EXHIBIT 10-41
IBIS TECHNOLOGY CORPORATION HAS OMITTED FROM THIS EXHIBIT 10.41 PORTIONS OF
THE EXHIBIT FOR WHICH IT HAS REQUESTED CONFIDENTIAL TREATMENT FROM THE
SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE AGREEMENT FOR WHICH
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED [ ] AND SUCH
CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
LICENSING AND DEVELOPMENT
AGREEMENT
between
INTERNATIONAL BUSINESS MACHINES CORPORATION
and
IBIS TECHNOLOGY CORPORATION
41
TABLE OF CONTENTS
Section Page
1. DEFINITIONS....................................................... Page 1
2. PROGRAM........................................................... Page 4
3. LICENSES.......................................................... Page 4
4. CONFIDENTIAL INFORMATION.......................................... Page 7
5. OWNERSHIP OF INTELLECTUAL PROPERTY AND TOOLS...................... Page 10
6. PAYMENT........................................................... Page 11
7. TERM AND TERMINATION.............................................. Page 12
8. REPRESENTATIONS AND DISCLAIMERS................................... Page 13
9. TECHNOLOGY TRANSFER AND TECHNICAL ASSISTANCE...................... Page 15
10. APPLICABLE LAW................................................... Page 16
11. MISCELLANEOUS.................................................... Page 17
APPENDIX A SCHEDULE.................................................. Page 22
APPENDIX B DELVERABLES............................................... Page 23
42
This Licensing and Development Agreement ("Agreement") is made effective as of
March 1, 1998 ("Effective Date") by and between International Business Machines
Corporation (IBM), a New York corporation, having an office at 1580 Route 52,
Hopewell Junction, New York, United States of America and Ibis Technology
Corporation (IBIS), a Massachusetts corporation, having an office at 32 Cherry
Hill Drive, Danvers Massachusetts, United States of America, said named parties
being referred to hereinafter individually as a "Party" and collectively as the
"Parties".
WHEREAS, the Parties have developed expertise in the development and manufacture
of ion beam systems for implanting semiconductor wafers;
WHEREAS, IBM wishes to obtain a license to make and have made ion implanting
tools designed by IBIS;
WHEREAS, IBIS agrees to train IBM personnel in the design, manufacture,
operation and use of such tools;
WHEREAS, IBM wishes to obtain a license to make and have made improvements made
by IBIS in ion-implantation systems;
NOW, THEREFORE in consideration of the contributions of knowledge and skill in
the areas of their respective expertise, in the cooperative undertaking
specified hereunder, and in view of the mutual promises, commitments, and
efforts relating thereto, it hereby is agreed between the Parties hereto as
follows:
1 DEFINITIONS
Words shall have their normally accepted meanings as employed in this
Agreement. The terms "herein", "hereunder" and "hereof", unless specifically
limited, shall have reference to the entire Agreement. The words "shall" and
"will" are mandatory, the word "may" is permissive, the word "or" is not
exclusive, the words "includes" and "including" are not limiting and the
singular includes the plural. The following terms shall have the described
meanings:
1.1 "Affiliate" shall mean a corporation, company or other entity:
1) more than twenty-five percent (25%) of whose
outstanding shares or securities (representing the
right to vote for the election of directors or other
managing authority) are, now or hereafter, owned or
controlled, directly or indirectly, by a Party
hereto, but such corporation, company or other entity
shall be deemed to be an Affiliate only so long as
such ownership or control exists; or
2) which does not have outstanding shares or securities,
as may be the case in a partnership, joint venture or
unincorporated association, but more than twenty-five
percent (25%) of whose ownership interest
representing the right to make the decisions for such
corporation, company or other entity is, now or
hereafter, owned or controlled, directly or
indirectly, by a Party hereto, but such corporation,
company or other entity shall be deemed to be an
Affiliate
43
only so long as such ownership or control exists; or
[ ]
1.2 "Background Intellectual Property Rights" shall mean
Intellectual Property Rights that are owned by a Party or
Parties and are created outside the course and scope of the
Program.
1.3 "Change of Control" shall mean one (1) transaction or a series
of related transactions which results in a third Party
obtaining, directly or indirectly, (a) thirty (30) percent or
more of the ownership of the outstanding voting shares or
other ownership interest of, or (b) the right to manage the
business or control the disposition of assets of, or (c)
Control of a Party.
1.4 "Confidential Information" shall mean technical and business
information disclosed within the course and scope of the
Program by or on behalf of a Party that is embodied in
tangible form and marked as specified in Section 4.6 of this
Agreement.
1.5 "Control" shall mean the power to direct the affairs of a
Person by reason of ownership of voting stock, by asset
acquisition, contract or otherwise.
1.6 "Deliverables" shall mean drawings, data, algorithms, computer
source and object code, reports, documentation and the like
pertaining to SIMOX systems (e.g. the IBIS 1000), as specified
in Appendix B.
1.7 "Escrow Agent" shall mean Fort Knox Escrow Services, Inc.,
3539A Church Street, Clarkston, Georgia, 30021-1717, or such
other escrow agent as the Parties may later agree to use.
1.8 "Improvement" shall mean any change, upgrade, modification or
revision to the Licensed Technology and/or in the field of
SIMOX put into commercial use by a Party during the Term, or
which such Party acquires the right to license during the
Term. Improvements shall not include any change, upgrade,
modification or revision to the Licensed Technology that a
Party is contractually prohibited by a Prior Agreement from
providing to a third Party. In the case of information
disclosed by IBM, Improvements shall exclude information on
the operation of ion-implanting systems or other processing of
integrated circuit wafers, e.g. annealing, which IBM shall
have no obligation to provide or to disclose hereunder. For
the avoidance of doubt, Improvements shall include know-how or
other information contained in a new model SIMOX system sold
by IBIS during the Term.
1.9 "Intellectual Property Rights" shall mean patent rights,
rights under copyright, and other rights in Inventions and
confidential information.
1.10 "Licensed Patents" shall mean all patents, including utility
models and design patents, issued or issuing on patent
applications worldwide that claim inventions having an
44
effective filing date prior to the expiration of the Term,
under which patents or the applications therefor a Party has
the right, at any time during the Program, to grant licenses
to the other Party of the scope granted herein and any
continuation, continuation-in-part, divisional, reissue,
reexamination and any equivalents thereof. The term "Licensed
Patents" shall also include any patent reissuing on any of the
aforesaid patents. The term "Licensed Patents" shall include
patents which such grant or the exercise of rights thereunder
would result in the payment of royalties or other
consideration by a Party to third parties, provided that such
Party shall have notified the other Party of the requirement
of compensation and the other Party shall have consented to
compensate such Party for such consideration.
1.11 "Licensed Product" shall mean a SIMOX system that
substantially conforms to the Licensed Technology (including
Improvements).
1.12 "Licensed Technology" shall mean: a) know-how or other
information (e.g. computer software) contained in the
materials specified in Appendix B relating to the technology
to be transferred to IBM; and b) additional know-how or other
information transferred or otherwise disclosed in writing by
IBIS to IBM in providing technical assistance pursuant to
Section 9.
1.13 "Material Default" shall mean the violation of or failure to
perform any material term or material covenant of this
Agreement by a Party.
1.14 "Person" shall mean any individual, corporation, partnership,
joint venture, trust, business association, governmental
entity or other entity.
1.15 "Prior Agreement" shall mean an agreement between a Party and
a third Party having a date of execution prior to the
Effective Date of this Agreement.
1.16 "Program" shall mean the cooperative undertaking by the
Parties, in which IBIS discloses to IBM and trains IBM's
employees in the Licensed Technology including, at IBM's
option, IBM's making or having made and testing a Licensed
Product.
1.17 "SIMOX" shall mean the implanting of oxygen ions into a
silicon wafer to form a layer of insulator underneath a device
layer of silicon and SIMOX system shall mean a system for
SIMOX.
1.18 "Subsidiary" shall mean an Affiliate more than fifty percent
(50%) of whose outstanding shares, securities or ownership
interest are, now or hereafter, owned or controlled, directly
or indirectly, by a Party hereto, but such corporation,
company, or other entity shall be deemed to be a Subsidiary
only so long as such ownership or control exists.
1.19 "Term" shall mean the period of time this Agreement is in
effect, which shall commence on the Effective Date and
continue until December 31, 2005, unless
45
sooner terminated pursuant to the provisions of Section 7.
2 PROGRAM
2.1 Each Party shall perform its tasks in the course of the
Program as specified in Appendix A.
2.1.1 IBIS and IBM will make commercially reasonable efforts
to meet the schedule specified in Appendix A.
2.1.2 Upon exercise by IBM of either Option A or Option B as
set forth in Section 3.5, IBIS will give technical assistance
to IBM as specified in Section 9.
2.2 Each Party shall have a Program Manager and a Technical
Coordinator as follows:
For IBIS: Program Manager: Al Alioto
Technical Coordinator: Al Alioto
For IBM: Program Manager: H. C. Calhoun
Technical Coordinator: Devendra Sadana
Each Party may change its Program Manager and/or Technical
Coordinator by giving written notice to the other Party.
2.3 Each of the Program Managers shall be responsible for the
representation of his Party's interest in the Program. The
Program Managers shall meet on a regular basis to review
progress.
2.4 The Technical Coordinators or their designees shall supervise
the exchange of information during the Program.
2.5 Each Party shall bear its own expenses in performing its tasks
in the course of the Program.
3 LICENSES
3.1 IBIS hereby grants to IBM an irrevocable, worldwide,
royalty-bearing, nonexclusive license, exercisable as
specified below, under IBIS's applicable patent and trade
secret rights in Licensed Patents, Licensed Technology [ ] to:
(a) make, have made, use and practice any process in the use
of SIMOX systems and components thereof; (b) lease, sell, or
otherwise transfer SIMOX systems and components thereof to
Affiliates; and (c) sublicense such Affiliates to use and
practice any process in the use of such SIMOX systems and
components thereof. For the avoidance of doubt, IBM agrees
that the foregoing right to sublicense Affiliates does not
include the right to license Affiliates to make or have made a
SIMOX system. For the further avoidance of doubt, IBM agrees
that it is not permitted to act under the foregoing license
until it has elected one of the options set forth in Section
3.5.
46
3.2 IBIS hereby grants to IBM an irrevocable, worldwide,
nonexclusive, license, exercisable as specified below, under
IBIS's copyrights in computer software or other works of
authorship disclosed by IBIS hereunder or delivered by IBIS to
IBM in connection with the sale of a SIMOX system to IBM to
copy and make derivative works of such software or other works
of authorship and to distribute such copies and derivative
works within IBM and to Affiliates, subject to the following
condition:
IBM may grant sublicenses under IBIS's copyrights in software
in object code format necessary for the operation of a SIMOX
system to its Affiliates' purchasing systems licensed
hereunder. Each license, agreement form, when executed with
customers, shall contain terms that are legally sufficient to:
(a) authorize the customer to use software sublicensed from
IBIS and supplied to it by or for IBM for operating a SIMOX
system sold hereunder for SIMOX and for no other purpose;
(b) authorize the customer to make copies of each authorized
product copy for backup purposes only; and
(c) prohibit further copying and/or transfer of the product;
and
(d) prohibit reverse assembly, reverse compilation, or other
translation of product code or any portion thereof.
For the avoidance of doubt, IBM agrees that it is not
permitted to act under the foregoing license until it has
elected one of the options set forth in Section 3.5.
3.3 No license or immunity is extended by a Party either directly
or by implication, estoppel, or otherwise except as explicitly
set forth herein.
3.4 IBM hereby grants to IBIS an irrevocable, royalty-free,
worldwide, nonexclusive license, exercisable as specified
below, under IBM's Intellectual Property Rights in [ ] that
pertain to the structure of a SIMOX system to: (a) make and
have made and (b) use, lease, sell, or otherwise transfer
SIMOX systems and components thereof. This license shall be
for the sale or other transfer of SIMOX systems only to IBM
and Affiliates for an initial period of [ ] after disclosure
of such [ ], after which initial period, IBIS may incorporate
such [ ] in a system sold to any customer. For the avoidance
of doubt, this license granted by IBM does not cover
Intellectual Property Rights pertaining to methods of
operation of an ion-implanting system or to processes used in
making or treating wafers and/or integrated circuits.
3.5 IBM shall have the option, to be exercised in its sole
discretion and at any time, to elect either License Option A
or License Option B by delivery of a written notice to IBIS.
Exercise of Option A or Option B shall be subject to the
conditions of Section 3.5.1 or Section 3.5.2, as the case may
be.
47
3.5.1 License Option A
IBM may exercise its license under License Option A by
delivery of written notice to IBIS and to the Escrow Agent.
The Escrow Agent shall immediately deliver the escrow
documentation to IBM upon receipt of notice. The consent of
IBIS is not required for delivery of the documentation under
this License Option A and IBIS hereby waives any right it may
have to object to such transfer. The royalty payments under
this License Option A shall be as specified in Section 6. Upon
receipt of notification, IBIS shall provide the training and
Technical Assistance specified in Appendix A at times mutually
agreed on but no later than the times specified in Appendix A.
3.5.2 License Option B
IBM may, in its sole discretion, exercise its license under
License Option B by delivery of written notice to the Escrow
Agent stating: a) [ ]; or b) that IBIS has failed to satisfy
one or more of the following conditions and IBIS has not cured
such failure within [ ] days after notification by IBM of the
failure.
3.5.2.1 The conditions are that IBIS:
(a) [ ]
(b) [ ]
(c) [ ]
(d) [ ]
The Escrow Agent shall immediately deliver the escrow
documentation to IBM upon receipt of notice. The consent of
IBIS is not required for delivery of the documentation under
this License Option B. IBIS hereby waives any right it may
have to object to or otherwise prevent the Escrow Agent from
completing such transfer and agrees that its only recourse
against IBM in the event of a dispute concerning such transfer
shall be a claim against IBM for monetary damages. The royalty
payments shall be as specified in Section 6. IBIS shall
deliver the training and Technical Assistance specified in
Appendix A at times mutually agreed on but no later than the
times specified in Appendix A.
3.6 IBIS agrees, within [ ] days after the last signature date of
this Agreement, to review with IBM at IBIS' place of business
the documentation and updates thereof listed in Appendix B.
After such review, IBIS shall transmit such documentation to
an Escrow Agent chosen by mutual agreement of the Parties.
Such Escrow Agent shall hold such documentation pursuant to an
escrow agreement to be executed concurrently herewith. The
parties shall share the cost of the escrow equally. For
convenience in administration, IBIS shall pay the escrow Agent
and invoice IBM for its share of the
48
payment. The Parties agree that such escrow agreement shall
permit IBM to inspect (but not copy) the documentation at the
Escrow Agent's premises.
3.7 IBIS represents and agrees that it will not initiate any work
(or otherwise take any steps in reliance) on a SIMOX system
for sale to IBM unless and until IBIS has received an
applicable written purchase order from IBM. IBM shall have no
obligation to exercise any of the options granted to it under
this Agreement.
4 CONFIDENTIAL INFORMATION
4.1 The prior Confidential Disclosure agreement between the
Parties concerning confidential information is terminated as
of the Effective Date and any information disclosed thereunder
shall be deemed to be disclosed under this Agreement as of the
Effective Date. The confidentiality provisions of the
Equipment Procurement Master Agreement between the Parties
having an effective date in May, 1996 are superseded only with
respect to Confidential Information disclosed under and marked
in accordance with this Agreement.
4.2 Subject to the provisions of Section 3, for a confidentiality
period as set forth below, the receiving Party agrees to use
the same care and discretion to safeguard Confidential
Information of the disclosing Party and to avoid release of
such Confidential Information outside of the receiving Party
as it employs with similar embodiments of information of its
own which it does not desire to publish, disclose, or
disseminate, but in no event less than reasonable care.
4.3 Obligations of confidentiality and restricted use set forth
herein shall extend until December 31, 2008.
4.4 The obligations of confidentiality herein shall not apply to
information that:
(a) Is already in the possession of the receiving Party
r any of its Subsidiaries without obligation of confidence;
(b) Is independently developed by the receiving Party
r any of its Subsidiaries;
(c) Is or becomes publicly available without breach of
his Agreement;
(d) Is rightfully received by the receiving Party from
third Party;
(e) Is released for disclosure by the disclosing Party
ith its written consent;
(f) Is required to be disclosed in a patent
pplication; or
(g) Is inherently disclosed in the use, lease, sale, or
ther distribution of any present or future product or
service by or for the receiving Party or any of its
Affiliates.
49
4.5 All disclosures of Confidential Information by IBIS or IBM, as
the disclosing Party, shall be made by or under the
supervision of its Technical Coordinator, or his designee, to
the receiving Party's Technical Coordinator, or his designee.
In the event of inadvertent disclosure, either Party may give
notice to the other Party that such inadvertently disclosed
information was confidential and the receiving Party
thereafter shall treat in good faith such information as
Confidential Information.
4.6 All disclosures of information will be deemed to be
non-confidential unless specifically designated at the time of
disclosure (as provided in Section 4.7 below) as including the
Confidential Information of a Party.
4.6.1 Notwithstanding the foregoing, Inventions created and
Confidential Information disclosed in the course of joint work
or discussions between the Parties shall be deemed to be the
Confidential Information of the employer(s) of the individuals
creating them, whether or not the pertinent information is
marked or summarized in a resume. The Parties agree to make
reasonable efforts to document and mark such joint work or
discussions.
4.7 Information, including Confidential Information, of a Party
shall be disclosed in writing in English (including such
information recorded in a medium such as a tape or disk),
which writing shall state the date of disclosure, that the
information contained therein is confidential and that it is
being disclosed pursuant to this Agreement, and shall contain
an appropriate legend, such as "IBIS Confidential
Information". If such disclosure is orally and/or visually
made, then it shall be confirmed in a written resume within
twenty (20) days following such disclosure. The resume will
specifically recite that information which is confidential.
Such resume will have such information that is confidential
identified as "IBIS Confidential (or IBM Confidential)
Information". The receiving Party may make a reasonable number
of copies of such writings or resumes.
4.8 A receiving Party possessing Confidential Information of the
other Party may disclose it to a vendor or to a subcontractor
(or to a sublicensee that in turn may disclose to a vendor or
subcontractor), for the purpose of exercising the license
specified in Section 3. under restrictions on disclosure at
least as stringent as those set forth herein. The receiving
Party may only authorize such vendor, subcontractor or
sublicensee to use such Confidential Information only for the
benefit of such receiving Party. If disclosure is compelled as
testimony or evidence in a judicial or legislative proceeding,
the Party under compulsion to disclose shall immediately
notify the owner Party and shall avail itself of all
reasonable protection at the reasonable expense and with the
express prior concurrence in writing of the Party owning the
applicable Confidential Information, such as protective orders
or exemptions from Freedom of Information Act availability, as
may be reasonably available and effective to protect the
Confidential Information in question.
4.9 It is understood that receipt of Confidential Information
under this Agreement will not create any obligation in any way
limiting or restricting the assignment and/or
50
reassignment of IBIS employees within IBIS or IBM employees
within IBM.
4.10 Each Party represents that it has, and agrees to maintain, an
appropriate agreement with each of its employees who may have
access to any Confidential Information sufficient to enable
each Party to comply with all the terms of this Agreement.
4.11 All disclosures of information under this Agreement shall be
governed by the applicable statutes and regulations of the
United States Government regarding the export of technical
information. Each Party agrees to comply, and do all things
reasonably necessary for the other Party to comply, with all
applicable laws, regulations and ordinances of any country
having jurisdiction over the subject matter hereof, including
but not limited to the regulations of the United States
Department of Commerce and Department of State relating to the
export or re-export of technical data or the direct product
thereof, insofar as they relate to the activities to be
performed under this Agreement. Each Party agrees to obtain
any required government documents and approvals prior to the
export or re-export by it of any technical data disclosed to
it or the direct product related thereto.
4.12 IBIS shall make available an initial data package [ ], as
specified in Section 3.6, Appendix A, and Appendix B, for
inspection and evaluation by IBM at IBIS' place of business
and subsequent transmission to the Escrow Agent. IBIS shall
promptly correct deficiencies in the data on IBM's request.
When IBM is satisfied that the data are adequate, IBIS shall
forward the data to the Escrow Agent.
4.12.1 In the event that IBM exercises its license under Section
3.5.1 or 3.5.2, IBIS shall continue to deliver data updates,
which IBM may immediately use under the terms hereof.
4.13 The conditions for release of data hereunder by the Escrow
Agent shall be as set forth herein and shall not be affected
by the existence of different conditions in, or by the status
of the escrow (i.e. whether released or not) under, the
Equipment Purchase Master Agreement. For the avoidance of
doubt, the data may be released under the Equipment Purchase
Master Agreement before or after the release of data
hereunder.
5 OWNERSHIP OF INTELLECTUAL PROPERTY
5.1 Each Party shall have and retain the sole and exclusive
ownership of all Intellectual Property Rights that are made or
created solely by it or its employees or agents in the course
of the Program.
5.2 Any Intellectual Property Rights made or created jointly by
the Parties or employees or agents of the Parties in the
course of the Program shall be owned jointly. Joint Inventions
shall be jointly owned, title to all patents issued thereon
shall be joint, all expense incurred in obtaining and
maintaining such patents, except as provided herein, shall be
jointly shared. Each Party shall have the unrestricted right
to license third parties under such jointly owned Intellectual
Property Rights without
51
accounting.
5.2.1 Unless otherwise agreed, joint owners of Intellectual Property
Rights shall engage outside counsel to perform tasks
associated with securing the legal protection of such
Intellectual Property Rights and shall share the costs thereof
equally. In the event that one Party elects not to seek patent
protection for any joint Invention in any particular country
or not to share equally in the expense thereof with the other
Party, the other Party shall have the right to seek or
maintain such protection at its own expense in such country
and shall have full control over the prosecution and
maintenance thereof even though title to any patent issuing
therefrom shall be jointly owned. Such one Party shall have no
obligation to pay expenses of securing and maintaining such
Intellectual Property Rights in any country unless it has so
agreed in writing.
5.3 Each Party shall give the other Party all reasonable
assistance in obtaining patent protection and in preparing and
prosecuting any patent application filed by the other Party,
and shall cause to be executed assignments and all other
instruments and documents as the other Party may consider
necessary or appropriate to carry out the intent of this
Section 5.
6. PAYMENT
6.1 From and after the Effective Date, IBM shall pay to IBIS a
royalty comprising the amount listed in the appropriate column
of Table I for each Licensed Product made by or for IBM and/or
sold, leased or otherwise transferred or disposed of by or for
IBM.
TABLE I
Number of
Machines Option A Option B
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
[ ] [ ] [ ]
6.2 The royalty of Section 6.1 shall accrue when a Licensed
Product is first put into service by IBM or is first sold,
leased or otherwise transferred or disposed of by or for IBM.
For the purpose of determining such royalty, Licensed Products
shall be considered sold, leased or otherwise transferred or
disposed of when invoiced. If not invoiced, then Licensed
Products are to be considered sold, leased or otherwise
transferred or disposed of when delivered or when paid for, if
paid for before delivery. If not invoiced, delivered or paid
for before delivery, Licensed Products are to be considered
sold, leased or otherwise transferred or disposed of at the
earlier of when put into use or when possession is transferred
to a third Party. When Licensed
52
Products are sold, leased or otherwise transferred or disposed
of in conjunction with other products or services provided,
sold, leased or otherwise transferred or disposed of by IBM,
IBM agrees to separately invoice such Licensed Products from
such other products or services.
6.3 Accrued royalties shall be calculated and paid on a calendar
quarterly basis. Any royalties due IBIS for any calendar
quarter shall be paid to IBIS by [ ] days after the end of
each calendar quarter. IBM may deduct from the accrued
royalties calculation in this Section 6.3 those royalties
accrued on Licensed Products which have been returned to IBM
or for which credit allowances have been made.
6.4 Within [ ] days of each calendar quarter, IBM shall furnish to
IBIS a written statement showing the Licensed Products that
were made, used, sold, leased and/or transferred or otherwise
disposed of during the immediately preceding calendar year and
the royalties payable thereon. If no royalties are payable,
that fact shall be shown on such statement.
6.5 IBIS shall have the right, at its expense, to have an
independent accountant acceptable to IBM inspect relevant
records of IBM during normal business hours and on reasonable
notice, to verify that the number of SIMOX systems made by or
for IBM is as reported to IBIS, and for no other purpose. IBIS
shall require such accountant to execute an agreement
permitting disclosure of such number only to IBIS and its
counsel and prohibiting any other disclosure or use of any
information learned during such inspection, except in
connection of enforcing its rights under this Agreement. If
such audit reveals that IBM has underpaid the royalty due, IBM
shall pay the reasonable cost of the audit.
7. TERM AND TERMINATION
Either Party may terminate this Agreement for a Material Default as
provided herein:
7.1 For a Material Default specified in Sections 7.1.1, the
non-defaulting Party may give written notice of such default
("Notice of Default") to the defaulting Party. If a Notice of
Default is given and the defaulting Party should fail to cure
such default within [ ] days after the date of receipt of the
Notice of Default, the non-defaulting Party may terminate this
Agreement by a second written notice ("Notice of Termination")
to the defaulting Party.
7.1.1 The parties agree that some of the grounds of Material
Default, for which a Party shall have the right to terminate
this Agreement per Section 7.1 are:
(a) the other Party breaches its obligation to deliver
Licensed Technology, training and/or Improvements.
(b) the other Party breaches its payment obligations under
Section 6.
53
7.2 For a Material Default specified in Sections 7.2.1, the non-
defaulting Party may give to the defaulting Party a Notice of
Termination immediately terminating this Agreement.
7.2.1 The parties agree that some of the grounds of Material
Default, for which a Party shall have the right to terminate
this Agreement immediately per Section 7.2 are:
(a) the other Party engages in or suffers a Change of
Control.
(b) the other Party breaches its obligation of
confidentiality under Section 4.
(c) the other Party breaches the terms of its license
under Section 3.
7.3 If this Agreement is terminated for Material Default;
(a) the obligations of the Parties to deliver Improvements
shall terminate; and
(b) the licenses granted in Section 3 and corresponding
payment obligations shall survive.
7.4 In the event of termination by either Party for any reason,
all royalties, fees, and other payments due or accrued
hereunder as of the date of termination shall remain payable.
7.5 Except as stated in Sections 7.3 and 7.4, to the extent a
particular right or obligation herein does not have a
specifically identified survival period, all rights and
obligations in this Section or in any other Section in this
Agreement which by their nature survive the termination of
this Agreement will remain in effect beyond any termination
for the time period reasonably necessary to accomplish their
purpose and shall bind and inure to the benefit of the
parties, their legal representatives and successors.
8. REPRESENTATIONS AND DISCLAIMERS
8.1 This Agreement is non-exclusive. IBIS and IBM recognize and
agree that each has been and may continue to be active in the
development of technology, and/or manufacture and sale of
products indirectly or directly relating to the technologies,
processes and products contemplated by this Agreement, and IBM
acknowledges and agrees that IBIS will be free in all respects
and not precluded by this Agreement to pursue such activities
independent of IBM, including with third parties, and further,
IBIS acknowledges and agrees that IBM will be free in all
respects and not precluded by this Agreement to pursue such
activities independent of IBIS, including with third parties.
Nothing in this Section 8.1 shall grant a Party any license
under the other Party's Intellectual Property Rights. Such
licenses are granted only as set forth explicitly elsewhere in
this Agreement.
8.2 Nothing contained in this Agreement shall be construed as:
54
8.2.1 conferring any rights to use in advertising, publicity, or
other marketing activities any name, trade name, trademark, or
other designation of either Party hereto, including any
contraction, abbreviation, or simulation of any of the
foregoing without prior mutual written agreement; or
8.2.2 conferring by implication, estoppel, or otherwise
upon either Party hereunder any license or other
right except the licenses and rights expressly
granted hereunder to a Party hereto or third parties;
or
8.2.3 a warranty that the recipient Party will successfully
manufacture products, or a particular volume of
products, based upon the Licensed Technology
transferred hereunder including transfer and
technical assistance; or
8.2.4 an obligation to bring or prosecute actions or suits
against third parties for infringement, or to defend
actions or suits from third parties for infringement,
or to secure and/or maintain any of its intellectual
property rights; or
8.2.5 in any way limiting the rights which a Party has
outside the scope of this Agreement.
8.3 IBIS warrants that the data delivered hereunder and the
manufacture and operation of SIMOX systems made according to
such data does not infringe the Intellectual Property Rights
of third Parties.
8.4 IBIS warrants that the initial data package disclosed to IBM
is the same as (or an improvement on) the information used in
the design assembly and test of tools currently used by IBIS
in production.
8.5 WITH THE EXCEPTION OF THE FOREGOING WARRANTIES IN SECTIONS 8.3
AND 8.4, AND THE PROVISIONS OF SECTION 11, ALL INFORMATION,
TECHNOLOGY, IMPROVEMENTS, INVENTIONS, ASSISTANCE, AND SERVICES
PROVIDED BY EITHER PARTY HEREUNDER ARE PROVIDED "AS IS"
WITHOUT ANY WARRANTY OF ANY KIND INCLUDING THAT NEITHER PARTY
MAKES ANY WARRANTY AS TO THE CONFIDENTIAL ACCURACY,
SUFFICIENCY, OR SUITABILITY FOR THE OTHER PARTY'S USE OF ANY
INFORMATION, IMPROVEMENTS, INVENTIONS, OR LICENSED TECHNOLOGY
PROVIDED HEREUNDER FOR THE MANUFACTURE OF PRODUCTS OR DELIVERY
OF SERVICES USING THE INFORMATION, IMPROVEMENTS, INVENTIONS,
OR LICENSED TECHNOLOGY, OR THE YIELD FROM THE MANUFACTURE OF
PRODUCTS OR DELIVERY OF SERVICES USING THE INFORMATION,
IMPROVEMENTS, INVENTIONS, OR LICENSED TECHNOLOGY, OR FOR THE
QUALITY OF SUCH PRODUCTS MADE OR SERVICES DELIVERED USING THE
INFORMATION, `IMPROVEMENTS, INVENTIONS, OR LICENSED TECHNOLOGY
OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. NEITHER PARTY ASSUMES ANY
55
RESPONSIBILITY OR LIABILITY FOR LOSSES OR DAMAGES, WHETHER
DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE,
WHICH MIGHT ARISE OUT OF THE OTHER PARTY'S USE OF THE
INFORMATION, IMPROVEMENTS, INVENTIONS, OR LICENSED TECHNOLOGY,
WHICH SHALL BE ENTIRELY AT THE OTHER PARTY'S RISK AND PERIL.
8.6 Each Party acknowledges its responsibility to make its own
evaluation of the risks of bringing any product based on
information provided under this Agreement to market, or
otherwise to use such information.
8.7 Although the Parties will use all reasonable efforts in
performing the Program, the Parties acknowledge that the
results of the work to be performed hereunder are uncertain
and cannot be guaranteed by any Party.
8.8 Each Party disclaims any warranty that the recipient will be
able to reproduce the results of the disclosing Party and each
Party acknowledges that it may be not be able to use disclosed
information without further research and development.
9. TECHNOLOGY TRANSFER AND TECHNICAL ASSISTANCE
9.1 IBIS shall deliver, at [ ] cost to IBM, a portion of the
technical training specified in Section 9.2, prior to the
review specified in Section 3.6 and sufficient to enable IBM
personnel to perform the evaluation specified in Section 4.12.
Such technical training shall be limited to a maximum of [ ]
hours.
9.2 IBIS shall provide detailed training to IBM in IBIS's
facilities in the United States the following technical
assistance, according to the schedule in Appendix A:
[ ]
In addition to the scheduled training listed above, IBM may make site
visits to IBIS's facilities upon reasonable notice to IBIS and upon
mutual agreement of the parties. A maximum of [ ] IBM employees may
visit either of IBIS's facilities at any one time. The travel and
living expenses of such visiting IBM employees shall be at the expense
of IBM.
9.3 During the period beginning on the date that IBM elects one of
the options specified in Section 3.5 and continuing for [ ]
years thereafter, IBIS agrees to provide, at [ ] cost to IBM,
assistance in the transfer of the Licensed Technology to IBM
as provided in Section 9.2, up to a total limit of [ ]
person-hours.
9.4 After the [ ] person-hours of the transfer assistance and
technical assistance specified in Section 9.2 are exhausted,
IBIS agrees to provide, up to an additional [ ] person-hours
of transfer assistance and technical assistance to IBM for a
period ending [ ] years after the date on which the last
transfer assistance is provided under Section 9.2, IBM agrees
to pay IBIS for such limited additional transfer and technical
56
assistance provided to IBM at the rate of [ ].
9.5 IBIS shall invoice charges monthly for the limited additional
transfer assistance and technical assistance provided for in
Section 9.3.
9.6 The Parties shall disclose Improvements in accordance with the
following:
9.6.1 Beginning with the first calendar quarter after
notification under Section 3.5.1 or 3.5.2, if any,
the Technical Coordinators of the Parties shall meet
within forty-five (45) days following the end of each
calendar quarter to discuss whether any Improvements
have been made, and to disclose such Improvements to
the other Party.
10. APPLICABLE LAW
10.1 This Agreement shall be trued and the legal relations between
the Parties shall be determined in accordance the law of the
State of New York without regard to the conflict of law
provisions thereof. Any proceedings to enforce this Agreement,
or to resolve disputes relating to this Agreement, shall be
brought in the United States District Court for the Southern
District of New York, Westchester County Division. IBIS and
IBM waive the right to trial by jury in any matter which
arises between the Parties pursuant or related to this
Agreement and agree that any proceeding hereunder shall be
tried by a judge without a jury.
10.1.1 No action, regardless of form, arising out of this Agreement
may be brought by a Party more than two (2) years after the
cause of action has accrued.
10.2 Each Party agrees to pay the other Party's attorney's fees and
costs of litigation, up to a maximum of [ ] if such Party, for
any reason whatever, brings suit against the other Party and
the other Party is finally adjudicated not to have liability.
10.3 If any sentence, paragraph, clause or combination of the same
in this Agreement is held by a court of competent jurisdiction
to be unenforceable in any jurisdiction, such sentence,
paragraph, clause or combination of same shall be
unenforceable in the jurisdiction in which it is invalid and
the remainder of this Agreement shall remain binding on the
Parties in such jurisdiction as if such unenforceable
provision had not been contained herein. The enforceability of
such sentence, paragraph, clause or combination of same in
this Agreement, shall be otherwise unaffected and shall remain
enforceable in all other jurisdictions.
11. MISCELLANEOUS
11.1 IBIS agrees to indemnify, defend, and hold harmless, IBM, its
Subsidiaries and Affiliates and their officers, directors,
agents, and employees, from any and all liability, losses,
damages, reasonable attorney's fees and expenses associated
with claims, suits, or actions brought by or on behalf of any
third party of any nature
57
arising from, or alleged to arise from, infringement of the
Intellectual Property Rights of third parties, resulting from
or in any way related to the use of the Licensed Technology by
IBM or the performance of this Agreement. IBIS's total
obligation to pay under this Section 11.1 shall not exceed the
lesser of: (a) the amount of royalties paid by IBM to IBIS
hereunder; or (b) [ ].
11.2 Each Party shall be solely responsible for determining its
prices and other terms and conditions for its products sold to
its customers. Each marketing Party shall be solely
responsible for marketing products to its customers, and the
other Party shall have no obligation to provide any support of
any kind to such marketing Party's customers.
11.3 If any Party is rendered wholly or partially unable by force
majeure to carry out its obligations under this Agreement, and
if that Party gives prompt written notice and full particulars
of such force majeure to the other Party, the notifying Party
shall be excused from performance of its obligations hereunder
during the continuance of any inability so caused, but for no
longer period; provided that if payment cannot be made due to
the existence of a banking crisis or international payment
embargo, such amount may be paid within the following thirty
(30) days. Such cause shall be remedied by the notifying Party
as far as possible with reasonable speed and effort. For the
purposes of this Agreement, force majeure shall mean Acts of
God, acts of public enemies or terrorists, wars, other
military conflicts, blockades, insurrections, riots,
epidemics, quarantine restrictions, landslides, lightning,
earthquake, floods, washouts, civil disturbances, restraints
by or actions of any governmental body (including export or
security restrictions on information, material, personnel,
equipment or otherwise), and any other acts or events
whatsoever, whether or not similar to the foregoing, not
within the control of the Party claiming excuse from
performance, which by the exercise of due diligence and best
reasonable effort that Party shall not have been able to
overcome or avoid. If the notifying Party cannot remedy the
force majeure situation and resume satisfactory performance
within [ ] of the notice, the other Party may at its option
immediately terminate this Agreement pursuant to Section 7.
11.4 Each Party agrees to comply with all applicable country,
Federal, State, and Local laws, rules, regulations, and
ordinances, including those of any other duly constituted
governmental authority having jurisdiction, and including
without limitation, all rules and regulations of the
Occupational Health and Safety Administration, Environmental
Protection Agency, U.S. Department of Commerce, and U.S.
Department of Transportation, as applicable. Each Party shall
do all things necessary (a) to obtain in a timely manner all
required licenses and approvals and (b) to comply with all
applicable laws, rules and regulations, including, but not
limited to, the Regulations of the United States Government
relating to the export and re-export of technical data,
commodities, and products produced as a result of the use of
such data. Each Party hereto agrees that it will not export or
re-export, directly or indirectly, any technology, software,
and/or commodities furnished under this Agreement, or the
direct product thereof, to any country, or the nationals
thereof, specified in such laws, rules,
58
regulations, and ordinances referred to above as an
unauthorized destination without IBIS or IBM first obtaining
U.S. Government approval.
11.5 The captions used in this Agreement are for convenience of
reference only and are not to be used in interpreting the
obligations of the Parties under this Agreement.
11.6 Nothing contained herein, or done in pursuance of this
Agreement, shall constitute the Parties as entering upon a
joint venture or partnership or shall constitute either Party
hereto the agent for the other Party for any purpose or in any
sense whatsoever.
11.7 Either Party may disapprove the assignment of any of its
former employees to perform work under this Agreement on its
premises by the other Party and such personnel will not be so
assigned. Each Party will take appropriate preventive steps,
before the assignment of any of its employees to perform work
under this Agreement, that that Party reasonably believes will
ensure that its employees will not engage in inappropriate
conduct while on the other Party's premises. Inappropriate
conduct shall include, but not be limited to: 1) being under
the influence of, or affected by, alcohol, illegal drugs or
controlled substances or engaging in their use, distribution
or sale; 2) the possession of a weapon of any sort; and 3)
harassment, threats or violent behavior.
11.8 Representatives and personnel of each Party, during the time
they are present on the premises of the other Party shall be
subject to all rules and regulations prevailing on such
premises. Each Party shall be responsible for the payment of
all compensation and expense of its respective representatives
and personnel. None of the representatives or personnel of
either Party shall be considered, for any reason, to be an
employee or agent of the other.
11.9 Each Party represents that it has, or will have in place,
established procedures and agreements with its Subsidiaries,
employees or others, including subcontractors and vendors,
whose services the Party may require, sufficient to enable the
Party to comply with all the provisions of this Agreement.
11.10 In the event of any inconsistency between the terms and
conditions of this Agreement and language set forth in the
Appendices, the inconsistency shall be resolved by giving
precedence to the terms and conditions of this Agreement.
11.11 Any written notice or communication required to be made or
given to either Party hereto, pursuant to this Agreement,
shall be deemed to have been sufficiently given on the date of
mailing if sent by registered or certified mail, postage
prepaid, and addressed as set forth below, or to such other
address as is designated by written notice given to the other
Party:
11.11.1 In the case of IBM:
Director of Licensing
International Business Machines Corporation
500 Columbus Avenue
59
Thornwood, NY, 10594
11.11.2 In the case of IBIS:
Al Alioto
Vice President of Sales and Marketing
Ibis Technology Corporation
32 Cherry Hill Drive
Danvers, MA 01923
11.12 The rights and obligations of Sections 3, 4, 5, 7, 8, 10, and
11 and the obligations of nondisclosure and restricted use of
this Agreement shall survive and continue after any expiration
or termination of this Agreement and shall bind the Parties
and their successors and assigns.
11.13 No failure on the part of any Party to exercise, and no delay
in exercising, any right, power, or remedy hereunder shall
operate as a waiver thereof or as a waiver of any other right,
power, or remedy hereunder or to the performance of any Party;
and no single or partial exercise by a Party of any right,
power, or remedy hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power, or
remedy.
11.14 Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity or other
promotional activities any name, trade name, trademark or
other designation of either Party (including any contraction,
abbreviation or simulation of any of the foregoing); and each
Party agrees not to disclose the terms and conditions of this
Agreement except as may be required by law or government rule
or regulation, without the express written consent of the
other Party. Notwithstanding the foregoing, the Parties shall
be permitted to disclose a summary of pertinent Sections of
this Agreement that are reasonably necessary for disclosing
and/or licensing under this Agreement, provided, however, that
such disclosure is under a written agreement containing
restrictions of confidentiality at least as stringent as those
contained herein.
11.15 Except for the provisions of Section 11.1, in no event will a
Party be liable to the other Party for incidental damages,
lost profits, lost savings special damages, or consequential
damages, regardless of whether the claim is for breach of
contract, breach of warranty, tort (including negligence),
failure of a remedy to accomplish its purpose or otherwise,
even if such Party has been advised of the possibility of such
damages.
11.16 Each Party shall be liable to the other Party up to a maximum
of the greater of (a) [ ], or (b) the amount of unpaid
royalties owed by such Party to the other Party hereunder plus
[ ], for all actual direct losses or damages sustained by the
other Party (other than those arising under Section 11.1) that
are proximately caused by the acts or omissions of such Party
under this Agreement.
60
11.17 Except as explicitly stated herein, a Party shall not assign
any of its rights, privileges or obligations under this
Agreement without the prior written consent of the other
Party. Any attempted assignment in derogation of the foregoing
shall be void.
11.18 The Equipment Purchase Master Agreement, any task orders
thereunder, and the Wafer Purchase Agreement between the
Parties are not superseded by this Agreement, except as
explicitly stated herein. By way of example and not as a
limitation, the license to make up to two tools granted to IBM
in Section 13 of EPMA 07482 between the Parties is not
superseded and that license may be exercised by IBM, in its
sole discretion, in addition to the license granted hereunder.
11.19 This Agreement shall not be binding upon the Parties until it
has been signed below by or on behalf of each Party, in which
event it shall be effective as of the date first above
written. Except as provided in Section 11.18, this Agreement
constitutes the entire agreement between the Parties with
respect to the subject matter hereof and shall supersede all
previous communications, understandings and agreements,
whether oral or written, between the Parties relating to the
subject matter hereof. No amendment or modification of this
Agreement shall be valid or binding upon the Parties unless
made in writing and signed on behalf of such Parties by their
respective authorized representatives. The requirement of
written form may only be waived in writing.
61
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives, who by their signature
represent that they are so authorized, to be effective as of the day and year
first above written.
By: /s/ H.C. Calhoun
----------------------------------------
H. C. Calhoun
Vice President of Semiconductor
Research and Development Center
Date: 6/3/98
----------------------------------------
By: /s/ Al Alioto
----------------------------------------
Al Alioto
Vice President of Sales and Marketing
Date: 6/9/98
----------------------------------------
62
APPENDIX A
Data Transfer Schedule
Initial data package for evaluation and delivery to the Escrow Agent
-- [ ] days after the last signature date
Update data for evaluation and delivery to the Escrow Agent
-- [ ] days after each calendar quarter
Technical Training
Initial training -- [ ] days after the last signature date.
Detailed training session pursuant to Section 9.2
-- [ ] days after option notification under Section 3.5.
63
APPENDIX B
DELIVERABLES
[ ]
64