Memorandum of Understanding between Wintegra, Inc. and Texas Instruments Incorporated
TI
/ Wintegra Confidential
Memorandum
of Understanding between Wintegra, Inc.
and
Texas Instruments Incorporated
This
Memorandum of Understanding (“MOU”) is entered into as of April 20, 2005,
(the “Effective Date”), by and between Wintegra, Inc., a Delaware corporation,
with principal offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, 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”) and Texas Instruments Incorporated, a Delaware corporation with
principal offices located at ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(“TI”).
TI
and
Wintegra agree that, except for this paragraph and paragraphs 9 through 15
hereof (the “Binding Commitments”), this MOU reflects only a statement of intent
for TI and Wintegra to grant TI a license to develop products that integrate
Wintegra IP into TI products and does not constitute a binding agreement. Such
a
binding agreement will arise only if and when all material rights, obligations,
terms and conditions have been set forth in a License Agreement executed by
both
parties. If either party chooses to develop any product or technology prior
to
execution of a License Agreement, it does so solely at its own risk. All
agreement drafts, “terms sheets”, memoranda and other communications respecting
a proposed License Agreement or activities related thereto prepared or exchanged
in the course of negotiations, even if signed by one party or both parties
will
be considered preliminary and will not be legally binding unless expressly
incorporated into a final License Agreement. Following execution of this MOU
and
continuing for its term, TI and Wintegra will promptly undertake to negotiate
in
good faith the terms and conditions of a License Agreement. Unless expressly
noted to the contrary, nothing herein or in such a final executed License
Agreement shall supercede, preempt or replace any other agreements between
TI
and Wintegra, and for clarity and without limitation, the parties hereto agree
and understand that the licenses and royalty scheme proposed pursuant to this
MOU shall not apply to any rights that TI has or may gain to Wintegra IP
pursuant to other agreements between the parties.
1. Introduction
This
MOU
sets out the common interests of TI and Wintegra in granting TI a license to
independently develop, manufacture or have manufactured, distribute, offer
for
sale and sell TI Devices that incorporate Wintegra IP. The terms of this MOU
set
forth TI and Wintegra’s relationship until the details of a complete License
Agreement are worked out and signed.
2. Definitions
2.1 “Average
Selling Price” shall mean the average price received by TI for the sale of a TI
Device in the quarter for which royalties are being calculated under this
Agreement less adjustments for taxes, shipping and handling and any other
similar adjustments.
2.2 “Intelligent
Gates” shall mean the number of gates on a device calculated by subtracting the
memory and I/O pads from the total gate count on such device. Also excluded
from
such intelligent gates count are gates to which TI has an independent right
to
distribute such gates such as those from MIPS Technologies and other third
parties that may be part of the TI Device.
TI
/ Wintegra Confidential
2.3 “TI
Device” shall mean a device manufacture by or for TI that contains proprietary
Wintegra IP such that [†]
on such
device are proprietary Wintegra IP.
2.4 “Wintegra
IP” shall mean the circuits and modules designed by and proprietary to Wintegra
that are provided to TI by Wintegra. The exact scope of the Wintegra IP shall
be
scheduled in an exhibit to the Final License Agreement and shall include the
Wintegra software packages listed in Exhibit 1 to this MOU.
2.5 “Wintegra
IP Rights” shall mean all applicable patents, mask works, copyrights, trade
secrets and other intellectual property rights in all countries of the world
that Wintegra owns or controls during the term of this MOU.
3. License
Grant
Subject
to Section 4, Wintegra shall grant TI a worldwide, non-exclusive,
non-transferable license under any and all Wintegra IP Rights to use the
Wintegra IP to (i) make copies, prepare derivative works, display, and
otherwise use the Wintegra IP for the purpose of designing, developing, making,
having made, and supporting TI Devices and (ii) make, use, sell, offer to
sell, import, export, and otherwise distribute or transfer TI
Devices.
4. Royalties
4.1 Base
Royalty Rate
TI
shall
pay Wintegra quarterly royalties based on its sales of TI Devices [†] based on
the following formula:
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[†]
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=
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[†]
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x
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[†]
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x
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[†]
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4.2
[†]
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[†]
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4.3 One
Time Buyout Fee Option
A
one
time “buyout” fee for use of certain intellectual property will also be an
option to be considered and negotiated in good faith by both Parties should
the
economics better fit the business situation.
__________________________
[†]
Information redacted pursuant to a confidential treatment request by Wintegra,
Inc. under 17 CFR §§ 200.80(b)(4) and 230.406 and submitted separately with the
Securities and Exchange Commission.
-2-
TI
/ Wintegra Confidential
4.4 Up-Front
License Fee Option
[† ] will
also
be an option to be considered and negotiated in good faith by both parties
should economics better fit the situation.
5. Intellectual
Property
5.1 The
parties agree that Wintegra owns all right, title and interest in and to all
Wintegra Intellectual Property (patents, copyrights, trade secrets, and other
intellectual property rights) existing before initiation of this endeavor or
developed independently of the endeavor by Wintegra and that the Agreement
will
not affect or impair Wintegra’s continued ownership of all right, title and
interest in such Pre-existing Wintegra IP.
5.2 The
parties agree that TI owns all right, title and interest in and to all TI
Intellectual Property (patents, copyrights, trade secrets and other intellectual
property rights) existing before initiation of this endeavor or developed
independently of the endeavor by TI and that the Agreement will not affect
or
impair TI’s continued ownership of all right, title and interest in such
Pre-existing TI Intellectual Property subject to Wintegra’s interest in the
Wintegra IP. The parties further agree that TI owns all right, title and
interest in and to all the intellectual property in the TI Devices except for
the Wintegra IP in such TI Devices.
5.3 Ownership,
title, and rights to any Intellectual Property (patents, copyrights, trade
secrets, and other intellectual property rights) that is to be jointly developed
by the Parties pursuant to this endeavor (if any), will be addressed by the
Parties in the final executed License Agreement between the Parties, but it
is
contemplated that some form of joint ownership of such items would be
appropriate.
6. Indemnification
Wintegra
shall defend TI and it customers against any claim, suit or proceeding brought
against either TI or its customers and shall indemnify and hold TI and its
customers harmless against all damages, liabilities and costs incurred or
awarded against TI or its customers, or agreed to by in settlement or
compromise, insofar as such claim, suit or proceeding is based on an allegation
that the Wintegra IP when used as licensed herein infringes any copyright,
mask
right, or patent or constitutes misappropriation of any trade secret; provided
that Wintegra is promptly notified of such claim, suit or proceeding, given
all
evidence in TI’s possession, custody or control and given reasonable assistance
in and sole control of the defense and all negotiations for its settlement
or
compromise. Notwithstanding the foregoing, TI shall be entitled, at its expense,
through counsel of its choosing, to participate in the defense and settlement
of
any claim, suit, or proceeding, and no settlement adversely affecting TI’s
rights or activities, or requiring payment by TI, shall be entered into without
TI’s prior written approval.
__________________________
[†]
Information redacted pursuant to a confidential treatment request by Wintegra,
Inc. under 17 CFR §§ 200.80(b)(4) and 230.406 and submitted separately with the
Securities and Exchange Commission.
-3-
TI
/ Wintegra Confidential
7. Maintenance
and Support
Wintegra
shall provide TI with maintenance and support on the Wintegra IP [†].
Such
maintenance and support shall include the following: (i) providing TI with
all updates and upgrades to the Wintegra IP as soon as such updates and upgrades
are first made available to any other party, (ii) making a qualified
Wintegra engineer available to answer TI’s questions during normal business
hours, (iii) providing prompt error and bug correction when such errors and
bugs are reported to Wintegra by TI, and (iv) working with TI to determine
whether any problems that TI encounters in TI Devices is the result of Wintegra
IP and working to resolve such issues where identified.
8. Independent
Development
Nothing
in this Agreement will be construed as a representation or agreement by either
party that it will not develop or have developed for it products, concepts,
systems or techniques that are similar to or compete with the products,
concepts, systems or techniques contemplated by or embodied herein, provided
that neither party violates any of its obligations under this Agreement in
connection with such development.
9. MOU
Costs and Expenses
Each
party will bear its own costs and expenses with regard to all negotiations
and
activities relating to the subject of this MOU.
10. Protection
of Information
During
the term of this MOU, the parties agree to use reasonable efforts (a) to
avoid public disclosure of the substance of their negotiations, and (b) to
limit all internal communications of information concerning the subject of
the
negotiations to those employees and advisors to whom such information needs
to
be disclosed for the negotiations to be properly conducted.
If
negotiations result in a License Agreement, then the License Agreement may
contain different terms and conditions respecting confidentiality.
__________________________
[†]
Information redacted pursuant to a confidential treatment request by Wintegra,
Inc. under 17 CFR §§ 200.80(b)(4) and 230.406 and submitted separately with the
Securities and Exchange Commission.
-4-
TI
/ Wintegra Confidential
11. Liability
Limitations
11.1 The
parties agree to use commercially reasonable efforts in their performance of
this MOU. No guarantees of any kind are made as to the outcome of these
efforts.
11.2 No
party will make a claim against, or be liable to, any other party or its
affiliates or agents for any damages, including (without limitation) lost
profits or injury to business reputation, resulting from the continuation,
abandonment or termination of MOU or negotiations related to the subject matter
of this MOU. Each Party developing information or technology or acquiring
personnel or capital assets in expectation of execution of a License Agreement
does so at its own risk and shall not claim against any other party for any
such
reliance damages.
12. Term
This
MOU
will be effective as of the Effective Date and will continue until the earlier
of December 31, 2006, or until superseded upon full execution of a License
Agreement. The provisions of the Binding Commitments (i.e., paragraphs 9 through
15) will survive any expiration or termination of this MOU.
13. Relationship
of the Parties
This
MOU
is not intended to create a relationship such as a partnership, franchise,
joint
venture, agency, or employment relationship. Neither party may represent to
any
third party or act in a manner that implies a relationship other than that
of
independent contractor. Neither party may enter into a binding agreement on
behalf of another party.
14. Choice
of Law
Any
action related to the Binding Commitments set forth in this MOU or
interpretation of this MOU will be governed by the laws of the state of Texas,
without reference to that state’s conflict-of-laws principles.
15. Entire
Agreement
This
MOU,
to the extent binding, upon the parties, is the parties’ entire agreement
relating to this subject matter. No modification of this MOU will be binding,
unless in writing and signed by an authorized representative of each
party.
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TI
/ Wintegra Confidential
In
witness whereof, the Parties have each caused this MOU to be executed by their
duly authorized representative as of the date below each of their
signatures.
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Texas
Instruments Incorporated
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Wintegra,
Inc.
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By:
/s/
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By:
/s/
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Print
Name: ▇▇▇▇
▇▇▇▇▇▇
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Print
Name: ▇▇▇▇
▇▇▇-▇▇▇
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Title:
VP,
DSP Systems
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Title:
CEO
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Date: June
6, 2005
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Date: June
1, 2005
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Wintegra,
Inc.
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By:
/s/
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Print
Name: ▇▇▇▇
▇▇▇-▇▇▇
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Title:
CEO
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Date: June
1, 2005
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TI
/ Wintegra Confidential
Exhibit
1
WinPath
Production Software Packages
(DPS/WDDI)
1 of 3
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Protocol
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Function
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ATM
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Notes:
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(1)
Requires M6 silicon
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(2)
Will not be available in release
2.3
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▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
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4Q
2004 Page 2
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Wintegra
Confidential Proprietary
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WinPath
Production Software Packages
(DPS/WDDI)
2 of 3
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Protocol
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Function
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[†]
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[†]
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[†]
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Packet
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Notes:
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(1)
Requires M6 silicon
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(2)
Will not be available in release
2.3
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▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
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4Q
2004 Page 3
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Wintegra
Confidential Proprietary
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__________________________
[†]
Information redacted pursuant to a confidential treatment request by Wintegra,
Inc. under 17 CFR §§ 200.80(b)(4) and 230.406 and submitted separately with the
Securities and Exchange Commission.
TI
/ Wintegra Confidential
WinPath
Production Software Packages
(DPS/WDDI)
3 of 3
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Protocol
|
Function
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[†]
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[†]
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[†]
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[†]
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[†]
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[†]
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[†]
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Interworking
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[†]
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[†]
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Notes:
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(1)
Requires M6 silicon
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(2)
Will not be available in release
2.3
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▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
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4Q
2004 Page 4
|
Wintegra
Confidential Proprietary
|
__________________________
[†]
Information redacted pursuant to a confidential treatment request by Wintegra,
Inc. under 17 CFR §§ 200.80(b)(4) and 230.406 and submitted separately with the
Securities and Exchange Commission.
-2-