LICENSE AGREEMENT
This License Agreement (the "Agreement") is entered into as of March 6,
1995 (the "Effective Date") by and between BTR, Inc., a Nevada Corporation (the
"Licensor"), and Actel Corporation, a California corporation (the "Licensee").
Recitals
(a) Licensor has developed a proprietary architecture for FPGAs and
Multichip Modules. (Unless otherwise defined in this Agreement, capitalized
terms herein are as defined in Exhibit A to this Agreement).
(b) Licensee desires: (i) to develop such architecture for use in such
FPGAs and Multichip Modules, and (ii) to license such proprietary technology for
use in FPGAs and Multichip Modules and in other integrated circuits.
(c) Licensor is willing to license such proprietary technology to Licensee
for such development and use, upon the terms and subject to the conditions set
forth in this Agreement.
Agreement
In consideration of the foregoing and the covenants contained in this
Agreement, the parties agree as follows:
1. License.
1.1 Grant of License. Licensor hereby grants to Licensee under all
intellectual property rights of Licensor, now owned or, to the extent it is
not prohibited from licensing such right, hereafter acquired (a) an
exclusive (except as it may subsequently become non-exclusive as provided
in Section 6 below), worldwide, perpetual license to develop, make, have
made, use, offer for sale and sell, design, modify and create derivative
works of Licensed Devices, and (b) a non-exclusive, worldwide, perpetual
license to develop, make, have made, use, offer for sale and sell, design,
modify and create derivative works of Products (such licenses shall be
hereinafter referred to, collectively, as the "License").
1.2 Improvements. If Licensor makes any Improvements to any of the
Technology, Licensor shall promptly thereafter (so long as the License is
in effect) provide to Licensee such information, in reasonable detail, with
respect to such Improvements as is reasonably necessary to permit Licensee
to incorporate such Improvements in Licensed Devices or Products.
1.3 Assignment and Sublicensing. Licensee shall not sell, assign, or
transfer any of its rights or obligations under this Agreement without the
prior written consent of Licensor, except for any such sale, assignment or
transfer that occurs as a result of a Change of Control of Licensee.
Licensee shall have the right to grant one or more sublicenses of its
rights under the License, other than with respect to the development,
making, use, offer for sale or sale of any Emulation/Simulation Device;
provided, however, (a) that the sublicensee under each such sublicense, as
a condition to the effectiveness of such sublicense, shall agree, in the
written agreement memorializing such sublicense, to be bound by the terms
and conditions of Section 4 of Exhibit "A" hereto as it relates to the
Technology, and (b) Licensee shall be obligated to pay royalties to
Licensor with respect to the sale of any Licensed Devices or Products
permitted by any such sublicense equal to the product of (i) the Net
Receipts received by the third party which sells such Licensed Devices or
Products to the user thereof, and (ii) the applicable exclusive royalty
rate under this Agreement. Each such sublicense shall be memorialized in a
written agreement with the sublicensee, a copy of which agreement shall be
delivered to Licensor promptly after it becoming effective, which provides
that (x) such sublicensee has no right to further sublicense or assign or
otherwise transfer such sublicense, and (y) the pricing of all Licensed
Devices and Products subject to such sublicense shall be determined on an
"arms' length basis."
2. Development of Licensed Device.
2.1 Delivery of Technology. Promptly after the Effective Date, and
from time-to-time thereafter, Licensor shall deliver to Licensee such
tangible information concerning the Technology as Licensee may reasonably
require to understand the Technology and implement the Technology in the
design of Licensed Devices. Such tangible information shall include
schematics of the FPGA Architecture and a portion of the layout for a
device employing the FPGA Architecture.
2.2 Development Activities. Licensee shall be responsible for the
development of Licensed Devices, and will engage in good faith efforts to
develop, manufacture and sell Licensed Devices. Such responsibilities shall
include the management and direction of such development program. So long
as the License with respect to Licensed Devices remains exclusive, Licensor
shall use good faith efforts to support such development program.
3. Initial Payments for License.
3.1 Advance Minimum Royalties. As consideration for the grant of the
License, Licensee shall pay to Licensor the following non-refundable
advance minimum royalties from the Effective Date until Tapeout.
[CONFIDENTIAL TREATMENT REQUESTED]
The first of the above-described monthly advance royalty payments
shall be made on the Effective Date, and each subsequent payment shall be
made on the first Business Day of each of the succeeding months.
3.2 Termination of Agreement. At any time, beginning three months
after the Effective Date and prior to Tapeout, Licensee may terminate this
Agreement, and its obligation to make the advance minimum royalty payments
described above, effective 30 days after it gives Licensor written notice
of such termination.
4. Royalties.
4.1 Additional Advance Minimum Royalties. As consideration for the
grant of the License, after Tapeout (and subject to Section 4.3 hereof),
Licensee shall pay Licensor, as non-refundable advance minimum royalties,
the amount, if any, by which (i) the amount due under Section 4.2 below for
each month exceeds (ii) [CONFIDENTIAL TREATMENT REQUESTED] beginning with
the [CONFIDENTIAL TREATMENT REQUESTED] anniversary of Product Introduction,
so long as the License with respect to Licensed Devices is exclusive). The
first of such payments shall be made on the first Business Day of the month
immediately succeeding the last month during which the advance minimum
royalty payments under Section 3.1 are made, and each subsequent payment
shall be made on the first Business Day of each of the succeeding months.
Each of the advance minimum royalty payments under Section 3.1 above or
under this Section 4.1 (collectively, the "Advance Payments") and the
lesser of (a) [CONFIDENTIAL TREATMENT REQUESTED] and (b) the direct
expenditures of Licensee for the development of two Product Families (but
no more than [CONFIDENTIAL TREATMENT REQUESTED] with respect to the first
Product Family and [CONFIDENTIAL TREATMENT REQUESTED] with respect to the
second Product Family) (collectively, with the Advance Payments, the
"Recoupable Payments"), shall be creditable against royalties payable under
Section 4.2 below. Notwithstanding the foregoing, (y) prior to the
[CONFIDENTIAL TREATMENT REQUESTED] anniversary of Product Introduction,
Licensee may only credit Recoupable Payments in an amount not in excess of
[CONFIDENTIAL TREATMENT REQUESTED] of the royalty payments, pursuant to
Section 4.2 below, in excess of [CONFIDENTIAL TREATMENT REQUESTED] in any
quarter, payable with respect to the applicable royalty period, and (z)
subsequent to the [CONFIDENTIAL TREATMENT REQUESTED] anniversary of Product
Introduction, Licensee may only credit [CONFIDENTIAL TREATMENT REQUESTED]
of the royalty payments, pursuant to Section 4.2 below, in excess of
[CONFIDENTIAL TREATMENT REQUESTED] in any quarter, payable with respect to
the applicable royalty period.
4.2 Current Royalties. As partial consideration for the grant of the
License, Licensee shall pay to Licensor a royalty on each sale of a
Licensed Device or Product by Licensee or any of its sublicensees (under
clause (a) of Section 1.3 above) in an amount equal to the following
applicable percentage (based on whether the License applicable thereto is
exclusive or non-exclusive on the date of sale thereof) of the Net Receipts
from the sale of such Licensed Device or Product (the "Royalty"). Each
Royalty (a) so long as the License with respect to Licensed Devices is
exclusive, shall be paid quarterly, within 45 days after the last day of
the quarter during which the sale giving rise to such Royalty occurred, or
(b) upon such license becoming non-exclusive, shall be paid monthly, within
15 days after the last day of each month, based on Licensee's reasonable
estimate of the sales giving rise to a Royalty during such month.
Notwithstanding the foregoing, the monthly royalties payable pursuant to
clause (b) above with respect to a successive three month period may not be
less than the actual average monthly royalties paid (after adjustment, as
described below) with respect to the immediately preceding successive three
month period. Licensee shall calculate the actual royalties payable
pursuant to clause (b) above for each successive three month period during
which such Royalties are payable, and shall pay such Royalties, less the
estimated Royalties paid with respect to such period, to Licensor within 45
days after the end of such period. In the event Licensee overpays Royalties
with respect to any period and gives Licensor written notice of such
overpayment, and a calculation, in reasonable detail, of such overpayment,
Licensee shall have the right to credit such overpayment against subsequent
payments of Royalties. Each payment of Royalties (after any such crediting)
hereunder shall be reduced by the amounts creditable against such
Royalties, as provided in Section 4.1 above.
[CONFIDENTIAL TREATMENT REQUESTED]
4.3 Cancellation of Exclusivity. At any time after the [CONFIDENTIAL
TREATMENT REQUESTED] anniversary of the Effective Date, Licensee may cause
the License with respect to Licensed Devices to become non-exclusive, by
giving Licensor written notice of its cancellation of the exclusive nature
of such license, 15 months after Licensor's receipt of such written notice.
Upon Licensor's receipt of such written notice, the minimum advance monthly
royalty payment described in Sections 4.1 above shall be reduced to
[CONFIDENTIAL TREATMENT REQUESTED]. After such 15 month period has run,
Licensor shall no longer be obligated to pay any such advance royalties and
shall no longer be entitled to credit any Recoupable Payments not then
credited.
4.4 Set-Off. In the event Licensor does not timely pay any amount it
is obligated to pay to Licensee under this Agreement and fails to cure such
failure within 20 days of receiving written notice, in reasonable detail,
of such failure, Licensee shall have the right to set-off against such past
due amount any royalty payment it is obligated to pay to Licensor, up to
the amount of such past due amount. Notwithstanding any implication to the
contrary herein, Licensee's set-off rights shall not permit it to avoid its
obligations to pay advance minimum monthly royalties pursuant to Section
3.1 and 4.1 above.
4.5 Deferral. In the event a Third Party Claim, in the form of the
filing and serving of a complaint instituting a legal proceeding, is
initiated, Licensee shall have the right to defer the payment to Licensor
of Royalties otherwise payable under Section 4.2 above after such
initiation (up to the aggregate damages claimed in such complaint, if a
specific amount of damages is claimed in such complaint) until such legal
proceedings are dismissed, the defendant(s) therein is granted a judgment
in its favor (including, without limitation, summary judgment) on all
claims therein, or such legal proceedings are settled (collectively, a
"Terminating Event"). All such deferred Royalty payments shall be paid into
an escrow account, in the name of Licensor and Licensee, at a bank
reasonably acceptable to Licensor and shall be invested in a succession of
90-day certificate of deposits until payable under this Section 4.5 to
Licensor and/or Licensee. Upon the occurrence of a Terminating Event, all
funds in such account shall be paid to Licensor within 30 days thereafter.
Licensee shall grant Licensor a first priority perfecting security interest
in the funds in such account, pursuant to a security agreement and other
required documentation reasonably acceptable to Licensor. Licensee shall be
entitled to draw upon the funds in such account to the extent necessary to
reimburse it for any amounts to which it is entitled under Section 3.2 of
Exhibit "A" hereto in connection with such legal proceedings if Licensor
fails to pay such amounts within 30 days of receiving a written notice, in
reasonable detail, setting forth the components, by dollar amount and
description, of such amounts. Notwithstanding any implication to the
contrary herein, Licensee's deferral rights shall not permit it to avoid
its obligations to pay advance minimum monthly royalties pursuant to
Section 3.1 and 4.1 above.
4.6 Most Favored Nations Pricing. In the event Licensor enters into a
written agreement to license any of the Technology with respect to any
Product pursuant to a grant substantially the same as the grant in Section
1.1(b) above, but with a royalty rate with respect to such Product which is
lower than the royalty rate for Products hereunder during the period of
exclusivity for Licensed Devices, the royalty rate hereunder for any
Product sold by Licensee which would be covered by the terms and conditions
of such grant (a "Comparable Product") shall be decreased to the royalty
rate for such Product under such written agreement with respect to sales of
such Comparable Product during the period commencing with the first month
with respect to which Licensor is required to pay a royalty on a sale of
such Product and ending with the month immediately succeeding the month in
which the exclusive License with respect to Licensed Devices ceases to be
in effect.
5. Cancellation. After Tapeout, but prior to Product Introduction,
Licensee shall have the right to cancel this Agreement by giving Licensor
written notice, received by Licensor during such period, of such cancellation.
Such cancellation shall be effective three months after Licensor receives such
written notice (the "Cancellation Date"). In the event Licensee cancels this
Agreement in this manner, (a) the License shall terminate, and Licensee (subject
to Section 8 hereof) shall have no right to develop, manufacture or sell any
Licensed Device or any Product or to use the FPGA Architecture after the
Cancellation Date, (b) no further Advance Royalties shall be payable by Licensee
hereunder, (c) Licensee shall have no right to recover any Recoupable Payments,
and (d) Licensor, as a condition to the effectiveness of such cancellation,
shall be granted the licenses described below. Prior to the Cancellation Date,
and as a condition to its effectiveness, Licensee shall provide Licensor with a
written license (to become effective on the Cancellation Date), in a form
reasonably acceptable to Licensor and Licensee, granting Licensor a perpetual,
royalty-free, worldwide, non-exclusive license, for all uses and purposes
(except as noted below), with a right to sublicense, to the Joint Technology,
and Licensee's object code (for internal use only, with no right to sublicense)
with respect to the FPGA Architecture. Notwithstanding any termination of this
Agreement and the License, the rights and licenses of Licensee's sublicensees
shall survive, subject to the continued payment by Licensee of the royalties
specified in Section 1.3 hereof; provided, however, Licensor shall cooperate
with Licensee, at Licensee's request, and Licensee shall cooperate with
Licensor, at Licensor's request, to convert any sublicensee of Licensee to a
direct licensee of Licensor and the terms of Licensee's sublicenses shall
provide for such conversion.
6. Exclusivity of License. The License with respect to Licensed Devices
shall be exclusive so long as each of the following conditions to exclusivity
are met by Licensee. In the event any of such conditions are not met, such
license shall become non-exclusive at the election of the Licensor, notice of
which change has been given to Licensee.
(a) The following minimum annual Net Receipts from sales of Licensed
Devices and Products must be achieved during each of the 12-month periods,
described below, beginning with the first day of the month immediately
subsequent to the month in which the [CONFIDENTIAL TREATMENT REQUESTED] and
each subsequent anniversary of the date of Product Introduction occurs;
provided, however, in the event any of such minimum annual Net Receipts are
not achieved during any such 12-month period, Licensee may retain
exclusivity with respect to Licensed Devices if it pays Licensor percentage
royalties on the short-fall from the amount of such minimum annual Net
Receipts in such period, at the applicable exclusive rate in Section 4.2
above, within 45 days after the end of such period.
[CONFIDENTIAL TREATMENT REQUESTED]
(b) The minimum advance royalty payments paid pursuant to Section 4.1
above (after all applicable crediting of Recoupable Payments) shall be
[CONFIDENTIAL TREATMENT REQUESTED] per month ([CONFIDENTIAL TREATMENT
REQUESTED] per month, beginning with the [CONFIDENTIAL TREATMENT REQUESTED]
year after Product Introduction).
7. Termination for Breach. Either party shall have the right to terminate
this Agreement in its entirety in the event of a material breach by the other
party of any of its obligations hereunder. In the event a party does materially
breach any of its obligations hereunder, the other party may effect such
termination by giving the breaching party written notice of its intent to
terminate this Agreement, which notice shall specify, in reasonable detail, the
nature of such breach. Such termination shall occur 30 days following the
effectiveness of such notice, unless the breaching party cures such breach prior
to the expiration of such 30-day period; provided, however, that (a) if such
breach is not curable, such termination shall occur upon the effectiveness of
such notice, and (b) if such breach is curable, but does not relate to the
payment of any sum of money or to Section 1.3 above, is not capable of being
cured within such 30-day period, and the breaching party commences engaging in
all reasonable efforts to cure it after receiving such notice and continues to
engage in such efforts until it is cured, a termination of the Agreement with
respect to such breach many not occur unless the breaching party fails to cure
such breach within 90 days following the effectiveness of such notice.
Notwithstanding the foregoing, in the event Licensor gives Licensee written
notice, claiming that Licensee has failed to pay royalties hereunder on products
sold by Licensee, and Licensee gives Licensor written notice that it does not
believe that it is obligated to pay such royalties and the reasons, in
reasonable detail, for such belief, within the 30-day period after the
effectiveness of such notice from Licensor, such dispute shall be submitted to
arbitration pursuant to Section 7.18 of Exhibit "A" hereto. This Agreement may
not be terminated during the pendency of such arbitration as a result of the
claimed breach to be resolved in such arbitration.
8. Sell-Off Period. Any Licensed Devices manufactured pursuant to the
License prior to the termination of this Agreement may be sold pursuant to the
terms and conditions of this Agreement within 18 months from the date of such
termination.
9. Sale of Licensor. During the period that the License with respect to
Licensed Devices is exclusive, (a) Licensor shall not solicit a purchase of the
Technology, all or substantially all of its assets or all of its outstanding
voting securities, (collectively, a "Purchase"), and (b) Licensee shall have a
right-of-first-refusal with respect to any Purchase, as described below. In the
event Licensor receives a written offer with respect to a Purchase that it is
willing to accept, it shall give Licensee written notice of the material terms
and conditions of such offer (the "Offer Notice"). Licensee shall have the right
to make such Purchase in the event it (x) gives Licensor written notice that it
is willing to make such Purchase, on such material terms and conditions, within
ten days of receiving the Offer Notice, (y) enters into a definitive agreement
with respect to such Purchase, which includes such material terms and conditions
and such other terms and conditions as are normal with respect to such a
transaction, within 20 days of receiving such agreement from Licensor, and (z)
consummates such transaction pursuant to the terms and conditions of such
agreement. If Licensee fails to timely meet any of such conditions, Licensor
shall have the right to consummate such Purchase on such material terms and
conditions, taken as a whole.
10. Confidentiality of Agreement. The terms and conditions of this
Agreement shall be deemed to constitute Confidential Information, as defined in
Section 4 of Exhibit "A" hereto, of each of the parties, and shall be subject to
all of the terms and conditions of such section; provided, however, Licensee may
disclose any such terms and conditions, as permitted by such section or with the
approval of Licensor, which shall not be unreasonably withheld or delayed.
11. Continuation of Business. So long as the License with respect to
Licensed Devices is exclusive and Licensor does not have the right to terminate
this Agreement pursuant to Section 7 above, Licensor shall not wind up its
affairs, liquidate or dissolve without Licensee's written consent, which shall
not be unreasonably withheld or delayed.
12. Additional Covenant. Licensee shall not unilaterally terminate its
consulting relationship with Ben Ting, Peter Pani or Richard Abraham until the
last to occur of (a) the License with respect to Licensed Devices ceasing to be
exclusive, and (b) an aggregate of 267,772 shares of Licensee's Common Stock
subject to options granted under the consulting agreements between Licensee and
Ben Ting, Peter Pani and Richard Abraham having vested. Licensee shall not
unilaterally terminate its employment relationship with Ben Ting, Peter Pani or
Richard Abraham unless and until the License with respect to Licensed Devices
ceases to be exclusive.
13. Other Terms and Conditions. Exhibit "A" attached hereto, which
contains additional definitions, terms and conditions, is hereby incorporated
in, and made a part of, this Agreement.
Each of the parties has caused this Agreement to be executed and delivered
by its duly authorized representative as of the date first written above.
LICENSOR LICENSEE
BTR, Inc. Actel Corporation
By: /s/ Richard P. Abraham By: /s/ Jeff Schlageter
Its: President Its: Sr. VP Engineering
EXHIBIT "A"
ADDITIONAL TERMS AND CONDITIONS
OF LICENSE AGREEMENT
This Exhibit "A" contains additional definitions, terms and conditions
which are an integral part of the License Agreement, dated as of March 6, 1995,
between BTR Inc. and Actel Corporation (the "Agreement").
1. Definitions. As used in the Agreement, the following terms shall have
the following meanings:
1.1 "Affiliate" shall mean, as to a party to the Agreement, any
corporation or other entity directly or indirectly controlling, controlled
by, or under common control with such party.
1.2 "Business Day" shall mean any day other than a Saturday, Sunday
or any national holiday in the United States of America or in the states of
Nevada or California.
1.3 "Change of Control: means the occurrence of any of the following
events:
(a) Any "person" or "group of persons" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of the
Company representing 50% or more of the total voting power represented
by the Company's then-outstanding voting securities; or
(b) A change in the composition of the Company's Board of
Directors occurring within a two-year period as a result of which
fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" shall mean directors who either (i) are
directors of the Company as of the date hereof or (ii) are elected, or
nominated for election, to the Board with the affirmative votes of at
least a majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened
proxy contest relating to the election of directors of the Company);
or
(c) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 50% of the total
voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
1.4 "Contributing Consultants" shall mean Ben Ting, Peter Pani and
Richard Abraham.
1.5 "Emulation/Simulation Device" shall mean a combination of one or
more Multichip Modules using the FPGA Architecture, together with
supporting software, the principal function of which is as a development
and/or diagnostic tool.
1.6 "Field Programmable Gate Array" or "FPGA" shall mean an
integrated circuit comprised, in whole or in part, of an array of logic or
analog elements, interconnects and programmable switches, the principal
function of which is to perform logic or analog functions.
1.7 "FPGA Architecture" shall mean the FPGA architecture covered by
claims in US Patent # 5457410 and augmented by US Patent Application
#08/229,923, all foreign counterparts of such U.S. patent or patent
application (whether or not the foreign counterparts claim priority from
such U.S. patent or patent application), any and all revisions,
continuations, divisions, substitutions, reissues, renewals, continuations
in part, parents, counterparts and extensions thereof, and all patents and
patent applications, whether filed in or granted by the United States or
another country, claiming, in whole or in part, the benefit of the filing
date of such U.S. patent or patent application.
1.8 "Improvements", with respect to technology, know-how or any
product, whether hardware, firmware or software, shall mean any
modifications, alterations or improvements made thereto by, or for the
benefit of, the owner thereof or licensed with a right to sublicense
(subject to any restrictions which are a part of such right).
1.9 "Joint Technology" shall mean any Technology developed through
the joint efforts of Licensee and one or more Contributing Consultants
which is an Improvement to the FPGA Architecture.
1.10 "License" shall mean the License to the Technology granted to
Licensee by Licensor in Section 1.1 of the Agreement.
1.11 "Licensed Device" shall mean any device, including an integrated
circuit, constituting a Field Programmable Gate Array or Multichip Module
designed with, or utilizing, in whole or in part, any of the Technology,
other than Emulation/ Simulation Devices.
1.12 "Multichip Module" shall mean a device containing multiple
integrated circuits, including one or more FPGAs.
1.13 "Net Receipts" shall mean the gross amount recognized as income
on Licensee's books (pursuant to generally accepted accounting principles
consistently applied) in connection with the sale of a Licensed Device or
Product, less deductions for payment of sales, value added or any similar
taxes, and shipping and insurance charges, with respect to such Licensed
Device or Product.
1.14 "Product" shall mean any integrated circuit, or any device
containing several integrated circuits, designed with or utilizing, in
whole or in part, any of the Technology that is not a Licensed Device.
1.15 "Product Introduction" shall mean the date on which Licensee has
sold, in the aggregate, Licensed Devices with respect to which it is
entitled to Net Receipts aggregating in excess of [CONFIDENTIAL TREATMENT
REQUESTED].
1.16 "Product Families" shall mean a series of products that have
different capacities, but are based on a common FPGA architecture and a
common process technology.
1.17 "Tapeout" shall mean the completion of the physical
specifications, including without limitation, fractured data ready for mask
making, of the first integrated circuit using the FPGA Architecture.
1.18 "Technology" shall mean the FPGA Architecture and any and all
know-how and engineering data related to the FPGA Architecture and any
Improvements thereto, and all related patents, copyrights, trade secrets
and other intellectual or industrial property rights; provided, however,
Technology shall not include any Improvement thereto which is developed at
the specific request of, and pursuant to a written agreement with, a third
party that is not an Affiliate of Licensor unless Licensor has a license
with respect to such Improvement with a right to sublicense (subject to any
restrictions which are a part of such right).
2. Reports, Records, Audits and Inspections
2.1 Reports. Licensee shall deliver to Licensor as soon as
practicable, but in any event within 60 days following the last day of each
calendar quarter during the term hereof, a written report showing, in
reasonable detail, sales of Licensed Devices by Licensee in such quarter,
including, without limitation, the Net Receipts attributable thereto and
any credits given by Licensee on previous sales.
2.2 Records. During the term of the Agreement, and for a period of at
least three years thereafter, Licensee shall maintain true and complete
books and records related to all sales of Licensed Devices; provided,
however, notwithstanding the foregoing, Licensee shall not be required to
maintain any of such books and records more than ten years after it is
first prepared.
2.3 Audits and Inspections
(a) During the term of the Agreement and for a period of one year
thereafter, Licensor shall have the right, at its expense and upon
reasonable notice to Licensee, to have examined by an independent
auditor with a national reputation, reasonably acceptable to Licensee,
Licensee's books and records in order to determine or verify the Net
Receipts and sales of the Licensed Devices. Licensor shall not make
any such examination more than twice in any calendar year.
(b) If an error in the reported Net Receipts or the reported
number of Licensed Devices sold by Licensee is discovered as a result
of such an examination and the reported Net Receipts or the reported
number of Licensed Devices sold by Licensee during the period(s)
examined were in excess of 5% less than the actual Net Receipts or
number of Licensed Devices sold by Licensee, as the case may be,
during such period(s), Licensee (i) shall pay all of Licensor's
out-of-pocket expenses related to such examination, and (ii) shall pay
Licensor interest on the amount of such underpayment, at the rate of
12% per annum, from the date such amount was due and payable until
such amount is actually paid.
3. Protection of Proprietary Information and Rights
3.1 Third Party Infringement and Misappropriation. Licensee shall
give Licensor prompt notice of any activities or threatened activities of
any third party of which it becomes aware that infringe any patent,
copyright or other intellectual or industrial property right subsisting in
or related to any of the Technology or that constitute a misappropriation
of trade secrets or act of unfair competition which may dilute, damage or
destroy rights subsisting in or related to any of the Technology
(collectively, the "Infringing Activities"). Licensor shall give Licensee
prompt notice of any Infringing Activities of which it becomes aware so
long as the license granted to Licensee pursuant to the Agreement is
exclusive. Licensor shall have the right, in its sole discretion, to take
whatever action, whether in the nature of legal proceedings or otherwise,
it deems necessary to remedy or prevent Infringing Activities. Licensee
shall not be permitted to take any action to remedy or prevent any
Infringing Activities without Licensor's prior written consent, which, so
long as the License with respect to Licensed Devices is exclusive, shall
not be unreasonably withheld or delayed. In the event Licensee takes any
such action, it shall be obligated to pay all expenses it incurs in doing
so and shall be entitled to retain all damages and reimbursement of fees
and expenses it receives as a result of doing so.
3.2 Third Party Claims
(a) Each party shall promptly notify the other party in writing
of any legal proceeding instituted or claim or demand asserted by any
third party, of which such party becomes aware, with respect to the
infringement of any patent, copyright or other intellectual or
industrial property right, or misappropriation of any trade secret or
act of unfair competition, which is alleged to result from Licensee's
use of any of the Technology as licensed under the Agreement (a "Third
Party Claim").
(b) In the event of a Third Party Claim, Licensor may elect at
its own cost and expense to be represented by counsel, which is
reasonably acceptable to Licensee, and to participate in, or, at its
option, take exclusive control of, the defense, negotiation or
settlement of such Third Party Claim, including, if it so elects, by
bringing counterclaims, in its own name or in Licensee's name (if such
counterclaim may only be brought in Licensee's name and Licensor
obtains Licensee's approval to bring such counterclaim, which approval
shall not be unreasonably withheld or delayed), as to the validity of
any alleged patents, copyrights, trade secrets or other intellectual
or industrial property rights involved in such Third Party Claim;
provided, however, that Licensor shall not have the right to agree to
settle such Third Party Claim without Licensee's consent, which shall
not be unreasonably withheld or delayed, unless (i) the terms and
conditions of such settlement require only the payment of money, and
do not require Licensee to admit any wrongdoing or take or refrain
from taking any action, (ii) the full amount of the settlement is paid
by Licensor, and (iii) such settlement does not materially and
adversely affect Licensee's rights under the Agreement. In the event
that Licensor elects to take such control, Licensee may participate in
such defense, negotiation or settlement with counsel of its own choice
and at its own expense.
(c) If Licensor elects not to control the defense, negotiation or
settlement of any such Third Party Claim, or fails to pursue such
defense, negotiation or settlement, Licensee may defend, negotiate or
settle such Third Party Claim provided, however, that Licensee shall
not have the right to agree to settle such Third Party Claim upon the
License ceasing to be exclusive in any respect without Licensor's
consent, which shall not be unreasonably withheld or delayed, unless
(i) the terms and conditions of such settlement require only the
payment of money, and do not require Licensor to admit any wrongdoing
or take or refrain from taking any action, (ii) the full amount of the
settlement is paid by Licensee, and (iii) such settlement does not
materially and adversely affect Licensor's rights to any of the
Technology. Licensee may be represented by counsel in any such
defense, negotiation or settlement which is reasonably acceptable to
Licensor.
(d) Notwithstanding any implication to the contrary herein,
Licensee shall make such modifications to the design of a Licensed
Device as may be reasonably requested by Licensor in order to reduce
the exposure to Licensor or Licensee of any Third Party Claim with
respect to such Licensed Device if such modifications may not
reasonably be expected to materially and adversely affect the costs of
producing such Licensed Device or the reasonably projected sales
volume of such Licensed Device.
(e) Licensor shall pay any reasonable out-of-pocket costs or
expenses Licensee incurs with respect to any Third Party Claim if
Licensee controls the defense, negotiation or settlement of such Third
Party Claim, any damages awarded against Licensee as a result of any
Third Party Claim, and the amount of any settlement of any Third Party
Claim (other than a settlement by Licensee which Licensee is required
to pay pursuant to subsection (c)). Licensor's obligations in this
subsection (e) with respect to any Third Party Claim are conditioned
on the following: (i) Licensor being notified in writing of such Third
Party Claim (provided, however, that any failure to provide such
notice on a prompt basis shall not affect any of Licensor's
obligations hereunder unless such failure materially and adversely
affects its ability to defend such Third Party Claim) promptly after
Licensee becomes aware of such Third Party Claim; and (ii) should any
Licensed Device become, or, in Licensor's opinion, is likely to
become, the subject of a Third Party Claim, Licensee shall permit
Licensor, at Licensor's option and expense, to do one of the
following: (A) procure for Licensee the right to continuing using the
Technology and to make, use, offer to sell and sell the Licensed
Device subject to the Third Party Claim; or (B) modify the Technology
so that its use is non-infringing but the Technology continues to have
the same material benefits with respect to the development process for
such Licensed Device as it possessed prior to such modification.
Licensor shall have no obligation under this subsection (e) with
respect to any Third Party Claim, to the extent such Claim involves
modifications of the Technology by Licensee.
4. Confidential Information
4.1 Protection of Confidential Information. Licensor and Licensee
each acknowledge that, during the term of the Agreement, it will have
access to proprietary or confidential information, including, without
limitation, documents or other items which have been marked or otherwise
identified as confidential or proprietary in nature, of the other party,
including, without limitation, information related to the Technology, the
Licensed Devices and the business or business practices of the other party
related to the Technology or the Licensed Devices. Each party shall use its
best efforts to protect such proprietary or confidential information of the
other party in the same manner in which it would protect its own
proprietary or confidential information, and shall not use proprietary or
confidential information of the other party for its own benefit or the
benefit of any other person or entity, except as may be specifically
permitted hereunder.
4.2 Exceptions to Confidential Treatment. The obligations of
confidentiality and non-use shall not apply to any confidential or
proprietary information of one party which:
(a) was known by the other party prior to the date of the
Agreement and not obtained or derived, directly or indirectly, from
such party or any of its Affiliates;
(b) is or becomes public or available to the general public or
generally to the computer or semiconductor manufacturing industry, or
generally to any other industry in which the Licensed Devices are used
or sold, otherwise than through (i) any act or default of a party that
has an obligation of confidentiality and non-use with respect to such
information, or (ii) the disclosure of such confidential or
proprietary information by such party, subject to an obligation of
confidentiality and non-use;
(c) is obtained or derived prior or subsequent to the date of the
Agreement from a third party which is lawfully in possession of such
information and does not hold such information subject to any
confidentiality or non-use obligations; or
(d) is required to be disclosed by the other party pursuant to
applicable law, or under a government or court order; provided,
however, that (i) the obligations of confidentiality and non-use shall
continue to the fullest extent not in conflict with such law or order,
and (ii) if and when the other party is required to disclose such
confidential or proprietary information pursuant to any such law or
order, such party shall use its best efforts to obtain a protective
order or take such other actions as will prevent or limit, to the
fullest extent possible, public access to, or disclosure of, such
information.
5. Indemnification
5.1 Protection of Parties. Subject to the limitations in this Section
5, each party agrees to indemnify and hold the other party harmless from
any and all damages, liabilities, losses, and costs or expenses suffered or
incurred by the other party arising out of, or resulting from, any breach
of its representations, warranties or covenants in the Agreement.
5.2 Procedure For Indemnification
(a) In the event that any legal proceedings are instituted, or
any claim or demand is asserted, by any third party which may give
rise to any damage, liability, loss, or cost or expense in respect of
which either party has indemnified the other party under Section 5.1
above, the indemnified party shall give the indemnifying party written
notice of the institution of such proceeding, or the assertion of such
claim or demand, promptly after the indemnified party first becomes
aware thereof; provided, however, that any failure by the indemnified
party to give such notice on such prompt basis shall not affect any of
its rights to indemnification hereunder unless such failure materially
and adversely affects the ability of the indemnifying party to defend
such proceeding.
(b) The indemnifying party shall have the right, at its option
and at its own expense, to be represented by counsel of its choice,
subject to the approval of the indemnified party, which approval shall
not be unreasonably withheld or delayed, and to defend against,
negotiate with respect to, settle or otherwise deal with such
proceeding, claim or demand; provided, however, that no settlement of
such proceeding, claim or demand shall be made without the prior
written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed, unless, pursuant to the terms and
conditions of such settlement, the indemnified party shall be released
from any liability or other exposure with respect to such proceeding,
claim or demand; and provided, further, that the indemnified party may
participate in any such proceeding with counsel of its choice and at
its own expense. In the event, or to the extent, the indemnifying
party elects not to, or fails to, defend such proceeding, claim or
demand and the indemnified party defends against, settles or otherwise
deals with any such proceeding, claim or demand, any settlement
thereof may be made without the consent of the indemnifying party if
it is given written notice of the material terms and conditions of
such settlement at least ten Business Days prior to a binding
agreement with respect to such settlement being reached. Each of the
parties agrees to cooperate fully with each other in connection with
the defense, negotiation or settlement of any such proceeding, claim
or demand.
6. Representations and Warranties.
(a) Licensor and Licensee each represents and warrants to the other
that:
(i) it is organized, validly existing and in good standing under
the laws of the country or state in which it is incorporated;
(ii) its execution and delivery of the Agreement, and the
performance of its obligations under the Agreement, have been duly
authorized by all necessary corporate action on its part, and it has
full corporate power, right and authority to enter into the Agreement,
to grant the license it has granted thereunder and to perform its
obligations thereunder;
(iii) neither the execution and delivery of the Agreement by it,
nor the performance by it of any of its obligations under the
Agreement, violates any applicable law or regulation of any country,
state or other governmental unit, or its Articles of Certificate of
Incorporation or Bylaws or other charter documents, or constitutes a
violation of, or a breach or default under, any agreement or
instrument, or judgment or order of any court or governmental
authority, to which it is a party or to which it is subject or to
which any of the Technology or the Licensed Devices is subject;
(iv) the Agreement is a valid and binding obligation of it,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by equitable principles or by bankruptcy
or other laws affecting creditors' rights generally; and
(v) no consent, approval, order or authorization of any person,
entity, court or governmental authority is required on its part in
connection with the execution and delivery of the Agreement or the
performance by it of its obligations thereunder.
(b) Licensor represents and warrants to Licensee that it has title
to, or a license with a right to sublicense, the Technology, in the form in
which it is delivered to Licensee, free and clear of any liens, claims or
encumbrances or interests of any third party or any license which is in
conflict with the License. As of the Effective Date, no part of the
Technology has been licensed to Licensor and Licensor has not granted any
license with respect to any part of the Technology.
(c) Licensor shall (i) file such patent applications covering the
FPGA Architecture as may be reasonably requested by Licensee, (ii)
prosecute in good faith each patent application covering the FPGA
Architecture, and (iii) maintain in force all patents covering the FPGA
Architecture; provided, however, upon the License becoming non-exclusive,
Licensee shall be obligated to reimburse Licensor for all of its costs and
expenses (promptly after it receives written notice of any such
expenditure) incurred in preparing, filing, prosecuting and maintaining any
patent application which Licensee thereafter requests Licensor to file.
7. Miscellaneous
7.1 Acknowledgments. Licensee acknowledges that it has no ownership
rights, and will not, pursuant to the Agreement, acquire any ownership
rights, in the Technology. Each party acknowledges that a breach of any of
its obligations under the Agreement would cause the other party irreparable
harm and, in the event such party breaches or threatens to breach its
obligations under the Agreement, the other party shall be entitled to
injunctive and other appropriate equitable relief.
7.2 Warranties. LICENSOR HAS GRANTED THE LICENSE ON AN "AS-IS" BASIS.
EXCEPT AS SET FORTH IN SECTIONS 6 AND 7.1 ABOVE, LICENSOR MAKES NO WARRANTY
WITH RESPECT TO ANY OF THE TECHNOLOGY. LICENSOR MAKES NO IMPLIED WARRANTIES
WITH RESPECT TO THE TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7.3 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE FOR ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER PARTY,
ANY OF ITS AFFILIATES, ANY OF ITS SUBLICENSEES OR ANY THIRD PARTY ARISING
OUT OF, OR IN CONNECTION WITH, THE LICENSE OR USE OF THE TECHNOLOGY OR SALE
OR USE OF ANY LICENSED DEVICE. IN ADDITION TO THE FOREGOING, NEITHER
LICENSOR NOR LICENSEE SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER PARTY, ANY
AFFILIATE OR SUBLICENSE OF THE OTHER OR ANY THIRD PARTY ARISING OUT OF, OR
IN CONNECTION WITH, THIS AGREEMENT, THE PERFORMANCE BY EITHER PARTY OF ANY
OF ITS OBLIGATIONS HEREUNDER, ANY REPRESENTATION OR WARRANTY OF EITHER
PARTY HEREUNDER OR OTHERWISE, EXCEPT ANY SUCH DAMAGES WHICH ARISE OUT OF,
OR RESULT FROM, ANY INTENTIONAL AND KNOWING BREACH OF THIS AGREEMENT. THE
FOREGOING LIMITATIONS APPLY TO ALL CLAIMS, INCLUDING, WITHOUT LIMITATION,
BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY,
MISREPRESENTATION OR OTHER TORTS.
7.4 Compliance With Applicable Law. Licensee shall comply with all
applicable laws and regulations of any country, state or government unit
relating to the use of any of the Technology or the manufacture or sale of
Licensed Devices, including, but not limited to, the Export Administration
Act and Export Administration Regulations of the United States of America.
Licensee shall obtain and maintain in effect all licenses, permits and
authorizations required for the performance of its obligations hereunder.
7.5 Relationship of Licensor and Licensee. Nothing in the Agreement
shall create a joint venture, partnership or principal-agent relationship
between Licensor and Licensee.
7.6 Notices. Whenever any matter in the Agreement provides for notice
or other written communication to be given to Licensor or Licensee, such
notice shall be given at the address of such party set forth below, or such
other address as such party shall provide, in writing, to the other party.
All notices may be given by being personally delivered, by being sent by
prepaid air freight, delivery of which, within one Business Day of receipt
by the air freight company, is guaranteed, or by being sent by facsimile,
the receipt of which is acknowledged, addressed to the party hereto to whom
notice is to be given at the above-described address. Each such notice
shall be deemed to be effective upon receipt, if personally delivered, one
Business Day after receipt by the airfreight company, if sent by
airfreight, and one Business Day after being sent by facsimile.
If to Licensor: If to Licensee:
BTR, Inc. Actel Corporation
c/o Corporate Trust Company of Nevada 955 East Arques Avenue
One East First Street Sunnyvale, California 94086
Reno, Nevada 89501 Attn.: Jeff Schlageter
Attn.: Richard Abraham Fax: (408) 522-8041
Fax: (415) 948-7652
7.7 Attorneys' Fees.Should any litigation or arbitration be commenced
between the parties hereto concerning the Agreement, or the rights and
duties of the parties in relation to the Agreement, the party prevailing in
such litigation or arbitration shall be entitled, in addition to such other
relief as may be granted, to a reasonable sum for attorneys' fees in
connection with such litigation or arbitration, which sum shall be
determined by the trier of fact in such litigation or arbitration or in a
separate action brought for that purpose.
7.8 Assignment. The Agreement shall be binding upon, and inure to the
benefit of, the respective legal representatives, successors and permitted
assigns of the parties hereto. Notwithstanding the foregoing, except as
otherwise provided herein, neither party may assign the Agreement, or any
of its rights or obligations under the Agreement, without the prior written
consent of the other party, which consent shall not be unreasonably
withheld or delayed. So long as any portion of the License is exclusive,
Licensor shall not assign (directly or indirectly, by operation of law or
otherwise) or sell any of the Technology without the prior written consent
of Licensee, which consent shall not be unreasonably withheld or delayed.
Any such sale or assignment not permitted hereunder shall be deemed to be
null and void and of no effect.
7.9 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive, but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
7.10 Severability. Should any portion or provision of the Agreement be
declared invalid or unenforceable in any jurisdiction by a court of
competent jurisdiction, then such portion or provision shall be deemed to
be severable, to the extent invalid or unenforceable, from the Agreement as
to such jurisdiction (but, to the extent permitted by law, not elsewhere)
and shall not affect the remainder thereof. Notwithstanding the foregoing,
(a) such provision of the Agreement shall be interpreted by the parties and
by any such court, to the extent possible, in such a manner that such
provision shall be deemed to be valid and enforceable, and (b) such court
shall have the right to make such modifications to any provision of this
Agreement as do not materially affect the rights or obligations of the
parties under the Agreement and as may be necessary in order for such
provision to be valid and enforceable.
7.11 Waiver. No waiver of any right or obligation of Licensor or
Licensee under the Agreement shall be effective unless in a writing,
specifying such waiver, executed by the party against which such waiver is
being enforced. A waiver by either party hereto of any of its rights under
the Agreement on any occasion shall not be a bar to the exercise of the
same right on any subsequent occasion or of any other right at any time.
7.12 Other Terms. The terms and provisions set forth in the Agreement
shall control over any terms and provisions set forth in any purchase order
or other document or instrument submitted to Licensor by Licensee, and no
such purchase order or other document or instrument or course of conduct or
trade practice may be used to modify, vary or supplement any terms set
forth herein unless Licensor expressly agrees in writing to such
modification, variation or supplement.
7.13 Headings and Titles. The designation of a title, or a caption or
a heading, for each section of the Agreement is for the purpose of
convenience only and shall not be used to limit, interpret or modify the
provisions of the Agreement.
7.14 Presumptions. Because each of the parties hereto have
participated in drafting the Agreement, there shall be no presumption
against any party on the ground that such party was responsible for
preparing the Agreement or any part thereof.
7.15 Amendment or Modification. The Agreement may be amended, altered,
or modified only by a writing, specifying such amendment, alteration or
modification, executed by Licensor and Licensee.
7.16 Counterparts. The Agreement may be executed in two counterparts,
each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
7.17 Governing Law; Jurisdiction. This Agreement, and the rights and
obligations of the parties hereunder, shall be governed by and construed in
accordance with the laws of the State of California. Any action with
respect to the Agreement filed by one party against the other may only be
brought in the Federal District Court for the Northern District of
California or the Superior Court of the State of California located in
Santa Clara County.
7.18 Arbitration. Any controversy or claim arising out of or relating
to this Agreement or its breach shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. In any arbitration hereunder,
Licensor and Licensee may agree on the selection of a single arbitrator,
but if they cannot so agree, each such party shall select an arbitrator and
the two selected arbitrators shall select a third arbitrator. No arbitrator
may be affiliated, whether directly or indirectly, with any of the parties,
including, without limitation, as an employee, consultant, partner or
shareholder. The arbitrator(s) shall permit each of the parties to the
arbitration to engage in a reasonable amount of discovery. In the event
either party requests such an arbitration, the arbitration shall be held in
Santa Clara County, California. The award by the arbitrator or arbitrators
shall be final, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. Notwithstanding the foregoing, neither
party shall be prevented from seeking injunctive relief, including, without
limitation, a temporary restraining order, as contemplated by Section 7.1,
from the courts specified in Section 7.17.
7.19 Survival. Sections 4.2, 4.4, 4.5, 5, 8, 10 and 12 of the
Agreement and each section of this Exhibit "A" shall survive the
termination or cancellation of the Agreement.
7.20 Complete Agreement. The Agreement constitutes the complete
understanding of the parties hereto regarding the subject matter thereof
and supersedes all prior or contemporaneous agreements of the parties,
whether written or oral, with respect to such subject matter.
License Agreement - BTR Inc. and Actel Corp.
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