Exhibit 10.36
LICENSE AND SUPPLY
AGREEMENT
THIS AGREEMENT
, is made and entered into this 16th
day of December, 2003 (“ Effective Date
”) by and between NEWPORT FAB, LLC , a Delaware
limited liability company d/b/a Jazz Semiconductor (“
Jazz ”), and ADVANCE SEMICONDUCTOR
MANUFACTURING CORP. OF SHANGHAI, a corporation formed under the
laws of the Peoples Republic of China (“ ASMC
”) (hereinafter Jazz and ASMC may each be referred to as a
“party” and may be jointly referred to as
“parties”).
PURPOSES
ASMC has committed to provide Jazz
with semiconductor products utilizing manufacturing capacity at
ASMC’s facility in Shanghai, Peoples Republic of China that
ASMC has reserved for the exclusive use of Jazz. This Agreement
provides the terms and conditions for the manufacture of such
products by ASMC for Jazz, including the use of the information and
know-how of Jazz in order to meet Jazz’s needs for Wafers,
and for no other purpose.
In consideration of the mutual
promises of the parties hereto, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, do
hereby agree as follows:
ARTICLE 1
DEFINITIONS
In this Agreement, unless otherwise
defined or the context otherwise requires, the following words and
expressions shall have the following meanings:
1.1
“ Affiliate
” shall mean and include, with respect to either of the
parties, any Person that directly or indirectly controls, is
controlled by or is under common control with such specified
Person.
1.2
“ Aggregate Wafer
Receipts” shall mean an aggregate amount equal to the
sum of (i) the ASMC Net Income and (ii) the Jazz Net
Income.
1.3
“ ASMC’s
Facility ” shall mean ASMC’s facility located
at 385 Hong Cao Road, Shanghai 200233, Peoples Republic of
China.
1.4
“ ASMC Net
Income ” shall mean the aggregate gross revenue of
ASMC resulting from the sale of the Wafers to Jazz pursuant to this
Agreement, determined as of the date of the finding of
infringement.
1.5
“CMOS”
and “BiCMOS”
shall refer to complementary metal oxide semiconductor devices and
bipolar complementary metal oxide semiconductor devices,
respectively.
1.6
“ Damages
” shall mean any and all demands, claims, actions or causes
of action, assessments, losses, diminution in value, damages
(including special and consequential damages), liabilities, costs,
and expenses, including without limitation, interest, penalties,
cost of investigation and defense, and reasonable attorneys’
and other professional fees and expenses.
Confidential treatment is being requested for
portions of this document. This copy of the document filed as
an exhibit omits the confidential information subject to the
confidentiality request. Omissions are designated by the
symbol [...***...]. A complete version of this document has
been filed separately with the Securities and Exchange
Commission.
1.7
“ Delivery Date
” shall mean a date for delivery of an agreed upon quantity
of Wafers ordered by Jazz as set forth in any Jazz
order.
1.8
“ Intellectual Property
Rights ” shall
mean all patents and all patent applications (including, without
limitation, originals, divisions, continuations,
continuations-in-part, CPA’s, RCE’s, provisional,
extensions or reissues), design rights (whether registered or not
and all applications for the foregoing), copyrights, database
rights, topography rights, mask work rights, applications to
register any of the aforementioned rights, trade secrets, rights in
unpatented know-how, rights of confidence and any other
intellectual or industrial property rights of any nature whatsoever
in any part of the world.
1.9
“ Lead-time
” shall mean the estimated amount of time required from order
placement to delivery as agreed to by the parties.
1.10
“ Jazz Net
Income ” shall mean the aggregate gross revenue of
Jazz resulting from the sale of the Wafers to its customers,
less (ii) the aggregate amount paid by Jazz to ASMC pursuant
to this Agreement, determined as of the date of the finding of
infringement.
1.11
“ Jazz
Technology ” shall mean all proprietary information
and know-how provided to ASMC by Jazz or any of its Affiliates, no
matter what form and including without limitation information and
know-how identified in Confidential Information Transmittal
Report(s) (copies of which shall be provided to Jazz), that relate
to Jazz’s process(es) for the manufacture of Wafers,
Jazz’s specifications for Wafers, Jazz’s performance
criteria for Wafers and all other matters relating to Wafers and
their manufacture, including without limitation, information
relating to the products and processes identified in Exhibit
A hereto.
1.12
“ Jazz Patent
Rights ” shall mean those patent rights owned by Jazz
during the term of this Agreement.
1.13
“
Person ” shall mean and
include any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization,
labor union, or other entity or governmental body.
1.14
“ Process
” shall mean Jazz’s process for the manufacture of
Wafers as communicated by Jazz or any of its Affiliates to ASMC or
from time to time during the term of this Agreement.
1.16
“ Term ”
shall have the meaning ascribed to it in Article 15.
1.17
“ Wafers ”
shall mean wafers that have been manufactured or processed
according to the Process so as to include or embody any of the
products listed on Exhibit B attached hereto.
1.18
“ Wafer Acceptance
Criteria ” shall mean those written Wafer
specifications, engineering requirements, performance criteria,
etc. provided to ASMC by Jazz or any of its Affiliates from time to
time during the term of this Agreement.
CONFIDENTIAL
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ARTICLE 2
PURCHASE OF WAFERS; PURCHASE
FORECASTS, ETC.
2.1
ASMC shall manufacture Wafers
utilizing the Process for Jazz. Jazz will purchase Wafers
manufactured by ASMC in accordance with the terms of this
Agreement.
2.2
Jazz shall provide to ASMC on or
before […***…] rolling forecast setting forth its
estimated requirements […***…] for Wafers. Such rolling
forecast shall not constitute a binding commitment to ASMC to buy
the estimated number of Wafers specified.
2.3
With respect to Specialty Wafers,
ASMC shall provide Jazz with sufficient production capacity at
ASMC’s Facility to manufacture at least five thousand (5,000)
Wafer starts per month between the Effective Date and March 2004
and at least ten thousand (10,000) Wafer starts per month between
April 2004 and December 2006. Additionally, ASMC shall use best
efforts to meet Jazz’s demand for Specialty Wafers should
that demand exceed the forgoing minimum quantities.
2.4
With respect to Advanced Specialty
Wafers, ASMC shall use best efforts to provide Jazz with the
quantity of Wafers set forth in the […***…] rolling
forecast for all months after March 2004.
2.5
ASMC shall manufacture Wafers,
including, without limitation, Specialty Wafers, using Jazz
Technology and/or the Process exclusively for Jazz. Except as set
forth in Section 2.11, ASMC shall not manufacture Specialty wafers
for any entity other than Jazz, regardless of the process used in
the manufacture of such wafers. ASMC shall have the right to
manufacture CMOS and BiCMOS wafers for entities other than Jazz,
provided that ASMC shall not use the Process, the Jazz Patent
Rights or Jazz Technology, in whole or in part, in such manufacture
without an express license from Jazz.
2.6
With respect to CMOS and BiCMOS
Wafers, ASMC shall use best efforts to provide Jazz with the
quantities of Wafers set forth in the […***…] rolling
forecast.
2.7
Jazz shall place its purchase order
for Wafers with ASMC in accordance with the Lead-time.
2.8
Jazz shall qualify the suppliers to
ASMC of major equipment, chemicals and other components required to
manufacture the Wafers in accordance with the Process and the terms
hereof. Thereafter, such suppliers may not be changed without
[…***…] prior notice so that Jazz may qualify the
proposed new supplier
2.9
Nothing herein shall be construed as
an obligation on the part of Jazz to purchase any quantity of
Wafers from ASMC.
2.10
ASMC shall use commercially
reasonable efforts to refer potential customers for semiconductor
devices to Jazz. If ASMC refers any potential customer(s) with
which Jazz has a commercial relationship, and the referred
customer(s) agrees to purchase Specialty Wafers from Jazz, then
Jazz shall give ASMC the first option to provide Specialty Wafers
to Jazz for the referred customer, provided that the referred
customer does not otherwise object to ASMC as a source for
Specialty Wafers.
2.11
If Jazz’s orders for Specialty
Wafers for […***…] consecutive months are less than
[…***…]percent ([…***…]%) of the smaller
of: (1) ASMC’s actual capacity for the manufacture of
Specialty Wafers and (2) the capacity amounts set forth in Section
2.3, then
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ASMC may manufacture Specialty
wafers for third parties, provided that ASMC shall not utilize
Process, Jazz Patent Rights or Jazz Technology in whole or in part,
in such manufacture.
2.12
If Jazz considers obtaining
Specialty Wafers from third parties between […***…],
then Jazz shall meet its requirements of up to […***…]
from ASMC pursuant to this Agreement provided: (1) the capacity for
the manufacture of Specialty Wafers at all Jazz facilities now
owned or hereafter acquired (including those facilities under
complete or partial common ownership) is full, (2) Jazz’s
customer(s) do not object to ASMC as a source of Specialty Wafers
and (3) ASMC agrees to sell such Specialty Wafers to Jazz on terms
and conditions as advantageous, in terms of price, delivery and
otherwise, as any third party offer(s) made to Jazz for the
provision of Specialty Wafers.
ARTICLE 3
ORDERS
3.1
Jazz shall place orders for the
Wafers by mail or by facsimile to ASMC or in another mutually
agreed upon way. ASMC shall, within […***…] after
receipt of such orders, send Jazz an acknowledgement of such
orders. ASMC shall regard Jazz’s orders as having most
favored customer status, providing Wafers to Jazz in quantities and
on schedules at least as advantageous as ASMC provides comparable
wafers to its two other largest customers in terms of sales
revenues.
3.2
The terms of this Agreement shall
supersede the terms of any Jazz purchase order and/or ASMC’s
acknowledgment/acceptance of such purchase order. Although it is
recognized that the parties may, for their respective convenience,
desire to use standardized purchase order forms, acknowledgment
forms and other documents which may contain terms in addition to or
at variance with the terms of this Agreement, no purchase order or
acknowledgement will amend this Agreement and all purchase order or
acknowledgements shall be subject to the terms and conditions of
this Agreement regardless of statements to the contrary contained
within the purchase order or acknowledgment.
3.3
All matters designated herein as
subject to agreement of the parties must be agreed upon in a
writing signed by authorized representatives of both parties for
such agreement to be effective. All issues that arise during the
Term that are not addressed by the terms herein shall be resolved
in accordance with Article 17 below.
ARTICLE 4
MANUFACTURE OF WAFERS,
ETC.
4.1
ASMC shall manufacture Wafers only
according to the Process and only on behalf of Jazz.
4.2
ASMC shall, at its own expense,
install all equipment necessary to produce Wafers according to
Process in the minimum quantities contemplated by this Agreement.
Further, ASMC shall install, at its own expense, all equipment
necessary to manufacture Specialty Wafers in the quantities set
forth in Section 2.3 above by June 2003 in accordance with the
Process. ASMC shall install, at its own expense, equipment
necessary for a pilot production line of Specialty Wafers by March
2004
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and thereafter shall use its best
efforts to expand its production capacity for Specialty
Wafers.
4.3
Jazz shall provide ASMC with Jazz
Technology and other technical assistance to enable ASMC to
implement the Process to manufacture Wafers. Prior to the
commercial production of Wafers, Jazz shall verify that ASMC is
utilizing the Process in accordance with Jazz’s
specifications to produce Wafers meeting the Wafer Acceptance
Criteria. Absent prior approval and subsequent verification by
Jazz, ASMC shall not deviate from the Process once the process at
ASMC’s Facility is verified.
4.4
ASMC shall provide authorized
personnel of Jazz with access to the ASMC Facility in order to
assist ASMC in implementing the Process and, thereafter, to
periodically verify that ASMC is manufacturing Wafers according to
the Process, that Wafers meet Wafer Acceptance Criteria and as
otherwise necessary in Jazz’s discretion to inspect the
Process and/or ASMC’s Facility for compliance with the terms
of this Agreement. Jazz shall give reasonable notice of its intent
to inspect ASMC’s Facility.
4.5
Jazz shall provide ASMC with advance
written notice of changes in Process and Jazz Technology relating
thereto. With assistance from Jazz, ASMC shall change its process
to comply with any changes, verify the Process as changed and
assist Jazz in verifying the Process as changed.
4.6
Each party shall use its
commercially reasonable efforts to complete, and shall bear its own
expenses in connection with, the actions associated with enabling
ASMC to utilize the Process, verifying ASMC’s process,
implementing changes to Process and ensuring that Wafers meet Wafer
Acceptance Criteria.
4.7
ASMC shall not use Process or Jazz
Technology at any location other than ASMC’s Facility or for
any purpose other than the manufacture of Wafers for
Jazz.
4.8
Jazz may at any time request ASMC to
[…***…] and ASMC shall […***…]. The
manufacture of Wafers shall […***…] pending
[…***…]. ASMC shall […***…] within a
reasonable time after receipt of Jazz’s written request,
subject to Jazz’s agreement to bear all expenses incurred by
ASMC in […***…]. If Jazz […***…] for more
than ninety (90) days, then ASMC may, at its option, cancel the
order. If an order for Wafers is cancelled after ASMC has
[…***…], Jazz shall pay to ASMC a cancellation fee
based on
[ ].
ARTICLE 5
LICENSE, INTELLECTUAL PROPERTY,
ACKNOWLEDGEMENT
5.1
Jazz hereby grants to ASMC a
non-exclusive, non-transferable, royalty-free license to use the
Jazz Technology and Jazz Patent Rights that can be licensed by Jazz
(including the Intellectual Property Rights of Jazz therein) to
manufacture Wafers at ASMC’s Facility solely on behalf of
Jazz. This license shall not be exercised at any other facility or
for the manufacture of Wafers for any other entity. Upon
termination of this Agreement, the license granted herein shall
terminate automatically.
5.2
ASMC hereby agrees and acknowledges
that Jazz is the sole owner of and shall retain all ownership
right, title, and interest in Jazz Technology and Jazz Patent
Rights.
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5.3
ASMC shall not contest or oppose or
otherwise participate in or support any challenge, including
without limitation a challenge to ownership, validity, scope, or
enforceability of Jazz Technology or Jazz Patent Rights nor shall
it participate in or support in any way any reissue, reexamination
or reconsideration thereof, with the exception of the ability to
challenge the validity of United States patents as permitted under
applicable law.
5.4
ASMC shall sign or cause to be
signed all documents necessary to perfect Jazz’s ownership
rights in Jazz Technology and Jazz Patent Rights, including all
Intellectual Property Rights therein, including without limitation
all necessary assignments and agreements with its employees,
subcontractors or agents.
5.5
ASMC acknowledges that, except as
set forth herein, Jazz reserves to itself all rights in all fields,
territories and technologies under Jazz Technology, Jazz Patent
Rights and the Intellectual Property Rights of Jazz therein. No
licenses are granted, no implied licenses are granted and no rights
to grant sublicenses are transferred to ASMC except those expressly
stated herein.
ARTICLE 6
OWNERSHIP OF NEWLY DEVELOPED
TECHNOLOGY
6.1
During the term of this Agreement
and with the written consent of Jazz, the Process may be improved,
modified, refined or otherwise altered by ASMC or by the parties
working in conjunction with one another. Such improvements,
modifications, refinements or other alterations of the Process,
whether before or after the date hereof, shall hereinafter be
referred to as “ Newly Developed Technology
” and may, but need not necessarily, constitute one or more
inventions, whether patentable or not.
6.2
ASMC agrees to promptly disclose any
Newly Developed Technology to Jazz. All Newly Developed Technology
and all Intellectual Property Rights therein shall be owned by
Jazz.
6.3
For no longer than the remainder of
the term of this Agreement, Jazz hereby grants to ASMC a
non-exclusive, non-transferable, royalty-free license in the Newly
Developed Technology (including newly developed technology
developed pursuant to any agreement with any of Jazz’s
Affiliates) and all Intellectual Property Rights therein to
manufacture Wafers at ASMC’s Facility. This license shall not
be exercised at any other facility or for the manufacture of Wafers
for any other entity. Upon termination of this Agreement, the
license grant in the Newly Developed Technology and all
Intellectual Property Rights therein shall terminate
automatically.
6.4
ASMC shall sign or cause to be
signed all documents necessary to perfect Jazz’s ownership
rights in the Newly Developed Technology and all Intellectual
Property Rights therein, in the Peoples Republic of China or
elsewhere, including without limitation all necessary assignments
and agreements with its employees, subcontractors and agents. ASMC
shall not make any registrations or filings with respect to any
Newly Developed Technology absent the prior written consent of
Jazz.
6.5
It is the intent of the parties that
ownership of the Newly Developed Technology and all Intellectual
Property Rights therein shall permanently reside in Jazz. However,
should a court of competent jurisdiction find that ASMC owns any
interest in the Newly Developed Technology or
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the Intellectual Property Rights
therein, then ASMC hereby grants to Jazz a worldwide, perpetual,
exclusive, irrevocable, transferable, royalty-free license in the
Newly Developed Technology and all Intellectual Property Rights
therein to make, sell, offer to sell, import and otherwise
distribute products that include or incorporate, in whole or in
part, the Newly Developed Technology and the Intellectual Property
Rights therein.
ARTICLE 7
PRICES AND PAYMENT
7.1
Prices for Jazz’s purchases of
Wafers, are provided in Exhibit B . Orders or changes to
Orders increasing the volume of an existing order shall
[…***…]. After the first anniversary of this Agreement,
either party may, from time to time, request the other party to
renegotiate pricing based on changing market conditions. Only price
changes agreed to in writing by both parties shall be
effective.
7.2
All prices are stated in U.S.
Dollars. All prices include all taxes, export duties, and other
charges imposed by the Peoples Republic of China and any local
governments in the Peoples Republic of China but are exclusive of
all federal, state or local sales, use, excise, or similar taxes
imposed by the United States of America and any local governments
within the United States of America. Any such tax(es) shall be
separately itemized on ASMC’s invoice(s) and paid by Jazz,
or, in lieu thereof, Jazz shall furnish ASMC a properly executed
tax exemption certificate prior to shipment.
7.3
ASMC shall invoice Jazz upon
ASMC’s shipment of such Wafers to Jazz. Payments from Jazz
shall be due […***…] days from the date of ASMC’s
invoice or Jazz’s acceptance of Wafers, whichever occurs
later. [Any late payment shall be subject to late payment charges
of […***…] percent ([…***…]%) per month].
Jazz shall pay the Invoices by wire transfer or check, payable in
U.S. Dollars. Jazz shall make any wire transfer payment requested
by ASMC to the account designated below or as otherwise directed by
ASMC:
Bank:
Location:
Account Name:
Account Number:
ABA/Routing:
ARTICLE 8
TERMS OF DELIVERY,
PACKING
8.1
The terms of delivery are Ex Works,
[ ].
8.2
Wafers shall be packed in accordance
with Jazz’s packing instructions, which shall be provided to
ASMC by Jazz from time to time. Prices for Wafers include the cost
of packing. Each delivery of Wafers to Jazz must include a packing
list that contains at least the Jazz Order number, the quantity of
Wafers shipped; the Process Control Monitor (PCM) data of the
shipped Wafers (either as hard copy or location of web-based data);
the date of shipment and the results of any testing performed on
the Wafers pursuant to the Wafer Acceptance Criteria.
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8.3
Wafers shall be shipped via
[ &nb
