1
EXHIBIT 10.13
TESSERA CONFIDENTIAL
TESSERA, INC.
WAVE(TM) PACKAGE DEVELOPMENT AND LICENSE AGREEMENT
This WAVE Package Development and License Agreement (hereinafter
"Agreement") is entered into as of this 4th day of November, 1999 (hereinafter
"WAVE Effective Date"), between TESSERA INC., a corporation organized under the
laws of Delaware, having a principal place of business at 0000 Xxxxxxx Xxxxx,
Xxx Xxxx, XX, 00000, XXX and the Tessera Affiliates (hereinafter referred to as
"Tessera") and Mitsui High-tec, Inc., a corporation organized under the laws of
Japan, having a principal place of business at 00-0, Xxxxxx 0 Xxxxx,
Xxxxxxxxxxx-xx, Xxxxxxxxxx, 000 Xxxxx and the Licensee Affiliates (hereinafter
referred to as "Licensee"). Tessera and Licensee are sometimes collectively
referred to as the "Parties" or singularly as a "Party" herein.
Scope:
WHEREAS, Licensee is a subcontract integrated circuit ("IC") package
assembler providing high volume package assembly and test services to IC
manufacturing companies and systems assembly customers and has an earlier
executed TCC License with Tessera that specifically excludes an area of
packaging referred to as "Batch Technology." Licensee represents that it is not
in breach of the terms of such earlier TCC License; and
WHEREAS, Tessera and Licensee desire to work together to better develop
and refine device structures, processes, and manufacturing equipment for a
specific type of IC package made using WAVE Technology, referred to herein as a
WAVE Package, and to jointly develop detailed package and equipment
specifications for the volume manufacturing of such WAVE Packages. The Parties
agree that time is of the essence for this goal and that competitive pricing is
a fundamental requirement for the broad acceptance and commercialization of such
IC packages. Tessera and Licensee therefore further desire to reduce the cost of
manufacturing WAVE Packages; and
WHEREAS, after the Development Period for the WAVE Package structures and
manufacturing processes, Licensee desires to license such WAVE Technology from
Tessera and to offer competitively priced volume assembly of such WAVE Packages
to support industry acceptance of the package type. Licensee further agrees to
make a good faith effort to preferentially promote, market and sell (as set
forth below) such WAVE Packages and systems made with such packages with Tessera
on a world-wide basis with an aim of making such WAVE Package a de facto
packaging standard by gaining industry-wide acceptance and fostering the rapid
growth of an infrastructure of materials suppliers, and of assembly, burn-in,
and test equipment. Further, Tessera will seek to expand the package
applications for the WAVE Packages by licensing the technology to other
companies to support such industry wide growth, subject to the exclusivity
provisions below; and
NOW, THEREFORE, the Parties hereto agree as follows:
I. SUPPLEMENT TO THE AGREEMENT. This Agreement replaces or
supplements certain provisions of the Limited TCC License Agreement executed by
the Parties having an Effective Date of July 22, 1996 and all written and
executed formal amendments thereto made prior to the WAVE Effective Date
(referred to herein collectively as the "TCC License"). All provisions in this
Agreement are therefore incorporated within the TCC License. In the event any of
the provisions of this Agreement and the TCC License conflict, the provisions
contained in this Agreement shall supersede such conflicting provisions in the
TCC License.
Page 1 of 18
2
TESSERA CONFIDENTIAL
II. Definitions.
As used herein, the following terms shall have the following meaning:
A. The term "Related Patents" means issued re-issues,
re-examinations, continuations, continuations-in-part, divisionals, and all
corresponding foreign patents therefor in all countries of the world.
B. The term "WAVE Technology" means any method or result of U.S.
Patent Number 5,518,964 and Related Patents for the manufacture of products
using a wide area vertical expansion method for forming elements within the
product.
C. The term "WAVE Package" means any single IC or wafer level IC
package made with WAVE Technology. The term "Single Chip WAVE Package" means a
WAVE Package made by using WAVE Technology to assemble individual IC die. The
term "Wafer Level WAVE Package" means WAVE Packages that may be made by using
WAVE Technology to package unitary undiced IC wafers. WAVE Packages are a type
of Batch Technology and a subset of TCC.
D. The term "Licensee WAVE Improvements" means structural
derivatives, improvements, modifications, or enhanced specifications relating to
the WAVE Technology or incorporated in a WAVE Package. Licensee WAVE
Improvements further include improved processes or manufacturability relating to
WAVE Technology or improved cost of manufacturing or changes to materials in a
WAVE Package.
F. The term "Standards" means those minimum standards as set forth in
Attachment C pursuant to which Licensee may sell any WAVE package (under the
terms of this Agreement) or TCC package (under the terms of the TCC License)
under a WAVE Xxxx or a Xxxx, respectively.
G. The term "Licensee Affiliate" means any company which agrees to be
bound by the terms and conditions of this Agreement and has more than fifty
percent (50%) of the voting stock owned or controlled by Licensee. A company
shall be considered a Licensee Affiliate only so long as such majority ownership
or control exists. Licensee shall be ultimately responsible for the actions of
the Licensee Affiliates pursuant to this Agreement. The term "Licensee
Affiliate" supercedes all references to the term "Affiliate" in the TCC License
where such references refer to Affiliates of Licensee.
H. The term "Tessera Affiliate" means any company which agrees to be
bound by the terms and conditions of this Agreement and has more than fifty
percent (50%) of the voting stock owned or controlled by Tessera. A company
shall be considered a Tessera Affiliate only so long as such majority ownership
or control exists. Tessera shall be ultimately responsible for the actions of
the Tessera Affiliates pursuant to this Agreement. The term "Tessera Affiliate"
supercedes all references to the term "Affiliate" in the TCC License where such
references refer to Affiliates of Tessera.
I. The term "WAVE Equipment" as used herein means equipment, detailed
process and equipment specifications developed by Tessera, Licensee or Tessera
and Licensee jointly for the manufacture (assembly and/or test) of WAVE
Technology products, more specifically WAVE Equipment covers any equipment,
processes and know-how relating to the manufacture of Single Chip WAVE Packages
and Wafer Level WAVE Packages.
J. The term "First Development Period" means the time period between
the WAVE Effective Date and the date that: (1) a volume manufacturing line or
lines installed in Licensee's factory capable of producing [*] ([*]) Rambus
RDRAM memory type Single Chip WAVE Packages per month at a total cumulative
yield or [*] or more on three separate consecutive sample lots (or another
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
Page 2 of 18
3
TESSERA CONFIDENTIAL
yield as mutually agreed to by the Parties in a signed writing); and (2) any
know how or process for the WAVE Equipment is available to third party equipment
vendors for sale of such equipment to Tessera, Licensee or any other Tessera
WAVE licensee. The time period of the First Development Period shall not exceed
a one (1) year period.
K. The term "Second Development Period" means the Parties' mutually
agreed upon start date after the end of the First Development Period and the
date that: (1) a volume manufacturing line or lines installed in Licensee's
factory capable of producing [*] ([*]) Rambus RDRAM memory type wafer level
packages per month at a total cumulative yield of [*]% or more on three separate
consecutive sample lots (or another yield as mutually agreed to by the Parties
in a signed writing); and (2) any know how or process for the WAVE Equipment is
available to third party equipment vendors for sale of such equipment to
Tessera, Licensee or any other Tessera WAVE licensee. As of the WAVE Effective
Date, it is the good faith intention of the Parties that the wafer level package
of choice will be a Wafer Level Wave Package; however, prior to or during the
Second Development Period, the Parties may mutually decide, in a signed writing,
that such wafer level development will include or embody other package
structures. The time period of the Second Development Period shall not exceed a
one (1) year period.
L. The term "Billable Pin" means any electrical connection to an IC
bond pad made or contained in any TCC package licensed hereunder.
III. FURTHER DEVELOPMENT OF WAVE(TM) PACKAGES.
A. Refinement of WAVE Packages. During the First and Second
Development Periods, Tessera and Licensee agree to work together in good faith
to jointly refine, identify, prioritize, and specify WAVE Package designs,
materials, processes, and related WAVE Equipment for the purpose of the
commercialization of such WAVE Packages based upon Tessera's WAVE Technology.
During each such Development Period, Tessera and Licensee agree to the
following:
1. Parallel Development.
a. Documentation. As soon as possible, but no later
than thirty (30) days, after payment of the License Fee in section V.A., Tessera
will transfer to Licensee substantially all relevant Single Chip WAVE Package
technical information and know-how. As soon as possible, but no later than
thirty (30) days, after the end of the First Development Period, Tessera will
transfer to Licensee Wafer Level WAVE Package technical information and
know-how. Such technical information and know-how may include, without
limitation, material specifications, current best method of manufacture and
assembly, tooling specifications, design methods, techniques, know-how, process
data, yields, reliability data, and other Tessera engineering data and test
results reasonably needed by Licensee to exercise the rights, licenses and
privileges of the licenses granted hereunder.
b. Training & Definition of Specifications. As soon as
possible, but no later than thirty (30) days, after payment of the License Fee
in section V.A. and as soon as possible, but no later than thirty (30) days,
after the initiation of the Second Development Period, Tessera will make certain
of its qualified engineering staff available at its San Xxxx facilities for
joint activities with Licensee's engineers, as may be necessary in accordance
with mutual agreement to successfully complete the transfer of Single Chip WAVE
Package information ("Single Chip Training") and the Wafer Level WAVE Package
information ("Wafer Training"), respectively. Notwithstanding, unless otherwise
agreed to in a writing signed by both Parties, the Single Chip Training shall
not extend beyond a three (3) week consecutive period and the Wafer Level
Training shall not extend beyond a one (1) week consecutive period. Tessera
shall have sole control over the number of its engineers and method of
instruction during these training periods. Further, during
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
Page 3 of 18
4
TESSERA CONFIDENTIAL
this initial training time period, the Parties shall mutually define the
development requirements to make the applicable WAVE Packages manufacturable at
the best cost and best reliability reasonably practical.
c. On-going Joint Activities. After the applicable
training set forth in section III.A.1b., above,
i. Tessera will continue its WAVE Package
development work and Licensee will initiate the applicable WAVE Package
development work in each Party's respective facility; and
ii. The Parties will agree upon at least one
common die design and WAVE Package design for the First and Second Development
Period to facilitate correlating and validating of assembly and testing of the
WAVE Packages; and
iii. The Parties will divide and allocate the
responsibilities for the development requirements defined in the Single Chip and
Wafer Level WAVE Training in order to expedite the development of such
development requirements; and
iv. Each Party agrees to meet for telephone
conferences at set days and times each week to discuss the progress of such
development requirements. Prior to such telephone conferences, each Party will
fax or email to the other Party an English language weekly progress report and
agenda of the discussion items for the meeting; and
v. Each Party will alternate sending up to five
(5) engineers to the other Party's facility every two (2) weeks for one (1) week
time periods (or as otherwise mutually determined by the Parties in a signed
writing) until the specific Development Period is over. The visiting engineers
will be restricted to the designated work areas in which the WAVE Package
development is being performed, but will have freedom to move around within such
work areas and shall have reasonable access to information, facilities and
equipment necessary to expedite the development of the WAVE Packages pertinent
to the corresponding Development Period;
vi. Any prototype Wave Equipment required shall
be mutually identified and the Parties shall agree upon specifications. Such
prototype WAVE Equipment shall then either be (a) ordered from a third party
equipment vendor, or (b) manufactured by Licensee. For all prototype WAVE
Equipment manufactured by Licensee, Tessera shall have the option to purchase
one fully functional piece of such prototype equipment at Licensee's actual
material cost (including the cost of any third party subassemblies incorporated
in the equipment) plus one half (1/2) of Licensee's actual labor cost (not
including development costs and costs associated with administrative overhead
such as sales and marketing). If Tessera exercises this option for such
prototype WAVE Equipment, Licensee agrees that Licensee will make and deliver
such prototype WAVE Equipment at the earliest possible time for Tessera's
continuing development efforts. For all actual manufacturing ready WAVE
Equipment manufactured by Licensee, Licensee shall make one fully functional
piece of WAVE Equipment available to Tessera at Tessera's request. All Tessera
WAVE Equipment orders for manufacturing ready WAVE Equipment after the first
such order shall be discussed by the Parties and built for Tessera by Licensee
on a best efforts basis. For all such orders of manufacturing ready WAVE
Equipment, Tessera shall pay Licensee one hundred and ten percent (110%) of the
actual manufacturing cost of the WAVE Equipment upon delivery of such equipment
to Tessera's San Xxxx facility, including reasonable labor and materials and
depreciation cost but excluding development costs and costs associated with
administrative overhead (such as sales and marketing).
2. Development of Single Chip WAVE Packages. During the First
Development Period, Tessera and Licensee hereby agree as a first priority and
initial task to begin by jointly developing a die attach and reflow process and
WAVE Equipment for accurate high volume placement and joining of individual IC
chips to the leads in package substrates, embodied in a machine referred to as
"Single Chip WAVE Equipment." Tessera shall provide Licensee with substantially
all relevant seed technical information including initial design concepts and
specifications for such Single Chip WAVE Equipment. Tessera and Licensee shall
then modify such specifications and mutually agree on the design of such
equipment, as set forth in section III.1., above ("Parallel Development"). The
Single Chip WAVE Equipment shall be delivered to Tessera's San Xxxx facilities
at the earliest practicable time. After the
Page 4 of 18
5
TESSERA CONFIDENTIAL
Parties are mutually satisfied with the Single Chip WAVE Equipment and the
process therefor, the Single Chip WAVE Equipment shall be integrated into a high
volume manufacturing line process flow. The Parties will mutually agree upon the
composition of such volume manufacturing line necessary to produce Single Chip
WAVE Packages.
3. Development of Wafer Level WAVE Packages. Immediately upon
the end of the First Development Period, the Parties will discuss the
development time line and milestones for the Second Development Period. During
the Second Development Period, Tessera and Licensee hereby agree as a first
priority to begin specifying and developing processes and machinery necessary to
manufacture high volume Wafer Level WAVE Packages, embodied in at least one
machine referred to as "Wafer Level WAVE Equipment." Tessera and Licensee shall
develop jointly agreed upon specifications and mutually agree on the design of
such equipment, as set forth in section III.1., above ("Parallel Development").
The Wafer Level WAVE Equipment shall be delivered to Tessera's San Xxxx
facilities at the earliest practicable time. After the Parties are mutually
satisfied that the Wafer Level WAVE Equipment and the process therefor, the
Parties will agree on an implementation strategy for building a Wafer Level WAVE
Package manufacturing line.
4. Costs for the WAVE Package Refinement. Each Party shall
bear its own costs and expenses, nonexclusively including costs and expenses for
manpower, material, facilities, and travel (airline, food and lodging) for the
development of the WAVE Packages and processes therefor.
5. Testing. Both Parties will share in the expenses of testing
the WAVE Packages equally. Each Party will perform roughly equivalent types and
amounts of testing at their respective facilities and will share the data
received from such testing with the other Party openly.
6. Transferability of WAVE Equipment. The Parties agree that
any WAVE Equipment which is manufactured by Licensee or a third party may only
be used, transferred or sold to Tessera, Licensee or other Tessera WAVE Package
Licensees for use to manufacture WAVE Packages for which Tessera receives a
royalty.
B. Customers During Development Periods. Since Licensee will not be
licensed to the specific embodiments of WAVE Packages until after the respective
Development Periods, any customers for embodiments of such WAVE Packages will be
served by Tessera out of Tessera's San Xxxx facility or supplied for Tessera by
Licensee under a mutually agreeable subcontract IC packaging agreement; however,
Licensee may discuss issues related to the manufacturing of the WAVE Packages
with customers during the respective Development Periods. Tessera and Licensee
agree to work together in good faith to jointly identify major customers for
WAVE Packages and to concentrate their mutual developmental efforts to meet such
customers' packaging needs. During the respective Development Periods, either
Party may discuss the associated WAVE Packages with potential customers;
however, since Licensee's license grant does not vest until after the end of the
associated Development Period, Licensee must request approval from Tessera for
such a customer inquiry. Tessera agrees not to unreasonable withhold such
approval. Licensee may not, however, actually ship parts directly to such
potential customers during the associated Development Periods. In the absence of
such customer guidance, Tessera and Licensee agree to work together to develop
several standardized WAVE Packages including at least packages for popular
memories (Flash, RDRAMs, SDRAMs) and moderate pin count DSPs and ASICS.
C. Limited Exclusivity in First Development Period. Tessera will not
enter into WAVE Package development with another merchant market subcontract
package assembler during the First Development Period for the Single Chip WAVE
Packages or the Wafer Level WAVE Packages and processes being developed
therefor. At the end of such First Development Period, Tessera shall be free to
work with any third party company on WAVE Packages and such developed
technology. Notwithstanding
Page 5 of 18
6
TESSERA CONFIDENTIAL
the terms of this section III.C., the term of exclusivity shall not extend
beyond six (6) months from the start of the First Development Period. Further,
this provision does not apply to semiconductor companies or other third parties
not in competition with Licensee's subcontract IC package assembly business.
IV. LICENSE RIGHTS.
A. Single Chip WAVE License Grant. Effective immediately upon the end
of the First Development Period and subject to the terms and conditions set
forth herein, Licensee's agreement to the provisions hereof including all
attachments hereto, and Licensee's payment (when due) of the fees and royalties
stated herein, Tessera hereby grants Licensee a world-wide, non-exclusive,
non-transferable, nonsublicensable, limited license to the WAVE Technology and
associated technical information for Licensee to manufacture, use, market or
sell Single Chip WAVE Packages. Licensee specifically is not granted any "have
made" rights which would allow Licensee to have companies that are not Licensee
Affiliates package and/or assemble ICs into Single Chip WAVE Packages for
Licensee.
B. Wafer Level WAVE License Grant. Effective immediately upon the end
of Second Development Period and subject to the terms and conditions set forth
herein, Licensee's agreement to the provisions hereof including all attachments
hereto, and Licensee's payment (when due) of the fees and royalties stated
herein, Tessera hereby grants Licensee a world-wide, non-exclusive,
non-transferable, non-sublicensable, limited license to the WAVE Technology and
associated technical information for Licensee to manufacture, use, market or
sell Wafer Level WAVE Packages. Licensee specifically is NOT granted any "have
made" rights which would allow Licensee to have companies that are not Licensee
Affiliates package and/or assemble ICs into Wafer Level WAVE Packages for
Licensee.
C. No Implied License. Notwithstanding the foregoing, nothing in this
Agreement shall be construed to grant Licensee or the Licensee Affiliates,
successors or assigns or any third parties an implied license under any patent
owned by Tessera other than the WAVE Technology Patents for the manufacture, use
and sale of WAVE Packages (as defined above). Specifically, other types of Batch
Technology are excluded from this Agreement.
D. WAVE Trademark Use. Licensee acknowledges Tessera's ownership of
the following trademarks: WAVE and W.A.V.E. (hereinafter "WAVE Marks"). Subject
to Licensee's agreement and compliance with the other provisions of this
Agreement including all attachments hereto, and Licensee's payment of the fees
and royalties stated herein, Tessera hereby grants Licensee a non-exclusive,
non-transferable, non-sublicensable limited license to use the WAVE Marks to
identify and distinguish Licensee's royalty bearing WAVE Packages that are sold
by Licensee under this Agreement, so long as Licensee agrees that it will do
nothing inconsistent with Tessera's ownership of such WAVE Marks and that all
use of the WAVE Marks by Licensee: (1) shall inure to the benefit of and be on
behalf of Tessera; (2) shall be used solely for identifying and distinguishing
the royalty bearing WAVE Packages that are manufactured, marketed and sold by
Licensee that meet the minimum criteria set forth in Attachment C; and (3) shall
follow the other guidelines of this section. Licensee agrees that nothing in
this Agreement shall give Licensee any right, title or interest in the Marks
other than the right to use the Marks in accordance with this Agreement.
Licensee shall further acknowledgement of Tessera's ownership of such Marks in
documentation, internet web pages, articles and promotional material; to wit,
each such use shall contain the following text: "______(List of the WAVE Marks
used in the promotional item) are trademarks of Tessera, Inc." or a suitable
variant thereof to account for a singular use of one or more of the WAVE Marks.
V. FEE AND ROYALTIES.
A. WAVE Package Transfer and License Fee. As consideration for the
transfer of WAVE Package technical information (as set forth in section III.),
license rights (as defined in sections IV.A. &
Page 6 of 18
7
TESSERA CONFIDENTIAL
IV.B.), and other privileges of this Agreement, Licensee shall pay to Tessera a
fee equal to [*] US DOLLARS (US$[*]) within thirty (30) days of the WAVE
Effective Date.
B. WAVE Package Royalty. In addition to the WAVE Package, Transfer
and License Fee set forth in section V.A., Licensee shall pay a running royalty
of [*] (US$[*]) per Billable Pin for WAVE Packages made by Licensee hereunder,
whether sold, transferred or used internally. This WAVE Package Royalty shall be
paid by Licensee to Tessera four times annually as set forth in section VI.
et.seq. of this Agreement. Notwithstanding, no running royalty need be paid for
scrap or defective WAVE Packages (which are not sold, transferred or used
internally) or for experimental or test WAVE Packages for which Licensee
receives no payment of any kind from a third party and for which Licensee does
not transfer to a third party.
C. Incentive Based Royalty Reductions. At any time after one (1) year
from the WAVE Effective Date and so long as Licensee has actually shipped and
paid royalties to Tessera for WAVE Packages totaling at least [*] ([*]),
Billable Pins, the royalty due Tessera from Licensee for WAVE Packages under
section V.B. may be reduced to [*] (US$[*]) per Billable Pin for WAVE Packages
made by Licensee hereunder, whether sold, transferred or used internally.
D. Most Favored WAVE Package Royalty. As of the WAVE Effective Date,
Tessera, in good faith, intends that any agreement that Tessera enters into
henceforth with another similarly situated licensee whereby such licensee
receives identical rights, privileges, terms and conditions as contained in this
Agreement, shall be on royalty rate terms no more favorable to such other
licensee than the royalty terms set forth in this Agreement. The following shall
not be deemed agreements subject to this Paragraph: (i) agreements between
Tessera and Tessera Affiliates; (ii) cross-license or other agreements under
which a substantial portion of the consideration received by Tessera consists of
rights to patents and/or technology owned by the other party to such agreement;
(iii) agreements with governmental or educational agencies; and (iv) agreements
in settlement of litigation. In the event that Tessera grants another such
otherwise identical license having better royalty terms than the royalty terms
set forth in this Agreement, Tessera shall promptly notify Licensee of the
financial terms of such other license. Upon notice by Licensee, given within 30
days after such notice by Tessera, this Agreement shall be amended to substitute
all of the royalty terms of such other license for the royalty terms of this
Agreement, provided that (a) Licensee must accept all of the royalty terms of
such other license, and may not select particular terms; and (b) such amendment
shall not affect Tessera's rights with respect to royalties or other moneys
accrued and/or paid prior to such amendment.
E. WAVE Co-Development Fee. As consideration for Licensee's efforts
to commercialize WAVE Packages, Tessera shall pay to Licensee a fee equal to
[*] US DOLLARS (US$[*]) over the next two (2) year period, as follows:
1. First year. For one full year starting on the WAVE
Effective Date, Licensee's royalties under paragraph V.B., above, shall be
reduced by [*] PERCENT ([*]%) to a running royalty of [*] (US$[*]) per Billable
Pin for WAVE Packages. After the first anniversary of the WAVE Effective Date,
this paragraph V.E.1 shall terminate and Licensee shall pay royalties as set
forth in paragraph V.B.
2. Second Year. Tessera shall pay any remaining amount of the
US$[*] WAVE Co-Development Fee not paid to Licensee in the first year after the
WAVE Effective Date, as provided for in paragraph V.E.1., to Licensee in four
equal quarterly installments starting from the first anniversary of the WAVE
Effective Date.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
Page 7 of 18
8
TESSERA CONFIDENTIAL
F. Royalty Adjustments. In making the royalty payments due Tessera,
Licensee may subtract from royalty payments any preceding royalty payments for
defective royalty bearing TCC packages or WAVE Packages that are returned to
Licensee from Licensee's customers ("Royalty Adjustment"). However, if at any
time such defective TCC packages or WAVE Packages are resold by Licensee,
Licensee shall pay a royalty to Tessera for such resold TCC packages or WAVE
Packages, as set forth in this Agreement. Before a Royalty Adjustment can be so
subtracted, Licensee must have originally paid a royalty on the particular
returned TCC package or WAVE Package. All Royalty Adjustments must be specified
with the information set forth in Attachment B and Attachment C hereto.
VI. LICENSEE REPORTS AND PAYMENT.
A. Fees. Any fees or royalties due hereunder pursuant to this
Agreement or to the TCC License shall be paid in US Dollars by wire transfer to
Union Bank of California, 00 Xxxxxxx Xxxx., Xxx Xxxx, XX 00000, Account Name:
Tessera, Account No.: 6450148359, Routing No. 000000000, International Swift
Code: XXXXXX00, or such other account as Tessera may designate in writing.
Payments shall be considered to be made as of the day on which they are received
in Tessera's designated account.
B. Quarterly Royalty Payments. Beginning on the WAVE Effective Date,
royalties under this Agreement and under the TCC License shall be calculated and
paid in full in quarter annual payment periods ending March 31, June 30,
September 30 and December 31 of each year. Beginning with the first such royalty
payment, Licensee shall deliver a written report (as shown in Attachments B and
C, as applicable) describing the basis upon and containing the information
sufficient to determine the royalties due Tessera for the applicable payment
period. All payments under this section shall be made in US Dollars by wire
transfer to Union Bank of California, 00 Xxxxxxx Xxxx., Xxx Xxxx, XX 00000,
Account Name: Tessera, Account No.: 6450148359, Routing No. 000000000,
International Swift Code: XXXXXX00, or such other bank or account as Tessera may
from time to time designate in writing. The payments of royalties and submission
of such reports from Licensee to Tessera under this section shall be made within
thirty (30) days from the end of each such quarter annual payment period and
shall be considered to be made as of the day on which such payments are received
in Tessera's designated bank account.
VII. RIGHT TO PURCHASE. Licensee agrees to use best efforts to
negotiate in good faith a reasonable subcontract assembly agreement to meet
Tessera's capacity requirements for any WAVE Packages that Tessera may from time
to time wish to have manufactured in the course of its own business having at
least the terms set forth in this section, below. Licensee agrees to provide
Tessera with most favored customer manufacturing time periods ("turn around
times") and allocations of capacity. Licensee further agrees that the price
Licensee charges Tessera for any WAVE Packages it manufactures for Tessera under
a subcontract assembly agreement shall not to exceed the lowest price offered or
paid commercially for such WAVE Packages, but in no event will Licensee's price
to Tessera for such WAVE Packages be higher than one hundred and ten percent
(110%) of Licensee's actual manufacturing cost, including reasonable labor,
materials, and equipment depreciation costs but excluding development costs and
costs associated with administrative overhead (such as sales and marketing).
VIII. IMPROVEMENTS.
A. Tessera Improvements. During the term of this Agreement, Tessera
will make available at no charge WAVE Package improvements which have been
reduced to practice including changes and modifications in Standards, methods,
materials and specifications relating to WAVE Packages so long as such
improvements do not require any training of Licensee's personnel or other
substantial cost of transfer. Additional engineering support beyond the First
and Second Development Periods may be made available, according to a mutually
agreeable time schedule and manpower assignment schedule, at a per diem rate of
US$[*] per support engineer, plus reasonable air travel and hotel charges.
Notwithstanding the
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
Page 8 of 18
9
TESSERA CONFIDENTIAL
foregoing, Tessera is under no obligation to transfer and/or license any
information whether confidential, proprietary or otherwise that it may be
prohibited from transferring to Licensee by contract with a third party or
applicable law. Notwithstanding any provision to the contrary, Tessera shall not
be under any obligation to transfer or disclose actual patent applications or
related documents to Licensee.
B. Licensee Improvements.
1. During Development Periods. During the First or Second
Development Periods, Licensee hereby grants to Tessera a world-wide, fully-paid,
non-exclusive, sublicensable, non-transferable, perpetual, right to use the
applicable Licensee WAVE Improvements and Licensee's Patents covering any
inventions conceived of during the First or Second Development Period of this
Agreement to manufacture, have manufactured, use or sell products.
Notwithstanding, Tessera shall not have the right to sublicense the specific
embodiments of WAVE Equipment solely developed by Licensee during the First or
Second Development Period. However, Tessera shall have the right to sublicense
the manufacturing processes that are solely developed by Licensee and
incorporated into such WAVE Equipment during the First and Second Development
Periods.
2. After Development Periods. After the First Development
Period, Licensee hereby grants to Tessera a world-wide, fully-paid,
non-exclusive, non-sublicensable, non-transferable, perpetual, right to use
Licensee WAVE Improvements and Licensee's Patents relating in the area of Single
Chip WAVE Packages and covering any inventions and equipment conceived of after
said First Development Period of this Agreement to manufacture, have
manufactured, use or sell products. After the Second Development Period,
Licensee hereby grants to Tessera a world-wide, fully-paid, non-exclusive,
non-sublicensable, non-transferable, perpetual, right to use any Licensee WAVE
Improvements and Licensee's Patents relating in the area of WAVE Technology and
covering any inventions and equipment conceived of after said Second Development
Period of this Agreement to manufacture, have manufactured, use or sell
products.
3. Notwithstanding any provision to the contrary, Licensee
shall not be under any obligation to transfer or disclose actual patent
applications or related documents to Tessera.
C. Immunity for Other Tessera WAVE Licensees. For Licensee WAVE
Improvements conceived of after the applicable First or Second Development
Period, Licensee agrees to grant to the other WAVE Package licensees of Tessera
on commercially reasonable terms a non-exclusive, non-transferable,
non-sublicensable immunity under Licensee's Patents covering any inventions
contained in such Licensee Improvements that are discoverable from an
examination of the WAVE Packages made by Licensee, and any inventions contained
in such Licensee WAVE Improvements to Licensee WAVE Equipment, unless such other
licensees refuse to grant to Licensee similar licenses under any of such other
licensees' patents relating to any improvements developed by such other licensee
on similar commercially reasonable terms.
IX. AUDITS. The following section will be added to the section
entitled "Reasonable Audit" in the TCC License.
A. Standards Audit. Prior to the first shipment of WAVE Packages to a
third party by Licensee upon which Licensee intends to bear the Marks under
section IV.D. pursuant to this Agreement, Licensee shall provide Tessera with
sufficient quantities of such packages to enable Tessera to determine if such
packages are in compliance with the Standards. Upon receipt of such packages,
Tessera shall promptly perform the tests set forth in Attachment C and provide a
written report to Licensee detailing the results of the tests so performed.
After the Licensee manufactured WAVE Packages have passed Tessera's testing
requirements, Licensee may use the Marks as set forth in section IV.D. To ensure
the on-going, future minimum quality and reliability of the TCC packages sold by
Licensee under any of the Marks pursuant to
Page 9 of 18
10
TESSERA CONFIDENTIAL
this Agreement, Tessera shall have a right to perform the tests set forth in
Attachment C at any time during the term of this Agreement upon 60 day written
notice by Tessera to Licensee of Tessera's intention to perform such Standards
testing. Upon Licensee's receipt of such written notice from Tessera, Licensee
shall promptly provide sufficient quantities of TCC packages for such testing.
Upon receipt of such packages, Tessera shall promptly perform the tests and
provide a written report to Licensee detailing the results of the tests so
performed.
X. PREFERENTIAL MARKETING. After the First and Second Development
Periods and upon a demonstration of manufacturability of WAVE Packages, Licensee
agrees to use best efforts to preferentially promote, where appropriate,
Tessera's WAVE Packages to Licensee's customers over other types of BGA type
packages with the intent on making Tessera's WAVE Packages the largest selling
and most popular chip scale packages in the IC packaging industry (exclusive of
other Tessera packaging technology). The Parties further agree to work together
to jointly market WAVE Package services and to support each other's individual
marketing efforts hereunder, as mutually agreed by the Parties. Notwithstanding,
both Tessera and Licensee shall also have the right to market the WAVE Package
services separate from each other; although, Licensee's right to so market shall
commence after the First and Second Development Periods for the respective types
of WAVE Packages, as defined in sections III.A.2. and III.A.3.
XI. TERM AND TERMINATION.
A. Term. This Agreement shall become effective on the Effective Date
and, unless earlier terminated as provided for elsewhere in this Agreement,
shall remain in full force until the expiration of the last to expire of any
Tessera Patent. This section supercedes section X.A. and section X.B. of the TCC
License.
B. Termination for Breach. Either party may terminate this Agreement
due to the other party's breach of this Agreement, such as failure to perform
its duties, obligations, or responsibilities herein (including, without
limitation, failure to pay royalties and provide reports as set forth herein).
The parties agree that such breach will cause substantial damages to the party
not in breach. Therefore, the parties agree to work together to mitigate the
effect of any such breach; however, the non-breaching party may terminate this
Agreement if such breach is not cured or sufficiently mitigated (to the
non-breaching party's satisfaction) within sixty (60) days of notice thereof.
The Parties acknowledge and agree that a breach of either the TCC License or
this Agreement is a breach of the combined total of the TCC License and this
Agreement. This section supercedes section X.C. of the TCC License.
C. WAVE Package Development and License Agreement Survival Clause.
Unless otherwise provided elsewhere in this Agreement, the following provisions
shall survive the termination or expiration of this Agreement:
1. Licensee's obligation to make fee and royalty payments to
Tessera accrued under this Agreement on or prior to expiration or termination,
as set forth in section V. et.seq.
2. Licensee's obligation to submit written reports stipulated
in section VI., Licensee Reports and Payment, and to permit the inspection and
audit of its account record stipulated in section VIII, Audits.
3. Section V.E., WAVE Co-Development Fee
4. Section VII.B., Licensee Improvements
5. Section XI, Term and Termination.
Page 10 of 18
11
TESSERA CONFIDENTIAL
6. Section XII, No Invalidity Claim; No Other Warranties
7. Section XIII, Indemnity
8. Section XIV, Miscellaneous
XII. NO INVALIDITY CLAIM; NO OTHER WARRANTIES. As of the WAVE
Effective Date, Tessera has not received any claim that U.S. patent number
5,518,964 or any Related Patent is not valid or was issued erroneously. Both
Tessera and Licensee acknowledge and agree that the rights and licenses,
improvements and know-how granted or otherwise provided hereunder are provided
to the other Party "AS IS", with no other warranty of any kind. NEITHER PARTY
MAKES ANY WARRANTY, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, CONCERNING THE
SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE, QUALITY, USEFULNESS OR NONINFRINGEMENT, except
as provided in this section above. Neither Party makes any warranty that the
information and rights provided hereunder will be sufficient or yield any
particular result.
XIII. INDEMNITY. This section supercedes section XIV. (Indemnity)
of the TCC License.
A. Licensee agrees to defend, indemnify and hold Tessera harmless
from and against any and all damages, liabilities, costs and expenses (including
reasonable attorney's fees and expenses) arising out of or related to Licensee's
use of Tessera's WAVE Technology, Technology, Patents, Technical Information or
other know-how. Notwithstanding, Licensee shall not bear the obligation or
expense of defending the validity of any Tessera owned Patent. Tessera shall
have sole control over and bear the expense for so defending the validity of the
Tessera owned Patents.
B. Tessera agrees to defend, indemnify and hold Licensee
harmless from and against any and all damages, liabilities, costs and expenses
(including reasonable attorney's fees and expenses) arising out of or related to
Tessera's use of Licensee Improvements and Licensee WAVE Improvements.
Notwithstanding, Tessera shall not bear the obligation or expense of defending
the validity of any Licensee owned Patent. Licensee shall have sole control over
and bear the expense for so defending the validity of the Licensee owned
Patents.
XIV. MISCELLANEOUS.
A. Export Regulations. Both parties shall comply with the laws
and regulations of the government of the United States and of any other country
as relevant to each party hereto relating to the export of commodities and
technical data. This section supercedes section XVI.H. of the TCC License.
B. Entire Understanding. This Agreement embodies the entire
understanding between the parties relating to the subject matter hereof, whether
written or oral, and there are no prior representations, warranties or
agreements between the parties not contained in this Agreement. Any amendment or
modification of any provision of this Agreement must be in writing, dated and
signed by both parties hereto. This section supercedes section XVI.E. of the TCC
License.
Page 11 of 18
12
TESSERA CONFIDENTIAL
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement as of the date first above written.
TESSERA, INC. MITSUI HIGH-TEC, INC.
By: /s/ XXXXX XXXXXXXXXX By: /s/ A. FUKUI
---------------------------------- ---------------------------------
Print Name: Xxxxx XxXxxxxxxx Print Name: Xxxxxxx Xxxxx
-------------------------- -------------------------
Title: CEO Title: Managing Director
------------------------------- ------------------------------
Date: November 5, 1999 Date: November 10, 1999
-------------------------------- -------------------------------
Page 12 of 18
