ASIC BUSINESS AGREEMENT
Agreement number: JATWIN05_001
This ASIC Business Agreement is entered into and made effective on [May/10/2005]
(the "Effective Date") between ARISE TECHNOLOGY CO. LTD with its principal
office located at 10F , XX. 00-0, XXXX 0, XXX XXX XXXXX XXXX, XXXXXX, XXXXXX
("Arise") and WINITY TECHNOLOGY INC. , with its principal office located at 0X,
XX. 00, XXXX 000, XXXX-XXXXX XX.,XXX-XX, XXXXXX, XXXXXX , ROC ("Winity"), and
hereinafter the parties may be referred to individually as "Party" and together
as "Parties".
RECITALS
WHEREAS, Winity desires to have a design for an application-specific
integrated circuit, complying with certain Specification as set forth in ASIC
PROPOSAL;
WHEREAS, Winity desires to obtain certain design services from Arise and
Arise agrees to provide certain design services to Winity; and
WHEREAS, Winity desires to have Arise to produce and manufacture the ASIC
Products (as defined below) and Arise agrees to provide certain service of
production and manufacturing to Winity, pursuant to the terms and conditions of
this Agreement.
Now, therefore, the Parties agree as follows:
1 DEFINITIONS
"PROPOSAL" shall mean a proposal issued by either Party to the other Party
related to the purposes outlined in the Recitals clause to this Agreement;
"ASIC SPECIFICATION" shall mean the design specification relating to functional
blocks, performance, testing conditions, and requirements of a specification
described in a Proposal issued by either Party and agreed upon by the Parties in
writing.
DELIVERABLES" shall mean the data manual, application note and all other
documents to or materials be supplied by Arise to Winity generating from Arise's
design service hereof as set forth in proposal.
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"INTELLECTUAL PROPERTY RIGHTS" shall mean the rights, titles and interests,
including any and all patents, copyrights, right to circuit layout, trade
secret, and other intellectual property rights.
"PROPRIETARY INFORMATION" shall mean any and all information (whether oral,
written or in any other tangible or intangible form) owned or held by the
disclosing party ("Disclosing Party") and disclosed or made known to the
receiving party ("Receiving Party"), relating to the Product, source code,
object code and any kind of software and firmware, inventions, algorithms,
know-how, design, ideas, output, testing procedure, logbook, engineering flow,
and all other business, technical and financial information in connection with
the Disclosing Party which shall include without limitation any and all
information that is marked with "confidential", "proprietary" or similar legend
at the time of disclosure and that may be reasonably understood by the artisan
of the industry concerned to be confidential.
"E/S" shall mean an engineering sample that is experimental in nature and which
is used to verify the functionality, performance, and other feature requirements
of an ASIC;
"SIGNOFF APPROVAL" shall mean Winity' written acknowledgment of successful
completion of the E/S post routing layout simulation and layout verification;
"RISK ORDER " shall mean a Purchase Order issued by Winity before Winity has
approved the E/S . Certain orders that are not logged or processed in accordance
with Arise's standard procedures may be treated as a Risk Order in accordance
with article 3 ;
"MASK WORK" shall mean photo masks and associated design rights in semiconductor
topographies;
"PRODUCT RELEASE SPECIFICATION" shall mean the functional and parametric
Specification for an ASIC that Winity desires to obtain from Arise that has been
mutually agreed upon in writing by the Parties;
"ASIC PRODUCT" shall mean an application-specific integrated circuit designed
and developed by Arise fully complying with the ASIC Specification or Winity's
engineering change orders(ECO).
"SYSTEM PRODUCT" shall mean Winity use ASIC Product provided by Arise to
complete a system verification which can be used for mass production . The
system verification contains FPGA verification , firmware verification ,
protocol/HW integration verification, PCB verification, field application
verification. The system can be mobile phone , Digital Still Camera , WLAN,
Portable Media Player, PC, Notebook Computer, Ethernet.
"MASS PRODUCTION PRODUCT" shall mean an ASIC product that has passed all
experimental procedures and has been approved by the Parties as to its
functionality, performance and other features and requirements and is available
for mass production;
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"MASS PRODUCTION PURCHASE ORDER" shall mean a Purchase Order issued for a Mass
Production Product in accordance with article 4 following Signoff Approval for
the relevant E/S;
"PRODUCTION PRODUCT" shall mean a product ordered by Winity and manufactured by
Arise in accordance with the Product Release Specification;
"PURCHASE ORDER" shall mean a purchase order issued by Winity;
"RISK ORDER DEVICE" shall mean an ASIC produced pursuant to a Risk Order;
Unless the context otherwise requires, the singular shall include the plural and
vice versa.
2 PROGRAM DESCRIPTION
E/S MANUFACTURE AND VERIFICATION
2.1 Following post routing layout simulation and layout verification of the
E/S, and at Winity' sole discretion, Winity may issue a Signoff Approval
for the E/S.
2.2 Upon receipt of the Signoff Approval, Arise shall arrange for the E/S to
be fabricated at a wafer foundry provider and deliver to Winity the E/S
in accordance with the agreed delivery schedule set out in the proposal
hereto.
2.3 Unless otherwise provided in proposal hereto, Arise shall test the E/S at
nominal, maximum and minimum Vcc under ambient temperature conditions,
and for functionality at one (1) MHz. The default pattern length of the
test program to estimate Arise's testing shall not exceed one (1) M byte.
Winity shall provide and approve the one (1) MHz test program prior to
Arise commencing testing.
2.4 At its sole discretion and in accordance with its sole requirements,
Winity may countersign a Proposal presented by Arise for the manufacture
of an E/S, and issue to Arise a Purchase Order for the E/S.
2.5 Following the making of a Purchase Order , Winity shall provide to Arise
the relevant design data and other necessary information described in the
Product Release Specification for the E/S manufacture and verification.
2.6 Forthwith upon receipt of the information described in clause 2.2, Arise
shall test and supply to Winity an E/S utilizing test program data to
meet the Product Release Specification.
2.7 The deliverables, schedule, and charges for the E/S are as provided for
in the proposal hereto. If there is to be any change in the future to
such deliverables, schedule, and charges, both Parties shall agree upon
the changes, and the attachment hereto shall be amended accordingly.
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2.8 Winity shall submit to Arise Purchase Orders for additional parts prior
to post routing layout simulation Signoff Approval. Neither Winity nor
ARISE may cancel any Purchase Order for additional parts, unless the
Parties agree otherwise. The preliminary shipping schedule shall be
agreed upon by the Parties in writing at the time of the making of the
E/S Purchase Order and shall be finalized at the time of the Signoff
Approval for the post routing layout simulation.
PRODUCTION PRODUCTS
2.9 Following production of an E/S to which Winity has given Signoff
Approval, the Parties shall agree on the Product Release Specification.
2.10 Winity may at its discretion submit to Arise a Mass Production Purchase
Order for ASICs in accordance with the Product Release Specification.
2.11 Following the making of a Mass Production Purchase Order , Arise shall
manufacture and supply to Winity Production Products in accordance with
the terms of the Mass Production Purchase Order.
2.12 Arise shall submit to Winity Mass Production Products that, unless
otherwise provided for in the proposal hereto, shall be tested at
nominal, maximum and minimum Vcc under ambient temperature conditions and
shall be tested for functionality at 1 (one) MHz frequency. The default
pattern length of the test program to estimate Arise's testing shall not
exceed one (1) M byte. Winity shall approve the test program at one (1)
MHz frequency in accordance with the E/S Signoff Approval and the terms
of the Mass Production Purchase Order.
2.13 The parties acknowledge and agree that the Products are designed and
developed by Arise exclusively for and upon the specific requirements of
Winity, for which significant resources have been contributed by Arise so
that, during the Term,
a. There is no minimum purchase quantities for Winity if Arise is the
only ASIC vendors in mass production.
b. If Winity plan choose second ASIC vendor for mass production, the
collective quantities of the Mass Production Products to be purchased
by Winity from Arise shall not be less than total value of
US$2,000,000 or 1,500,000 PCS unit (either condition reach first)
exclusive of any sales and other taxes, duties and expenses ("Minimum
Purchase Value"). If the total value of Winity's purchases upon the
expiration or termination of this Agreement becomes less than the
Minimum Purchase Value, Winity shall immediately make up and pay the
shortfall upon receipt of an invoice by Arise.
2.14 The parties acknowledge and agree that certain portions of the services
or works of foregoing subparagraph may be performed by one or more
qualified subcontractors as reasonably determined by Arise, and that in
no event shall Arise be held liable for any loss or damages (whether
direct, indirect, consequential, special or incidental, or loss of profit
or opportunity) suffered by Winity due to unavailability of utilities,
raw materials, components or manufacturing or other cause attributable to
such subcontractors; provided that Arise shall assist Winity to acquire
any and all claims and rights against the subcontractors who are liable
for such loss or damages.
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3 RISK ORDERS
3.1 Winity acknowledges and agrees that the purpose of a Risk Order and an
E/S Purchase Order is to verify and test the functionality, ability to
manufacture and performance of ASIC devices.
3.2 Winity accordingly agrees that Arise has no responsibility to yield rate
improvement of a Risk Order Device or an E/S.
3.3 If Arise delivers to Winity a Risk Order Device, Arise offers no
assurance regarding the performance or functionality of the Risk Order
Device .
4 MASS PRODUCTION PURCHASE ORDER
4.1 The Mass Production Purchase Order shall clearly state the product name,
purchase quantity, delivery date, delivery location and total amount of
product required.
4.2 Upon the making of the Mass Production Purchase Order, the Parties shall
agree in writing on an appropriate down payment to be paid by Winity to
Arise and the timing of such payment, and if agreement cannot be reached
in this regard, the Mass Production Purchase Order shall terminate.
4.3 Arise shall manufacture all Products in accordance with consistent
production processes.
5 DELIVERY SCHEDULE
5.1 Winity shall in its sole discretion but in consultation with Arise
determine the period allowed for the development, manufacture and
verification of the Products.
5.2 Following Winity' approval of the Product Release Specification, Arise
shall provide to Winity with an accurate implementation schedule for
delivery of Products, which shall include provisions on rescheduling of
deliveries.
5.3 Arise shall deliver to Winity Products be in accordance with the date(s)
and quantity specified in the applicable Purchase Order.
5.4 If Arise becomes aware of any possible delay or shortfall in delivery
from that stipulated in the Purchase Order Agreement, Arise shall
immediately notify Winity of the possible delay, together with an
explanation of the cause, impact and suggested remedial action, and
shall, at no cost to Winity, take all necessary measures to meet the
scheduled delivery date or to minimize any delay and its impact.
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6 E/S ACCEPTANCE PROCEDURE
6.1 Winity' internal coordinator or inspector shall within fifteen (15) days
following delivery of an E/S perform acceptance testing to determine
whether the E/S conforms to the Product Release Specification and
performs in accordance with the post routing layout simulation results.
Winity shall inform Arise of the results of the E/S testing within
fifteen (15) days of the results becoming available.
6.2 If within the acceptance period or thereafter Winity advises Arise that
the E/S fails to meet the requirements described in Product Release
Specification, and such non-conformity with the Product Release
Specification is caused by Arise or its vendors, Winity shall request
Arise's coordinator either by written notice, or orally and later
confirmed by written notice, that Arise should use its best endeavors to
correct the defect, or to provide to Winity a replacement E/S as soon as
practicable.
6.3 If Arise's examination of such allegedly defective E/S discloses that the
E/S is defective and that the defect is caused by Winity, Arise shall be
entitled to request Winity to pay the cost of Arise's examination.
6.4 Notwithstanding any assistance that Arise may provide to Winity in
preparation of the Product Release Specification, Arise does not warrant
adequacy of the Product Release Specification with respect to Winity'
intended use of the E/S and Arise shall not be responsible for the
circuit performance of the E/S in Winity' application.
7 MASS PRODUCTION PRODUCTS ACCEPTANCE PROCEDURE
7.1 Winity' internal coordinator or inspector shall within thirty (30) days
following delivery of Mass Production Products perform acceptance testing
to determine whether the Products delivered are in accordance with the
standard U.S. NAVY chart 105, single sampling II, and AQL 0.1%. The
product shall be considered non-defective and Winity is not allowed to
reject the product if the above quality acceptance criterion has been
met.
Arise shall consider each Mass Production Product to be accepted by
Winity if there is no written notice from Winity within thirty (30) days
of delivery rejecting such shipment.
7.2 If within the acceptance period or thereafter Winity advises Arise that
the Mass Production Product fails to meet the requirements described in
the Purchase Order Agreement, Winity shall request Arise's coordinator,
either by written notice, or orally and later confirmed by written
notice, that ARISE should use its best endeavors to correct the defect,
or to provide to Winity a replacement Mass Production Product as soon as
practicable.
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If Winity advises Arise by written notice of any defect, Arise shall
undertake failure analysis of the Mass Production Product. Arise shall
replace the Mass Production Product if the defect is attributable to
Arise. If Arise's analysis discloses such defect is not attributable to
Arise, Arise is entitled to claim against Winity for the cost of its
analysis.
8 INTELLECTUAL PROPERTY RIGHTS AND WARRANTIES
8.1 Winity shall be the sole owner of any Intellectual Property developed
solely by employees of Winity.
8.2 Both parties shall apply the patent for join development ASIC product and
retain ownership of ASIC Product design databases, all logic diagrams,
test patterns and other documentation.
8.3 Arise shall retain exclusive title to and all rights in Mask Work,
including the right to register Mask Work under all System Product, and
in the integrated circuit design layouts arising out of the development
work carried out pursuant to this Agreement.
8.4 Arise shall assign a unique part number to Products manufactured for
Winity under this Agreement by any wafer foundry provider, and Arise
shall not accept any Purchase Order from any company other than Winity
for the supply of Products ordered by such unique part number unless
previously authorized in writing by Winity.
8.5 Arise shall, at no additional cost to Winity, maintain wafer Mask Work
unique to the ASIC Products for a period of not less than one (1) year
following Arise's last shipment date of ASIC Products. Arise shall give
to Winity at least sixty (60) days' prior written notice of its intention
to destroy any wafers, Mask Work, Products or other items related to this
Agreement. The Parties reserve the right to negotiate on compensation for
a longer retention and maintenance period.
8.6 Arise shall not sell ASIC Products to third parties without Winity's
prior written authorization. Winity shall not work with any design
service or IP vendors for ASIC Product without Arise's prior written
authorization. This agreement will be terminated immediately if these two
condition occur.
8.7 Each Party represents and warrants that all information and documents
provided to the other Party do not infringe the valid Intellectual
Property rights of any third party. Should infringement of such
Intellectual Property rights occur, the defaulting Party shall fully
cooperate with the other Party in the defense of any claims, and the
defaulting Party shall compensate the other Party for any losses and
damages (including attorney's fees) suffered by the other Party as a
result of such infringement.
9 PAYMENT AND TAX
9.1 Payment terms shall be set out in the Proposal or Purchase Order.
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9.2 Winity acknowledges and agrees that the conditions and assumptions of any
Proposal are based on the original Product Release Specification. If by
agreement between the Parties in writing the Product Release
Specification is amended during the development, verification,
fabrication or testing processes, the Parties shall at that time agree on
any additional fee for such amendment. If Winity does not accept the
additional fee for the revised Product Release Specification, the
Purchase Order shall be deemed to be revoked, and no further payments
shall be required pursuant to it.
9.3 WINITY shall be responsible to pay all applicable taxes, levies, duties,
and similar governmental charges of any type or nature in connection with
this Agreement, and penalties and interest thereon, if any (together,
"Imposts"). If Arise is subject to any Imposts in connection with this
Agreement, Winity shall pay to Arise cash with an amount necessary (after
taking into account all Imposts) to place Arise in the same after-tax
position it would have been in had no Imposts been paid or incurred. The
parties will consult each other and cooperate in minimizing any taxes
payable by the parties.
10 WARRANTIES AND OBLIGATIONS
10.1 ARISE shall provide to Winity a one (1) year product warranty for
Products commencing with the shipment date of such Products.
10.2 In the event of epidemic or latent defects being discovered after this
one (1) year period, both Parties shall, in good faith, negotiate to
resolve such issues.
10.3 One Party's total liability to the other Party for any claims or causes
of action arising from or in connection with this Agreement shall not
exceed the total amount of relevant Purchase Order Agreement.
10.4 Neither Party shall be liable to the other Party for any indirect,
incidental or consequential damages, whether such damages are alleged to
have arisen as a result of tortious conduct, breach of contract, the
circumstances outlined in clause 8.8, or otherwise, even if the other
Party has been advised of the possibility of such damages accruing.
"Indirect, incidental or consequential damages" shall include, but shall
not be limited to, the cost of removal and reinstallation of goods, loss
of goodwill, loss of profits, loss of use of data, interruption of
business or other economic loss. Remedies provided for in this Agreement
are intended to be exclusive and are in lieu of any other remedy that
would otherwise have been available to the aggrieved Party at law or in
equity.
11 CONFIDENTIAL INFORMATION
The Parties may disclose to the each other certain information during the term
of this Agreement that is confidential information, and the basis of disclosure
and the rights and obligations of the Parties upon disclosure of such
information are governed by the Non-Disclosure Agreement entered into between
the Parties and annexed marked "II".
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12 TERMINATION AND CANCELLATION
12.1 One Party may terminate this Agreement in the event that the other Party
is in breach of its obligations under this Agreement, and termination
shall be effective after seven (7) days following receipt by the other
Party of written notice of termination.
12.2 Upon termination of this agreement for any reason, whether for cause or
otherwise, Arise shall return to Winity any and all information provided
by Winity to Arise and which remains in Arise's possession or power,
whether or not such information is classified as Confidential Information
under the Non-Disclosure Agreement between the Parties.
12.3 Unless the Winity terminates this Agreement due to Arise's breach of its
obligation(s) under this Agreement, Winity shall pay to Arise all amounts
owing for work performed prior to termination.
12.4 Either Party may terminate this Agreement by giving to the other Party
three (3) months written notice of termination
13 FORCE MAJEURE
Neither Party shall be liable to the other Party for any failure or delay in its
performance of its obligations under this Agreement due to causes, including,
but not limited to, acts of God, acts of civil or military authority, fires,
epidemics, floods, earthquakes, riots, wars, sabotage, third party industrial
disputes and government actions, which are beyond its reasonable control;
provided that the delaying Party: (a) gives to the other Party written notice of
such cause promptly, and in any event within fourteen (14) days of discovery
thereof; and (ii) uses its best efforts to prevent or cure such failure or delay
in its performance. The other Party shall grant to the delaying Party an
additional performance period equal to the duration of the cause of the delay to
enable it to fulfil its obligations under this Agreement once the cause giving
rise to the delay ends.
14 GENERAL
14.1 Neither Party shall publicly announce or disclose the existence of this
Agreement or its terms and conditions, or advertise or release any
publicity regarding this Agreement, without the prior written consent of
the other Party.
14.2 This Agreement constitutes the entire understanding of the Parties, and
revokes and supersedes all prior agreements between the Parties and is
intended as a final expression of their Agreement. It shall not be
modified or amended except in writing signed by the Parties and
specifically referring to this Agreement. All attachments to this
Agreement shall form part of this Agreement.
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14.3 The headings used in this Agreement shall be for reference purposes only,
and do not affect the interpretation of the terms and conditions of this
Agreement.
14.4 This Agreement shall be prepared and executed in two original
counterparts and each Party shall retain one counterpart.
15 JURISDICTION, APPLICABLE LAW AND ARBITRATION
15.1 This Agreement shall be governed by and construed in accordance with the
laws of the Republic of China
15.2 Any dispute, controversy, or claim arising out of or relating to this
Agreement, or concerning the interpretation, breach, termination, or
validity hereof, shall be resolved through friendly consultation. Such
consultation shall begin immediately after one Party has delivered to the
other Party a written request for such consultation.
15.3 If, within thirty (30) days following the date on which such notice is
given pursuant to clause 15.2, the dispute cannot be resolved, either
Party may initiate court proceedings. In the event of an action is
initiated to enforce or interpret any term or provision of this Agreement
or otherwise arising out of this Agreement, the prevailing party in such
action shall be entitled to recover all costs incurred in connection
therewith, including, without limitation, reasonable attorneys' fees.
EXECUTION
In witness whereof, the Parties have caused this Agreement to be executed by
their duly authorized representatives.
Arise Technology Co. Ltd Winity Technology Inc.
By:/s/________________________ By:/s/________________________
Name: XXXXX XXXXX Name: XXXX XXXX
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Title: PRESIDENT Title: PRESIDENT
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Date: 2005/7/3 Date: 2005/7/3
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