Hardware License Agreement

This Agreement is made and entered into as of April 16, 2003, (“Effective Date”) by and between Wintegra, Inc., a Delaware corporation with its principal place of business located at 7200 North MoPac Expressway, Suite 270, Austin, Texas 78731, Wintegra Ltd., a company incorporated under the laws of Israel with its principal place of business located at 6 Hamasger St. P.O. Box 3048, 43653 Ra’anana Israel (Wintegra, Inc. and Wintegra, Ltd shall be referred to as "Wintegra" or “Licensor”) and Texas Instruments Incorporated, a Delaware corporation with its principal place of business located at 12500 TI Boulevard, Dallas, Texas, 75243 (“TI” or “Licensee”)(collectively, the “Parties,” or individually, each a “Party”).

 

Whereas, the Parties will enter into a separate agreement entitled “Co-Marketing and Software License Agreement” to jointly market the High Density Solution (as defined below),

 

Whereas, Wintegra acknowledges that TI, as a supplier of TI chipsets in a High Density Solution, and its customers using a High Density Solution are critically dependent on a continuity of supply of Wintegra software and chips, and that TI and such customers could suffer material damage due to any lack of supply of Wintegra Products (as defined below),

 

Whereas, the Parties acknowledge that customer supply problems regarding Wintegra Products should be addressed and solved directly by Wintegra, but in certain circumstances after Wintegra has been provided reasonable opportunity, as described in this Agreement, to remedy breaches in supply but has been unable to do so, TI shall have the right to independently develop, manufacture or have manufactured, distribute, and support Wintegra products or products having the same or similar functionality as the Wintegra portions of the High Density Solution, and

 

NOW, THEREFORE, the Parties agree that the consideration each Party is providing is adequate, and in consideration of the foregoing premises and the mutual promises and covenants set forth below, TI and Wintegra mutually agree as follows:

 

 

 

 

The Parties acknowledge that they share the common goal of ensuring that Mutual Customers have a continuous supply of Wintegra Products. Wintegra agrees to use its best efforts to ensure that the supply of Wintegra Products to Mutual Customers is timely and remains uninterrupted. TI agrees that the needs of the Parties’ Mutual Customers are best served if Wintegra communicates directly with Mutual Customers on Wintegra Product supply issues. TI agrees to facilitate discussions between Wintegra and Mutual Customers regarding Wintegra Product supply issues. Wintegra further agrees that, if, despite such discussions with Mutual Customers, it is unable to timely and adequately meet the supply needs of Mutual Customers, Wintegra will use its best efforts, working diligently with TI and all relevant third parties, to enable TI to design, manufacture or have manufactured, distribute, modify, and support Wintegra Products, Licensed Software, Wintegra Chips, TI High Density Chips, and/or an TI High Density Solution. At a minimum, Wintegra will perform the obligations specifically set forth in this Agreement so as to attain these goals.

Subject to Section 8, Wintegra hereby grants TI a worldwide, non-exclusive, non-transferable license under all such necessary and applicable Wintegra intellectual property (including but not limited to copyright, patent, mask works, trade secret rights and know-how), to, upon the occurrence of a Release Condition described in Appendix 4 (“Release Condition”), (i) make copies, prepare derivative works, display, and use the Escrow Materials for the purpose of designing, developing, making, having made, and supporting a TI High Density Solution, TI High Density Chips, and derivatives of the Licensed Software (this includes permission for TI or its contractor to emulate the electrical characteristics and performance of the Wintegra Product or Wintegra Chip) and (ii) sell, offer to sell, and otherwise distribute or transfer TI High Density Solutions, TI High Density Chips, Licensed Software, and derivatives of the Licensed Software to TI customers and TI distributors.

 

Notwithstanding the foregoing, if the sole Release Condition that occurs is Release Condition B (Change of Control of Wintegra), then TI agrees that its development of a TI High Density Chip shall be limited to a chip that has the same or similar functionality as the Wintegra Chips, but shall not contain features that are significant upgrades from the Wintegra Chips.

Subject to Section 8, Wintegra hereby grants TI a worldwide, non-exclusive, non-transferable license under all such necessary and applicable Wintegra intellectual property (including but not limited to copyright, patent, mask works, trade secret rights, and know-how) to, upon the occurrence of a Release Condition, (i) make copies, prepare derivative works, display, and use the Escrow Materials for the purpose of supporting Wintegra Products, Wintegra Chips, and the Licensed Software, and managing the manufacture of Wintegra Chips at Wintegra’s Fabrication Sources; and (ii) sell, offer to sell, and otherwise distribute or transfer Wintegra Products, and Wintegra Chips to TI customers and TI distributors.

Wintegra agrees to notify TI in writing (i) immediately upon the occurrence of any of the Release Conditions described in Appendix 4 and (ii) as soon as practicable when Wintegra receives information that a Release Condition is likely to occur. Such notice shall be made in accordance with Article 15 entitled “Notices” in this Agreement with a copy to the person named below and shall detail the alleged Release Condition or potential Release Condition.

TI agrees that prior to requesting release of the Escrow Materials, it will notify Wintegra in writing at least seven (7) days prior of such release request and will use good faith, reasonable efforts to work with Wintegra in a timely manner to find a mutually agreeable alternative to TI obtaining the Escrow Materials and exercising the licenses granted in this Agreement.

 

The parties agree that the issuance by Wintegra of an End of Life notification (“EOL”) in accordance with legitimate business considerations and Wintegra’s standard EOL policies, shall not, in and of itself, constitute a Release Condition (for example, a legitimate business consideration would be i) minimal customer demand for the Wintegra Product, or ii) transition to next-generation product. Wintegra’s exiting of a viable market would not be a legitimate business consideration). Wintegra agrees that a standard EOL would include a minimum of [†] written notice to TI and [†] written notice to the customer of such EOL event and an opportunity for the customer to make a purchase of Wintegra Products subject to such EOL.

 

b.   Immediately upon request by TI, Wintegra shall physically transfer the reticles that are used to make the Wintegra Products to TI or any other third party identified by TI  

c.   Wintegra shall arrange for the employees below to assist TI in implementing the development, manufacture, distribution, and support of products as described in this Agreement, and shall allocate such employees’ other responsibilities in a manner that will allow such employees to assist TI in a timely manner. If such employees are not available, Wintegra shall arrange for persons with comparable experience and knowledge to assist TI.

 

d.   TI shall be entitled to notify the escrow agent in writing (with a copy to Wintegra) of such Release Condition. The escrow agent shall notify Wintegra of TI’s notification and shall release the Escrow Materials subject to the terms of this Agreement and the Escrow Agreement. Wintegra agrees it shall not challenge the escrow agent’s release of the Escrow Materials. If Wintegra believe that, contrary to TI’s notification to the escrow agent, a Release Condition has not occurred, Wintegra will nevertheless permit the release of the Escrow Materials, but may challenge the occurrence of a Release Condition through arbitration as described in the Escrow Agreement. During the period between the release of the Escrow Materials and decision of the arbitrator(s) (the “Interim Period”), TI shall pay Wintegra [†] of the Profits (as defined in Section 8 below) from TI’s sale of the TI High Density Chip or Wintegra Chip during the Interim Period. If the arbitrator(s) determines that a Release Condition did indeed occur, TI will continue supplying its customers as described in this Agreement, and will receive [†] for the amounts [†]. If the arbitrator(s) determines that the Release Condition did not occur, TI will return the Escrow Materials to the escrow agent, and Wintegra will resume supplying Mutual Customers directly.

8.2   Other Release Conditions . If any other Release Condition described in Appendix 4, occurs (Change of Control, Force Majeure, Unexcused Failure to Timely Supply), and TI desires to exercise the licenses granted in Section 5 of this Agreement, TI shall TI shall pay Wintegra [†], calculated in the following manner, beginning from the date of the Release Condition:

a.   If the Release Condition that occurs is a force majeure event and TI chooses to distribute Wintegra Products to certain customers, TI will honor any pricing commitment that Wintegra has made to such customers, or negotiate another agreement with the customer. TI shall be not be obligated to assume the rights and obligations of Wintegra under Wintegra’s agreements with such Mutual Customers.

b.   Upon release of the Escrow Materials, TI may, at TI’s sole option, assume Wintegra’s rights and obligations under all or some of Wintegra’s customer contracts, or TI may enter into new contracts with such customers. Wintegra agrees to execute any and all documents necessary to give full effect to such assumption of rights and obligations.

Title to the Escrow Materials, including all copies thereof, shall be in and remain with Wintegra. TI shall own all right, title and interest to the intellectual property rights (including, but not limited to mask works rights, copyrights, trade secret, and patent rights) in derivatives works of the Escrow Materials resulting from TI’s work with and contribution of TI intellectual property to such Escrow Materials, subject to Wintegra’s ownership of the underlying Escrow Materials. TI shall maintain title to all software, hardware and other intellectual property belonging to TI before the Effective Date, and any original software, hardware or other intellectual property independently developed by TI after the Effective Date and incorporated in or added to the Escrow Materials, and may use such software, hardware or other intellectual property without restriction when not combined with the Escrowed Materials.

During the course of the Term of this Agreement, either Party ("Disclosing Party") may disclose certain Confidential Information to the other Party ("Receiving Party"). “Confidential Information” may include any data or information, oral, or written, that relates to either Party’s (or, if either Party is bound to protect the confidentiality of any other person’s information, such other person’s) past, present, or future research, development, technology, products, personnel, or business activities, including, but not limited to, any unannounced products, software, and services, and including any information relating to services or the technology, developments, inventions, software, expertise, processes, trade secrets, filed patents, know how, Source Code, plans, financial information, customer and supplier lists, forecasts, and projections. The Parties agree that all information a Party desires to be deemed Confidential Information shall be conspicuously marked or otherwise identified as Confidential Information of the Disclosing Party at the time of disclosure or, if disclosed in an intangible form, shall be followed by a writing identifying the information as confidential within thirty (30) days of first disclosure thereof. Confidential Information includes the terms of this Agreement (except as set forth herein), and any material considered confidential under any NDA signed between the Parties prior to entering this Agreement. The Party receiving any such Confidential Information shall treat such Confidential Information as confidential and proprietary of the Disclosing Party for a period of five (5) years from first receipt thereof and for this term shall not use, disclose, or otherwise exploit any Confidential Information for any purpose not expressly contemplated by this Agreement. Each Party shall require each of their employees, independent contractors, agents or representatives who have access to the Confidential Information to execute a written confidentiality agreement containing terms substantially similar to those set forth in this Agreement or shall have form employee or consultant agreements and procedures to ensure their execution where these agreement are reasonably protective of confidential information according to software industry standard practices.

Notwithstanding the confidentiality terms in this Agreement, the Parties agree that the other Party has the right to disclose the terms of this Agreement (this includes the right to provide a copy of a fully executed version of this Agreement), except for (i) Appendix 5 (“Significant Customers”), (ii) Section 8 (iii) names listed in Section 7(c), (iv) royalty amounts in Section 7(d) and (v) the competitor list in Appendix 4.B.1, to any potential customer of the High Density Solution, if such potential customer has inquired into the possibility of Wintegra’s inability to maintain a continuous supply of Wintegra Chips and/or Licensed Software and if the disclosing Party has the prior written approval from the nondisclosing Party. Approval by the nondisclosing Party shall not be unreasonably withheld or delayed. TI and Wintegra each have the right to make press announcements regarding the Agreement, as long as written approval from the other Party has been obtained. Such prior approval shall not be unreasonably withheld or delayed.

Wintegra acknowledges that (i) TI is has worked, may be working on, and may continue to work on developing technology that is similar to, that competes with, or replaces any or all of the technology embodied in the Escrow Materials; and (ii) TI may continue to develop such technology in the future. Nothing in this Agreement shall be construed as precluding TI from proceeding with any such development or distribution now or in the future, or from implementing and distributing such technology developed in the past. Nothing in this Agreement shall prevent TI from using information in non-tangible form that may be retained in the unaided memories of persons who have had access to the Escrow Materials, including ideas, concepts, know-how or techniques contained therein (“Residuals”). TI shall have no obligation to limit or restrict the assignment of such persons or to pay royalties for any work resulting from the use of residuals, except as may arise under valid patents, copyrights or trademarks.

 

 

Wintegra warrants that: (i) the Escrow Materials, Wintegra Products, Wintegra Chips, and Licensed Software do not violate any third party trade secrets, mask works rights, or copyrights, (ii) as of the Effective Date of this Agreement, Wintegra is not aware of any potential or actual third party patent claim on the Escrow Materials, Wintegra Products, Wintegra Chips, or Licensed Software, and (iii) no additional royalties, except those described below, will be due from TI to any third parties for the use or distribution of the Escrow Materials, Wintegra Products, Wintegra Chips, Licensed Software as described in this Agreement.

 

Wintegra agrees to, within [†] from the Effective Date of this Agreement, secure from [†] and [†] the right to sublicense to TI (on terms at least as favorable as the licensing terms in this agreement) such third party intellectual property rights necessary for TI to exercise all licenses granted in this Agreement. Any royalties due to such third parties shall reduce TI’s Profits as defined in Section 8. If a Release Condition occurs and Wintegra has not secured TI such rights, then Wintegra agrees to pay any license fees due to such third parties that are necessary for TI to exercise all licenses granted in this Agreement.

 

 

Wintegra represents and warrants that it has sufficient right, title, and interest in the Escrow Materials and Licensed Software to license them to TI as set forth in this Agreement.

 

Wintegra represents and warrants that the materials included in the Escrow Materials are adequate for a semiconductor manufacturer like TI to manufacture, modify, use, and maintain the Wintegra Chips, Licensed Software, Wintegra Products, TI High Density Chips, and TI High Density Solution without any assistance provided by Wintegra or its successor.