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EXHIBIT 10.9
AGREEMENT
THIS AGREEMENT ("AGREEMENT") is effective as of August 31, 1999 (the
"EFFECTIVE DATE") by and between Monolithic System Technology, Inc., a
corporation organized and existing under the laws of the State of California,
and having a principal place of business at 1020 Stewart Drive, Sunnyvale,
California, 94086, United States of America (which may be referred to in this
Agreement as either "MOSYS, INC." or "MOSYS"), and Nintendo Co., Ltd, a
corporation organized and existing under the laws of Japan, and having a
principal place of business at 60 Fukuine Kamitakamatsu-cho, Higashiyama-ku,
Kyoto 605-8660, Japan ("NINTENDO") (each a "PARTY;" together the "PARTIES").
BACKGROUND
WHEREAS, Nintendo is developing a proprietary product which is currently
code-named "Dolphin", and MoSys is a fab-less semiconductor memory technology
company that has developed and is developing certain proprietary technology
involving semiconductor memories;
WHEREAS, Nintendo desires to obtain under license certain memory
integrated circuit products that use 1T-SRAM memory technology of MoSys to
incorporate into the Dolphin Product, and MoSys desires to enable Nintendo as a
preferred customer and other third parties working on Dolphin to obtain such
integrated circuit products from certain third party integrated circuit
manufacturers;
WHEREAS, MoSys is in confidential discussions with such manufacturers
regarding the possible development, manufacture and sale of such integrated
circuit products, but no definitive agreements have been reached and the
integrated circuit products have not been developed; and
WHEREAS, MoSys and Nintendo desire to enter into an agreement on the
terms and conditions set forth below to develop Prototype 1T-SRAM Memories and
establish fees to be paid directly by Nintendo to MoSys for integrated circuit
products in the event they become available and are purchased by Nintendo.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the Parties agree as follows:
SECTION 1. DEFINITIONS
For purposes of this Agreement the following terms shall have the
meanings set forth below:
*Marked items are omitted pursuant to a request for confidential treatment
and filed with the Securities and Exchange Commission.
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1.1 "AUTHORIZED MANUFACTURER" means a third party in the regular
business of manufacturing integrated circuit devices who is listed in the
attached EXHIBIT A and is expressly authorized by MoSys in a Manufacturer
Agreement to manufacture and sell a High Density 1T-SRAM Memory.
1.2 "DOLPHIN PRODUCT" means the next generation video game platform
currently being developed by Nintendo and referred to as the "Dolphin" product,
as such product is modified, developed and ultimately released by Nintendo. This
Agreement shall be amended to identify such product by its actual commercial
name when available if requested by either Party.
1.3 "FEES" means all amounts payable to MoSys under this Agreement.
1.4 "HIGH DENSITY 1T-SRAM MEMORIES" means products expressly
identified as "High Density 1T-SRAM Memories" in a Manufacturer's Agreement
between MoSys and the third party integrated circuit manufacturer and which are
listed in the attached EXHIBIT A as well as Prototype 1T-SRAM Memories as listed
in the attached EXHIBIT B. The Parties currently plan that the High Density
1T-SRAM Memories will include stand alone memory integrated circuits, which are
expected to use the MoSys 1T-SRAM technology.
1.5 "MANUFACTURER'S AGREEMENT" means a confidential written agreement
that expressly refers to this Agreement by the names of the Parties and the
Effective Date and title set forth above, that is executed by MoSys and the
applicable third party integrated circuit manufacturer, and that expressly
covers integrated circuit products that use MoSys's 1T-SRAM technology that may
be sold to Nintendo for use in the Dolphin Product.
1.6 "MOSYS INTELLECTUAL PROPERTY" means any and all know-how,
technical information, trade secrets, patents and patent applications owned or
controlled by MoSys (a partial list of which is attached in EXHIBIT C), which
(i) MoSys has the right to license, relating to memory architecture, protocol
and circuit implementation, and which (ii) are incorporated in the High Density
1T-SRAM Memory by MoSys. The term "MoSys Intellectual Property" does not include
any and all know-how, technical information, trade secrets and circuit
implementation which is (a) in the public domain, (b) known generally by persons
skilled in the art, (d) already in the rightful possession of Nintendo, (d)
hereafter becomes available for use without license, (e) owned or controlled by
others, including but not limited to which relating to generic DRAM processes,
memory cells, capacitor fabrication and memory operations, (f) hereafter becomes
rightfully known to Nintendo without restriction or (g) subsequently developed
independently by employees of Nintendo without access to the High Density
1T-SRAM Memory.
1.7 "PER UNIT ROYALTY" means the per unit royalty payable by an
Authorized Manufacturer to MoSys under a Manufacturer's Agreement for the sale
of a High Density 1T-SRAM Memory to Nintendo and which is identified in such
agreement as a royalty that will be waived by MoSys for sales to Nintendo of
High Density 1T-SRAM Memories used in the Dolphin Product. Per Unit Royalty
shall not include any up front or other lump sum license fees, any costs,
expenses, duties, tariffs or taxes, or any non-recurring charges or any other
amounts associated with the development of any products, which the Parties
contemplate will be charged to and paid by any Authorized Manufacturer.
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1.8 "PROTOTYPE DEVELOPMENT FEES" means the Fees payable by Nintendo to
MoSys under this Agreement for the development of the Prototype 1T-SRAM Memory
integrated circuits.
1.9 "PROTOTYPE 1T-SRAM MEMORIES" means the prototype high-density,
1T-SRAM memory integrated circuit developed by MoSys on behalf of Nintendo
which is included in the attached EXHIBIT B. It is contemplated that [*]
units of the Prototype 1T-SRAM Memories will be manufactured for Nintendo,
provided, however, that Nintendo may request a reasonable number of
additional units be manufactured as mutually agreed by the parties.
1.10 "PURCHASE PRICE" means the gross sales amount invoiced or
otherwise charged to Nintendo by an Authorized Manufacturer for the purchase or
other disposition of a High Density 1T-SRAM Memory in finished and packaged form
in a fully arms length transaction, excluding import, export, value added,
excise and sales taxes, customs duties, and tariffs actually paid. In the event
that a High Density 1T-SRAM Memory is bundled with other products or otherwise
sold or disposed of under circumstances which might indicate that the
transaction was on other than a fully arms length basis, the Purchase Price
shall, upon MoSys's request, mean the fair market value of the High Density
1T-SRAM Memory. Such fair market value shall be determined by looking at the
arms length sales to third parties of similar MoSys products, or if such arms
length sales do not appear to provide a reasonable basis for the fair market
value, the arms length sales to third parties of similar MoSys and other
products.
1.11 "QUARTER" means a period of three (3) consecutive calendar months
which period commences upon either January 1, April 1, July 1, or October 1.
1.12 "TERM" means the initial term and any renewal term under Section 6
below.
SECTION 2. LICENSE; PRODUCT PURCHASES
2.1 AVAILABILITY OF PRODUCTS. MoSys is currently in discussions with
potential Authorized Manufacturers concerning the possible development,
manufacture, and sale of High Density 1T-SRAM Memories, but definitive
agreements have not yet been reached and High Density 1T-SRAM Memories have not
yet been developed. It is understood and agreed that Nintendo's ability to
obtain High Density 1T-SRAM Memories is contingent upon availability from
MoSys's Authorized Manufacturers and because availability is anticipated as
being only through such third parties, the design, performance, and availability
of High Density 1T-SRAM Memories may not be in MoSys's sole control. In light of
the foregoing, but subject to the last sentence in this Section 2.1, this
Agreement is not intended to obligate MoSys to sell, make available, or continue
to make available to Nintendo, or obligate Nintendo to purchase, any High
Density 1T-SRAM Memories. Rather, this Agreement is intended to establish the
Fees to be paid to MoSys by Nintendo for High Density 1T-SRAM Memories used in
the Dolphin Product only to the extent the High Density 1T-SRAM Memories become
and remain available through such Authorized Manufacturers. EXHIBIT A hereto may
be amended to add High Density 1T-SRAM Memories only by mutual written agreement
of both Parties and shall list the Authorized Manufacturers that are authorized
by MoSys to supply each High Density 1T-SRAM Memory. It is acknowledged that
this Agreement does not prevent the High Density 1T-SRAM Memories from being
modified, changed, or discontinued at any time, provided, however, that MoSys
shall deliver to Nintendo prior written
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notice of any such modification, change or intent to discontinue.
Notwithstanding the foregoing, in the event definitive agreements are executed
and High Density 1T-SRAM Memories are developed, all applicable terms and
conditions of this Agreement shall apply to and govern the relationship between
Nintendo and MoSys.
2.2 LICENSE; PURCHASE OF PRODUCTS. Subject to the terms and conditions
of this Agreement and acceptance of the High Density 1T-SRAM Memory from MoSys,
MoSys grants Nintendo as a preferred customer a royalty-bearing, world-wide
license to have manufactured by an Authorized Manufacturer, use, sell, and
distribute the High Density 1T-SRAM Memory acquired from and manufactured by any
Authorized Manufacturer. Nintendo shall also have the right to inform any
Authorized Manufacturer of the terms of this Agreement governing the waiver of
payment of Per Unit Royalties by any Authorized Manufacturer and the payment of
Fees by Nintendo in arranging such purchases. MoSys will confirm to the
Authorized Manufacturers these terms and will waive the obligation of Authorized
Manufacturers to pay Per Unit Royalties to MoSys under Manufacturers' Agreements
solely as follows. MoSys will waive each Authorized Manufacturer's obligation to
pay Per Unit Royalties to MoSys under a Manufacturer's Agreement for each
authorized sale by the Authorized Manufacturer to Nintendo of a High Density
1T-SRAM Memory that is used by Nintendo in the Dolphin Product; provided that
MoSys has received from Nintendo payment of the applicable Fees in accordance
with Section 3 below. Nintendo shall not request the waiver for, and the waiver
shall not apply to, any High Density 1T-SRAM Memories that are not incorporated
into the Dolphin Product. The waiver will be made in accordance with the terms
of the applicable Manufacturer's Agreement.
2.3 DEVELOPMENT OF PROTOTYPE 1T-SRAM MEMORIES. MoSys deems Nintendo a
preferred customer and therefore agrees to develop on behalf of Nintendo the
Prototype 1T-SRAM Memories according to the specifications in the attached
EXHIBIT B. Upon timely completion of the Prototype 1T-SRAM Memories, MoSys shall
use commercially reasonable efforts to promptly deliver the Prototype 1T-SRAM
Memories to Nintendo along with associated design specifications and application
documents and further grants Nintendo the right to have the Prototype 1T-SRAM
Memories manufactured by an Authorized Manufacturer of Nintendo's choice in
accordance with the terms of the applicable Manufacturer's Agreement.
2.4 NO OTHER RIGHTS. Except as expressly granted herein, nothing in
this Agreement grants to Nintendo any right or license to manufacture or to have
manufactured the High Density 1T-SRAM Memories or any right or license under any
intellectual property or proprietary rights of MoSys, whether by reliance,
implication, estoppel or otherwise. Nintendo shall not exercise its rights under
this Agreement in any manner, or take any other action, which adversely affects
MoSys's rights in and to the High Density 1T-SRAM Memories. ALL RIGHTS NOT
EXPRESSLY GRANTED HEREIN ARE RESERVED TO MOSYS. It is understood and agreed that
MoSys may in its sole discretion determine the terms and conditions to which it
wishes to agree in each Manufacturer's Agreement and that MoSys shall have no
obligations or responsibility to Nintendo to obtain any particular terms or
conditions, except that any manufacture or production of High Density 1T-SRAM
Memories shall meet the specifications set forth in the attached EXHIBIT B. It
is also understood and agreed that the actual price between Nintendo and the
Authorized Manufacturer for the purchase of High Density 1T-SRAM Memories is not
under MoSys's control and that MoSys shall have no obligations, responsibility
or liability concerning such price. Except as expressly granted herein, nothing
in this Agreement grants to MoSys any right or license under any intellectual
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property or proprietary rights of Nintendo, whether by reliance, implication,
estoppel or otherwise. MoSys shall not exercise its rights under this Agreement
in any manner, or take any other action, which adversely affects Nintendo's
rights in and to the Dolphin Product. ALL RIGHTS NOT EXPRESSLY GRANTED HEREIN
ARE RESERVED TO NINTENDO.
2.5 EXCLUSIVITY. MoSys agrees that, from the Effective Date through
December 31, 2001, providing Nintendo continues to actively promote the use
of 1T-SRAM as specified in this Agreement, MoSys agrees not to sell, provide
or otherwise distribute the same High Density 1T-SRAM Memory as specified in
EXHIBITS A and B to Sony Computer Entertainment Company or Sega Corporation
as part of their video game consoles. Notwithstanding the above, however,
MoSys shall have no obligation to impose such a restriction on any of its
licensees.
SECTION 3 COMPENSATION TO MOSYS
3.1 PRODUCT FEES. In consideration of the preferred rights provided to
Nintendo hereunder, Nintendo shall pay to MoSys the negotiated Fee in the amount
set forth below for each High Density 1T-SRAM Memory for which Nintendo would
like MoSys to waive the Authorized Manufacturer's Per Unit Royalty in accordance
with Section 2.2 above:
(a) [*] of the Purchase Price for each of the first [*] units of
High Density 1T-SRAM Memory obtained from an Authorized Manufacturer; and
(b) [*] of the Purchase Price for each High Density 1T-SRAM Memory
obtained from an Authorized Manufacturer in excess of such first [*] units.
In the event any High Density 1T-SRAM Memories as delivered are not accepted by
Nintendo or are otherwise rejected due to defects or other performance problems
and such High Density 1T-SRAM Memories are returned to any Authorized
Manufacturer, Nintendo shall be entitled and have the right to deduct from and
set off against any amounts payable by Nintendo under this Agreement any amounts
owed by Nintendo to MoSys for such High Density 1T-SRAM Memories as described in
this Section 3.
3.2 PROTOTYPE DEVELOPMENT FEES. In consideration of the development
and delivery to Nintendo of the Prototype 1T-SRAM Memories, Nintendo shall pay
to MoSys the negotiated Fee of [*] as set forth in EXHIBIT B.
3.3 PAYMENT. Unless otherwise specified, all Fees (except Prototype
Development Fees) shall be due and paid no later than [*] after the end of the
Quarter during which any High Density 1T-SRAM Memories were obtained from an
Authorized Manufacturer. All payments shall be calculated and made in United
States Dollars by wire transfer to:
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Chiao Tung Bank
Silicon Valley Branch
333 West San Carlos St., Suite 100
San Jose, CA 95110, U.S.A.
Tel: +1 (408) 283-1888
Account Name: MoSys, Inc.
Account No.: 001-600642
Routing No.: 1211-41754
with notification to:
Chief Financial Officer
MoSys, Inc.
1020 Stewart Drive
Sunnyvale, CA 94086, U.S.A.
Tel: +1 (408) 731-1814
Fax: +1 (408) 731-1893
unless otherwise specified in writing by MoSys. All notifications to MoSys shall
be accompanied by a written report from Nintendo showing the number of and
actual Purchase Price for each High Density 1T-SRAM Memory to which the payment
applies as well as the total number of each High Density 1T-SRAM Memory obtained
from each Authorized Manufacturer as of the date of the report.
3.4 TAXES. Any and all Fees payable hereunder do not include any
government taxes (including without limitation sales, use, excise, and value
added taxes) or duties imposed by any governmental agency that are applicable to
the export, import, or purchase of the Products (other than taxes on the net
income of MoSys), and Nintendo shall bear all such taxes and duties. When MoSys
has a current or subsequent legal obligation to collect and/or pay such taxes,
the appropriate amount shall be added to Nintendo's invoice and paid by
Nintendo, unless Nintendo provides MoSys with a valid tax exemption certificate
authorized by the appropriate taxing authority. All payments by Nintendo
specified hereunder are expressed as net amounts and shall be made free and
clear of, and without reduction for, any withholding taxes. Any such taxes which
are otherwise imposed on payments to MoSys shall be the sole responsibility of
Nintendo. If any applicable law requires Nintendo to withhold amounts from any
payments to MoSys hereunder, (i) Nintendo shall effect such withholding, remit
such amounts to the appropriate taxing authorities and promptly furnish MoSys
with tax receipts evidencing the payments of such amounts, and (ii) the sum
payable by Nintendo upon which the deduction or withholding is based shall be
increased to the extent necessary to ensure that, after such deduction or
withholding, MoSys receives and retains, free from liability for such deduction
or withholding, a net amount equal to the amount MoSys would have received and
retained in the absence of such required deduction or withholding. In the event
that MoSys receives a reduction in tax due or rebate from any tax authority
directly due to the amount withholding tax paid by Nintendo, it will promptly
reimburse Nintendo such amount that it has had reduced or received from the tax
authority. Upon request, MoSys shall promptly provide Nintendo, with a copy of
all its relevant tax documents and filings as authorized by the appropriate tax
authority or authorities. For purposes of this Section 3.4, the parties
acknowledge that Nintendo intends to take delivery of all High Density 1T-SRAM
Memories and other related products in
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Japan. When and if applicable, MoSys shall timely execute and deliver to NCL, a
tax form in the form which is attached hereto as EXHIBIT D.
3.5 LATE PAYMENT. Any payments due under this Agreement which are not
paid when due shall bear interest to the extent permitted by applicable law at
the prime rate as reported by the Chase Manhattan Bank, New York, New York, on
the date such payment is due, plus an additional three percent (3%), calculated
on the number of days such payment is delinquent. This Section 3.5 shall in no
way limit any other remedies available to any Party. In the event that Fees are
not timely paid under this Agreement, MoSys shall have no obligation to waive
the applicable Per Unit Royalties of the Authorized Manufacturer. In the event
that MoSys elects not to waive the Per Unit Royalties it shall notify Nintendo
of this fact.
3.6 AUDIT RIGHTS. MoSys grants to Nintendo and Nintendo shall have the
right to review and audit any draft and/or final version of any Manufacturer's
Agreement between MoSys and any Authorized Manufacturer. In addition, Nintendo
and MoSys each agree to make and to maintain until the expiration of three (3)
years after the year to which such records pertain, sufficient books, records
and accounts regarding, with respect to Nintendo, its purchase and other
activities in order to calculate and confirm its payment, and with respect to
both Parties, each of their respective confidentiality and other obligations
hereunder. Nintendo and MoSys will each have the right, at its own expense and
not more than once in any calendar year, to have an independent certified public
accountant, or other reasonably acceptable professional, inspect, upon
reasonable notice and during regular business hours, Nintendo's or MoSys's
relevant records and practices to verify, with respect to Nintendo, the accuracy
of Fees paid and compliance with its payment obligations, and with respect to
both Parties, each of their respective confidentiality and other obligations
under the terms of this Agreement. If any such examination discloses a shortfall
in the Fees paid to MoSys hereunder or other non-compliance by either Party with
this Agreement, Nintendo shall reimburse MoSys for the full amount of any such
shortfall and Nintendo or MoSys shall have the right to repeat the examination
in the applicable calendar year. If the amount of underpayment for any period is
more than five percent (5%) Nintendo shall pay MoSys's actual out-of-pocket
costs (including without limitation attorneys' fees and fees paid to the
auditor) of performing the audit with respect to such period.
SECTION 4 PROPRIETARY NOTICES AND MARKETING
4.1 PROPRIETARY NOTICES. Nintendo shall not remove any trademark,
trade name, mask work notice, patent marking or other proprietary notice from
the High Density 1T-SRAM Memories. As reasonably requested by MoSys, Nintendo
further agrees to apply all applicable mask work, patent, copyright and other
proprietary notices in order to fully preserve and protect MoSys's rights and
remedies under applicable laws.
4.2 PUBLIC ANNOUNCEMENTS. After execution of this Agreement by both
Parties, MoSys and Nintendo will issue a mutually agreed-upon joint public
announcement stating that MoSys's proprietary embedded 1T-SRAM technology has
been selected by Nintendo as the memory in the graphics chip in the Dolphin
Product. At a mutually agreed later date, contemplated to be no later than the
second Quarter of 2000, MoSys and Nintendo will issue a mutually agreed-upon
joint public announcement stating that Nintendo has selected MoSys's ultra-high
density 1T-SRAM discrete memory devices for use in the Dolphin Product in
addition to the embedded 1T-SRAM memory.
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Each Party shall use diligent good faith efforts to promptly mutually agree to
such public announcements, and neither will unreasonably withhold its agreement
to a public announcement concerning the foregoing that is proposed by the other.
SECTION 5 CONFIDENTIALITY
5.1 OBLIGATIONS. The parties have entered into a separate
non-disclosure agreement dated March 23, 1999, and hereby acknowledge and agree
that such confidentiality agreement shall govern and control all confidential
information of the Parties, including maintaining confidential the existence of
and the terms and conditions of this Agreement except as specifically set forth
herein or until otherwise agreed to in writing by the Parties.
SECTION 6 TERM AND TERMINATION
6.1 TERM. This Agreement shall remain in effect until December 31,
2006, from the Effective Date unless earlier terminated as provided below. This
Agreement may be renewed thereafter for additional one (1) year terms only by
mutual written agreement of both Parties.
6.2 TERMINATION FOR BREACH. In the event of a material breach by
either Party, the non-breaching Party shall be entitled to give the breaching
Party written notice of such breach. If the breaching Party has not cured such
breach within thirty (30) days after receipt of such notice, the non-breaching
Party shall be entitled, in addition to any other rights it may have under this
Agreement or otherwise under law, to terminate this Agreement by giving notice
thereof to the other Party which shall take effect immediately.
6.3 TERMINATION BY MOSYS. This Agreement may be terminated at any time
by MoSys by providing written notice to Nintendo in the event of a good faith
disagreement regarding the determination of the Purchase Price as set forth in
Section 1.10, which disagreement is not resolved after: (a) thirty (30) days
from the date on which both Parties become aware of the disagreement and are
unable to resolve any disagreement by mutual consent; and (b) if the Parties are
unable to resolve such disagreement, the matter will be submitted to an
independent arbitrator acceptable to both Parties who will review materials from
both Parties and issue a written decision which will be binding on both Parties.
6.4 TERMINATION BY NINTENDO. This Agreement may be terminated at any
time by Nintendo by providing written notice to MoSys in the event of a
disagreement regarding the design quality of the High Density 1T-SRAM Memories,
which disagreement is not resolved after: (a) thirty (30) days from the date on
which both Parties become aware of the disagreement and are unable to resolve
any disagreement by mutual consent; and (b) if the Parties are unable to resolve
such disagreement, the matter will be submitted to an independent arbitrator
acceptable to both Parties who will review materials from both Parties and issue
a written decision which will be binding on both Parties.
6.5 EFFECT OF TERMINATION OR EXPIRATION. Upon termination or
expiration of this Agreement for any reason, the rights granted under this
Agreement shall immediately terminate except as expressly set forth in Section
6.6 below. Upon such termination, each Party shall immediately destroy or return
to the other Party all tangible items in its possession or control which are
proprietary to the delivering Party.
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6.6 SURVIVAL. The provisions of Section 3, 4.1, 5, 6, 7, 8 and 9 shall
survive the termination or expiration of this Agreement for any reason. It is
expressly understood and agreed that, notwithstanding anything to the contrary
herein, any compensation or payment obligations accruing under Section 3 above
prior to termination, shall continue unaffected and survive termination of this
Agreement for any reason.
SECTION 7 CUSTOMER SUPPORT, WARRANTIES AND INDEMNIFICATION
7.1 GENERAL. Except as provided in this Agreement and this Section 7,
Nintendo shall be solely responsible for obtaining desired warranties and
indemnification directly from the applicable Authorized Manufacturer rather than
from MoSys. Except for warranties and indemnification so obtained, Nintendo
shall be solely responsible for the representations and warranties that it
provides with respect to the High Density 1T-SRAM Memories. MoSys shall have no
obligation to honor any such representations or warranties, and Nintendo agrees
to expressly disclaim on MoSys's behalf any and all warranties, whether express,
implied, statutory or otherwise. Except for support and maintenance obtained by
Nintendo directly from the Authorized Manufacturer, Nintendo shall be solely
responsible for providing support and maintenance to its customers. MoSys's sole
obligation, responsibility and liability shall be directly to the Authorized
Manufacturer in accordance with the Manufacturer's Agreement
7.2 MOSYS REPRESENTATIONS AND WARRANTIES. MoSys represents and
warrants to Nintendo that as of the Effective Date:
(a) to the best of MoSys's knowledge, it is the originator and/or
rightful owner of the MoSys Intellectual Property and the design information and
documentation of the High Density 1T-SRAM Memory provided to Nintendo pursuant
to the terms of this Agreement (hereinafter collectively "INFORMATION");
(b) there are no claims pending or, to the best of MoSys's knowledge,
threatened against MoSys, that relate to the Information or the contemplated use
of the Information by Nintendo and/or any Authorized Manufacturer under this
Agreement;
(c) it has received no written communication from a third party
asserting infringement or alleging infringement of their intellectual property
rights regarding 1T-SRAM memory technology which has not been resolved; and
(d) it has the full right and authority to enter into and perform any
and all applicable provisions of this Agreement and that there are no
encumbrances or other restrictions that may prevent MoSys or its employees from
performing any and all applicable provisions of this Agreement.
7.3 INFRINGEMENT. Except as expressly provided herein, MoSys disclaims
and shall have no obligation of defense, contribution, or indemnity with respect
to any actual or alleged intellectual property infringement with respect to the
Information provided or otherwise arising out of this Agreement. Except as
expressly provided herein, MoSys shall have no liability arising out of any such
actual or alleged intellectual property infringement. Each Party, however, will
use commercially reasonable efforts to notify the other Party, in writing, of
any such infringement claim of which it becomes aware, and Nintendo shall
cooperate with MoSys if MoSys desires to intervene
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in any such infringement action by any third party against Nintendo, provided,
however, that MoSys shall have no control or right to control the defense of any
such infringement action unless it assumes full responsibility and liability for
such infringement action.
7.4 LIMITATION OF CLAIMS. In the event of any claim by a third party
for alleged infringement by Nintendo of the third party's intellectual property
rights where such claim (i) is caused substantially by the unmodified High
Density 1T-SRAM Memories and, (ii) is not associated with standard DRAM
operations, processes, design or manufacturing then MoSys shall use its
commercially reasonable efforts at MoSys's sole expense to provide assistance,
including appropriate documentation and commercially reasonable access to
appropriate technical personnel, to Nintendo, in Nintendo's defense against such
claim under this provision. If pursuant to such a claim Nintendo is or may
become prohibited from using the High Density 1T-SRAM Memories, MoSys shall use
commercially reasonable efforts to modify the design of the High Density 1T-SRAM
Memories to avoid any infringement without impairing the ability to use the High
Density 1T-SRAM Memories as intended. In addition, if pursuant to such a claim
Nintendo is or may become prohibited from using the High Density 1T-SRAM
Memories, MoSys shall use commercially reasonable efforts to provide assistance,
including appropriate documentation and commercially reasonable access to
appropriate technical personnel, to Nintendo at rates to be agreed between the
Parties to assist Nintendo at Nintendo's sole expense in either replacing the
High Density 1T-SRAM Memories with compatible, functionally equivalent
non-infringing devices or securing the right to continue using the High Density
1T-SRAM Memories.
7.5 LIMIT OF LIABILITY. The foregoing states MoSys's sole obligations
and entire liability with respect to any claimed infringement of the High
Density 1T-SRAM Memories of any intellectual property or other rights of any
third party.
7.6 DISCLAIMERS.
(a) EXCEPT AS PROVIDED IN THIS AGREEMENT, THE WARRANTIES AND
INDEMNIFICATIONS OBTAINED BY NINTENDO DIRECTLY FROM THE AUTHORIZED MANUFACTURER
CONTAIN THE ENTIRE LIABILITY AND OBLIGATIONS OF MOSYS, AND THE EXCLUSIVE REMEDY
OF NINTENDO AND ITS CUSTOMERS, WITH RESPECT TO ANY ALLEGED OR ACTUAL
INFRINGEMENT OF PATENTS, MASK WORKS, TRADE SECRETS, COPYRIGHTS, OR OTHER
INTELLECTUAL PROPERTY RIGHTS BY THE HIGH DENSITY 1T-SRAM MEMORIES PRODUCED BY
THE AUTHORIZED MANUFACTURERS.
(b) EXCEPT AS PROVIDED IN THIS AGREEMENT, MOSYS MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND AND NO REPRESENTATIONS OR WARRANTIES
SHALL BE MADE ON BEHALF OF MOSYS, WHETHER EXPRESS, IMPLIED, STATUTORY, OR
OTHERWISE, AND MOSYS SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.
SECTION 8 LIMITATION OF LIABILITY
8.1 EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, MOSYS
SHALL HAVE NO OBLIGATION, RESPONSIBILITY OR LIABILITY ARISING OUT OF OR
RESULTING FROM THE HIGH DENSITY 1T-SRAM MEMORY OR THE PURCHASE
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OR USE OF HIGH DENSITY 1T-SRAM MEMORIES PRODUCED BY THE AUTHORIZED
MANUFACTURERS. THE TOTAL LIABILITY OF MOSYS ARISING OUT OF OR RELATED TO THIS
AGREEMENT SHALL NOT EXCEED THE TOTAL AMOUNT PAID BY NINTENDO TO MOSYS HEREUNDER
(AT THE TIME LIABILITY IS DETERMINED AND LIQUIDATED) AND THE LIABILITY RELATING
TO SPECIFIC PRODUCT(S) PROVIDED HEREUNDER SHALL NOT EXCEED THE TOTAL AMOUNT PAID
BY NINTENDO TO MOSYS FOR SUCH PRODUCT(S) (AT THE TIME LIABILITY IS DETERMINED
AND LIQUIDATED). IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND ON
ANY THEORY OF LIABILITY, WHETHER FOR BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE, ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR FOR
COST OF PROCUREMENT OF SUBSTITUTE GOODS OR LOSS OF ANTICIPATED PROFITS, EVEN IF
THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS
SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY.
SECTION 9 GENERAL PROVISIONS
9.1 ASSIGNMENT. Neither Party may assign or transfer this Agreement or
any rights or obligations hereunder, by operation of law or otherwise, without
the prior written approval of the other Party and any such attempted assignment
or transfer shall be void; provided, however, that either Party may assign or
transfer this Agreement to an affiliate, subsidiary, or a successor to all or
substantially all of its business or assets to which this Agreement relates,
whether by way of merger, acquisition of stock or assets, or the like, if the
assignee agrees in writing to comply with all terms and conditions of this
Agreement. Notwithstanding the foregoing, if the assignee is a competitor of
MoSys or Sony Computer Entertainment Company or Sega Corporation, then the
assignment requires the prior written approval of the other Party. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the Parties, their successors and permitted assigns.
9.2 NOTICES. All notices between the parties shall be in writing and
shall be deemed to have been given if personally delivered or made by certified
or registered mail (return receipt requested) or facsimile to the addresses set
forth as follows, or such other contact and/or address as is provided by notice
as set forth herein.
If to MoSys to: MoSys, Inc.
1020 Stewart Drive
Sunnyvale, CA 94086, U.S.A.
Attention: Chief Financial Officer
Facsimile: 408-731-1893
If to Nintendo to: Nintendo Co., Ltd.
60 Fukuine Kamitakamatsu-cho
Higashiyama-ku
Kyoto 605-8660, Japan
Attention: Genyo Takeda
Facsimile: +81 (75) 531-8623
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With a copy to: Nintendo of America Inc.
4820 150th Avenue N.E.
Redmond, Washington 98052, U.S.A.
Attention: Director, Corporate Legal Affairs
Facsimile: +1 (425) 882-3585
Notices shall be deemed effective upon receipt or, if delivery is not effected
by reason of some fault of the addressee, when tendered.
9.3 EXPORT REGULATIONS. Nintendo understands that MoSys is subject to
regulation by the United States government, including, but not limited to, the
U.S. Department of Commerce and its other agencies, which prohibit export or
diversion of certain technical products and information to certain countries and
individuals.
9.4 GOVERNING LAW. This Agreement, and all disputes arising out of or
relating to this Agreement, shall be governed and construed under the laws of
the State of Washington, U.S.A, without reference to conflict of laws
principles. The United Nations Convention on the International Sale of Goods
shall not apply.
9.5 DISPUTE RESOLUTION. In the event of any dispute, controversy or
difference which may arise between the parties hereto out of or in connection
with or in relation to this Agreement, or the breach thereof, the parties hereto
shall in the first instance do their utmost to settle such dispute, controversy
or difference amicably.
9.6 RELATIONSHIP OF THE PARTIES. The Parties are independent
contractors. Nothing in this Agreement shall constitute, nor shall any party
represent that there is any relationship of employee and employee, principal and
agent, partnership or joint venturers between the parties as a result of this
Agreement.
9.7 SEVERABILITY. If, for any reason, a court or other body of
competent jurisdiction finds, or the Parties mutually believe, any provision of
this Agreement, or portion thereof, to be invalid or unenforceable, such
provision will be enforced to the maximum extent permissible and the remainder
of this Agreement will continue in full force and effect if the resulting
Agreement effects the original intent of the Parties. The Parties shall
negotiate in good faith toward an enforceable substitute provision that most
nearly achieves the intent and economic effect of the invalid or unenforceable
provision.
9.8 FORCE MAJEURE. Other than the payment of money, nonperformance of
either Party shall be excused to the extent that performance is rendered
commercially unreasonable by acts of God, war, fire, flood, riot, power failure,
embargo, material shortages, strikes, governmental acts, man-made or natural
disasters, earthquakes, inability to obtain labor or materials through its
regular sources, failure or limitation of supply, or any other reason where
failure to perform is beyond the reasonable control and not caused by the
negligence of the non-performing Party. The time for performance shall be
extended for the time period lost due to the delay.
9.9 WAIVER. The waiver of, or failure to strictly enforce, any breach
or default hereunder shall not constitute the waiver of any other or subsequent
breach or default or the rights of the Party to subsequently require strict
performance.
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9.10 HEADINGS. The paragraph headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe
or describe the scope or extent of such paragraph, or in any way affect such
agreements.
9.11 ENTIRE AGREEMENT. This Agreement, along with the Exhibits attached
hereto, the Non-Disclosure Agreement dated March 23, 1999, and the letter
regarding this Agreement signed contemporaneously herewith, which are all
incorporated herein by reference, sets forth the entire agreement between the
parties and supersedes, merges, and renders void any and all prior and
contemporaneous proposals, agreements, and representations between them, whether
written or oral, to the extent they relate in any way to the subject matter
hereof. This Agreement may be changed only by mutual agreement of the parties in
writing.
9.12 FOREIGN CORRUPT PRACTICES ACT. In conformity with the United
States Foreign Corrupt Practices Act, neither Party nor any of their respective
employees and agents, shall directly or indirectly make any offer, payment, or
promise to pay; authorize payment; nor offer a gift, promise to give, or
authorize the giving of anything of value for the purpose of influencing any act
or decision of an official of any government within the Territory or the United
States Government (including a decision not to act) or inducing such a person to
use his or her influence to affect any such governmental act or decision in
order to assist in obtaining, retaining or directing any business.
9.13 COUNTERPARTS. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which will be considered an original, but all
of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by duly authorized representatives on the dates set forth below to be effective
as of the Effective Date set forth above.
MONOLITHIC SYSTEM TECHNOLOGY, INC.
Date: _______________ ___________________________
(Signature)
___________________________
(Printed Name)
___________________________
(Title)
NINTENDO CO., LTD.
Date: _____________________
(Signature)
___________________________
(Printed Name)
___________________________
(Title)
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EXHIBIT A
HIGH DENSITY 1T-SRAM MEMORIES
1. [*]
----------------------------- --------------- -----------------------------
CONFIGURATION PROCESS AUTHORIZED MANUFACTURERS
----------------------------- --------------- -----------------------------
3M x 32 bit 1T-SRAM (TBD) (TBD)
----------------------------- --------------- ------------------------------
<PAGE>
EXHIBIT B
PROTOTYPE 1T-SRAM MEMORIES
1. [*]
2. PAYMENTS
2.1 PAYMENTS OF PROTOTYPE DEVELOPMENT FEES BY NINTENDO TO MOSYS.
Nintendo shall pay the following Prototype Development Fees to MoSys:
(a) Within [*] of the Effective Date, Nintendo shall pay to MoSys the
non-refundable, non-cancelable amount of [*], and;
(b) Within [*] of tape-out of the Prototype 1T-SRAM Memories, Nintendo
shall pay to MoSys the non-refundable, non-cancelable amount of [*].
<PAGE>
EXHIBIT C
MOSYS PATENTS AND PATENT APPLICATIONS
1. The License granted under this Agreement may contain all or
portions the following U.S. patents owned by MoSys:
MoSys' Patent numbers 5,265,047, 5,498,886, 5,498,990, 5,511,020,
5,576,554, 5,592,632, 5,613,077, 5,615,169, 5,655,113, 5,666,480,
5,703,827, 5,708,624, 5,729,152, 5,737,587, 5,784,705, 5,787,267,
5,790,138, 5,805,509, 5,831,467, 5,843,799 and 5,829,026
2. The License granted under this Agreement may contain all or
portions the following patents applications filed by MoSys:
MoSys' Patent Application numbers [*]
