Exhibit 10.4
* OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE
SECURITES AND EXCHANGE COMMISSION
FOUNDRY VENTURE AGREEMENT
This Foundry Venture Agreement ("Foundry Venture Agreement") is entered into
as of August ___, 1995, by and between Lattice Semiconductor Corp., a
corporation with its headquarters in Oregon ("Lattice") and United
Microelectronics Corporation, a corporation organized under the laws of the
Republic of China ("UMC").
Lattice understands that UMC is in discussions with others who are
interested in participating in FabVen. Lattice agrees that UMC may commit to
such others (collectively referred to in this Foundry Venture Agreement as
"OtherVen") in such amounts as UMC deems appropriate, subject to the commitments
made to Lattice hereunder, and provided further that each OtherVen must commit
in writing to comply with and be bound by this Foundry Venture Agreement as if
specifically named as a Venturer herein. Notwithstanding such OtherVen, Lattice
will be fully bound by and is committed to the terms of this Foundry Venture
Agreement.
Lattice, OtherVen and UMC (collectively "the Venturers") agree:
1. PURPOSE AND FORMATION OF VENTURE
1.1 Subject to the Technology Transfer and License Agreement and the
Foundry Capacity Agreement referred to in paragraphs 3 and 5 below
(collectively, the "Venture Agreements"), the Venturers each commit to form and
invest in a corporation to be formed under the laws of the Republic of China
("R.O.C.") for purposes of engaging in the business of providing integrated
circuit foundry services, making and selling integrated circuits in wafer, die
and packaged form as generally described in the FabVen Business Plan referred to
in paragraph 1.4 below.
1.2 UMC will arrange the formalities of submission to the Administration of
the Science Based Industrial Park for approval of and then for incorporation of
the corporation contemplated under this Foundry Venture Agreement, using a name
mutually agreeable to the Venturers (for purposes of this Foundry Venture
Agreement, the corporation contemplated under this Foundry Venture Agreement
shall be referred to as "FabVen."). All reasonable expenses, up to a maximum of
USD $10,000 (exclusive of fees to be paid to the government), incurred by UMC
pursuant to this paragraph 1.2 with respect to such incorporation shall be
subject to reimbursement by FabVen if the FabVen shares contemplated under
Paragraph 4 are not issued to UMC as described below.
1.3 Subject to the terms of the Venture Agreements, FabVen shall engage in
the business of foundry services, and develop and improve processing and
manufacturing techniques in order to improve its competitiveness in the foundry
area.
1.4 UMC will submit to the Science Based Industrial Park a written
business plan (the "FabVen Business Plan") for the operations and for the
capital structure and expenditures of
1
FabVen; this FabVen Business Plan is subject to approval by the Administration
of the Science Based Industrial Park; and, subject to the conditions of
confidentiality in Paragraph 9.7 below, will be made available to the Venturers.
As part of the FabVen Business Plan, the Venturers contemplate FabVen will
apply for "tax holiday" and/or other favorable tax treatment under R.O.C. law.
2. INITIAL OPERATIONS
2.1 The Venturers generally contemplate the Building and Construction
Schedule for FabVen as shown in Attachment A and the Production and Business
Schedule for FabVen as shown in Attachment B.
2.2 Under mutually agreeable written terms to be negotiated between UMC and
FabVen, FabVen shall lease from UMC the land generally described in Attachment
C, and commonly known as UMC's Module D, located at No. 3 Li-Hsin Road Science
Based Industrial Park, Hsin Chu City, Taiwan, R.O.C.
(a) The Venturers contemplate that except as agreed by them in writing, the
terms of this lease will be at the market rate which would be negotiated between
a lessor and lessee dealing with one another at arms length in the context of an
independent lease and not based on some other business relationship.
(b) Without limiting the foregoing, any and all services and supplies
(including without limitation power, water, gas and/or materials) will not be
part of such lease, and will be the subject of such terms as may be negotiated
by FabVen.
(c) The lease term for Module D will be for an initial period of five
years, and FabVen will have the right to extend the lease for up to two
additional five year periods under terms to be stated in the lease agreement.
FabVen will occupy the land for this Module as its principal place of business,
and will utilize this land for its production facility.
2.3 The Venturers shall each cooperate to build out this land as FabVen's
production facility as quickly and efficiently as commercially reasonable,
provided however that this Paragraph 2.3 shall not impose any obligation to
provide additional funding beyond that expressly required under this Foundry
Venture Agreement.
3. TECHNOLOGY TRANSFER AND MANAGERIAL SUPPORT
Promptly after FabVen's formation, UMC and FabVen will enter into a mutually
agreeable Technology Transfer and License Agreement pursuant to which UMC will
transfer to FabVen for use in FabVen facilities the Licensed Process (as defined
in the Technology Transfer and License Agreement) and related manufacturing
know-how. The execution of the Technology Transfer and License Agreement is an
essential aspect of the relationship contemplated under this Foundry Venture
Agreement.
2
* OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE
SECURITES AND EXCHANGE COMMISSION
4. INVESTMENT COMMITMENTS & STOCK PURCHASE AND SHAREHOLDER AGREEMENTS &
REPRESENTATION ON BOARD OF DIRECTORS
4.1 The Venturers will purchase shares in FabVen as follows:
(a) The total capital of FabVen shall be USD $1 Billion: USD $600 million
will be by investment in standard shares, and, as may be approved by the FabVen
board of directors, USD $400 million (plus any other additional capital
required) will be by way of participation in UMC credit facilities and/or bank
loans, and/or will be by way of other debt and/or equity to the extent such
other debt and equity is approved in writing by each of the Venturers.
Notwithstanding anything to the contrary, (i) UMC shall not be required to
provide participation on behalf of FabVen in UMC's credit facilities in any
amount in excess of USD $400 million, and (ii) provided further that, to the
extent demanded by the lender and subject to the requirements of the law, UMC
shall guarantee such bank loans made directly to FabVen but only so long as and
to the extent that the total FabVen capital financed by way of participation in
credit facilities, bank loans, debt and/or such other equity (excluding the
investment stated in the table of paragraph 4.1(b) below) is less than and/or
equal to USD $410 million.
(b) The Venturers will invest according to the following table:
- --------------------------------------------------------------------------------
$ investment
Standard share % represented by Technical share %
standard share
(USD millions)
- --------------------------------------------------------------------------------
Lattice 10% $60M 0%
- --------------------------------------------------------------------------------
OtherVen TBD% $TBD 0%
- --------------------------------------------------------------------------------
UMC, UMC Affiliates* 40% $240M 15%
FabVen employees,
UMC employees** &
R.O.C. financial
institutions
- --------------------------------------------------------------------------------
Total shareholding 85% $510M 15%
- --------------------------------------------------------------------------------
*For purposes of this Foundry Venture Agreement, "UMC Affiliates" shall mean
those entities: (i) nominated by UMC and approved by the Venturers in writing,
(ii) which UMC directly and/or indirectly controls, and/or (iii) in which UMC
directly or indirectly owns a majority interest.
**UMC employees who intend to become (and who later become) regular employees of
FabVen will be among the FabVen shareholders pursuant to this table. The UMC
employees and the eligible FabVen employees shall be required to pay the value
shown in this table for their standard shares.
(c) The Venturers shall pay in cash for their standard shares as follows:
(i) twenty-five percent (25%) to be paid in full on the later of *,
or when *;
3
* OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE
SECURITES AND EXCHANGE COMMISSION
(ii) fifty percent (50%) to be paid in full on or before the *; and
(iii) the remainder, twenty-five percent (25%), to be paid in full on
or before the *.
(d) Subject to the requirements of law and pursuant to the applicable
statutory and regulatory rules, the standard shares of the Venturers, of the UMC
Affiliates, of the UMC employees, and of the FabVen employees as shown in
paragraph 4.1(b) above shall vest upon payment for the shares involved; UMC's
technical shares shall vest upon completion of first silicon for any process
licensed from UMC having feature sizes of * or less; the shares of
UMC Affiliates (to the extent fully paid) shall be issued as UMC requests; and
the shares of UMC and UMC Affiliates shall be transferrable amongst UMC and UMC
Affiliates without the necessity of FabVen's, Lattice's, and/or OtherVen's prior
written consent.
(e) The Venturers' shares shall be common stock, and, to the fullest
extent allowable under the law, will be registered in any public offering by
FabVen, provided that with respect to such shares, each Venturer (and all UMC
Affiliates holding such shares) must follow and comply with all requirements of
R.O.C. law and of the Taiwan Securities and Exchange Commission and of the
Taiwan Securities Exchange, including, without limitation, with respect to
stand-still, lock-up, and/or other requirements.
(f) Until FabVen completes a successful offering of its shares on a
recognized securities exchange, the shares of the Venturers (and of UMC
Affiliates holding such shares) in FabVen will not be transferable in any manner
whatsoever except with the written consent of the Venturers, provided however
that any Venturer may transfer its entire right, title and interest in FabVen
(including its proportionate right of first refusal for foundry capacity, the
"Foundry Rights") and other rights under the Foundry Venture Agreement and/or
Venture Agreements:
(i) once but only to the extent and only as part of a transfer of all or
substantially all of the assets, business and/or ownership of that Venturer
to a transferee subject, with respect to the Foundry Rights, to the terms of
paragraph 4.1(f)(iii) below; and/or
(ii) once to or between itself and any of its subsidiaries in which, at the
time of such transfer, the transferring Venturer owns at least 50%.
Notwithstanding anything to the contrary:
(iii) the Foundry Rights when and if transferred pursuant to Paragraph
4.1(f)(i) above shall only be exercisable with respect to the manufacture of
products which the transferring Venturer at the time of such transfer was
selling, was designing (as reflected in contemporaneous documents) or was
contemplating designing and selling (as demonstrated in its then written
business plan(s)), and all future revisions and more highly integrated
versions of such products.
4
(iv) if prior to the completion of a public offering of FabVen securities on
a recognized securities exchange, any Venturer (or UMC Affiliate holding
such shares) wishes and/or attempts to transfer its shares in FabVen (other
than as allowed by Paragraph 4.1(f)(i) and/or 4.1(f)(ii)) pursuant to any
Court or other order or law, or as a result of any nonconsensual action by
any authority with jurisdiction, the shares involved will be subject to a
right of first refusal as follows:
(aa) the other Venturers (the "eligible other Venturers") will
have the right to purchase the shares involved at their then fair
market value as determined by a mutually agreeable independent
appraiser;
(bb) each such eligible other Venturer will have the right to purchase
such shares on a pro rata basis as determined by the ratio of their
respective shareholding percentages (which, absent any previously
permitted transfers, would be as shown in the table in Paragraph 4.1(b)
above);
(cc) if any such eligible other Venturer elects not to exercise any
portion or all of such right of first refusal within 30 days of the
independent appraisal, such portion of such right of first refusal will
be subject to exercise by the other eligible other Venturer, and the
shares involved will be subject to a right of such other eligible other
Venturer to purchase on the same terms as outlined above; and
(dd) if the other eligible other Venturer does not commit to purchase
such shares within 60 days of the independent appraisal, all rights
under this Paragraph 4.1(f)(iv) will expire as to such unpurchased
shares.
(g) Subject to the requirements of and to the extent permissible under
R.O.C. law, to the extent that FabVen wishes to offer any equity beyond the USD
$600 million referred to in Paragraph 4.1(a) above, each Venturer shall have the
right of first refusal to participate in such offering in proportion to its then
current respective shareholding.
4.2 The parties shall in good faith after execution of this Foundry Venture
Agreement enter into negotiations regarding audit and information rights to be
provided to the Venturers, in order to, among other things, make timely public
disclosure of information about FabVen's profits, losses, and/or other financial
information reasonably required, in the view of such Venturer's counsel and
accountants, to be disclosed separately, in conjunction with, or consolidated
into, such Venturer's public quarterly, annual and/or other reports. Such rights
shall at a minimum be sufficient for such Venturers to timely comply with their
public reporting obligations, but shall not require FabVen to pay for and/or
incur the expenses of such matters. In the event the parties do not reach
agreement on such rights by December 15, 1995, the extent of such rights will be
decided conclusively by Price Waterhouse & Co. (Taipei office) and a nationally
recognized independent accounting firm nominated by Lattice and OtherVen. If
the aforesaid accounting firms fail to decide such rights by January 30, 1996,
the matter shall be resolved by binding arbitration on an expedited basis.
5
5. FOUNDRY CAPACITY & COMMITMENTS
Each Venturer's obligations under Paragraphs 1 to 5 of this Foundry Venture
Agreement shall be conditioned upon entry by the Venturer into a Foundry
Capacity Agreement with FabVen (the "Foundry Capacity Agreement") and none of
the obligations of the Venturer or of FabVen under those sections shall be
binding until such time as it enters such a Foundry Capacity Agreement. The
terms of the Articles of Incorporation and Bylaws of FabVen shall be consistent
with the terms of this Foundry Venture Agreement, and the Venture Agreements.
6. TERMINATION OF RIGHTS & PRIVILEGES
6.1 Subject to Paragraph 6.2 below, any one or more of the Venturers and/or
FabVen (collectively "the Parties") shall have the right to terminate the rights
of any other Party under this Foundry Venture Agreement and/or the Venture
Agreements by giving written notice of termination to that other Party at any
time upon or after:
(a) the filing by the other Party of a petition in bankruptcy or
insolvency;
(b) any adjudication that the other Party is bankrupt or insolvent;
(c) the filing by the other Party of any petition or answer seeking
reorganization, readjustment or arrangement of its business under any law
relating to bankruptcy or insolvency;
(d) the appointment of a receiver for all or substantially all of the
property of the other Party;
(e) the making by the other Party of any assignment for the benefit of
creditors; or,
(f) the institution of any proceeding for the liquidation or winding up of
the other Party's business or for the termination of its corporate charter.
Notwithstanding anything to the contrary, no termination under this Paragraph
6.1 as to such other Party shall affect the rights of any other Venturer under
this Foundry Venture Agreement and/or the Venture Agreements.
6.2 (a) Termination pursuant to Paragraph 6.1 above shall be effective
immediately upon delivery of the written notice, or in the case of airmail
notice, four days after dispatch, pursuant to Paragraph 8 below.
(b) Upon termination as to a Venturer under Paragraph 6.1 above, any
shares held by that Venturer shall be subject to purchase by the remaining
Venturers pursuant to Paragraph 4.1(f)(iv) above.
6
(c) Except as permitted in paragraph 4.1(f), no Venturer may transfer its
interest or right in FabVen in any manner to any competitor of UMC or to any
entity in the business of fabricating integrated circuits except under terms (i)
in which such Venturer first relinquishes and releases all rights to FabVen
capacity under this and any and all other agreements, and (ii) in which such
entity and/or competitor expressly consents in writing that they have no such
interest or right to such capacity.
6.3 FabVen will undertake its reasonable best efforts to implement the
Technology Road Map attached as Attachment B, and to achieve the goals described
in the FabVen Business Plan. In addition, and subject to the terms of this
Foundry Venture Agreement and the Venture Agreements, FabVen will cooperate with
each Venturer in a commercially reasonable manner to qualify products of such
Venturer under the processes involved.
7. DISPUTE RESOLUTION
7.1 The Venturers and FabVen shall cooperate and attempt in good faith to
resolve any and all disputes arising out of and/or relating to this Foundry
Venture Agreement and/or any of the Venture Agreements. Without limiting the
foregoing, within thirty days of a written demand to meet to resolve such a
dispute, senior management with the authority to negotiate and resolve the
issues shall meet in the State of Hawaii or in some other mutually agreeable
location to discuss the issues, from time to time during the forty-five day
period following such demand (or longer if agreeable to the Venturers involved)
as reasonably requested by any party involved, and such senior management will
attempt to resolve the dispute.
7.2 Any such disputes relating to and/or arising out of this Foundry Venture
Agreement and/or any of the Venture Agreements which cannot be so resolved will
be decided exclusively by binding arbitration under procedures which ensure
efficient and speedy resolution. Such an arbitration may be commenced by FabVen
and/or any Venturer involved in the dispute (i) after the expiration of the
forty-five day period following the written demand to meet to resolve the
dispute pursuant to Paragraph 7.1 above, and/or (ii) at such earlier time as any
Party involved repudiates and/or refuses to continue with its obligations to
negotiate in good faith.
7.3 The arbitration hearing will be before a panel of three neutral,
independent arbitrators. The arbitration hearing will be conducted in the State
of Hawaii, and will be in the English language (with translations and
interpretations as reasonable for the presentation of evidence and/or conduct of
the arbitration). Notwithstanding anything to the contrary, any party may
apply to any court of competent jurisdiction for interim injunctive relief as
may be allowed under applicable law with respect to irreparable harm which
cannot be avoided and/or compensated by such arbitration proceedings, without
breach of this Paragraph 7 and without any abridgment of the powers of the
arbitrators.
7.4 The arbitration will be conducted under the Rules of the Asia Pacific
Arbitration Center. Notwithstanding anything to the contrary:
7
(a) the arbitrators will have no power to order discovery; and
(b) the arbitrators shall require pre-hearing exchange of documentary
evidence to be relied upon by each of the respective parties in their respective
cases in chief, and pre-hearing exchange of briefs, witness lists and summaries
of expected testimony.
7.5 The arbitrators will make their decision in writing; and their decision
will be binding upon the Venturers and FabVen and it may be entered by any court
having jurisdiction.
8. NOTICES
All notices required or permitted to be given under this Foundry Venture
Agreement and/or any of the Venture Agreements shall be in writing and be deemed
as given when delivered, or in the case of airmail, four days after dispatch,
and shall be addressed as follows and dispatched by personal delivery, by
airmail letter in any post office in the U.S. or in Taiwan, or by facsimile:
If to Lattice:
Lattice Semiconductor Corp.
5555 N.E. Moore Court
Hillsboro Oregon 97124
Attention: President
fax (503) 681-3077; fon (503) 681-0118
If to UMC:
United Microelectronics Corporation
No. 13 Innovation Road I
Science Based Industrial Park
Hsin Chu City, Taiwan, R.O.C.
Attention: John Hsuan, President
fax (035) 774-767; fon (035) 782-258
If to FabVen:
FabVen
No. 3 Li-Hsin Road
Science Based Industrial Park
Hsin Chu City, Taiwan, R.O.C.
Attention: President
fax (035) ; fon (035)
Any Venturer and/or FabVen may at any time give written notice of a change of
its address to the others.
8
9. MISCELLANEOUS
9.1 No Party shall be liable to the others with respect to the failure or delay
in the performance of any obligation under this Foundry Venture Agreement and/or
any of the Venture Agreements for the time of and to the extent that such
failure is caused by or the result of war, fire, flood, earthquake, acts of god
or any causes beyond the reasonable control of the Venturers and/or FabVen.
9.2 No Party shall be liable to the others (i) for any special, incidental,
indirect or consequential damages; (ii) for increased costs of obtaining
substitute goods or services to the extent such increased costs are in excess of
those amounts which such Party would have been entitled to receive for the goods
and services involved had it properly performed; (iii) for loss of use,
opportunity, market potential, and/or profit, on any theory (whether contract,
tort, from third party claims or otherwise).
9.3 Except as expressly stated above and in Paragraphs 9.5 and/or 9.13 below
and/or in the Venture Agreements, no Party makes any warranties or
representations (express, implied or statutory), and there are no other
warranties, representations, or indemnities, and THE PARTIES EXPRESSLY DISCLAIM
ALL SUCH OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE. Without limiting the
foregoing, except as expressly stated in this Foundry Venture Agreement and/or
in any of the Venture Agreements (these "Agreements"), there are no other
representations and/or warranties concerning the subject matter of such
Agreements, and/or relating to FabVen of any sort or manner, and each Party
expressly agrees that it is not relying upon any such other representations
and/or warranties. Each Party has consulted with counsel concerning such
Agreements and FabVen, and enters into these Agreements with full advice and
understanding and accepting the risks involved.
9.4 Notwithstanding anything to the contrary (whether in the Venture Agreements
or elsewhere), nothing contained in this Foundry Venture Agreement, in the
Venture Agreements, and/or in the FabVen Business Plan shall be or be construed
as:
(a) a warranty or representation as to the validity, utility, suitability
or economic viability of this opportunity or of any intellectual property or
technology except as expressly stated in paragraph 9.5 below, in Paragraph 9 of
the Technology Transfer and License Agreement, and/or in Paragraphs 5 and/or 7
of the Foundry Capacity Agreement;
(b) a warranty or representation that any manufacture, sales, use or other
disposition of products to be manufactured by FabVen will be free from
infringement of patents, utility models and/or design patents other than those
under which licenses have been granted hereunder and/or except as expressly
stated in paragraph 9.5 below, and/or in Paragraph 7 of the Foundry Capacity
Agreement;
(c) a warranty or representation that FabVen will be successful, that
FabVen will realize and/or fulfill any of its Business Plans, that FabVen will
go public or return profit to the
9
Parties, or that the Parties will recover their investments (for purposes of
this Paragraph 9.4(c), any covenant or obligation in these Agreements shall not
be eliminated and/or excluded by reason of it also being part of the FabVen
Business Plan, nor shall this Paragraph 9.4(c) absolve FabVen from efforts
required under these Agreements to implement the FabVen Business Plan);
(d) conferring any right to the other Parties to use in advertising,
publicity, or otherwise, any trademark, trade name or names of any Party, or any
contraction, abbreviation or simulation thereof; and/or
(e) conferring by implication, estoppel or otherwise, upon any Party any
license or other right under any class or type of patent, utility model or
design patent except the licenses and rights expressly granted under the Venture
Agreements.
9.5 (a) Each Venturer represents and warrants to the other Venturers and to
FabVen that all technology, processes, masks and other information tranferred by
that Venturer pursuant to the terms of this Foundry Venture Agreement and/or the
Venture Agreements, and/or its respective foundry relationship with FabVen shall
be free from any claims of infringement or violation of valid and enforceable
trade secret, trademark, copyright, and/or mask work rights of others; and that
Venturer shall defend, indemnify and hold the other Venturers and FabVen
harmless from and against any claims to the contrary, provided however that such
indemnifying Venturer shall receive (i) prompt written notification of any claim
for which it is providing indemnification under this Paragraph 9.5, (ii) the
right to assume, in a prompt fashion, sole control of the defense or settlement
of such claim (provided that the indemnifying Venturer cannot commit any other
Venturer and/or FabVen to the payment of sums), and (iii) reasonable assistance
from the indemnified party or parties, at the indemnifying Venturer's request
and expense and provided further that if the indemnifying Venturer assumes sole
control of the defense of such claim, the indemnified party may, at its
expense, participate in such defense.
(b) FabVen represents and warrants to the Venturers that all technology,
processes, masks and other information transferred by it (in products or
otherwise) or used by it in any process employed in the fabrication of products
pursuant to the terms of this Foundry Venture Agreement and/or the Venture
Agreements, and/or under its respective foundry relationships with the Venturers
shall be free from any claims of infringement or violation of valid and
enforceable trade secret, trademark, copyright, and/or mask work rights of
others; and FabVen shall defend, indemnify and hold the Venturers harmless from
and against any claims to the contrary, provided however that FabVen shall
receive (i) prompt written notification of any claim for which it is providing
indemnification under this Paragraph 9.5, (ii) the right to assume, in a prompt
fashion, sole control of the defense or settlement of such claim (provided that
FabVen cannot commit any Venturer to the payment of sums), and (iii) reasonable
assistance from the indemnified party or parties, at FabVen's request and
expense, and provided further that if FabVen assumes sole control of the defense
of such claim, the indemnified party may, at its expense, participate in such
defense.
9.6 The obligations of the Parties under Paragraphs 1 to 5 above shall be
subject to and conditioned upon funding of FabVen by the Venturers and upon
approval of the formation of
10
FabVen and of its operation at Module D by all required governmental
authorities, including without limitation, the Science Based Industrial Park
Administration, but the obligations under the other Paragraphs of this Agreement
shall not be so conditioned. UMC shall cooperate with FabVen in securing such
approvals within the time contemplated under the schedule of Attachment A. The
obligations and responsibilities of the Venturers and FabVen under Paragraphs 6
to 9 shall survive the expiration and/or termination of this Foundry Venture
Agreement.
9.7 (a) For purposes of these Agreements, "Confidential Information" shall
mean:
(i) any information disclosed by one party to another pursuant to or
in connection with these Agreements which is in written, graphic, machine
readable or other tangible form and is marked confidential, proprietary, or
in some other manner to indicate its confidential nature; and
(ii) any information orally disclosed by one party to another pursuant
to or in connection with these Agreements provided that such information is
designated as confidential at the time of disclosure and reduced to a
writing delivered to the receiving party within thirty days of the oral
disclosure and detailing the confidential information involved.
(b) Each party shall treat as confidential all Confidential Information
provided by any other party, shall not use or disclose such Confidential
Information except as contemplated in these Agreements and then only subject to
written confidentiality agreements at least as protective as those stated in
this Foundry Venture Agreement. Without limiting the above, each party shall
use at least the same procedures and degree of care which it uses to prevent the
disclosure of its confidential information of like importance and shall in no
event use less than reasonable procedures and a reasonable degree of care.
Notwithstanding the above, no party shall have obligations with respect to
Confidential Information of any other party which:
(i) Such party shows was generally known and available to the public at
the time it was disclosed, or becomes generally known and available to the
public through no fault of the receiver prior to the use and or disclosure of
such information by the receiver;
(ii) Such party shows was known to the receiver without obligation of
confidentiality at the time of disclosure as shown by written evidence in
existence at the time of disclosure;
(iii)Is disclosed with the prior written consent of the discloser;
(iv) Such party shows becomes known to the receiver without obligations of
confidentiality; or
(v) Is disclosed pursuant to the order or requirement of any court,
agency, or other governmental body having jurisdiction;
11
provided, however, that, prior to any such disclosure pursuant to paragraphs
9.7(b)(v) above, the Party seeking disclosure shall notify the others and take
all reasonable actions in an effort to minimize the nature and extent of such
disclosure.
(c) Each party agrees that the terms of these Agreements and the FabVen
Business Plan shall be treated as Confidential Information and not disclosed,
provided however that any and all parties may disclose the terms and conditions
of these Agreements and the FabVen Business Plan in confidence to its legal
counsel, accountants, banks, and financing sources and their advisers, or
pursuant to written confidentiality agreements having terms at least as
restrictive as those this Paragraph 9.7 in connection with an actual or proposed
merger or acquisition, and/or in connection with the enforcement of its rights
under this Foundry Venture Agreement
(d) Notwithstanding anything to the contrary, and subject to the
exceptions of Paragraph 9.7(b):
(i) any Confidential Information disclosed to UMC by a Venturer which is
marked "UMC only" (or similarly) may be used and disclosed by UMC solely in
connection with preparing and submitting the FabVen Business Plan and
applications for governmental approvals relating to FabVen but may not
otherwise be disclosed by UMC to FabVen or to any other Venturer;
(ii) any Confidential Information disclosed to UMC and/or to FabVen which
is marked as "FabVen Internal Only" may be disclosed by UMC to FabVen, but
may not be disclosed by FabVen to any other Venturer; and
(iii)any Confidential Information disclosed to a Venturer which is not
marked "UMC Only" and/or "FabVen Internal Only" (or similarly) may be
disclosed to FabVen and/or to any Venturer.
(e) Without limiting the foregoing, in order to facilitate exchanges of
Confidential Information amongst themselves, the Venturers contemplate they may
negotiate and execute one or more mutually satisfactory non-disclosure
agreements.
(f) The obligations of this Paragraph 9.7 shall survive the expiration or
termination of this Foundry Venture Agreement and the Venture Agreements for a
period of three (3) years after the last of them to expire and/or terminate. In
the event of any breach of this covenant, the Venturers and FabVen shall
promptly discuss and cooperate in good faith with respect to measures to
mitigate any harmful effect of such breach and with respect to possible
compensation to the injured party.
9.8 This Foundry Venture Agreement and the Venture Agreements are written only
in the English language, which language shall be controlling in all respects,
and all versions in any other language shall be for accommodation only and shall
not be binding upon the Venturers. All communications to be made or given
pursuant to such Agreements shall be in the English language, except as may be
required under applicable law.
12
9.9 This Foundry Venture Agreement and the Foundry Capacity Agreement and
matters connected with performance under any one or more of them shall be
interpreted and construed in all respects in accordance with the laws of the
State of California, provided however that all matters connected with the
purchase and formalities of stock and ownership interests in FabVen and the
Technology Transfer and License Agreement shall be interpreted and construed in
all respects in accordance with the laws of Taiwan, the Republic of China, all
without regard to that body of law which pertains to conflicts and/or choice of
law and excluding the UN Convention on Contracts for International Sales of
Goods.
9.10 If any provision of this Foundry Venture Agreement and/or the Venture
Agreements is held wholly or partially unenforceable for any reason, such
unenforceability shall not affect the enforceability of the remaining provisions
of such Agreements, and all provisions of such Agreements shall be construed so
as to preserve enforceability.
9.11 (a) The terms and conditions contained in the FabVen Business Plan, this
Foundry Venture Agreement and/or the Venture Agreements and the documents
attached thereto (the "Plan and Agreements") shall supersede all previous
communications, understandings, representations and/or agreements, oral and/or
written, between the Venturers with respect to the subject matter hereof;
(b) There are no other such agreements, understandings and/or writings
except as stated above;
(c) No agreement or understanding varying, modifying or extending the
terms and/or conditions of such Plan and Agreements, nor any custom, practice,
course of dealing or conduct of the parties, shall be binding upon any Venturer
unless in writing and signed by a duly authorized officer or representative of
each Party to be bound; provided however that a Venturer and FabVen may agree to
ordering procedures which are established by them pursuant to mutual agreement;
and
(d) Except as expressly allowed under this Foundry Venture Agreement, no
party may transfer or assign its rights or delegate its duties under this
Agreement, except with the written consent of all the Parties to the agreement
involved.
9.12 No licenses, other than the licenses expressly granted under these
Agreements, are granted under these Agreements, by implication, estoppel or
otherwise. Nothing in these Agreements shall be construed as conferring any
license, right to use or other right with respect to any trademark or trade name
of any party. Each party may make reasonable reference by name to any other
party provided that the written consent of that other has been obtained in
advance.
9.13 (a) The failure of any party to enforce, or the delay by any party in
enforcing any of its rights under these Agreements shall not be deemed a waiver
or a containing waiver of such rights or a modification of these Agreements, and
such party may, within the time provided by applicable law, commence appropriate
proceedings to enforce any and/or all such rights.
13
(b) The section headings in these Agreements are for convenience only and
do not define or limit nor will they be used to construe the content of such
sections.
(c) Each party expressly represents and warrants that it is free to enter
into these Agreements and that such party has not made and will not make any
creations or commitments in conflict with the provisions of these Agreements, or
which reasonably might interfere with the full and complete performance of such
party's obligations under these Agreements. Each party further represents and
warrants that these Agreements, and the performance of its respective
obligations under these Agreements, and the consummation of the transactions
contemplated under these Agreements have been duly authorized and approved by
all necessary action, and all necessary consents or permits have been obtained,
and neither the execution of these Agreements nor the performance of the party's
respective obligations under these agreements will violate any term or provision
of any valid contract or agreement to which such party is subject and/or by
which such party is bound. No further actions or consents are necessary to make
these Agreements valid binding contracts, enforceable against the respective
parties in accordance with their terms.
9.14 Nothing in this Foundry Venture Agreement and/or in the Venture Agreements
shall be deemed to create a general or limited partnership or an agency
relationship between the Venturers and/or FabVen, and the Venturers and FabVen
are independent companies. The Venturers intend to become shareholders of
FabVen and thereafter purchase products manufactured from FabVen in an arm's
length vendor-purchaser relationship, and, in the case of FabVen and UMC, in an
arm's length vendor-purchaser, lessor-lessee, and licensor-licensee
relationship. No party shall be entitled to act on behalf of and/or to bind any
one or more of the others.
9.15 The Venturers will cause FabVen to execute promptly after its formation the
Foundry Capacity Agreement, Technology Transfer and License Agreement, and this
Foundry Venture Agreement, to confirm FabVen's agreement to abide by the terms
in such agreements which are binding upon FabVen.
IN WITNESS WHEREOF, the Venturers have caused this Foundry Venture Agreement to
be signed below by their respective duly authorized officers.
LATTICE SEMICONDUCTOR CORP.
/s/ Steven Laub
- ---------------------------------------
UNITED MICROELECTRONICS CORPORATION
/s/ John Hsuan
- ---------------------------------------
John Hsuan, President
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