|
Exhibit
10.29
CELIS/HYNIX
RFID DEVELOPMENT AND
LICENSING
AGREEMENT
THIS AGREEMENT is effective
as of March 29, 2004, by and between Celis Semiconductor
Corporation (hereinafter called “Celis”), a corporation
organized and existing under the laws of the State of Colorado,
USA, and having its principal place of business at 5475 Mark
Dabling Boulevard, Suite 102, Colorado Springs, Colorado 80918,
USA, and Hynix Semiconductor Inc. (hereinafter called
“Hynix”), a Korean corporation having its principal
place of business at San 136-1, Ami-ri, Bubal-eub, Ichon-si,
Kyoungki-do, Korea (hereinafter collectively called the
“Parties”, or individually, a
“Party”).
WHEREAS, Hynix is engaged in
the developing and manufacturing of microelectronic components, and
possesses the ability and expertise to design and fabricate
integrated circuit memories and smart cards incorporating embedded
memory, and
WHEREAS, Celis has developed
expertise, proprietary information, and know-how in the areas of
radio frequency integrated circuits, integrated circuit design,
ferroelectric memory design, device modeling and characterization
methods, and
WHEREAS, Hynix and Celis
desire to develop a radio frequency integrated circuit for low cost
radio frequency identification (RFID) tags, and
WHEREAS, Celis is willing to
license to Hynix, and Hynix desires to be licensed from Celis, its
design information, patents and mask work rights related to low
cost radio frequency integrated circuits;
NOW, THEREFORE, in
consideration of the mutual covenants and promises herein
contained, the Parties hereto agree to the following:
ARTICLE 1.
DEFINITIONS
As used in this Agreement,
the following terms shall have the following meanings unless the
context otherwise requires (terms defined in the singular have the
same meaning when used in the plural and vice versa):
| 1.1 |
“ Affiliate ” shall mean any entity that is
more than 50% owned and controlled directly or indirectly by Hynix
or Celis, now or hereafter. Indirect control is defined by the
following example: |
If either Party of this
Agreement owns and controls more than 50% of Company A and Company
A owns and controls more than 50% of
Page 1 of 17
Celis/Hynix RFID
Development and Licensing Agreement
Company B, then Company B
shall be considered to be an Affiliate for the purposes of this
Agreement.
All rights granted to any
Affiliate under this Agreement shall terminate immediately when
such entity no longer satisfies this definition.
| 1.2 |
“ Alcoa CSI ” shall mean Alcoa Closure
Systems International, Inc., a Delaware corporation having offices
at 6625 Network Way, Suite 200, Indianapolis, Indiana
46278. |
| 1.3 |
“ Analog Front End ” shall mean the analog
circuitry and other circuitry that receives a radio frequency
signal for use in Radio Frequency Integrated Circuits and which is
comprised of any or all of the following circuits: voltage
rectifier, voltage regulator, voltage reference, power-on-reset,
clock extraction, data modulator, and data demodulator, as more
specifically described in Attachment A . |
| 1.4 |
“ Celis Design Information ” shall mean any
and all know-how, trade secrets, processes, data, designs, layout
designs, or other information, written or not, which is owned and
controlled by Celis, or which Celis has the right to disclose and
grant licenses or sublicenses to others without any obligation,
that was developed before the execution of this Agreement or is
developed during the term of the Design Program, and that may
reasonably be necessary for the design, engineering development and
manufacture of the Radio Frequency Integrated Circuits. Specific
items of Celis Design Information are listed in Attachment B
as of the Effective Date, which may be updated depending upon the
design work hereunder , except for any information, which
under the terms of any contract or agreement to which Celis is a
party is restricted from being disclosed . |
| 1.5 |
“ Celis Patents And Mask Work Rights ” shall
mean all mask work rights, unexpired patents and patent
applications, continuations, continuations in part, and divisions
thereof, regarding integrated circuit design and/or technology,
issued or issuing on any applications entitled to a first effective
filing date prior to the completion of the Design Program, owned by
Celis and in which Celis has the right to grant licenses or
sublicenses without additional consideration to any Third Party,
which may be reasonably necessary for the design, engineering
development and manufacture of the RFID Circuit. Specific items of
Celis Patents And Mask Work Rights are initially listed in
Attachment C as of the Effective Date, which may be updated
depending upon the design work hereunder. |
| 1.6 |
“ Design Program ” shall mean the work
efforts of Celis and Hynix to develop the RFID Circuit by means of
the design program described in Attachment D . |
| 1.7 |
“ Digital Circuitry ” shall mean the digital
circuit block in the RFID Circuit that contains only digital
circuits and controls the RFID Circuit and performs digital
functions consistent with the Specification. |
Page 2 of 17
Celis/Hynix RFID
Development and Licensing Agreement
| 1.8 |
“ Effective Date ” shall mean the date of
execution of this Agreement by both Parties, subject to the
approval by the government of the Republic of Korea and/or the
government of United States of America. |
| 1.9 |
“ Exclusive Field ” means (a) injection and
compression molded plastic closures, (b) consumer grade aluminum
foil of the type marketed under the Reynolds Wrap aluminum foil
brand, (c) consumer grade polymer film for home packaging of the
type marketed under the Reynolds plastic wrap brand, and (d) thin
wall transparent polymeric containers of the type used for food
packaging of less than a gallon capacity. |
| 1.10 |
“ Memory Circuitry ” shall mean the memory
circuit block in the RFID Circuit, including the memory cell array
and peripheral circuitry to operate the memory, as is commonly
understood within the RFID industry. |
| 1.11 |
“ Net Sales Price ” means the quarterly
arithmetic average Hynix sales price for Radio Frequency Integrated
Circuits shipped in such quarter by or for Hynix and its Affiliates
in arm’s length transactions with independent customers. In
the case of sales of wafers for assembly of Radio Frequency
Integrated Circuits into RFID Tags or modules, the Net Sales Price
of wafers shall mean the quarterly average Hynix sales price of
each good die, as if each good die were a finished Radio Frequency
Integrated Circuit, times the average number of good dice per
wafer. The net sales price for sales by Hynix to Hynix Affiliates
or other divisions of Hynix shall be calculated as if such sales
were to independent customers in arm’s length transactions
based on the number of dice shipped to such Hynix Affiliates or
other divisions of Hynix. The Net Sales Price shall be reduced by
deduction of transportation charges, insurance and taxes paid by
Hynix and/or its Affiliates related to the sale of such Radio
Frequency Integrated Circuits and/or wafers containing such Radio
Frequency Integrated Circuits. |
| 1.12 |
“ Radio Frequency Integrated Circuit ” shall
mean an integrated circuit that contains Celis Design Information
and/or Celis Patents and Mask Work Rights, and shall include
integrated circuits that have a mode of operation that does not
require a battery or power supply for their operation (all power
comes from the radio frequency signal from the antenna), although
such integrated circuits may have more than one mode of
operation. |
| 1.13 |
“ RFID Circuit ” shall mean the specific
Radio Frequency Integrated Circuit to be developed by Hynix and
Celis under this Agreement. |
| 1.14 |
“ Specifications ” shall mean the data and
communication protocols mutually agreed upon by Celis and Hynix for
the RFID Circuit, in accordance with Attachment E
. |
| 1.15 |
“ Third Party ” shall mean any entity,
person, firm, or corporation other than Hynix, Celis, or an
Affiliate of either Party. |
Page 3 of 17
Celis/Hynix RFID
Development and Licensing Agreement
ARTICLE 2.
PURPOSE
| 2.1 |
General Purposes . The purpose of this Agreement is for
Celis and Hynix to develop a RFID Circuit meeting the
Specifications, and for Celis to license Hynix and its Affiliates
to use Celis Design Information and Celis Patents And Mask Work
Rights to develop, manufacture, and sell Radio Frequency Integrated
Circuits. Further purposes of this Agreement are for Celis and
Hynix to collaborate in the design and testing of the RFID Circuit,
and for Celis to receive consideration based on Hynix sales of
Radio Frequency Integrated Circuits that use Celis Design
Information and/or Celis Patents and Mask Work Rights. |
ARTICLE 3. DEVELOPMENT
WORK
| 3.1 |
Celis Obligations . Celis shall use its reasonable best
efforts to complete the design work for the RFID Circuit in strict
compliance with Design Program and the Specifications and any
reasonable modifications that Hynix and Celis might agree upon in
accordance with Article 3.3. Celis shall timely deliver relevant
deliverables set forth in and in accordance with the Design
Program. |
| 3.2 |
Hynix Obligations . Hynix shall use its reasonable best
efforts to provide Celis with the Hynix information required for
execution of the Design Program, and to complete the design work
for the RFID Circuit in strict compliance with the Design Program
and the Specifications , and any reasonable modifications
that Hynix and Celis might agree upon in accordance with Section
3.3. Hynix agrees to generate reticles and to fabricate silicon
wafers containing the RFID Circuit as specified in Article 5 and
Attachment D . |
| 3.3 |
Modifications . The Design Program and the
Specifications, which are attached hereto as Attachments D and
E may be changed or modified from time to time by the written
request of either Party and approval by the other Party acting in
good faith. In case of any change, both Parties will determine in
good faith to modify any of the terms and conditions hereof which
may be related to such change. Hynix and Celis agree to revise the
Specification in accordance with industry standard changes,
revisions, or replacements to the data and communication protocols
made prior to completion of the RFID Circuit, such as may be put
forth by EPCglobal. |
ARTICLE 4. DEVELOPMENT
COSTS
| 4.1 |
Compensation . In compensation for a portion of the
design work to be performed by Celis hereunder in accordance with
the Design Program, Hynix shall pay Celis [*****] at the time of
sign-off of this Agreement, and an additional [*****] within thirty
(30) days of tape out of the RFID Circuit design. |
[*****] - Portions of this exhibit are
subject to a request for confidential treatment and have been
redacted and filed separately with the Securities and Exchange
Commission.
Page 4 of 17
Celis/Hynix RFID
Development and Licensing Agreement
| 4.2 |
Compensation Limit . It is agreed that in no event shall
the total amount to be paid by Hynix for the design work by Celis
pursuant to Article 5.1 exceed [*****]. |
ARTICLE 5. WAFER
FABRICATION AND EVALUATION
| 5.1 |
Reticles . Hynix will generate the mask reticles
containing the RFID Circuit and a Hynix process control TEG at its
own cost in accordance with the Design Program. |
| 5.2 |
Silicon Wafers . Hynix will fabricate the silicon wafers
containing the RFID Circuit and the process control TEG at its own
cost in accordance with the Design Program. The obligation of Hynix
under this Article 4.2 shall be to process no more than three split
lots, provided that any such lots are not scrapped due to
misprocessing by Hynix. In case of a misprocessed lot by Hynix,
such misprocessed lot shall not be counted as any of the three
split lots. The lots shall be reasonably split (wafers held at
certain processing points) as mutually agreed by Hynix and Celis
acting in good faith. The number of silicon wafers started for each
lot does not need to exceed 20 wafers. Data obtained from the three
silicon wafer lots shall be used for qualification of the RFID
Circuit, as applicable. If a full layer reticle revision is
required solely because of Celis’ design errors, Celis shall
pay Hynix the full reasonable reticle charge for such full layer
revision. |
| 5.3 |
Celis Wafers . Hynix agrees to provide Celis with a
reasonable number of wafers in a timely fashion for evaluation
testing of the RFID Circuit by Celis. Hynix agrees to provide Celis
with parametric information from the TEG structures on the wafers
provided to Celis. |
| 5.4 |
Evaluation . Hynix and Celis agree to evaluate the
performance of the RFID Circuit. Hynix and Celis agree to provide
each other with their evaluation results from testing the RFID
Circuit. |
ARTICLE 6.
LICENSE
| 6.1 |
Celis Grant . Subject to Article 6.2, Celis hereby
grants to Hynix and Hynix’s Affiliates a non-exclusive,
non-transferable, worldwide, perpetual and royalty-bearing license,
with no right to sublicense, to use, copy, reproduce or modify the
Celis Design Information and Celis Patents And Mask Work Rights in
order to develop, manufacture, have manufactured, use, sell or
otherwise dispose of the RFID Circuit and Radio Frequency
Integrated Circuits. Such license shall be subject to the terms and
conditions of this Agreement. Hynix and Hynix’s Affiliates
shall use Celis Design Information and Celis Patents And Mask Work
Rights only for the purposes of this Agreement. Hynix agrees to
notify Celis, in writing, of the name and address of each
manufacturing |
| [*****] |
- Portions of
this exhibit are subject to a request for confidential treatment
and have been redacted and filed separately with the Securities and
Exchange Commission.
|
Page 5 of 17
Celis/Hynix RFID
Development and Licensing Agreement
| |
Affiliate who will be
using this license prior to such an Affiliate’s use of this
license. Unless otherwise specified in this Agreement, Hynix and
Hynix’s Affiliates shall in no event sell the Radio Frequency
Integrated Circuits for any military and/or space application (this
includes all governmental entities, agencies, military agencies, or
commercial space customers of any nation). Hynix and Hynix’s
Affiliates shall have the sole and exclusive right to manufacture
the RFID Circuit that uses Hynix intellectual property, in part,
and Celis shall have no right to sublicense Hynix intellectual
property.
|
| 6.2 |
Exclusive Field . In the Exclusive Field, the license
grant of Article 6.2 shall apply to sales to only Alcoa/CSI. Should
Hynix desire to sell Radio Frequency Integrated Circuits into the
Exclusive Field to customers other than Alcoa CSI, then Hynix shall
consult with Celis and Celis shall be the sole interface to Alcoa
CSI to attempt to negotiate such rights. Celis shall use its
reasonable best efforts in negotiating for such rights, and shall
consult with Hynix at reasonable time intervals during the
negotiating period for such rights. |
| 6.3 |
Export . Hynix hereby covenants and assures Celis that
it will not, nor will its Affiliates, without prior authorization
on the United States Department of Commerce, export, either
directly or indirectly, any Celis Design Information or technology
derived from Celis or any “direct product” of such
Celis Design Information or technology, in violation of the export
laws of the United States. Celis relies on Hynix’s covenants
and assurances in entering into this Agreement. |
| 6.4 |
Royalty Rate . Subject to Article 6.5, in consideration
for the license rights granted to Hynix and its Affiliates by Celis
pursuant to Article 6.1, Hynix shall pay Celis a declining royalty,
as follows: |
| |
• |
|
of [*****] of the Net Sales Price for first [*****] of
royalties received by Celis Semiconductor Corporation under this
Article 6.3, |
| |
• |
|
of [*****] of the Net Sales Price for next [*****] of royalties
received by Celis Semiconductor Corporation under this Article
6.3, |
| |
• |
|
of [*****] of the Net Sales Price for next [*****] of royalties
received by Celis Semiconductor Corporation under this Article 6.3,
and, |
| |
• |
|
of [*****] of the Net Sales Price thereafter
perpetually. |
| 6.5 |
Royalty Exclusion . Hynix shall not pay any royalty to
Celis for sale of silicon die or wafers containing Radio Frequency
Integrated Circuits to Celis, and Hynix shall not commence payment
of royalties to Celis until the royalties calculated in accordance
with Article 6.3 exceed [*****]. |
[*****] - Portions of this exhibit are
subject to a request for confidential treatment and have been
redacted and filed separately with the Securities and Exchange
Commission.
Page 6 of 17
Celis/Hynix RFID
Development and Licensing Agreement
| 6.6 |
Royalty Period . Within sixty (60) days following March
31, June 30, September 30 and December 31 of each year, for so long
as royalties are payable under this Agreement, and within sixty
(60) days after any termination of this Agreement under Article 14
hereof, Hynix shall furnish Celis with a detailed report covering
the direct preceding quarterly period, setting forth the amount of
royalties accrued and due as specified under this Article 6 of this
Agreement. |
| 6.7 |
Royalty Payments . Based on the information provided to
Celis pursuant to Article 6.6, Celis shall provide Hynix with an
invoice, and Hynix shall pay the amount of the invoice to Celis
within thirty (30) days of Hynix receipt of such invoice. All
payments paid under this Agreement shall be paid in U.S. Dollars.
In the event that the royalties under this Article 6 are from sales
in currencies other than U.S. Dollars, the amount shall be
converted to U.S. Dollars at the official rate of exchange on March
31, June 30, September 30 and December 31 of each year for the
preceding three (3) month period. |
| 6.8 |
Royalty Late Payment . Any late payment of royalties
shall include interest at one percent (1%) per month, from the time
such payment is due. |
| 6.9 |
Royalty Records and Audit . Hynix shall keep full
records of all transactions requiring the payment of royalties for
a period of three (3) years from date of payment. A certified
public accountant, appointed and paid by Celis and accepted by
Hynix, which acceptance will not be unreasonably withheld, shall
have the right to examine the records kept by Hynix and its
Affiliates during regular business hours upon thirty (30) days
written advance notice, for the purpose of verifying the reports
and accuracy of payment of the royalties described in this Article
6. Such certified public accountant shall be under obligation of
confidentiality and shall not disclose to any Third Party any
information and shall not disclose to Celis any information other
than information relatin |
|
