Exhibit 10.22
SPINOFF AGREEMENT
This Spinoff Agreement (the "Agreement") is made by and between
Integrated Telecom Express, Inc. ("ITeX" or "UMC SPINOFF"), a Delaware
Corporation, having its principal place of business in Santa Clara, California,
and United Microelectronics Corporation "UMC"), a corporation organized under
the laws of the Republic of China having a place of business at Xx. 0 Xx Xxxx
Xxxx 0, Science Based Industrial Park, Xxxx Xxx City, Taiwan.
BACKGROUND
UMC has previously entered into a patent cross license agreement
("License Agreement") with Texas Instruments, Inc. ("TI") attached hereto as
Exhibit B;
The License Agreement allows UMC to extend certain licenses granted by
TI to certain UMC related entities (including without limitation ITeX) in
exchange for royalties, patent cross licenses and other obligations;
ITeX has requested that UMC obtain such licenses for ITeX;
The parties are entering into this Agreement to document and
summarize ITeX's rights and obligations pursuant to the exercise of the
option to include ITeX within the scope of the License Agreement as a UMC
SPINOFF (as defined in the "License Agreement") but agree that the License
Agreement shall in all events control;
As such, the parties agree as follows:
1 LICENSES
1.1 LICENSES TO ITEX. Pursuant to Sections 1.1.3 and 1.1.4 of the License
Agreement, ITeX shall have a license from TI as follows:
1.1.1 TI PATENTS. Each TI ENTITY hereby grants and agrees to grant to
UMC SPINOFF a non-exclusive license under any TI PATENTS to
use, sell, lease, import, offer for sale or otherwise dispose
of UMC SPINOFF BRANDED PRODUCTS manufactured by UMC ENTITIES.
1.1.2 TI PARTICIPATION PATENTS. To the extent that each TI ENTITY has
the legal right to do so, each such TI ENTITY hereby grants and
agrees to grant to UMC SPINOFF non-exclusive licenses or
sub-licenses under any TI-PARTICIPATION PATENTS, to use, sell,
lease, import, offer for sale or otherwise dispose of UMC
SPINOFF BRANDED PRODUCTS manufactured by UMC ENTITIES.
1.2 LICENSES TO TI. ITeX hereby grants to TI licenses of the scope set forth in
Section 1.2.1 of the License Agreement as follows:
1.2.1 SPINOFF PATENTS. UMC SPINOFF hereby grants and agrees to grant
to each TI ENTITY non-exclusive, paid-up, royalty-free licenses
under any SPINOFF PATENTS, to make PRODUCTS. UMC SPINOFF
further grants and agrees to grant to each TI ENTITY the right
to use, sell, lease, import, offer for sale or otherwise
dispose of PRODUCTS made by any TI ENTITY. The grant to make
PRODUCTS shall include the right, under any SPINOFF PATENTS,
for any TI ENTITY to use manufacturing and business processes
and methods and shall further include the right under any
SPINOFF PATENTS for any TI ENTITY to use MANUFACTURING
EQUIPMENT AND SYSTEMS and BUSINESS EQUIPMENT AND SYSTEMS made
by any TI ENTITY or any other party.
1.2.2 SPINOFF PARTICIPATION PATENTS. To the extent that it has the
legal right to do so, UMC SPINOFF hereby grants and agrees to
grant to each TI ENTITY non-exclusive paid-up royalty-free
licenses or sub-licenses under any SPINOFF PARTICIPATION
PATENTS, to make PRODUCTS; and to use, sell, lease, import,
offer for sale, or otherwise dispose of PRODUCTS made by any TI
ENTITY. The grant to make PRODUCTS shall include the right,
under any SPINOFF PARTICIPATION PATENTS, for any TI ENTITY to
use manufacturing and business processes and methods and shall
further include the right under any SPINOFF PARTICIPATION
PATENTS to use MANUFACTURING EQUIPMENT AND SYSTEMS and BUSINESS
EQUIPMENT AND SYSTEMS made by any TI ENTITY or any other party.
1.2.3 TI ENTITY SUBCONTRACTING. The licenses granted hereunder to TI
ENTITIES include the right to have a third party make PRODUCTS
either in finished or semifinished form for the sole account of
a TI ENTITY, but only if:.
1.2.3.1 said PRODUCTS are to be sold, used. leased or otherwise
disposed of, by a TI ENTITY, and under the trademark, trade
name, or other commercial indicia, of a TI ENTITY;
1.2.3.2 the TI ENTITY provides its standard patent indemnities and
product warranties (that it would provide for the same or
similar products manufactured in its own facilities) for any
of said PRODUCTS sold, leased or otherwise disposed of, by the
TI ENTITY; and
1.2.3.3 said PRODUCTS are made by the third party using manufacturing
drawings, specifications, data base tapes, or the like:
1.2.3.3.1 originated by a TI ENTITY,
1.2.3.3.2 originated by any third party specifically and
exclusively for a TI ENTITY,
1.2.3.3.3 licensed to a TI ENTITY by an entity or person other
than the manufacturing party, or
1.2.3.3.4 which a TI ENTITY has the legal or contractual right
to so utilize except where such right derives from the
manufacturing party; provided however that such right shall
not extend to standard, off-
the-shelf products of such third party nor to
products originally designed by such third party
and to which only minor revisions are made to
conform to the specifications of a TI ENTITY.
Except as set forth above, the licenses granted hereunder to
TI ENTITIES shall not include have made rights.
1.2.4 THIRD-PARTY PRODUCTS. With respect to the licenses granted
hereunder to TI ENTITIES, and notwithstanding anything in
Section 1.2.3 to the contrary, a license to a TI ENTITY "to
use, sell, lease, offer for sale, import or otherwise dispose
of" PRODUCTS made by a TI ENTITY, does include the right of the
TI ENTITY to use, sell, lease, offer for sale, import, or
otherwise dispose of, standard, off-the-shelf PRODUCTS of, and
purchased directly or indirectly by such TI ENTITY from, any
third party; provided that such PRODUCTS are used, leased,
sold, offered for sale, imported, or otherwise disposed of
under the trademark, trade name or other commercial indicia of
such TI ENTITY.
1.2.5 TI FOUNDRY RESTRICTION. With respect to the licenses granted
hereunder to the TI ENTITIES, no such license includes the
right of any TI ENTITY to make or have made PRODUCTS, either in
finished or semifinished form (by way of example, "semifinished
form" includes (1) semiconductor wafers at any stage of their
manufacture, (2) foundry services and (3) assembly) for, or for
sale to, any third party to use, to lease, to sell, to offer
for sale, to import, or otherwise to dispose of, such PRODUCTS
under the trademark, trade name, or other commercial indicia of
such third party in any instance where the manufacturing
drawings, specifications, data base tapes, or the like, are in
whole or in part originated by, or on behalf of, such third
party. In the event of any such activity by a TI ENTITY, the
exclusive remedy for UMC SPINOFF for any claim of patent
infringement shall be against any-party other than a TI ENTITY.
The foregoing in this Section 1.2.5 notwithstanding, in any
instance in which such PRODUCTS are application-specific
INTEGRATED CIRCUITS (ASICs or CSICs), which are substantially
comprised of a TI ENTITY's ASIC or CSIC preconfigured cells,
whether macro or primitive, characterized to a TI ENTITY's
process, the licenses granted hereunder to the TI ENTITY shall
be deemed to be extended to such PRODUCTS.
1.3 THIRD PARTY DESIGNS. With respect to the licenses granted hereunder, and
except as provided otherwise in Section 1.2.4, a license to a LICENSED
PARTY, "to use, sell, lease, offer for sale, import, or otherwise
dispose of" PRODUCTS:
1.3.1 does not include any right for the LICENSED PARTY to act as a
sales agent, commission agent, sales representative, broker or
factor of products made by third parties; and
1.3.2 does not include any right for a LICENSED PARTY to act as a
distributor or reseller of products made by third parties.
1.4 GENERAL EXCLUSIONS.
1.4.1 Nothing in this Agreement shall be construed or interpreted as an
agreement to bring or prosecute actions or suits against third
parties for infringement or conferring any right to bring or
prosecute actions or suits against third parties for infringement.
1.4.2 Specifically excluded from the grants of licenses pursuant to this
Agreement, is any license, direct Or implied, under the U.S.
Semiconductor Chip Protection Act of 1984, or under the Japanese
Law Concerning Semiconductor Integrated Circuit Layouts of 1985,
or under any other corresponding legislation of any other country.
1.4.3 Specifically excluded from the grants of licenses pursuant to this
Agreement, is any license, direct or implied, under any
copyrights, trademarks, service marks, trade names, trade dress,
or trade secrets.
1.4.4 Specifically excluded from the grants of licenses pursuant to this
Agreement is any license, direct or implied, under any design
PATENTS except for any design PATENTS for packaging, modules, or
housing, for PRODUCTS.
1.4.5 Specifically excluded from the grants of licenses pursuant to this
Agreement is any right to sublicense.
2 RELEASES
ITeX agrees to grant the releases set forth below and shall enjoy the release
granted by TI below all in accordance with the License Agreement:
2.1 UMC SPINOFF hereby releases, acquits and forever discharges each TI
ENTITY which is a TI ENTITY on or as of the EFFECTIVE DATE from any and
all claims or liability for infringement or alleged infringement of any
SPINOFF PATENTS under which a license is herein granted by UMC SPINOFF,
with respect to performance by any such TI ENTITY, prior to the
EFFECTIVE DATE, of acts which if performed on or after the EFFECTIVE
DATE would be acts licensed hereunder.
2.2 Each TI ENTITY which is a TI ENTITY on or as of the EFFECTIVE DATE hereby
releases, acquits and forever discharges UMC SPINOFF from any and all
claims or liability for infringement or alleged infringement of any TI
PATENTS under which a license is herein granted by any such TI ENTITY, with
respect to performance by UMC SPINOFF, prior to the EFFECTIVE DATE, of acts
which if performed on or after the EFFECTIVE DATE would be acts licensed
hereunder.
2.3 UMC SPINOFF hereby waives any and all claims or liability for
infringement or alleged infringement which UMC SPINOFF itself may have
against any TI ENTITY which is a TI ENTITY on or as of the EFFECTIVE
DATE, based on any SPINOFF-PARTICIPATION PATENT with respect to
performance by any such TI ENTITY, prior to the EFFECTIVE DATE, of acts
which if performed on or after the EFFECTIVE DATE would be acts
licensed hereunder, and UMC SPINOFF agrees to release each such TI ENTITY
from any and all such claims or liability to the extent UMC SPINOFF has or
later acquires the legal right to grant such a release.
2.4 Each TI ENTITY which is a TI ENTITY on or as of the EFFECTIVE DATE hereby
waives any and all claims or liability for infringement or alleged
infringement which any such TI ENTITY itself may have against UMC SPINOFF
based on any TI-PARTICIPATION PATENT, with respect to performance by UMC
SPINOFF, prior to the EFFECTIVE DATE, of acts which if performed on or
after the EFFECTIVE DATE would be acts licensed hereunder, and each such
TI ENTITY hereby agrees to release UMC SPINOFF from any and all such claims
or liability to the extent any TI ENTITY has or later acquires the legal
right to grant such a release.
3 ROYALTIES
3.1 ROYALTY. UMC SPINOFF shall pay a royalty equal to one percent of the NET
SALES BILLED for all UMC SPINOFF BRANDED PRODUCTS purchased or otherwise
transferred from a UMC ENTITY to UMC SPINOFF, provided however that UMC
SPINOFF BRANDED PRODUCTS manufactured prior to the EFFECTIVE DATE shall
not be subject to payment of royalties.
3.2 DUE DATES. UMC SPINOFF shall pay the applicable royalties to UMC as
follows:
3.2.1 All royalties due herein during each calendar semi-annual period
commencing on January 1st and ending on June 30th or commencing
on July 31st and ending on December 31st, as the case may be,
shall be paid within thirty (30) days after that June 30th or
December 31st, as the case may be;
3.2.2 In the event this Agreement expires or terminates during a
calendar semi-annual period, other than on June 30th or December
31st, all royalties payable for that calendar semi-annual period
shall be paid within thirty (30) days after such termination or
expiration of this Agreement.
3.2.3 Royalties for UMC SPINOFF BRANDED PRODUCTS purchased or
transferred from a UMC ENTITY on or before December 31, 1999 (and
manufactured after the EFFECTIVE DATE) shall be reported and paid
by April 1, 2000.
3.3 ROYALTY TRIGGERING EVENTS. For purposes of NET SALES BILLED and determining
royalties hereunder, UMC SPINOFF BRANDED PRODUCTS shall be deemed to be
sold or otherwise disposed of, when a UMC ENTITY bills UMC SPINOFF, or upon
delivery to UMC SPINOFF by a UMC ENTITY, whichever event occurs first.
3.4 SURVIVAL. The obligation to pay unpaid royalties which accrued during the
term of this Agreement shall survive any termination or expiration of this
Agreement.
3.5 ACCOUNTING AND RECORDS.
3.5.1 COMPUTATION. All computations relating to determination of the
amounts of royalties due and payable pursuant to this Agreement
shall be made in accordance with internationally recognized and
generally accepted accounting principles as reflected in the
practice of independent certified public accountants of
international reputation.
3.5.2 AUDIT.
3.5.2.1 ACCESS TO RECORDS. Upon the reasonable written request of TI
or UMC, UMC SPINOFF shall permit access to its books and
records relating to UMC SPINOFF BRANDED PRODUCTS by UMC or an
independent accounting firm selected by TI and/or UMC, for the
sole purpose of, and solely to the extent reasonable for,
verifying the calculation of royalties due and payable
pursuant to this Agreement.
3.5.2.2 FREQUENCY. TI and UMC shall each seek permission for an audit
of UMC SPINOFF no more than once each calendar year, and no
such request may be made at a time longer than four (4) years
after the due date for the payment(s) involved.
3.5.2.3 SCOPE. All information concerning manufacture, use, lease,
sale or other disposition of UMC SPINOFF BRANDED PRODUCTS,
including without limitation, sales prices and customers
and other confidential business information shall be made
available to the independent accounting firm or UMC to the
extent necessary to verify the calculation of royalties;
provided that such information shall not be made available
to TI by UMC or the independent accounting firm and
provided further that UMC or such accounting firm shall
agree in writing to maintain such information as
confidential, not to disclose it to anyone other than as
necessary to verify such calculation (and then only upon
such terms as ensure protection for confidentiality at
least as stringent as provided herein), and not to use it
for any purpose other than such verification.
3.5.3 RECORD KEEPING. UMC SPINOFF shall retain such books and records as
are reasonably necessary for verifying the calculation of
royalties due and payable under this Agreement, for a period of no
less than five (5) years after the date of payment of such
royalties.
3.5.4 COSTS. UMC SPINOFF shall bear all costs and expenses for a
particular audit if upon performance of the audit, the independent
accounting firm or UMC determines that royalties paid during the
audited period were under by an amount in excess of 5%. Otherwise,
TI and/or UMC shall bear the costs and expenses that are incurred
in performing the audit. UMC SPINOFF shall also pay the amount of
any royalty shortfall determined by the audit within thirty (30)
days of written notice of
the amount of such shortfall following the conclusion of such
audit, provided however that no such payment or acceptance thereof
shall be an admission that the audit determination was correct,
and UMC SPINOFF, UMC and TI shall remain free to contest such
determination in the manner allowed under the law.
3.5.5 SURVIVAL. The rights and obligations provided under this
Section 3.5 shall survive for a period of five (5) years after
the termination or expiration of this Agreement, for any reason.
3.6 CURRENCY EXCHANGE. Royalties accounted for in any currency other than
United States dollars shall be converted to United States dollars by
using the prevailing rate of exchange of any such currency for United
States dollars first quoted in the New York Foreign Exchange Market
("prevailing rate of exchange") on the date ten (10) business days prior
to the date of the written statement required under Section 3.7 below.
3.7 ROYALTY REPORT. On or before the date each royalty payment is due, UMC
SPINOFF shall furnish to UMC a written statement in the English
language, certified by an authorized representative of UMC SPINOFF,
concerning the computation of royalties due to or payable, in respect of
the applicable calendar annual or semi-annual period. Each such written
statement shall contain information in reasonably sufficient detail to
permit the determination of the overall accuracy of each royalty payment
due or payable under this Agreement and, in particular, shall set forth
the following:
3.7.1 The total NET SALES BILLED for such annual or semi-annual
reporting period, including a listing of the aggregate NET
SALES BILLED in the currency(ies) in which billed, the
prevailing rates of exchange used and the final United States
dollar value, and
3.7.2 Whatever additional information TI or UMC may reasonably prescribe
by written request from time to time to enable TI or UMC to
ascertain the computation of royalties under this Agreement,
provided, however, that TI is not entitled to specific information
concerning particular sales and/or transactions except as may be
requested in connection with an audit pursuant to the terms of
this Agreement, and then only as prescribed for such an audit.
3.7.3 The obligation to provide such a royalty report for any
royalties for which a royalty report has not already been
provided shall survive for five (5) years beyond the
termination or expiration of this Agreement, for any reason.
3.8 TAXATION. All taxes imposed as a result of the existence of this Agreement
or the performance hereunder shall be paid by the party required to do so
by applicable law.
4 TERM, TERMINATION, DISPUTE RESOLUTION
4.1 TERM. Except as otherwise provided in this Section 4, this Agreement and
the licenses granted pursuant hereto shall remain in force until December
31, 2007 unless extended by UMC upon written notice to UMC SPINOFF.
4.2 TERMINATION.
4.2.1 EVENTS OF TERMINATION.
4.2.1.1 NATURAL TERMINATION. Unless extended under Section 4.1 above,
this Agreement (and all licenses granted under it) shall
expire by its terms on December 31, 2007, except that such
expiration shall not effect any royalty or other obligation
arising prior to such expiration and shall not affect any
rights or obligations which are specifically provided
hereunder as surviving expiration or termination of this
Agreement.
4.2.1.2 MATERIAL BREACH. If UMC SPINOFF fails to make any payment
fully or timely as required by this Agreement, or in the
event of any other material breach of this Agreement by UMC
SPINOFF, and if such failure or other material breach is
not corrected within forty-five (45) days after written
notice by UMC or TI, then this Agreement may be terminated
by UMC forthwith in its entirety by written notice to UMC
SPINOFF, provided that such termination shall not affect
any royalty or other obligation arising prior to such
termination and shall not affect any rights or obligations
which are specifically provided hereunder as surviving
expiration or termination of this Agreement, and provided
further that as to UMC SPINOFF BRANDED PRODUCTS as to which
TI accepts payment of royalties, the licenses, covenants
and releases under this Agreement shall not be terminated
as to such products for which royalty payments have been
made by UMC and accepted by TI.
4.2.1.3 REORGANIZATION OR SALE OF ASSETS. This Agreement may be
terminated by written notice of UMC to UMC SPINOFF within
thirty (30) days of receiving actual notice that the UMC
SPINOFF has consolidated with or merged with or into, or
transferred, directly or indirectly; all or substantially all
of its assets to, another corporation, company or other
entity; notwithstanding that UMC SPINOFF may be the surviving
entity of such consolidation, merger or transfer. No such
termination shall affect any royalty or other obligation
arising prior to such termination.
4.2.1.4 GOVERNMENT INTERVENTION. If at any time during the term of
this Agreement, any government or agency thereof takes any
action against either or both PARTIES requiring, directly or
indirectly, formally or informally, alteration or modification
of any material term or condition of this Agreement or of the
performance of the PARTIES that materially adversely affects
one PARTY (the "Affected PARTY") substantially frustrating the
purpose of the Affected
PARTY in entering into this Agreement, then if the Affected
PARTY makes written request to the other PARTY within sixty
(60) days from said action of such government or agency
thereof, the PARTIES shall enter into good faith negotiations
with the objective of restructuring the relationship between
the PARTIES in a manner such that the adverse effect of such
required alteration or modification of this Agreement will be
minimized consistent with the purposes of the PARTIES in
entering this Agreement as expressed herein. If the PARTIES
cannot reach an acceptable restructuring arrangement within
six (6) months from the date of such written request, or
within such longer period of time as mutually agreed upon,
either PARTY shall have the right to terminate this Agreement
forthwith in its entirety by giving written notice to that
effect to the other PARTY and such termination shall be
effective upon receipt of notice. All other provisions of this
Section 4.2 notwithstanding, in the event this Agreement is
terminated pursuant to this Section 4.2.1.4, then all rights
and licenses under TI PATENTS, TI-PARTICIPATION PATENTS,. UMC
SPINOFF PATENTS and UMC SPINOFF-PARTICIPATION PATENTS shall
cease and terminate upon receipt of such termination notice.
No such termination shall affect any royalty or other
obligation arising prior to such termination.
4.2.1.5 TERMINATION OF LICENSE AGREEMENT. This Agreement shall
terminate without notice upon termination or expiration of the
License Agreement.
4.2.1.6 CHANGE OF OWNERSHIP OF UMC SPINOFF. UMC SPINOFF shall give
prompt written notice to UMC or TI if and when any person,
entity, or "group" within the meaning of Section 13 of the
U.S. Securities Exchange Act of 1934 owns more shares of
stock of UMC SPINOFF entitled to vote for the election of
directors than are owned, directly or indirectly, by UMC
("Shift in Control"). UMC will inform TI of such event, and
at the option of TI by written notice to UMC given within
forty-five (45) days of receipt of UMC's notice, or within
forty-five (45) days of TI learning of such Shift in
Control, UMC SPINOFF shall cease to be have a license to TI
PATENTS with respect to any wafer starts from and after the
date of such Shift in Control and all licenses and
covenants to any TI ENTITY from UMC SPINOFF shall terminate
as to wafer starts on or after such date, provided however
that if UMC and/or UMC SPINOFF sends written notice to TI
of the Shift in Control within forty-five (45) days of the
effective date of such Shift in Control, no termination
under this clause will take effect as to any wafers started
prior to the date that the UMC receives the applicable
written notice from TI terminating the licenses.
4.2.2 NON-TERMINATING EVENTS. For the convenience of the PARTIES hereto,
this Agreement is made in consideration of the exchange of patent
licenses under a group of PATENTS of TI and its respective
ENTITIES and UMC SPINOFF. A determination or action by a court of
competent jurisdiction, regulatory authority or governmental
agency: (1) finding that one or more of the PATENTS are invalid or
unenforceable; or (2) granting a temporary or permanent injunction
or restraining
order under one or more of the PATENTS; shall not give rise to a
right of termination by either PARTY nor shall such determination
or action be regarded as justification (a) for a retrospective or
prospective change in this Agreement affecting the royalty rates
or amounts to be paid, or (b) for changing any other provision of
this Agreement.
4.2.3 EFFECT OF TERMINATION. Except as otherwise provided specifically
in Section 4.2.4, all licenses granted pursuant to this Agreement
shall cease forthwith as of the date of expiration or termination
for any reason of this Agreement. Any PRODUCTS as to which an
event specified in the first sentence of Section 3.3 has not
occurred prior to the date of such expiration or termination shall
not be considered to be licensed under this Agreement.
4.2.4 LICENSE SURVIVAL. In the event of termination of this Agreement or
any of the licenses granted under this Agreement by one party
("the Terminating PARTY") pursuant to Section 4.2.1.2, the
licenses granted by the defaulting PARTY and its respective
ENTITIES to the Terminating PARTY and its respective ENTITIES
hereunder shall survive until December 31, 2007.
5 WARRANTIES AND REPRESENTATIONS
5.1 EXPRESS WARRANTIES, ACKNOWLEDGEMENTS AND REPRESENTATIONS.
5.2 POWER AND AUTHORITY. UMC SPINOFF represents and warrants that it has
sufficient right and authority to grant to the all licenses, releases, and
other rights granted hereunder by it.
5.3 FULL ROYALTY. UMC SPINOFF represents and acknowledges that it has bargained
for the right to use all of the PATENTS licensed herein but are free not to
use any if they so choose. UMC SPINOFF acknowledges that it is liable
hereunder for the full royalty obligation detailed herein regardless of the
number of PATENTS used and such royalty obligation exists even if no
PATENTS are actually used.
5.4 DISCLAIMER. The warranties in this Agreement are in lieu of all other
warranties, express or implied. This Agreement is a compromise of disputed
matters. Nothing contained in this Agreement shall be construed as: (i) a
warranty, representation and/or an admission by any of the PARTIES or their
respective ENTITIES as to the infringement, enforceability, validity, or
scope of any patents; or (ii) a warranty or representation that any
manufacture, sale, offer for sale, lease, import, use or other disposition
of PRODUCTS hereunder will be free from infringement of any intellectual
property rights of third parties.
6 MISCELLANEOUS PROVISIONS
6.1 IMPLIED LICENSES AND RELEASES. Nothing in this Agreement shall be construed
or interpreted as conferring by implication, estoppel or otherwise, upon
any PARTY, any license or other right under any patent or utility model,
copyright, mask work right, trade secret, trademark, trade name or the
like, except the licenses and rights expressly granted hereunder.
6.2 TECHNICAL ASSISTANCE. Nothing in this Agreement shall be construed or
interpreted as an obligation to furnish any technical assistance or
information or know-how.
6.3 NO LICENSE TO SOFTWARE. Nothing in this Agreement shall be construed or
interpreted as conferring by implication, estoppel or otherwise upon any
PARTY, any license or other right under copyrights or design PATENTS
covering any computer software that may be embodied in a PRODUCT.
6.4 GOVERNMENTAL CONTRACT RESTRICTIONS. It is recognized that the TI ENTITIES
and UMC SPINOFF may have contracted, or may after the EFFECTIVE DATE,
contract with a governmental entity, such as a national or other sovereign
government, governmental agency or intergovernmental authority, to do work
financed by such entity and to assign to such entity its/their right to
grant, or may now or hereafter be restrained by such entity from granting,
licenses (other than between related ENTITIES) under PATENTS for inventions
arising out of such work. The inability, for such a reason, to grant the
licenses herein agreed to be granted shall not be considered a breach of
this Agreement.
6.5 NO AGENCY. Nothing in this agreement or anything done by either in the
discharge of its obligations hereunder shall be deemed to make it the agent
of another party.
6.6 NO ASSIGNMENT. This Agreement and the licenses granted herein shall inure
to the benefit of the PARTIES and their respective ENTITIES. UMC SPINOFF
shall not assign or transfer any of its rights, privileges or obligations
hereunder without the prior written consent of a duly authorized
representative of UMC. Any attempt to so assign this Agreement or the
licenses without such consent shall be null and void.
6.7 NOTICES. All notices required or permitted to be given hereunder shall be
in writing and shall be valid and sufficient if dispatched by registered
airmail, postage prepaid, in any post office in the United States or in the
R.O.C., as the case may be, or by facsimile with receipt confirmed,
addressed as follows:
Integrated Telecom Express, Inc.: UMC:
Integrated Telecom Express, Inc. United Microelectronics Corp.
0000 Xxxxx Xxxxxx No. 3 Li Hsin Road 2
Xxxxx Xxxxx, XX 00000 Science Based Industrial Park
Attn: President Xxxx Xxx City, Taiwan, R.O.C.
Attn: President
Fax: 0 (000) 000-0000 Fax: 000 (00) 000.0000
Copy to:. Copy to:
Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx
Fax: 0 (000) 000-0000 Fax: 0 (000) 000-0000
Either PARTY may change its address by a notice given to the other PARTY in the
manner set forth above. Notices given as herein provided shall be deemed to be
duly received seven (7) business days after mailing or upon actual receipt,
whichever is earlier.
6.8 PAROLE EVIDENCE/NO ORAL MODIFICATION. No oral explanation or oral
information by either party hereto shall alter the meaning or
interpretation of this Agreement. No modification, alteration, addition or
change in the terms hereof shall be binding on either party unless reduced
to writing and executed by a duly authorized representative of each party.
6.9 CHOICE OF LAW. This Agreement and matters connected with the performance
thereof shall be construed, interpreted, applied and governed in all
respects in accordance with the laws of the State of New York, United
States of America, as applicable to agreements made and to be performed
entirely within that state and without regard to the choice of law
provisions, statutes, or regulations of this or any jurisdiction.
6.10 JURISDICTION AND VENUE. Neither party shall commence any action or
proceeding against the other arising out of this Agreement or the
termination thereof, except in a Federal Court located in the Southern
District of the State of New York or Santa Xxxxx County, CA. The parties
each consent to jurisdiction by such Federal Courts and hereby waive any
objection they may have in any such action or proceeding, as to the
appropriateness of the above-identified venues.
6.11 CONFIDENTIALITY. UMC SPINOFF shall keep the terms of this Agreement and
the License Agreement confidential and shall not now or hereafter divulge
the same or any part thereof to third parties except:
6.11.1 with the prior written consent of UMC;
6.11.2 to any governmental body or judicial entity having jurisdiction
and calling therefor;
6.11.3 as otherwise may be required by law or a securities exchange
established under law, and the rules and regulations of or
pertaining to such law or exchange, including but not limited to
those promulgated under the U.S. Securities Act and Securities
Exchange Act, and by any securities exchange established
thereunder;
6.11.4 to legal counsel;
6.11.5 to the independent outside auditors;
6.11.6 as may reasonably be appropriate to communicate to customers and
prospective customers, the license rights which affect the
PRODUCTS sold or to be sold to them (but any such disclosure under
this Section 6.11 shall not include the royalty or payment
obligations or copies of any portion of this Agreement);
6.11.7 as may reasonably be required for customary business needs not
covered in (vi) above (but any such disclosure under this Section
6.11 shall not include the royalty or payment terms or copies of
any portion of this Agreement);
6.11.8 as may be reasonably necessary in connection with corporate
financings and similar transactions but only under appropriate
confidentiality requirements; or
The disclosing party shall provide notification to the non-disclosing
party prior to any disclosure under a court or governmental order, under Section
6.11.2 above. All reasonable efforts to preserve the confidentiality of the
terms of this Agreement shall be expended by the disclosing party in complying
with such an order, including requesting and obtaining a protective order to the
extent possible.
6.12 MERGER. This Agreement sets forth the full and complete agreement and
understanding between the parties as to the subject matter of this
Agreement and merges all prior discussions and writings between them as to
the subject matter hereof; provided that the parties understand that this
Agreement is intended to summarize the rights and obligations of UMC
SPINOFF under the License Agreement and in the event additional rights or
obligations are set forth in the License Agreement that are not set forth
herein, they shall be incorporated into this Agreement and in the event of
a conflict between this Agreement and the License Agreement the terms of
the License Agreement shall control. There are no representations,
understandings or agreements, oral or written, between UMC SPINOFF and UMC
as to the subject matter of this Agreement which are not expressly
included herein. Neither of the PARTIES shall be bound by any modification
of this Agreement, other than as expressly provided in this Agreement or
as duly set forth on or subsequent to the date hereof in writing and
signed by a duly authorized representative of both PARTIES.
6.13 NO WAIVER. The failure by a party to exercise any of its rights under this
Agreement shall not be deemed to constitute a waiver of any of such
rights, or other rights or remedies available to such party.
6.14 CONVENIENCE OF THE PARTIES. The PARTIES hereto understand and agree that
the royalty payments to be made by UMC SPINOFF hereunder are based on
royalty rates applied to all purchases from UMC ENTITIES by UMC SPINOFFS
of all UMC SPINOFF BRANDED PRODUCTS in any country in the world regardless
of whether or not a TI ENTITY has any patent in any particular country and
regardless of whether there is any use of any TI PATENTS in certain
countries. It is further understood that this is specifically done for the
convenience of the PARTIES and their respective ENTITIES, so that separate
accountings do not have to be made and separate license agreements do not
have to be negotiated for all PATENTS and for each country in which the
PARTIES or their respective ENTITIES hold or may hold PATENTS and do
business.
IN WITNESS WHEREOF, the PARTIES have caused their duly authorized
officers to execute this Agreement, on the dates below indicated.
INTEGRATED TELECOM EXPRESS, INC.
BY /S/ Xxxxxxx X. Xxxxx
-----------------------------------
DATE:
-----------------------------------
UNITED MICROELECTRONICS CORPORATION
BY /S/ [ILLEGIBLE]
-----------------------------------
DATE: June 10, 2000
-----------------------------------
EXHIBIT A
DEFINITIONS
1. "BUSINESS EQUIPMENT AND SYSTEMS"
Means equipment, processes and methods useful for the operation of the
business of manufacturing and marketing PRODUCTS, including equipment, processes
and methods related to office operations, communications, accounting, sales,
purchasing and the like.
2. "DEFORMABLE DEVICE"
Means a SEMICONDUCTOR PRODUCT wherein addressable and movable
electromagnetic radiation reflecting members comprise a substantial portion of
the product, including, by way of illustration and not limitation,
electrostatically controllable, deformable, or deflectable mirrors.
3. "EFFECTIVE DATE"
Means the effective date of the License Agreement which is August 6,
1999.
4. "ENTITY"
Means a TI ENTITY or a UMC ENTITY, as the case may be.
5. "INTEGRATED CIRCUIT"
Means any integrated circuit (having two or more active circuit
elements) whether sold, leased, used, incorporated or otherwise disposed of
singly, or in wafer form, or as hybrid integrated circuits, or as XXXXX or the
like. INTEGRATED CIRCUIT includes any packaging provided as a part thereof. The
intent of this definition is to coincide with the manner in which Dataquest (as
of the EFFECTIVE DATE) uses the term "integrated circuit" or "IC." INTEGRATED
CIRCUIT shall not include display devices such as LCD displays, field emission
displays, or the like.
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6. "MANUFACTURING EQUIPMENT AND SYSTEMS"
Means equipment, processes and methods useful for the operation of
facilities for the production of PRODUCTS, including equipment, processes and
methods related to the operation and control of machinery and processes used to
create PRODUCTS, and shall also include test equipment and systems including any
aggregate of instrumentalities primarily adapted for use in the examination,
analysis, measurement, detection, recording or indication of one or more
characteristics or properties of a PRODUCT or PRODUCTS.
7. "NET SALES BILLED"
Means the following:
a. the total amount billed by an UMC ENTITY in any country of the world
to UMC SPINOFF pursuant to a bona fide, arms length transaction unaffected by
reason of affiliation or any other cause, in connection with the sale, lease,
importation, or other disposition, anywhere in the world, of ROYALTY BEARING
PRODUCTS less (i) sales, excise taxes and other taxes (other than taxes measured
by a UMC ENTITY's income) levied in respect to such worldwide sales: leases or
other disposition, where such amounts are included in the amount billed, (ii)
returned sales, sales allowances (adjustments for quality and/or yield) and/or
retroactive price adjustments or credits, (iii) trade, cash or quantity
discounts but only if they are expressly documented, (iv) transportation and
insurance costs where such amounts are included in the amount billed, and (v.)
import duties; or
b. the fair market value of such ROYALTY BEARING PRODUCTS otherwise
transferred by a UMC ENTITY to UMC SPINOFF (provided, however, that products
described in clause a. of this definition and products which are distributed
without charge in the ordinary course of business and in commercially
insignificant volumes, such as samples, products consumed in internal testing,
benchmarking, research and/or development, or scrapped products, shall not be
included in NET SALES BILLED for purpose of this clause b.). For purposes of
this clause b., fair market value of a particular ROYALTY BEARING PRODUCT shall
be determined as set forth in the License Agreement.
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c. NET SALES BILLED shall be accounted for in accordance with Section
3.3 of the Agreement.
8. "PARTY"
Means TI, UMC, or UMC SPINOFF as the case may be.
9. "PATENT(S)"
Means patents (including reissues and re-examination certificates),
utility models, and applications therefor of all countries of the world, which
convey legally enforceable rights, in any country, prior to the date of
expiration or termination of this Agreement. PATENTS includes applications for
patents and utility models which have been published for opposition. PATENTS
does not include design patents, except PATENTS does include design patents
which cover packaging, modules, or housing for SEMICONDUCTOR PRODUCTS. PATENTS
does not include any rights for which payments or other consideration to third
parties is required for the right to grant licenses of the scope granted herein,
except for (i) payments to a SUBSIDIARY of the party owning or controlling such
PATENT, or (ii) payments made to said third parties for inventions made while
employed by such party or its SUBSIDIARIES. PATENTS does not include any claims
of any of the foregoing which am applicable primarily to a DEFORMABLE DEVICE;
provided, however, that for purposes of the license grants hereunder, PATENTS
shall include any such claims to the extent they cover PRODUCTS licensed other
than DEFORMABLE DEVICES.
10. "PRODUCTS"
Means SEMICONDUCTOR PRODUCTS.
a. By way of example and not of limitation, PRODUCTS shall include
semiconductor material, wafers (both unprocessed and processed), discrete
devices (such as transistors), INTEGRATED CIRCUITS, unpackaged dies, packaged
INTEGRATED CIRCUITS (such as DRAMs, SRAMs, DSPs, and subject to clause b below,
microprocessors), memory chips, packaged chips (such as memory and processor
chips), hybrid integrated circuits, memory modules and stacked memory chip
packages, and similar devices. PRODUCTS shall not include any electronic systems
(other than as may
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UMC CONFIDENTIAL
be provided above with respect to hybrid integrated circuits, memory modules
and stacked memory chip packages, and the like) created using more than one
INTEGRATED CIRCUIT or an INTEGRATED CIRCUIT combined with other peripheral
systems such as personal, laptop, or palmtop computers, computer cards or
boards, audio visual components, telecommunications equipment such as
switches or handsets, or other electronic system comprising one or more
packaged INTEGRATED CIRCUITS and other systems or structures. The fact that a
PRODUCT licensed hereunder is part of a combination as stated above does not
in and of itself mean that such combination of such PRODUCT is licensed.
b. PRODUCTS shall not include any microprocessors (including without
limitation, digital signal processors), microcontrollers, or math
coprocessors, that are Object Code Compatible (defined below) with a
Proprietary Product (defined below) of a "Licensor" (meaning a TI ENTITY or
UMC SPINOFF, as the case may be). "Proprietary Product" shall mean a
microprocessor (including without limitation, digital signal processors),
microcontroller, or math coprocessor, introduced or marketed by the Licensor,
that has an instruction set originally designed by the Licensor or originally
and exclusively designed for the Licensor. "Object Code Compatible" shall
mean the condition in which a microprocessor (including without limitation,
digital signal processors), microcontroller, or math coprocessor, is capable
of executing the binary object code of 75% or more of the instructions in the
instruction set of a Licensor's Proprietary Product.
11. "ROYALTY BEARING PRODUCT(S)"
Means any INTEGRATED CIRCUITS which are UMC SPINOFF BRANDED PRODUCTS.
12. "SEMICONDUCTOR PRODUCT"
Means any product comprising at least in part semiconductive material,
such products, including, but not limited to, semiconductor devices,
semiconductor circuits, and INTEGRATED CIRCUITS.
13. "SUBSIDIARY(IES)"
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Means any corporation, company or other entity more than fifty percent (50%) of
the outstanding shares or stock entitled to vote for the election of directors
of which is owned or controlled by a party (meaning a PARTY or a third party, as
the case may be), directly or indirectly, now or hereafter during the term of
this Agreement. Subsidiary also means any corporation, company or other entity
in which a party (meaning a PARTY or a third party as appropriate): (i) owns or
controls at least forty percent (40%) of such shares or stock and (ii) controls
and/or designates more than fifty percent (50%) of the members of the board of
directors during the term of this Agreement. Any corporation, company or other
entity which would at any time be a SUBSIDIARY of a party, by reason of the
foregoing shall be considered a SUBSIDIARY for the purposes of this Agreement
only so long as the ownership or control, directly or indirectly, by such party,
meets the conditions set forth above.
14. "TI ENTITIES"
Means TI and its SUBSIDIARIES.
15. "TI-PARTICIPATION PATENT(S)"
Means PATENTS arising out of and covering inventions developed or made
by one or more employees, agents or independent contractors of a TI ENTITY
(including employees of a TI ENTITY temporarily dispatched, assigned or
otherwise participating in any project of, or placed on the payroll of, any
third party) singly, or jointly with a third party, and where approval or
consent by a party other than a TI ENTITY is required prior to granting a
license or sublicense thereunder.
16. "TI PATENT(S)"
Means PATENTS which, at any time during the term of this Agreement, a
TI ENTITY owns or controls and under which a TI ENTITY has the right to grant
releases or licenses of the scope granted pursuant to this Agreement.
17. "UMC ENTITIES"
Means UMC and its SUBSIDIARIES.
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18. "UMC SPINOFF-PARTICIPATION PATENT(S)"
Means PATENTS arising out of and covering inventions developed or made
by one or more employees, agents or o independent contractors of UMC SPINOFF
temporarily dispatched, assigned, or otherwise participating in any project of,
or placed on the payroll of any third party) singly, or jointly with a o third
party, and where approval or consent by a party other than a party hereto is
required prior to granting a license or sublicense thereunder.
19. "UMC SPINOFF PATENT(S)"
Means PATENTS which, at any time during the term of this Agreement that
UMC SPINOFF owns or controls and under which UMC SPINOFF has the right to grant
releases or licenses of the scope granted pursuant to this Agreement.
20. "UMC SPINOFF BRANDED PRODUCT(S)"
Means any PRODUCT
(i) Sold to UMC SPINOFF by a UMC ENTITY; and
(ii) Sold by UMC SPINOFF under a brand name or designation of UMC
SPINOFF or whose electrical design includes substantial,
material or meaningful design contribution from UMC SPINOFF;
and
(iii) Manufactured at least through the wafer fabrication stage by a
UMC ENTITY; and
(iv) Which is sold by UMC SPINOFF with a patent indemnity.
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EXHIBIT B
LICENSE AGREEMENT
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