EXHIBIT 10.20
DEVELOPMENT, PRODUCTION, SUPPLY AND LICENSE
AGREEMENT
PREAMBLE
This Development, Production, Supply, License and Escrow Agreement
("Agreement") is entered as of August 11, 1997 ("Effective Date"), by and
between Advanced Telecommunications Modules Limited, an English corporation
with offices at Mount Pleasant House, 2 Xxxxx Xxxxxxxx, Xxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxx XX0 0XX ("ATML") and Symbios Incorporated, a Delaware
corporation with offices at 0000 Xxxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx, 00000,
XXX ("Symbios"), each individually known as a "Party" and collectively as the
"Parties".
RECITALS
A. Symbios is experienced in the design, development, production and
supply of integrated circuits, and owns (or licenses from third parties with
rights to sub-license) certain intellectual property rights in functional blocks
that it licenses to its customers.
B. ATML is experienced in the design of ASICs which it sells (in
conjunction with licensing its ATM software stacks) to customers engaged in
developing solutions for the xDSL, CATV and loop refreshment markets.
C. ATML desires to engage Symbios to develop, produce and supply the
Helium ASIC incorporating certain Symbios functional blocks, and to make clear
the ownership of contributed intellectual property and resulting licensing
arrangements whereby the Helium ASIC shall be sold exclusively by ATML.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, ATML and Symbios mutually agree as
follows:
ARTICLE 1. DEFINITIONS
1.1 "Affiliate" of a Party shall mean (a) any company owned or controlled
by such Party to the extent of at least fifty percent (50%) of its issued voting
capital and any other company so owned or controlled (directly or indirectly) by
any such company or the owner of any such company, or (b) any partnership, joint
venture or other entity directly or indirectly controlled by, controlling, or
under common control of such Party, to the extent of fifty percent (50%) or more
of its voting power (or otherwise having power to control its general
activities), but in each case only for so long as such ownership or control
shall continue.
1.2 "ATML Technology" shall mean the proprietary and confidential
technical information and data related to the Helium ASIC furnished to Symbios
by or on behalf of ATML, including but not limited to those specifications,
designs, software. techniques, processes and other technology identified in
Exhibit A as being owned by ATML.
1.3 "Class 1 Defect" shall mean a defect in a Helium ASIC: (a) such that
the Helium ASIC fails to meet Specifications; or (b) that causes loss or
corruption of data continuously or in certain isolated instances, and for which
no workaround exists, or where a workaround exists such workaround provides
significant loss of performance; or (c) that causes loss of sales to a
significant portion of the customer and prospect base because of such defect.
1.4 "Class 2 Defect" shall mean a defect in a Helium ASIC: (a) such that
the Helium ASIC marginally fails to meet Specifications; or (b) that does not
cause significant loss or corruption of data, and for which a workaround
exists, which workaround provides negligible loss of performance; or (c) that
causes negligible impact on sales to the customer and prospect base because of
such defect.
1.5 "Delivery Date" shall mean a date for which delivery of Helium ASICs
has been properly committed to by Symbios.
1.6 "First Commercial Sale" shall mean the first commercial sale by ATML
or its Affiliates of a version of the Helium ASIC supplied by Symbios which
conforms to the Specifications.
1.7 "Helium ASIC" shall mean each version of the Helium ASIC supplied
hereunder to ATML by Symbios as described in Exhibit B hereto, as such exhibit
may be amended from time to time by mutual written agreement of the Parties.
1.8 "Pre-Production Samples" shall mean Helium ASICs supplied to ATML by
Symbios which Symbios has tested to the then current test program, for use by
ATML in preliminary testing or qualification. Pre-Production Samples are parts
which are ordered prior to receipt by Symbios of ATML's Prototype Approval.
1.9 "Production Version Chip" shall mean a version of the Helium ASIC, to
be developed under this Agreement, that conforms to the Specifications in all
material respects except that it may exhibit no more than two (2) Class 2
Defects as determined by ATML and is based on a Prototype Sample or Pre-
Production Sample for which Prototype Approval has been given by ATML.
1.10 "Prototype Approval" shall mean signature approval by ATML indicating
they have completed testing of any Prototype Samples or Pre-Production Samples
and have approved that version as the Production Version Chip.
1.11 "Prototype Delivery Date(s)" shall mean the dates specified in
Exhibit C for delivery of the required Prototype Samples and Pre-Production
Samples.
1.12 "Prototype Samples" shall mean Helium ASICs which are expedited
through the fabrication process to provide early samples of each version of the
Helium ASIC to ATML in order for ATML to evaluate the version for production
release and Prototype Approval.
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1.13 "Specifications" shall mean: (i) the descriptions of the technical
requirements, component blocks, features, functionality, performance criteria,
operating conditions, interfaces, data transfer, processing parameters and
protocols applicable to the Helium ASIC, as such descriptions are set forth in
the attached Exhibit B, from the beginning of the development until receipt by
Symbios of the netlist, (ii) the logical netlist, from the date of receipt by
Symbios of such netlist until post layout approval by ATML, (iii) the validated
physical layout, from post layout approval by ATML until signoff by ATML of the
completed test program and (iv) the mutually agreed upon test program, after
signoff by ATML of such test program.
1.14 "Symbios Technology"- Except that which is described as ATML
Technology, all technical and non-technical information, data, or software
related to design and manufacture of integrated circuits and the Helium ASIC,
including without limitation, the specifications, designs, software, techniques,
processes and other technology identified in Exhibit B as being owned by
Symbios, and
1.14.1 the layout, simulation, fabrication, packaging and testing of the
Helium ASIC,
1.14.2 the behavior level model of the Helium ASIC the net list,
1.14.3 the methods, processes, techniques, apparatus and software used or
useful in the layout, simulation, fabrication, packaging and testing of the
Helium ASIC
1.14.4 the design, fabrication and test tools used to produce Prototype
Samples and the Helium ASIC, including, without limitation, pattern generation
tapes, masks, cells and cell interiors, and all trade secrets, copyrights, mask
works, patents and other intellectual property rights therein.
ARTICLE 2. DESIGN AND DEVELOPMENT OBLIGATIONS
2.1 Development Obligations
2.1.1 The Parties shall jointly design and develop the Helium ASIC with
each of them contributing intellectual property, technology, tools and resources
as described in Exhibit A such that the Helium ASIC conforms to the
Specifications. Both Parties recognize that time is of the essence in the
performance of this activity and each Party shall apply reasonable efforts
required to meet commitments of the Development Schedule in Exhibit C. Changes
to Exhibits A, B and C shall be made only by written agreement between the
Parties.
2.1.2 The Parties shall jointly agree that the design of the Helium ASIC
is completed by signature acceptance of both the logical net list (Verilog RTL)
and the validated physical layout (place and route with SDF), following which
these files will supersede the logical definitions provided within the
Specifications.
2.1.3 As further described in Exhibit C, Symbios shall promptly provide
library design kits and other components to ATML to enable ATML to integrate
them with its ATM circuit design. ATML shall design the Helium ASIC using
Verilog and synthesize the design using
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Synopsys to RTL level taking account of post layout back annotation to ensure
correct functionality. Symbios shall be responsible for layout incorporating its
ARM cores, memory compilers, Universal Serial Bus and Ethernet interface and
Symbios shall produce a GDS II tape together with a test program for use in
production. Symbios shall use reasonable efforts to layout the Helium ASIC to
have the minimum die size. ATML shall maintain and Symbios shall assist in
developing the data sheet for the device. Symbios shall provide timing
information for the macrocells provided.
2.1.4 ATML shall pay Symbios for its non recurring engineering ("NRE")
costs associated with developing the Helium ASIC as set forth in Exhibit D. The
Parties agree that such payment incorporates any and all fees Symbios charges
for use of its intellectual property and technical contribution to the design
and development of the Helium ASIC as described in Exhibits A, B and C.
2.1.5 Symbios shall provide ATML with reasonable technical assistance and
information required for ATML to be able to publish an industry standard data
sheet to its customers for the Helium ASIC based upon the Specifications in
Exhibit B.
2.2 Prototype Samples and Evaluation
2.2.1 Symbios shall fabricate a lot of twelve (12) wafers of the Helium
ASIC developed as above of which six (6) wafers shall be finished for the
provision of Prototype Samples of the Helium ASIC. The other 6 wafers shall be
held pre-metal to provide for rapid correction and re-submission of the new
Prototype Samples in the event that a defect is identified which can be
corrected by a metal layer change. Symbios shall use reasonable efforts to
adjust its fabrication processes such that within the lots of six (6) wafers
there shall exist Helium ASICs representative of the extremes and nominal
characteristics to be anticipated in subsequent Helium ASIC production that
complies with the Specifications.
2.2.2 Symbios shall use reasonable efforts to deliver a quantity of twenty
five (25) Prototype Samples of the Helium ASIC to ATML no later than the
scheduled date for Prototype Samples shown in Exhibit C. Such Prototype Samples
shall be as fully tested as possible by Symbios prior to delivery within the
time allotted in Exhibit C. Ceramic packaging may be used for such Prototype
Samples.
2.2.3 ATML shall test and validate the Prototype Samples and provide
written Prototype Approval or rejection, if applicable, to Symbios within the
time allotted in Exhibit C.
2.3 Corrections. In the event that the Prototype Samples are found to
either not conform to the Specifications or to exhibit one or more Class 1
Defect or to exhibit more than two Class 2 Defects then ATML shall specify in
detail the reason that the Prototypes do not meet the Specifications. The Party
responsible for that part of the design identified as being incorrect shall use
reasonable efforts to correct the design, remove the defect and repeat those
phases of the development process necessary to re-supply new Prototype Samples.
The other Party shall provide reasonable assistance to the Party responsible for
correcting such defect. Each Party shall be responsible for its own costs in
this event; however, if the defect is caused by ATML
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then Symbios shall be entitled to claim from ATML the re-spin charges for
fabricating the new Prototype Samples per the prices in Exhibit D. From the date
of receipt by Symbios of ATML's Prototype Approval, Symbios shall warrant the
Helium ASICs it produces for ATML according to Article 10 herein.
2.4 Pre-Production Supplies. If ATML places an order for Pre-Production
Samples and signs the appropriate Pre-Production Agreement, Symbios shall
manufacture, package and test the Helium ASIC as available from the twelve (12)
wafers fabricated per 2.2.1 above in order to make available pre-production
quantities of the Helium ASIC for initial application by ATML and its customers.
Availability of pre-production quantities of the Helium ASIC shall be as
described in Exhibit C and units shall be charged to ATML at the prices set
forth in Exhibit D. At the time the order is placed Symbios will inform ATML of
its option to have pre-production Helium ASICs packaged off-shore or at the
Symbios manufacturing facility in which case prices will vary as set forth in
Exhibit D.
ARTICLE 3. OWNERSHIP; LICENSE
3.1 Ownership.
3.1.1 The Parties agree that, as between the Parties, Symbios shall own all
right, title and interest (including all patent rights, copyrights, trade secret
rights, mask works rights and all other intellectual property rights throughout
the world (collectively, "Proprietary Rights")) in all Symbios Technology
including but not limited to those items listed in Exhibit A.
3.1.2 The Parties agree that, as between the Parties, ATML shall own all
Proprietary Rights in all ATML Technology including but not limited to those
items listed in Exhibit A.
3.2 Grant of License.
3.2.1 License from Symbios to ATML. Without payment of additional
consideration, Symbios grants to ATML an irrevocable, non-exclusive, non-
cancelable, non-sub-licensable, perpetual, royalty free, personal, worldwide
license under its Proprietary Rights in the Symbios Technology solely for the
purpose of exclusive sale and distribution by ATML of the Helium ASIC.
3.2.2 License from ATML to Symbios. Without payment of additional
consideration, ATML grants to Symbios an irrevocable, non-exclusive, non-
cancelable, non-sub-licensable, perpetual, royalty free, personal, worldwide
license under its Proprietary Rights in the ATML Technology solely for the
purpose of making, having made or using the Helium ASIC for its exclusive supply
to ATML.
3.3 Third Party Rights. Symbios represents and warrants that it possesses
licenses sufficient to allow it to incorporate intellectual property and
technology originated by Sand Microelectronics Incorporated, Sican
Microelectronics Corp, Advanced RISC Machines Limited and any other entity from
which it procures such things within its contribution to the design and
manufacture of the Helium ASIC such that ATML may purchase, market and sell the
Helium
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ASIC world-wide and free of royalty other than as already included within the
NRE and Helium ASIC pricing stated in Exhibit D. Symbios agrees to maintain such
licenses in effect, at Symbios' sole expense, such that it will apply to all
Helium ASICs that Symbios sells to ATML under this Agreement.
3.4 Trademarks. Neither Party shall at any time use any trade name,
trademark, service xxxx, logo, company name or other designation of the other
Party without obtaining such Party's prior written consent (given or withheld in
its sole discretion), and then only as expressly and unambiguously permitted in
such consent.
ARTICLE 4. SALE AND PURCHASE OF HELIUM ASICS
4.1 Sale and Purchase. Symbios agrees to use reasonable efforts to
manufacture and sell exclusively to ATML such quantities of the Helium ASIC as
ATML may order in accordance herewith. It is understood that Symbios shall have
the right in connection with supply hereunder to contract with respect to
manufacture of the Helium ASIC either at its parent company, Hyundai Electronics
Incorporated, Ichon, Korea fabrication facility or another foundry qualified by
Symbios and approved by ATML as Symbios deems advisable, provided, however, that
Symbios shall remain fully responsible hereunder.
4.2 Quantity; Forecasts. Commencing on the Effective Date, ATML shall
provide Symbios with non-binding four (4) month rolling delivery forecast on the
twentieth (20th) day of each month.
Notwithstanding any forecast provided by ATML, ATML shall have the right to
order an unlimited quantity of Helium ASICs in accordance with this Article 4.
4.3 Orders; Delivery; Incidental Charges. All Orders for Helium ASICs
shall be submitted by ATML or its designated representative to Symbios in
writing at least twelve (12) weeks prior to ATML's requested Delivery Date.
Orders for Helium ASICs shall be in multiples of the Minimum Order Quantity
specified in Exhibit D. Symbios shall use reasonable efforts to deliver the
Helium ASICs within five (5) business days of the applicable Delivery Dates.
4.4 Delivery.
4.4.1 All Helium ASICs delivered to ATML shall be F.C.A. (Incoterms 1992)
at the origin designated on ATML's purchase order. Symbios shall use reasonable
efforts to deliver Helium ASICs via air freight within five (5) days of the
applicable Delivery Dates. Any customs or duties relating to such
transportation and delivery shall be at ATML's expense. All shipping charges,
insurance premiums, and other expenses relating to such transportation and
delivery shall be at Symbios' expense. Symbios shall notify ATML of each
delivery promptly and provide shipment details of air-way xxxx and flight number
where appropriate.
4.4.2 Product Marking. Symbios shall xxxx each Helium ASIC with Advanced
RISC Machines Limited's logo, ATML's name, logo, the model number, and the
revision level, if any. The Helium ASICs shall not be marked with Symbios'
name, nor shall they be marked with any
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Symbios xxxx or model number. The Helium ASICs shall be marked with a date code,
a lot number and Symbios' 10 digit part number.
4.4.3 The Helium ASICs shall be packed and shipped in accordance with the
specifications set forth in Exhibit E hereto.
4.5 Rescheduling. ATML may freely reschedule the delivery of Helium
ASICs, at no charge to ATML, for any delivery due ninety (90) days or more from
the date of the reschedule. Rescheduling of deliveries due in less than 90 days
but more than 30 days time is limited to the end of the month following the
month in which delivery was originally due. Deliveries due within 30 days may
be rescheduled to the end of the month in which they were originally due.
4.6 Cancellation ATML may cancel its orders at any time in which case
Symbios will be entitled to invoice for the costs of its work in progress as
follows:
No work in progress 0% cancellation charge
Wafer fabrication prior to poly photography 40% cancellation charge
Prior to interconnect 55% cancellation charge
Sorted die (md. die bank if any) 60% cancellation charge
Packaged product 10004 cancellation charge
4.7 Failure to Deliver. ATML may cancel any order not delivered by
Symbios within thirty (30) days of the Delivery Date, whether or not due to
force majeure, and shall in addition have all other rights and remedies
available hereunder, at law or in equity.
4.8 Sorted Die Orders. ATML may at its option order and Symbios shall
supply up to 25% of ATML's annualized requirements in the form of sorted die
which has not been assembled into a packaged product subject to a review of the
associated quality and warranty restrictions.
4.9 Die Bank.
4.9.1 Symbios shall maintain a segregated die bank inventory on receipt of
instruction to do so by a separate die-bank purchase order from ATML. All
production shall be cycled through this die bank thus ensuring that the material
in the die bank is freshly manufactured. On receipt of further instruction from
ATML to provide packaged product from this die bank the lead time from order to
delivery shall be three (3) weeks. ATML shall order, pay for and solely own the
die bank at a cost of 75% of the pricing for product quoted in Exhibit D.
4.9.2 If the die bank is held at inventory for more than 90 days with no
backlog or orders for product, or this Agreement is terminated, Symbios will
notify ATML of the quantity of product in the die bank. At that time, ATML will
either:
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(i) issue a purchase order to Symbios for 100% of the unit selling
price to have the inventory assembled to finished product and shipped to ATML,
or
(ii) pay Symbios the value of the die bank, as determined by the die
bank purchase order.
4.9.3 In the event that ATML chooses 4.9.2 (ii) above, Symbios may destroy
the material in the die bank thirty days after receiving payment from ATML.
4.9.4 If ATML fails to respond to Symbios' notice or fails to select one
of the above options within 30 days of the date of such notice, option described
in 4.9.2 (ii) above will be deemed to have been selected by the ATML.
4.9.5 Die Bank Early Life Charges. Prior to shipment of the first 900,000
units of the Production Version Chip or January 1, 1999 whichever event occurs
first, up to 50,000 die-bank units may be ordered at 50% of the finished product
cost. Units beyond 50,000 will be charged at 75% as above. The cancellation
schedule shown in section 4.6 applies to the die bank material as well.
ARTICLE 5. QUALITY CONTROL
5.1 ISO 9000 Quality Control System. Symbios shall at all times during
the term of this Agreement maintain a quality control system that meets the
requirements of ISO 9000 and shall at all times take such additional measures as
are necessary to maintain a quality control system designed to identify, correct
and prevent quality deficiencies in the Helium ASICs. Notwithstanding the
foregoing, failure to maintain an 150 9000 Quality Control System does not
constitute material breach of this Agreement.
5.2 Pre-shipment Testing. Prior to delivery, Symbios shall test all
Helium ASICs and shall not ship any Helium ASIC which fails to meet the
Specifications. Quarterly following Prototype Approval by ATML, Symbios will
send ATML a copy of our CBR (Customer Based Requirements Report) which includes
information regarding assembly, fabrication, semiconductor metrics, reliability
and test.
5.3 Inspection. ATML may at its option send its quality control
personnel to Symbios manufacturing facilities to observe the manufacturing and
testing of Helium ASICs, provided such inspections shall be properly noticed to
Symbios and shall be reasonable in scope and frequency.
5.4 Rejection of Helium ASICs in Case of Nonconformity
5.4.1 ATML may reject any portion of any shipment of Helium ASICs which
does not meet the Specifications. In order to reject a shipment, ATML must:
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(i) give notice to Symbios of ATML's intent to reject the
shipment within sixty (60) days of receipt together with a written indication of
the reasons for such possible rejection, and
(ii) as promptly as reasonably possible thereafter provide Symbios
with notice of final rejection and the full basis therefor.
Before returning any product to Symbios, ATML must contact Symbios for a
Returned Material Authorization number and other appropriate instructions. ATML
may then return the product to Symbios according to those instructions.
After notice of intent to reject is given, ATML shall cooperate with
Symbios in determining whether rejection is necessary or justified. If no such
notice of intent to reject is timely received, ATML shall be deemed to have
accepted such delivery of Helium ASICs.
5.4.2 Whether or not Symbios accepts ATML's basis for rejection, promptly
on receipt of a notice of rejection, Symbios shall use reasonable efforts, at
ATML's request, to provide replacement Helium ASICs which shall be purchased by
ATML as provided in this Agreement.
5.4.3 Upon confirmation by Symbios of defective product, Symbios will
instruct ATML to either return the rejected batch or destroy such batch promptly
and provide Symbios with certification of such destruction.
ARTICLE 6. PRICE AND PAYMENTS
6.1 Price. Pricing for non-recurring engineering charges, re-spins, pre-
production and production Helium ASICs is set forth in Exhibit D hereto.
6.2 Method of Payment. Subject to approval from Symbios' accounts
receivable department, all payments due hereunder to Symbios shall be paid in
United States dollars not later than thirty (30) days following the date of the
applicable invoice. In the absence of such approval, payments to Symbios will
be by a Standby Letter of Credit ("LOC"). All bank fees associated with the LOC
are the responsibility of ATM L.
6.3 Pricing Reviews. Price reduction shall be reviewed on each
anniversary of the date of first supply of production parts taking into
consideration volumes shipped during the previous twelve (12) months and cost
improvements over and above those forecast at the time of making the price
quotation shown in Exhibit D.
6.4 Interim Pricing Review. Within fifteen (15) days notice from ATML to
Symbios, Symbios agrees to meet with ATML and to enter into good faith
discussions regarding any proposed adjustment to pricing, provided such requests
are reasonable in frequency.
ARTICLE .7. CONFIDENTIALITY
7.1 Confidential Information means all information reasonably related to
information exchanged pursuant to this Agreement in the form of trade secrets
which one party ("Discloser")
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first discloses to the other party ("Recipient") during the term of this
Agreement: (i) in documents or other tangible materials clearly marked
CONFIDENTIAL or the like, or (ii) orally or in any other intangible form, if at
the time of first disclosure the Discloser tells the Recipient that the
information is confidential, and within 10 calendar days after that first
disclosure the Discloser delivers to the Recipient documents or other tangible
materials clearly marked CONFIDENTIAL or the like which disclose or describe
that information.
"Confidential Information" does not include information which: (a) is or
becomes publicly known or readily ascertainable by the public through no
wrongful act of the Recipient; (b) is independently developed by or for the
Recipient; (c) the Recipient receives from a third party, if the Recipient does
not know of any restrictions on the disclosure of that information; or (d) the
Discloser discloses to a third party without similar restrictions on disclosure.
7.2 Sole Obligations. For a period of 36 months from the date of
disclosure of the Confidential Information, the Recipient will use reasonable
efforts to prevent the disclosure of Confidential Information to any other
person, unless disclosure is required by law. Symbios may disclose ATML's
Confidential Information to Symbios/7 /affiliates (Symbios' parent company and
the companies its parent directly or indirectly owns or controls) and
subcontractors, if the Confidential Information so disclosed remains subject to
this Article 7 and Symbios remains liable for any unauthorized disclosures by
its affiliates. All materials containing Confidential Information delivered by
the Discloser under this Agreement are and will remain the Discloser's property;
at the Discloser's written request, the Recipient must promptly return to the
Discloser all those materials and any copies, except a single archival copy.
Symbios will use reasonable efforts to prevent the disclosure of Confidential
Information contained in masks and test programs under this Section 7.2 for a
period extending from the date of disclosure until 36 months following the
termination of this Agreement.
7.3 Product Development and Marketing. Subject to the intellectual
property rights of each Party, this Article 7 does not: (i) restrict either
party from developing new products, improving existing products, or marketing
any new, improved, or existing products; or (ii) commit either party to disclose
any particular information, or to develop, make, use, buy, sell, or otherwise
dispose of any existing or future product, or to favor or recommend any product
or service of the other party. To be binding, any such restriction or
commitment must be in writing and signed by both parties.
7.4 Other Information Not Confidential Unless Otherwise Agreed; No Patent
or Copyright Licenses Implied. This Article 7 does not enlarge, diminish, or
affect the rights and obligations that either party may have or come to have
under any other written agreement signed by both parties, or with respect to any
patent or copyright of either party. Except as this Article 7 or any such other
written agreement specifically provides, there are no restrictions on the use or
disclosure of any information exchanged at any time between the parties, in the
past or in the future, except restrictions that either party may independently
have a right to assert under the patent or copyright laws.
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7.5 Warranty Disclaimer; Limitation on Actions and Applicable Law.
Neither party makes any representations or warranties of any kind with respect
to its respective Confidential Information, which is provided to Recipient "AS
IS," and neither party shall have any liability of any kind to Recipient
resulting from Recipient's receipt or use of the Confidential Information.
ARTICLE 8. SECURITY OF SUPPLY; ALTERNATE ARRANGEMENTS
8.1 Last Time Buy. In the event that Symbios determines the production
of the Helium ASIC is to be discontinued then Symbios shall provide ATML notice
of such intent ("Notice"), and shall offer ATML a last time buy opportunity. The
Notice will contain the date for the last shipment of product ("EOL Date"),
which shall be no less than 12 months after the date of such Notice. At ATML's
request and with the appropriate purchase order, Symbios will hold in inventory
a quantity of product no greater than 20% of the shipments made during the
twelve (12) month period immediately proceeding the date of the Notice. Symbios
will hold this inventory for up to one year past the EOL Date at a cost to ATML
of 120% of the current finished unit price.
8.2 Second Source Fabrication Facility. At ATML's request Symbios will
attempt to setup production for the device at a second source facility for a
charge to ATML of sixty thousand dollars ($60,000). If, at the time of such
request, cumulative deliveries of the Helium ASIC have exceeded one million
units the second source shall be set up by Symbios at no cost to ATML. For the
avoidance of doubt, ATML cannot place orders directly with this Symbios second
source.
ARTICLE 9. TERMINATION, RIGHTS AND OBLIGATIONS UPON TERMINATION
9.1 Term. Unless terminated by either Party pursuant to the other
provisions of this Article 9, this Agreement shall continue in effect until six
(6) years from the date of First Commercial Sale of the first Production Version
Chip supplied hereunder (the "Initial Term"). Thereafter, this Agreement shall
automatically renew for additional one (1) year renewal terms unless either
Party gives written notice to the other Party of its intent not to renew this
Agreement at least one hundred and twenty (120) calendar days prior to the
expiration of the original term or renewal term, as the case may be, of this
Agreement.
9.2 Termination for Default. If either Party materially defaults in the
performance of any material agreement, condition or covenant of this Agreement
and such default or noncompliance shall not have been remedied within ninety
(90) days (or ten (10) days in the case of non-payment) after receipt by the
defaulting Party of a notice thereof from the other Party, the Party not in
default may terminate this Agreement.
9.3 Rights and Obligations on Expiration or Termination. Except to the
extent expressly provided to the contrary, the following provisions shall
survive the termination of this Agreement: all warranty, infringement,
confidentiality, arbitration, and liability obligations and limitations, and
those terms which by their nature are intended to survive, will survive. Any
rights of Symbios to payments accrued through termination as well as obligations
of the Parties
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under firm orders placed prior to termination, the terminating Party may elect
whether obligations under firm orders will remain in effect and except that
Symbios will have no obligation with respect to Delivery Dates more than six (6)
months after termination.
ARTICLE 10. WARRANTY; INDEMNIFICATION; EPIDEMIC FAILURE
10.1 Warranty of Title. Symbios warrants to ATML that ATML shall upon
shipment by Symbios acquire good and clear title to each Helium ASIC, free and
clear of all liens and encumbrances.
10.2 Helium ASIC Warranty. Symbios warrants to ATML and ATML's customers
that each Helium ASIC will, for a period of three (3) years from date it is
shipped by Symbios, have no Class 1 Defects, have no more than two (2) Class 2
Defects, and shall otherwise conform to the Specifications current at time of
shipment during the duration of such three (3) year period.
During the warranty period Symbios, at its sole option, shall either issue
a credit for the purchase price of the defective Helium ASICs or replace any
defective Helium ASIC, provided that the Helium ASIC is returned to Symbios
(which return shall be at Symbios' expense). This warranty shall survive
inspection and payment, provided that ATML promptly notified Symbios of any
defect covered by such warranty. All replaced Helium ASICs become the property
of Symbios. Any replacement Helium ASIC shall be covered by this warranty for
the remainder of the original warranty period or for six (6) months from the
date of shipment of the replaced Helium ASIC by Symbios, whichever is longer.
10.3 Sorted Die Warranty. In the case that deliveries of the Helium ASIC
are made in the form of sorted die then the warranty period in Article 10;2
above is reduced to 30 days from the date of shipment by Symbios.
EXCEPT AS EXPRESSLY STATED HEREIN, NO OTHER WARRANTIES ARE EXPRESSED OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
10.4 Patent. Copyright and Trademark Claims Against the Parties.
10.4.1 "Indemnifying Party" shall mean:
(i) Symbios, with respect to third party claims that the Symbios
Technology used in the development or manufacture of the Helium ASIC infringes a
patent, copyright, trade secret or any other intellectual property right in the
countries of the United States, the European Community, Australia, Brazil,
Canada, Japan and South Korea,
(ii) ATML with respect to third party claims that ATML Technology
used in the development or manufacture of the Helium ASIC infringes a patent,
copyright, trade secret or any other intellectual property right in the
countries of the United States, the European Community, Australia, Brazil,
Canada, Japan and South Korea.
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10.4.2 If a Party to this Agreement (the "Indemnified Party") shall
receive a claim for which the other Party to this Agreement is the Indemnifying
Party, the Indemnified Party will notify the Indemnifying Party promptly in
writing and give the Indemnifying Party all necessary information and assistance
and the exclusive authority to evaluate, defend and settle such claim. The
Indemnifying Party, at its own expense, shall settle or defend against such
claim, and may then at its option:
(i) procure for the Indemnified Party the right to use the
allegedly infringing material or product (if the Indemnified Party would, absent
the claim, have a right to use such material or product under this Agreement),
or
(ii) replace or modify the allegedly infringing material or
products to avoid infringement, provided such replacements shall offer no less
functionality, or
(iii) request the Indemnified Party to halt its distribution and
sale of the allegedly infringing material or product and refund the purchase
price less a reasonable amount of depreciation for any product returned to the
Indemnifying Party, or
(iv) do any combination of the foregoing.
Provided that timely notice has been given by the Indemnified Party, should
any court of competent jurisdiction hold such material or product to be
infringing, the Indemnifying Party shall pay any final judgment against the
Indemnified Party arising from such infringement and, if the use of such
material or product by the Indemnified Party is enjoined, the Indemnifying Party
shall take at its option, one or more of the actions described in (i), (ii) or
(iii) above.
10.4.3 If a Party to this Agreement receives a claim for which it is the
Indemnifying Party, it may, at its own expense and option, replace or modify the
products or materials to avoid infringement.
10.4.4 The indemnity in this Section 10.4 will not apply (i) if the claim
is found to be based upon the manner in which a Helium ASIC is combined together
with other hardware or software components, or (ii) if the claim is found to be
based upon the negligence, recklessness or willful action or inaction of the
Indemnified Party, or (iii) if the Indemnified Party does not comply with the
provisions of this Section 10.4 and such failure materially prejudices the
Indemnifying Xxxxx or (iv) to any infringement occurring after 'the Indemnified
Party has received notice alleging infringement, unless the Indemnifying Party
has given the Indemnified Party written permission to continue the alleged
infringement, or (v) to any settlement entered into in violation of this Section
10.4.
10.4.5 In no event shall a Party to this Agreement be entitled to settle
any claim for which it is the Indemnified Party without the consent of the
Indemnifying Party.
10.4.6 THE FOREGOING IS GIVEN TO EACH PARTY IN LIEU OF ALL WARRANTIES OF
NON-INFRINGEMENT WITH RESPECT TO THE HELIUM ASICS. THE FOREGOING STATES THE SOLE
AND EXCLUSIVE LIABILITY OF THE PARTIES
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FOR INFRINGEMENT OF ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHTS.
10.4.7 The provisions of this Section 10.4 shall survive termination of
this Agreement.
10.5 Epidemic Failure. In the event of an Epidemic Failure (as defined
below) the Parties shall promptly meet to attempt to identify the cause of the
Epidemic Failure and the universe of effected Helium ASICs. Symbios will use
reasonable efforts to assist ATML with the replacement of the Helium ASICs that
are prone to failure. For the purposes of this Agreement "Epidemic Failure"
shall mean any thirty day period in which the failure rate expressed as a
percentage equals or exceeds one percent (1%), such percentage to be calculated
by multiplying one hundred by a fraction the numerator of which is the total
number of Helium ASIC failures in the field due to any one failure mechanism
during such thirty day period and the denominator of which is the total number
of Helium ASICs shipped by Symbios over the three (3) years prior to the last
day of such thirty day period. This provision shall not survive termination of
this Agreement.
ARTICLE 11. LIMITED LIABILITY
11.1 NEITHER PARTY SHALL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY
FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES.
11.2. Except for personal injury caused by Symbios' negligence, Symbios'
cumulative liability under this Agreement will not exceed the aggregate amount
paid to Symbios under this Agreement, even if a term of this Agreement fails of
its essential purpose.
ARTICLE 12. MISCELLANEOUS
12.1 Entire Agreement. This Agreement contains the entire agreement of
the Parties regarding the subject matter hereof and supersedes all prior
agreements, understandings and negotiations regarding the same. This Agreement
may not be changed, modified, amended or supplemented except by a written
instrument signed by both Parties. Furthermore, it is the intention of the
Parties that this Agreement be controlling over additional or different terms of
any order, confirmation, invoice or similar document.
12.2 Assignability. This Agreement may not be assigned by either Xxxxx
without the prior consent of the other Party; provided, however, (a) either
Party may assign this Agreement to any entity which acquires substantially all
of its stock, assets or business, and (b) ATML may assign this Agreement, in
whole or in part, to any Affiliate of ATML.
12.3 Severability. If any provision of this Agreement shall be held
illegal or unenforceable, that provision shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.
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12.4 Use of Party's Name. No right, express or implied, is granted by
this Agreement to either Party to use in any manner the name of the other or any
other trade name or trademark of the other in connection with the performance of
this Agreement.
12.5 Notice and Reports. All notices, consents or approvals required by
this Agreement shall be in writing sent by certified or registered air mail,
postage prepaid or by facsimile or cable (confirmed by such certified or
registered mail) to the Parties at the following addresses or such other
addresses as may be designated in writing by the respective Parties:
12.9.2 ATML and Symbios agree to settle by arbitration any controversy or
claim between them, including without limitation those related to this
Agreement, any order or any product to which this Agreement applies, whether
based on contract, tort, fraud, misrepresentation, or other legal theory. A
single arbitrator will conduct the arbitration in Denver, Colorado, if brought
by ATML and San Francisco, CA if brought by ATML, under the then current rules
and supervision of the American Arbitration Association. ATML and Symbios will
select an arbitrator from a panel of persons knowledgeable in semiconductor
marketing or design or manufacturing, as applicable. The arbitrator will have
the authority to award temporary and permanent injunctive relief, but may not
award punitive or exemplary damages to either party. The decision and award of
the arbitrator will be final and binding and may be entered in any court having
jurisdiction. ATML and Symbios will pay their own attorney's fees associated
with the arbitration, and will pay the other costs and expenses of the
arbitration as the rules of the American Arbitration Association provide.
12.9.3 Neither party may bring any action, regardless of form, related to
this Agreement, any order or any product to which this Agreement applies, more
than one year after the party bringing the action knew or should have known that
the cause of action accrued.
12.9.4 The duty to arbitrate under Section 12.9.2, above extends to any
director, officer, employee, agent, or affiliate making or defending any claim
which would otherwise be arbitrable.
12.10 Captions. Paragraph captions are inserted for convenience only and
in no way are to be construed to define, limit or affect the construction or
interpretation of this Agreement.
12.11 Force Majeure. A Party shall not be liable for nonperformance or
delay in performance (other 'than of obligations regarding confidentiality)
caused by any event reasonably beyond the control of such Party including, but
not limited to wars, hostilities, revolutions riots, civil commotion, national
emergency, strikes, lockouts, unavailability of supplies, epidemics, fire,
flood, earthquake, force of nature, explosion, embargo, or any other Act of God,
or any law, proclamation, regulation, ordinance, or other act or order of any
court, government or governmental agency.
12.12 BASIS OF BARGAIN. EACH PARTY RECOGNIZES AND AGREES THAT THE
WARRANTY DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT ARE
MATERIAL, BARGAINED FOR BASES OF THIS AGREEMENT AND THAT THEY HAVE BEEN TAKEN
INTO ACCOUNT AND REFLECTED IN
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DETERMINING THE CONSIDERATION TO BE GIVEN BY EACH PARTY UNDER THIS AGREEMENT AND
IN THE DECISION BY EACH PARTY TO ENTER INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to be
effective as of the date first written above.
Symbios
By: /s/
Print: Xxxxxxxx X. Xxxxxxx
Title: Vice President Asic and
Peripheral Solutions
ATML
By /s/
Print: Xxxxxxx Xxxxxx
Title: CEO
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