Exhibit 99.3
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PRODUCTION AND DEVELOPMENT AGREEMENT
THIS PRODUCTION AND DEVELOPMENT AGREEMENT ("Agreement") is entered into and made
effective May 4, 2005 ("Effective Date") by and between Simtek Corporation, a
Colorado corporation, having a place of business at 0000 Xxxxxxxxxx Xxxxx, Xxxxx
000, Xxxxxxxx Xxxxxxx, XX 00000 ("Simtek"), and Cypress Semiconductor
Corporation, a Delaware corporation, having a place of business at 0000 Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 ("Cypress"). Simtek and Cypress, collectively
and interchangeably, a "Party" or the "Parties".
RECITALS
Simtek and Cypress desire to enter into a relationship under which Cypress will
produce and deliver to Simtek one or more Simtek products as designated by
Simtek (as further defined below, "Simtek Products") using the Cypress S8
0.13-micron SONOS technology (as further defined below, the "S8 Process"). This
Agreement sets forth the terms and conditions under which the Parties will enter
into such relationship and the obligations that each Party will undertake with
respect thereto.
AGREEMENT
In consideration of the promises herein, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree to be bound by the following terms and conditions:
1. DEFINITIONS; CONSTRUCTION; AND INTERPRETATION.
1.1 Definitions. As used in this Agreement, the terms defined in Exhibit
1.1 will have the meanings given to those terms therein. Other capitalized terms
used in this Agreement are defined in the context in which they are used and
will have the meanings given to them below.
1.2 Construction. This Agreement together with the Exhibits hereto and any
Statements of Work issued hereunder (all of which are hereby incorporated herein
and made a part hereof), constitute the entire agreement between the Parties
regarding the subject matter hereof and supersedes all prior or contemporaneous
agreements, understandings, and communication, whether written or oral,
including the Mutual Nondisclosure Agreement, dated Sept 31, 2004 [sic], between
the Parties. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the Party against whom enforcement
of any such amendment, waiver, discharge or termination is sought. The terms on
any purchase order or similar document submitted by either Party to the other,
and the terms on the web site of either Party, will have no effect on the terms
of this Agreement.
1.3 Interpretation. The following rules will apply in interpreting this
Agreement: (a) terms other than those defined in this Agreement will be given
their plain English meaning, and those terms, acronyms and phrases known in the
semiconductor products and services industries will be interpreted in accordance
with their generally known meanings; (b) unless the context otherwise requires,
words importing the singular include the plural and vice-versa; (c) references
to an "Article," "Section" and "Subsection" will be references to an article,
section, or subsection of this Agreement, unless otherwise specifically stated;
(d) references to this Agreement and the words "herein," "hereof," "hereto," and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or Subsection; (e) the Article,
Section and Subsection headings in this Agreement are intended to be for
reference purposes only and will in no way be construed to modify or restrict
any of the terms or provisions of this Agreement; (f) the word "including" and
words of similar import (such as "include" and "includes") mean "including, but
not limited to"; (g) a reference to "days" means calendar days, unless otherwise
specifically stated in a reference. A reference to a monthly "date" is the last
day of the month unless another day is specified.
2. S8 PROCESS DEVELOPMENT.
2.1 Development. Cypress will perform all obligations necessary to complete
the milestones in the development of the S8 Process as set forth in Exhibit 2.1
("Milestones") in accordance with terms of this Agreement. Without limiting
Cypress' obligations, Simtek will commit such resources as are set forth in
Exhibit 2.1 to assist Cypress in the development of the S8 Process. The
Milestones are further described in Cypress specifications 01-00177, 42-00005
and 42-00011, as such specifications may be updated from time to time, current
copies of which have been provided to Simtek. Any dispute as to the substance of
the Milestones (as a result of changes to the above-listed specifications or
otherwise) shall be resolved by the Council.
2.2 Development Program Council. During the term of this Agreement, Cypress
and Simtek shall jointly form a Development Program Council to review and
coordinate the development of the Milestones in accordance with this Agreement
(the "Council"). The Council shall be comprised of a minimum of each Party's
Project Manager. Each Party will identify its other participant(s) for the
Council within 1 month after the Effective Date of this Agreement. The Council
shall meet every month at a mutually agreeable location. While the Council will
be used as a forum for coordinating development activities to complete the
Milestones, the decisions of the Council shall not be legally binding on either
Party unless the Council's decision is memorialized in writing and executed by
an authorized officer of each respective Party.
2.3 Failure to Meet Milestone. Cypress agrees to complete each Milestone to
the reasonable satisfaction and approval of both Parties pursuant to the
development schedule agreed to by the Parties. The Parties agree that Estimated
Completion Dates provided in Exhibit 2.1 are estimates for the completion of the
Milestones and such dates are subject to change upon the mutual agreement of the
Parties. Failure to meet an Estimated Completion Date for a Milestone shall not
be deemed to be a breach of this Agreement. If a Milestone is not met on its
Estimated Completion Date as set forth in Exhibit 2.1, the Council shall meet
with senior management from Cypress and Simtek no later than 15 days after such
Milestone Estimated Completion Date is missed. The Council shall provide senior
management with the Milestone status, and a proposed Action Plan to complete the
Milestone. Upon review of the facts presented by the Council, the Parties'
senior management and Council shall adopt an Action Plan to complete the
Milestone, schedule a new Milestone date and amend Exhibit 2.1, if necessary.
2.4 Milestone Completion. Within 15 days of successfully achieving each
Milestone to the reasonable satisfaction and approval of both Parties, the
Council shall meet to develop and approve an Action Plan that is mutually agreed
to by both Parties for the succesful achievement of the remaining Milestones.
2.5 Modifications to the S8 Process. If Simtek desires that Cypress modify
the S8 Process used to produce any Simtek Product (for example, by including
additional process modules), Simtek will give Cypress notice thereof. Within a
reasonable amount of time after receipt of any such notice, Cypress will provide
a proposal to Simtek describing any additional costs, adjustments in price,
production, delivery schedule, and any other terms and conditions of this
Agreement that are necessary to make such modifications. Upon mutual agreement
to the proposal, the Parties will enter in to a written Statement of Work
describing in detail the obligations of each Party with respect to such
modifications. If the Parties are unable to agree upon the proposal or Statement
of Work, Cypress will continue to produce Simtek Products using the unmodified
S8 Process.
3. SIMTEK PRODUCTS.
Simtek has designated the lead Simtek Product for production by Cypress
under this Agreement to be the 4 Mbit nvSRAM. At any time during the term of
this Agreement, Simtek may designate additional Simtek Products for production
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by Cypress under the terms of this Agreement subject to Cypress' agreement to
produce such additional Simtek Products. Any additional production costs
incurred by Cypress to produce such additional Simtek Products shall be mutually
agreed upon by the Parties prior to the commencement of production, and
accordingly the Fee Schedule shall be revised pursuant to Section 11.1. For
purposes of clarification, "additional production costs" include the costs
incurred by Cypress for new masks or additional tooling, process or CAD
development necessary to produce the additional Simtek Products.
4. ORDERING AND FORECASTING.
4.1 Order Process. At any time after Qual, and thereafter during the term
of this Agreement, Simtek will issue purchase orders to Cypress ordering
quantities of Simtek Products from Cypress ("Orders"), and Cypress will accept
Orders in accordance with Section 4.2 and will produce and deliver the Simtek
Products designated in such Orders accepted by Cypress. Each Order will include
purchase order number, quantity, applicable price, shipping method and
instructions, and statement that the Order is being placed under this Agreement.
4.2 Order Acknowledgment. Each Order issued by Simtek to Cypress under this
Agreement will be deemed acknowledged and accepted by Cypress, and Cypress will
fulfill the terms of the Order and produce and deliver the Simtek Products
ordered under the Order in accordance with the terms of the Order and the terms
and conditions of this Agreement, unless Cypress provides notice to Simtek
within 10 days of receipt of such Order indicating that such Order: (a) causes
the number of Weekly Starts to exceed the maximum number of Weekly Starts set
forth in Exhibit 4.2; or (b) includes a delivery date for the applicable Simtek
Product that is less than 90 days from the date of the Order. Any such notice by
Cypress will be accompanied by an amendment revising such Order so that the
Order is in compliance with (a) and (b) above. Upon receipt of such notice from
Cypress, Simtek may either: (i) accept such the amendment to the Order, in which
case Cypress will fulfill the terms of the amended Order and produce and deliver
the Simtek Products ordered under the amended Order in accordance with the terms
of the amended Order and the terms and conditions of this Agreement; or (ii)
cancel such amended Order without penalty to Simtek. If Simtek does not provide
an acceptance or rejection of an amendment to an Order within 10 business days
of Simtek's receipt of notice of such amended Order from Cypress, the amended
Order will be deemed accepted by Simtek. Changes to Orders accepted by Cypress
that decrease or increase the quantity of Simtek Products may be made only with
written consent of Cypress. Cypress will meet the agreed delivery date(s) as set
forth in Orders accepted by Cypress. If Cypress cannot meet the agreed upon
delivery date, Cypress will immediately notify Simtek.
4.3 Shipment and Risk of Loss. Cypress will package, or cause the packaging
of, all Simtek Products for secure shipment according to good production
practices in consideration of the method of shipment chosen. All shipments will
be F.O.B. point of shipment. Title and risk of loss or damage will transfer to
Simtek upon pick-up from the point of shipment by Simtek or the carrier
designated by Simtek in the applicable Order.
4.4 Delivery Rescheduling. Simtek may reschedule the delivery date(s) for
the Simtek Products ordered hereunder on the condition that Simtek gives Cypress
90 days written notice of its desire to reschedule prior to the scheduled
delivery date. Within 10 days after Cypress' receipt of such notice, Simtek must
state in writing its desired final disposition of the rescheduled Simtek
Products. All requests to reschedule the delivery dates of the Simtek Products
that are less than 90 days prior to the scheduled delivery date are subject to
Cypress' written acceptance, which acceptance shall not be unreasonably
withheld.
4.5 Forecasts. Commencing with Qual and within 10 days of the end of each
month thereafter, Simtek will provide Cypress with a rolling 13 week Order
forecast for Orders of Simtek Products (each, a "Forecast"). Forecasts are
provided solely for Cypress' convenience and only become a binding commitment
for Simtek to purchase the Simtek Products through the Order process described
in Section 4.1 above; provided, however, that, at Simtek's request, Simtek will
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be permitted to provide Cypress with an Order forecast prior to the initial
Qual. Notwithstanding the foregoing, upon receipt of any Forecast, if Cypress
has information that shortages, supplier quality issues or other factors would
preclude Cypress' ability to meet any Forecast amount in any week included in
the Forecast, Cypress will submit a proposal to revise the Forecast to Simtek
within 10 days of receipt of the Forecast. The proposal will include Cypress'
Action Plan to minimize the impact on the Forecast. Upon Simtek's approval of
the Action Plan, which will not be unreasonably withheld the Forecast will be
revised accordingly. Simtek may modify Forecasts submitted to Cypress either in
a subsequent Forecast, or by providing written notice to Cypress thereof.
5. PRODUCTION PLANNING AND PRODUCTION.
5.1 Production. Cypress will perform all obligations necessary for the
production and delivery of all Simtek Products subject to Orders by Simtek in
accordance with terms of this Agreement.
5.2 Acceptance Testing. Simtek may perform acceptance testing on any Simtek
Products in any shipment of Simtek Products received from Cypress in accordance
with Simtek's then-current testing procedures and specifications for the Simtek
Products.
5.3 Defects. If acceptance testing identifies any failure of a Simtek
Product in any shipment of Simtek Products received from Cypress to operate in
conformance with Simtek's applicable specifications for such Simtek Product (a
"Defect"), Simtek will notify Cypress of the Defect and indicate to Cypress that
Simtek is either rejecting in whole or in part the shipment of Simtek Products
or waiving the Defect. If Simtek does not issue either a notice of rejection or
waiver of any Simtek Product in any shipment of Simtek Products within 10
business days of receipt of the shipment of Simtek Products from Cypress, the
Simtek Products in such shipment will be deemed accepted by Simtek.
5.4 Corrective Action. Following notice of any Defect, unless Simtek has
waived the Defect, the Council shall meet with senior management from Cypress
and Simtek no later than 15 days after notice of such Defect to agree upon an
Action Plan covering the affected Simtek Products.
6. QUALITY CONTROL AND CERTIFICATION.
6.1 Quality Standards. Cypress will produce and deliver all Simtek Products
in accordance with the quality standards used on similar products made and
distributed by Cypress (including products not using the S8 Process).
6.2 Testing. As part of its quality assurance obligations, Cypress will
conduct testing of Simtek Products after Acceptance of such Simtek Products in
accordance with reasonable industry practices. If testing of Simtek Products
indicates a problem with the quality of the Simtek Products generally based on
evidence of failure of the Simtek Products, then the Council shall meet with
senior management from Cypress and Simtek no later than 15 days after notice of
such failure of the Simtek Products to create an Action Plan to correct the
problem.
6.3 Qualification Reports. Within 1 month of Qual, Cypress will provide to
Simtek copies of Cypress' qualification reports regarding the S8 Process.
Cypress will provide standard "Rel Monitor" updates to such qualification
reports from time to time on its website during the term of this Agreement.
6.4 Action by Simtek. Simtek reserves the right to request changes in the
Simtek Products at Cypress' expense (or to take such action as it may deem
reasonable to protect its rights) based on a material breach of the terms of
this Section 6 by Cypress.
7. PROGRAM MANAGEMENT. Each Party will designate one employee with
decision-making authority to serve as the principal technical contact for such
Party during the term (each a "Project Manager"). The Project Managers will work
together to ensure that the development and delivery efforts hereunder proceed
in a timely manner. Either Party may change its Project Manager at any time and
from time to time by giving the other Party written notice. Each Party will bear
its own costs and expenses incurred in connection with participation in such
meetings.
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8. LOYALTY.
8.1 By Cypress. During the term of this Agreement, Cypress and any
Affiliate will not use the S8 Process (or allow the S8 Process to be used) to
develop or produce (or have developed or produced) any Competing Product. For
purposes of this Section 8, a "Competing Product" is defined as a product that:
(a) has the same form, fit and function as any product listed in Exhibit 8.1
(the "Simtek Catalog"); (b) competes with a product in the Simtek Catalog; and
(c) is primarily a memory product. For the avoidance of doubt, the foregoing
will not restrict Cypress from: (i) developing or producing a Competing Product
using any other process other than the S8 Process; or (ii) developing or
producing a product using the S8 Process wherein the product: (1) is not
primarily a memory device; and (2) contains embedded within the same piece of
silicon a block which is the same form, fit and, function as a product in the
Simtek Catalog.
8.2 By Simtek. During the term of this Agreement, Simtek and any Affiliate
will not engage any third party to develop or produce (or have developed or have
produced) any product in the Simtek Catalog using technologies from 0.11 - 0.17
microns. Following the successful completion of the ES10 FAB4 Milestone set
forth in Exhibit 2.1, for the remainder of the term of this Agreement (if any),
Simtek will not engage any third party in the development or production of a
product with the same form, fit, and function as an S8 Product using
technologies from 0.11 - 0.21 microns. For purposes of this Section 8, an "S8
Product" means any product designed, developed, produced, and sold (or offered
for sale) by or for Simtek which is reasonably capable of being developed or
produced using the S8 Process.
8.3 Right of First Refusal. During the term of this Agreement, Simtek will
offer Cypress the first right of refusal to develop and produce any Simtek
Product on a technology of 100nm or below ("Offer"). Notwithstanding the
foregoing, in addition to the other rights and remedies available to Simtek
under this Agreement, and without excusing Cypress from any commitment or
obligation under this Agreement, Simtek will be excused from its obligations
under this Section 8.3, and the provisions of this Section 8.3 will be of no
force and effect on Simtek, if Cypress fails to: (a) provide Simtek with a
written proposal for the development and production of such Simtek Products to
Simtek within 90 days of Simtek's Offer to Cypress; or (b) the Parties fail
after negotiating in good faith to complete a definitive written agreement (or
amendment to this Agreement) regarding the development and production of such
Simtek Products within 180 days of Simtek's Offer to Cypress.
8.4 Exceptions. In addition to the other rights and remedies available to
the Parties under this Agreement, and without excusing the Parties from any
commitment or obligation under this Agreement, the Parties will be excused from
their obligations under this Section 8, and the provisions of Sections 8.1, 8.2
and 8.3 will be of no force and effect on the Parties, if: (a) either Party
issues a notice of non-renewal under Section 13.1; or (b) either Party issues a
notice of termination under Section 13.2(c). If at any time during the term of
this Agreement, Simtek reasonably believes that Cypress has not performed its
manufacturing obligations under this Agreement pursuant to reasonable
manufacturing standards (e.g., Cypress cannot or does not accept any 3
consecutive Orders issued by Simtek or any 2 consecutive Orders in any 3 month
period, for any reason other than those stated in Section 4.2(a) or (b), or
Cypress cannot or does not fulfill any 3 consecutive Orders issued by Simtek or
any 2 consecutive Orders in any 3 month period, for any reason), at the
reasonable request of Simtek, the Council will meet with senior management from
Cypress and Simtek to determine whether Cypress has failed to meet reasonable
manufacturing standards and to excuse Simtek from its obligations under this
Section 8.
9 GRANT OF RIGHTS.
9.1 License to Cypress.
(a) Grant of License. Subject to the terms and conditions of this
Agreement, Simtek hereby grants to Cypress and its Affiliates a nonexclusive,
nontransferable (except as set forth herein), non-sublicensable, limited license
to the Simtek Technology solely to the extent necessary for Cypress to produce
Simtek Products subject to Orders placed by Simtek under this Agreement and to
deliver those Simtek Products to Simtek under the terms of this Agreement.
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(b) Restrictions. Cypress acknowledges that the Simtek Products and
their structure, organization, and design constitute valuable trade secrets of
Simtek. Except as expressly permitted herein, Cypress will not, and will not
permit any third party, to: (a) modify, adapt, alter, translate, or create
derivative works of or from the Simtek Products or Simtek Technology; (b) merge
the Simtek Products or Simtek Technology with other technology; (c) sublicense,
distribute, sell, allow access to, lease, rent, loan, or otherwise transfer the
Simtek Products or Simtek Technology to any third party; (d) reverse engineer,
decompile, disassemble, or otherwise attempt to derive the method of operation
or design for or other proprietary information or trade secrets from the Simtek
Products or Simtek Technology; or (e) otherwise utilize the Simtek Products or
Simtek Technology.
10. OWNERSHIP.
10.1 Simtek Property. Simtek owns all right, title and interest in and to
the Simtek Products, (including without limitation, all circuits within the
Simtek Products and the specific circuit architectures), the Simtek Technology,
and any Developments related thereto, including without limitation, all
Intellectual Property Rights therein and related thereto (the "Simtek
Property").
10.2 S8 Process and S8 Technology. Cypress owns all right, title and
interest in and to the S8 Process and the related S8 Technology, and any
Developments related thereto, including without limitation, all Intellectual
Property Rights therein and related thereto (the "Cypress Property"). Except for
Simtek's rights in and to the Simtek Property, Simtek agrees to assign and does
hereby assign to Cypress its right, title and interest in and to the Cypress
Property. For the avoidance of doubt, nothing in this Section 10.2 will entitle
Cypress to any right in or to any Simtek Property or Simtek Intellectual
Property.
10.3 No Further Rights to Cypress. Simtek retains exclusive ownership in
and to the Simtek Property. Except for the limited license granted in Section
9.1: (a) all right, title, and interest in and to the Simtek Property and Simtek
Intellectual Property are reserved by Simtek; (b) no license, right, or interest
in or to any Simtek Property or Simtek Intellectual Property Right is granted
under this Agreement; and (c) Cypress will not use any Simtek Property or Simtek
Intellectual Property Rights unless Cypress and Simtek may agree to that use in
a separate written agreement between the parties relating to the use of the
Simtek Property or Simtek Intellectual Property Rights in exchange for value.
10.4 No Further Rights to Simtek. Cypress retains exclusive ownership in
and to the Cypress Property. All right, title, and interest in and to the
Cypress Property and Cypress Intellectual Property are reserved by Cypress. No
license, right, or interest in or to any Cypress Property or Cypress
Intellectual Property Right is granted under this Agreement. Simtek will not use
any Cypress Property or Cypress Intellectual Property Rights unless Cypress and
Simtek may agree to that use in a separate written agreement between the parties
relating to the use of the Cypress Property or Cypress Intellectual Property
Rights in exchange for value.
11. FEES, EXPENSES AND TAXES.
11.1 Fees. In consideration of the obligations undertaken by each Party
under this Agreement, each Party will pay to the other Party the fees ("Fees")
set forth in Exhibit 11. The Fee Schedule set forth in Exhibit 11 may be revised
from time to time during the term of this Agreement by mutual written agreement
of the Parties. The Fees shall be paid first from the Deposit (as defined in
section 21) and then from Simtek's assets and cash flows.
11.2 Expenses. Except as set forth in Exhibit 11, all costs and expenses
relating to the obligations of either Party will be borne by the Party incurring
such expenses.
11.3 Payment. Cypress will invoice Simtek for all Fees due under this
Agreement. Unless otherwise stated herein, Simtek will pay all undisputed Fees
within 30 days of receipt of the invoice for such Fees. No Fees will be invoiced
by Cypress unless and until the event giving rise to such Fees set forth in
Exhibit 11 takes place. Each invoice will include information sufficient for
Simtek to determine the nature of the Fee and amount due. All payments shall be
made in U.S. dollars. In addition to the other rights and remedies available to
Cypress if Simtek fails to pay any undisputed fees under this Agreement, Cypress
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may charge interest at a rate of 18% per year or the maximum rate permitted by
applicable law, whichever is less, on any such outstanding undisputed fees.
11.4 Disputed Payments. If Simtek has a good faith dispute regarding any
Fee invoiced by Cypress, Simtek may withhold payment of the particular disputed
Fees. Simtek will notify Cypress if it disputes any Fees hereunder within 30
days after receipt of the invoice for such disputed Fees, and will set forth its
reasons for such dispute in reasonable detail. All disputes under this Section
11.4 will be resolved under the terms of this Agreement.
11.5 Fee Adjustment. If during the term of the Agreement the Fees set forth
in Exhibit 11 for any Simtek Product being produced under (or subject to the
terms of) this Agreement become commercially unreasonable when compared with
available prices for the production of products having a similar form, fit and
function at similar quantities, Cypress and Simtek will mutually adjust the
applicable Fees so that the Fees are commercially reasonable in comparison to
products having a similar form, fit and function at similar quantities.
11.6 Taxes. Unless otherwise agreed to by the Parties in an Order, the
Parties' respective responsibilities for taxes arising under or in connection
with this Agreement will be as follows:
(a) Each Party will be responsible for any personal property taxes on
property it owns or leases, for franchise and privilege taxes on its business,
and for taxes based on its net income or gross receipts.
(b) Cypress will be responsible for any sales, use, excise,
value-added, services, consumption, and other taxes, customs and duties assessed
or otherwise payable by Cypress on any goods or services that are used or
consumed by Cypress in producing and delivering the Simtek Products where the
tax is imposed on Cypress' acquisition or use of such goods or services and the
amount of tax is measured by Cypress' costs in acquiring such goods or services.
(c) Simtek will be responsible for any sales, use, excise, value-added,
services, consumption, or other tax, customs and duties assessed on any
particular Simtek Product purchased by Simtek hereunder.
The Parties agree to cooperate with each other to enable each to more accurately
determine its own tax liability and to minimize such liability to the extent
legally permissible. Cypress' invoices issued to Simtek will separately state
the amounts of any taxes paid by Cypress.
12. RECORDS, INSPECTION.
12.1 Records. For at least 2
years after the year to which they pertain, but for not less than 1 year
following the termination or expiration of this Agreement, each Party will
maintain at its principal place of business complete and accurate records with
respect to its activities pursuant to this Agreement, including all data
reasonably required for verification of such Party's compliance with the terms
of this Agreement and payment of Fees owed by Simtek under this Agreement.
12.2 Inspections. Simtek shall have the right to have an inspection and
audit of all relevant accounting and sales books and records of Cypress by an
independent auditor at Simtek's cost and expense. Unless otherwise agreed to in
writing, such inspection and audit shall be conducted during Cypress' regular
business hours at Cypress' regular business offices and in such a manner as not
to interfere with Cypress' normal business activities. Such independent auditor
shall sign a customary non-disclosure agreement in form and substance
satisfactory to Cypress and shall disclose to Simtek only that information that
is necessary to verify that Cypress is in compliance with this Agreement. Such
inspection and audit shall require at least 30 days advance written notice and
shall be held no more frequently than once per calendar year. If such inspection
and audit reveals that Cypress has materially breached the terms of this
Agreement in a manner that would give rise to a right of termination hereunder
had such material breach been detected and reported, or that Cypress has
overbilled Simtek for the amounts actually owed hereunder by 5% or more for the
period audited, Cypress shall have the right to cure such breach or
"overbilling" within 60 days after being provided with written notice thereof.
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If the inspection and audit reveals a material breach or "overbilling" as stated
above, Cypress will reimburse Simtek for all reasonable costs and expenses
incurred by Simtek in connection with such inspection and audit. In addition,
Cypress will promptly pay to Simtek any amounts shown by any such inspection and
audit to be owing plus interest at a rate of 18% per year or the maximum rate
permitted by applicable law, whichever is less.
13. TERM AND TERMINATION.
13.1 Term. The term of this Agreement will begin upon the Effective Date
and, unless earlier terminated as provided in this Agreement, will expire 7
years thereafter. This Agreement will automatically renew for successive 2 year
terms unless either Party provides written notice to the other Party of its
intent not to renew at least 2 years prior to the expiration of the then-current
term.
13.2 Termination.
(a) By Either Party For Cause. Either Party may terminate this
Agreement if the other Party breaches any material provision of this Agreement
and does not cure such breach within 60 days after being provided with written
notice thereof, or, in the event that such breach is not reasonably capable of
cure with 60 days, does not provide the other Party with a written Action Plan
for curing such breach, including a reasonable deadline for curing such breach,
and take reasonable steps to implement such Action Plan within such reasonable
deadline.
(b) By Either Party For Financial Reasons. Either Party may terminate
this Agreement by notice to the other Party if the other Party: (i) becomes
insolvent; (ii) fails to pay its debts or perform its obligations in the
ordinary course of business as they mature; (iii) admits in writing its
insolvency or inability to pay its debts or perform its obligations as they
mature; or (iv) makes an assignment for the benefit of creditors.
(c) By Either Party at Will. At any time after the 5 year anniversary
of the Effective Date of this Agreement, either Party may, for any reason or no
reason, terminate this Agreement by providing the other Party with written
notice 2 years in advance of such termination.
13.3 Effect of Termination. Upon termination or expiration of this
Agreement for any reason: (a) any amounts owed by either Party to the other
Party under this Agreement before such termination or expiration will be
immediately due and payable; (b) all license rights granted in this Agreement
will immediately cease to exist; (c) each Party agrees to return to the other
Party all physical embodiments (including, but not limited to, drafts, notes,
sketches, documents, drawings, and samples) of the Confidential Information of
the other Party; and (d) Sections 1, 10, 11, 12, 13.3, 14.3, 15.3, 16, 17, 18,
21, 23 and 24 will survive such expiration or termination of this Agreement for
any reason. Upon termination of this Agreement for any reason, the Deposit shall
be distributed in accordance with the Security Agreement as provided in Section
21. If Simtek terminates this Agreement pursuant to Section 13.2(a), 13.2(b) or
24.5, the Warrant (as defined in that certain Share Purchase Agreement, of even
date herewith, by and between Cypress and Simtek (the "Share Purchase
Agreement")) shall be immediately terminated, become null and void and be of no
further force or effect.
4. REPRESENTATIONS AND WARRANTIES.
14.1 Warranties by Both Parties. Each Party represents and warrants that:
(a) it has full power and authority to enter into and perform this
Agreement, and the person signing this Agreement on such Party's behalf has been
duly authorized and empowered to enter into this Agreement; and
(b) it will at all times comply with all applicable laws and regulation
and refrain from any unethical conduct or any other conduct that tends to damage
the reputation of the other Party or its products or services in producing and
distributing Simtek Products.
14.2 Warranties by Cypress. Cypress warrants that:
(a) it is the owner or has the right to license all of its Intellectual
Property Rights necessary that relate to the S8 Process; and
8
all Simtek Products delivered under this Agreement will comply with Simtek's
applicable specifications for such Simtek Product and Cypress' standard warranty
as set forth in Exhibit 14.2 attached hereto.
14.3 DISCLAIMER OF OTHER WARRANTIES. THE EXPRESS WARRANTIES IN THIS SECTION
14 ARE IN LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY,
REGARDING THIS AGREEMENT, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND
NON-INFRINGEMENT OF THIRD-PARTY RIGHTS.
15. INDEMNIFICATION.
15.1 Indemnification by Cypress. Cypress will indemnify, defend and hold
harmless Simtek and its Affiliates, and Simtek's and its Affiliates' respective
officers, directors, employees, agents, contractors, successors and assigns (the
"Simtek Indemnified Parties"), from any and all Losses arising from, in
connection with, or based on allegations, claims, suits, or proceedings of any
of the following:
(a) third party claims arising out of Cypress' performance under this
Agreement, including breach of this Agreement;
(b) third party claims arising out of Cypress' failure to observe or
perform any duties or obligations to third parties, including its
subcontractors;
(c) Cypress' breach of its obligations with respect to Simtek
Confidential Information; or
(d) as provided in Section 16.4.
15.2 Indemnification by Simtek. Simtek will indemnify, defend and hold
harmless Cypress, its Affiliates, its customers and Cypress', its Affiliates'
respective officers, directors, employees, agents, successors and assigns (the
"Cypress Indemnified Parties"), from any and all Losses arising from, in
connection with, or based on allegations, claims, suits, or proceedings of any
of the following:
(a) third party claims arising out of Simtek's performance under this
Agreement, including breach of this Agreement;
(b) third party claims arising out of Simtek's failure to observe or
perform any duties or obligations to third parties, including its
subcontractors;
(c) Simtek's breach of its obligations with respect to Cypress
Confidential Information; or
(d) as provided in Section 16.2.
15.3 Intellectual Property Infringement.
(a) Cypress will indemnify, defend and hold harmless the Simtek
Indemnified Parties from any and all Losses arising from, in connection with, or
based on allegations, claims, suits, or proceedings brought against Simtek that
the S8 Process or S8 Technology infringes or misappropriates any Intellectual
Property Right of any third party. If the respective S8 Process or S8 Technology
becomes, or in Cypress' opinion is likely to become, the subject of an
infringement claim, then Cypress may, at its option and expense, either: (a)
procure for Simtek the right to continue exercising the rights in question; or
(b) replace or modify the allegedly or potentially infringing S8 Process or S8
Technology so that such S8 Process or S8 Technology becomes non-infringing.
(b) Simtek will indemnify, defend and hold harmless the Cypress
Indemnified Parties from any and all Losses arising from, in connection with, or
based on allegations, claims, suits, or proceedings brought against Cypress that
the Simtek Technology infringes or misappropriates any Intellectual Property
Right of any third party. If the respective Simtek Technology becomes, or in
Simtek's opinion is likely to become, the subject of an infringement claim, then
Simtek may, at its option and expense, either: (a) procure for Cypress the right
to continue exercising the rights in question; (b) replace or modify the
allegedly or potentially infringing Simtek Technology so that such Simtek
9
Technology becomes non-infringing; or (c) cancel all orders for Simtek Products
where the affected Simtek Technology would be used by Cypress to produce such
Simtek Products.
15.4 Indemnification Procedures. The indemnity obligation of the Parties
under Sections 15, 16.2 and 16.4 are contingent upon the following conditions:
(a) the party seeking indemnification must promptly notify the other party in
writing of the claim giving rise to indemnification; (b) the indemnifying party
will have sole control over the defense and settlement of the indemnified claim
(provided that the indemnified party will have the right to participate in such
action, at its own expense, using counsel of its choice and that the
indemnifying party may not enter into any settlement that would impose any
non-monetary obligation on the indemnified party without first obtaining the
consent of the indemnified party); and (c) the indemnified party will provide
the indemnifying party with reasonable assistance in the defense of the
indemnified claim at the expense of the indemnifying party.
16. PERSONNEL.
16.1 Simtek Personnel. Simtek acknowledges that all of the responsibilities
and duties of the employer of all employees, contractors and agents
("Personnel") of Simtek visiting or otherwise working at Cypress' facilities
with respect to such persons' compliance with Simtek's obligations under this
Agreement are those of Simtek, and covenants and agrees that Simtek itself will
assume responsibility for such persons' compliance as stated in this Agreement.
Without limiting the generality of the foregoing, Simtek shall itself impose on
each of the Simtek Personnel all of such persons' obligations hereunder, by
contract or otherwise, and otherwise ensure that the principal duty of each of
the Simtek Personnel shall be to Simtek, notwithstanding the location of such
employee's place of work and the constraints imposed there.
16.2 Indemnification by Simtek. Simtek will indemnify, defend and hold
harmless the Cypress Indemnified Parties from any and all Losses arising from,
in connection with, or based on allegations, claims, suits, or proceedings of
any of the following: (i) that any such Simtek Personnel is an employee of
Cypress (such Losses including without limitation any employee benefit that any
such person shall be so claimed or determined to be entitled to from Cypress
after such a claim or determination that such person is an employee of Cypress),
(ii) based upon any grossly negligent or intentionally wrongful act or grossly
negligent or intentionally wrongful omission of any Simtek Personnel, or (iii)
based upon any breach by any Simtek Personnel of any obligation of that person
to Simtek imposed by this Agreement.
16.3 Cypress Personnel. Cypress acknowledges that all of the
responsibilities and duties of the employer of all of the Cypress Personnel
visiting or otherwise working at Cypress' or Simtek's facilities with respect to
such persons' compliance with Cypress' obligations under this Agreement are
those of Cypress, and covenants and agrees that Cypress itself will assume
responsibility for such persons' compliance as stated above. Without limiting
the generality of the foregoing, Cypress shall itself impose on each of the
Cypress Personnel all of such persons' obligations hereunder, by contract or
otherwise, and otherwise ensure that the principal duty of each of the Cypress
Personnel shall be to Cypress, notwithstanding the location of such employee's
place of work and the constraints imposed there.
16.4 Indemnification by Cypress. Cypress will indemnify, defend and hold
harmless the Simtek Indemnified Parties arising from, in connection with, or
based on allegations, claims, suits, or proceedings of any of the following: (i)
that any such Cypress Personnel is an employee of Simtek (such Losses including
without limitation any employee benefit that any such person shall be so claimed
or determined to be entitled to from Simtek after such a claim or determination
that such person is an employee of Simtek), (ii) based upon any grossly
negligent or intentionally wrongful act or grossly negligent or intentionally
wrongful omission of any Cypress Personnel, or (iii) based upon any breach by
any Cypress Personnel of any obligation of that person to Cypress imposed by
this Agreement.
16.5 Non-Solicitation. Each Party agrees not to solicit or hire the other
Party's Personnel during the term of this Agreement except by mutual consent;
10
provided, however, that nothing contained herein shall prevent either Party from
hiring such Personnel in response to a general hiring program conducted in the
ordinary course of business not specifically directed to such Personnel or
Personnel who approach the Party on an unsolicited basis.
17. LIMITATION OF LIABILITY. EXCEPT FOR EACH PARTY'S INDEMNIFICATION OBLIGATIONS
UNDER SECTION 15, 16.2 OR 16.4 OR A BREACH OF SECTIONS 9, 10, AND 18, AND
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT: (1) IN NO EVENT WILL
EITHER PARTY'S TOTAL AGGREGATE LIABILITY TO THE OTHER ARISING FROM OR RELATING
TO THIS AGREEMENT EXCEED THE AMOUNT OF FEES PAID TO CYPRESS BY SIMTEK UNDER THIS
AGREEMENT DURING THE PREVIOUS 12 MONTH PERIOD PRECEDING THE EVENTS GIVING RISE
TO SUCH LIABILITY, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT
OR OTHERWISE (IT BEING UNDERSTOOD THAT EACH PARTY'S LIABILITY MAY BE FURTHER
LIMITED BY OTHER PROVISIONS OF THIS AGREEMENT); AND (2) NEITHER PARTY WILL BE
LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE,
EXEMPLARY OR SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION LOST DATA,
INFORMATION OR MATERIALS, LOST PROFITS OR REVENUE, BUSINESS INTERRUPTION,
DOWNTIME OR UNAVAILABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. EACH PARTY ACKNOWLEDGES THAT THE FEES SET FORTH IN
THIS AGREEMENT REFLECT THE ALLOCATION OF RISK SET FORTH IN THIS AGREEMENT AND
THAT THE OTHER PARTY WOULD NOT ENTER INTO THIS AGREEMENT WITHOUT THESE
LIMITATIONS ON ITS LIABILITY, AND EACH PARTY AGREES THAT THESE LIMITATIONS WILL
APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
THE FOREGOING LIMITATIONS OF LIABILITY ARE INDEPENDENT OF ANY EXCLUSIVE REMEDIES
FOR BREACH OF WARRANTY SET FORTH IN THIS AGREEMENT.
18. CONFIDENTIALITY. This Agreement is made subject to, and all Confidential
Information of the other Party obtained by either Party under this Agreement
will be governed by, the terms set forth in Exhibit 18.
19. INSURANCE. Each Party shall maintain and carry throughout the term of this
Agreement liability insurance which includes but is not limited to employer's
liability, xxxxxxx'x compensation, general liability, public liability, property
damage liability, product liability, completed operations liability and
contractual liability in mutually agreed amounts but in no event less than
minimum statutory requirements, if any. Each Party will, if requested by the
other, furnish certificates of insurance indicating the foregoing coverage.
20. EXPORT. Cypress acknowledges that the export, import, and use of certain
hardware, software, and technical data provided hereunder is regulated by the
United States and other governments. Cypress will be responsible for performance
of all duties and obligations of the importer and exporter of record for all
deliveries and transfers hereunder (including by electronic means), and shall
otherwise be responsible for compliance with all applicable laws, regulations,
tariffs, duties, and fees, including the U.S. Export Administration Act, the
regulations implemented thereunder by the U.S. Department of Commerce, and any
other applicable import and export laws or regulations of the U.S. or any other
applicable nation, and obtaining any necessary export licenses and clearances
thereunder. Cypress represents and warrants that it is not subject to any
government order suspending, revoking or denying export or import privileges.
Cypress will not export or re-export any personal computer software, system,
part, technical data or sub-elements under this Agreement, directly or
indirectly, to any destinations prohibited by the U.S. Government, including
without limitation, to any country or other party listed on any list of
prohibited or restricted countries or parties maintained by the U.S. Treasury
Department or other applicable branch of the U.S. Government. The term
"technical data" in this context, means such data as is defined as technical
data by applicable U.S. Government export regulations.
11
21. DEPOSIT. Pursuant to the Escrow Agreement, of even date herewith, by and
between the Parties (the "Security Agreement"), Simtek has deposited $3,000,000
(the "Deposit") to an escrow account to be used for payments by Simtek to
Cypress upon the successful completion of each of the Milestones and in
accordance with the Quarterly PE/TE/Qualification/Failure Analysis schedule set
forth in Section 3 of Exhibit 11 in accordance with the terms of this Agreement.
The terms and conditions of the Deposit are provided in the Security Agreement.
22. FORCE MAJEURE. Neither Party shall be in default under this Agreement nor
any delay or failure to perform hereunder due to causes beyond its control and
without its fault or negligence, including but not limited to acts of God, acts
of any government in its sovereign or contractual capacity, strikes, fires,
floods, riots, terrorist acts or threats, wars or embargoes; provided, however,
that prompt written notice is given to the other Party describing such cause and
the affected Party will resume performance as soon as possible.
23. DISPUTE RESOLUTION. The Parties will in good faith attempt to resolve
amicably all disputes, controversies, or claims arising out of or related to
this Agreement, including without limitation, the breach, termination,
performance, invalidity or interpretation thereof (each, a "Dispute") in
accordance with the procedures in this Section 23.
23.1 Initial Resolution Procedures.
(a) Within 5 business days after either Party provides notice to the
other Party of a Dispute, the Project Manager for each Party will consider the
Dispute in person or by telephone and will attempt in good faith to resolve the
Dispute for a period of 10 business days.
(b) If the Dispute is not resolved, as agreed by the Parties in
writing, within such period, the Parties will escalate the Dispute to the
Council who will consider the Dispute at a mutually agreeable location. The
Council will attempt in good faith to resolve the Dispute for a period of 10
business days.
(c) In the case of Disputes of the Council, or other Disputes not
previously resolved as set forth above, the Parties will escalate the resolution
of the Dispute to a Senior Vice President or similar level executive of each
Party who will consider the Dispute in person at a location agreed to by the
Parties. The parties shall attempt in good faith to resolve the Dispute for a
period of 10 business days.
23.2 Final Resolution Procedures. If the Dispute is not resolved, as agreed
by the Parties in writing, after following the initial resolution procedures set
forth in Section 23.1, either Party may bring suit regarding such Dispute in the
applicable state and federal courts having jurisdiction over such Dispute, as
permitted by law.
23.3 Injunctive Relief. Notwithstanding Sections 23.1 and 23.2 above, each
Party shall be entitled to seek equitable and injunctive relief in such court to
prevent or stop a violation of the terms and conditions contained herein. Either
Party's breach of this Agreement or violation of the other Party's Intellectual
Property Rights may cause irreparable injury to such other Party for which such
other Party may not have an adequate remedy at law. Each Party shall have the
right to seek immediate relief from the court for breach of any obligation of
confidentiality, infringement, misappropriation or misuse of any Intellectual
Property Right, or any other claim where interim relief from the court is sought
to prevent serious and irreparable injury to one of the Parties.
24. ADDITIONAL PROVISIONS.
24.1 Status of Parties. Nothing contained in this Agreement will be deemed
or construed as creating a joint venture or partnership between the Parties.
Neither Party will have the power to control the activities and operations of
the other and their status is, and at all times will continue to be, that of
independent contractors with respect to each other. Neither Party will hold
itself out as having any authority or relationship with the other in
12
contravention of this Section 24.1, and neither Party will act on behalf of the
other Party or enter into any contracts, warranty, or representation as to any
other matter on the behalf of the other Party.
24.2 Effect of Waiver. No waiver whether express or implied, of any breach
of any term, condition, or obligation of this Agreement will be construed as a
waiver of any subsequent breach of that term, condition, or obligation, or any
other term, condition, or obligation of this Agreement of the same or different
nature.
24.3 Notices. Any notice or other communication required or permitted under
this Agreement will be given in writing and will be sent by facsimile or
commercially recognized express courier to the address specified below or to any
other address that may be designated by prior notice. Any notice or other
communication delivered by facsimile will be deemed to have been received the
day it is sent and must be confirmed by a copy sent by express courier. Any
notice or other communication sent by commercially recognized courier will be
deemed to have been received on the 3rd business day after delivery to the
courier.
Notices to be given to Cypress will be addressed to:
Cypress Semiconductor Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Senior Vice President, Memory Products Division
With a copy to:
Cypress Semiconductor Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
If given to Simtek, it will be addressed to:
Simtek Corporation
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
Either Party hereto may at any time, by 30 days written notice to the other,
designate any other person or address in place of those provided in this Section
24.3.
24.4 Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement will continue in full force and effect without said
provision; provided that no such severability will be effective if it materially
changes the economic benefit of this Agreement to any Party.
24.5 Successors and Assigns. This Agreement will inure to the benefit of
the permitted successors, or assigns of the Parties. The rights and licenses
granted by this Agreement will be binding on any permitted successor to
ownership or control of the Simtek Technology. Neither Party will have any right
to assign its rights under this Agreement without the sole written consent of
the other Party, which consent will not be unreasonably withheld; provided,
however, that if a Change of Control of a Party occurs, such Party will be able
to assign this Agreement as a whole to the purchasing, acquiring or resulting
entity without the prior written consent of the other Party, unless the other
Party reasonably believes such assignment would materially adversely effect the
performance of the obligations owed to it, or such other Party's rights and
licenses, under this Agreement. The Parties agree that such a material adverse
13
effect would occur if the purchasing, acquiring or resulting entity is: (i) a
competitor of the other Party or (ii) a person with whom the other Party has an
actual conflict of interest at the time of such Change of Control.
24.6 Governing Law. This Agreement will be governed and construed in all
respects in accordance with the laws of the State of California as applied to
agreements made and performed in California by residents of the State of
California.
24.7 Facsimile/E-Mail Signatures. Any signature page delivered by a fax
machine or by e-mail will be binding to the same extent as an original signature
page, with regard to any agreement subject to the terms hereof or any amendment
thereto. Any Party who delivers such a facsimile signature page or scanned
signature page agrees to later deliver an original counterpart to any Party
which requests it.
24.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Parties,
each of which will be enforceable against the Parties actually executing such
counterparts, and all of which together will constitute one instrument.
[Signature page follows]
14
The Parties hereto have caused this Agreement to be duly executed as of the
Effective Date.
FOR SIMTEK FOR CYPRESS
Simtek Corporation Cypress Semiconductor Corporation
Signed: /S/ XXXXXXX XXXXXXXX Signed: /S/ A.R. XXXXXXX
------------------------ ---------------------------
By: Xxxxxxx Xxxxxxxx By: A.R. Xxxxxxx
Title: CEO/President Title: GM & SR VP, Memory Products
Date: May 4, 2005 Date: May 4, 2005
- Signature Page -
EXHIBIT 1.1
DEFINITIONS
"Action Plan" means a corrective plan developed by the Council in response to a
particular failure, defect or breach that provides a detailed description of the
corrective actions to be implemented to correct the particular failure, defect
or breach.
"Affiliate" means any business entity: (a) which owns or controls, directly or
indirectly, 50% or more of the voting rights with respect to the election of
directors or managers, or which has practical control directly or indirectly, of
the Party; (b) of which 50% or more of the voting rights with respect to the
election of directors or managers is owned or controlled, directly or
indirectly, by, or which is under the practical control directly or indirectly
of, the Party; or (c) of which 50% or more of the total voting rights with
respect to the election of directors or managers is owned or controlled,
directly or indirectly, by, or which is under the practical control directly or
indirectly of, any corporation, limited liability company, partnership or other
business enterprise described by subsections (a) or (b) above.
"Change of Control" means a transaction under which: (a) a Party consolidates or
merges with or into a third party, if the shareholders of the Party's
outstanding capital stock entitled to vote generally in elections of directors
before such transaction do not own, directly or indirectly, immediately
following such transaction, at least 50% of the combined voting power of the
outstanding voting interests of the entity resulting from such transaction; or
(b) an entity purchases or otherwise acquires all, or substantially all, of the
assets of that segment of either Party's business relating to the subject matter
of this Agreement. A "Change of Control" specifically excludes a bona fide
equity financing transaction or series of transactions as long as at least a
majority of the Party's board of directors immediately following the transaction
were directors of such Party immediately prior to such transaction.
"Confidential Information" means any information regarding the business,
finances or technology of either Party, including technical, marketing,
financial, employee, and planning information, and any other information that a
reasonable person should have known, under the circumstances, was confidential
or proprietary. The Simtek Products and Simtek Technology (including
specifications and architecture thereto) is Simtek Confidential Information
whether or not so marked. The S8 Process and S8 Technology (including
specifications and architecture thereto) is Cypress Confidential Information
whether or not so marked.
"Development" means any modification, enhancement, improvement, or derivative,
including, without limitation, any port, correction, addition, extension,
upgrade, compilation, abridgment, or other form in which a work is transformed
or adapted.
"Intellectual Property Rights" means all intellectual property rights as may
exist now or hereafter come into existence regardless of whether such rights
arise under the laws of the United States or any other state, country or
jurisdiction, including, without limitation: (a) all patent rights and all
right, title and interest in and to all letters patent and applications for
letters patent, and all other government-issued or -granted indicia of invention
ownership, including any reissue, division, term extensions, continuation or
continuation-in-part applications; (b) all copyrights and all other literary
property and author (moral) rights, and all right, title and interest in and to
all copyrights, copyright registrations, certificates of copyrights and
copyrighted interests; (c) all trademarks, trade names and service marks, and
all rights, title and interest in and to all applications, certifications and
registrations therefor; (d) all mask work rights, mask work applications, and
mask work registrations; (e) all rights, title and interest in and to all trade
secrets and trade secret rights; (f) all licenses or license rights with respect
to the foregoing; and (g) all other analogous rights, such as database rights.
"Losses" means all losses, costs, expenses, liabilities and damages reasonably
incurred resulting from or relating to under any settlement, litigation or final
judgment, and all related reasonable costs and expenses, including reasonable
legal fees, fines, interest and penalties.
"Qual" means achievement of the QUAL Milestone as set forth in Exhibit 2.1.
"Simtek Product" means a silicon wafer containing integrated circuits having a
design dictated by Simtek and any materials (including masks), information, test
programs, or procedures relating thereto.
"Simtek Technology" means all Intellectual Property Rights, whether present or
future, relating to the Simtek Products.
"Stacked FLASH" means the technology related to nvSRAM with multiple
non-volatile memory cells for each SRAM memory cell as further described in U.S.
Patent No. 6,414,873.
"Statement of Work" means a mutually agreed to written description of the work
to be performed by each Party.
"S8 Process" means the process used to produce (fabricate) Simtek Products under
this Agreement based on the Cypress S8 0.13-micron SONOS technology.
"S8 Technology" means all Intellectual Property Rights, whether present or
future, relating to the S8 Process.
"Weekly Starts" means the maximum number of wafer starts per week set forth in
Exhibit 4.2.
2
EXHIBIT 2.1
S8 PROCESS DEVELOPMENT
1. Simtek Resources.
1.1 S8 Development. Simtek will make available 2 engineers for up to 40
hours per week to assist Cypress in the completion of the Milestones.
1.2 Memory Compiler Development. Simtek will make available up to 2
engineers for up to 40 hours per week to assist Cypress in the development of a
memory compiler and will continue to make the engineers available until the
completion of the development of the memory compiler as agreed to by the
Parties.
1.3 Additional Simtek Resources. Any additional engineering resources
required or utilized by Cypress will be made available by Simtek at Simtek's
then-current professional services rates.
2. Milestones and Schedule. Cypress will accomplish the following milestones in
accordance with the schedule set forth below:
MILESTONE DESCRIPTION ESTIMATED COMPLETION DATE
--------- ----------- -------------------------
ETP Technology Plan
PR2:SPECS Project Review 2
TCPR3 Test Chip Tapeout Ready
TC10 Test Chip 10 Samples
PR3:TO Product Tapeout
ES10 FAB4 Engineering Samples
ES100 Full Data Sheet Samples
PR4 Cost / Yield / Conditional Qual
QUAL Full Qual
EXHIBIT 4.2
ORDERING
Wafer Starts Allocated
Calendar Year to Simtek/Week
------------- ----------------------
2006 200
2007 250
2008 300
2009 350
2010 400
EXHIBIT 8.1
SIMTEK CATALOG
Memory Architecture Density Options I/O Options
-------------------- ------- ------- -----------
nvSRAM 4Mbit Real Time Clock (RTC) X8, x16, serial
1 Mbit RTC X8, x16, serial
256 Kbit RTC X8, x16, serial
64Kbit RTC X8, x16, serial
nvSRAM + Stacked FLASH 1 Mbit + Density TBD RTC X8, x16, serial
256 Kbit + Density TBD RTC X8, x16, serial
64 Kbit + Density TBD RTC X8, x16, serial
EXHIBIT 11
FEE SCHEDULE
1. Simtek Product Development and Set-Up Fees. Following acceptance of the lead
Order of any Simtek Product received under this Agreement, Simtek will reimburse
Cypress for 100% of the out of pocket costs incurred in the production of all
mask sets necessary for the production of Simtek Products under this Agreement
based on actual invoices paid by Cypress for mask sets used in the production of
such Simtek Product.
2. S8 Process Development Fees. Provided that Cypress has completed the
applicable Milestones set forth on Exhibit 2.1, in accordance with the terms and
conditions of this Agreement, Simtek will pay Cypress the Fees set forth below:
MILESTONE SIMTEK PAYMENT ADDITIONAL SIMTEK PAYMENT TOTAL PAYMENT
--------- -------------- ------------------------- -------------
ETP $257,400.00 $0.00 $257,400.00
PR2:SPECS $257,400.00 $0.00 $257,400.00
TCPR3 $257,400.00 $0.00 $257,400.00
TC10 $257,400.00 $0.00 $257,400.00
PR3:TO $257,400.00 $0.00 $257,400.00
ES10 FAB4 $386,100.00 $91,500.00 $477,600.00
ES100 $257,400.00 $91,500.00 $348,900.00
PR4 $257,400.00 $91,500.00 $348,900.00
QUAL $386,100.00 $91,500.00 $477,600.00
TOTAL: $2,574,000.00 $ 366,000.00 $2,940,000.00
3. Quarterly PE/TE/Qualification/Failure Analysis Fees. Subject to the terms and
conditions of this Agreement, Simtek will pay Cypress the Fees set forth below
on or before the end of each calendar quarter set forth below:
QUARTER SIMTEK PAYMENT
------- -------------
Q2 2005 $48,800.00
Q3 2005 $48,800.00
Q4 2005 $48,800.00
Q1 2006 $48,800.00
Q2 2006 $48,800.00
4. Simtek Product Production Fees. Simtek will pay Cypress as follows for Simtek
Products provided by Cypress, for which Simtek issues an Acceptance as set forth
in the Agreement:
Wafer Price
-----------
Calendar Year Price/Wafer*
------------- ------------
2006 $ 2000.00
2007 $ 1950.00
2008 $1900.00
2009 $ 1850.00
2010 $1800.00
* The prices set forth in this table are subject to adjustment as set forth
in Section 11.5 of the Agreement.
After Process Qualification, the Parties will agree on a production yield target
for all wafers produced by Cypress for the Simtek Products, and Simtek will not
accept any wafers not meeting the production yield target mutually agreed upon
by the Parties.
EXHIBIT 14.2
WARRANTY FOR SIMTEK PRODUCTS
STANDARD CYPRESS PRODUCT WARRANTY
---------------------------------
1. LIMITED WARRANTY.
(a) Semiconductor Products: Seller warrants that the Semiconductor products
to be delivered hereunder if properly used and serviced, will conform to
applicable specifications for such Semiconductor products agreed to by the
Council and will be free from defects in material and workmanship for one (1)
year following the date of shipment. (b) Systems or Board Level: Seller warrants
that the systems or board level products to be delivered hereunder if properly
used and serviced, will perform to Seller's published specifications and will be
free from defects in material and workmanship for ninety (90) days following the
date of shipment.
2. EXCLUSIONS OF WARRANTIES. THE WARRANTIES CONTAINED IN THIS AGREEMENT ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, ANY IMPLIED WARRANTY
OF FITNESS FOR A PARTICULAR PURPOSE, OR ANY IMPLIED WARRANTY ARISING BY STATUTE
OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR USAGE OF TRADE. If any
product furnished by Seller fails-to conform to the above warranty, Seller's
sole and exclusive liability shall be, at Seller's option, to repair, replace or
credit Buyer's account with an amount equal to the price paid for any such
product returned by Buyer during the warranty period, provided that; (a) Buyer
promptly notifies Seller in writing that such product failed to conform and
furnishes a detailed explanation of any alleged deficiency; (b) such product is
returned to Seller's plant at Buyer's risk and expense, (c) Seller is satisfied
that claimed deficiencies actually exist and were not caused by accident,
misuse, neglect, alteration, improper installation, repair or improper testing.
If such product fails to conform, Seller will reimburse Buyer for the
transportation charges. Seller shall have a reasonable time to make repairs, to
replace products or to credit Buyer's account.
EXHIBIT 18
CONFIDENTIALITY
1. Protection of Confidential Information. Each Party (the "Disclosing Party")
may from time to time during the term of this Agreement disclose to the other
Party (the "Receiving Party") certain Confidential Information. The Receiving
Party will not use any Confidential Information of the Disclosing Party for any
purpose not expressly permitted by this Agreement, and will disclose the
Confidential Information of the Disclosing Party only to the employees or
contractors of the Receiving Party who have a need to know such Confidential
Information for purposes of this Agreement and who are under a duty of
confidentiality no less restrictive than the Receiving Party's duty hereunder.
The Receiving Party will protect the Disclosing Party's Confidential Information
from unauthorized use, access, or disclosure in the same manner as the Receiving
Party protects its own confidential or proprietary information of a similar
nature and with no less than reasonable care.
2. Exceptions. The Receiving Party's obligations with respect to any
Confidential Information of the Disclosing Party will terminate if such
information: (1) was already lawfully known to the Receiving Party at the time
of disclosure by the Disclosing Party; (2) is disclosed to the Receiving Party
by a third party who had the right to make such disclosure without any
confidentiality restrictions; (3) is, or through no fault of the Receiving Party
has become, generally available to the public; or (4) is proven by the Receiving
Party (who shall bear the burden of proof) to have been independently developed
by the Receiving Party without use of the Disclosing Party's Confidential
Information. In addition, the Receiving Party will be allowed to disclose
Confidential Information of the Disclosing Party to the extent that such
disclosure is: (a) approved in advance in writing by the Disclosing Party; (b)
necessary for the Receiving Party to enforce its rights under this Agreement in
connection with a legal proceeding; or (c) required by law or by the order or a
court of similar judicial or administrative body, provided that the Receiving
Party notifies the Disclosing Party in advance of such required disclosure
promptly and in writing and cooperates with the Disclosing Party, at the
Disclosing Party's reasonable request and expense, in any lawful action to
contest or limit the scope of such required disclosure.
3. Mask Sets. In particular, and without limiting any obligation of Cypress,
Cypress will protect all mask sets relating to the Simtek Products, whether
transferred to Cypress or otherwise obtained by Cypress, as Confidential
Information of Simtek in accordance with this Exhibit 18.
4. Return of Confidential Information. The Receiving Party will return to the
Disclosing Party or destroy all Confidential Information of the Disclosing Party
in the Receiving Party's possession or control and permanently erase all
electronic copies of such Confidential Information promptly upon the request of
the Disclosing Party or at the expiration or termination of this Agreement or
when no longer needed in connection with its performance under this Agreement,
whichever comes first. Without limiting any obligation of Cypress, when any mask
set is no longer usable by Cypress for the purposes of the Agreement, Cypress
will return to Simtek or, at Simtek's request, destroy the mask set, and will
permanently erase all electronic copies of such mask set and the information
relating thereto. At the Disclosing Party's request, the Receiving Party will
certify in writing signed by an officer of the Receiving Party that it has fully
complied with the foregoing obligations.
5. Confidentiality of Agreement. Neither Party will disclose any terms of this
Agreement to anyone other than its attorneys, accountants, and other
professional advisors except: (1) as required by law; or (2) pursuant to a
mutually agreeable press release; or (3) in connection with a proposed merger,
financing, or sale of such Party's business (provided that any third party to
whom the terms of this Agreement are to be disclosed signs a confidentiality
agreement reasonably satisfactory to the other Party to this Agreement).
6. Independent Development. The terms of confidentiality under this Exhibit 18
will not be construed to limit either Party's right to develop independently or
acquire products, concepts, systems, processes or techniques without use of the
other Party's Confidential Information. The Disclosing Party acknowledges that
the Receiving Party may develop information internally, or may receive
information from other parties, that is similar to the Confidential Information
of the Disclosing Party. Accordingly, nothing in this Exhibit 18 or in the
Agreement will prohibit the Receiving Party from developing or having developed
for it products, concepts, systems, processes or techniques that are similar to
or compete with the products, concepts, systems, processes or techniques
contemplated by or embodied in the Confidential Information provided that the
Receiving Party does not violate any of its obligations under this Exhibit 18 in
connection with such development.
