<PAGE>
As filed with the Securities and Exchange Commission on May 1, 2000
Registration No. 333-34024
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
AMENDMENT NO. 1
To
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------------
TVIA, INC.
(Exact name of registrant as specified in its charter)
-------------------
<TABLE>
<C> <S> <C>
California 3674 94-3175152
(Primary Standard
(State or other jurisdiction Industrial (I.R.S. Employer
of incorporation or Classification Code
organization) Number) Identification No.)
</TABLE>
4001 Burton Drive
Santa Clara, CA 95054
(408) 982-8588
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-------------------
Kenny Liu
Chief Executive Officer
Tvia, Inc.
4001 Burton Drive
Santa Clara, CA 95054
(408) 982-8588
(Name, address, including zip code, and telephone number, including area code,
of agent for service of process)
Copies to:
<TABLE>
<S> <C>
Gabriella A. Lombardi, Esq. Christopher L. Kaufman, Esq.
Jeffrey S. Harrell, Esq. Bryant B. Edwards, Esq.
P. Christine Lillquist, Esq. Stephen B. Richards, Esq.
Pillsbury Madison & Sutro LLP Latham & Watkins
2550 Hanover Street 135 Commonwealth Drive
Palo Alto, CA 94304 Menlo Park, CA 94025
</TABLE>
-------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement numbers of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
-------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
Explanatory Note
The purpose of this Amendment No. 1 to the Registration Statement is solely
to file certain exhibits to the Registration Statement, as set for the below in
Item 16(a) of Part II
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses expected to be incurred
by the Registrant in connection with the sale and distribution of the
securities being registered hereby, other than underwriting discounts and
commissions. All amounts are estimated except the Securities and Exchange
Commission registration fee, the National Association of Securities Dealers,
Inc. filing fee and the Nasdaq National Market listing fee.
<TABLE>
<CAPTION>
Payable by
Registrant
----------
<S> <C>
SEC registration fee............................................. $ 13,600
National Association of Securities Dealers, Inc. filing fee...... 5,675
Nasdaq National Market listing fee............................... *
Accounting fees and expenses..................................... 350,000
Legal fees and expenses.......................................... 400,000
Printing and engraving expenses.................................. 200,000
Blue Sky fees and expenses....................................... *
Registrar and Transfer Agent fees................................ *
Miscellaneous fees and expenses.................................. 30,752
----------
Total.......................................................... $1,000,000
==========
</TABLE>
- --------
*To be included in an amendment.
Item 14. Indemnification of Directors and Officers
Our articles of incorporation limit the liability of directors to the
maximum extent permitted by California law. This limitation of liability is
subject to exceptions including intentional misconduct, obtaining an improper
personal benefit and abdication or reckless disregard of director duties. Our
articles of incorporation and bylaws provide that we may indemnify our
directors, officers, employees and other agents to the fullest extent permitted
by law. Our bylaws also permit us to secure insurance on behalf of any officer,
director, employee or other agent for any liability arising out of his or her
actions in such capacity, regardless of whether the bylaws would permit
indemnification. We have entered into agreements to indemnify our directors and
executive officers, in addition to indemnification provided for in our bylaws.
These agreements, among other things, provide for indemnification of our
directors and executive officers for certain expenses (including attorney's
fees), judgments, fines and settlement amounts incurred by any such person in
any action or proceeding, including any action by or in the right of Tvia,
arising out of such person's services as a director or executive officer of
Tvia, any of our subsidiaries or any other company or enterprise to which the
person provides services at the request of Tvia. We believe that these
provisions and agreements are necessary to attract and retain qualified persons
as directors and executive officers.
Item 15. Recent Sales of Unregistered Securities
Since March 28, 1997, we have issued and sold the following unregistered
securities:
1. Since March 28, 1997, we issued and sold 769,740 shares of Common
Stock to employees, directors and consultants at prices ranging from
$.04 to $.12 per share.
2. Since March 28, 1997 we issued options to purchase 15,316,697 shares
of our common stock to directors, employees and consultants pursuant
to the Registrant's 1999 Stock Incentive Plan.
3. From September 25, 1998, we sold 4,750,000 shares of Series G
preferred stock to six investors for an aggregate purchase price of
$4,250,000.
4. On March 22, 2000, we sold 3,614,869 shares of Series H preferred
stock to 28 investors for an aggregate purchase price of
$4,518,586.25.
II-1
<PAGE>
5. On March 29, 2000, we sold 1,494,000 shares of Series I preferred
stock to 21 investors for an aggregate purchase price of $3,735,000.
6. From December 31, 1997 to January 31, 2000, we issued warrants to
purchase an aggregate of 425,000 shares of Series G preferred stock at
a purchase price of $1.00 per share and 440,000 shares of Series H
preferred stock at an exercise price of $1.25 per share.
The sales of the above securities were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act, or Regulation D promulgated thereunder (with respect to items
3, 4, 5 and 6), or Rule 701 (with respect to items 1 and 2) promulgated under
Section 3(b) of the Securities Act, as transactions by an issuer not involving
a public offering or transactions pursuant to compensatory benefit plans and
contracts relating to compensation as provided under Rule 701. The recipients
of securities in each of these transactions represented their intention to
acquire the securities for investment only and not with view to or for sale in
connection with any distribution thereof and appropriate legends were affixed
to the share certificates and instruments issued in such transactions. All
recipients had adequate access, through their relationship with the Registrant,
to information about the Registrant.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
See exhibits listed on the Exhibit Index following the signature page of
the Form S-1, which is incorporated herein by reference.
(b) Financial Statement Schedules
Schedules other than those referred to above have been omitted because they
are not applicable or not required or because the information is included
elsewhere in the Financial Statements or the notes thereto.
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act"), may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, as amended, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part
of this registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) The Registrant will provide to the underwriters at the closing(s)
specified in the underwriting agreement certificates in such denominations
and registered in such names as required by the underwriters to permit
prompt delivery to each purchaser.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Santa
Clara, State of California, on the 1st day of May, 2000.
TVIA, INC.
/s/ Kenny Liu
By __________________________________
Kenny Liu
Chief Executive Officer and
Chairman
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
/s/ Kenny Liu Chief Executive Officer May 1, 2000
______________________________________ and Chairman of the Board
Kenny Liu (Principal Executive
Officer)
/s/ Michael Hoberg* Vice President of Finance May 1, 2000
______________________________________ and Chief Financial
Michael Hoberg Officer (Principal
Financial Officer and
Accounting Officer)
/s/ R. David Dicioccio* Director May 1, 2000
______________________________________
R. David Dicioccio
Director May 1, 2000
______________________________________
Steven Cheng
/s/ James Bunker* Director May 1, 2000
______________________________________
James Bunker
/s/ M. K. Tsai* Director May 1, 2000
______________________________________
M. K. Tsai
</TABLE>
/s/ Kenny Liu
*By: _______________________
Kenny Liu
Attorney-in-fact
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1** Amended and Restated Articles of Incorporation.
3.2** Amended and Restated Bylaws.
3.3* Amended and Restated Certificate of Incorporation, to be effective
upon consummation of this offering.
3.4* Amended and Restated Bylaws, to be effective upon consummation of this
offering.
4.1* Form of Common Stock certificate.
4.2** Form of Amended and Restated Registration Rights Agreement dated as of
April 3, 2000.
4.3** Warrant to Purchase Stock issued December 31, 1997 to C.Y. Lee.
4.4** Warrant to Purchase Stock issued April 30, 1999 to James Mah.
4.5** Warrant to Purchase Stock issued June 21, 1999 to Far East National
Bank.
4.6** Warrant to Purchase Stock issued July 8, 1999 to C.Y. Lee.
4.7** Warrant to Purchase Stock issued December 30, 1999 to Far East
National Bank.
4.8* Warrant to Purchase Stock issued January , 2000 to C.Y. Lee.
4.9* Warrant to Purchase Stock issued January , 2000 to James Mah.
5.1* Opinion of Pillsbury Madison & Sutro LLP.
10.1 Amended and Restated 1999 Stock Incentive Plan of Tvia, Inc.
10.2** 2000 Stock Incentive Plan of Tvia, Inc.
10.3** 2000 Employee Stock Purchase Plan of Tvia, Inc.
10.4* Form of Directors and Officers' Indemnification Agreement.
10.5 TSMC Terms and Conditions dated November 15, 1999.
10.6 UMC Wafer Foundry Standard Terms and Conditions.
10.7+ Caesar International, Inc. Quotation dated August 20, 1998.
10.8+ Joint Development Agreement dated October 29, 1999 between IGS
Technologies, Inc. and Coreum Technology, Inc.
10.9 [Reserved]
10.10+ Cross License Agreement dated March 21, 2000 between Innovative
Semiconductors, Inc. and IGS Technologies with Innovative
Semiconductors.
10.11+ Audio Technology Licensing Agreement dated June 26, 1997 between T-
Squared Design, Inc. and InteGraphics Systems, Inc.
10.12+ Technology License Agreement dated July 1, 1997 between Reality
Simulation Systems Acquisition Corporation and InteGraphics Systems,
Inc.
10.13** Multi-Tenant Single-Building Modified-Net Lease dated October 27, 1995
between Koll/Intereal Bay Area and Intergraphics System, Inc.
10.14** First Amendment to Lease Agreement dated January 15, 1999 between
Koll/Intereal Bay Area and IGS Technologies, Inc.
10.15** Second Amendment to Lease Agreement dated May 6, 1999 between
Koll/Intereal Bay Area and IGS Technologies, Inc.
21.1** Subsidiaries of the Registrant.
23.1** Consent of Arthur Andersen LLP, Independent Public Accountants.
23.3* Consent of Pillsbury Madison & Sutro LLP (contained in their opinion
filed as Exhibit 5.1).
24.1** Power of Attorney. Reference is made to Page II-4.
27.1** Financial Data Schedule.
</TABLE>
- --------
*To be filed by amendment.
** Previously filed.
+ Confidential Treatment Requested.
<PAGE>
EXHIBIT 10.1
TVIA, INC.
AMENDED AND RESTATED
1999 STOCK INCENTIVE PLAN
1 Purposes of the Plan. The purposes of this Stock Incentive Plan are
--------------------
to attract and retain the best available personnel, to provide additional
incentive to Employees, Directors and Consultants and to promote the success of
the Company's business.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of the Committees appointed
-------------
to administer the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
----------------
administration of stock incentive plans, if any, under applicable provisions of
federal and state securities laws, the corporate laws of California and, to the
extent other than California, the corporate law of the state of the Company's
incorporation, the Code, the rules of any applicable stock exchange or national
market system, and the rules of any foreign jurisdiction applicable to Awards
granted to residents therein.
(c) "Award" means the grant of an Option, Restricted Stock, or other
-----
right or benefit under the Plan.
(d) "Award Agreement" means the written agreement evidencing the grant
----------------
of an Award executed by the Company and the Grantee, including any amendments
thereto.
(e) "Board" means the Board of Directors of the Company.
-----
(f) "Cause" means, with respect to the termination by the Company or a
-----
Related Entity of the Grantee's Continuous Service, that such termination is for
"Cause" as such term is expressly defined in a then-effective written agreement
between the Grantee and the Company or such Related Entity, or in the absence of
such then-effective written agreement and definition, is based on, in the
determination of the Administrator, the Grantee's: (i) refusal or failure to act
in accordance with any specific, lawful direction or order of the Company or a
Related Entity; (ii) unfitness or unavailability for service or unsatisfactory
performance (other than as a result of Disability); (iii) performance of any act
or failure to perform any act in bad faith and to the detriment of the Company
or a Related Entity; (iv) dishonesty, intentional misconduct or material breach
of any agreement with the Company or a Related Entity; or (v) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person. At least 30 days prior to the termination of the Grantee's
Continuous Service pursuant to (i) or (ii) above, the Company shall provide the
Grantee with notice of the Company's or such Related Entity's intent to
terminate, the reason therefor, and an opportunity for the Grantee to cure such
defects in his or her service to the Company's or such Related Entity's
satisfaction. During this 30 day (or longer) period, no Award issued to the
Grantee under the Plan may be exercised or purchased.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
----
(h) "Committee" means any committee appointed by the Board to
---------
administer the Plan.
(i) "Common Stock" means the common stock of the Company.
------------
1
<PAGE>
(j) "Company" means Tvia, Inc., a California corporation.
-------
(k) "Consultant" means any person (other than an Employee or a
----------
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.
(l) "Continuous Service" means that the provision of services to the
------------------
Company or a Related Entity in any capacity of Employee, Director or Consultant,
is not interrupted or terminated. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
between locations of the Company or among the Company, any Related Entity, or
any successor, in any capacity of Employee, Director or Consultant, or (iii) any
change in status as long as the individual remains in the service of the Company
or a Related Entity in any capacity of Employee, Director or Consultant (except
as otherwise provided in the Award Agreement). An approved leave of absence
shall include sick leave, military leave, or any other authorized personal
leave. For purposes of Incentive Stock Options, no such leave may exceed ninety
(90) days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract.
(m) "Corporate Transaction" means any of the following transactions to
---------------------
which the Company is a party:
(i) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company (including the capital stock of
the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company;
(iii) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger; or
(iv) acquisition by any person or related group of persons
(other than the Company or by a Company-sponsored employee benefit plan) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities, but excluding any such
transaction that the Administrator determines shall not be a Corporate
Transaction.
(n) "Director" means a member of the Board or the board of directors
--------
of any Related Entity.
(o) "Disability" means that a Grantee is permanently unable to carry
----------
out the responsibilities and functions of the position held by the Grantee by
reason of any medically determinable physical or mental impairment. A Grantee
will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.
2
<PAGE>
(p) "Employee" means any person, including an Officer or Director, who
--------
is an employee of the Company or any Related Entity. The payment of a
director's fee by the Company or a Related Entity shall not be sufficient to
constitute "employment" by the Company.
(q) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(r) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) Where there exists a public market for the Common Stock,
the Fair Market Value shall be (A) the closing price for a Share for the last
market trading day prior to the time of the determination (or, if no closing
price was reported on that date, on the last trading date on which a closing
price was reported) on the stock exchange determined by the Administrator to be
the primary market for the Common Stock or the Nasdaq National Market, whichever
is applicable or (B) if the Common Stock is not traded on any such exchange or
national market system, the average of the closing bid and asked prices of a
Share on the Nasdaq Small Cap Market for the day prior to the time of the
determination (or, if no such prices were reported on that date, on the last
date on which such prices were reported), in each case, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or
(ii) In the absence of an established market for the Common
Stock of the type described in (i), above, the Fair Market Value thereof shall
be determined by the Administrator in good faith and in a manner consistent with
Section 260.140.50 of Title 10 of the California Code of Regulations.
(s) "Grantee" means an Employee, Director or Consultant who receives
-------
an Award under the Plan.
(t) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code.
(u) "Non-Qualified Stock Option" means an Option not intended to
--------------------------
qualify as an Incentive Stock Option.
(v) "Officer" means a person who is an officer of the Company or a
-------
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
(w) "Option" means an option to purchase Shares pursuant to an Award
------
Agreement granted under the Plan.
(x) "Parent" means a "parent corporation," whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(y) "Plan" means this Amended and Restated 1999 Stock Incentive Plan.
----
(z) "Post-Termination Exercise Period" means the period specified in
--------------------------------
the Award Agreement of not less than thirty (30) days commencing on the date of
termination (other than termination by the Company or any Related Entity for
Cause) of the Grantee's Continuous Service, or such longer period as may be
applicable upon death or Disability.
3
<PAGE>
(aa) "Registration Date" means the first to occur of (i) the closing
-----------------
of the first sale to the general public of (A) the Common Stock or (B) the same
class of securities of a successor corporation (or its Parent) issued pursuant
to a Corporate Transaction in exchange for or in substitution of the Common
Stock, pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission under the Securities Act of 1933, as
amended; and (ii) in the event of a Corporate Transaction, the date of the
consummation of the Corporate Transaction if the same class of securities of the
successor corporation (or its Parent) issuable in such Corporate Transaction
shall have been sold to the general public pursuant to a registration statement
filed with and declared effective by the Securities and Exchange Commission
under the Securities Act of 1933, as amended, on or prior to the date of
consummation of such Corporate Transaction, .
(bb) "Related Entity" means any Parent, Subsidiary and any business,
--------------
corporation, partnership, limited liability company or other entity in which the
Company, a Parent or a Subsidiary holds a substantial ownership interest,
directly or indirectly.
(cc) "Restricted Stock" means Shares issued under the Plan to the
-----------------
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.
(dd) "Share" means a share of the Common Stock.
-----
(ee) "Subsidiary" means a "subsidiary corporation," whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
--------------------------
(a) Subject to the provisions of Section 11(a) below, the maximum
aggregate number of Shares which may be issued pursuant to all Awards (including
Incentive Stock Options) is 13.8 million Shares. The shares may be authorized,
but unissued, or reacquired Common Stock.
(b) Any Shares covered by an Award (or portion of an Award) which is
forfeited or canceled, expires or is settled in cash, shall be deemed not to
have been issued for purposes of determining the maximum aggregate number of
Shares which may be issued under the Plan. If any unissued Shares are retained
by the Company upon exercise of an Award in order to satisfy the exercise price
for such Award or any withholding taxes due with respect to such Award, such
retained Shares subject to such Award shall become available for future issuance
under the Plan (unless the Plan has terminated). Shares that actually have been
issued under the Plan pursuant to an Award shall not be returned to the Plan and
shall not become available for future issuance under the Plan, except that if
unvested Shares are forfeited, or repurchased by the Company at their original
purchase price, such Shares shall become available for future grant under the
Plan.
4. Administration of the Plan.
---------------------------
(a) Plan Administrator. With respect to grants of Awards to
------------------
Employees, Directors, or Consultants, the Plan shall be administered by (A) the
Board or (B) a Committee (or a subcommittee of the Committee) designated by the
Board, which Committee shall be constituted in such a manner as to satisfy
Applicable Laws. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.
4
<PAGE>
(b) Powers of the Administrator. Subject to Applicable Laws and the
---------------------------
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:
(i) to select the Employees, Directors and Consultants to whom
Awards may be granted from time to time hereunder;
(ii) to determine whether and to what extent Awards are granted
hereunder;
(iii) to determine the number of Shares or the amount of other
consideration to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the
Plan;
(v) to determine the terms and conditions of any Award granted
hereunder;
(vi) to establish additional terms, conditions, rules or
procedures to accommodate the rules or laws of applicable foreign jurisdictions
and to afford Grantees favorable treatment under such rules or laws; provided,
however, that no Award shall be granted under any such additional terms,
conditions, rules or procedures with terms or conditions which are inconsistent
with the provisions of the Plan;
(vii) to amend the terms of any outstanding Award granted under
the Plan, provided that any amendment that would adversely affect the Grantee's
rights under an outstanding Award shall not be made without the Grantee's
written consent;
(viii) to construe and interpret the terms of the Plan and
Awards, including without limitation, any notice of award or Award Agreement,
granted pursuant to the Plan; and
(ix) to take such other action, not inconsistent with the terms
of the Plan, as the Administrator deems appropriate.
(c) Effect of Administrator's Decision. All decisions, determinations
----------------------------------
and interpretations of the Administrator shall be conclusive and binding on all
persons.
5. Eligibility. Awards other than Incentive Stock Options may be granted
-----------
to Employees, Directors and Consultants. Incentive Stock Options may be granted
only to Employees of the Company, a Parent or a Subsidiary. An Employee,
Director or Consultant who has been granted an Award may, if otherwise eligible,
be granted additional Awards. Awards may be granted to such Employees,
Directors or Consultants who are residing in foreign jurisdictions as the
Administrator may determine from time to time.
6. Terms and Conditions of Awards.
-------------------------------
(a) Type of Awards. The Administrator is authorized under the Plan to
--------------
award any type of arrangement to an Employee, Director or Consultant that is not
inconsistent with the provisions of the Plan and that by its terms involves or
might involve the issuance of (i) Shares, (ii) an Option, or similar right with
a fixed or variable price related to the Fair Market Value of the Shares and
with an exercise or conversion privilege related to the passage of time, the
occurrence of one or more events, or the satisfaction of performance criteria or
other conditions, or (iii) any other security with the value
5
<PAGE>
derived from the value of the Shares. Such awards include, without limitation,
Options, or sales or bonuses of Restricted Stock, and an Award may consist of
one such security or benefit, or two (2) or more of them in any combination or
alternative.
(b) Designation of Award. Each Award shall be designated in the Award
--------------------
Agreement. In the case of an Option, the Option shall be designated as either
an Incentive Stock Option or a Non-Qualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of Shares subject to Options designated as Incentive Stock Options which
become exercisable for the first time by a Grantee during any calendar year
(under all plans of the Company or any Parent or Subsidiary) exceeds $100,000,
such excess Options, to the extent of the Shares covered thereby in excess of
the foregoing limitation, shall be treated as Non-Qualified Stock Options. For
this purpose, Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of the Shares shall be
determined as of the grant date of the relevant Option.
(c) Conditions of Award. Subject to the terms of the Plan, the
-------------------
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, increase in share price, earnings per share, total shareholder
return, return on equity, return on assets, return on investment, net operating
income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator.
Partial achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award Agreement.
(d) Acquisitions and Other Transactions. The Administrator may issue
-----------------------------------
Awards under the Plan in settlement, assumption or substitution for, outstanding
awards or obligations to grant future awards in connection with the Company or a
Related Entity acquiring another entity, an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase, asset
purchase or other form of transaction.
(e) Award Exchange Programs. The Administrator may establish one or
-----------------------
more programs under the Plan to permit selected Grantees to exchange an Award
under the Plan for one or more other types of Awards under the Plan on such
terms and conditions as determined by the Administrator from time to time.
(f) Separate Programs. The Administrator may establish one or more
-----------------
separate programs under the Plan for the purpose of issuing particular forms of
Awards to one or more classes of Grantees on such terms and conditions as
determined by the Administrator from time to time.
(g) Early Exercise. The Award Agreement may, but need not, include a
--------------
provision whereby the Grantee may elect at any time while an Employee, Director
or Consultant to exercise any part or all of the Award prior to full vesting of
the Award. Any unvested Shares received pursuant to such exercise may be
subject to a repurchase right in favor of the Company or a Related Entity or to
any other restriction the Administrator determines to be appropriate.
(h) Term of Award. The term of each Award shall be the term stated in
-------------
the Award Agreement, provided, however, that the term shall be no more than ten
(10) years from the date of grant
6
<PAGE>
thereof. However, in the case of an Incentive Stock Option granted to a Grantee
who, at the time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5)
years from the date of grant thereof or such shorter term as may be provided in
the Award Agreement.
(i) Transferability of Awards. Non-Qualified Stock Options shall be
-------------------------
transferable (i) to the extent provided in the Award Agreement and in a manner
consistent with Section 260.140.41 of Title 10 of the California Code of
Regulations and (ii) by will, and by the laws of descent and distribution.
Incentive Stock Options and other Awards may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent or distribution and may be exercised, during the lifetime of
the Grantee, only by the Grantee.
(j) Time of Granting Awards. The date of grant of an Award shall for
-----------------------
all purposes be the date on which the Administrator makes the determination to
grant such Award, or such other date as is determined by the Administrator.
Notice of the grant determination shall be given to each Employee, Director or
Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.
7. Award Exercise or Purchase Price, Consideration, Taxes and Reload
-----------------------------------------------------------------
Options.
- -------
(a) Exercise or Purchase Price. The exercise or purchase price, if
--------------------------
any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the grant
of such Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be not less than one hundred
ten percent (110%) of the Fair Market Value per Share on the date of grant; or
(B) granted to any Employee other than an Employee
described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
(ii) In the case of a Non-Qualified Stock Option:
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
per Share exercise price shall be not less than one hundred ten percent (110%)
of the Fair Market Value per Share on the date of grant; or
(B) granted to any person other than a person described
in the preceding paragraph, the per Share exercise price shall be not less than
eighty-five percent (85%) of the Fair Market Value per Share on the date of
grant.
(iii) In the case of the sale of Shares:
(A) granted to a person who, at the time of the grant of
such Award, or at the time the purchase is consummated, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share purchase
7
<PAGE>
price shall be not less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant; or
(B) granted to any person other than a person described in
the preceding paragraph, the per Share purchase price shall be not less than
eighty-five percent (85%) of the Fair Market Value per Share on the date of
grant.
(iv) In the case of other Awards, such price as is determined
by the Administrator.
(v) Notwithstanding the foregoing provisions of this Section
7(a), in the case of an Award issued pursuant to Section 6(d), above, the
exercise or purchase price for the Award shall be determined in accordance with
the principles of Section 424(a) of the Code.
(b) Consideration. Subject to Applicable Laws, the consideration to
-------------
be paid for the Shares to be issued upon exercise or purchase of an Award
including the method of payment, shall be determined by the Administrator (and,
in the case of an Incentive Stock Option, shall be determined at the time of
grant). In addition to any other types of consideration the Administrator may
determine, the Administrator is authorized to accept as consideration for Shares
issued under the Plan the following:
(i) cash;
(ii) check;
(iii) delivery of Grantee's promissory note with such recourse,
interest, security, and redemption provisions as the Administrator determines as
appropriate ;
(iv) if the exercise or purchase occurs on or after the
Registration Date, surrender of Shares or delivery of a properly executed form
of attestation of ownership of Shares as the Administrator may require
(including withholding of Shares otherwise deliverable upon exercise of the
Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall
be exercised (but only to the extent that such exercise of the Award would not
result in an accounting compensation charge with respect to the Shares used to
pay the exercise price unless otherwise determined by the Administrator);
(v) with respect to Options, if the exercise occurs on or
after the Registration Date, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written instructions
to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased Shares and (B) shall provide written
directives to the Company to deliver the certificates for the purchased Shares
directly to such brokerage firm in order to complete the sale transaction; or
(vi) any combination of the foregoing methods of payment.
(c) Taxes. No Shares shall be delivered under the Plan to any Grantee
-----
or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any foreign, federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition
8
<PAGE>
of Shares received on exercise of an Incentive Stock Option. Upon exercise of an
Award the Company shall withhold or collect from Grantee an amount sufficient to
satisfy such tax obligations.
(d) Reload Options. In the event the exercise price or tax
--------------
withholding of an Option is satisfied by the Company or the Grantee's employer
withholding Shares otherwise deliverable to the Grantee, the Administrator may
issue the Grantee an additional Option, with terms identical to the Award
Agreement under which the Option was exercised, but at an exercise price as
determined by the Administrator in accordance with the Plan.
8. Exercise of Award.
------------------
(a) Procedure for Exercise; Rights as a Shareholder.
------------------------------------------------
(i) Any Award granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator under the
terms of the Plan and specified in the Award Agreement but in the case of an
Option, in no case at a rate of less than twenty percent (20%) per year over
five (5) years from the date the Option is granted, subject to reasonable
conditions such as continued employment. Notwithstanding the foregoing, in the
case of an Option granted to an Officer, Director or Consultant, the Award
Agreement may provide that the Option may become exercisable, subject to
reasonable conditions such as such Officer's, Director's or Consultant's
Continuous Service, at any time or during any period established in the Award
Agreement.
(ii) An Award shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Award by the person entitled to exercise the Award and full payment
for the Shares with respect to which the Award is exercised, including, to the
extent selected, use of the broker-dealer sale and remittance procedure to pay
the purchase price as provided in Section 7(b)(v). Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to Shares subject to an Award,
notwithstanding the exercise of an Option or other Award. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in the Award Agreement
or Section 11(a), below.
(b) Exercise of Award Following Termination of Continuous Service. In
-------------------------------------------------------------
the event of termination of a Grantee's Continuous Service for any reason other
than Disability or death (but not in the event of a Grantee's change of status
from Employee to Consultant or from Consultant to Employee), such Grantee may,
but only during the Post-Termination Exercise Period (but in no event later than
the expiration date of the term of such Award as set forth in the Award
Agreement), exercise the Award to the extent that the Grantee was entitled to
exercise it at the date of such termination or to such other extent as may be
determined by the Administrator. The Grantee's Award Agreement may provide that
upon the termination of the Grantee's Continuous Service for Cause, the
Grantee's right to exercise the Award shall terminate concurrently with the
termination of Grantee's Continuous Service. In the event of a Grantee's change
of status from Employee to Consultant, an Employee's Incentive Stock Option
shall convert automatically to a Non-Qualified Stock Option on the day three (3)
months and one day following such change of status. To the extent that the
Grantee is not entitled to exercise the Award at the date of termination, or if
the Grantee does not exercise such Award to the extent so entitled within the
Post-Termination Exercise Period, the Award shall terminate.
9
<PAGE>
(c) Disability of Grantee. In the event of termination of a Grantee's
---------------------
Continuous Service as a result of his or her Disability, Grantee may, but only
within twelve (12) months from the date of such termination (and in no event
later than the expiration date of the term of such Award as set forth in the
Award Agreement), exercise the Award to the extent that the Grantee was
otherwise entitled to exercise it at the date of such termination; provided,
however, that if such Disability is not a "disability" as such term is defined
in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such
Incentive Stock Option shall automatically convert to a Non-Qualified Stock
Option on the day three (3) months and one day following such termination. To
the extent that the Grantee is not entitled to exercise the Award at the date of
termination, or if Grantee does not exercise such Award to the extent so
entitled within the time specified herein, the Award shall terminate.
(d) Death of Grantee. In the event of a termination of the Grantee's
----------------
Continuous Service as a result of his or her death, or in the event of the death
of the Grantee during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's Termination of Continuous Service as a
result of his or her Disability, the Grantee's estate or a person who acquired
the right to exercise the Award by bequest or inheritance may exercise the
Award, but only to the extent that the Grantee was entitled to exercise the
Award as of the date of termination, within twelve (12) months from the date of
death (but in no event later than the expiration of the term of such Award as
set forth in the Award Agreement). To the extent that, at the time of death,
the Grantee was not entitled to exercise the Award, or if the Grantee's estate
or a person who acquired the right to exercise the Award by bequest or
inheritance does not exercise such Award to the extent so entitled within the
time specified herein, the Award shall terminate.
(e) Buyout Provisions. The Administrator may at any time offer to buy
-----------------
out for a payment in cash or Shares, an Award previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Grantee at the time that such offer is made.
9. Conditions Upon Issuance of Shares.
-----------------------------------
(a) Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares
pursuant thereto shall comply with all Applicable Laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) As a condition to the exercise of an Award, the Company may
require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any
Applicable Laws.
10. Repurchase Right. If the provisions of an Award Agreement grant to
----------------
the Company the right to repurchase Shares upon termination of the Grantee's
Continuous Service, the Award Agreement shall (or may, with respect to Awards
granted or issued to Officers, Directors or Consultants) provide that:
(a) the right to repurchase must be exercised, if at all, within
ninety (90) days of the termination of the Grantee's Continuous Service (or in
the case of Shares issued upon exercise of Awards after the date of termination
of the Grantee's Continuous Service, within ninety (90) days after the date of
the Award exercise);
10
<PAGE>
(b) the consideration payable for the Shares upon exercise of such
repurchase right shall be made in cash or by cancellation of purchase money
indebtedness within the ninety (90) day periods specified in Section 10(a);
(c) the amount of such consideration shall (i) be equal to the
original purchase price paid by Grantee for each such Share; provided, that the
right to repurchase such Shares at the original purchase price shall lapse at
the rate of at least twenty percent (20%) of the Shares subject to the Award per
year over five (5) years from the date the Award is granted (without respect to
the date the Award was exercised or became exercisable), and (ii) with respect
to Shares, other than Shares subject to repurchase at the original purchase
price pursuant to clause (i) above, not less than the Fair Market Value of the
Shares to be repurchased on the date of termination of Grantee's Continuous
Service; and
(d) the right to repurchase Shares, other than the right to repurchase
Shares at the original purchase price pursuant to clause (i) of Section 10(c),
shall terminate on the Registration Date.
11. Adjustments Upon Changes in Capitalization or Corporate Transaction.
--------------------------------------------------------------------
(a) Adjustments upon Changes in Capitalization. Subject to any
------------------------------------------
required action by the shareholders of the Company, the number of Shares covered
by each outstanding Award, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each
such outstanding Award, as well as any other terms that the Administrator
determines require adjustment shall be proportionately adjusted for (i) any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or similar transaction affecting the Shares, (ii) any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) as the Administrator may determine in its
discretion, any other transaction with respect to Common Stock to which Section
424(a) of the Code applies or a similar transaction; provided, however that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Administrator and its determination shall be final, binding and
conclusive. Except as the Administrator determines, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason hereof shall be made
with respect to, the number or price of Shares subject to an Award.
(b) Corporate Transaction. In the event of a Corporate Transaction
---------------------
each Award which is at the time outstanding under the Plan shall automatically
become fully vested and exercisable and be released from any restrictions on
transfer (other than transfer restrictions applicable to Options) and repurchase
or forfeiture rights, immediately prior to the specified effective date of such
Corporate Transaction, for all of the Shares at the time represented by such
Award unless the Award is assumed by the successor corporation or the Parent
thereof in connection with the Corporate Transaction. Effective upon the
consummation of the Corporate Transaction, each outstanding Award under the Plan
shall terminate unless the Award is assumed by the successor corporation or the
Parent thereof in connection with the Corporate Transaction. For the purposes
of accelerating the vesting and the release of restrictions applicable to Awards
pursuant to this subsection (but not for purposes of termination of such
Awards), the Award shall be considered assumed if, in connection with the
Corporate Transaction, the Award is replaced with a comparable Award with
respect to shares of capital stock of the successor corporation or Parent
thereof or is replaced with a cash incentive program of the successor
corporation or Parent thereof which preserves the compensation element of such
Award existing at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same vesting schedule
11
<PAGE>
applicable to such Award. The determination of Award comparability above shall
be made by the Administrator and its determination shall be final, binding and
conclusive.
12. Effective Date and Term of Plan. The Plan shall become effective upon
-------------------------------
the earlier to occur of its adoption by the Board or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated. Subject to Section 16, below, and Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.
13. Amendment, Suspension or Termination of the Plan.
-------------------------------------------------
(a) The Board may at any time amend, suspend or terminate the Plan.
To the extent necessary to comply with Applicable Laws, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a degree
as required.
(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.
(c) Any amendment, suspension or termination of the Plan (including
termination of the Plan under Section 12, above) shall not affect Awards already
granted, and such Awards shall remain in full force and effect as if the Plan
had not been amended, suspended or terminated, unless mutually agreed otherwise
between the Grantee and the Administrator, which agreement must be in writing
and signed by the Grantee and the Company.
14. Reservation of Shares.
----------------------
(a) The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
(b) The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
15. No Effect on Terms of Employment/Consulting Relationship. The Plan
--------------------------------------------------------
shall not confer upon any Grantee any right with respect to the Grantee's
Continuous Service, nor shall it interfere in any way with his or her right or
the Company's right to terminate the Grantee's Continuous Service at any time,
with or without cause.
16. No Effect on Retirement and Other Benefit Plans. Except as
-----------------------------------------------
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The
Plan is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement
Income Security Act of 1974, as amended.
17. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under Applicable Laws. Any Award exercised
before shareholder approval is obtained shall be rescinded if shareholder
approval
12
<PAGE>
is not obtained within the time prescribed, and Shares issued on the exercise of
any such Award shall not be counted in determining whether shareholder approval
is obtained.
18. Information to Grantees. The Company shall provide to each Grantee,
-----------------------
during the period for which such Grantee has one or more Awards outstanding,
copies of financial statements at least annually.
13
<PAGE>
EXHIBIT 10.5
Graphic goes here
Nov. 15, 1999
Mr. Gary Lee
INTEGRAPHICS SYSTEMS, INC.
4001 BURTON DRIVE
SANTA CLARA, CA 95054
U.S.A.
Re: TSMC Terms and Conditions ("T & C")
---------------------------------------
Dear Mr. Gary Lee:
Please be advised that effective immediately, all sales made by TSMC to your
company will be in accordance with the following standard TSMC T & C. The T & C
will also retroactively apply to all past transactions between our companies,
thereby replacing and superseding all previous terms of sale as stated in
purchase orders issued by you or in any other form.
TERMS AND CONDITIONS
1. ACCEPTING: Taiwan Semiconductor Manufacturing Co., Ltd. ("TSMC")
acknowledges the receipt of the Purchase Order by its issuer ("BUYER"). TSMC
hereby objects to any and all terms and conditions (if any) stated in BUYER'S
Purchase Order. TSMC agrees to manufacture the goods specified in the Purchase
Order without BUYER's objections to the following terms and conditions ("T &
C"). Failure to object promptly in writing to any of the T & C shall constitute
its acceptance by BUYER.
2. PACKING, SHIPMENT, RISK OF LOSS: TSMC shall deliver the goods to BUYER in
accordance with the terms and conditions of the INCOTERMS 1990 - EXW (Ex Works
TSMC's fab). Title and risk of loss shall pass to BUYER upon delivery to a
carrier. TSMC shall package the goods in accordance with good commercial
practice. The date of the bill of lading or other receipts issued by the carrier
shall be conclusive proof of the date and fact of shipment of the goods.
3. DELIVERY SCHEDULE: Delivery schedules as provided by TSMC in connection to
the Purchaser Order shall be binding. TSMC shall report to BUYER of any
anticipated or actual delays in shipment and at that time, the parties shall
negotiate a mutually agreeable amended delivery schedule. At all times BUYER
shall be liable to TSMC for any goods actually delivered or services performed
prior to the date of any such notice. In the event that BUYER requests TSMC to
hold the production process of any goods ordered, such hold shall be subject to
terms to be mutually agreed upon by both parties.
4. INSPECTION AND ACCEPTANCE: All goods shall be subject to final inspection
and acceptance at BUYER's principal place of business or such other destination
as is specified in the Purchase Order within a reasonable time after delivery
but in no event later than ninety (90) days. In case any item is defective in
material or workmanship, or otherwise not in conformity with any specifications
agreed upon by the parties in writing, BUYER shall immediately contact TSMC to
reach a mutual agreement to bring the goods to an acceptable level.
5. CHANGES: No changes shall be made to the Purchase Order without mutual
agreement of both parties. BUYER specifically agrees that it shall make no
change in any design, configuration, material, part, manufacture or test process
which has been approved by TSMC and which is applicable to the Purchase Order
without the prior approval by TSMC. Breach of this obligation shall be
considered as a material breach of T & C.
Notwithstanding the above, TSMC has the right to make any changes to the
manufacturing technology and equipment used for the goods purchased herein which
may affect prices, delivery schedule, yield, and function of the goods ("Major
Changes"). TSMC shall provide forty-five (45) days prior written notice to BUYER
on any Major Changes. If BUYER does not notify its acceptance or rejection of
the Major Changes during the foregoing period, the Major Changes shall be deemed
accepted by BUYER and TSMC has the right to implement the Major Changes on or
after the forty-sixth day after the notice.
6. PRICES AND TAXES: Pricing of the goods purchased herein shall be agreed by
both parties. Unless otherwise specified, the prices set forth in the Purchase
Order are net of any and all taxes. BUYER agrees to pay for all applicable taxes
regardless if it is itemized on the invoices. All invoices are due net thirty
(30) days after invoice date unless otherwise agreed between parties signed by
both parties' authorized representatives.
7. DEFAULT: BUYER shall be deemed in default of its performance of T & C for
any action or omission constituting a breach of contract law, including but not
limited to: (a) BUYER's failure to comply with any agreement, including without
limitation, this T & C; or (b) BUYER's failure to pay for the goods in a timely
manner. Notice of default will be given by TSMC to BUYER. If BUYER is in
default, TSMC may terminate the Purchase Order, T & C or any part thereof and
invoke all rights and remedies provided by law or under T & C. TSMC may charge
BUYER for any excess costs thereby incurred in addition to any other damages it
suffers as a result of the default.
8. WARRANTIES: TSMC warrants that the goods delivered hereunder shall meet the
specifications and are within industry standards as agreed upon by the parties
and shall be free from defects in material and workmanship under normal use for
a period of one (1) year from the date of shipment. If, during the one year
period, i) TSMC is notified promptly in writing of a detailed description of the
alleged defects upon discovery of any defects in the goods, and ii) such goods
are returned to TSMC, and iii) TSMC's examination of such goods reveals that
such goods are indeed defective and defects are not caused by accident, abuse,
misuse, neglect, improper installation or packaging, repair or alteration by
someone other than TSMC, or improper testing or use contrary to instructions
given by TSMC, then TSMC will, at its option, either repair, replace, or credit
BUYER for such defective goods. TSMC shall return any goods repaired or replaced
under this warranty to BUYER, transportation prepaid, and shall reimburse BUYER
for the transportation charges paid by BUYER for returning such defective goods
to TSMC. This warranty shall not act to extend the above one (1)-year warranty
period for any goods repaired or replaced beyond the original warranty term.
Notwithstanding the above, prior to any return of allegedly defective goods by
BUYER pursuant to this section, BUYER shall first offer TSMC the opportunity to
inspect the goods at BUYER's facilities.
The foregoing warranty constitutes TSMC's exclusive liability, and BUYER's
exclusive remedy for any non-conformity of the goods or for any defects in
material or workmanship of the goods delivered hereunder. THE FOREGOING WARRANTY
SHALL BE IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING BUT NOT LIMITED TO, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED.
9. CONFIDENTIAL INFORMATION: Parties agree to maintain all confidential
information in accordance to the confidentiality agreement signed between
parties. In the event no such agreement is in place, parties agree not to
disclose any information relating to this business transaction, including but
not limited to all specifications, drawings, technical data, software tools,
dies, fixtures, materials or other items furnished by the disclosing party. Such
confidential information shall remain the property of the disclosing party and
shall be returned immediately upon request to the disclosing party without added
cost. Except for TSMC's intellectual property rights vested in the masks, the
masks generated by TSMC from BUYER's database tapes shall be the property of
BUYER, and will be returned to BUYER or scrapped at TSMC upon BUYER'S request.
In the event a mask is held at TSMC for over one (1) year after production, TSMC
has the right to return the mask to BUYER at BUYER's cost and risk to BUYER's
last known address upon thirty (30) days' written notice.
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<PAGE>
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10. INDEMNIFICATION: In the event BUYER, its employees, agents or
subcontractors enters premises occupied or under control of TSMC or its
designated fabs, BUYER shall indemnify and hold TSMC, its officers, directors,
employees, and other parties harmless from any loss, cost, damage, expense or
liability by reason of loss, property damage, or personal injury arising from
any acts or omissions of BUYER, its employees, agents, or subcontractors.
11. INTELLECTUAL PROPERTY INDEMNIFICATION: BUYER warrants and guarantees that
goods ordered under the Purchase Order do not infringe any valid patent,
trademark, copyright, mask work right, trade secret, or other intellectual
property rights owned or controlled by any other corporation, firm, or person.
BUYER shall, at its own expense, indemnify and hold TSMC, its subcontractors,
successors or assigns harmless from and against any expense and loss resulting
from any direct infringement of any patent, trademark, copyright, mask work
right, trade secret, or other intellectual property rights of any third party to
the extent arising from TSMC's compliance with or implementation of any of
BUYER's instructions, specifications, designs or requirements to manufacture,
sell, and/or ship the goods for or to Customer. TSMC shall notify BUYER promptly
in writing and give authority, information and assistance to enable BUYER to
defend at BUYER's expense. BUYER shall pay all damages and costs awarded therein
against TSMC, its subcontractors, successors or assigns. In case any goods, or
any part thereof is the subject matter of any intellectual property infringement
dispute, TSMC shall also have the right to stop the production of such goods. In
the event that TSMC so stops production of such goods, BUYER shall be
responsible for the costs incurred by TSMC that are directly related to the
production of such goods.
Except as provided above, TSMC shall, at its own expense, indemnify and hold
BUYER harmless from and against any expenses and losses resulting from any
direct infringement of any patent, trademark, copyright, mask work right, trade
secret, or other intellectual property rights of any third party to the extent
arising from the manufacturing process provided and used by TSMC to manufacture
the goods purchased, excluding, however, infringement arising from or in
connection with TSMC's use of equipment, materials or supplies provided to TSMC
by a third party. BUYER shall notify TSMC promptly in writing and give
authority, information and assistance to enable TSMC to defend at TSMC's
expense. TSMC shall pay all damages and costs awarded therein against BUYER.
12. LIMITATION OF LIABILITY: In no event shall TSMC be liable for any
indirect, special, incidental or consequential damages (including loss of
profits and loss of use) resulting from, arising out of, or in connection with
TSMC's performance or failure to perform under this Purchase Order or T & C, or
resulting from, arising out of, or in connection with TSMC's producing,
supplying, and/or sale of the goods or any part thereof, whether due to a breach
of contract, breach of warranty, tort, or negligence of TSMC, or otherwise.
13. EXPORT CONTROL: Each party will take all appropriate measures to comply
with all applicable export control regulations and will keep the other party
fully harmless from all damages arising out of or in connection with any
violation.
14. NON-ASSIGNMENT: Any assignment by BUYER of any interest of the Purchase
Order, or any payment due or to become due hereunder, or any delegation of
BUYER'S obligations hereunder, without a written consent of TSMC, shall be void.
15. TERMINATION: If BUYER ceases to conduct its operation in the normal course
of business (including inability to meet its obligations as they mature) or if
any proceeding under any bankruptcy or insolvency laws is brought against BUYER,
or a receiver for BUYER is appointed or applied for, or an assignment for the
benefit of creditors is made by BUYER, TSMC may terminate this Purchase Order
without liability except for deliveries previously made or for goods then
completed and subsequently delivered in accordance with the terms herein.
16. SUBCONTRACTING: BUYER agrees that TSMC has right to subcontract mask
vendors, testing houses and/or assembly houses of its choice for the goods
ordered.
In addition to the above, after discussion with BUYER, TSMC may manufacture all
or part of the goods ordered at one or more TSMC and/or TSMC affiliated
companies fabs at TSMC's discretion.
17. GENERAL: TSMC's failure to enforce at any time or for any period of time
of the provisions hereof shall not be construed a waiver of such provisions nor
of the right of TSMC thereafter to enforce each and every provision herein
contained. The Purchase Order and its related schedules constitute the entire
understanding between the parties with respect to the purchase and sale of the
specified goods and services and supersede all previous negotiations,
commitments, and writings with respect thereto. Any alteration, modification or
amendment to any of the provisions herein shall not be binding unless set forth
in writing and signed by the duly authorized representatives of both parties.
Any dispute, controversy or claim relating to T & C shall be solely and finally
settled under the Rules of Arbitration of the International Chamber of Commerce.
This T & C shall be governed and interpreted in accordance with the laws of the
Republic of China.
Please acknowledge your acceptance of the T & C as well as its above mentioned
scope of application by signing below and returning the signed copy to us. If we
do not receive your signed acknowledgement within 14 days from the date of this
letter, the T & C and its said scope of application shall be deemed accepted by
your.
Thank you for your attention to this matter.
Sincerely,
/s/ Ron Norris
Ron Norris Accepted by:
Senior Vice President INTEGRATED SYSTEMS, INC.
Worldwide Marketing & Sales
/s/ Gary Liu
_____________________________________
By: Gary Liu
Title: Director of Operations
Date: 11/22/99
Name stamp goes here
2 of 2
<PAGE>
EXHIBIT 10.6
(graphic)
UMC WAFER FOUNDRY STANDARD TERMS AND CONDITIONS
1. ACCEPTANCE OF TERMS
- ------------------------
United Microelectronics Corporation (USA) ("Seller" or "UMC"), and Buyer (i)
accepts these terms as essential to their relationship governing provision of
foundry services to be performed by United Microelectronics Corporation, an ROC
corporation ("Manufacturer") (collectively, these terms, all foundry agreements,
and all written quotations (if any) are referred to as "Agreements") and (ii)
confirm acceptance by Buyer's failure to return wafers/die or to reject services
(collectively "goods") within five (5) days of delivery.
2. DELIVERY
- -------------
2.1 Delivery will be made Free Carrier (Incoterms 2000). Manufacturer's plant,
Science Based Industry Park, HsinChu City, Taiwan to a carrier designated
in writing by Buyer or, if Buyer fails to designate a carrier, to a carrier
designated by Seller.
2.2 Title to the goods will pass to Buyer upon delivery to carrier.
2.3 All shipping and delivery dates are subject to timely receipt by Seller or
Manufacturer of fully-approved mask sets and fully-completed purchase
orders.
2.4 Seller shall make reasonable efforts to achieve on-time delivery and linear
shipments. Subject to this and Seller's written commitments for wafer
starts, SELLER SHALL NOT BE LIABLE FOR ANY DELAYS OR FAILURES TO MEET
DATES.
3. TERMS OF PAYMENT & QUANTITIES
- ----------------------------------
3.1 Unless otherwise agreed, full payment shall be made in New Taiwan Dollars
and/or U.S. Dollars (as stated in the invoice) within 30 days of delivery.
3.2 Seller reserves the right to change credit terms at any time in its sole
discretion.
3.3 Buyer will issue written purchase orders at least 75 days prior to
requested wafer out day, and guarantees prompt payment of all obligations
accrued pursuant to purchase orders.
3.4 Regardless of anything to the contrary, Buyer understands that Manufacturer
generally needs to start more than the numbers of wafers ordered by Buyer
in order to guarantee at the time of wafer start the quantities of wafers
so ordered which will yield within the agreed specifications. Accordingly,
Buyer will accept quantity variations (and pay according to the agreed
pricing) up to as much as ten percent (10%) above the quantities stated in
Buyer's purchase order(s).
4. PRICE, CYCLE TIMES, QUALIFICATION, PILOT FUNS, HOT LOTS, PRODUCTION, OH-
------------------------------------------------------------------------
HOLD
----
Unless otherwise agreed in writing, Wafer Price, Wafer Cycle Time,
Qualification, Pilot runs, Hot Lots, Production Runs and On Hold will be
exclusively as stated in Seller's Foundry Procedures and/or Seller's
written quotation for the goods involved.
5. NON-DISCLOSURE, CONFIDENTIALITY OF DESIGN & OWNERSHIP OF PROCESS
- ---------------------------------------------------------------------
5.1 Unless otherwise agreed in writing, the terms of Seller's Reciprocal Non-
Disclosure Agreement are expressly incorporated herein.
5.2 Unless otherwise expressly agreed in writing to the contrary, Seller will
treat any and all masks and databases provided by Buyer as confidential.
5.3 Regardless of anything to the contrary, nothing in this Agreement shall
limit or restrict either party from using and/or implementing in the
ordinary course of its business any and all processes, recipes, and
manufacturing, fabrication, assembly and test techniques, and related
improvements ("process technology") provided, derived and/or developed in
whole or in part by or on behalf of that party, and neither party shall be
limited to or restricted with respect to any such process technology unless
clearly stated to the contrary in a writing signed by an officer of the
party involved identifying the specific information in precise detail.
6. CHANGE NOTICES, ECN PROCEDURES, RELIABILITY & QUALITY
- ----------------------------------------------------------
Change Notices, ECN Procedures and Reliability and Quality shall be as
stated in Seller's Foundry Procedures, or in another writing signed by
Seller and Buyer.
7. LIMITED WARRANTY
- ---------------------
7.1 Seller warrants goods delivered after initial qualification shall be
processed (i) using the masks (or duplicates of them) which were used for
qualification, (ii) within the tolerances stated in Seller's applicable
process specifications, and (iii) in compliance with applicable Wafer
Acceptance and/or Yield Criteria agreed to in a writing signed by Seller
and Buyer.
7.2 Goods which have been subject to abuse, misuse, accident, alteration,
neglect, conditions outside specification, unauthorized repair or improper
application are not covered by any warranty.
7.3 Seller shall not be responsible for defects or claims caused by acts not
performed by or on behalf of Seller or Manufacturer; or by design or
application; or by combination of goods with other things.
7.4 Goods are not intended for use in, and no warranty is made with respect to,
applications where failure to perform can reasonably be expected to result
in significant injury (including, without limitation, navigation, weaponry,
aviation or nuclear equipment, or for surgical implant or to support or
sustain life) and Buyer will indemnify, defend, and hold harmless Seller
from all claims, damages and liabilities arising out of any such matters.
7.5 To the extent that any goods fail to meet the applicable warranties and/or
requirements due to reasons for which Seller and/or Manufacturer is
responsible, Seller shall either (i) replace such goods without charge, or
(ii) refund the payments made to Seller for such goods, all within sixty
(60) calendar days of Seller's receipt of written notice from Buyer of such
non-conformity. The parties will discuss in good faith which of these two
remedies is the most appropriate; provided however that if they cannot
agree, Seller may choose in its sole discretion between the two remedies,
and provided further that all goods for which refund and/or replacement is
sought and all returns shall be handled pursuant to Seller's return policy
and procedures.
7.6 This Section 7 is the only warranty by or on behalf of Seller or
Manufacturer and may not be modified or amended except in writing signed by
an authorized officer of Seller and by Buyer. Buyer is not relying upon any
warranty or representation except for those specifically stated here or in
such a signed writing.
7.7 Buyer is not relying on any statements or information in Seller or
Manufacturer's literature, and Buyer will test all parts and applications
under extended field and laboratory conditions as appropriate.
Notwithstanding any cross-reference or statements of compatibility,
functionality, interchangeability, and the like, Seller-provided goods,
circuits, embedded devices and processes may differ from similar goods,
circuits, devices and processes from other vendors in performance, function
or operation, or as to matters, ranges and conditions not stated in and/or
outside Seller's written specifications; and Buyer agrees that Seller makes
no warranties and is not responsible for such things. All reusable IP,
including that listed in Seller's Intellectual Property Catalog, and
including but not limited to blocks, libraries, tools, and documentation
therefor, is licensed to Buyer by the individual IP vendors and not by
Seller, and in any event Seller and Manufacturer make no warranty in
connection with such IP. Buyer is not relying on any statements or
information provided by Seller or Manufacturer in connection with such IP,
and Buyer will fully verify all IP as appropriate and be responsible to
ensure that such IP is compatible and suitable for Buyer's intended purpose
and applications.
7.8 EXCEPT AS PROVIDED ABOVE, SELLER AND MANUFACTURER MAKE NO WARRANTIES OR
CONDITIONS, EXPRESS, IMPLIED, OR STATUTORY, AND EXPRESSLY EXCLUDES AND
DISCLAIMS ANY WARRANTY OR CONDITION OF MERCHANTABILITY, NONINFRINGEMENT, OR
FITNESS FOR A PARTICULAR PURPOSE OR APPLICATION.
7.9 REGARDLESS OF CAUSE OR REASON FOR DAMAGE (WHETHER ACCIDENT, NEGLIGENCE, OR
OTHERWISE) SELLER SHALL HAVE NO LIABILITY (DIRECT, CONSEQUENTIAL OR OTHER)
FOR, IN CONNECTION WITH OR ARISING FROM PROPERTY FURNISHED FOR USE AT OR
LEFT AT SELLER; and by delivering or entrusting property to Seller, Buyer
expressly confirms this limitation. Notwithstanding this limitation, Seller
will replace, or pay the reasonable retooling costs to replace, masks
damaged or destroyed as a result of Seller's or Manufacturer's negligence
or fault.
Upon written request sent to the billing address listed on Buyer's latest-dated
purchase order, Buyer will promptly take possession of any and all property
of Buyer, and should Buyer fail to do so within thirty days of such
request. Seller may destroy or reclaim such property without liability.
8. LIMITATION OF LIABILITY
- ----------------------------
8.1 Neither party will be liable for any loss, damage or claim resulting from
causes beyond its reasonable control, including but not limited to, war,
fire, delay caused by others, material shortage, force majeure, or labor
conditions; and in the event of such a condition(s), the date(s) for
Seller's performance will be extended for a period equal to any resulting
delay.
8.2 SELLER'S AND MANUFACTURER'S LIABILITY ARISING OUT OF ANY QUOTATION, ANY
AGREEMENT, ANY BREACH THEREOF, OR ANY GOODS OR SERVICES WILL BE LIMITED TO
REFUND OF THE PURCHASE PRICE OR REPLACEMENT OF PURCHASED GOODS (RETURNED TO
UMC FREIGHT PREPAID); OR IN THE EVENT OF A FAILURE OR BREACH BY SELLER
REGARDING DELIVERY, AN AMOUNT EQUAL TO THE TOTAL PURCHASE PRICE OF THE
GOODS THAT HAVE NOT BEEN DELIVERED DUE TO SUCH FAILURE.
8.3 AS A SEPARATE LIMITATION, IN NO EVENT WILL SELLER OR MANUFACTURER BE LIABLE
(i) FOR COSTS OF SUBSTITUTE GOODS, (ii) FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL OR INDIRECT DAMAGES, OR (iii) FOR LOSS OF USE, OPPORTUNITY,
MARKET POTENTIAL, GOODWILL AND/OR PROFIT ON ANY THEORY (CONTRACT, TORT,
FROM THIRD PARTY CLAIMS OR OTHERWISE). THESE LIMITATIONS SHALL APPLY
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OR OF ANY FAILURE OR
INADEQUACY OF ANY REMEDY. THIS AGREEMENT STATES THE ONLY AND EXCLUSIVE
REMEDY FOR ANY AND ALL CLAIMS MADE AGAINST SELLER AND/OR MANUFACTURER UNDER
ANY AGREEMENT AND/OR WITH RESPECT TO WAFERS, SERVICES AND/OR GOODS.
8.4 No action or proceeding may be commenced by either party against the other,
whether for breach, indemnification, contribution or otherwise, more than
one year after delivery of the goods to the carrier; and no claim may be
brought unless the non-claiming party has first been given commercially
reasonable notice, a full written explanation of all pertinent details
(including copies of all materials), and a good faith opportunity to
resolve the matter.
8.5 BUYER EXPRESSLY AGREES TO THE LIMITATIONS OF SECTIONS 5, 7, 8 AND 9 AND TO
THEIR REASONABLENESS.
8.6 The exclusions and limitations of Sections 5, 7, 8 and 9 will survive the
termination of the applicable Agreements, and shall apply notwithstanding
any claim of a failure of any one or more remedies to accomplish their
purpose, and THE PARTIES EXPRESSLY WAIVE AND RELINQUISH ANY CONTRARY RIGHTS
UNDER ANY AGREEMENT, AND/OR LAW, DECISION, CUSTOM OR PRACTICE.
9. INDEMNIFICATION & COOPERATION
- ----------------------------------
9.1 Seller will defend and/or settle all suits against Buyer to the extent
based on any claim that any processes (as performed by Seller with respect
to goods) infringe any R.O.C., Canadian, Japanese, European Community
and/or U.S. patent, copyright, trade secret or trademark; provided,
however, that Buyer (i) gives immediate written notice to Seller, (ii)
permits Seller to defend, and (iii) gives Seller all needed information,
assistance, and authority.
9.2 However, neither Seller not manufacturer will be responsible for
infringements resulting from anything not manufactured entirely by or on
behalf of Seller, or from any combination with things or materials not
furnished by Seller, or for any claim due in whole or in part to any act,
omission, design and/or specification of Buyer.
9.3 THIS SECTION 9 STATES SELLER'S AND MANUFACTURER'S ENTIRE LIABILITY AND
OBLIGATION WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT OR CLAIMS
THEREFOR AND IS EXPRESSLY SUBJECT TO SECTION 8. Except as to claims Seller
is obligated to defend, BUYER WILL INDEMNIFY, DEFEND AND HOLD HARMLESS
SELLER AND MANUFACTURER FROM ALL CLAIMS, COSTS, LOSSES, AND DAMAGES
(INCLUDING REASONABLE ATTORNEYS' FEES) AGAINST AND/OR ARISING OUT OF GOODS
AND/OR SERVICES.
9.4 Without limiting any other terms, Buyer guarantees that production of goods
pursuant to Buyer's specifications and/or designs will not infringe,
misappropriate or violate any applicable R.O.C., Canadian, Japanese,
European Community and/or U.S. copyright, trademark, patent, trade secret,
mask work, or other rights of third parties. In the event Buyer is a party
to any infringement or misappropriation action or dispute, (i) Seller may,
at its sole option, immediately terminate and/or suspend performance, and
(ii) Buyer shall be fully and solely responsible, and will defend,
indemnify and hold Seller harmless from any and all damages, losses and
costs (including Seller's reasonable attorneys fees) from and against any
claim of breach of Buyer's guarantee in this paragraph.
9.5 Seller and Buyer will cooperate with respect to intellectual property
rights of third parties relating to goods and/or services as stated in
Seller's Foundry Procedures.
10. TERMINATION & DISPUTE RESOLUTION
- -------------------------------------
10.1 Cancellation and/or termination of the Agreements and/or any order for
goods shall not be permitted except strictly pursuant and subject to
Seller's Foundry Procedures.
10.2 Buyer and Seller shall cooperate and attempt in good faith to resolve any
and all disputes arising out of and/or relating to any Agreement and/or
goods as described in Seller's Foundry Procedures.
10.3 Any disputes relating to and/or arising out of any Agreement and/or goods
which cannot be so resolved will be decided exclusively by binding
arbitration under procedures which ensure efficient and speedy resolution.
The specific procedures concerning such arbitrations shall be pursuant to
the Rules for International Arbitrations under the American Arbitration
Association, as described in more detail in Seller's Foundry Procedures.
10.4 Notwithstanding anything to the contrary, any party may apply to any court
of competent jurisdiction for interim injunctive relief with respect to
irreparable harm which cannot be avoided and/or compensated by such
arbitration proceedings, without breach of this Section 10 and without any
abridgment of the powers of the arbitrators.
11. NO OTHER WARRANTY OR REPRESENTATION
- ----------------------------------------
These terms and conditions (and the Agreements) are the entire agreement
between Seller and Buyer with respect to foundry, fabrication,
semiconductors, design support and goods, there are no other agreements
concerning such subject matter, and no addition, deletion or modification
shall be binding on Seller unless expressly agreed to in a writing signed
by an officer of Seller.
12. MISCELLANEOUS
- ------------------
12.1 All foundry arrangements involving Seller and all performance and disputes
arising out of and/or relating to such matters and/or any Goods involved
will be governed by the laws of California and the United States of
America, without reference to conflicts of laws principles, and/or any
contrary provision, including without limitation, the U.N. Convention of
Contracts for the International Sale of Goods.
12.2 The parties will comply with all applicable restrictions and requirements
of applicable law, including without limitation those relating to labor,
employment, environment, and export control.
Wafer Foundry Standard Terms
<PAGE>
EXHIBIT 10.7
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
(graphic) CAESAR INTERNATIONAL, INC.
2333 Zanker Road, San Jose, CA 5131 Tel. # (408) 474-0808 FAX # (408) 474-0800
August 20, 1998
Mr. Yee Lok Wong
InteGraphics, Inc.
4001 Burton Drive
Santa Clara, CA 95054
Subject: Quotation No. IGS-0898-001
Dear Mr. Wong,
Caesar Technology, Inc. (CTI) is proud to present the following quotation
for assembly of your plastic devices.
1.0 Pricing
-----------
Quad Flat Pack
--------------
CTI Supplied Material
---------------------
Leadframe: ***, spot ***, stamped
Die Attach Epoxy: Ablestick ***
Bonding Wire: Gold *** Mils
Molding Compound: Sumitomo ***
Lead Finish: Solder Plate ***
Shipping tray: *** bakeable *** standard
Heatspreader: Anodized A1
Lead Pkg Body L/F Price
per unit
*** PQFP w/HS *** Stamped ***
*** PQFP w/o HS *** Stamped ***
Note: Price includes Assembly, Heatspreader, Bake & Dry Pack, Tray, AQ
leadscan.
***CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
1
<PAGE>
Quotation No.IGS-0898-001
2.0 Fast Tract Program
----------------------
Caesar Technology Inc. offers both Fast Track Program (FTP) and Super Fast
Track Program (SFTP) for all packages we assemble. Conditions are as
follows:
1. Fast Track Program will be assembled 5 days in house at an 100%
premium including all miscellaneous charges.
2. Super Fast Track Program will be assembled 3 days in house at an
200% premium including all miscellaneous charges.
3. Assumes CTI standard process flow.
4. Assumes all material is in house and reserved for said assembly
and test prior to shipment of die.
5. Assumes all documentation is in house and ready to go upon
receipt of die shipment.
6. Capacity must be reserved through U.S. office prior to shipment
die.
3.0 Cycle Time
--------------
CTI standard in house cycle time is 8 workdays days. Standard cycle time
is based on the assumption all material and documentation are in house.
4.0 Precious Metal Adder:
------------------------
Prices are quoted at an average price of $400 per troy ounce for gold
and $10.00 per troy ounce for silver. Prices are based on the
Englehard fabricated product price on the day of shipment from the
factory. CTI reserves the right to renegotiate the assembly pricing
should the precious metal prices move appreciably from the base
prices.
5.0 Terms and Conditions
------------------------
1. Minimum lot charge is $ *** USD.
2. Engineering lot charge is $ *** USD or total assembly cost, which
ever is greater.
3. FOB is Caesar Technology Inc. Chutung, Hsinchu, Taiwan. CTI will
not be responsible for product damages/missing...etc. once it
leaves CTI's door.
4. Customer will provide sorted linked wafers with inked die for
set-up purposes.
5. Customer should provide CTI with three months rolling forecast
for CTI to set up all necessary material stock.
***CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
2
<PAGE>
Quotation No.IGS-0898-001
6. In any case, should Customer terminate the production, Customer
must zero the lead frame stock balance and pay the lead frame
cost in cash immediately. This applies to non-standard materials
specific to Customer device only.
7. Payment terms are net 30 days upon shipment from Chutung,
Hsinchu, Taiwan. A monthly late charge of 2% will be applied to
all invoices over 30 days outstanding. If collections and/or
legal actions will become necessary for unpaid shipments to
Customers, Customer will have to pay for all charges incurred
relating to the collections and/or legal activities.
8. The assembly price include stamped lead frames or etched
leadframes whichever is applicable, *** C *** tray or Shipping
Tubes, AQL sample lead scan and dry packiing. Additional
charges will be applied for different materials used or services
rendered.
9. Assembly prices do not include freight, forwarding fees or
duties. A separate invoice will be issued for these charges.
10. CTI liability shall be value added through assembly only and this
quotation supersedes all other warranties.
11. All Claims must be made 30 days after product ships from Chutung,
Hsinchu, Taiwan.
12. This quote is based on CTI standard process and shall be
effective upon receipt of purchase order referencing this
quotation number.
13. The price break applicable for the current month is determined by
the actual die loading of the previous month.
14. This quote is effective for 60 days. The price will apply for
shipouts made starting July 1, 1998 from Caesar Technology, Inc.
On behalf of Caesar Technology Inc., I would like to thank you for the
opportunity to quote on your assembly requirements. Please feel free to
call me or our U.S. office should you have any questions regarding this
quotation.
Sincerely,
/s/ Stephen Lee
Stephen Lee
President
Caesar International, Inc.
Tel # (408) 474-0808
Fax # (408) 474-0800
***CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
3
<PAGE>
EXHIBIT 10.8
CONFIDENTIAL TREATEMENT REQUESTED. CONFIDENTIAL PORTIONS FO THIS DOCUMENT HAVE
BEEN REDACTD AND HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
JOINT DEVELOPMENT AGREEMENT
This Joint Development Agreement (the "Agreement") is made and entered into
as of the 29th day of October, 1999 (the "Effective Date"), by and between IGS
Technologies, Inc., a corporation organized and existing under the laws of
California, with its principal place of business at 4001 Burton Drive, Santa
Clara, CA 95054 ("IGS"), and Coreum Technology, Inc., a corporation organized
and existing under the laws of California, with its principal place of business
at 4030, Moorpark Avenue, Suite #125, San Jose, CA 95117 ("Coreum").
Whereas, Coreum has developed and is developing certain *** macrocell core
designs;
Whereas, Coreum and iGST are willing to jointly customize and port such
designs as well as add new designs for integration into iGST's Integrated
Circuits and for usage by Coreum for its Macrocell product offering;
Now, Therefore, the parties, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS
1.1 "Core" shall have the meaning set forth in the Statement of Work.
1.2 "Database" means the technical specifications described in the
Statement of Work, Verilog models and the Documentation.
1.3 "Deliverables" means the items to be developed and/or provided by
Coreum to iGST under this Agreement in accordance with the Statement of Work and
the Specifications.
1.4 "Device" means the embodiment or incorporation of the Core in a
semiconductor device or other product.
1.5 "Documentation" means user manuals, training materials, help text,
sample documents and graphics and other written or graphic materials provided to
iGST by Coreum that describe the operation of the Core.
1.6 "Error" shall mean a material nonconformity of the Core with the
Specifications.
1.7 "Improvements" means any improvements, discoveries, developments,
modifications or derivative works whether or not patentable.
1.8 "Intellectual Property Rights" means all current and future trade
secrets, copyrights, patents and other patent rights, trademark rights, service
mark rights, mask work rights and any and all other intellectual property or
proprietary rights now known or hereafter recognized in any jurisdiction.
1.9 "Specifications" means the functional specifications of the Core set
forth in Attachment 1 to the Statement of Work (see Exhibit A).
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
1
<PAGE>
1.10 "Statement of Work" means the document specifying the development
work to be performed by Coreum under this Agreement and the iGST's
responsibilities for the development (see paragraph 2.3), NRE and Payment per
Chip. A copy of the Statement of Work is attached hereto as Exhibit A. The
Statement of Work may be amended by the parties from time to time upon the
mutual agreement, in writing, of both parties.
1.11 " Schedule" means the schedule set forth in the Attachment 2 to the
Statement of Work (Exhibit A).
2. Development, Delivery And Acceptance
2.1 Project Managers. Each party shall appoint a project manager who will
coordinate and act as liaison with the other party with respect to each project
under the Statement of Work. The parties' respective project managers shall
participate in project review meetings as set forth in a Statement of Work or as
otherwise mutually agreed. Either party may change its project manager from time
to time upon written notice to the other party.
2.2 Modifications to the Statement of Work. From time to time during the
development process, either party may propose changes to the Specifications to
improve or add functionality to the Core. If Coreum generates such proposal, the
proposal will include an estimate of the effect on price and timing of the
development effort. If iGST makes such proposal, Coreum will notify iGST of
technical feasibility of the proposed change and the estimated effect on price
and timing of Coreum's development effort. The parties will then discuss in good
faith whether to adopt such change. To be effective, any such modification to a
Statement of Work must be agreed upon in writing by the parties. Absent such
written agreement, the Specifications and Statement of Work in existence at the
time of the proposal will remain in effect.
2.3 iGST's Responsibilities. For Coreum to be able to perform its
development tasks, iGST must provide the information and mutually agreed upon
assistance described in the applicable Statement of Work.
2.4 Delivery. Coreum shall use diligent efforts to deliver to iGST each of
the Deliverables in accordance with the delivery schedule set forth in the
applicable Statement of Work. Upon completion of each Deliverable set forth in
the Statement of Work, Coreum shall deliver such Deliverable to iGST. Such
delivery shall be ex works Coreum's facilities.
2.5 Acceptance.
(a) Within thirty (30) days, or such other period of time as may be
set forth in the Statement of Work for a particular Deliverable, after receipt
by iGST of a Deliverable from Coreum, (the "Acceptance Period"), iGST shall
review, test, and evaluate such Deliverable for conformity with the
Specifications and in accordance with the test procedures described in the
Statement of Work and provide Coreum either (i) a written acceptance of the
Deliverable or (ii) a written statement of rejection indicating the non-
conformities to the Specification requiring correction. A Deliverable will be
deemed accepted by iGST if Coreum does not receive either written acceptance or
written rejection regarding such deliverable within the Acceptance Period.
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(b) If any Deliverable is rejected as set forth above, Coreum shall
use diligent efforts to remedy all identified, reproducible and material non-
conformities to the Specifications in such Deliverable and shall promptly return
the reworked Deliverable to iGST for re-testing, review, and reevaluation. If
Coreum believes in good faith that such remediation will take longer than thirty
(30) days, Coreum shall so notify iGST. iGST shall then, within the Acceptance
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Period of such redelivery, use reasonable efforts to again provide Coreum with a
written statement indicating any further material non-conformities requiring
correction.
(c) The foregoing procedure shall be repeated until (i) final written
acceptance of the Deliverable by iGST, or (ii) the parties mutually agree in
writing to terminate this Agreement; provided, however, should Coreum fail to
remedy all material non-conformities to Specifications in any Deliverable after
iGST has rejected such Deliverable three (3) times, iGST may, as its sole
remedy, terminate this Agreement in accordance with Section 10.2 hereof.
3. Joint Development
3.1 Terms of the Joint Development.
(a) Subject to the terms and conditions of this Agreement, Coreum and
iGST will jointly develop new designs as well as customize and port Coreum's
existing integration into iGST's Integrated Circuits and for usage by Coreum for
its Macrocell product offering.
(b) iGST is not in the business of licensing its core and does not
intent to offer the jointly develop core as a standard Macrocell. After the
completion of this development and final acceptance of the core as specified
under this Agreement, iGST might, from time to time, license the core developed
during that first year to specific OEM partners.
(c) Neither iGST nor Coreum shall make the jointly developed core
available in the public domain.
3.2 Trademarks. Nothing in this Agreement shall be deemed to give Coreum
or iGST any rights to use any of the other party's trademarks or trade names,
including without limitation the respective company names without specific,
prior written consent.
3.3 Ownership. The Core will be developed as a Joint development and
ownership will be according to paragraph 3.4 except for Customer Specific, non-
standard circuitry or features ("custom circuitry") that iGST has been requested
to implement for a specific customer and identified in writing at the time of
the discussion of this custom circuitry with Coreum.
3.4 Jointly Developed Applications. For any joint conception, invention
and development of technology, the parties agree that all Intellectual Property
Rights conceived, created, made, or first fixed in a tangible medium of
expression during the term of and in the course of performance of any applicable
Statement of Work, shall be as follows: (i) Coreum's Intellectual Property
Rights when algorithms are conceived, invented or created by Coreum personnel
not for the purpose of this Joint Development Agreement; (ii) iGST Intellectual
Property Rights when algorithms are conceived, invented or created by iGST
personnel not for the purpose of this Joint Development Agreement; and (iii)
owned jointly by the parties (if not an Improvement to the Core), without right
of accounting, when algorithms are conceived, invented
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or created jointly by iGST and Coreum personnel for the purpose of this Joint
Development Agreement ("Joint Intellectual Property"). Coreum and iGST agree
that throughout the term of this Agreement they shall cooperate reasonably and
in good faith to decide jointly the manner in which their respective interests
in Joint Intellectual Property shall be perfected and enforced. Specifically,
for Joint Intellectual Property, Coreum and iGST shall jointly decide: (i) the
subject matter for which patent applications and applications for copyright
registrations will be prepared; (ii) the resources to be utilized in the
preparation and prosecution of such applications; (iii) the parties' rights to
review and/or approve such applications and other papers prior to filling in, or
submission to, the United States Patent and Trademark Office and/or with the
Registrar of Copyrights; (iv) the allocation of expenses incurred in the
preparation, prosecution and maintenance of patent applications, patents, and
copyright registrations and the like; (v) matters regarding the enforcement,
through litigation, licensing or otherwise of the Joint Intellectual Property
against third parties; and (vi) the manner in which revenue resulting from
enforcement of Joint Intellectual Property will be shared between Coreum and
iGST. Should a party choose not to participate in securing or protecting an
element of Joint Intellectual Property, the other party may secure or protect
its claims to such Joint Intellectual Property and shall be entitled to reap the
benefit of its efforts without accounting to the other party, including without
limitation retaining the full amount of any settlement or damage award from a
third party. If one party declines to participate in securing or protecting an
element of Joint Intellectual Property, and the other party secures Patents or
Copyrights, the declining party will maintain ownership as specified in this
Agreement. Moreover, the Patents or Copyrights obtained during and for the
purpose of this Joint Development between Coreum and iGST under this Agreement
will not be enforceable to either Coreum or iGST for the jointly developed
Intellectual Property.
3.5 Infringement by Third Parties. If either party learns of any possible
infringement or misappropriation of either Party's Intellectual Property Rights,
it shall immediately give notice thereof to the other party. iGST agrees to
cooperate with Coreum's reasonable efforts to seek legal remedies for such
infringements and misappropriations.
4. Payments
4.1 Fees. iGST shall pay to Coreum the fees set forth in the Statement of
Work, including without limitation non-recurring engineering fees, milestone
payments and payment-per-device set forth therein.
4.2 Payment-per-Device ("PPD"). iGST shall, within thirty (30) days after
the end of each calendar quarter:
(a) Send to Coreum a report detailing the number of Devices sold
during the quarter to which the payment set forth in Section 4.1 above applies,
the rates at which the PPD were computed, the amount of PPD due, and all
additional details necessary to show how these amounts were determined. iGST
will provide Coreum with a written, quarterly report, whether or not any PPD is
due; and
(b) Pay to Coreum all PPD to which Coreum is entitled, as stated in
the attached Statement of Work.
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4.3 Books and Records. iGST shall keep true and accurate records and books
of account containing all the data reasonably required for the full computation
and verification of royalty payments due under this Agreement for each quarter
of each of iGST's fiscal years. Such materials shall be retained for a period of
at least five (5) years following the end of the fiscal year to which they
relate. iGST's books of account shall be maintained in accordance with generally
accepted accounting principles consistently applied. iGST shall permit the
auditing and copying of such records and books of account by Coreum's
representatives. Fees and expenses incurred in connection with such inspections
(such as professional fees and expenses paid to accountants or other examiners
retained by Coreum and the cost of copying records and books of account) shall
be borne by Coreum, unless such inspection shall reveal that an error of ten per
cent (10%) or more in any payment was made during any given quarter, in which
case the fees and expenses incurred in connection with the inspection during
which such error was discovered shall be borne by iGST.
4.4 Late Payment. Any payment not made when due shall bear interest at a
rate equal to one percent (1%) per month, on the unpaid amounts from time to
time outstanding from the date on which portions of such amounts became due and
owing until payment thereof in full.
4.5 No Set-Off. No part of any amount payable to either party hereunder
may be reduced due to any counterclaim, set-off, adjustment or other right which
the other party may have against such party.
4.6 Taxes. iGST will be responsible for the payment of all export,
excise, sales, use, property and other taxes based on the transactions under
this Agreement or the fees paid hereunder, including without limitation NRE fees
and PPD. If iGST is required to withhold any taxes from amounts paid to Coreum
under this Agreement, it shall pay Coreum an additional amount so that the
amount actually received net of taxes by Coreum is the amount that Coreum would
have received had there been no withholding tax.
4.7 Currency. All payments hereunder shall be in United States Dollars.
In the event of transactions giving rise to an obligation to make a payment
hereunder with respect to which iGST receives payment in a currency other than
currency which is legal tender in the United States of America, all payments
required to be made by iGST under Section 4.1 hereof shall be converted, prior
to payment, into United States Dollars at the applicable rate of exchange
published in the Western United States edition of the Wall Street Journal on the
last day of the month in which such transaction occurred.
5. Maintenance
5.1 Error Correction. For a period of ninety (90) days following
acceptance of the Core, Coreum shall, at no additional charge to iGST, use
reasonable efforts to fix any and all Errors, and provide technical support
relating to the Core. In the event that part of the Coreum team has moved to
iGST, then this team should be available to Coreum to support the error
correction effort. Upon each successful fix or correction of Errors, Coreum
shall deliver to iGST the Database comprising such fix or correction.
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5.2 Ongoing Support. Following expiration of the period set forth in
Section 5.1, iGST may elect to purchase additional support and maintenance
services from Coreum at Coreum's then-current hourly rate plus reasonable
expenses. Alternatively, iGST may purchase annual support and maintenance
services at Coreum's then-current annual rates, payable in advance in quarterly
installments. iGST may cancel such services upon receipt of Coreum's invoice for
any semiannual installment or at any time upon ninety (90) days prior notice to
Coreum, and receive a pro rata refund of any prepayments for the cancelled
period. Coreum's rates are subject to change at Coreum's sole discretion upon
thirty (30) days' advance notice for any period not then currently paid for by
iGST.
6. Warranties
6.1 Limited Performance Warranty. Coreum represents and warrants that the
Core will conform in all material respects to the Specifications for a period of
ninety (90) days after acceptance of the Core in the initial iGST target Device
and in accordance with Section 2.5 and the applicable Statement of Work. The
warranty set forth above shall not apply if (A) the Devices are used in any
direct or active operations of any equipment in any nuclear, aviation, mass
transit, or medical applications, or in any other inherently dangerous
applications, or (B) the Core is not used in accordance with the Documentation
or is otherwise misused. The limited warranty set forth above shall also not
apply to modifications or Improvements made by any party other than Coreum to
the Core nor shall it apply to the Device as a whole except to the extent solely
attributable to the Core.
6.2 Remedies. iGST's sole and exclusive remedy and Coreum's sole and
exclusive obligation for a breach of the warranty set forth in Section 6.1 shall
be the Error correction provided in accordance with Section 5.
6.3 Commercialization. Both Coreum and iGST shall use commercially
reasonable efforts to manufacture, market, sell and warranty the Devices
integrating the Jointly Developed Core.
6.4 Warranty Exclusion. Except as provided in Section 6.1, Coreum makes
no warranty of any kind with regard to the Deliverables, the Core, the Database,
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the Documentation, or any Coreum Intellectual Property Rights. COREUM EXPRESSLY
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DISCLAIMS ANY AND ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
WITHOUT LIMITATION WARRANTIES OF TITLE, NONINFRINGEMENT, MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, WHETHER ARISING IN LAW, CUSTOM, CONDUCT OR
OTHERWISE. No person is authorized to make any warranty or representation
concerning the performance of the Core. Both Coreum and iGST agree that they
will make no warranty, express or implied, on behalf of the other party.
7. Indemnification.
7.1 Coreum Indemnity. Coreum agrees at its expense to defend any action,
claim, suit or proceeding (a "Claim") that the Core infringes any third party's
United States patent or copyright or misappropriates any third party's trade
secret, and will indemnify iGST from and
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against any costs, liabilities and damages finally awarded against iGST by a
court of competition jurisdiction in such Claim, including without limitation
reasonable attorneys' fees; provided that (i) iGST promptly notifies Coreum of
the existence of such Claim, (ii) iGST provides Coreum reasonable assistance
upon Coreum's request and at Coreum's reasonable expense, and (iii) iGST gives
Coreum the sole control of the defense and settlement of such Claim. If an
injunction is obtained against iGST for use of the Core, or if Coreum reasonably
believes that such injunction is likely, Coreum will, at its option and its
expense, either (i) procure for iGST the right to continue using such Core, (ii)
replace or modify Core or the infringing portions thereof so that they become
non-infringing, or (iii) refund PPD and fees paid therefor depreciated on a
straight-line basis over three (3) years and terminate this Agreement. Coreum
will have no liability or obligation to defend or indemnify for any Claim
arising from (i) the combination of Core with iGST or third party materials or
intellectual property, unless it is determined by a court of competent
jurisdiction that the Core is the sole infringing element of such claim; (ii)
the modification or translation of Core or any portion of the Core by a party
other then Coreum; (iii) any use by iGST of the Core after iGST becomes aware
that the Core may be infringing; or (iv) use of an outmoded or superceded
version of the Core after Coreum has made available a revised, non-infringing
version.
7.2 iGST Indemnity. Except as specifically provided in Section 7.1, iGST
agrees to defend, indemnify and hold Coreum harmless from and against any and
all Claims, brought by a third party and from and against any and all
liabilities, losses, costs, including without limitation reasonable attorneys'
fees and other court expenses related thereto, arising by reason of iGST's
exercise of its rights under this Agreement, including without limitation any
Claims that (i) the Devices infringe any third party's Intellectual Property
Rights, or (ii) relate to product liability claims from use of the Devices;
provided that (i) Coreum promptly notifies iGST of the existence of such Claim;
(ii) Coreum provides iGST reasonable assistance in the defense of such Claim at
iGST's request and at iGST's reasonable expenses; and (iii) Coreum gives iGST
the sole control of the defense and settlement for such Claim, except that iGST
may not settle or compromise any Claim without Coreum's prior written consent
unless such settlement or compromise unconditionally releases Coreum. iGST will
have no liability for any Claim of indemnity under this Section 7.2 if it is
determined by a court of competent jurisdiction that the Core, and not the
combination of the Core with iGST or third party material, is the infringing
element of such Claim.
7.3 The foregoing provisions of this Section 7 state the entire liability
and obligations of each party and the exclusive remedy of each party with
respect to any alleged Intellectual Property Rights infringement by the Core,
the Database, the Documentation and the Devices.
8. Limitation Of Liability
OTHER THAN FOR BREACHES OF SECTIONS 3 AND SECTION 9, OR FOR ANY AMOUNTS PAYABLE
PURSUANT TO SECTION 7, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
LOST PROFITS, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR
EXEMPLARY DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION ANY LOSS OF USE OR
OTHER ECONOMIC DAMAGE, INCLUDING INJURY TO PROPERTY, AS A RESULT OF BREACH OF
ANY WARRANTY OR OTHER TERM OF THIS AGREEMENT,
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REGARDLESS OF WHETHER THE OTHER PARTY WAS ADVISED, HAD OTHER REASON TO KNOW, OR
IN FACT KNEW OF, THE POSSIBILITY THEREOF. IN NO EVENT SHALL COREUM'S AGGREGATE
LIABILITY EXCEED THE AMOUNTS RECEIVED BY COREUM FROM CUSTOMER UNDER THIS
AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE DATE OF THE INITIAL EVENT
RESULTING IN SUCH CLAIMS. THE EXISTENCE OF MULTIPLE CLAIMS SHALL NOT ENLARGE THE
FOREGOING LIMIT. THE PARTIES ACKNOWLEDGE THAT THE FOREGOING LIMITATION OF
LIABILITY IS A FUNDAMENTAL BASIS OF THE BARGAIN BETWEEN THE PARTIES AND THAT IN
ITS ABSENCE THE ECONOMIC TERMS WOULD BE SUBSTANTIALLY DIFFERENT.
9. Confidentiality
9.1 Nondisclosure and Non-Use. All confidential or proprietary information
disclosed by one party to the other and marked as confidential or proprietary
("Confidential Information") shall be treated as confidential and not disclosed
or transferred by the recipient to third parties, other than the recipient's
agents and employees who need to know such information to serve the recipient
and who are obligated to treat such information as confidential. For purposes
hereof, confidential or proprietary information disclosed orally shall also be
considered Confidential Information hereunder if identified at the time of
disclosure as confidential and thereafter summarized and reduced to writing,
marked as confidential.
9.2 Exclusions. Notwithstanding any other provision of this Agreement,
neither party shall be restricted from using information received from the other
party which: (a) is or becomes public knowledge through no wrongful act of the
recipient; (b) is rightfully obtained by the recipient from a third party
without similar restriction and without breach of any obligation owed to the
disclosing party; (c) is approved for release by written authorization of the
disclosing party.
9.3 Enforcement. Each party shall exert its reasonable and diligent
efforts, including, but not limited to the execution of proprietary non-
disclosure agreements with employees, consultants, and other third parties, and
legal action, to enforce compliance with the provisions of this Section 9 by its
directors, officers, employees, and any third party to whom it provided access
to Confidential Information of the other party.
10. Term And Termination
10.1 Term. Unless terminated earlier under the terms of this Section, this
Agreement shall commence upon the Effective Date and shall continue for a period
of 7 years or until terminated as provided below (the "Term").
10.2 Termination for Breach. If either party materially defaults in the
performance of its obligations hereunder, the defaulting party agrees to use its
commercially reasonable efforts to correct the default within sixty (60) days
after written notice of default from the non-defaulting party; provided,
however, that the Acceptance of the Core has been in accordance with paragraph
2.5; period for a failure to make a payment when due shall be thirty (30) days.
If any such default
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is not corrected within the applicable cure period, then the non-defaulting
party at its option may, in addition to any other remedies it may have,
terminate this Agreement immediately.
10.3 Survival. Sections 1, 3, 4, 6.4, 7, 8, 9, 10 and 11 shall survive any
termination or expiration of this Agreement.
11. General Provisions
11.1 Assignment. Either party may assign this Agreement in connection
with a corporate reorganization, acquisition, merger, or sale of all or
substantially all of its assets. Subject to the foregoing, neither party may
assign or otherwise transfer this Agreement nor any rights or obligations under
this Agreement, in whole or in part, without the other party's prior written
consent. Any attempt by a party to effect such an assignment or transfer without
the other party's written consent will be void.
11.2 Independent Contractors. The parties hereto are independent
contractors. Nothing contained herein or done in pursuance of this Agreement
shall constitute either party the agent of the other party for any purpose or in
any sense whatsoever, or constitute the parties as partners or joint venturers.
11.3 Amendment. No alteration, amendment, waiver, cancellation or any
other change in any term or condition of this Agreement shall be valid or
binding on either party unless mutually assented to in writing by both parties.
11.4 No Waiver. No waiver of any term or condition of this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be a further or continuing waiver of that term or condition or a waiver of
any other term or condition.
11.5 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. The parties agree to negotiate
in good faith an enforceable substitute provision for any unenforceable
provision that most nearly achieves the intent and economic effect of the
unenforceable provision.
11.6 Headings. The section headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
11.7 Notices. The addresses of the parties for this Agreement are as
detailed below, or any other address as to which a party will notify the other
fifteen days in advance. All notices and other communications delivered in
person shall be deemed received upon delivery, sent by registered mail shall be
deemed to have been received as of ten business days after sending thereof, and
given by facsimile shall be deemed received twenty-four (24) hours after
transmission with confirmed answer-back.
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If to Coreum: Coreum, Inc.
4030, Moorpark Avenue, Suite #125,
San Jose, CA 95117
Fax: 408-
Attn: Fuad Abunofal
If to iGST: iGS Technologies
4001, Burton Drive
Santa Clara, CA 95054
Fax: 408-982-8951
Attn: Jack Guedj
11.8 Export Compliance; Government End Users. IGST and Coreum will not
export, directly or indirectly, the Devices, or any portion of the Devices, or
the Core in any form, to any country or foreign national for which United States
laws or regulations require an export license or other governmental approval,
without first obtaining such license or approval. Both Parties hereby agree to
indemnify and hold the other Party harmless from and against any losses,
damages, penalties or causes of action resulting from a violation of this
Section.
11.9 Force Majeure. Except for the payment of monies due under this
Agreement, neither party shall be deemed to be in default under this Agreement
as long as its failure to perform any of its obligations hereunder is occasioned
solely by fire, labor disturbance, acts of civil or military authorities, acts
of God, or any similar cause beyond such party's reasonable control. Upon the
occurrence of an event of force majeure, the party claiming force majeure shall
immediately notify the other of the nature and expected duration of the event of
force majeure.
11.10 Venue; Jurisdiction. Coreum and iGST each hereby irrevocably: (i)
agree that upon the request of either part, any suit, action or other legal
proceeding arising from or relating to this Agreement shall be brought in a
court of competent jurisdiction in San Jose, California, which court shall have
exclusive jurisdiction over any controversy arising from or related to this
Agreement; (ii) consents to the jurisdiction of such court in any such suit,
action or proceeding; and (iii) waives any objection it may have to the laying
of venue of any such suit, action or proceeding in such court and waives any
claim that any such suit, action or proceeding has been brought in an
inconvenient forum. Service of process in any suit, action or proceeding may be
made in any manner permitted by law.
11.11 Governing Law. This agreement shall be governed by and interpreted
in accordance with the laws of California as between California residents,
without reference to its conflict of laws principles. The parties expressly
agree that the United Nations Convention on Contracts for the International Sale
of Goods is specifically excluded from application to this Agreement.
11.12 Entire Agreement. This Agreement and the referenced Exhibits which
are incorporated herein by this reference, constitute the entire agreement
between the parties with respect to the subject matter hereof and supersede all
previous and contemporaneous agreements and understandings, whether oral or
written, between the parties hereto with respect to the subject matter hereof.
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In Witness Whereof, the parties hereto have caused this JOINT DEVELOPMENT
AGREEMENT to be signed in duplicate by duly authorized officers or
representatives as of the date first above written.
iGST Coreum, Inc.
By /s/ Jack Guedj By /s/ Fuad Abunofal
---------------------------- -----------------------------
Name Jack Guedj Name Fuad Abunofal
-------------------------- --------------------------
Title President Title President
------------------------- -------------------------
10/29/99 10/29/99
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EXHIBIT A
Statement Of Work
1. Purpose: Joint Development of ***, ***, ***, Memory Interface Core
meeting iGST's requirements.
2. Coreum will provide Behavioral Model, Verilog source code, simulation
environment and synthesis scripts.
3. Coreum will manage the development as a separate team which comprises of ***
to *** Coreum engineers plus *** to *** engineers loaned from iGST. The
Coreum dedicated team for iGST will join iGST within *** months of the start
of the program. The development program will take place approximately on an
equal basis at the Coreum and iGST facilities.
4. Development fees
. NRE: $*** at contract signing with payment upon receipt of invoice from
Coreum.
. Payment to Coreum per iGST chip sold to its customers for the first *** units
or the first *** years after signing of the final agreement whichever comes
first:
- first *** units: $*** per chip
- *** to *** units: $*** per chip
- *** to *** units: $*** per chip
- *** to *** units: $*** per chip
. Coreum will receive a compensation of $***/month/employee assigned to the
iGST project for up to *** employees for the period of *** months estimated
to complete the deliverables. An amount of $*** per month will be retained by
iGST and paid upon working prototypes of the first chip embedding the
technology defined in paragraph 2. Invoices for monthly payments will be sent
by Coreum the 3rd week of the first month and then on a monthly basis. iGST
will make the payment within 15 calendar days after receipt of the monthly
invoice.
. The specifications and development schedule have been mutually agreed upon by
both parties and integrated as an attachments to this exhibit A: Attachment 1
for the specifications and Attachment 2 for the development schedule. If
Coreum completes the development in less than 6 months, then iGST will grant
20,000 shares to be assigned at Coreum's discretion. Unless of no fault from
Coreum, if Coreum completes the development more than 6 months, then there
will be a ***% penalty on the payment per chip paid to Coreum.
. If at least one of the Coreum employees join iGST and stay with iGST for a
period of 1 year, Coreum will receive an additional NRE of 100,000 shares of
iGST at the price per share at the start of the program. If all the employees
terminate their employment with iGST, without cause, before the one-year
period, then no incentive will be paid. Finally, if at least one of the
Coreum employees working on the program do not join iGST or join iGST but
terminate his employment, without cause in less that 6 months, then there
will be a ***% penalty on the payments per chip paid to Coreum.
6. iGST will review additional services at a mutually acceptable rate that
Coreum can provide such as total chip integration, *** um conversion,
design methodology or other design consulting services.
7. Both iGST and Coreum will co-own the design and code for the modules
defined in paragraph 1 and developed by Coreum for iGST. It is understood
that whatever Coreum develops independently and separately from the team
that it assigns for iGST will be
- -------------
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
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solely owned by Coreum. Similarly, whatever iGST develops independently
will be solely owned by iGST.
8. The employees to be transferred from iGST to Coreum will be identified at
the beginning of the program and interviewed by iGST. In turn, Coreum will
also interview the *** to *** iGST engineers working on the program.
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ATTACHMENT 1 TO EXHIBIT A
SPECIFICATIONS
*** and ***
*** and *** Core
1. DESCRIPTION OF WORK
Coreum Technology, Inc. "Coreum" and IGS Technologies "IGS" will integrate
several of their own IP blocks in addition to some jointly developed IP blocks
to build a Chip set for the Set Top Box market. Coreum IP blocks include
(***,***,*** and ***) with IGS Chip ***. The new chip including the *** will be
called ***.
NOTE:
. ONLY (***,***,*** and *** were included in the original contract, the two new
blocks mentioned in the following pages (*** and ***) were added to simplify the
interface between the new chip and the existing IGST chip. They are not very
complex but they add to the complexity of the design
. The *** block will be physically residing on the *** but it is the
responsibility of IGS. As of 10/10/99 the *** was not defined. This implies that
the bus connected to the *** is not defined yet.
. In addition to the *** and ***, IGS is requesting that the *** be able to run
*** streams of ***, in order to be able to do that, it was agreed that the speed
of *** be almost doubled. The new speed target is set to ***Hz. Also the memory
system *** should be modified to support the increased bandwidth, a *** wide ***
will be needed, it is possble that the memory subsystem (external SDRAM) should
run at ***. The internal *** should run at the speed of ***.
. IGS requested that the *** copies of *** be used to enable reception of ***
simultanous bit streams. Though only *** of these *** can be sent to the ***
parallel port. IGS has added the *** and *** standards to the *** filter and
removed ***. IGS will provide all the specification of these Standards to
Coreum.
. For a low end application, IGS's requested that *** memory interface be
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
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added, and that *** configuration be supported.
. IGS requested that a second *** port be added. Both ports will be identical
and will connect to ***
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
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2. Full Chip Block Diagram:
[graphic]
***
. The *** will be build as a high speed *** to allow future scalability
. Specification for the *** will be given by IGS, the external *** will connect
to this *** and will run synchronously with ***.
. ***, is a *** that runs on the internal ***
. The *** type is not know yet. It will be licensed by IGS.
. The *** (***) is a new block that was requested by IGS after the LOI
. The *** (***) is a new block that was requested by IGS after the LOI
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
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2.1. ***: High Definition ***:
*** is a high definition *** and *** compliant with *** and *** Functionality
specified by *** and *** standards. The *** meets the constraints of the ***
specification regarding ***.
The *** is a ***; it *** all layers of an *** Bitstream up to the *** layer. The
*** off loads the on board embedded *** from all the *** functions; the *** is
required only at the *** header setup. All modes of the *** specifications are
handled, including concealment *** vectors.
*** can process the following *** formats and resolutions:
. *** @ ***HZ
. *** @ ***HZ
. *** @ ***HZ
. *** @ ***HZ
The *** read the *** stream from a buffer in the SDRAM, *** it, *** it and
stores it back into a different buffer in the SDRAM as a frame or as a field.
The *** controlling *** will be able to perform the following functions:
1. Frame-store modes: ***, ***, *** or more frames to allow scaling.
2. Low delay ***: The *** driver controling specially this *** will *** if the
*** buffer is empty and resume *** process when data arrives. The *** will
repeat a suitable, previously *** frame when this happens.
3. *** detects error in the input *** stream (*** syntax or grammar rules
violations) With the help of the Host *** these errors can be ***.
4. Trick modes (***,***,***, and ***.
5. Concatenated sequences. This IP is able to *** and present correct ***
at the boundary of *** sequences which may include the sequence layer
changes, such as:
. coding standard changes between *** and ***.
. *** size changes
. *** changes
. *** rate changes
. bit rate changes up to *** (***)*** bits/sec.
. *** buffer size changes
. constrained parameters flag changes
. *** matrics changes
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
17
<PAGE>
. profile and level indications
. progressive sequence
. chroma_format
. low delay
. missing sequence end
6. will be able to display the last picture in a sequence even though there is
no further data arrive.
7. still ***
8. software controlled parameters: ***, ***, ***.
9. *** support for ***
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
18
<PAGE>
2.2. ***: *** and ***:
*** is programmable *** as well as ***. IT reads the *** stream from a buffer in
the SDRAM, *** it, *** it and stores back into a different buffer in the SDRAM
as a frame or as a field.
The *** has the following features:
. *** stream
. Sampling rate: *** HZ, *** HZ, *** HZ
. Conformance: highest level (***)
. *** streams according to ***
. Sampling frequency: *** HZ, *** HZ, *** HZ
. Code modes: ***, ***, ***, ***, ***, ***, ***, ***
. Multi-*** down-mixing
. Conformance: Group A (***)
. *** modes for non-*** *** data
. Sampling frequency: *** HZ, *** HZ, *** HZ
. 1/0: *** input ***, *** output ***
. modes: *** pass, ***, *** -L, *** -R
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
19
<PAGE>
2.3. ***: ProgramMable sdram controller:
The *** is programmable SDRAM controller optimized to work with Coreum *** to
fully utilize the memory bandwidth. The *** will support the following ***
channels:
. ***
. ***
. *** Requests coming through the bridge
. ***
. *** Parallel port requests
The *** will support *** external SDRAM bus in the following configurations:
. *** organized as *** SDRAM chips of ***
. *** organized as *** SDRAM chips of *** (This configuration is not
recommended )
. *** organized as *** SDRAM chip of ***
For future expansion, *** will support *** external SDRAM bus in the following
configurations:
. *** organized as *** SDRAM chips of ***
. *** organized as *** SDRAM chips of ***
The speed of the memory sub system will be the same as the *** for the ***
version and can be *** or *** for the *** version
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
20
<PAGE>
2.4. ***: ON Board ***:
The ON board *** will be used to *** the *** Stream, reading the *** stream from
the local memory, *** the data and stores the *** into the local memory. It will
be used to perform portions of the *** stream *** and ***.
The *** will interface to the *** and will use one of the *** channels of the
***.
The *** can be a slave for an external HOST will can access the *** internal
registers and give it the proper addressing and memory spaces.
2.4.1. Memory space allocation:
The memory space supported in this system will be allocated in the
following way:
[graphic]
The on board *** can access all the shaded memory spaces.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
21
<PAGE>
2.5. ***: ***:
[graphic]
Features OF ***:
. input rate: sustained input rate ***/sec serial and ***/sec parallel
. *** supported
. extensive and programmable hardware section filter (***,***,*** )
. ***clock recovery logic
. standard input interface for FEC/Error correction
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
22
<PAGE>
. error handling capability at the *** level
. *** access interface support: internal ***, *** (***) and external ***
access interface (support *** level and *** level decryption as well as
up to *** pairs of *** keys)
. high speed input/output *** parallel interface to allow different source
of bit stream, i.e through a ***port on *** chip, to be filtered through
***.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
23
<PAGE>
2.6. ***: *** streaming engine:
THE *** WAS NOT PART OF THE ORIGINAL PROPOSAL, IGST ASKED TO ADD THIS BLOCK
TO SIMPLIFY THE INTERFACE AND TO CREATE A MORE NATURAL SEPARATION BETWEEN
COREUM'S RESPONSIBILITIES AND IGS'S.
THE *** WILL TAKE THE *** DATA, RESIDING IN THE *** AFTER THE *** AND ***
THE DATA, WILL FORMAT IT AND SERIALIZED AND SEND IT TO AN EXTERNAL ***.
THIS BLOCK WILL SUPPORT SAMPLING FREQUENCY OF: *** HZ, *** HZ, *** HZ
IT WILL READ A *** STREAM (ORIGINATED FROM EITHER *** OR ***) AND
CONVERT IT INTO *** STREAM.
SUPPORTS *** ANNEX B., IEC ***
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
24
<PAGE>
2.7. ***: *** Streaming and Scaling Engine:
THE *** WAS NOT PART OF THE ORIGINAL PROPOSAL, IGST ASKED TO ADD THIS BLOCK
TO SIMPLIFY THE INTERFACE AND TO CREATE A MORE NATURAL SEPARATION BETWEEN
COREUM'S RESPONSIBILITIES AND IGS'S.
THE *** WILL TAKE THE *** DATA, RESIDING IN THE *** AFTER THE *** AND ***
THE DATA, WILL SCALE IT, FORMAT IT AND SEND IT *** ACCORDING TO THE ***
STANDARD. THIS DATA WILL BE SEND DIRECTLY TO A *** INPUT PORT IN ***.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
25
<PAGE>
2.8. ***: Internal *** bridge:
The bridge connects the internal high speed *** with an external system ***.
The internal *** will allow *** bursts between the various processing units and
the ***.
The speed of *** will be a multiple of the *** speed and will be set to ***Hz
for this generation, the system *** can run a different speed than the ***.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
26
<PAGE>
3.0 General:
ALL THE IP WILL BE DESIGNED TO ALLOW REUSABILITY, SOME FEATURES WILL BE
IMPLEMENTED TO ALLOW FUTURE EXPANSION. COREUM CORES WILL HAVE A HAVE A TEST
SHADOW REGISTERS AROUND THEM TO ENSURE TO SIMPLIFY ISOLATION OF THE CORE AND
TESTABILITY DURING THE MANUFACTURING PROCESS.
ALL COREUM DESIGNS WILL BE SCANABLE AND WILL HAVE FAULT COVERAGE HIGHER
THAN 96%.
ALL COREUM DESIGNS WILL BE BASED ON A LIBRARY SUPPLIED BY IGS (FROM UMC)
ALL MEMORIES WILL BE SUPPLIED BY THE IGS WHICH WILL HAVE ALL LIBRARY VIEWS.
NOTE: FOR THE DESIGN TO BE ABLE TO REACH ***Hz, A TRUE *** LIBRARY WILL
NEED TO BE SUPPLIED TO COREUM AT THE BEGINNING OF THE WORK.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
27
<PAGE>
ATTACHMENT 2 TO EXHIBIT A
MILESTONES SCHEDULE
*** and ***
*** and *** Core
3. Tentative Project Schedule
This Schedule takes into account the design of the following IP blocks,
***, ***, *** and ***
<TABLE>
<CAPTION>
Phase DURATION SCHEDULE Dates NOTES
- ----------------------------------------------------------------------------------------------------------------------
(WW) (WW)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
0.0 Contract Signed 0 S 0 01-Nov-99 1
- ----------------------------------------------------------------------------------------------------------------------
0.5 Final Spec 4 P 4 29-Nov-99
- ----------------------------------------------------------------------------------------------------------------------
1.0 RTL Design. Rev 1.0 6 S 6 13-Dec-99
- ----------------------------------------------------------------------------------------------------------------------
1.5 Initial C Models 2 P 8 27-Dec-99 2
- ----------------------------------------------------------------------------------------------------------------------
2.0 RTL Design. Rev 2.0 6 S 12 24-Jan-00
- ----------------------------------------------------------------------------------------------------------------------
3.0 RTL Design. Rev 3.0 6 S 18 06-Mar-00 3
- ----------------------------------------------------------------------------------------------------------------------
4.0 RTL Design. Rev 4.0 6 S 24 17-Apr-00
- ----------------------------------------------------------------------------------------------------------------------
4.5 Sign Off *** P *** ***
- ----------------------------------------------------------------------------------------------------------------------
5.0 Final Design *** S *** *** 4
- ----------------------------------------------------------------------------------------------------------------------
6.0 Post Silicon *** S *** *** 5
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Definition of "successful completion of phases" (Acceptance Criteria)
Phase 0.0: (Contract Signed)
- Contract reviewed and signed.
Phase 0.5: (Final Spec)
- All Specification agreed on
- All block owners identified and assigned
- Standard Cell library vendor identified.
- Memory Generation tools/methods identified.
Phase 1.0: (RTL 1.0)
- *** will runs *** streams
-
Phase 1.5: (Initial C Models)
- *** Architecture finalized, C models ready for other *** development
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
28
<PAGE>
Phase 2.0: (RTL 2.0)
- *** will runs *** streams, *** and ***, *** block *** basic *** streams
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
29
<PAGE>
Phase 3.0: (RTL 3.0)
- External *** I/F tested, *** Parallel port tested, all modes of ***
tested
- Basic *** streams tested for al formats
Phase 4.0: (RTL 4.0)
- All *** bit streams tested (*** streams?)
- All *** bit streams tested (*** streams?)
- All Modes of *** tested
- All memory configurations tested
- Floor plan release for chip integration
Phase 4.5: (Sign Off)
- Identify all sign off criteria to be applied on Phase 5.0
-
Phase 5.0: (Final Design)
- Same as Phase 4.0 plus
- Timing goals met
- Fits the area
- Meets DfT goals
Phase 6.0: (post ***)
- Assumes FAB time is *** weeks, *** weeks of debug time is allocated
NOTES:
1) Design officially starts when every one assigned to the program is 100%
on board. It is assumed that, at lease *** engineers (Full Time) will
be assigned from Coreum and *** other engineers (Full Time) will be
assigned from IGS to work on this program. The program will be Managed
By a Coreum Manager.
2) Initial C models will be provided as early as possible to allow other
*** development to start in parallel to the *** design
3) Physical design will start as early as possible. This will allow quick
feedback to the logic design and will ensure a smooth Tapeout.
4) Final chip integration done at IGS site.
5) Silicon Debug will be done as IGS site. Engineers from both companies
will collaborate to ensure a smooth and quick transfer to Production.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
30
<PAGE>
EXHIBIT 10.10
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
CROSS LICENSE AGREEMENT
This Cross License Agreement ("Agreement") is made and entered into as of this
---------
21 day of March, 2000 ("Effective Date") between Innovative Semiconductors,
--------------
Inc., a California corporation with its principal place of business at 465
Fairchild Drive, Suite 227, Mountain View, CA 94043 ("Innovative") and IGS
----------
Technologies, a California corporation doing business at 4001 Burton Drive,
Santa Clara, CA 95054 ("IGS").
---
RECITALS
A. Innovative has developed, and is developing, certain proprietary
semiconductor technology and products, including but not limited to an ***
controller with *** support and an *** core.
B. Innovative is engaged in the business of providing technology licenses to
such proprietary semiconductor technology and products.
C. IGS designs, manufactures and sells integrated circuits.
D. IGS has developed, and is developing, certain proprietary semiconductor
technology, including a ***, ***, an ***, ***, a ***V to ***V voltage regulator,
a ***V to ***V voltage regulator, and a *** programmable ***.
E. IGS and Innovative desire that, subject to the terms and conditions of this
Agreement, Innovative grant to IGS certain license rights to design, manufacture
and sell integrated circuits which incorporate such Innovative technology, and
that IGS grant to Innovative certain license rights to sublicense such IGS
technology and design, manufacture and sell integrated circuits which
incorporate such IGS technology.
NOW, THEREFORE, IGS and Innovative hereby agree as follows:
1. DEFINITIONS
-----------
1.1 "Re-branded Chip" shall mean an integrated circuit that is manufactured
---------------
by a party for the main purpose of distribution and sales under the brand of a
third party.
1.2 "IGS Core Specifications" shall mean the technical specifications for
-----------------------
the IGS Cores, as further specified in Exhibit A.
---------
1.3 "IGS Cores" shall mean the IGS proprietary semiconductor circuit and
---------
logic design(s) and associated documentation set forth in detail in Exhibit A.
---------
The IGS Cores shall include all error corrections, revisions, and updates
thereto provided by IGS under this Agreement. Upon written agreement of the
parties, the definition of IGS Cores may be expanded to include other cores,
which shall be added to Exhibit A.
---------
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
1.4 "IGS Licensed Product" shall mean an integrated circuit which (i)
--------------------
incorporates any module, submodule, or any combination thereof of the Innovative
Cores or any derivative thereof, (ii) is manufactured by or for IGS; and (iii)
is marketed and sold on a component basis by or for IGS as a IGS branded product
to the general market. The definition of IGS Licensed Products does not include
Re-branded Chips, regardless of whether an Innovative Core, or a derivative
thereof, is incorporated in such Re-branded Chip.
---------------
1.5 "IGS Test Benches" shall mean the IGS validation test benches, in
----------------
source code form, used for testing functionality of the IGS Cores and generating
test vectors, as set forth in Exhibit A.
---------
1.6 "Innovative Core Specifications" shall mean the technical
------------------------------
specifications for the Innovative Cores, as further specified in Exhibit B.
---------
1.7 "Innovative Cores" shall mean the Innovative proprietary semiconductor
----------------
circuit and logic design(s) and associated documentation for the *** Core and
the *** Core. The Innovative Cores shall include all error corrections,
revisions, and updates thereto provided by Innovative under this Agreement.
1.8 "Innovative Test Benches" shall mean the Innovative validation test
-----------------------
benches, in source code form, used for testing functionality of the Innovative
Cores and generating test vectors, as set forth in Exhibit B.
---------
1.9 "Intellectual Property Rights" shall mean patent rights, rights of
----------------------------
priority, mask work rights, copyrights, moral rights, trade secrets, know-how
and any other intellectual property rights recognized in any country or
jurisdiction of the world, including, without limitation, applications for,
originals, divisionals, continuations, continuation-in-parts, reexaminations or
reissues of any of the foregoing; exclusive of trademarks, trade names, logos,
service marks, and other designations of source.
1.10 "Net Sales" shall mean the amount received by Innovative for the
---------
commercial licensing of IGS Cores under this Agreement, calculated according to
GAAP, excluding amounts attributable to sales, value-add, and use taxes (as may
be applicable), reasonable discounts actually provided. In the event that
Innovative licenses the IGS Cores together with other intellectual property, and
revenues for the IGS Cores are not separately specified, the portion of such
revenues that are attributable to the IGS Cores will be calculated based on the
ratio of the list price of the IGS Cores to the total list price for all cores
licensed in such transaction. Innovative will make available to IGS the list
price of the IGS Cores, Innovative Cores and other cores to be licensed with IGS
Cores on a quarterly basis.
1.11 "Software Drivers" shall mean source and object code versions of
Windows CE software drivers for the Innovative Cores, and source sample code, as
set forth in Exhibit A.
---------
1.12 "*** Core" shall mean Innovative's proprietary *** core, as
--------
described in Exhibit B.
---------
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
2
<PAGE>
1.13 "*** Core" shall mean Innovative's proprietary *** controller as
--------
described in Exhibit B. When Innovative delivers to IGS the *** support, such
---------
*** support shall constitute part of the *** Core.
2. GRANT OF LICENSE RIGHTS
-----------------------
2.1 Innovative License Grants.
-------------------------
2.1.1 License. Subject to the terms and conditions of this Agreement,
-------
Innovative hereby grants to IGS a worldwide, nonexclusive, non-transferable,
royalty-free license under all Intellectual Property Rights licensable by
Innovative:
(a) to use, copy and modify the Innovative Cores for internal use and
for the sole purpose of designing and developing Licensed Products;
(b) to make, manufacture, have manufactured by subcontractors, market,
distribute, and sell the Innovative Core and derivative works thereof
solely as incorporated in a Licensed Product; and
(c) to use the Innovative Test Benches for internal use for the sole
purpose of designing, developing, testing and verifying Licensed Products.
All of the above provided, however, that all subcontractors of IGS
authorized to perform services under this Section 2.1.1 shall be bound by and
subject to the restrictions set forth in Section 5 below.
2.1.2 Restrictions. IGS will have no right or license to sublicense,
------------
transfer or otherwise convey the Innovative Cores, any derivative
works thereof, the Innovative Test Benches, or any portion of the foregoing, to
any third party except as otherwise provided in this Section 2.1. Without
limiting the generality of the foregoing, IGS is expressly prohibited from (i)
designing, manufacturing, marketing, or selling Re-branded Chips and (ii)
----------------
providing the Innovative Cores, any derivative works thereof, the Innovative
Test Benches, or any portion of the foregoing, or access thereto, to any third
party as a part of an Re-branded Chip library or design kit, except as otherwise
---------------
agreed to by Innovative in writing.
2.1.3 Reservation. No license or right is granted, by implication or
-----------
otherwise, to IGS, under any Intellectual Property Rights now or hereafter owned
or controlled by Innovative except for licenses and rights expressly granted in
this Agreement. No license is granted to IGS with respect to future Innovative
products or technologies, unless otherwise mutually agreed to by the parties.
2.2 IGS License Grants.
------------------
2.2.1 License. Subject to the terms and conditions of this Agreement, IGS
-------
hereby grants to Innovative:
- -------------
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
3
<PAGE>
(a) a worldwide, nonexclusive, royalty-bearing license under all
Intellectual Property Rights licensable by IGS embodied in the IGS Cores
and IGS Test Benches to use, reproduce, modify, port and sublicense
(including to Re- branded Chip vendors) the IGS Cores and IGS Test Benches,
and to integrate or bundle the IGS Cores or IGS Test Benches with
Innovative products under Innovative's then-current licensing scheme (i.e.
in a manner similar to Innovative's cores); and
(b) a worldwide, nonexclusive, royalty-free license under all
Intellectual Property Rights licensable by IGS embodied in the Software
Drivers to use, reproduce, modify, compile, port, and sublicense the
Software Drivers.
2.2.2 Reservation. No license or right is granted, by implication or
-----------
otherwise, to Innovative, under any Intellectual Property Rights now or
hereafter owned or controlled by IGS except for licenses and rights expressly
granted in this Agreement. No license is granted to Innovative with respect to
future IGS products or technologies, unless otherwise mutually agreed to by the
parties.
2.3 Exclusivity. IGS shall not license any of the IGS Cores on a
-----------
stand-alone basis to third parties. Notwithstanding the foregoing, IGS shall be
permitted to license the IGS Cores to any third party where such license is in
connection with another transaction with such third party. In no event shall IGS
license any IGS Core to any of the companies listed on Exhibit C, which exhibit
---------
may be amended from time to time by written agreement of both parties. In no
event shall Innovative license any IGS Core to any of the companies listed on
Exhibit D, which exhibit may be amended from time to time by written agreement
- ---------
of both parties.
2.4 Bankruptcy Provision. All rights and licenses granted by the parties
--------------------
hereunder are, for purposes of Section 365(n) of the United States Bankruptcy
Code (the "Bankruptcy Code"), licenses of intellectual property within the scope
---------------
of Section 101 of the Bankruptcy Code. Each party acknowledges that the other
party, as a licensee of such rights and licenses hereunder, will retain and may
fully exercise all of its rights and elections under the Bankruptcy Code. Each
party further acknowledges that, in the event of the commencement of a
bankruptcy or insolvency proceeding by or against it, the other party will be
entitled to a complete duplicate of (and complete access to) any such
intellectual property and all embodiments thereof. If not already in its
possession, each party has the right to immediate delivery of such intellectual
property and embodiment upon written request: (i) upon any such commencement of
bankruptcy proceedings against the other party, unless the other party or its
representative or trustee elects to continue to perform all of its obligations
hereunder, or (ii) if not delivered under clause (i) of this Section 2.3, upon
the rejection of this Agreement by or on behalf of the other party.
3. TECHNOLOGY TRANSFER AND SUPPORT
-------------------------------
4
<PAGE>
3.1 Innovative Deliverables. Innovative shall deliver the Innovative Cores
-----------------------
and Innovative Test Benches to IGS according to the schedule set forth in
Exhibit B, and in the format identified therein.
- ---------
3.2 IGS Deliverables. IGS shall deliver the IGS Cores and IGS Test Benches
----------------
to Innovative according to the schedule set forth in Exhibit A, and in the
---------
format identified therein. In addition, within *** (***) days of the Effective
Date, IGS shall deliver to Innovative: (i) for each IGS Core, *** (***) packaged
semiconductor chips incorporating that IGS Core, and (ii) *** prototype 5000PCI
boards incorporating such chips.
3.3 Software Drivers. IGS shall develop and deliver to Innovative a
----------------
Software Driver for each Innovative Core prior to distributing an IGS Licensed
Product incorporating such Innovative Core. During the term of this Agreement
both parties shall use reasonable efforts to have Microsoft Corporation include
the Software Drivers with its Windows CE operating system.
3.4 Innovative Updates and Revisions. For *** commencing on the Effective
--------------------------------
Date, and for each year thereafter in which IGS is current in its payment of the
Maintenance Fees set forth in Section 4 below, Innovative will provide to IGS,
at no additional cost, such upgrades, updates, error corrections, patches, and
maintenance revisions for the Innovative Cores and Innovative Test Benches as
Innovative develops in the ordinary course of business.
3.5 Innovative Technical Support. For *** commencing on the Effective Date,
----------------------------
and for each year thereafter in which IGS is current in its payment of the
Maintenance Fees set forth in Section 4 below, Innovative will: (i) use
commercially reasonable efforts to assist IGS in integrating the *** Core with
Licensed Products, including assisting IGS in making minor modifications to the
*** Core, if necessary, and (ii) use commercially reasonable efforts to
provide technical support to IGS in the use of the Innovative Cores and
Innovative Test Benches for projects relating to the development of Licensed
Products. Innovative will make reasonable efforts to answer IGS technical
questions relating to the Innovative Cores. In addition, during the term of this
Agreement, Innovative will make reasonable efforts to investigate any error
reports from IGS regarding the Innovative Cores, and to provide IGS with a fix
for such errors.
3.6 IGS Updates and Revisions. For *** commencing on the Effective Date,
-------------------------
and for each year thereafter in which Innovative is current in its payment of
---
the Maintenance Fees set forth in Section 4 below, IGS will provide to
Innovative such upgrades, updates, error corrections, patches, process ports and
maintenance revisions for the IGS Cores and IGS Test Benches as IGS develops in
the ordinary course of business. Such process ports shall include, without
limitation, any port of the IGS Cores to the *** um *** process.
3.7 IGS Technical Support. For *** commencing on the Effective Date, and
---------------------
for each year thereafter in which Innovative is current in its payment of the
Maintenance Fees set forth in Section 4 below, IGS will, at Innovative's
request, review Innovative's product data sheets and documentation relating to
the IGS Cores. IGS will provide Innovative with reasonably prompt feedback on
such data sheets and documentation in order to ensure the
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXHCNAGE COMMISSION.
5
<PAGE>
accuracy and usefulness of such materials. IGS will make reasonable effort to
answer Innovative technical questions relating to the IGS cores. In addition,
during the term of this Agreement, IGS will make reasonable efforts to
investigate any error reports from Innovative regarding the IGS Cores, and to
provide Innovative with a fix for such errors.
3.8 Test and Characterization. IGS will: (i) with Innovative's reasonable
-------------------------
application support, commence testing of the *** Core pursuant to IGS'
standard testing procedure, and provide the resulting initial test data solely
with respect to the *** Core (the "Test Data") to Innovative within *** of
receiving first silicon that incorporates the *** and thereafter to complete
testing of the *** pursuant to such testing procedure and within *** (***)
business days of the full Test Data being available, provide such full Test Data
to Innovative; (ii) in accordance with its standard manufacturing process, have
manufactured test chips for the *** Core at different process comers, (iii)
have manufactured test boards for testing the test chips, (iv) have the test
chips assembled and tested, and (v) provide to Innovative *** (***) of the test
chips and *** (***) of the test boards. Innovative shall be permitted to use the
Test Data for any purpose, including making such materials available to its
customers. Innovative shall be permitted to use the test chips and test boards
for any purpose, including making such materials available to its customers
excluding the companies listed on Exhibit D attached hereto.
3.9 Exclusions. Neither party shall have an obligation to provide
----------
maintenance or technical support services for problems resulting from (i)
neglect, misuse or damage caused by the other party to the media containing the
cores, (ii) alterations or modifications to the cores not made by or for that
party, (iii) the failure of the other party to provide and to maintain a
suitable installation environment and facilities, or (iv) the use of the cores
for purposes other than as expressly permitted by this Agreement.
4. PAYMENTS AND OTHER CONSIDERATIONS
---------------------------------
4.1 Innovative License Fee. In consideration for the licenses granted to
----------------------
IGS in Section 2 above, IGS shall pay Innovative a License Fee of *** U.S.
dollars ($***). IGS shall pay *** U.S. dollars ($***) of the License Fee in cash
according to the schedule set forth in Exhibit B. IGS shall pay the remaining
---------
one hundred fifty thousand U.S. dollars ($150,000) of the License Fee by selling
to Innovative sixty thousand (60,000) shares of IGS Series I Preferred Stock
("Purchased Shares") pursuant to a separate Series I Stock Purchase Agreement
- ------------------
and related financing agreements. No other payment shall be due to Innovative
based on IGS' exercise of the licenses granted to IGS, including without
limitation, the sale of IGS Licensed Products.
4.2 IGS License Fees. In consideration for the licenses granted to
----------------
Innovative in Section 2 above, Innovative shall pay to IGS a percentage of its
Net Sales, as follows. For IGS Cores which have not been ported by Innovative to
another process ("Unported IGS Cores"), Innovative shall pay IGS *** percent
(*** %) of its Net Sales of unported IGS Cores until Net Sales exceed *** U.S.
dollars ($***), after which Innovative shall pay IGS *** percent (*** %) of any
subsequent Net Sales of Unported IGS Cores. For IGS Cores which have been ported
by Innovative to another process ("Ported IGS Cores"), Innovative shall pay IGS
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
6
<PAGE>
*** percent (*** %) of its Net Sales of ported IGS Cores until Net Sales exceed
*** U.S. dollars ($***), after which Innovative shall pay IGS *** percent (***
%) of any subsequent Net Sales of Ported IGS Cores. Innovative shall pay IGS any
fees due within thirty (30) days of the end of the calendar quarter during which
the fee became due.
4.3 Maintenance Fees. Except with respect to the first twelve months of
----------------
this Agreement (for which the maintenance fee is included in the amount to be
paid pursuant to Section 4.1), IGS may subscribe to the upgrades, updates, error
corrections, patches, maintenance revisions, and support set forth in Sections
3.4 (Innovative Updates and Revisions) and 3.5 (Innovative Technical Support)
above by paying to Innovative a Maintenance Fee of *** dollars ($***) for each
year following the first anniversary of the Effective Date. The Maintenance Fee
for each year will be due on the anniversary of the Effective Date that marks
the beginning of such year. Innovative may subscribe to the upgrades, updates,
error corrections, patches, maintenance revisions, and support set forth in
Sections 3.6 (IGS Updates and Revisions) and 3.7 (IGS Technical Support) above
by paying to IGS a Maintenance Fee of *** dollars ($***) for each year following
the first anniversary of the Effective Date. The Maintenance Fee for each year
will be due on the anniversary of the Effective Date that marks the beginning of
such year.
4.4 Taxes. Each party will pay all sales, use and other taxes imposed by
-----
any applicable laws and regulations as a result of the payments made by such
party under this Agreement, other than taxes based upon the other party's net
income. If any withholding or similar tax must be paid under the laws of any
country outside of the U.S. based on the payments under this Agreement, then the
party making such payments will pay such taxes and shall increase the amounts
due to the receiving party such that the amounts received by the receiving party
after the payment of such taxes are equal to the amounts stated in this
Agreement.
4.5 Payments. Within thirty (30) days following the last day of each
--------
calendar month during the term of this Agreement, Innovative shall submit to IGS
a complete and accurate report stating the number of licenses to IGS Cores
granted during such calendar month by Innovative, to whom the licenses were
granted andindicating the Net Sales for each license and amounts owed to IGS
therefor. Payment with respect to any specific license is due within thirty (30)
days of Innovative's receipt of such payment from its customer. All payments
will be made in U.S. dollars. Time of payment is of the essence under this
Agreement. All amounts owed hereunder not paid within thirty (30) days of the
date when due and payable will bear interest from the date such amounts are due
and payable at the lesser of 1.5% per month, and the maximum rate permitted
under applicable law.
4.6 Records; Audit. During the term of this Agreement and for three (3)
--------------
years after its termination, Innovative agrees (i) to retain all usual and
proper records and books of account and all usual and proper entries relating to
licenses of IGS Cores and (ii) to allow IGS and its representative to audit
Innovative's documents, financial statements and business records in order to
verify Innovative's compliance with the terms of this Agreement, including
without limitation, the payment of the appropriate license fees. Any audit shall
be conducted during
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXHCNAGE COMMISSION.
7
<PAGE>
regular business hours on reasonable prior notice. Any audit shall be conducted
by an independent certified public accountant selected by IGS, subject to
Innovative's consent (such consent not to be unreasonably withheld or delayed).
If the audit reveals any underreporting of amounts due IGS, then Innovative
shall within thirty (30) days after notice thereof pay IGS the full amount of
the underpayment and any accrued interest running from the date payments should
have been made had the reports been accurate. If Innovative's underreporting in
any reportmade under this Agreement exceeds five percent (5%) of total amount
due to IGS for such period, then Innovative shall reimburse IGS for all
reasonable costs of the audit.
5. CONFIDENTIAL INFORMATION
------------------------
5.1 Definition of Confidential Information. Innovative and IGS acknowledge
--------------------------------------
that, in the course of performing their respective obligations hereunder, each
may obtain information relating to the other and the other's products that is of
a confidential and proprietary nature to such other party. "Confidential
------------
Information" means confidential and proprietary information of either party
- -----------
which is (i) designated with the legend "Confidential" or comparable legend in
case of disclosure thereof in written, graphic, machine readable or other
tangible form or (ii) designated "Confidential" at the disclosure thereof in
other form and within thirty (30) days after such disclosure set forth in
writing designated "Confidential" and forwarded to the receiving party. For the
purposes of this Agreement, the Innovative Cores, the Innovative Test Benches
and the certain Innovative Core Specifications identified by Innovative shall be
considered Confidential Information of Innovative, and the IGS Cores, the IGS
Test Benches, Software Drivers and the certain IGS Core Specifications
identified by IGS shall be considered Confidential Information of IGS. The terms
of this Agreement shall be considered Confidential Information of both parties,
and shall not be subject to the exclusions set forth in Section 5.2 of this
Agreement.
5.2 Exclusions. Confidential Information does not include information which
----------
(i) is or becomes public knowledge without the fault or action of the other
party or any breach of any confidentiality obligation; (ii) the other party can
document was independently developed by it without use or reference to the
Confidential Information; (iii) the other party can document was previously
known to it prior to receipt of the Confidential Information; or (iv) is
received by the other party absent confidentiality obligations from a third
party who is without confidentiality obligations with respect to such
information.
5.3 Obligation. Innovative and IGS agree that, for a period of ten (10)
----------
years after the receipt of the other party's Confidential Information or for
perpetuity in the case of source code material, it will (i) use the other
party's Confidential Information only in connection with fulfilling its rights
and obligations under this Agreement; (ii) hold the other party's Confidential
Information in strict confidence and exercise due care with respect to its
handling and protection, consistent with its own policies concerning protection
of its own Confidential Information of like importance but in no instance less
than reasonable care, such due care including without limitation requiring its
employees to execute non-disclosure agreements which provide protection of the
other party's Confidential Information which is at least as protective as the
8
<PAGE>
terms and conditions of this Agreement; (iii) not disclose, divulge or publish
the other party's Confidential Information except to such of its responsible
employees and subcontractors who have a bona fide need to know to the extent
necessary to fulfill such party's obligations under this Agreement; and except
that a party may disclose the terms of this Agreement to its professional
advisors who are subject to an obligation of confidentiality; (iv) instruct all
such employees and subcontractors not to disclose the other party's Confidential
Information to third parties, including consultants, without the prior written
permission of the other party; (v) require all subcontractors permitted under
this Agreement to execute a confidentiality agreement at least as protective as
the terms and conditions of this Agreement before allowing such subcontractors
access to the Confidential Information of the other party. The parties
acknowledge and agree that the "bona fide need to know" standard set forth in
the foregoing subsection (iii) above as applied to (x) dissemination of the
Innovative Cores requires that authorized IGS employees and subcontractors must
have actual need to use the Innovative Cores for a purpose permitted under this
Agreement and (y) dissemination of the IGS Cores requires that authorized
Innovative employees and subcontractors must have actual need to use the IGS
Cores for a purpose permitted under this Agreement.
5.4 Exceptions to Obligation. Notwithstanding the foregoing, either party
------------------------
may disclose Confidential Information to the extent required by law, provided
the other party uses reasonable efforts to give the party owning the
Confidential Information sufficient notice of such required disclosure to allow
the party owning the Confidential Information reasonable opportunity to object
to and to take legal action to prevent or limit such disclosure.
6. INTELLECTUAL PROPERTY RIGHTS
----------------------------
6.1 Innovative Ownership. All right, title, and interest in and to the
--------------------
Innovative Cores, Innovative Test Benches, Innovative Core Specifications,
derivatives of the IGS Cores developed by Innovative (exclusive of the
Intellectual Property embodied in the underlying IGS Cores), and all
Intellectual Property Rights in the foregoing are the sole and exclusive
property of Innovative.
6.2 IGS Ownership. All right, title, and interest in and to the IGS Cores,
-------------
IGS Test Benches, IGS Core Specifications, derivatives of the Innovative Cores
developed by IGS (exclusive of the Intellectual Property embodied in the
underlying Innovative Cores), and all Intellectual Property Rights in the
foregoing are the sole and exclusive property of IGS.
6.3 Proprietary Markings.
--------------------
6.3.1 IGS shall duplicate and apply Innovative's mask work notice on
any mask incorporating an Innovative Core, subject to IGS'
reasonable approval of the size of such notice. IGS shall include
Innovative's copyright notice, as it appears in the source code
version (RTL) of the Innovative Cores, in any source code copy of
the Innovative Cores, and the source code version of any
derivative work thereof.
6.3.2 Innovative shall, and shall require its sublicensees to,
duplicate and apply IGS' mask work notice on any mask
incorporating an IGS Core.
9
<PAGE>
Innovative shall duplicate and apply IGS' proprietary rights
notices on all copies of the IGS documentation related to the IGS
Cores made by Innovative.
6.4 Third Party Patents and Warranty.
--------------------------------
6.4.1 IEEE *** Patents. The parties acknowledge that certain portions
----------------
of the technology embodied in the Innovative Cores are covered by certain third
party patents to which the IEEE [PROVIDE FULL NAME OF ENTITY] coordinates access
and that this Agreement does not constitute a license to such third party
patents, including those licensed by Apple Computer, Inc. and SGS-Thomson
Microelectronics, Ltd. IGS will be responsible for obtaining appropriate
licenses to such third party patents which will allow it to fully exercise its
license rights under this Agreement.
6.4.2 DTLA Intellectual Property. The parties acknowledge that certain
--------------------------
portions of the technology embodied in the *** are covered by certain third
party patents and other intellectual property to which the Digital Transmission
Licensing Administrator coordinates access and that this Agreement does not
constitute a license to such third party intellectual property, including that
intellectual property owned by Hitachi Ltd., Intel Corporation, Matsushita
Electric Industrial Co., Ltd., Sony Corporation, and Toshiba Corporation. IGS
represents and warrants that IGS will be responsible for obtaining appropriate
licenses to such third party intellectual property which will allow it to fully
exercise its license rights under this Agreement.
6.4.3 UMC Cell Library License. The parties acknowledge that the ***
------------------------
Core incorporates cell libraries owned by the UMC Group, and that this Agreement
does not constitute a license to such third party cell libraries. IGS will be
responsible for obtaining appropriate licenses to use such cell libraries which
will allow it to fully exercise its license rights under this Agreement.
6.5 Joint Ownership. Innovative and IGS will jointly own equal undivided
---------------
interests in the Software Drivers, without duty to account.
7. INDEMNIFICATION
---------------
7.1 Indemnification by Innovative.
-----------------------------
(a) Indemnification. Innovative will indemnify, hold harmless, and
---------------
defend IGS from and against any and all liabilities, damages, losses, costs and
expenses (including but not limited to reasonable fees of attorneys and other
professionals) payable to third parties based upon a claim that any of the
Innovative Cores or Innovative Test Benches infringe or violate any Intellectual
Property Right of any third party, provided that IGS (i) promptly notifies
Innovative of the claim; (ii) provides Innovative with all reasonable
information and assistance, at Innovative's expense, to defend or settle such a
claim; and (iii) grants Innovative authority and control of the defense or
settlement of such claim. Innovative shall not settle any such claim, without
IGS's prior written consent, if such settlement would alter, impair or reduce
the scope of
- -------------
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
10
<PAGE>
IGS's rights in the Innovative Cores or Innovative Test Benches, would otherwise
limit IGS's exercise of its rights under this Agreement, or would require IGS to
pay any compensation or to assume any obligations including a license of IGS's
Intellectual Property Rights. IGS reserves the right to retain counsel, at IGS's
expense, to participate in the defense and settlement of any such claim.
(b) Injunctions. If the exercise by IGS of any of the rights granted to it
-----------
under this Agreement is enjoined or, in Innovative's reasonable opinion, is
likely to be enjoined due to the type of infringement or misappropriation
specified in Section 7.1(a) above, without prejudice to the rights and remedies
of IGS, Innovative at its option and expense, will either: (i) procure for IGS a
license to continue to exercise all of the rights granted under this Agreement
with respect to the Innovative Cores and Innovative Test Benches; (ii) modify
the allegedly infringing item to avoid the infringement or misappropriation,
without materially impairing the performance or compliance with the Innovative
Core Specifications, or the rights of IGS under this Agreement, or (iii) if
neither of the foregoing options are commercially practical, terminate this
Agreement and refund to IGS all amounts paid by IGS under this Agreement during
the twelve months immediately preceding notice of termination.
(c) Sole Remedy. THE FOREGOING IS IGS'S SOLE AND EXCLUSIVE REMEDY FOR
-----------
ANY CLAIM OF INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT.
(d) Exclusions. Innovative will have no liability for any infringement
----------
or misappropriation claim to the extent it results from: (i) modifications of
the Innovative Cores or Innovative Test Benches other than by Innovative, if
such a claim would have been avoided but for such modification; (ii) combination
of the Innovative Cores with designs, circuits, products, processes or materials
not provided by Innovative, if such a claim would have been avoided but for such
combination; or (iii) IGS's failure to use modifications to the Innovative Cores
or Innovative Test Benches provided by Innovative to avoid infringement or
misappropriation with notice of the potential claim.
7.2 Indemnification by IGS.
----------------------
(a) Indemnification. IGS will indemnify, hold harmless, and defend
---------------
Innovative from and against any and all liabilities, damages, losses, costs and
expenses (including but not limited to reasonable fees of attorneys and other
professionals) payable to third parties based upon any claim that any of the IGS
Cores or IGS Test Benches infringe or violate any Intellectual Property Right of
any third party, provided that Innovative (i) promptly notifies IGS of the
claim; (ii) provides IGS with all reasonable information and assistance, at
IGS's expense, to defend or settle such a claim; and (iii) grants IGS authority
and control of the defense or settlement of such claim. IGS shall not settle any
such claim, without Innovative's prior written consent, if such settlement would
alter, impair or reduce the scope of Innovative's rights in the IGS Cores or IGS
Test Benches, would otherwise limit Innovative's exercise of its rights under
this Agreement, or would require Innovative to pay any compensation or to assume
any obligations including a license of Innovative's Intellectual Property
Rights. Innovative reserves
11
<PAGE>
the right to retain counsel, at Innovative's expense, to participate in the
defense and settlement of any such claim.
(b) Injunctions. If the exercise by Innovative of any of the rights granted
-----------
to it under this Agreement is enjoined or, in IGS's reasonable opinion, is
likely to be enjoined due to the type of infringement or misappropriation
specified in Section 7.1(a) above, without prejudice to the rights and remedies
of Innovative, IGS at its option and expense, will either: (i) procure for
Innovative a license to continue to exercise all of the rights granted under
this Agreement with respect to the IGS Cores and IGS Test Benches; (ii) modify
the allegedly infringing item to avoid the infringement or misappropriation,
without materially impairing the performance or compliance with the IGS Core
Specifications, or the rights of Innovative under this Agreement, or (iii) if
neither of the foregoing options are commercially practical, terminate this
Agreement and refund to Innovative all amounts paid by Innovative under this
Agreement during the twelve months immediately preceding notice of termination.
(c) Sole Remedy. THE FOREGOING IS INNOVATIVE'S SOLE AND EXCLUSIVE REMEDY
-----------
FOR ANY CLAIM OF INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT.
(d) Exclusions. IGS will have no liability for any infringement or
----------
misappropriation claim to the extent it results from: (i) modifications of the
IGS Cores or IGS Test Benches other than by IGS, if such a claim would have been
avoided but for such modification; (ii) combination of the IGS Cores or IGS Test
Benches with designs, circuits, products, processes or materials not provided by
IGS, if such a claim would have been avoided but for such combination; or (iii)
Innovative's failure to use modifications to the IGS Cores or IGS Test Benches
provided by IGS to avoid infringement or misappropriation with notice to
Innovative of the potential claim.
12
<PAGE>
8. WARRANTIES
----------
8.1 Innovative Limited Warrant. Innovative warrants to IGS that the
--------------------------
Innovative Cores and Innovative Test Benches will perform in all material
respects in accordance with the Innovative Core Specifications for a period of
ninety (90) days from receipt of the Innovative Cores and Innovative Test
Benches by IGS. IGS's sole remedy is that Innovative will, at no extra charge,
use commercially reasonable efforts to correct any defect discovered so that it
performs in accordance with such specification in all material respects,
provided that IGS reports such defect to Innovative during such ninety (90) day
period in writing; and provided that if Innovative cannot correct such defect,
then IGS will have the right to terminate this Agreement and receive refund from
Innovative of the amounts paid by IGS to Innovative under this Agreement. The
foregoing warranty will not apply to modifications by IGS.
8.2 IGS Limited Warranty. IGS warrants to Innovative that the IGS Cores and
--------------------
the IGS Test Benches will perform in all material respects in accordance with
the IGS Core Specifications for a period of ninety (90) days from receipt of the
IGS Cores and IGS Test Benches by Innovative. Innovative's sole remedy is that
IGS will, at no extra charge, use commercially reasonable efforts to correct any
defect discovered so that it performs in accordance with such specification in
all material respects, provided that Innovative reports such defect to IGS
during such ninety (90) day period in writing; and provided that if IGS cannot
correct such defect, then Innovative will have the right to terminate this
Agreement and receive refund from IGS of the amounts paid by Innovative to IGS
under this Agreement. The foregoing warranty will not apply to modifications by
Innovative.
8.3 Disclaimer of Warranty. EXCEPT AS EXPRESSLY SET FORTH IN THIS
----------------------
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT.
9. TERM AND TERMINATION
--------------------
9.1 Term. This Agreement will commence on the Effective Date and continue
----
in effect until five (5) years from the Effective Date.
9.2 Termination due to Material Breach. If either party materially breaches
----------------------------------
any term or condition of this Agreement and fails to cure that breach within
thirty (30) days after receiving written notice of the breach, the other party
shall have the right to terminate this Agreement any time after the end of such
thirty (30) day period.
9.3 Termination due to Insolvency. If either party becomes the subject of a
-----------------------------
voluntary or involuntary petition in bankruptcy or any proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit of
creditors, if that petition or proceeding is not
13
<PAGE>
resolved in its favor within sixty (60) days after filing, the other party may
terminate this Agreement on thirty (30) days' prior written notice and
opportunity to cure.
9.4 No Liability for Damages. Neither party will be liable for damages of
------------------------
any kind as a result of exercising its right to terminate this Agreement
according to its terms, and termination will not affect any other right or
remedy at law or in equity of either party.
9.5 Obligations Upon Termination or Expiration. Upon any termination or
------------------------------------------
expiration of this Agreement, each party shall return or destroy all copies of
the Confidential Information of the other party, except for Confidential
Information required to exercise a party's surviving rights, within thirty (30)
days after the termination or expiration, and, at the request of the other
party, have an officer certify in writing that the party has complied with this
obligation.
9.6 Survival of Obligations. The following provisions shall survive
-----------------------
termination or expiration of this Agreement for any reason: Sections 1
(Definitions), 2 (Grant of License Rights) except that if the Agreement is
terminated for material breach of a party, licenses to such breaching party
shall not survive, 4 (Payments and Other Considerations), 5 (Confidential
Information), 6 (Intellectual Property Rights), 7 (Indemnification), 8.3-8.7
(Warranties), 9 (Term and Termination), 10 (Limitation of Liability), and 11
(General).
10. LIMITATION OF LIABILITY
-----------------------
10.1 General Limitation of Damages. OTHERTHAN WITH RESPECT TO THE INDEMNITY
-----------------------------
OBLIGATIONS SET FORTH IN SECTION 7 OF THIS AGREEMENT,IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, LOSS
OF USE, DATA OR PROFITS, INTERRUPTION OF BUSINESS OR ANY SPECIAL, INCIDENTAL,
INDIRECT, EXEMPLARY, OR CONSEQUENTIAL DAMAGES, ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY, WHETHER IN AN
ACTION FOR CONTRACT, STRICT LIABILITY, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
AND WHETHER OR NOT THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
10.2 Specific Limitation. OTHERTHAN WITH RESPECT TO THE INDEMNITY
-------------------
OBLIGATIONS SET FORTH IN SECTION 7 OF THIS AGREEMENT, THE AGGREGATE LIABILITY OF
EACH PARTY TO THE OTHER UNDER THIS AGREEMENT SHALL NOT EXCEED THE TOTAL AMOUNTS
PAID BY BOTH PARTIES UNDER THIS AGREEMENT.
10.3 Severability. EACH AND EVERY PROVISION OF THIS AGREEMENT WHICH
------------
PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTY OR EXCLUSION OF
DAMAGES IS INTENDED BY THE PARTIES TO BE SEVERABLE AND INDEPENDENT OF ANY OTHER
SUCH PROVISION. FURTHER, IN THE EVENT THAT ANY REMEDY HEREUNDER IS DETERMINED TO
HAVE FAILED OF ITS ESSENTIAL PURPOSE, ALL LIMITATIONS OF LIABILITY AND
EXCLUSIONS OF DAMAGES SHALL REMAIN IN EFFECT.
14
<PAGE>
11. GENERAL
-------
11.1 Governing Law. This Agreement will be governed by and interpreted in
-------------
accordance with the laws of the state of California without reference to its
conflicts of law.
11.2 Injunctive Relief. Each of the parties acknowledges that unauthorized
-----------------
disclosure or use of the other party's Confidential Information or infringement
or misappropriation of the other party's Intellectual Property Rights could
cause irreparable harm and significant injury that would be difficult to
ascertain and may not be compensable by damages alone. Accordingly, the parties
agree that, in addition to any and all legal remedies, claims regarding
Intellectual Property Rights or Confidential Information may, subject to claims,
be remedied by specific performance, injunction or other appropriate equitable
relief.
11.3 Press Releases. The parties agree to issue two press releases. The
--------------
first press release will be issued within thirty (30) days of the Effective Date
and will describe the Innovative/IGS relationship without disclosing details of
any cores. The second press release will include information about the use of
the Innovative Cores in the first IGS Licensed Product and IGS' market. IGS will
use reasonable efforts to include a quote from its key customer in the second
press release. Both press releases shall include quotes from executives of both
parties, and shall be issued only upon mutual agreement of both parties.
11.4 Assignment. Neither party may assign this Agreement without the prior
----------
written consent of the other; provided however that either party may assign this
Agreement in connection with a merger, acquisition, reorganization, or sale of
all or substantially all of its assets without such consent. Any assignment
permitted hereunder will be subject to the written consent of the assignee to
all of the terms and provisions of this Agreement. Any attempted assignment in
derogation of this section will be null and void.
11.5 Modification and Waiver. No modification to this Agreement, nor any
-----------------------
waiver of any rights, will be effective unless assented to in writing by the
party to be charged, and the waiver of any breach or default shall not
constitute a waiver of any other right hereunder or any subsequent breach or
default.
11.6 Notices. Any required or permitted notices hereunder must be given in
-------
writing at the address of each party set forth below, or to such other address
as either party may substitute by written notice to the other in the manner
contemplated herein, by one of the following methods: hand delivery; registered,
express, or certified mail, return receipt requested, postage prepaid;
nationally-recognized private express courier; or facsimile. Notices will be
deemed given on the date when hand delivered or transmitted by facsimile, five
(5) days after being sent by express mail or nationally-recognized private
express courier, and ten (10) days after being sent by registered or certified
mail.
To Innovative: To IGS:
------------- ------
Innovative Semiconductors, Inc. IGS Technologies
465 Fairchild Drive, Ste 228 4001 Burton Drive
15
<PAGE>
Mountain View, California 94043 Santa Clara, CA
Attention: Nabil Takla Attention: Jack Guedj
----------
President President
Phone: (650) 943-0170 Phone: (408) 982-8588
-------------------
Fax: (650) 943-0174 Fax: (408) 982-8591
---------------------
Copy to:
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA 94306
Attn.: Hirohisa Tachibana, Esq.
11.7 Compliance with Law, including U.S. Export Laws. Each party agrees to
-----------------------------------------------
comply with all applicable international, national, state, regional and local
laws and regulations in performing its duties hereunder and in any of its
dealings with respect to the technical information disclosed hereunder or direct
products thereof Neither party shall export or reexport, directly or indirectly,
any technical information disclosed hereunder or direct products thereof to any
destination prohibited or restricted by the export control laws and regulations
of the United States, including the U.S. Export Administration Regulations,
without the prior authorization form the appropriate governmental authorities.
11.8 Force Majeure. Neither party shall be responsible for delay or failure
-------------
in performance caused by any government act, law, regulation, order or decree,
by communication line or power failures beyond its control, or by fire, flood or
other natural disasters or by other causes beyond its reasonable control, nor
shall any such delay or failure be considered to be a breach of this Agreement.
In any such event, performance shall take place as soon thereafter as is
reasonably feasible.
11.9 Headings. The headings of the Sections of this Agreement are for
--------
convenience only and will not be of any effect in construing the meanings of the
Sections.
11.10 Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
11.11 Independent Contractors. In performing their respective duties under
-----------------------
this Agreement, each of the parties will be operating as an independent
contractor. Nothing contained herein will in any way constitute any association,
partnership, or joint venture between the parties hereto, or be construed to
evidence the intention of the parties to establish any such relationship.
Neither party will have the power to bind the other party or incur obligations
on the other party's behalf without the other party's prior written consent.
11.12 Severability. In the event that it is determined by a court of
------------
competent jurisdiction that any provision of this Agreement is invalid, illegal,
or otherwise unenforceable, such provision will be enforced as nearly as
possible in accordance with the stated intention of the parties, while the
remainder of this Agreement will remain in full force and effect and bind
16
<PAGE>
the parties according to its terms. To the extent any provision cannot be
enforced in accordance with the stated intentions of the parties, such
provisions will be deemed not to be a part of this Agreement.
11.13 Entire Agreement. This Agreement and the exhibits attached hereto
----------------
constitute the entire and exclusive agreement between the parties hereto with
respect to the subject matter hereof and supersede any prior agreements between
the parties with respect to such subject matter.
17
<PAGE>
IN WITNESS WHEREOF, Innovative and IGS have caused this Agreement to be executed
by their duly authorized representatives as of the Effective Date.
<TABLE>
<CAPTION>
Innovative Semiconductor, Inc. IGS Technologies
<S> <C>
By: /s/ Nabil Takla /s/ Jack Guedj
--------------------------------- -----------------------------------------------
Name: Nabil Takla Jack Guedj
------------------------------- ---------------------------------------
Title: President President
------------------------------ -----------------------------------------------
</TABLE>
Exhibits
Exhibit A Description and Specifications of the IGS Technology
Exhibit B Description and Specifications of the Innovative
Technology
Exhibit C IGS Excluded Company List
Exhibit D Innovative Excluded Company List
Exhibit E IGS Articles
18
<PAGE>
EXHIBIT A
---------
DESCRIPTION & SPECIFICATIONS OF IGS TECHNOLOGY
IGS Cores:
Delivery Schedule:
IGS Core Specifications:
IGS Test Benches:
Software Drivers:
19
<PAGE>
EXHIBIT B
---------
DESCRIPTION & SPECIFICATIONS OF INNOVATIVE TECHNOLOGY
Innovative Cores:
***:
*** with ***:
Delivery Schedule:
*** (w/out ***): *** after Effective Date
***: *** after Effective Date
*** support: *** after Effective Date
Schedule of Payments from IGS:
Effective Date: $***
Delivery of *** (w/out ***): $***
Delivery of ***: $***
Delivery of *** support: $***
Earlier of first tape-out or ***: $***
Earlier of first silicon verification or ***: $***
Innovative Core Specifications:
***:
*** with ***:
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
20
<PAGE>
Innovative Test Benches:
21
Exhibit B
<TABLE>
<CAPTION>
*** ***
*** Layer Core [LOGO]
Product Brief Innovative Semiconductors, Inc.
<S> <C> <C>
***(TM) IEEE ***
*** Core Family IEEE *** is a high-speed serial bus
. ***: General purpose Link standard that allows video and audio
. ***: Link compatible with consumer devices to communicate quickly, | | | |
Texas Instrument's GPLynx(TM) reliably, and inexpensively with a PC and | | | |
. ***: PCI to *** Link with each other. | | | |
. ***: Audio/Video Link
. ***: *** *** Architecture Innovative
. ***: Backplane *** Semiconductors' *** architecture scripts, and user documentation.
. ***: *** Test Bench & is based on a set of parameterized
Validation Suite building blocks that can be quickly and Features
easily configured to support a wide
range of *** applications. . Compliant with IEEE *** v2.0
[LOGO] specification
The *** core family includes general . Interoperates with ***-1995 devices
purpose and application-specific cores . Supports 100, 200, and 400 Mbits/sec
for both *** and *** Layer controllers. transfer rates
Innovative . Includes both analog and digital
Semiconductors, Inc. *** offers the fastest and most portions
reliable way to incorporate *** . Digital portion is available in
465 Fairchild Drive capabilities into products such as synthesizable RTL
Suite 227 digital cameras, audio/video devices, . Analog portion can be ported to
Mountain View, CA 94043 disk controllers, and other PC commercial digital CMOS processes
Tel 650-934-0170 peripherals. . Interoperates with Innovative's line
Fax 650-934-0174 of application-specific *** cores
www.isi96.com *** Core . Configurable number of ports and
- ------------- The *** includes both the analog and port speeds
Japan digital logic for a ***-compliant PHY . Supports *** advanced power
Kanematsu Layer controller, and is capable of management
Design Technology Corp operating at transfer rates up to 400 . Supports all *** arbitration and
Ichikawa Bldg. 5-13-3 Ginza Mbits/sec. concatenation enhancements
Chuo-ku, Tokyo 104-0061 . Proprietary skew management
Tel 81-3-3543-7404 The digital portion of the *** techniques ensure timing is met
Fax 81-3-3543-7407 implements the arbitration and decoding . Extensive testing includes IDDq,
logic and synchronizing FIFO, and is alternate frequency operation,
available in synthesizable RTL. ultra-slow operation, precise clock
[LOGO] [LOGO] control, scan, and on-Tester
The analog portion implements the Transceiver Transmit/Receive Mode
transmit and receive logic, and can be
ported to commercially-available digital
CMOS processes of .35(mu) or smaller.
The *** is compatible with
Innovative's line of ***-compliant
*** cores, for a complete ***
solution.
The *** includes a comprehensive test
bench and validation suite, synthesis
Copyright(C) 1998 Innovative
Semiconductors, Inc. 12/98
*** is a trademark of Innovative
Semiconductors, Inc.
</TABLE>
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
<TABLE>
<CAPTION>
*** *** Audio/Video
*** Layer Core [LOGO]
Product Brief Innovative Semiconductors, Inc.
<S> <C> <C>
***(TM) IEEE ***
*** Core Family
. ***: General purpose Link IEEE *** is a high-speed serial bus [GRAPHIC]
. ***: Link compatible with standard that allows video and audio
Texas Instrument's GPLynx(TM) consumer devices to communicate quickly,
. ***: PCI to *** Link reliably, and inexpensively with a PC and
. ***: Audio/Video Link with each other.
. ***: ***
. ***: Backplane *** ***(TM) Architecture Innovative
. ***: *** Test Bench & Semiconductors' *** architecture is based
Validation Suite on a set of parameterized building blocks Features
that can be quickly and easily configured
to support a wide range of *** applications. . Compliant with IEEE 1394a Link Layer
[LOGO] specification
The *** core family includes general purpose . Supports IEC 61883 standard
and application-specific cores for both *** . Supports 100, 200, and 400 Mbits/sec
and *** Layer controllers. transfer rates
Innovative . Works with Innovative's ***
Semiconductors, Inc. *** offers the fastest and most Layer core, or with commercial
reliable way to incorporate *** *** chips
465 Fairchild Drive capabilities into products such as . Based on parameterized building
Suite 227 digital cameras, audio/video devices, blocks that can be configured for a
Mountain View, CA 94043 disk controllers, and other PC wide range of A/V applications
Tel 650-934-0170 peripherals. . Performs jitter compensation
Fax 650-934-0174 . Supports CIP, PCR and FCP
www.isi96.com *** Core . Provides full *** support,
- -------------------------------- The *** provides the interface to plus some Transaction Layer and Bus
Japan connect MPEG-2/DVC devices to high speed Management functions
Kanematsu *** serial bus, at speeds up to 400 . Supports asynchronous and
Design Technology Corp Mbits/sec. isochronous transfers, including
Ichikawa Bldg. 5-13-3 Ginza multi-channel isochronous receive
Chuo-ku, Tokyo 104-0061 The core can be used in set-top boxes, . Cycle master capable
Tel 81-3-3543-7404 digital TV/VCRs, video PCs, or any . 8, 16, or 32-bit application bus
Fax 81-3-3543-7407 application that requires MPEG-2/DVC interfaces to common embedded processors
format isochronous data transfer . Dynamically configurable FIFO
[LOGO] [LOGO] according to the IEC 61883 specification. functionality, number, and size
. Detects late packet and sequence
The *** can be integrated with errors
Innovative's *** Mixed Signal PHY core . Performs 32-bit CRC generation and
for a single-chip 1394a Audio/Video error detection.
solution.
The *** is available in synthesizable
RTL, and includes a comprehensive test
bench and validation suite, synthesis
scripts, and user documentation.
Copyright(C) 1998 Innovative
Semiconductors, Inc.
*** is a trademark of Innovative 12/98
Semiconductors, In
</TABLE>
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
Exhibit B
<TABLE>
<CAPTION>
*** *** Test Bench and
Validation Suite [LOGO]
Product Brief Innovative Semiconductors, Inc.
<S> <C> <C>
***(TM) IEEE ***
*** Core Family
. ***: General purpose Link IEEE *** is a high-speed serial bus [GRAPHIC]
. ***: Link compatible with standard that allows video and audio
Texas Instrument's GPLynx(TM) consumer devices to communicate quickly,
. ***: PCI *** Core reliably, and inexpensively with a PC and
with DMA with each other.
. ***: Audio/Video Link
. ***: *** ***(TM) Architecture Innovative
. ***: Backplane *** Semiconductors' *** architecture is based [GRAPHIC]
. ***: *** Test Bench & on a set of parameterized building blocks
Validation Suite that can be quickly and easily configured
to support a wide range of *** applications.
[LOGO]
The *** core family includes general Features
purpose and application-specific cores . Provides thorough coverage of
for both *** and *** Layer controllers. . ***-compliant asynchronous and
Innovative isochronous Link behavior
Semiconductors, Inc. *** offers the fastest and most . Simple interface for easy addition
reliable way to incorporate *** of tests and applications
465 Fairchild Drive capabilities into products such as . Pseudo-random and nested loop
Suite 227 digital cameras, audio/video devices, sequencing, configurable through simple
Mountain View, CA 94043 disk controllers, and other PC parameters
Tel 650-934-0170 peripherals. . All internal buses and events are
Fax 650-934-0174 observable
www.isi96.com *** Test Bench and Validation Suite . All modules support trace
- -------------------------------- . Automatically configures system
Japan The *** provides a top level simulation model for FIFO RAM size and host memory
Kanematsu test bench and set of validation programs size
Design Technology Corp to verify functional correctness of a . Model builder provided to simplify
Ichikawa Bldg. 5-13-3 Ginza *** core per the *** specification. creation of specific node topologies
Chuo-ku, Tokyo 104-0061 . Included with all *** family
Tel 81-3-3543-7404 The test bench is organized as a series cores, also available separately
Fax 81-3-3543-7407 of layers, with configuration and test
setup done at the highest levels for
maximum ease of use.
[LOGO] [LOGO]
The *** includes a set of model builder
scripts that make it easy to set up test
scenarios using different node topologies.
The *** Test Bench and Validation Suite
package is included with each core in
Innovative's *** family, or it can
be purchased separately.
Copyright(C) 1998 Innovative
Semiconductors, Inc. 4/99
*** is a trademark of Innovative
Semiconductors, Inc.
All other trademarks are the property of
their respective owners.
</TABLE>
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
EXHIBIT C
ISG EXCLUDED COMPANY LIST
***
***
***
***
***
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXHCNAGE COMMISSION.
22
<PAGE>
EXHIBIT D
INNOVATIVE EXCLUDED COMPANY LIST
***
***
***
***
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXHCNAGE COMMISSION.
23
<PAGE>
EXHIBIT E
IGS ARTICLES
24
<PAGE>
Exhibit 10.11
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
AUDIO TECHNOLOGY LICENSING AGREEMENT
This Audio Technology Licensing Agreement (the "Agreement") is made this
26th day of June, 1997 (the Effective Date") between T-Square Design, Inc., a
California corporation with its principal place of business at 4633 Old
Ironsides Drive, Ste. 290, Santa Clara, California 95054 ("T-Square") and
InteGraphics Systems, Inc., a California Corporation with its principal place of
business at 4001 Burton Drive, Santa Clara, California 95054, ("IGS"). (As used
herein, "party" or Parties" will refer to T-Square Design, Inc., InteGraphics
Systems, or both, as the case may be.)
RECITALS
T-Square Design, Inc. has developed and is developing certain proprietary
semiconductor technology and products, including but not limited to *** Audio
Technology.
IGS has developed and is developing certain graphics controller-based
products and technology targeting the Multimedia Technology Industry which
includes the integration of Graphics and Audio products, (Audio/Graphics
Integrated Circuit), and is in the business of manufacturing Graphics/Multimedia
Products, and marketing, selling and supporting these Graphics/Multimedia
Products.
Both Parties desire that IGS be licensed to develop, manufacture, market
and sell integrated circuit based Audio/Graphics Products which incorporate T-
Square Design, Inc.'s *** Audio Technology implemented in the Audio Engine,
Software Drivers, Source Code, and technical/marketing support described herein.
TERMS AND CONDITIONS
1. Definitions:
The following terms when used in this Agreement shall have the meanings
ascribed to them in Section 1;
1.1 "*** Audio Technology" shall mean:
The Audio Engine hardware, software specifications, and marketing/technical
support as more completely described in Section 4, that enables the
incorporation of the Audio function on to the Graphics Controller Chip,
including but not limited to the items defined below in Sections 1.2, 1.3, 1.4,
1.5, and 1.6
All information, inventions, ideas, concepts, discoveries, algorithms,
procedures, techniques, solutions, technology, technical documentation, designs
(including circuit designs), simulation and other models, materials and know-how
associated with the design, development, testing, construction, use and
distribution of such *** Audio Technology with IGS Graphics Controller Designs
as part of Integrated Audio/Graphics Controller Chips, whether developed by IGS
or T-Square Design.
1.2 "T-Square Design, Inc. *** Audio Product Specification" shall mean the
hardware and software product specifications developed by T-Square Design,
Inc. for the IGS Graphics/Audio Integrated Circuit.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
1.3 "Compatible" or "Compatibility" shall mean that T-Square's Audio Engine
hardware and all necessary supporting Software is compatible with IGS's
Graphic Controller Integrated Circuit such that the resulting
Audio/Graphics Integrated Circuit can perform both graphics and audio
functions at a *** Marketplace level of acceptability in a *** and ***
environment.
1.4 "Intellectual Property Rights" of a Party means any and all rights of the
Party in and to all patents, patent applications, copyrights, trademarks,
trade secrets and know-how, mask work rights, industrial design and other
proprietary rights of any kind, recognised in any country of the world,
whether or not perfected, owned (or licensed by the Party with the right to
grant sub-licenses of the scope granted herein) as of the Effective Date or
hereafter acquired (whether by creation, transfer, license with right of
sub-license or by any other means) during the term of this Agreement.
1.5 "Unit Shipments" shall mean the gross number of Integrated Circuits using
the T-Square *** Audio Technology, shipped to customers of IGS, less any
returned units for which a refund or credit is given.
1.6 Licensed ICs or Licensed Technology. shall mean any and all of the ***
Audio Technology hardware and software licensed by T-Square to IGS under
this Agreement.
2. Grant of Rights
2.1 Marketing Rights: IGS shall have non-exclusive marketing rights of the T-
Square *** Audio Technology as integrated with graphics controllers.
2.2 Integration Rights: Subject to the terms and conditions of this Agreement,
T-Square Design, Inc. hereby grants to IGS a non-exclusive license to use
this licensed Audio Technology for products other than Graphics/Audio
integration after March 31, 1998.
2.3 Manufacturing and Distribution Rights: Subject to the terms and conditions
of this Agreement, T-Square Design, Inc. hereby grants to IGS a non-
exclusive, world-wide, non-transferable, non-assignable, royalty-bearing
license to make, have made, manufacture, reproduce, use, market, distribute
and sell the *** Audio Technology, solely in connection with making, having
made, manufacturing, reproducing, using, marketing, distributing and
selling licensed ICs.
2.4 Sub-licensing Rights: Neither IGS nor its customers can sub-licensing the
licensed audio technology.
2.5 Use of Documentation: T-Square Design, Inc. grants to IGS a non-exclusive,
world-wide, fully paid-up, non-transferable, non-assignable license under
T-Square Design. Inc. Intellectual Property Rights to use, copy, modify and
distribute information other than Confidential Information as defined in
Section 8 of this Agreement for IGS's internal use and for creating and
publishing technical documentation to assist IGS's customers to use the
Audio/Graphics Chips. Notwithstanding anything in this Agreement to the
contrary, IGS will not disclose T-Square's Confidential Information without
the prior written consent of T-Square Design, Inc.
2.6 Limitations: No license or right is granted, by implication or otherwise,
to IGS, under any patents, confidential information or other intellectual
property rights now or hereafter owned or controlled by T-Square Design,
Inc. except for licenses and rights expressly granted in this Agreement.
2.7 Notification On Licensing: T-Square shall notify IGS if T-Square license
this *** Audio Technology for purposes of integrating *** Audio Technology
with Graphics Integrated Circuit technology to any newly licensed IC
company, designer, developer, manufacturer, or technology entity, prior to
March 31, 1998.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
2.8 Licensing And Distribution: IGS shall have the right to distribute the
object code of the software for T-Square's *** Audio Technology only with
the licensed IC. IGS may sub-license the software source code to OEM
customers of IGS for use with the licensed IC only.
3. Obligations
3.1 IGS Support. Notwithstanding the obligations of T-Square to provide
adequate engineering human resources for the delivery of the *** Audio
Technology as contained herein, IGS will provide additional necessary human
resources and all financial resources necessary to promote and support this
licensed technology.
3.2 Engineering Support. IGS will supply reasonable resources and support to
adapt the audio engine hardware and software core from T-Square. 3.3 Other
Support. IGS will provide all necessary equipment for layout, tape out,
revisions and debug of the sample silicon.
3.4 Modifications or Improvements. T-Square agrees that any modifications or
improvements it makes or receives, limited to changes of the existing logic
and circuit design that are offered to other *** Audio Technology licensees
at no charge, including those made by other Graphics Controller companies
but exclusive of any similarly granted licensee-specific layout
optimizations, process migrations, or improvements in technology covered by
other patents or patent applications, which are now or hereafter owned or
controlled by T-Square but not as yet made to the IGS Graphics/Audio chip,
shall be made immediately available to IGS at no additional charge if those
improvements will, in T-Square's and IGS's judgement, place IGS's products
in a non-competitive or non-compatibility position. Any modifications or
improvements for which T-Square must pay a license fee or royalty, and T-
Square acquires sub-license rights to, will be made available to IGS at a
similar license fee and royalty schedule.
4. *** Audio Technology Delivery and Support
4.1 Hardware. T-Square will deliver to IGS a complete package of *** Audio
Technology which shall include but is not limited to the following:
(a) Complete Verilog, RTL level and behaviour model of the Audio Engine
(b) Low level schematics and/or netlist of the Audio Engine
(c) Test vectors for verifying the audio engine prior to tape out (which
will be used for IC mass production.
(d) Debug the sample silicon and solve any problem relative to
functionality, compatibility and stability of the Audio Engine.
(e) Provide demo board schematics and debugging assistance
4.2 Software. T-Square shall provide the following software deliverables as
part of the *** Audio Technology:
(a) Source code of ***, *** and *** drivers
(b) Source code of audio chip level diagnostics and board testing software
(c) Complete set of wave sample for General *** compatible synthesizer
(d) Source code for General *** interpreter for *** games (***)
(e) Source code of *** to *** converter for *** games (***)
4.3 Marketing Support. T-Square shall supply the following:
(a) Product training for the Audio Market
(b) Product specification and comparison for Audio segment
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
(c) Hardware and software compatibility testing on audio feature
(d) Customer support in the form of joint visits to IGS's customers with
IGS's Sales, Marketing, and Engineering personnel.
5. Royalties and Other Payment Terms
The royalty license fee schedule as enumerated below shall pertain to all chips
sold by IGS which are a derivative of the *** Audio Technology with audio engine
hardware and/or software licensed from T-Square under this Agreement.
5.1 Royalty Payments. Royalties as specified under this Agreement, shall be
payable to T Square by IGS within 30 (thirty) days of the close of each
fiscal quarter for all licensed ICs incorporating the *** Audio Technology
licensed under this Agreement at $*** per unit.
5.2 Non-Recurring Expanse. A total of $*** design transfer fee will be paid by
IGS to T-Square upon the date of execution of this Agreement.
5.3 Software Source Code Sub-Licensees Fee: Each sub-licensee must sign a
software license agreement with T-Square and pay a one-time software source
code license fee of $***. Software source code license fees shall be waived
by T-Square or refunded to any IGS customer when said fee has been paid in
advance whenever such customer has purchased in excess of *** licensed ICs
in any given fiscal quarter. IGS will treat T-Square's source code with the
same care and protective measures as it would treat it's own source code.
5.4 Fair Market Price Consideration. In the event IGS sells chips using the
licensed technology at a price substantially lower than the fair market
price, or in such event that the fair market price should fall below the
level of sufficient margin to the extent that royalty payments to T-Square
by IGS would cause a loss to IGS, T-Square is not obligated but will
consider waive the royalty payment requirement or issue a credit to IGS as
is mutually agreed upon.
6. Confidential Information:
6.1 Definition. T-Square and IGS acknowledge that, in the course of performing
their respective obligation hereunder, each may obtain information relating
to the other and the other's products that is of a confidential and
proprietary nature to such other Party("Confidential Information"). Such
Confidential Information includes without limitation the Graphics
Controller Technology, *** Audio Technology, trade secrets, know-how
formulas, composition of matter, inventions, techniques, process, programs,
diagrams, schematics, technical information, customer and financial
information, sales and marketing plans and the terms of this Agreement.
6.2 Obligation. Each of T-Square and IGS agrees, for itself and its
subcontractors that it will
(a) use the other Party's Confidential Information only in connection with
fulfilling its obligations under this Agreement;
(b) hold the other Parties Confidential Information in strict confidence
and exercise due care with respect to its handling and protection,
consistent with its own policies concerning protection of its own
Confidential Information of like importance;
(c) not disclose, divulge or publish the other Party's Confidential
information except to such of its responsible employees and
subcontractors who have a bona fide need to know to the extent
necessary to fulfil such Party's obligations under this Agreement; and
(d) instruct all such employees not to disclose the other Party's
Confidential Information to third parties, including consultants,
without the prior written permission of the other party.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
6.3 Exceptions The obligations set forth in Section 8.2 above will not apply
to either Party's Confidential Information which
(a) is or becomes public knowledge without the fault or action of the
other Party;
(b) received by the other Party from a third party, without restriction as
to use or disclosure;
(c) the other Party can document was independently developed by it;
(d) is required to be disclosed pursuant to law provided the other Party
uses reasonable efforts to give the Party owning the Confidential
Information reasonable notice of such required disclosure; or
(e) is or becomes available to the other Party on an unrestricted basis
from the Party owning the Confidential Information.
6.4 Employer Non-Disclosure Agreement
IGS represents that to the best of its knowledge, at the Effective Date,
all IGS employees with access to all or part of the T-Square's confidential
document have executed written IGS employee non-disclosure agreements or are
otherwise under written obligation of non-disclosure which, inter alia, require
such employees to maintain the confidentiality of confidential Information of
third parties received by IGS. IGS agrees that during the Term of this
Agreement, it shall use reasonable efforts to assure that all additional IGS
employees will execute IGS employee non-disclosure agreements prior to having
access to the T-Square *** Audio Technology. Signed employee non-disclosure
agreements are to be retained by IGS for a period of no less than three (3)
years from the date of the employee's termination.
T-Square represents that to the best of its knowledge, at the Effective
Date, all T-Square employees with access to the IGS Graphics Controller
Technology have executed written T-Square employee non-disclosure agreements or
are otherwise under written obligation of non-disclosure agreements which, inter
alia, require such employees to maintain the confidentiality of Confidential
Information of third parties received by T-Square Design, Inc. T-Square Design,
Inc. agrees that during the Term if this Agreement, it shall use reasonable
efforts to assure that all additional T-Square employees will execute T-Square
employee non-disclosure agreements prior to having access to the IGS Graphics
Controller Technology. Signed employee non-disclosure agreements are to be
retained by T-Square for a period of no less than three (3) years from the date
of the employee's termination.
7. Intellectual Property Rights
7.1 *** Audio Technology. The *** Audio Technology and all Intellectual
Property Rights therein will be the sole and exclusive property of T-
Square, and IGS hereby transfers and assigns to T-Square all right, title
and interest that IGS may have in the *** Audio Technology and all
Intellectual Property Rights therein based on the T-Square Audio
Technology. IGS will provide reasonable assistance and co-operation to T-
Square to acquire, transfer, maintain, perfect and enforce the Intellectual
Property Rights in the *** Audio Technology including but not limited to
execution of such documents as may reasonable be requested by T-Square
7.2 Intellectual Property Indemnification. T-Square will apply its best effort
to defend IGS against any claim that the *** Audio Technology and/or
supporting software source code, object code, or drivers, as supplied by T-
Square infringes or misappropriates the intellectual Property Rights of any
third party.
8. Term and Termination
8.1 Both Parties are binding by this agreement which can only be terminated by
mutual agreeable terms in written signed by both Parties' officers.
8.2 Return of Confidential Information. Each Party shall return or destroy all
copies of the Confidential Information of the other Party within thirty
(30) days after the effective date of the termination. At the
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
request of either Party, an officer of the other Party will certify in
writing that such other Party has complied with this obligation.
9. Warranties and Liability
9.1 Limited Warranty. T-Square warrants to IGS that the *** Audio Technology,
Software Source Code and Object Code will perform in all material respects
in accordance with T-Square's specifications as contained herein. IGS's
sole remedy is that T-Square will, at no extra charge, correct any defect
discovered in the Audio/Graphics chip design so that it performs in
accordance with such specification in all material respects. In case the
Audio/Graphics chip does not meet its functional specification, T-Square
will apply its best effort to correct any defect.
9.2 Liability. Neither Party is liable to the other party for any damage or
loss cost by the usual risks, delays and malfunction of the licensed
products.
10. Miscellaneous
10.1 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the substantive laws of the State of California or the
United States, as applicable. Except for claims regarding either Party's
Intellectual Property Rights or Confidential Information, all claims will
be resolved through mediation by a mutually acceptable mediator to be
chosen by the parties within 30 days after written notice by one Party to
the other demanding mediation. Neither Party may unreasonably withhold
consent to the selection of a mediator, and the parties will share the
costs of mediation equally. Claims regarding Intellectual Property Rights
or Confidential information may be brought immediately in the state or
federal courts having personal jurisdiction over the Party defending the
claim. Each of the parties acknowledges that unauthorised disclosure or use
of the other Party's Confidential Information or infringement or
misappropriation of the other Party's Intellectual Property Rights could
cause irreparable harm and significant injury that would be difficult to
ascertain and may not be compensated by damages alone. Accordingly, the
parties agree that, in addition to any and all legal remedies, claims
regarding Intellectual Property Rights or Confidential Information may be
remedied by appropriate equitable relief.
10.2 Assignment. IGS shall not assign this Agreement and all of it's rights
pertaining thereto to other party without prior written approval from T-
Square's officer.
10.3 Modification and Waiver. No modification to this Agreement, nor any waiver
of any rights, will be effective unless assented to in writing by the Party
to be charged, and the waiver of any breach or default shall not constitute
a waiver of any other right hereunder or any subsequent breach or default.
10.4 Notices. Any required or permitted notices hereunder must be given in
writing at the address of each Party set forth below, or to such other
address as either Party may substitute by written notice to the other in
the manner contemplated herein, by one of the following methods: hand
delivery; registered, express, or nationally-recognised private express
courier; or facsimile. Notices will be deemed given on the date when hand
delivered or transmitted by facsimile, one (1) day after being sent by
express mail or nationally recognised private express courier, and five (5)
days after being sent by registered or certified mail.
If to T-Square:
Tony Chu, President & CTO
T-Square Design, Inc.
4633 Old Ironsides Dr. Ste 290 Santa Clara, CA 95054
If to IGS
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
Kenny Liu, President
InteGraphics Systems, Inc.
4001 Burton Drive, Santa Clara, CA 95054
10.5 Force Majeure. Nether Party shall be responsible for delay or failure in
performance caused by any government act, law, regulation, order or
decree, by communication line or power failures beyond its control, or by
fire, flood or other natural disasters or by other causes beyond its
reasonable control, nor shall any such delay or failure be considered to
be a breach of this agreement. In any such event, performance shall take
place as soon thereafter as is reasonably feasible.
10.6 Attorney's Fees. In the event of any dispute resolution proceeding between
the parties hereunder, the prevailing party shall be entitled to recover
its costs and reasonable attorney's fees therein. A "prevailing party"
shall mean a party who receives all or substantially all of the relief
sought by such party.
10.7 Counterparts. This Agreement may be executed in multiple counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
10.8 Independent Contractors. In performing their respective duties under this
Agreement, each of the parties will be operating as an independent
contractor. Nothing contained herein will in any way constitute any
association, partnership, or joint venture between the parties hereto, or
be construed to evidence the intention of the parties to establish any
such relationship.
10.9 Severability. In the event that it is determined by a court of competent
jurisdiction that any provision of this Agreement is invalid, illegal, or
otherwise unenforceable, such provision will be enforced as nearly as
possible in accordance with the stated intention of the parties, while the
remainder of this Agreement will remain in full force and effect and bind
the parties according to its terms. To the extent any provision cannot be
enforced in accordance with the stated intentions of the parties, such
provision will be deemed not to be a part of this Agreement
10.10 Headings. The heading of the Sections and subsections of this Agreement
are for convenience only and will not be of any effect in construing the
meanings of the Section and subsections.
10.11 Entire Agreement. This Agreement and the exhibits attached hereto
constitute the entire and exclusive agreement between the parties hereto
with respect to the subject matter hereof.
Attachment
T-Square Game-Audio Engine Data Sheet
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
T-Square Design, Inc. InteGraphics Systems, Inc.
By: By:
/s/ Tony Chu /s/ Kenny Liu
Tony Chu, President & CTO Kenny Liu, President
7/30/1997
<PAGE>
CONFIDENTIAL INTERNAL USE ONLY T/2/DESIGN
- --------------------------------------------------------------------------------
1 INTRODUCTION:
FEATURES:
* *** v2.0 interface
* *** Variable Sample Rate support
* Up to ***Hz Double Sample Rate support
* 32-*** synthesis
* *** positioning sound acceleration
* Legacy *** compatible
* Virtual *** emulation
* Virtual *** interpretation
* *** interface
* Enhanced digital *** interface
* *** receiver & transmitter
* *** transmitter
* Sample Bank resides in Main Memory or Local Memory
* Interface with *** BIU or other Host BIU
1.1 OVERVIEW:
Powered with T-Square *** Synthesizer engine ***, Cyber5050 is a
versatile audio processor which can be integrated in costumed CE product and
also can be utilized on *** platform.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
EXHIBIT 10.12
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
TECHNOLOGY LICENSE AGREEMENT
----------------------------
This Technology License Agreement ("Agreement") is entered into as of July
1st, 1997 ("Effective Date") by and between Reality Simulation Systems
Acquisition Corporation ("RSS"), a California corporation, with its principal
place of business 1020 Asbury Street, San Jose, California 95126, and
InteGraphics Systems, Inc. ("IGS"), a California corporation, having its
principal place of business at 4001 Burton Drive, Santa Clara, California 95054.
WHEREAS, RSS has developed or will develop *** graphics technology useful
in personal computers and consumer electronics products;
WHEREAS, IGS desires to obtain a license to such RSS technology to develop
a semiconductor and certain driver software for use in *** and *** graphics
applications, and RSS desires to grant IGS a license, pursuant to the terms and
conditions in the Agreement, to its technology;
WHEREAS, RSS wishes to obtain a license to sell and distribute products and
chips and IGS desires to grant RSS such a license pursuant to the terms and
conditions of this Agreement; and
WHEREAS, RSS and IGS each desire to distribute the products developed
hereunder on an exclusive basis to separate geographic and platform markets.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties hereto agree as follows:
1. Definitions.
-----------
1.1 "AGP Technology" shall mean the graphics port protocol promoted by
Intel Corporation, a Delaware corporation, and implemented by IGS, and further
specified in Exhibit A hereto. The AGP Technology includes, without limitation,
Source Code, test vectors, schematics, and descriptive specifications.
1.2 "CyberPro3000 Products" shall mean products based on or
incorporating *** Verilog Source Code and further specified in Attachment
B hereto regardless of the name or commercial designation of such products. Any
CyberPro3000 Products Introduced by or for a party for a period of twelve (12)
months following completion of the first production CyberPro3000 Product for
commercial sale which is substantially similar to the CyberPro3000 Products
shall also be a CyberPro3000 Product hereunder.
1.3 "Derivative Work" shall mean:
(a) for copyrights and copyrightable materials, any modification,
revision, port, translation, abridgement, condensation or expansion of the pre-
existing work, or any portion thereof, or any form in which the preexisting work
is recast, transferred, transformed or adapted;
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
(b) for patents and patentable materials, any improvement
thereon; and
(c) for trade secrets and materials protected by trade secret,
any new material derived from such existing trade secret or materials, including
new material which may be protected by copyright, patent or trade secret or any
combination of the foregoing.
1.4 "Documentation" shall mean any user documentation or materials
relating to CyberPro3000 Products and *** Verilog Based Products, including,
without limitation, screen displays, "read me" files and reference, user,
installation, systems administrator and technical guides.
1.5 "IGS Chip" shall mean the IGS graphics chip based on the ***
Technology, produced by or for IGS hereunder and further specified in Attachment
A, including, without limitation, any and all semiconductor masks used to
fabricate or manufacture such chips. Any graphics chip Introduced by or for IGS
for a period of twelve (12) months following completion of the first production
CyberPro3000 Product for commercial sale which is substantially similar to the
IGS Chip shall also be an IGS Chip hereunder.
1.6 "IGS Market" shall mean the platform(s) and territory(ies)
specified in Attachment C hereto.
1.7 "IGS Software" shall mean the IGS driver software specified in
Attachment A.
1.8 "Introduced" shall mean the announcement of a product by press
release, trade show announcement, or other like marketing technique.
1.9 "*** Technology" shall mean the RSS Software and Verilog
Source Code (in both *** and *** forms).
1.10 "Proprietary Rights" shall mean patents, patent rights, copyright
rights, trademark rights, trade secret rights, mask work rights, and all other
intellectual property rights worldwide.
1.11 "RSS Market" shall mean the platform(s) and territory(ies)
specified in Attachment C.
1.12 "RSS Software" shall mean the RSS driver software specified in
Attachment A.
1.13 "Source Code" shall mean those statements in a computer language
which, when processed by a compiler, assembler or interpreter, become executable
by a computer and includes, without limitation, all comments, notes, flow
charts, decision tables, argument lists and other human readable references
relating to the operation, purpose, compilation, assembly or interpretation
thereof.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
2
<PAGE>
1.14 "*** Technology" shall mean the successor technology to the ***
Technology specified in Attachment E hereto.
1.15 "Verilog Source Code" shall mean the IGS Chip and associated
electronics as described and documented in a human readable hardware description
language which can reproduce the same netlist description of the *** Verilog.
1.16 "*** Verilog Based Products" shall mean CyberPro3000 Products
based on or incorporating the *** Verilog Source Code regardless of the name or
commercial designation of such products.
2. License Grant to IGS.
--------------------
2.1 Subject to all of the terms and conditions of this Agreement, RSS
hereby grants to IGS a royalty-bearing (as provided in Section 10 below), non-
transferable, non-sublicenseable (except as provided in Section 2.1(e) below)
license to:
(a) use and reproduce for its internal purposes only the RSS
Software Source Code and modify, create and prepare Derivative Works thereof.
IGS assumes all responsibility for integrating the RSS Software into the IGS
Software;
(b) use and reproduce for its internal purposes only the ***
Verilog Source Code, make speed improvements through layout, process, and
silicon integration refinements, and manufacture IGS Chips and successor
therefrom;
(c) use, reproduce, manufacture. market, display, license, sell
and distribute solely within the IGS Market the RSS Software (in object code
form only) and only as embedded and incorporated into CyberPro3000 Products and
*** Verilog Based Products;
(d) use, reproduce, manufacture, market, display, license, sell
and distribute the Documentation solely within the IGS Market and only together
with CyberPro3000 Products and *** Verilog Based Products; and
(e) reproduce, license and distribute the RSS Software Source
Code to such third parties as the parties mutually approve in writing and for
the sole purpose of allowing such third parties to provide end user technical
support; provided such third parties agree in writing to be bound by all of the
obligations and restrictions herein with regard to such Source Code.
2.2 Upon completion of the first production CyberPro3000 Product for
commercial sale which substantially conforms to the specifications in Attachment
B;
(a) RSS will grant IGS, subject to all the terms and conditions
of this Agreement (including, without limitation, Sections 9, 10.3(b) and 16,
but not Section 8.2), a non-exclusive, non-transferable, non-sublicenseable,
royalty-bearing license to use and reproduce for its internal purposes only the
*** Verilog Source Code and modify, create and prepare Derivative Works
thereof for the sole purpose of developing and manufacturing the IGS Chip (for
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
3
<PAGE>
(b) For the purposes of distinguishing the *** and *** versions
of the Verilog Source Code, and by extension the CyberPro3000 Products and
*** Verilog Based Products, IGS agrees to perform, prior to tape out at
RSS' request, Verilog design verification tests provided by RSS to IGS
("Verification Tests"). IGS shall complete each Verification Test and provide to
RSS a written report detailing all the results of each Verification Test within
*** (***) days of RSS request or IGS' receipt of such Verification Test,
whichever is later. IGS further agrees to allow RSS to physically inspect each
and every IGS site during IGS' normal business hours to verify IGS' compliance
with this Section 2.2 and to determine, by whatever means necessary, the version
of the Verilog Source Code used in each IGS chip (and any successor chip based
in whole or in part on *** Technology) prior to tapeout. In the event of any
dispute between IGS and RSS arising under this Section 2.2, both parties agree
to settle the dispute by arbitration as outlined in Section 20.4. If IGS agrees
beforehand to pay Unencripted Royalties no inspection will be required.
3. License Grant to RSS.
--------------------
3.1 Subject to all of the terms and conditions of this Agreement, IGS
hereby grants to RSS a non-exclusive, non-transferable, non-sublicenseable
(except as provided in Section 3.2 and 6.3 below), royalty-bearing (as provided
in Section 10 below), fully paid-up, worldwide license to:
(a) use, reproduce, manufacture, market, display, distribute,
modify and create Derivative Works based on the AGP Technology if developed
internally by IGS for the CyberPro3000 products or *** Verilog Based Products.
(b) use, reproduce, manufacture, market, display, license, sell
and distribute solely within the RSS Market the IGS Software (in object code
form only) and IGS Chip and only as embedded and incorporated into CyberPro3000
Products or *** Verilog Based Products; and
(c) reproduce, license and distribute the IGS Software Source
Code by IGS to such third parties as the parties mutually approve in writing and
for the sole purpose of allowing such third parties to provide end user
technical support; provided such third parties agree in writing to be bound by
all of the obligations and restrictions herein with regard to such Source Code.
3.2 The license grant under Section 3.1 is sublicensable by RSS only
to a third party manufacturer mutually agreed upon by both parties who will
provide a source of CyberPro3000 Products and *** Verilog Based Products to both
IGS and RSS, provided, however, that such third party manufacturer shall be
bound in writing to all restrictions on RSS under this Agreement and further
provided that such third party manufacturer shall not have the right to
manufacture such products for any third party. The parties hereby acknowledge
and agree, that at RSS expense, Seiko Epson Corporation ("Seiko"), a Japan
corporation, shall be an authorized third party manufacturer under this Section
3.2 upon Seiko's written agreement to be bound by all restrictions on RSS under
this Agreement.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION
4
<PAGE>
bound by all restrictions on RSS under this Agreement.
4. Restrictions.
------------
4.1 The license grants herein shall be not be exercisable by a party's
contractors, except those contractors who agree in writing to be bound to all of
such party's obligations and restrictions under this Agreement.
4.2 Each party agrees to include and not to obscure or modify the
other party's copyright and other notices which appear in or on the CyberPro3000
Products, *** Verilog Based Products, *** Technology or Documentation.
4.3 Each party agrees not to develop or use any benchmarking tests
which cheat on results of he CyberPro3000 Products, *** Verilog Based products
or portions thereof.
4.4 No rights or licenses are granted or deemed granted to any
Proprietary Rights of either party to the other party to any subject matter of
this Agreement except those rights or licenses expressly and unambiguously
granted herein.
4.5 In no event whatsoever, except as expressly and unambiguously
stated herein, shall a party use, disclose or distribute to any third party
Source Code, or any portion thereof, of the other party including, without
limitation, *** and *** Verilog Source Code (in the case of IGS).
5. Right of First Refusal. RSS agrees that IGS shall, for a period of
----------------------
three (3) months following the Effective Date and to the exclusion of all other
parties, have the first opportunity to acquire a non-exclusive, worldwide
license to use, reproduce, market, manufacture, display, license, sell,
distribute and modify the *** Technology for use in graphics chips.
6. Distribution Rights.
-------------------
6.1 IGS shall have the exclusive, non-transferable (except as provided
below) right to market, sell and distribute CyberPro3000 Products and ***
Verilog Based Products in the IGS Market and RSS shall have the exclusive, non-
transferable (except as provided below) right to market, sell and distribute
CyberPro3000 Products and *** Verilog Based Products in the RSS Market except
that the exclusive rights granted under this Section 6.1 shall automatically and
irrevocably become non-exclusive as to both parties:
(a) on ***; or
(b) in the event that a party fails to sell *** (***) units of
CyberPro3000 Products and/or *** Verilog Based Products within *** (***) months
of the first retail sale of a CyberPro3000 Product or *** Verilog Based Product.
6.2 The parties acknowledge and agree that IGS may continue to develop
graphics technology after the Execution Date and that, as to products Introduced
by IGS after the
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION
5
<PAGE>
sale, no right, tide or interest in or to any Proprietary Rights in such
products is transferred under this Agreement and IGS may freely market, sell,
distribute or otherwise transfer such products in all markets worldwide.
6.3 A party's exclusive rights under Section 6.1 above may be
transferred only with the prior written approval of the non-transferring party,
except that RSS may, in its sole discretion and without the prior written
approval of IGS, transfer its exclusive rights hereunder to S-MOS Systems Inc.
("S-MOS"), a California corporation.
6.4 A party may appoint a third party distributor to exercise such
party's distribution rights under this Section 6 to a third party distributor
who agrees in writing to be bound by all the terms and conditions of this
Agreement.
7. Ownership.
---------
7.1 As between the parties and subject to the licenses granted herein,
RSS owns all right, title and interest in and to all of the *** Technology and
Documentation and all copies and portions thereof and all Proprietary Rights
thereto. As between the parties and subject to the license granted herein, IGS
owns all right title and interest in and to the IGS Chip and all Proprietary
Rights thereto, subject to RSS' rights in the *** Technology. IGS agrees to
assign and hereby does assign to RSS any and all Proprietary Rights IGS may
acquire in the *** Technology or Documentation or any Derivative Work of the
foregoing. In the event RSS is unable for any reason to secure IGS' authorized
signature to apply for or to pursue any application for any United States or
foreign letters patent or copyright registrations or other intellectual property
protection relating to Proprietary Rights assigned to RSS hereunder, then IGS
hereby irrevocably designates and appoints RSS and its duly authorized officers
and agents as its agent and attorney-in-fact, with full power of substitution,
to act for and in its behalf and stead to execute and file any such applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of letters, patent or copyright registrations or other intellectual
property protection thereon with the same legal force and effect as if executed
by IGS.
7.2 The foregoing ownership provision in Section 7.1 shall not be
construed to Emit either party's right to independently develop or acquire
similar products or technology without use of the other party's Confidential
Information (as defined in Section 16 below), products or technology; provided
that, except for the licenses expressly granted in this Agreement, nothing in
this Section 7.2 shall be deemed to grant either party a license under the other
party's Proprietary Rights.
7.3 In the course of marketing the CyberPro3000 Products and ***
Verilog Based Products, IGS will use the then current names and designations
used by RSS therefor ("Marks") but will not represent or imply that it is RSS or
a part of RSS. However, all advertisements, promotional materials, packaging and
anything else bearing a Mark, including, without limitation, any product based
on or incorporating *** Technology or Derivative Works thereof, shall identify
RSS as the Mark owner and shall be subject to the prior written approval of RSS,
which approval shall not be unreasonably withheld. IGS also agrees not to use or
contest, during or after the term of this Agreement, any name, mark or
designation used by RSS
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
6
<PAGE>
advertisements, promotional materials, packaging and anything else bearing a
Mark, including, without limitation, any product based on or incorporating ***
Technology or Derivative Works thereof, shall identify RSS as the Mark owner and
shall be subject to the prior written approval of RSS, which approval shall not
be unreasonably withheld. IGS also agrees not to use or contest, during or after
the term of this Agreement, any name, mark or designation used by RSS anywhere
in the world (or any name, mark or designation similar thereto). IGS
acknowledges and agrees that all use of Marks by IGS shall inure to the benefit
of RSS.
8. Delivery of RSS Software.
------------------------
8.1 RSS will use its diligent commercial efforts to deliver to IGS the
RSS Software and *** Verilog Source Code in accordance with the milestones set
forth in Attachment D hereto.
8.2 IGS may perform acceptance tests on the RSS Software and ***
Verilog Source Code for a period of thirty (30) days following IGS' receipt
thereof for conformance with RSS' specifications therefor as set forth in
Attachment A. If IGS discovers material non-conformance in conducting such
acceptance tests and provides RSS with sufficient written instructions,
equipment, machines and documentation ("Nonconformance Materials") to allow RSS
to readily reproduce the problems at its facility, RSS shall, at its cost, use
reasonable efforts to make corrections or develop workarounds within thirty (30)
days after receipt of the required Nonconformance Materials or such longer
period as the parties agree in writing after conferring in good faith. The RSS
Software and *** Verilog Source Code will be deemed accepted upon the earliest
of the following: (i) IGS provides written notice of acceptance, (ii) thirty
(30) days after IGS commercially ships or licenses CyberPro3000 Products, or
(iii) thirty (30) days after delivery to IGS of the RSS Software or *** Verilog
Source Code or a correction thereto if IGS has not first provided the necessary
Nonconformance Materials. IGS shall have the right to terminate this Agreement
if RSS has not corrected any material non- conformance in the RSS Software or
*** Verilog Source Code in connection with this Section 8.2 within one hundred
twenty (120) days of IGS' delivery to RSS of Nonconformance Materials therefor.
9. Protection of the *** Technology.
--------------------------------
9.1 In addition to its obligations under Section 16 below, IGS shall
restrict access to and shall not disclose any *** Technology to any person or
entity except to a limited number (but in no event more than ten (10)) of IGS'
employees and independent contractors (i) located at 4001 Burton Drive, Santa
Clara, CA. 95054, and (ii) who have a need to access the *** Technology to
enable IGS to exercise its rights and perform its obligations under this
Agreement. Within thirty (30) days after request from RSS but not more than
three (3) times each year, IGS shall provide RSS with a list of the names of any
and all individuals (employees, independent contractors, employees of
independent contractors, and any other individuals) who then have or have had,
at any time since IGS last provided such a list, access to the *** Technology.
IGS shall inform all persons who are given access to the *** Technology that the
*** Technology contains confidential trade secrets of RSS and is the
Confidential Information (as defined in Section 16 below) of RSS. IGS shall
employ its best efforts to prevent unauthorized physical or electronic access,
use, reproduction, transmission, display, disclosure and
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
7
<PAGE>
at RSS' request, but no more than three (3) times each calendar year, for the
purpose of (i) confirming that it is protecting the *** Technology in accordance
with this Agreement, and (ii) reminding its employees and independent
contractors of the limited rights and obligations of IGS and each employee and
independent contractor pertaining to the *** Technology. Following each review,
IGS will notify RSS in writing that IGS conducted the review and (a) that no
violations were discovered, or (b) that violations were discovered, a
description of the nature and extent of the violations, and a description of the
actions taken by IGS to correct the violations. IGS shall take all actions
reasonably required to recover and prevent further use, reproduction and
disclosure of the *** Technology in the event of loss or misappropriation;
provided that if IGS fails to enforce any confidentiality obligations of its
employees or independent contractors or fails to recover and prevent further use
of the *** Technology, then RSS may take all necessary steps, including, without
limitation, initiating legal action, to enforce such agreements to protect its
interests in the *** Technology. IGS shall be fully responsible for the conduct
of all of its employees, independent contractors, agents and representatives who
may in any way breach this Section 9 or Section 16 below and shall indemnify RSS
for any damages relating to or arising from such breach.
9.3 IGS expressly agrees to keep the *** Technology and Derivative Works
thereof and any portions or copies of the foregoing at IGS' offices located at
4001 Burton Drive, Santa Clara, CA. 95054, and not to move, transmit, view,
access, store, situate or otherwise transfer, distribute, display or relocate
for any period of time whatsoever, physically, electronically or otherwise, or
allow any third party to do any of the foregoing, any *** Technology or
Derivative Works thereof or any portions or copies of the foregoing without the
prior written approval of RSS.
10. License Fees: Royalties.
-----------------------
10.1 Initial Payments. In consideration of the licenses granted to
----------------
IGS by RSS herein, upon execution of this Agreement, IGS shall pay RSS a non-
refundable, non-recoupable, non-creditable RSS Software license fee in the
amount of *** Dollars ($***) and a non-refundable, non-recoupable, non-
creditable *** Verilog Source Code license fee in the amount *** Dollars
($***).
10.2 Milestone Payments. In consideration of RSS' development of the
------------------
*** Technology for use in CyberPro3000 Products, IGS shall pay RSS the following
non-refundable, non-recoupable, non-creditable milestone payments upon RSS'
completion of the milestones below and further specified in Attachment D:
(a) *** Dollars ($***) upon sign-off by IGS of a test sample of
the IGS Chip;
(b) *** Dollars ($***) upon the commercial production release of
the IGS Chip; and
(c) *** Dollars ($***) upon the commercial production release of
the RSS Software.
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
8
<PAGE>
Notwithstanding anything else in this Agreement, the first commercial sale
of a CyberPro3000 Product shall conclusively be deemed to satisfy each and every
milestone requirement in this Section 10.2 and IGS shall immediately pay to RSS
any milestone payment(s) not yet paid hereunder.
10.3 Royalties.
---------
(a) Each party shall pay royalties to the other party for each
unit of CyberPro3000 Product sold, distributed or otherwise transferred under
this Agreement by or for such selling party as follows:
Number of Units Royalty Per Unit
--------------- ----------------
1-*** $***
***- *** $***
***- *** $***
***+ $***
(b) Each party shall pay royalties to the other party for each
unit of *** Verilog Based Product sold, distributed or otherwise transferred
under this Agreement by or for such selling party in the amount of *** ($***)
for each unit of the first *** (***) units of *** Verilog Based Products,
licensed, distributed or otherwise transferred.
(c) All royalties shall be due and paid at the same time as the
quarterly reports are provided under Section 10.5 below. No royalties shall
accrue with respect to either party after ***, provided all royalties accrued
prior to *** have been paid in full on or before ***. Royalties shall continue
to accrue after ***with respect to a party which has not paid royalties as
provided in this paragraph (c) until such time as that party has paid all
outstanding and accrued royalties in full. No royalties shall be payable for (i)
units of CyberPro3000 Products and *** Verilog Based Products that are returned
and for which a credit has been made to a customer or (ii) commercially
reasonable quantities of CyberPro3000 Products and *** Verilog Based Products
used for testing, demonstration and similar purposes provided a party is not
paid for such use.
10.4 New Markets. In the event the parties agree in writing to amend
-----------
either the IGS Market or RSS Market to add any additional platform or territory,
all royalties for units of CyberPro3000 Products sold in such new market shall
be calculated based only on the unit sales applicable to such additional
platform(s) or territory(ies), as the case may be.
10.5 Payments; Reports; Audit. Each party shall bear its own
------------------------
manufacturing, marketing, sales and distribution costs including, without
limitation, taxes, duties and other government assessments. All late payments
will be assessed a service fee of one and one-half percent (1.5%) per month or
the maximum rate allowed under applicable law, whichever is less. Each party
shall provide to the other party, within thirty (30) days after the end of each
calendar quarter, quarterly written reports of the total number of units of
CyberPro3000 Products and
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
9
<PAGE>
*** Verilog Based Products distributed by or for such party and the royalties
payable, if any, which have accrued under Section 10.3 above. Each party shall
keep complete and accurate books and records of its sales and distribution of
CyberPro3000 Products and *** Verilog Based Products all other transactions
relating thereto in sufficient detail to enable any payments due hereunder to be
determined and verified. Each party shall have the right (at its expense, upon
reasonable notice and during the audited party's normal business hours) to have
an independent certified public accountant inspect and audit the books and
records of the other party for the purpose of verifying any reports, information
or payments provided or due hereunder. Such accountant shall be bound in
confidence not to use or disclose any information except to the extent necessary
to inform the auditing party of any non-compliance with the reports, information
or payments provisions of this Agreement. All underpayments revealed by such
audit shall be paid within thirty (30) days of the audit results. If such audit
reveals an underpayment in excess of five percent (5%), the underpaying party
shall bear the expense of the audit. Each party may exercise its right to audit
no more than once per year unless an underpayment of over five percent (5%) has
been discovered in the prior audit. In such event, the underpaid party shall
have the right to audit once every three (3) months until the results of the
three (3) most recent audits show less than a five percent (5%) underpayment.
11. Training and Support.
--------------------
11.1 The parties agree to cooperate in the development and support of
the *** Technology, IGS Software, IGS Chip and CyberPro3000 Products.
Accordingly, each party shall provide, at the other party's request and expense,
up to *** (***) man hours of training and technical support during the providing
party's normal business hours. A party may request additional training and
technical support at the providing party's then current consulting fee, which
request shall not unreasonably be denied.
11.2 The parties shall together and in good faith negotiate with
third parties for the right to bundle mutually acceptable third party products
with the CyberPro3000 Products and *** Verilog Based Products.
12. Representations and Warranties.
------------------------------
12.1 Each party represents and warrants that:
(a) it has the corporate power and authority to enter into and
to fulfil its obligations under this Agreement;
(b) it will use its diligent commercial efforts to successfully
market, distribute and support the CyberPro3000 Products in the IGS Market (in
the case of IGS) and the RSS Market (in the case of RSS) on a continuing basis
and to comply with good business practices and all laws and regulations relevant
to this Agreement or the subject matter hereof;
(c) it is fully responsible for the satisfaction and support of
its customers. Each party will be responsible for, and shall indemnify, defend
and hold the other party harmless from, all claims, damages, settlements,
expenses and attorneys' fees incurred by a party
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
10
<PAGE>
with respect to the other party's customers and their claims; and
(d) to keep for three (3) years after termination of this
Agreement records of all CyberPro3000 Product and *** Verilog Based Product
sales and customers sufficient to adequately administer a recall of any such
products and to fully cooperate in any decision by RSS or IGS to recall,
retrieve and/or replace any such products.
12.2 IGS represents and warrants that:
(a) it has the right to grant RSS the licenses in Section 3
including, without limitation, the license to the AGP Technology;
(b) IGS shall not enter into any manufacturing, fabrication or
foundry agreement with any third party for the CyberPro3000 Products, ***
Verilog Based Products or IGS Chips which does not expressly grant RSS the
irrevocable right to obtain manufacturing, fabrication or foundry services for
CyberPro3000 Products, *** Verilog Based Products or IGS Chips from such third
party on the same terms as IGS and grant RSS discounts, credits or other
favorable terms (including, without limitation, price) based on the number of
units thereof produced by such third party manufacturer for IGS; and
(c) the deliverables provided by it hereunder shall be the same
in every respect as the products shipped by IGS to its customers and that it
will, without charge, provide to RSS for the term of this Agreement, all
improvement, upgrades, updates, bug fixes and other enhancements which IGS makes
generally available to its customers.
13. Warranty; Disclaimer. RSS represents and warrants that (i) the
--------------------
*** Technology, as delivered by RSS hereunder, will conform substantially to
RSS' specifications therefor, provided that IGS' sole remedy for breach of the
warranty in this clause (i) shall be IGS' rights under Section 8.2; and (ii) to
the best of RSS' knowledge, the RSS Software does not infringe any United States
Proprietary Rights of any third party, provided that IGS' sole remedy for breach
of the warranty in this clause (ii) shall be IGS' rights under Section 15.
EXCEPT AS EXPRESSLY AND UNAMBIGUOUSLY SET FORTH IN TIES SECTION 13, RSS MAKES NO
WARRANTIES TO ANY PERSON OR ENTITY WITH RESPECT TO ANY PRODUCTS, *** TECHNOLOGY
OR DOCUMENTATION OR ANY PORTION OR DERIVATIVE WORK THEREOF OR ANY SERVICES OR
LICENSES AND HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NONINFRINGEMENT.
14. Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
-----------------
OTHERWISE (EXCEPT SECTION 15 BELOW), NEITHER PARTY WILL BE LIABLE WITH RESPECT
TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOST DATA, (II) COST OF PROCUREMENT OF SUBSTITUTE
GOODS, TECHNOLOGY OR SERVICES, (III) ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
11
<PAGE>
THE MILESTONE PAYMENTS ACTUALLY PAID TO RSS BY IGS PURSUANT TO SECTION 10.2
ABOVE, OR (IV) ANY MATTER BEYOND ITS REASONABLE CONTROL.
15. Indemnification. Each party shall indemnify, defend and hold the
---------------
other party and its officers, directors, agents and employees harmless from
liability, damages, costs, and attorneys' fees, if any, finally awarded in any
suit or the amount of the settlement thereof resulting from any third party
claim that the *** Technology or Derivative Works thereof created by or for RSS
(in the case of RSS) or IGS Chip, IGS Software or Derivative Works thereof or
other deliverable created by or for IGS (in the case of IGS) infringes any
United States patent, copyright or trademark or misappropriates any trade
secret, provided that: (i) the indemnifying party is promptly notified of any
and all threats, claims and proceedings related thereto, (ii) the indemnifying
party shall have sole control of the defense and/or settlement thereof, (iii)
the indemnified party furnishes to the indemnifying party upon the indemnifying
party's request and expense, information reasonably available to the indemnified
party for such defense, and (iv) the indemnified party provides the indemnifying
party with reasonable assistance. Neither party shall admit any such claim
without prior written consent of the other party. Neither party shall have any
obligation under this Section 15 with respect to any *** Technology, IGS Chip,
IGS Software or any portion, component or Derivative Works of the foregoing (a)
not supplied by the indemnifying party, (b) made in whole or in part in
accordance with the indemnified party's specifications, (c) that are modified
after delivery by the indemnifying party, if the alleged infringement relates to
such modification, (d) combined with other products, processes or materials
where the alleged infringement relates to such combination, (e) where the
indemnified party continues allegedly infringing activity after being notified
thereof or after being informed of modifications that would have avoided the
alleged infringement and such modifications are not fully implemented, or (f)
where the indemnified party's use of the *** Technology, IGS Chip, IGS Software
or Derivative Work thereof is not strictly in accordance with the licenses
granted herein.
16. Confidentiality.
---------------
16.1 Each party ("disclosing party") may, from time to time, in
connection with performance under this Agreement, disclose confidential
information ("Confidential Information") to the other party ("receiving party").
Each recipient party agrees not to use (other than for purposes contemplated by
this Agreement), and will use reasonable efforts to prevent the disclosure to
third parties of, any of the disclosing party's Confidential Information that is
identified as confidential at the time of disclosure and is provided in tangible
form marked "confidential" or "proprietary" (or is reduced to such form within
thirty (30) days after oral disclosure). All RSS Software, Source Code, Verilog
Source Code and Derivative Works of any of the foregoing provided by RSS is
hereby identified and marked as RSS' Confidential Information. The IGS Chip, IGS
Software and Derivative Works provided by IGS are hereby identified as IGS'
Confidential Information. The recipient party's confidentiality obligation
hereunder shall not apply to information that the recipient party can document:
(i) was in the recipient party's possession or known by it
prior to receipt from the disclosing party;
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
12
<PAGE>
(ii) is or (through no fault of the recipient party or any of
its employees, contractors, agents or licensees) becomes generally available to
the public;
(iii) is rightfully disclosed to the recipient party by a third
party having no obligations of confidentiality to the disclosing party, provided
the recipient party complies with any restrictions imposed by the third party;
(iv) is independently developed by the recipient party without
use of or reference to the disclosing party's Confidential Information; or
(v) is required by law or regulation to be disclosed
(including, without limitation, in connection with SEC filings), provided that
the recipient party uses reasonable efforts to restrict disclosure and to obtain
confidential treatment therefor.
16.2 Each recipient party acknowledges and agrees that due to the
unique nature of the disclosing party's Confidential Information, there can be
no adequate remedy at law for any breach of its obligations hereunder, that any
such breach may allow the recipient party or third parties to unfairly compete
with the disclosing party resulting in irreparable harm to the disclosing party
and, therefore, that upon any such breach or threat thereof, the disclosing
party shall be entitled to injunctive relief and other appropriate equitable
relief in addition to whatever remedies it may have at law, and to be
indemnified by the recipient party from any loss or harm (including, without
limitation, attorneys' fees) in connection with any breach or enforcement of the
recipient party's obligations hereunder or the unauthorized use or release of
any Confidential Information. The recipient party will notify the disclosing
party in writing immediately upon the occurrence of any such unauthorized
release or other breach of which it is aware.
17. Term and Termination.
--------------------
17.1 This Agreement shall commence on the Effective Date and shall
remain in effect until terminated.
17.2 This Agreement will terminate:
(a) upon thirty (30) days (ten (10) days in the case of
nonpayment) prior written notice if IGS shall be in breach or default of any
material obligation under this Agreement; provided however, IGS may avoid such
termination if, before the end of such notice period, it cures such breach;
(b) immediately if IGS ceases to do business, or otherwise
terminates its business operations;
(c) immediately if IGS seeks protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against IGS (and not
dismissed within sixty (60) days); or
(d) immediately if IGS is unable to grant RSS the AGP
Technology
13
<PAGE>
license specified in Section 3.1(a).
17.3 Neither party shall incur any liability whatsoever for any
damage, loss or expenses of any kind suffered or incurred by the other (or for
any compensation to the other) arising from or incident to any termination of
this Agreement by such party which complies with the terms of the Agreement
whether or not such party is aware of any such damage, loss or expenses.
17.4 Upon termination of this Agreement by either party: (i) all
rights and licenses granted hereunder shall immediately terminate, except that
licenses to end user customers for the use of the RSS Software, Documentation,
IGS Chip and IGS Software pursuant to this Agreement shall continue in
accordance with the applicable end user agreements therefor; (ii) IGS will
immediately return to RSS all *** Technology and all materials relating to ***
Technology or portion(s) thereof and all RSS Confidential Information in IGS'
possession, custody or control in whatever form held (including all copies or
embodiments thereof), except that IGS may maintain one (1) copy of the RSS
Software solely to the extent necessary to support its installed base of
customers for the CyberPro3000 Products and *** Verilog Based Products; and
(iii) except to the extent expressly provided to the contrary in this Agreement,
all rights to payment (including, without limitation, milestone payments and
royalties) and the following provisions shall survive the termination of this
Agreement: Sections 4, 7, 9.1, 9.3, 10.5, 12.1(a), (c) & (d), 12.2(a) and 13
through 20, inclusive.
17.5 Termination is not the sole remedy under this Agreement and,
whether or not termination is effected, all other remedies will remain
available.
18. Export Requirements. IGS agrees to comply with the U.S. Foreign
-------------------
Corrupt Practices Act (regarding, among other things, payments to government
officials) and all export laws, restrictions, national security controls and
regulations of the United States and all other applicable foreign agencies and
authorities, and not to export or re-export, or allow the export or re-export
of, any CyberPro3000 Product, *** Verilog Based Product, *** Technology or
Documentation or any copy or direct product thereof (a) in violation of any such
restrictions, laws or regulations or (b) without all required licenses and
proper authorizations, to Cuba, Libya, North Korea, Iran, Iraq or Rwanda or to
any Group D or E country (or any national of such country) specified in the then
current Supplement No. 1 to part 740 of the U.S. Export Administration
Regulations (or any successor supplement or regulations). IGS shall promptly
execute any documents required by U.S. export requirements and demonstrate upon
demand to RSS its compliance with such requirements. IGS shall obtain and bear
all expenses relating to any licenses, exemptions and other requirements with
respect to the export from the U.S. of any and all CyberPro3000 Products, ***
Verilog Based Products, *** Technology, Documentation, information, materials or
items deliverable by RSS hereunder to any location and shall demonstrate to RSS
compliance with all applicable laws and regulations prior to export thereof.
19. Assignment. Neither this Agreement nor any rights, licenses or
----------
obligations hereunder, may be assigned by either party without the prior written
approval of the non-assigning party. Notwithstanding the foregoing, either party
may assign this Agreement (with no rights or obligations retained by the
assignor) to any acquiror of all or substantially all of such party's stock
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
14
<PAGE>
assets or business to which this Agreement relates. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, RSS and IGS and
their respective successors and permitted assigns.
20. Miscellaneous.
-------------
20.1 Entire Agreement: Amendment. This Agreement (and all
---------------------------
Attachments hereto) constitutes the entire and only agreement between the
parties relating to the subject matter hereof, and supersedes all other prior
negotiations, representations, understandings and agreements. No agreements
amending, modifying or supplementing the terms hereof shall be effective except
by means of a written document signed by the duly authorized representatives of
both parties.
20.2 Notices. All notices, consents, or approvals required by this
-------
Agreement shall be in writing and shall be deemed given five (5) days after
being sent by certified or registered air mail, postage prepaid, or when
received after being sent by facsimile (confirmed by such certified or
registered mail) or by commercial overnight courier service with tracking
capabilities, to the parties at the addresses below or such other addresses as
may be designated in writing by the respective parties pursuant to the terms of
this notice provision:
To RSS:
Reality Simulation Systems Acquisition Corporation
1020 Ashbury St.
San Jose, CA 95126
Attn: Sandeep Gupta
To IGS:
InteGraphics Systems, Inc.
4001 Burton Drive
Santa Clara, CA 95054
Attn: Kenny Liu
20.3 Governing Law and Legal Accounts. This Agreement shall be
--------------------------------
governed by and construed under the laws of the State of California and the
United States, without regard to the conflicts of laws provisions thereof and
without regard to the United Nations Convention on the International Sale of
Goods. In any action or proceeding to enforce rights under this Agreement, the
prevailing party shall be entitled to recover its costs and attorneys' fees.
20.4 Arbitration. Except that either party may seek equitable or
-----------
similar relief from a court, any dispute, controversy or claim arising out of or
in relation to this Agreement or at law, or the breach, termination or
invalidity thereof, that cannot be settled amicably by agreement of the parties
hereto, shall be finally settled by arbitration in accordance with the
arbitration rules of the American Arbitration Association ("AAA"), then in force
by one or more qualified, independent arbitrators appointed in accordance with
said rules; provided, however, that arbitration proceedings
15
<PAGE>
may not be instituted until the party alleging breach of this Agreement by the
other party has given the other party not less than thirty (30) days to remedy
any alleged breach and the other party has failed to do so. The arbitration will
take place in San Jose, California. The award rendered shall be final and
binding upon both parties. Judgment upon the award may be entered in any court
having jurisdiction, or application may be made to such court for judicial
acceptance of the award and/or an order of enforcement as the case may be.
20.5 Waiver. The failure of a party to enforce a right under this
------
Agreement shall not act as a waiver of that right or the ability to assert that
right relative to the particular situation involved. The waiver by either party
of a breach of any provisions contained in this Agreement shall be effective
only if set forth in a writing signed by both parties and shall in no way be
construed as a waiver of any succeeding breach of such provision or the waiver
of the provision itself.
20.6 Headings. Headings included herein are for convenience only
--------
and shall not be used to interpret or construe this Agreement.
20.7 Severability. If any provision of this Agreement shall be held
------------
void, invalid, illegal or unenforceable, that provision shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable.
20.8 Remedies; Injunctive Relief. Except as otherwise expressly
---------------------------
provided, the rights and remedies of a party set forth herein with respect to
failure of the other party to comply with the terms of this Agreement are not
exclusive, the exercise thereof shall not constitute an election of remedies and
the aggrieved party shall in all events be entitled to seek whatever additional
remedies may be available in law or in equity (including, without limitation,
appropriate injunctive relief).
20.9 Nonsolicitation. During the term of this Agreement and for a
---------------
period of one (1) year after the termination or expiration of the Agreement,
neither party shall, directly or indirectly, solicit the employment or services
of any employee of the other party, or encourage employees to leave the employ
of the other party.
20.10 No Joint Venture. Nothing in this Agreement shall be deemed
----------------
or construed as creating a joint venture or partnership between the parties.
Except as expressly set forth, no party is by virtue of this Agreement
authorized as an agent, employee or legal representative of any other party, and
the relationship of the parties is, and at all times shall continue to be, that
of independent contractors.
20.11 Further Assurances. Each party agrees to cooperate fully with
------------------
the other party and to execute such further instruments, documents and
agreements and to give such further written assurances, as may be reasonably
requested by the other party, to better evidence and reflect the transactions
described in and contemplated by this Agreement, and to carry into effect the
intents and purposes of this Agreement.
16
<PAGE>
20.12 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement as of the Effective Date.
REALITY SIMULATION SYSTEMS INTEGRAPHICS SYSTEMS, INC.
ACQUISITION CORPORATION
By: /s/ Sandeep Gupta By /s/ Kenny Liu
----------------------------- ----------------------------
Name: Sandeep Gupta Name: Kenny Liu
--------------------------- -------------------------
Title: President Title: CEO/President
-------------------------- ------------------------
17
<PAGE>
ATTACHMENT A
AGP Technology Specification:
[to be provided]
IGS Chip Specification:
[to be provided]
IGS Software Specification:
[to be provided]
RSS Software Specification:
[to be provided]
18
<PAGE>
ATTACHMENT B
CYPERPRO3000 PRODUCTS
[to be provided]
19
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT B [***(TM) Logo]
- ------------ *** Graphics Chip
PRELIMINARY
<S> <C>
Features High Performance *** Engine
***Rendering Engine
. On-chip *** setup The *** Rendering Engine is based on the ***(TM) which performs many of the ***
. *** visibility operations such as *** setup, ***, and *** on chip resulting in minimal overhead on the
. *** filtering host processor to deliver outstanding *** mapped graphics. The patented rendering engine
. *** lighting utilizes and takes advantage at a no *** -buffer memory architecture, increasing the
. *** Interpolation resolution and amount of *** that can be stored in any given memory configuration.
. Per Pixel *** and Depth ***
. Perspective-correct Interpolation Superb *** Graphics Accelerator
. *** pixels/sec, *** MIP-mapped
. ***/sec, *** pixel-***. *** ***(TM) includes a glueless solution for simple, efficient, cost effective high
lighting, alpha, floating point (API performance graphics subsystem design for *** systems. The integrated ***Hz***,
natural) input* dual programmable clocks, write *** and dual command *** reduce system cost while
optimizing memory bandwidth for maximum graphics performance.
***Accelerator
. *** GUI engine
. ***Hz RAMDAC, dual clock ***(TM) Output
. Supports up to ***, *** & ***Hz up
to *** The ***(TM) incorporates a *** technology, *** and an integrated ***
. ***, *** support on-chip for true *** quality output.
. WINBench97 @ ***
Pentium ***: *** (est.)* Since the *** does not display as many vertical lines as a ***, scaling is implemented
to avoid losing information when lines are dropped. The data from the lines which are
***(TM) Output eliminated during scaling is incorporated into adjacent lines, thus avoiding a loss of
. Low cost Accelerator with on-chip data.
digital NTSC/PAL ***
. Proprietary *** filtering Fig. 1 - ***(TM) Chip Block Diagram
. Enhanced *** & *** quality with ***
. *** (***),*** (***) [GRAPHIC OMITTED]
. ***, ***, *** & ***
. Requires only a *** for *** output.
. Support for *** output.
. *** /Composite direct *** output
. Simultaneous & different *** & ***
outputs
. Supports *** (TM) ***
* Mileage might vary depending on
actual system implementation
</TABLE>
CONFIDENTIAL
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
20
<PAGE>
<TABLE>
<CAPTION>
[***(TM) Logo]
*** Graphics Chip
PRELIMINARY
<S> <C>
*** Editing/Conferencing Better *** Capture Quality
. ***, windows plus ***
. High Quality multi-tap filtering *** and *** can capture very high quality *** through the *** port and the
during *** capture. hardware filter. The filter averages the scaled down *** for better quality
. *** Interpolation with edge before minifying for capture. The ***(TM) will support both *** and
smoothing
. Mirror/upside down support for *** formats as well as *** and *** interfaces.
***
. Filtering during down scaling & Enhanced Triple *** Windows
*** capture
Flexible *** Inputs The (***(TM) supports hardware assisted three independently scaleable
. ***, *** & *** support *** windows enabling *** and *** applications.
. Support for ***, ***
. Direct Interface for popular Where necessary, the *** is scaled with interpolation and displayed for
*** better *** quality. This *** chip provides excellent *** and *** when
Multiplatform Support scaling from *** icon size to full screen because it supports both
. Intel(TM), Cyrix(TM), and AMD horizontal and vertical interpolation along with edge smoothing technologies
(TM) for jagged edges, In addition, it eliminates the combing effect of rapid
. PowerPC(TM) movement. When *** is scaled down, the *** is filtered and either *** or ***
Drivers & Software at a much higher quality.
. Microsoft DirectX(TM)
. Apple QuickDraw3D(TM) RAVE
. BIOS Table 1 - Supported *** Resolutions*
Documentation [GRAPHIC OMITTED]
. Technical Manual
Reference Board FB 2MB 4MB 8MB
. Reference Design Board *** *** ***
RSSI Resolutions bpp Supported MEM Supported MEM Supported MEM
2355 Old Oakland Road, Suite #4 ------------------------------------------------------------------------
SAN JOSE, CA 95131 *** *** X 848 X 2,896 X 6,992
PH: 408-955-9663 *** X 248 X 2,296 X 6,392
FX 408-955-9671 *** X 1,696 X 5,792
http://www.simsys.oom -----------------------------------------------------------------------
RSSI assumes no responsibility or *** *** X 173 X 2,221 X 6,317
liability for any errors or *** X 1,284 X 5,380
errors contained in this X 346 X 4,442
document. This includes any -----------------------------------------------------------------------
claim for copyright or patent *** *** X 1,024 X 5,120
infringement or direct, *** X 3,584
indirect, special or X 2,048
consequential damages. The -----------------------------------------------------------------------
information herein is subject to *** *** X 3,072
change without notice from RSSI. *** X 512
AD trademark and registered ***
trademarks are property of their
respective owners.
Glossy rev. 004 06/97 - EH01 * Includes single-butter, double-buffer, *** -butter with remaining ***
map storage as shown above (kB).
x Not supported by traditional *** chips.
</TABLE>
CONFIDENTIAL
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
21
<PAGE>
ATTACHMENT C
PLATFORMS AND TERRITORIES
As used herein, "Network Computer" and "Settop" shall mean consumer information
appliances based on Java or a real time operating system using embedded central
processing units and a television as a primary display.
IGS market:
- --------------------------------------------------------------------------------
Platform Territories
- --------------------------------------------------------------------------------
Settop ***
Network Computer ***
Laptop Computer ***
***
***
***
***
***
- --------------------------------------------------------------------------------
RSS Market:
- --------------------------------------------------------------------------------
Platform Territories
- --------------------------------------------------------------------------------
All MAC OS accounts N. American PC desktop accounts
- --------------------------------------------------------------------------------
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
22
<PAGE>
ATTACHMENT D
MILESTONE SCHEDULE
- --------------------------------------------------------------------------------
Milestone Target Date
- --------------------------------------------------------------------------------
Execution of Agreement June 1, 1997
Test Sample sign-off July 31, 1997
Commercial Production Release October 31, 1997
- --------------------------------------------------------------------------------
23
<PAGE>
ATTACHMENT E
*** TECHNOLOGY
<TABLE>
<CAPTION>
<S> <C>
. Triangle, Line, Point rendering Input display list can include all basic *** primitives.
. Setup from floating point coordinates No driver overhead for reformatting data
. Perspective correct interpolation All values, including ***
. *** per-pixel lighting Allows *** lights
. *** interpolation per-pixel *** plus MIP-map level and ***
. Specular Lighting Best quality lighting enabled by ***
. Point/Linear/*** filtering *** and *** -quality *** modes
. *** buffer Flexible *** for apps that read *** buffer
. Alpha channel mixing (translucency) No front-back sorting required
. Oversampling anti-aliasing Reduces "***" on *** of triangles and lines
. Anisotropic *** Better filtering than ***
. Sub-pixel accuracy No *** jitter
. Source *** keying For *** with *** texels
. Multiple *** Compact high quality ***
</TABLE>
*** CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
24
