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EXHIBIT 10.13
*CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AND THE NON-PUBLIC
INFORMATION HAS BEEN FILED SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
DEVELOPMENT AND LICENSING AGREEMENT
This agreement ("Agreement") is entered into and effective as of March 3, 1999
("Effective Date") by and between Taiwan Semiconductor Manufacturing Co., Ltd.,
a company duly incorporated under the laws of the Republic of China ("ROC"),
having its principal place of business at No. 121, Park Avenue 3, Science Based
Industrial Park, Hsin-Chu, Taiwan, ROC ("TSMC"), and VIRAGE LOGIC, Corp.,
("VIRAGE"), a company duly incorporated under the laws of Delaware, USA, having
its principal place of business at 46824 Lakeview Blvd., Fremont, California
94538 USA.
WHEREAS, VIRAGE has the expertise in developing capability in designing
sub-micron memory bit cells, memory compilers, and other silicon intellectual
property; and
WHEREAS, TSMC desires to have VIRAGE license to TSMC and TSMC's customers an
existing and/or future development of sub-micron memory bit cells and memory
compilers, including, but not limited to, based on TSMC 0.25um and 0.18um
technologies (the "Library") for TSMC's manufacturing services, and to have
VIRAGE extend the Library to its customers;
WHEREAS, Parties desire to jointly determine the manufacturability of
TSMC's Bit Cells ("TBC");
This Agreement shall serve to:
(i) confirm certain agreements that TSMC and VIRAGE have reached
over the past several months regarding certain elements of the
TSMC library Program. The TSMC Library Program shall mean the
design, maintenance, sales, distribution and support by VIRAGE
of certain library cells (the "Licensed Product"). TSMC Cells
are defined as certain library cells contained in the Licensed
Product, including but not limited to Exhibits A & B, which are
solely owned by TSMC as listed in Exhibit D. The Licensed
Library contains the Licensed Products and TSMC Cells ("Licensed
Library").
(ii) identify a) the legally binding terms which are as provided
below in this Agreement; and b) certain non-binding and open
issues relating to the TSMC Library Program (as listed in the
Exhibit F), and the parties agree to work together in good faith
to find mutually satisfactory resolutions to open issues
identified herein.
NOW, THEREFORE, the parties hereto agree as follows:
I. DEVELOPMENT AND DELIVERY OF THE LIBRARY EXTENSIONS
1.1 VIRAGE agrees to use good faith and reasonable efforts to develop for
TSMC the Library according to specifications as provided in Exhibit B
("Specifications") of this document. VIRAGE agrees to use good faith and
reasonable efforts to provide to TSMC the set of deliverables outlined
in Exhibit A and Exhibit B Specifications ("Deliverables"). The scope of
this Agreement shall include 0.25um and 0.18um
<PAGE> 2
technologies, which may be extended to future technologies by mutual
agreement in writing.
1.2 VIRAGE agrees to use good faith and reasonable efforts to provide the
set of Deliverables according to the schedule and milestones as provided
in the Exhibit C ("Schedule"). Both TSMC and VIRAGE shall conduct
engineering reviews to track the progress on a weekly basis. For every
milestone set forth in Exhibit C, VIRAGE commits to allocate resources
to meet the Schedule.
1.3 TSMC agrees to use good faith and reasonable efforts to provide early
access to the technical information, including Design Rules and SPICE
Models to VIRAGE for the purpose of developing the Library. TSMC will
also provide when available, the DRC command file for the given process,
if appropriate, to VIRAGE for verification of design rule
interpretations. VIRAGE understands that there may be potential changes
to information provided, and TSMC agrees to use good faith and
reasonable efforts to keep VIRAGE continuously updated on the most
current version of information. Provided, however, that both parties
understand that the scope of such changes may result in VIRAGE being
unable to meet the Schedule.
1.4 Library Deliverables will be an integration of (but not limited to)
TSMC-specific memory compilers using the single-port TSMC-supplied bit
cells (only after VIRAGE has reviewed the TSMC bit cell and finds it
technically superior to VIRAGE's bit cells from an electrical and layout
standpoint), and TSMC-specific memory compilers for dual-port, two-port
and ROM compilers which contain bit cells developed by VIRAGE. Library
Deliverables shall also pass TSMC's design rule check (DRC) procedure.
TSMC will consider VIRAGE's suggestions with respect to design rule
modifications and interpretations.
1.5 VIRAGE and TSMC shall hold joint periodic technical discussions in order
to improve the probability that TSMC-specific library versions are
industry-competitive. The objectives and schedules of such technical
discussions are set forth in Exhibit G.
1.6 Parties shall mutually agree on an auditable quality assurance ("QA")
procedure to ascertain that VIRAGE's deliverables meet the Specification
prior to the delivery of the Library Products. VIRAGE agrees to perform
the QA Procedure on the Library Deliverables and promptly provide the
results to TSMC for its review. TSMC will review the Library
Deliverables, then provide authorization for customer release. Both
Parties agree to make the QA Procedure and results thereof available to
either party's potential customers promptly upon request.
1.7 The Schedule shall be appropriately and equitably extended to account
for any delays resulting from changes due to either party, and the
non-changing party shall have no liability as a result of Schedule
change.
II. MODIFICATION AND REVISION
2.1 VIRAGE shall revise the Library at its own expense and at no charge to
TSMC in the event that TSMC makes changes (not limited to) to design
rules and process parameters
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which TSMC at its discretion deems significant. The adjusted VIRAGE
Deliverables shall be shipped to TSMC after QA verification, upon a
mutually agreed-upon schedule as set forth in Exhibit G.
2.2 VIRAGE shall revise the design kits in the Library at its own expense in
the event of design tool revisions and changes which are deemed
significant but customer demand and/or after technical review as set
forth in Exhibit G and agreed to by VIRAGE and TSMC. The adjusted VIRAGE
Deliverables shall be shipped to TSMC after VIRAGE's QA verification,
upon a mutually agreed Schedule.
2.3 VIRAGE shall have no right to modify, alter or improve any cell in TSMC
Cells and TSMC shall remain the sole owner to all rights to such TSMC
Cells. TSMC grants VIRAGE the non-exclusive, non-transferable,
worldwide, royalty-free right and license to reproduce, and distribute
TSMC Cells, under the terms set forth in Section 5.1, for the term of
this Agreement, solely for the purpose of evaluation and for the design,
place-and-route and tape-out of integrated circuits to be manufactured
at TSMC owned or controlled manufacturing facilities. Such distribution
of TSMC Cells by VIRAGE shall be consistent with the manner in which
VIRAGE distributes the Licensed Products under TSMC Library Program
(e.g., provided under the same License Agreements, etc.). TSMC will use
good faith and reasonable efforts and reasonable efforts to correct any
bugs as necessary to have VIRAGE meet its Support Agreement(s).
III. OWNERSHIP AND LICENSE
3.1 As between the parties, VIRAGE exclusively shall have all right, title
and interest [including all patent rights, copyrights, trade secret
rights, mask work rights and other rights throughout the world
(collectively "Intellectual Property Rights")] in any inventions,
intellectual property, trademarks, works-of-authorship, mask works,
ideas or information made or conceived or reduced to practice by VIRAGE
or by VIRAGE jointly with TSMC and/or other third parties in the course
of development of memory bit cells, memory compilers, excepting only
those TSMC Cells listed in Exhibit D, or others as listed in Exhibit B
under this Agreement.
3.2 As between the parties, TSMC exclusively shall have all right, title and
interest [including all patent rights, copyrights, trade secret rights,
mask work rights and other rights throughout the world (collectively
"Intellectual Property Rights")] in any inventions, works-of-authorship,
processes, mask works, ideas or information made or conceived or reduced
to practice by TSMC or by TSMC jointly with third parties in the course
of development of those specifically identified library cells as listed
in Exhibit D, including but not limited to the TSMC single port memory
bit cells under this Agreement. Exhibit D shall be modified from time to
time upon mutual agreement between parties.
IV. CONSIDERATION
4.1 In consideration of the 0.18um Licensed Products developed herein, TSMC
shall pay to VIRAGE $*** as a non-refundable development fee which
shall be net of
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any taxes and withholdings, excepting only any taxes due on VIRAGE's
income, and where the payment terms are as follows:
****
4.2 TSMC shall also pay to VIRAGE a Pay-for-Performance compensation rate as
specified herein. Pay-for-Performance compensation payments will be
strictly limited based on the wafers shipped and accepted through TSMC
that contain third party libraries from vendors participating in the
TSMC Library Program where these libraries conform to the specifications
identified by TSMC as part of this Agreement. TSMC shall not pay any
Pay-for-Performance compensation for either engineering lots or any test
chip wafers.
4.3 Parties understand and agree that TSMC is in the process of evaluating
Pay-for-Performance compensation methods such as area-based
partitioning. This evaluation may alter the
Pay-for-Performance/compensation methods stated herein. Notwithstanding
the above, both Parties agree that the method of Pay-for-Performance
compensation payments will be as determined below:
A) 1/N x applicable percentage, where N = number of third party
library supplies identified on one tape-out.
B) Area-based partitioning model where the percentage of the
Pay-for-Performance compensation is based directly upon the
percent of the core die are occupied by the Library.
4.4 Pay-for-Performance Table. Parties agree that the total TSMC
Pay-for-Performance percentage compensation is based upon accounts
receivables of wafers ordered through TSMC that contains third party
libraries from vendors participating in the TSMC Library Program where
these libraries conform to the specifications identified by TSMC as part
of this Agreement. VIRAGE shall receive compensation for TSMC for TSMC
cells that contain the Library Program. Pay-for-Performance compensation
percentage rates are applicable to Licensed Library products which are
TSMC-specific libraries for both 0.25um and 0.18um technologies.
Pay-for-Performance TABLE for 0.25um technology:
<TABLE>
<CAPTION>
Year 1998 1999 2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Compensation ** ** ** ** ** ** ** **
</TABLE>
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<PAGE> 5
Pay-for-Performance TABLE for 0.18um technology:
<TABLE>
<CAPTION>
Year 1998 1999 2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Compensation ** ** ** ** ** ** ** **
</TABLE>
4.5 TSMC shall be obligated to pay royalties as stated herein to VIRAGE for
any TSMC customer design that is: (a) designated at time of production
release to TSMC to TSMC's customer as containing VIRAGE's Library
Products that have been so licensed under TSMC's Library Program, and
(b) where such designs are manufactured by TSMC. In the event that a
customer designates to TSMC that multiple Licensed Products vendors
contributed to the design, the royalties shall be distributed among
these multiple Licensed Products vendors as stated in Section 4.3
4.6 TSMC agrees to use good faith and reasonable efforts to require that
customers declare all designs as either "containing such Licensed
Products" or "NOT contained such Licensed Products." TSMC's sole
liability shall be limited to recording its customers' assertions
regarding such Licensed Products. Notwithstanding the above, if any of
TSMC's customers notifies TSMC of errors or omissions discovered, TSMC
shall pay VIRAGE the owed applicable royalties as stated under the terms
of this Agreement.
4.7 TSMC and VIRAGE shall work together to develop an auditing system to
verify the Pay-for-Performance compensation structure without violating
the confidentiality of TSMC's and VIRAGE's customers.
V. DISTRIBUTION OF THE LIBRARY
5.1 During the terms of this Agreement, VIRAGE shall have non-exclusive and
non-transferable rights to reproduce and distribute the Licensed Library
to third party entities ("Licensed Library Recipients") without any
payment of royalties or other fees to TSMC. VIRAGE agrees that Tm bit
cells may only be shipped with memory compilers developed specifically
for the TSMC bit cell and shall not be distributed by themselves.
5.2 VIRAGE agrees to sign "License Agreements" with the Licensed Library
Recipients' use of the Licensed Library. VIRAGE understands and agrees
to inform Licensed Library Recipients in the License Agreements that the
relationship between TSMC and the Licensed Library Recipients will be
purely for foundry services provided by TSMC, and the Licensed Library
Recipients must enter into a separate agreement with TSMC to obtain
foundry services from TSMC.
5.3 TSMC and VIRAGE shall use their best efforts to reach a mutual agreement
on the forms of the License Agreements immediately upon signing of this
Agreement. VIRAGE shall have the right to make changes from time to time
to the License Agreements so long as any such changes do not materially
alter (1) the terms and conditions provided in the mutually agreed
version of the License Agreements approved by TSMC, and (2) the basic
license restriction that the Licensed Library Recipients may use the
Licensed Library
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<PAGE> 6
only for evaluation and for the design, place-and-route and tape-out of
integrated circuits to be manufactured solely at TSMC or its designated
manufacturing facilities.
5.4 Parties agree that VIRAGE may make changes to the License Agreements on
a case-by-case basis for particular Licensed Library Recipients that do
materially alter the terms and conditions set forth; provided that
TSMC's consent has been obtained in writing (Email with appropriate
acknowledgment and facsimile will be acceptable forms of writing for
such consents).
5.5 VIRAGE shall be responsible for providing Licensed Library Recipients
the support for the Licensed Library distributed by VIRAGE. VIRAGE shall
be free to set all terms and conditions for support, maintenance,
engineering and customization services provided by VIRAGE to any
Licensed Library Recipients with no accounting to TSMC of any such fees.
5.6 TSMC shall have the right to distribute the Licensed Library for TSMC or
its designated subcontractors' internal designs, including ASIC's;
provided that TSMC shall execute a standard VIRAGE License Agreement as
described in this Agreement. If required, support for TSMC's internal
ASIC use of the Licensed Library can be purchased at VIRAGE's standard
fees.
5.7 Upon written request by TSMC, VIRAGE will license and distribute the
Licensed Library to (a) other third party design service providers
creating designs that will be manufactured solely at TSMC or TSMC
designated facilities; (b) distribute as necessary to Licensed Products
developers; or (c) distribute to fulfill TSMC's current contractual
obligations and to facilitate future contractual obligations. The terms
of these aforementioned licenses will be mutually agreeable to TSMC,
VIRAGE and the third party on a case-by-case basis.
5.8 Both VIRAGE and TSMC shall actively promote the Library to customers of
both parties ("Customers") using VIRAGE as the distributor. All Library
licensees will be granted a license for unlimited and/or limited use of
the Licensed Library and Deliverables solely for tape-out to TSMC.
5.9 VIRAGE shall provide TSMC a monthly update of all Licensed Library
Recipients who receive Front-End Views and/or Back-End Views. VIRAGE
shall not directly or knowingly indirectly make available the Licensed
Library to any company on the list provided in Exhibit E without first
obtaining TSMC's consent in writing (Email and facsimile will be
acceptable forms of writing for such consents).
5.10 Both parties will jointly hold quarterly meetings to review performance
as a participant in the TSMC Library Program beginning from the
Effective Date. The Parties will assign liaison representatives at both
corporate and regional levels.
5.11 TSMC, as the sponsor of the TSMC Library Program, agrees to use good
faith and reasonable efforts to manage the program for the useful life
of the 0l25 and 0.18 processes in the Licensed Libraries. VIRAGE will
incur large, uncompensated, up-front costs, and possible loss of
short-term business that can only be recovered through the
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aforementioned long-term Pay-for-Performance payments. If, due to
changes in the business environment or other reasons, TSMC chooses to
alter the terms of this Agreement, then TSMC agrees to use good faith
and reasonable efforts to give VIRAGE at least one year's notice before
any of the terms in Section IV of this Agreement can be altered so that
VIRAGE can renegotiate its agreements with Customers. Notwithstanding
the above, the one-year notice period will be waived due to any
unforeseen circumstances to TSMC.
VI. TERMS AND TERMINATION
6.1 This Agreement shall have an initial term of five (5) years from the
Effective Date, and shall automatically be renewed for successive one
(1) year terms, unless either Party gives sixty (60) days' written
notice of cancellation to the other Party prior to the expiration of the
term (including the initial term) then in effect.
6.2 This Agreement may be terminated early by either Party if the other
Party (1) breaches any material provision of this Agreement and does not
cure or remedy such breach within thirty (30) days after receipt of the
written notice of the breach from the other Party; (2) becomes the
subject of a voluntary or involuntary petition in bankruptcy or any
proceeding relating to insolvency, receivership, liquidation, or
composition for the benefits of creditors if such petition or proceeding
is not dismissed with prejudice within sixty (60) days after filing.
Termination of this Agreement shall be effective thirty (30) days after
issuance of a written notice of termination to the other Party by the
non-defaulting party.
6.3 Either Party without any cause may also terminate this Agreement early
by giving a ninety (90) day written notice to the other Party prior to
the desired termination date.
6.4 Termination of this Agreement for any reason shall not affect (1) the
obligations accruing prior to the effective date of termination; and (2)
any obligations under Sections 3, 4, 7, 8, 9, 10 and current customer
engagements hereof, all of which shall survive termination or expiration
of this Agreement.
6.5 Upon the effective date of termination, VIRAGE shall cease to use and
shall either destroy or return to TSMC all of the TBC documentation and
data in VIRAGE's possession or under VIRAGE's control. Any related
documentation and copies thereof, in whole or in part, in all forms of
media, together with VIRAGE's written certification by a duly authorized
officer, that the TBC documentation and data stored in any kind of forms
in VIRAGE's possession or under VIRAGE's control, and all related
documentation and all copies thereof in whole or in part are no longer
in use and have been returned to TSMC or destroyed.
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6.6 Termination of this Agreement under this Section shall be in addition
to, and not a waiver of, any remedy at law or in equity available to
either Party arising from the other Party's breach of this Agreement.
VII. DISCLAIMER OF WARRANTEE
7.1 Limited Warranty. VIRAGE warrants for a period of twelve (12) months
from delivery of the Licensed Library to TSMC that such Licensed
Library, as delivered, will be free from defects in the media and will
substantially conform to the Specifications. In the event of
nonconformance of the Licensed Library, TSMC shall promptly notify
VIRAGE and provide VIRAGE with all available information in written or
electronic form so that VIRAGE can reproduce the Error. VIRAGE's sole
obligation is to undertake reasonable commercial efforts to correct the
Errors reported to VIRAGE in writing, or in electronic form during the
warranty period. VIRAGE'S SOLE LIABILITY AND LICENSEE'S EXCLUSIVE REMEDY
WITH RESPECT TO BREACH OF THE FOREGOING LIMITED WARRANTY WILL BE LIMITED
TO ERROR CORRECTION AND PRODUCT REPLACEMENT, OR IF NEITHER IS IN
VIRAGE'S OPINION COMMERCIAL FEASIBLE, REFUND OF THE NRE DEVELOPMENT FEE
AND PAY-FOR-PERFORMANCE COMPENSATION PAYMENTS RECEIVED BY VIRAGE BY
TSMC.
7.2 DISCLAIMER. EXCEPT FOR THE ABOVE EXPRESS LIMITED WARRANTY, THE LICENSED
LIBRARY, KNOW-HOW, AND DOCUMENTATION ARE LICENSED "AS IS," AND VIRAGE
MAKES NO OTHER WARRANTIES EXPRESS, IMPLIED, OR STATUTORY OR OTHERWISE
REGARDING THE LICENSED PRODUCT, DESIGN TECHNIQUES OR DOCUMENTATION.
VIRAGE SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM A COURSE OF
DEALING OR USAGE OF TRADE.
VIII. LIMITATIONS OF LIABILITY
8.1 Direct Damages. VIRAGE'S TOTAL LIABILITY FOR DIRECT DAMAGES UNDER THIS
AGREEMENT SHALL NOT EXCEED THE NRE DEVELOPMENT FEE AND
PAY-FOR-PERFORMANCE COMPENSATION PAYMENTS RECEIVED BY VIRAGE FROM TSMC.
TSMC'S TOTAL LIABILITY FOR DIRECT DAMAGES UNDER THIS AGREEMENT SHALL NOT
EXCEED $50,000 AS STATED IN THIS AGREEMENT.
8.2 Consequential Damages. EXCEPT AS PROVIDED IN SECTION 7 ABOVE, UNDER NO
CIRCUMSTANCES, SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES ARISING IN ANY WAY OUT OF THIS AGREEMENT OR IN
THE USE OF THE LICENSED PRODUCT, DESIGN TECHNIQUES AND DOCUMENTATION,
HOWEVER CAUSES (WHETHER ARISING UNDER A THEORY OF CONTRACT, TORT
(INCLUDING NEGLIGENCE); OR OTHERWISE); INCLUDING, WITHOUT LIMITATION,
DAMAGES FOR LOST PROFITS, LOSS OF DATA, OR COSTS OF
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<PAGE> 9
PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES. THE LIMITATIONS ON EITHER
PARTY'S LIABILITY SET FORTH IN THIS SECTION VIII SHALL APPLY,
NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY OF THE LIMITED
REMEDIES SET FORTH IN SECTION 8.1 ABOVE.
IX. PROPRIETARY INFORMATION
9.1 Both Parties agree to maintain Property Information in confidence, not
to make use thereof other than for the performance of this Agreement, to
release it only to employees who have a reasonable need to know the
same, and to release or disclose it to any third parties, without prior
written consent of the disclosing Party. Each Party hereto shall provide
proper and secured storage for papers, return the original and all
copies of tangible Proprietary Information.
9.2 All Proprietary Information and any copies thereof remain the property
of the disclosing Party, and no license or other rights is granted or
implied hereby. The receiving Party shall, upon the disclosing Party's
request, return the original and all copies of tangible Proprietary
information.
9.3 This Section shall survive the termination or expiration of this
Agreement for a period of three (3) years.
X. PATENT AND COPYRIGHT INFRINGEMENT
10.1 TSMC represents that TSMC Cells are and will be developed by TSMC or its
subcontractors and such TSMC Cells shall not infringe upon or
misappropriate the patents, mask work rights, copyrights, trade secrets
or other proprietary rights of other intellectual property of third
parties and that it has the right and authority to convey the TSMC Cells
as set forth herein.
10.2 TSMC shall, at its own expense, indemnify, hold harmless, and defend or
at its option, settle any claim, suit or proceeding brought by a third
party against VIRAGE for infringement of any third party's proprietary
rights or other intellectual property right issued in the United States,
Taiwan, Japan or the European Union, by virtue of VIRAGE's authorized
use, reproduction, distribution and sublicensing of any of the TSMC
Cells pursuant to the terms of this Agreement and shall pay any
settlement amounts or damages finally awarded in such claim, suit or
proceeding; provided that VIRAGE: (a) promptly notifies TSMC in writing
of such claim, suit or proceeding; (b) gives TSMC sole control over the
defense and/or settlement of such claim, suit or proceeding; and (c)
fully cooperates and provides all available information, assistance and
authority to defend or settle the claim, suit or proceeding. TSMC shall
not be liable for any costs, expenses, damages or fees incurred by
VIRAGE in defending such action or claim unless authorized in advance in
writing by TSMC.
10.3 Any action to be brought to prevent or enjoin any third party from
infringement of any patent, copyright or other proprietary rights of
TSMC with respect to TSMC Cells shall be brought exclusively by TSMC or
TSMC's designee, in TSMC's sole discretion and as between TSMC and
VIRAGE, at TSMC's sole cost and expense.
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<PAGE> 10
10.4 If the TSMC Cells are, or in TSMC's opinion are likely to become the
subject of a claim, suit or proceeding alleging infringement, TSMC will
use good faith and reasonable efforts: (a) to procure at not cost to
VIRAGE, the right to continue using, reproducing, distributing and
sublicensing the TSMC Cells; (b) to replace or modify the TSMC Cells, at
not cost to VIRAGE, to make them non-infringing, provided that
substantially the same function is performed by the replacement of
modified TSMC Cells; or (c) if the right to continue using, reproducing,
distributing and sublicensing the TSMC Cells cannot be reasonably
procured for VIRAGE or the TSMC Cells cannot be replaced or modified to
make them non-infringing, terminate the license of such TSMC Cells
hereunder; provided that TSMC's indemnity obligations shall continue
indefinitely as to all use, reproduction, distribution and sublicensing
of the TSMC Cells prior to such termination.
10.5 The foregoing states TSMC's sole obligations and entire liability with
respect to any claim infringement of the TSMC Cells of any intellectual
property or other rights of any third party.
10.6 VIRAGE warrants and represents that the Library will be developed by
VIRAGE or appropriate subcontractors and that as such the Library shall
not infringe upon or misappropriate the patents, mask work rights,
copyrights, trade secrets, or other proprietary rights of other
intellectual property of third parties and that it has the right and
authority to convey the Library as set forth herein.
10.7 VIRAGE shall, at its own expense, indemnify, hold harmless, and defend
at its option, settle any claim, suit or proceeding brought by a third
party against TSMC for infringement of any third party's proprietary
rights or other intellectual property including but not limited to any
claim based upon a patent, copyright or other intellectual property
right issued in the United States, Taiwan, Japan or the European Union,
by virtue of TSMC's authorized use, reproduction, distribution and
sublicensing of any of the Library pursuant to the terms of this
Agreement and shall pay any settlement amounts or damages finally
awarded in such claim, suit or proceeding; provided that TSMC: (a)
promptly notifies VIRAGE in writing of such claim, suit or proceeding;
(b) gives VIRAGE sole control over the defense and/or settlement of such
claim, suit or proceeding; and ( ) reasonably cooperates and provides
all available information, assistance and authority to defend or settle
the claim, suit or proceeding. VIRAGE shall not be liable for any costs,
expenses, damages or fees incurred by TSMC in defending such action or
claim unless authorized in advance in writing by VIRAGE.
10.8 Any action to be brought to prevent or enjoin any third party from
infringement of any patent, copyright or other proprietary rights of
VIRAGE with respect to the Library shall be brought exclusively by
VIRAGE or VIRAGE's designee, in VIRAGE's sole discretion and as between
VIRAGE and TSMC, at VIRAGE's sole cost and expense.
10.9 If the Library, or in VIRAGE's opinion is likely to become the subject
of a claim, suit or proceeding alleging infringement, VIRAGE will use
good faith and reasonable efforts: (a) to procure at not cost to TSMC,
the right to continue using, reproducing, distributing and sublicensing
the Library; (b) to replace or modify the Library, at no cost to TSMC,
to
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make them non-infringing, provided that substantially the same function
is performed by the replacement of modified the Library, or (c) if the
right to continue using, reproducing, distributing and sublicensing the
VIRAGE Cells cannot be reasonably procured for TSMC or the Library
cannot be replaced or modified to make them non-infringing, terminate
the license of such VIRAGE products hereunder; provided that VIRAGE's
indemnity obligations shall continue indefinitely as to all use,
reproduction, distribution and sublicensing of the Library prior to such
termination.
10.10 The foregoing states VIRAGE's sole obligations and entire liability with
respect to any claim infringement of the Library of any intellectual
property or other rights of any third party.
XI. GENERAL TERMS
11.1 Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. In the event of any
dispute arising out of or in connection with this Agreement which cannot
be amicably settled by the Parties hereto, the Parties agree to submit
any such dispute to binding arbitration in accordance with the Rules of
American Arbitration Association. All information relating to or
disclosed by either Party in connection with the arbitration shall be
treated by the Parties as confidential information and no disclosure of
such information shall be made by either Party without prior written
consent of the other party.
11.2 Export Controls. Both Parties agree and certify that neither the
Licensed Library, not any other technical data received from VIRAGE, nor
the direct product thereof, will be exported or reexported outside the
United States except as authorized and as permitted by the laws and
regulations of the United States.
11.3 Assignment. This Agreement may not be assigned by either Party without
the prior written consent from the other party.
11.4 Audit. TSMC shall keep full and accurate books and records pertaining to
TSMC's performance under this Agreement for a period of at least one (1)
year after the date a given quarterly payment is made by TSMC to VIRAGE.
TSMC shall permit a mutually appointed third party, on behalf of VIRAGE,
to examine such books and records, at VIRAGE's sole cost and expense,
upon reasonable prior written notice during normal working hours, but
not later than one (1) year following the payment in question, for the
sole purpose of verifying the compensation payments and reports and
accountings related thereto. Prompt adjustments shall be made to
compensate for any errors or omissions disclosed by such examination. In
the event such examination shows underreporting and underpayments in
excess of five percent (5%) for any twelve (12) month period ending
three (3) months prior to the date of such examination, then TSMC shall
pay VIRAGE the reasonable costs of any such examination as well as the
unpaid compensation payments.
11.5 Notices. Any notice, report, approval or consent required or permitted
hereunder shall be in writing (allowing 5 days for mailing) and will be
deemed to have been duly given if
-11-
<PAGE> 12
delivered personally, by facsimile, or mailed by first-class, registered
or certified mail, postage prepaid to the respective addresses of the
Parties as set forth in this Agreement. If to VIRAGE, Attention:
Corporate Controller. If to TSMC: Attention: Corporate Counsel.
George Rassam: CFO
Telephone: 510-360-8020
[email protected]
11.6 No Waiver. Failure by either party to enforce any provision of this
Agreement will not be deemed a waiver of future endorsement of that or
any other provision.
11.7 Independent Contractors. The relationship of VIRAGE and Licensee
established by this Agreement is that of independent contractors, and
nothing contained in this Agreement shall be construed (i) to give
either party the power to direct or control the day-to-day activities of
the other or (ii) to constitute the Parties as partners, joint
venturers, co-owners or otherwise as participants in a joint or common
undertaking.
11.8 Severability. If for any reason a court of competent jurisdiction finds
any provision of this Agreement, or portion thereof, to be
unenforceable, that provision of the Agreement will be enforced to the
maximum extent permissible so as to effect the intent of the Parties,
and the remainder of this Agreement will continue in full force and
effect.
11.9 Attorneys' Fees. The prevailing party in any action to enforce this
Agreement shall be entitled to recover the costs and expenses including,
without limitation, reasonable attorneys' fees.
11.10 Injunctive Relief. The parties agree that a material breach of this
Agreement adversely affecting both Parties' Intellectual Property Rights
which would cause irreparable injury to the non-breaching Party for
which monetary damages would not be an adequate remedy. Therefore, the
Parties agree that the non-breaching Party shall be entitled to
equitable relief in addition to any remedies it may have hereunder or at
law.
11.11 Force Majeure. Except for the obligation to make payments hereunder,
nonperformance of either Party shall be excused to the extent that
performance is rendered impossible by strike, fire, flood, governmental
action, failure of suppliers, earthquake, or any other reason where
failure to perform is beyond the reasonable control of the nonperforming
Party.
11.12 Entire Agreement. This Agreement, including all Supplements, constitutes
the entire agreement between the Parties with respect to the subject
matter hereof, and supersedes all prior agreements or representations,
oral or written, regarding such subject matter. This Agreement may not
be modified or amended except in writing, signed by a duly authorized
representative of both parties.
-12-
<PAGE> 13
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed in duplicate on their behalf by their duly authorized officers and
representatives on the date given above.
TAIWAN SEMICONDUCTOR MANUFACTURING VIRAGE LOGIC CORPORATION
CO., LTD.
By: /s/ MAGNUS RYDE /s/ ADAM KABLANIAN
------------------------------ -------------------------------------
Magnus Ryde for Ron Norris Adam Kablanian
--------------------------------- -------------------------------------
(Print Name) (Print Name)
Sr. VP TSMC Ltd. President & CEO
--------------------------------- -------------------------------------
(Title) (Title)
-13-
<PAGE> 14
EXHIBIT A VIRAGE 0.18um DELIVERABLES TO TSMC
The contents of this Exhibit shall be modified from time to time as mutually
agreed to by both parties:
DEFINITION OF TSMC 0.18um DELIVERABLES:
Models and User Documentation ("Front-End Views"):
1. Verilog Models with SDF Support
2. VCS Models with SDF Support (in Stamp format)
3. -VHDL (VITAL) Models with SDF Support
4. Symbols for compose (RAM support not required)
5. Symbols for Synopsys (RAM support not required)
6. Symbols for EDIF 200 (RAM support not required)
7. Schematic for special cell design (TSMC internal use only)
**Schematics in composer format for TSMC core cell
**Hard copy for memory compilers (models include core cell & memory
compiler models)
8. Motive Models with SDF Support
9. Primetime Models with SDF Support
10. IKOS models with SDF Support
11. Ambit models
12. Fastscan models
13. Sunrise models
14. Quickturn models
15. Synopsys Synthesis Models (.lib file) - including power information for
power design, wire-load model (options for customer to choose)
constructed by place & route results.
16. Cadence TLF 3.0 Models
17. Star-RC timing models
18. Star-DC timing models
19. LEF/Abstracts for Silicon Ensemble/Cell3/Aquarius/Apollo
20. Memory compiler abstract for Aquarius & Apollo: manual and
automated approach
21. CLF models for Avanti
22. Derating factors (including pin-to-pin delay time. Timing constraints:
setup time, hold time, recovery time, min. pulse width).
**Process derating factor when typical is set to 1
**Temp. derating factor when 25 degrees V is set to 1
**Voltage derating factor when VDD = 1.8V is set to 1
23. Automatic Data Sheet Generator
24. Customer Documentation*
* Note that item 1, 3, 9, 15, 16, 19, 22, 23 are the standard
deliverables, other items are delivered upon customer request
<PAGE> 15
Physical Views ("Back-End" Views):
1. -GDSII
2. Place & Route technology file for Silicon
Ensemble/Cell3/Aquarius/Apollo
**Provide sample solution in deliverable (TSMC needs to review and run
test case).
3. -SPICE netlist for LVS
Note that Item 2 will be shipped as per customer request.
<PAGE> 16
EXHIBIT A: TSMC 0.18UM DELIVERABLES (cont'd)
CUSTOMER DOCUMENTATION
- Documentation Describing Characterization and Verification Methodology
*Note: Customer Documentation includes:
1) Standard Cell Databook (if provided by Virage) (including power route
guide)
2) Users Manual for Custom-Touch Memory Compilers which may include
1. Installation and usage instructions
2. Process Optimization for TSMC 0.18 process
3. Memory architecture
Optimizing clock-to-wordline driver performance Optimizing
wordline driver-to-sensing performance Optimizing
sensing-to-output drive performance Optimizing sense
amplifier recovery time Self-timing and duty-cycle
independence
4. Memory Compiler
USER OPTIONS - .glb PARAMETERS
Performance metrics
Design specifications
Run-time configuration
Model views
Functional description
Timing diagrams
Characterization conditions
5. Test Interface
BIST
Parallel test
Scan test
Serial test
<PAGE> 17
EXHIBIT B: VIRAGE LOGIC BIT CELLS
The contents of this Exhibit shall be modified from time to time as mutually
agreed to by both Parties:
Please see 0.18um TSMC memory Compiler Data Sheet
1) Dual Port Bit Cell
2) ROM Bit Cell
3) Register File Bit Cell one and two ports
4) Virage Logic Bit Cell for Single port High Density
<PAGE> 18
EXHIBIT C: 0.25uM DELIVERABLE SCHEDULE
Exhibit C1
0.25um TSMC-Specific Library - PHASE I
<TABLE>
<CAPTION>
TSMC SPECIFICATIONS VERSION DATE DELIVERY TSMC CONTROL #
------------------------------------- ------- -------- -------- ---------------
<S> <C> <C> <C> <C>
Spice Models - TSMC 0.25uM LOGIC 1.7 8/7/98 8/24/98 TA-1099-6001
SALICIDE (1P5M, 2.5V, 2.5V/3.3V)
Design Rules - 0.25uM LOGIC SALICIDE 1.3 9/25/98 11/21/98 TA-1099-4003
2.5V/3.3V PROCESS DESIGN RULE
DRC runset - 0.25uM LOGIC SALICIDE 3 8/04/98 11/21/98 TA-1099-4003-D2
2.5V/3.3V DESIGN RULE COMMAND FILE
TSMC Single-Port Memory Bit Cell 1.0 11/04/98 12/17/98 TA-10A0-4101
Sizing Equation
Layer Mapping
</TABLE>
KEY MILESTONES (D1 + RELATIVE TIMES)
<TABLE>
<CAPTION>
DELIVERY TIME
REQ. ACTIVITY WHO (RELATIVE TO D1)
------------------------------- ----------------------------- -------------------------------
<S> <C> <C>
Tech file 0.25um data including TSMC Done
Dracula runset
Tech file calibration & sample VIRAGE D1 + 2 weeks
set
Tech file review & sign-off TSMC D1 + 4 weeks
Create synchronous single-port VIRAGE Bitcell delivery + 16 weeks
memory compiler using TSMC
bit cell for large memories
</TABLE>
<PAGE> 19
EXHIBIT C: 0.18um DELIVERABLE SCHEDULE
Exhibit C2
0.18um TSMC Specific Library --- PHASE I
<TABLE>
<CAPTION>
TSMC SPECIFICATIONS VERSION DATE DELIVERY TSMC CONTROL #
------------------- ------- -------- -------- --------------
<S> <C> <C> <C> <C>
Spice Models - TSMC 0.18uM LOGIC 1.1 11/06/98 11/16/98 TA-10A5-6001
SALICIDE (1.8V/3.3V)
Design Rules - 0.18uM LOGIC SALICIDE 1.1 11/05/98 11/16/98 TA-10A5-4001
1.8V/3.3V PROCESS DESIGN RULE
DRC runset - 0.18uM LOGIC SALICIDE 2 10/21/98 11/24/98 TA-10A5-4001-D1
1.8V/3.3V PROCESS DESIGN RULE COMMAND
FILE
TSMC Single-Port RAM Bit Cell 0.1 10/09/98 12/17/98 TA-10A5-4101
Sizing Equation
Layer Mapping
</TABLE>
KEY MILESTONES (D2 + RELATIVE TIMES)
<TABLE>
<CAPTION>
DELIVERY TIME
REQ. ACTIVITY WHO (RELATIVE TO D1)
------------------------------- ----------------------------- -------------------------------
<S> <C> <C>
Tech file 0.18um data including TSMC Done
Dracula runset
Tech file calibration & sample VIRAGE D2 + 2 weeks
set
Tech file review & sign-off TSMC D2 + 4 weeks
Create synchronous single-port VIRAGE Bitcell delivery + 18 weeks
memory compiler using TSMC or
Virage Logic bit cell for large
memories
</TABLE>
-16-
<PAGE> 20
EXHIBIT D: TSMC CELLS
The contents of this Exhibit shall be modified from time to time as mutually
agreed to by both Parties:
<TABLE>
<CAPTION>
PART NUMBER DESCRIPTION
----------- -----------
<S> <C>
0.18um 4.6552um2 Single-Port SRAM bit cell
(Borderless)
0.25um 7.5 um2 Single-Port SRAM bit cell
(Borderless)
10.95 um2 Single-Port SRAM bit cell
(Borderless)
</TABLE>
<PAGE> 21
EXHIBIT E
List to be updated as appropriate. Companies on this list shall not receive
Licensed Library from VIRAGE unless first approved by TSMC:
<TABLE>
<S> <C>
ALI Micrel
Allegro Microsystems Mitel
Allied Signal Aerospace Mitsubishi
American Microsystems National Semiconductor
AMIC NEC
Amkor Wafer Fabrication Services Newport Wafer Fab Limited
(ANAM) Nippon Steel Semiconductor
Applied Micro Circuits Corp. OKI
Asahi Kasei Micro Systems Orbit Semiconductor
ASMC (Shanghai) Raytheon
Austria Mikro Systems Ricoh
Calogic ROHM
Chartered Semiconductor Samsung
Daewoo Sanyo
Faraday Seiko Epson
Fujitsu Sensym
Hitachi SGS-Thompson
Holtek (Part of UMC Group) Sharp
Hualon Microelectronics Corp. Sony
Hyundai Standard Microsystems
IBM Microelectronics Thesys
IC Works TI
IMP Toshiba
ITE Tower Semiconductor
Kawasaki Semiconductor TriTech
LG SEMICON UMC Group
Linfinity VLSI Technology
LSI Logic WSMC
Lucent Yamaha
Matsushita
</TABLE>
<PAGE> 22
EXHIBIT F: OPEN ISSUES
1. Review End-User License Agreement from VIRAGE, to review for TSMC
related Terms and Conditions.
2. 1/N based Pay-for-Performance/compensation calculation model versus
Area-based royalty/compensation calculation model decision.
<PAGE> 23
EXHIBIT G: TECHNICAL REVIEWS OR DISCUSSIONS
<PAGE> 24
EXHIBIT H
CUSTOM TOUCH STAR MEMORY COMPILER
This Exhibit H to the Development and Licensing Agreement between TSMC and
VIRAGE, dated March 3, 1999 ("DLA") constitutes the agreement between TSMC and
VIRAGE for the development, distribution and sale of the Custom Touch STAR
Memory Compiler developed by VIRAGE. Except as modified herein, the DLA is
hereby ratified and confirmed and remains in full force and effect. In the event
of a conflict between the terms of this Exhibit H and the DLA, the terms of this
Exhibit shall govern.
I. DEVELOPMENT DELIVERY OF THE CUSTOM TOUCH STAR COMPILER
1.1 VIRAGE agrees to develop for TSMC the Custom Touch STAR memory compiler
as specified in Attachment Number One ("Specifications") to this
Exhibit. VIRAGE agrees to provide to TSMC the set of deliverable
("Deliverables") outlined in the Attachment Number One to this Exhibit,
and to provide these Deliverables according to the Schedule and
milestones as provided in Attachment Number Two to this Exhibit
("Schedule"). The scope of this Agreement shall only include 0.18um
technologies and may be extended to future technologies by mutual
agreement in writing.
1.2 All terms of Section I of the DLA apply to the Deliverables of this
Exhibit.
II. MODIFICATION AND REVISION
All terms of Section II of the DLA apply to the Deliverables of this
Exhibit with the exception that the Schedule for the Custom Touch STAR
Deliverables is provided in Attachment Number Two to this Exhibit.
III. OWNERSHIP AND LICENSE
All terms of Section III of the DLA apply to the Deliverables of this
Exhibit.
IV. CONSIDERATION
4.1 In consideration for the development of the 0.18um Custom Touch STAR
memory compiler and Deliverables developed herein, TSMC shall pay to
VIRAGE US$**** as a non-refundable, Non-Recurring Engineering (NRE)
development fee, which shall include any taxes and withholdings,
excepting only any taxes due on VIRAGE's income. If upon receipt of the
final deliverable, the Custom Touch STAR Compiler is non-functional
(meaning the inability to generate any memory instances)k, and the
problems are unrecoverable, VIRAGE will credit Tm for the NRE paid. The
credit will be applied to any new project development between VIRAGE and
TSMC. If TSMC does not identify a project in which to apply the credit
within one (1) year, the credit will be rolled over to VIRAGE as
pre-paid royalty income. The payment terms are net 30 days upon receipt
of invoice from VIRAGE, which will be generated upon notification of
receipt from TSMC. TSMC shall be invoiced as follows:
<PAGE> 25
****
TSMC shall pay to VIRAGE Pay-for-Performance compensation as specified
in Sections 4.2 through 4l7 in the DLA. For those wafers that include a
Custom Touch STARinstance, **% of the Pay-for-Performance royalty amount
paid by TSMC to VIRAGE, to a maximum of $****, shall be kept in
reserve, to be utilized in funding VIRAGE to perform subsequent
technology developments for joint TSMC/VIRAGE memory products.
Developments funded with these funds must be mutually agreed to between
VIRAGE and TSMC, and must be in accordance with VIRAGE's published
product/technology roadmap. TSMC shall not unreasonably withhold
agreement to fund future developments in accordance with this section.
If TSMC does not utilize the royalty pool to fund future developments
within one (1) year of accumulating up to $**** in accordance with
the terms of this section, then VIRAGE will rollover the accumulated
funds and accept the $**** as royalty revenue. The one (1) year
period may be extended in twelve (12) month increments if mutually
agreed upon by both Parties.
4.2 VIRAGE will insert a paragraph in their Licensing Agreement, which when
signed by VIRAGE's and TSMC's customer, will provide authorization for
TSMC to release information that will assist VIRAGE in the collection of
royalties from the Custom Touch STAR memory compiler customers. The
authorization will allow TSMC to collect information on the usage of the
resulting Custom Touch STAR memory compiler instances and provide that
information to VIRAGE in order to assist in the collection of the
royalties. The information that VIRAGE will obtain permission from
Custom Touch STARcustomers for TSMC to collect and provide to VIRAGE
shall include but not be limited to: (i) specific data on wafers where
Custom Touch STAR instances are utilized, including customer name and
tape-out information, number of wafers manufactured and price per wafer
for that customer, and (ii) any other information deemed necessary to
ensure VIRAGE can charge and collect royalties for the Custom Touch STAR
instances.
For any actual customers of the Custom Touch STAR memory compiler,
VIRAGE shall mandate that these customers enter into appropriate
Licensing Agreements with VIRAGE directly, whereby the customers shall
pay to VIRAGE Licensing fees and/or Royalty fees. All distribution and
licensing will occur between the Custom Touch STAR customer and VIRAGE
unless authorized by VIRAGE to TSMC on a case-by-case basis. TSMC shall
clearly communicate to their customers the proper engagement method with
VIRAGE for obtaining said technology.
V. SILICON VERIFICATION AND CUSTOM TOUCH STAR CUSTOMER DELIVERABLES
5.1 All deliverables listed in Attachment Number Two must be
compliant with TSMC9000 specification.
-2-
<PAGE> 26
5.2 VIRAGE and TSMC will work together to define and develop a manufacturing
and yield analysis plan for redundancy & repair.
5.3 VIRAGE shall make available to their Custom Touch STAR
customers the following deliverables:
Front-end models
GDSII files
Custom Touch STAR specifications
Custom Touch STAR application notes
Test flow and test methodology
Built-in self test (BIST) or diagnostic circuitry description
BIST interface
BIST Option for testability
5.4 After receiving VIRAGE's deliverables (Attachment number Two), TSMC
will, free of any charges to VIRAGE, start the fabrication procedure by
running test instances developed by VIRAGE, and produce the Prototype
for VIRAGE. The number of lots and units supplied to VIRAGE by TSMC will
be determined mutually with Deliverables and Schedule. VIRAGE agrees to
start its own verification and qualification procedure on the Prototype
produced by TSMC, and within 45 calendar days after receiving Prototype,
VIRAGE shall provide a silicon verification report which shall include
information as outlined in the TSMC9000 specification.
VI. OTHER TERMS
6.1 All other terms in the DLA, including Sections 5, 6, 7, 8, 9, 10 and 11
in their entirety, shall apply to the Custom Touch STAR memory compiler
and Deliverables developed under this Exhibit unless specifically
modified by this Exhibit.
6.2 The rights and obligations of the parties contained in section 9 of the
DLA shall survive the termination or expiration of this Exhibit for a
period of five (5) years.
6.3 All rights and obligations of the parties under this Exhibit shall not
survive the expiration or termination of the DLA.
TAIWAN SEMICONDUCTOR MANUFACTURING VIRAGE LOGIC CORPORATION
COMPANY, LTD.
/s/ MICHAEL M. PAWLIK /s/ ADAM KABLANIAN
------------------------------------------ -----------------------------------
NAME: Michael M. Pawlik NAME: Adam Kablanian
TITLE: Vice President, Corporate Marketing TITLE: President & CEO
DATE: DATE:
-3-
