EXHIBIT 10.38
LICENSE AGREEMENT
THIS Agreement is made and entered into as of this 21st day of February 2005
(Effective Date), by and between, Patriot Scientific, Inc., a Delaware
corporation, doing business at 00000 Xxx Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000
(hereinafter referred to as PTSC) and Advanced Micro Devices Inc., a Delaware
corporation doing business at 0000 Xxxx Xxx Xxxxx Xxxxxxxxx, Xxxxxx, Xxxxx 00000
(hereinafter referred to as LICENSEE) including Spansion Inc. and all current
Affiliates of AMD and Affiliates formed by AMD over the course of this Agreement
for which AMD owns or controls more than 50% of the shares, board seats, or
equity in the entity. This Agreement shall apply to all current AMD Affiliates,
in the same manner it applies to AMD, for the term of this Agreement even if
these legal entities cease in the future to be an "Affiliate" of AMD, as defined
above.
WHEREAS PTSC is the developer of the IGNITE 32-bit microprocessor (hereinafter
referred to as the Licensed Microprocessor), and possesses certain design and
engineering drawings relating thereto, and other confidential and trade secret
information relating to the Register Transfer Level documentation of the IGNITE
microprocessor (hereinafter collectively referred to as the Licensed
Technology).
WHEREAS LICENSEE desires to acquire from PTSC a non-exclusive license to
manufacture, have made, design, and sell products containing the Licensed
Microprocessor.
WHEREAS PTSC is willing to grant such a license upon the terms and conditions
hereinafter set forth.
NOW THEREFORE, for and in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto mutually covenant and agree as
follows:
1. License
PTSC hereby grants and agrees to grant to LICENSEE a worldwide, irrevocable,
perpetual, non-exclusive license under LICENSEE's patent, copyright, trade
secret and other intellectual property rights in or related to the Licensed
Technology and Licensed Microprocessor to manufacture, have made, use, import,
create derivatives works of, display, perform, copy, distribute, offer for sell,
and sell any products containing the Licensed Microprocessor or any derivatives
thereof developed by or for LICENSEE or any portion of any of the foregoing
(hereinafter referred to as Products) and engage in any services related
thereto. PTSC hereby grants and agrees to grant to LICENSEE a worldwide,
irrevocable, perpetual, non-exclusive license under LICENSEE's patent,
copyright, trade secret and other intellectual property rights in or related to
the Licensed Technology and Licensed Microprocessor to use and copy the Licensed
Technology, any derivatives thereof, or any portion thereof to make Products or
perform any services as licensed herein. LICENSEE may sublicense the rights set
forth herein only to third parties (e.g., foundry, distributor, design
consultants, benchmark agencies, etc.) that assist LICENSEE in exercising any of
it's licensed rights set forth herein. LICENSEE may use or not use the Licensed
Technology in LICENSEE's sole discretion, and LICENSEE has no obligation to use
the Licensed Technology in any capacity. PTSC agrees to provide all deliverables
1
to LICENSEE necessary to engage in the licenses and covenants provided herein
and in the separate Patent License. These deliverables include but are not
limited to all Ignite RTL and other high level language implementations, copies
of all GDSII files, gerber files, PCB information, test vectors, packaging
information, design rules, product tooling, special CAD software, databases,
simulation tools, software, compilers, development tools, and any other
information, software, or tangible required to exercise the rights granted
herein. If third party rights are needed to use any such deliverables, PTSC will
assist AMD in contacting such third parties and working with such third parties
to obtain all necessary rights.
2. Licensing Royalties, Payment, Use of License
2.1 During the term of this Agreement, LICENSEE shall maintain complete
records of Products that are subject to royalty under this Section and are
manufactured, distributed, sold or given away. These records shall be available
for audit, on reasonable notice by a representative of PTSC, per Section 4.
2.2 Running Royalty. LICENSEE shall aggregate a royalty for every Unit
sold as set forth herein. LICENSEE will aggregate such royalties over each
calendar quarter and shall make payment of such aggregated royalties to PTSC net
forty-five (45) days from the end of each calendar quarter. A royalty under this
Agreement shall only be due for Product that was actively derived and designed
from direct use or incorporation of Licensed Technology or the Licensed
Microprocessor tangibles into the Product. Royalties shall be due for no other
Product and under no other circumstances. The royalty under this Agreement shall
be a royalty of [***]*."Sale" as used in this Section shall include any
commercial units given away by AMD for commercial use by another party, however,
"sale" shall not include the provision of reference design kits (RDKs) or like
development or beta products that are provided for the purpose of trying to
secure subsequent volume sales of Products from a partner or customer. "Sale"
shall also include the consumer end use of Product by AMD internal to their
operations.
2.3 License Issue Fee and Maintenance Fee. In consideration of the rights
granted herein LICENSEE shall pay to PTSC a License and Maintenance fee of
[***]*. Minimum Royalties. The Parties hereto mutually agree that there shall be
no minimum quarterly royalties.
2.4 The term Unit, for the purposes of this License Agreement, means an
integrated circuit Product in the form it is advertised and provided to
customers by Licensee. One Product is subject to one royalty regardless of the
extent of Licensed Technology or Licensed Microprocessors used within that one
Product.
2.5 Withholding Taxes. All amounts owing from LICENSEE to PTSC under the
Agreement and the Patent License are final amounts, and shall not be grossed-up
to account for any withholding taxes, value-added taxes or other taxes, levies
or charges with respect to such amounts, including United States taxes, payable
by LICENSEE, or any taxes required to be withheld by LICENSEE to the extent such
taxes are imposed by reason of LICENSEE having a permanent establishment in any
country or otherwise being subject to taxation by such country.
2
3. Reports and Audits
3.1 Within forty-five days following the end of each calendar quarter
during the term of this agreement, LICENSEE shall deliver to PTSC the
appropriate running royalty payment and a statement duly verified by an
executive of LICENSEE setting forth, in detail, by Product number the specific
number of Units that were manufactured and/or sold during the preceding
quarterly period and subject to royalty. Said detailed statement shall include
all information necessary, in combination with the current price list and
calculations, to justify the amount due for the reporting period. Such royalty
payment shall be made in U.S. dollars. In the event where no royalties are due
for two (2) consecutive quarters and it is reasonable to assume that no more
royalties will be due under this Agreement, then all reporting obligations
placed on LICENSEE under this Agreement shall cease as long as royalties are not
actually accumulating. Should royalties ever start to accumulate again the
future, LICENSEE shall restart quarterly reporting procedures under this
Agreement. AMD only has to begin reporting under this Agreement if the Licensed
Technology or Licensed Microprocessor deliverables begins to be used by AMD in a
commercial manner, else no reporting or payment is required.
3.2 In the event PTSC elects to audit the reported sales or royalty
payments and/or reports, made by LICENSEE such audits shall only be made after
30 days written notice to LICENSEE by PTSC and shall be conducted at LICENSEE
place of business. Audits cannot be conducted more than once annually.
4. Confidentiality and Proprietary Rights
4.1 Confidential Information. For a period of seven (7) years following
first disclosure thereof, each party shall maintain in confidence the
confidential information of the other party (including samples) disclosed by the
other party and identified as, or acknowledged to be confidential (the
"Confidential Information") at the time of disclosure, and shall not use,
disclose or grant the use of the Confidential Information except as licensed
herein or on a need-to-know basis to those directors, officers, affiliates,
employees, permitted licensees, permitted assignees and agents, consultants,
clinical investigators, contractors, or other people or entities reasonably
needed in connection with such party's activities as expressly authorized by the
Agreement. To the extent that disclosure is authorized by the Agreement, prior
to disclosure, each party hereto shall obtain agreement of any such Person to
hold in confidence and not make use of the Confidential Information for any
purpose other than those permitted by the Agreement. Each party shall notify the
other promptly upon discovery of any unauthorized use or disclosure of the other
party's Confidential Information, however, both parties agree to only assert one
of either breach of contract or misappropriation of trade secret claims (not
both) against a party in the event unauthorized use or disclosure of
Confidential Information.
3
4.2 Permitted Disclosures. The confidentiality obligations contained in
Section 6.1 above shall not apply to the extent that (a) any receiving party
(the "Recipient") is required (i) to disclose information by law, order or
regulation of a governmental agency or a court of competent jurisdiction, or
(ii) to disclose information to any governmental agency for purposes of
obtaining approval to test or market a product, provided in either case that the
Recipient shall provide written notice thereof to the other party and sufficient
opportunity to object to any such disclosure or to request confidential
treatment thereof; or (b) the Recipient can demonstrate that (i) the disclosed
information was public knowledge at the time of such disclosure to the
Recipient, or thereafter became public knowledge, other than as a result of
actions of the Recipient in violation hereof; (ii) the disclosed information was
rightfully known by the Recipient (as shown by its written records) prior to the
date of disclosure to the Recipient by the other party hereunder; or (iii) the
disclosed information was disclosed to the Recipient on an unrestricted basis
from a source unrelated to any party to the Agreement and not under a duty of
confidentiality to the other party.
4.3 Terms of the Agreement. Except as otherwise provided in Section 6.2
above or as required in order to operate in accordance with applicable laws and
regulations (e.g., disclosure to legal counsel, accounting firms, etc.),
LICENSEE shall not disclose any terms or conditions of the Agreement to any
third party without the prior consent of the other party. Notwithstanding the
foregoing, during the term of this Agreement, LICENSEE may disclose that it
holds a non-exclusive license to the Licensed Technology.
4.4 Proprietary Rights. All ownership of patent rights, copyrights, trade
secret rights and other proprietary rights in the Licensed Technology shall
remain with PTSC and their licensors, and no right or license is granted to
LICENSEE hereunder except for the non-exclusive license expressly set forth in
Section 1 above.
5. Term
The term of this Agreement shall begin upon the date of execution hereof and
shall continue until all intellectual property under this Agreement has expired
or ceases to be enforceable.
4
6. Termination
6.1 LICENSEE shall have the right to terminate this Agreement with or
without cause on thirty (30) days written notice to PTSC provided that LICENSEE
pays all fees then due and owed to PTSC. If LICENSEE is terminating for cause,
then LICENSEE shall state this reason for termination in the written notice
provided to PTSC.
6.2 If LICENSEE shall become insolvent, or shall make any assignment for
the benefit of creditors, or if LICENSEE is adjudged bankrupt, or if a voluntary
and/or involuntary bankruptcy is filed on behalf of LICENSEE, and/or if a
receiver and/or trustee of LICENSEE property shall be appointed, this agreement
shall immediately terminate and all orders in production shall be disposed of in
accordance with paragraph 6.3 below. No other orders shall be accepted for
manufacture without the approval in writing by PTSC. LICENSEE if unable to
manufacture said orders shall offer these orders to PTSC, at their option, to
produce said orders.
6.3 If this Agreement is terminated pursuant to paragraph 6.1 or 6.2
above, then, for a period of three (3) years following the effective date of
termination, LICENSEE shall have the right to complete any design activity in
progress at the time of termination but shall not begin any new design activity
using the Licensed Technology deliverables thereafter. If this Agreement is
terminated pursuant to paragraph 6.1 or 6.2 above, then, LICENSEE may continue
all support, marketing, and sale of products containing or using the Licensed
Technology or Licensed Microprocessor until the Products are end-of-lifed in
accordance with LICENSEE's then current end-of-life policy. However, all
products that continued to be sold by LICENSEE under this Section using the
Licensed technology deliverables shall continue to accrue the royalties and fees
set forth in this Agreement, unless this Agreement was terminated for PTSC's
breach of this Agreement. If this Agreement is terminated by LICENSEE for PTSC's
breach of this Agreement, LICENSEE shall be entitled to cease all royalty
payments to PTSC until the losses associated with PTSC's breach are recouped by
LICENSEE. And, any such recouped fees actually retained by LICENSEE hereunder
shall be offset against any monetary remedy that LICENSEE may later receive
against PTSC in law or equity.
6.4 The provisions of paragraphs 0, 0, 0 and 0 shall survive any
expiration or termination hereof. Section 1 shall also survive only to the
extent necessary for LICENSEE to perform in accordance with Section 6.3.
7. Assignment
Neither party shall assign any rights, duties or obligations of this agreement
or the subject matter of this agreement without the prior written consent of the
other party, which shall not be unreasonable withheld if the assignment will not
material impair the parties ability to conduct business after the assignment.
8. Sublicense
LICENSEE shall not sublicense or transfer in any way, any right, duty or
obligation under this agreement or the subject matter of this agreement unless
expressly set forth herein.
9. Representations and Warranties
9.1 Nothing in this agreement shall be construed as a warranty or
representation by PTSC as to the validity or scope of any patent or a warranty
or representation that anything made, used, sold, leased or otherwise disposed
of under any License granted in this Agreement is or will be free from
infringement of patents of third parties.
9.2 PTSC represents and warrants that:
5
(i) it has the right to provide the licenses set forth herein;
(ii) it has not assigned, exclusively licensed, or transferred any
intellectual property rights within the last two years of the Effective
Date of this Agreement to another party or any affiliate or subsidiary
that claims or covers the Licensed Microprocessor or the Licensed
Technology;
(iii) any software and Licensed Technology provided under this
Agreement contains no open source software and was created with no open
source software of which LICENSEE was not notified of in writing prior to
the Effective Date;
(iv) there are no pending proceedings, mediation, arbitration, or
litigation before any court, tribunal, government office, or equivalent
authority anywhere in the world or any other adverse written claims or, to
the actual knowledge of PTSC, no such proceedings, litigation or adverse
claims have been threatened in writing, by any person or legal entity that
are related to the Licensed Technology and/or Licensed Microprocessor;
(v) to the actual knowledge of the PTSC, the use of the Licensed
Technology and Licensed Microprocessor, as conducted by PTSC up until the
Effective Date, does not infringe any intellectual property rights of any
other party.
(vi) the Licensed Technology and Licensed Microprocessor are free
from material defect(s), function in accordance with applicable standards
and documentation, and are manufactured within standard yields and
performance associated generally with the fabrication facilities used by
PTSC for a period of one (1) year from the Effective Date of this
Agreement.,
(vii) that all noncompliances of the Licensed Technology and
Licensed Microprocessor in the past have been corrected or subject to a
proper errata that has been provided to LICENSEE. PTSC agrees to
indemnify, defend, and hold LICENSEE harmless, at LICENSEE's option, for
any breach of any warranty under this Section 8.
9.3 PTSC shall be under no obligation whatsoever to institute suits to
prosecute infringers under any patent directed to products containing the
Licensed Technology nor shall PTSC be in any way responsible or liable to
LICENSEE for failure to prosecute infringers. If PTSC elects to prosecute any
infringers, the conduct of such suit shall be directed by and any recoveries
therefrom shall belong entirely to PTSC.
10. Liability
LICENSEE shall indemnify and hold PTSC harmless against third parties for any
and all claims relating to or arising from the use, manufacture or supply of
Products by LICENSEE, except to the extent such claim is based on content or use
solely of the Licensed Technology and/or Licensed Microprocessor as provided by
PTSC. Except with respect to breaches of confidentiality or indemnity
obligations, in no event shall either party be liable for any indirect, special
or consequential damages, such as loss of anticipated profits or any other
economic loss in connection with or arising out of this Agreement. Except for
breaches of warranty or indemnity obligations under this Agreement, the
aggregate liability of a party to this Agreement shall be capped at the total
amount paid by LICENSEE to PTSC under this and related Agreements.
6
13. Notices
All notices required or permitted under this agreement shall be in writing and
shall be effective upon receipt, and addressed to the respective parties at
their addresses set forth below or to any other address designated by the
parties at a later date.
LICENSEE PTSC
-------- ----
0000 Xxxx Xxx Xxxxx Xxxxxxxxx 10989 Via Frontera
Xxxxxx, Xxxxx 00000 Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
14. Severability
Each provision of this Agreement is severable from all other provisions of this
Agreement and if one or more of the provisions herein is declared invalid, the
remaining provisions shall, nevertheless, remain in full force and effect;
provided, however, if any paragraph shall be declared invalid, LICENSEE and PTSC
shall execute, as soon as possible, a supplemental agreement to restore, to the
extent legally possible, the protection by said paragraph.
15. Attorney Fees and Choice of Law
This agreement shall be governed by and construed in accordance with the laws of
the State of California applicable to contracts made and to be performed wholly
in that State. Venue for the determination of any dispute or controversy or
claim between PTSC and LICENSEE, arising out of or relating to this License
Agreement or the breach, termination, interpretation, or invalidity thereof,
shall be proper in California. The prevailing party in any action to enforce or
otherwise interpret this Agreement shall be entitled to reasonable legal fees
and also for reimbursement of all other costs incurred in such an action.
16. Headings
The headings or titles of the paragraphs of this agreement are for convenience
only, are not a part of this agreement, and shall not be used as an aid in
construction of any provision thereof.
17. Waiver
No waiver of, acquiescence in or consent to any breach of or default under this
agreement shall be deemed a waiver of, acquiescence in or consent to any other
breach or default occurring at any time.
18. Counterparts
This agreement may be executed in several counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same instrument. The headings contained in the agreement have been inserted for
convenience of reference only and shall not modify, define, expand or limit any
of the provisions of this agreement.
19. Complete Agreement
This document constitutes the complete agreement between the parties and
supersedes any prior understanding and agreements between and among them with
respect to the subject matter. There are no representations, agreements,
arrangements or understandings, oral or written, between the parties hereto
relating to the subject matter of this Agreement which are not fully expressed
herein. This Agreement shall not be amended or rescinded except by a further
written agreement execute by both parties.
7
IN WITNESS WHEREOF, LICENSEE and PTSC have caused this License Agreement to be
executed in duplicate originals by their duly authorized representative each of
whom in executing this document warrants his or her authority to bind their
respective company to this Agreement.
PTSC: Patriot Scientific, Inc.
A Delaware corporation
By: /S/ X.X. XXXXXX
-------------------------------------
X. X. Xxxxxx
Title: CEO
Dated: February 21, 2005
LICENSEE: Advanced Micro Devices
By: /S/ XXXXX X. XXXXX
-------------------------------------
Xxxxx X. Xxxxx
Title: Senior Vice President and
General Counsel
Dated: February 21, 2005
[***]* Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as ***. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
8
