article 11. Assignment
Neither party hereto shall, operation of law or otherwise, in whole or in part,
assign or otherwise transfer this Agreement or any of rights oc obligations
created thereunder without the prior written consent of the other party. Any
attempted or purported assignment or delegation by either party without such
consent shall be void and deemed a material breach of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the parties'
permitted successors or assignees.
Article 12. Governing Law
The validity, construction, performance and enforceability of this Agreement
shall be governed in all respects by the laws of the State of California, USA.
Article 13. Arbitration
The parties hereto shall use their best endeavors to settle by mutual agreement
any disputes, controversies which may arise from, under, out of or in connection
with this Agreement. If any such disputes, controversies or differences cannot
be settled between the parties hereto, they shall be finally settled by
confidential arbitration and such arbitration shall be held in San Jose,
California, U.S.A. in accordance with the Rules of Arbitration of the
International Chamber of Commerce, except that either party may bring an action
seeking injunctive relief in a court of competent jurisdiction with respect to
breach of confidentiality obligations as set forth in Section 6. The award
rendered by the arbitrators shall be final and binding upon the parties.
Judgment upon the award may be entered in any court having jurisdiction thereof.
The prevailing party shall be entitled to recover from the losing party and all
costs (including reasonable attorney's fee) incurred in conducting the
arbitration. Unless and until the panel of arbitrators rules to the contrary,
all of the rights and obligations of each party shall continue in force and
effect during the pendency of any dispute or arbitration.
Article 14. Notice
All notices, requests, demands and other communications which shall or may be
given under this Agreement shall be made in writing by airmail or by facsimile
to the address-specified below or to such changed address as may have been
previously specified in writing by the addressed party:
TO FUJITSU: Fujitsu Limited
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇
Attention: General Manager,
System Memory Division
Electronic Devices Group
Facsimile: ▇▇-▇▇▇-▇▇▇▇
TO SMIC: Semiconductor Manufacturing International Corporation
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▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇ of China
Attention: ▇. ▇. ▇▇▇▇, Vice President
Facsimile:▇▇-▇▇-▇▇▇▇-▇▇▇▇
Unless otherwise proven, each such notice given by either party hereto shall be
deemed to have been received by the other party on the fifth (5th) business day
following the mailing date or on the second (2nd) business day following the
facsimile date.
Article 15. Severability
If any term, clause or provision of this Agreement is judged to be ineffective,
unenforceable or illegal by a court or executive body with judicial powers
having jurisdiction over this Agreement or either party hereto, such
ineffective, unenforceable or illegal term, clause or provision shall be deemed
deleted from this Agreement, and the validity of any other term, clause or
provision of this Agreement shall not be affected; provided that both parties
shall negotiate in good faith and agree to mutually satisfactory term, clause or
provision which shall replace the ineffective, unforeseeable or illegal term,
clause or provision.
Article 16. Waiver
Any failure of either party to enforce, at any time or for any period of time,
any of the provisions of this Agreement shall not be construed as waiver of such
provisions or of the right of such party thereafter to enforce such provisions.
Article 17. Headings
The headings of Articles used in this Agreement are inserted for convenience of
the reference only, and shall not be deemed to be a part of this Agreement or to
affect the meaning or interpretation of this Agreement.
Article 18. Language
This Agreement and Exhibits hereto are in English language, which language shall
be controlling in all respects.
Article 19. Entire Agreements
This Agreement constitutes the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and merges all prior
discussions between the parties hereto, and there are no other understandings,
representations or warranties of any kind except as expressly set forth herein.
Any amendment to this Agreement shall be ineffective, unless reduced to writing
signed by duly authorized representatives of both parties hereto.
Article 20. Relationship of Parties
Neither party shall have, or shall represent that it has, any power, right or
authority to bind the other party on behalf of the other party or in the other
party's name, or to assume or create any obligation or responsibility, express
or implied, on behalf of the other party or in the other party's name.
Article 21. Counterparts
This Agreement shall be executed in two counterparts, each of which shall be
deemed an original, and both of which shall be deemed to constitute one and
the same instrument.
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IN WITHNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers or representatives on the day and
year first above written.
Fujitsu Limited Semiconductor Manufacturing
International Corporation
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ Tzu ▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇
-------------------------------------- ---------------------------------------
Signature Signature
▇▇▇▇▇ ▇▇▇▇▇▇▇ Tzu ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
-------------------------------------- ---------------------------------------
Printed Name Printed Name
General Manager VP,OP II Corporate Secretary
-------------------------------------- ---------------------------------------
Title System Memory Div. Title
August 5, 2002 Aug. 14, 2002 Aug. 14, 2002
-------------------------------------- ---------------------------------------
Date Date
Semiconductor Manufacturing
International (Shanghai) Corporation
/s/ Tzu ▇▇▇ ▇▇▇▇
---------------------------------------
Signature
Tzu ▇▇▇ ▇▇▇▇
---------------------------------------
Printed Name
VP, OP II, SHIC
---------------------------------------
Title
Aug. 14, 2002
---------------------------------------
Date
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Exhibit A: Licensed Products
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Exhibit B: Deliverables
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[
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