Patent Cross License Agreement (quicklogic)

PATENT CROSS LICENSE AGREEMENT


THIS AGREEMENT is made and entered into on the 25th day of August, 1998, by and between QuickLogic Corporation, a corporation incorporated under the laws of California ("QuickLogic") and headquartered at 1277 Orleans Drive, Sunnyvale, California 94089, and Actel Corporation, a corporation incorporated under the laws of California ("Actel") and headquartered at 955 East Arques Avenue, Sunnyvale, California 94086.


WHEREAS, QuickLogic and Actel are parties to those certain legal actions entitled Actel Corporation v. QuickLogic Corporation, No. C-94 20050 JW (PVT) and Actel Corporation v. QuickLogic Corporation, No. C-97 21107JW (EAI) (collectively, the "Actions") currently pending before the United States District Court for the Northern District of California, San Jose Division (the "Court"); and


WHEREAS, QuickLogic and Actel mutually desire to settle the Actions, as well as certain other actual or potential disputes between them, as part of such settlement; and


WHEREAS, the Parties have entered into a settlement agreement of even date herewith defining with particularity the terms of the settlement (the "Settlement Agreement and Mutual Release");


NOW, THEREFORE, the Parties, in consideration of the premises and the mutual promises of the Parties hereinafter set forth and intending to be bound by the terms hereof, hereby agree, effective as of the Effective Date (as defined below), as follows:


1. DEFINITIONS


As used in this Agreement, the following terms shall have the following meanings:


1.1. "Actel" shall mean Actel Corporation, a California corporation, and its successor, Actel Corporation, a Nevada corporation.


1.2. "Actel Licensed Patents" shall mean all Patents (a) that Actel or any of its Affiliates now own or may hereafter during the term of this Agreement own or (b) under which and to the extent that Actel or any of its Affiliates have acquired or may hereafter during the term of this Agreement acquire the right to grant licenses without the payment of a royalty or other consideration to a third party (excluding consideration paid to an employee in connection with the assignment to Actel of the employee's rights in an invention that resulted from any work performed by the employee for Actel).


1.3. "Acquired Party" shall mean a party to this Agreement following a Change in Ownership of such party.


1.4. "Acquiring Party" shall mean the Person(s), if any, in Control of an Acquired Party following a Change in Ownership and the Affiliates of such Person(s).


1.5. "Affiliate" shall mean a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified Person.


1.6. "Antifuse" shall mean a two-terminal switch that is open prior to programming.


1.7. "Antifuse Programmable Logic Device" shall mean any Programmable Logic Device in which all of the Programmable Switching Elements are Antifuses.


1.8. "Beneficial Owner" shall be used in this Agreement as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended.


1.9. "Change in Ownership" shall mean the occurrence of any one of the following:


1.9.1. Any Person is or shall have the right to become the Beneficial Owner, directly or indirectly, of Voting Securities of such party representing 50% or more of the Total Voting Power of such party's Voting Securities.


1.9.2. The shareholders of a party approving a merger or consolidation of such party with any other corporation, other than a merger or consolidation that would result in the Voting Securities of such party outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving corporation) 50% or more of the Total Voting Power represented by the Voting Securities of such party or such surviving corporation outstanding immediately after such merger or consolidation.


1.9.3. The shareholders of a party approving a plan of dissolution or liquidation of such party or an agreement for the sale or disposition by such party of all or substantially all of such party's assets in one or a series of transactions.


1.10. "Control," including the terms "controlling," "controlled by," and "under common control with," shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Securities, by contract, or otherwise. A Person's Beneficial Ownership of twenty (20%) or more of a corporation's outstanding Voting Securities shall create a rebuttable presumption that such Person has control of such corporation. Notwithstanding the foregoing, a Person shall not be deemed to have control of a corporation if such Person holds Voting Securities, in good faith and not for the purpose of circumventing this Section, as an agent, bank, broker, nominee, custodian, or trustee for one or more Beneficial Owners who do not individually or as a group have control of such corporation.


1.11. "Effective Date" shall mean the date on which the Stipulations (as defined in the Settlement Agreement and Mutual Release) are filed with the Court.


1.12. "Embedded SRAM Programmable Logic Device" shall mean an Embedded Programmable Logic Device in which any of the Programmable Switching Elements is controlled by SRAM.


1.13. "Embedded Programmable Logic Device" shall mean a Programmable Logic Device in which (x) the circuitry controlled by Programmable Switching Elements and (y) the circuitry containing User Memories contain in the aggregate less than 80% of the total number of transistors on the die.


1.14. "Flash" shall mean electrically erasable read only memory that can be erased more than one bit at a time.


1.15. "GateField" shall mean GateField Corporation, a Delaware corporation.


1.16. "Incumbent Directors" shall mean directors who either (a) are directors of a party to this Agreement as of the Effective Date (or as of the date of a Change of Ownership, in the case of an Acquiring Party) or (b) are elected, or nominated for election, to the Board of Directors of such party with the affirmative votes of a least a majority of the Incumbent Directors at the time of such election or nomination, but "Incumbent Directors" shall not include any individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors of such party.


1.17. "Internal Use" by a Person shall mean (a) use by the Person or its Affiliates without any sale, lease, distribution, or other transfer to a third party that is not an Affiliate of the Person or (b) incorporation in a value-added product made by the Person or its Affiliates that is sold, leased, distributed, or otherwise transferred to a third party that is not an Affiliate of the Person.


1.18. "Licensee Party" shall mean either Actel or QuickLogic in its capacity as the recipient of rights under any Patent of the other party pursuant to this Agreement.


1.19. "Licensor Party" shall mean either Actel or QuickLogic in its capacity as the grantor of rights under any of its Patents pursuant to this Agreement.


1.20. "Material Terms" shall refer to the provisions of Sections 3 and 6.4 of this Agreement.


1.21. "Matsushita" shall mean Matsushita Electric Industrial Co., Ltd, a Japan corporation, Matsushita Electronics Corporation, a Japan corporation, and their Affiliates.


1.22. "Non-Acquired Party" shall mean the party to this Agreement that is not the Acquired Party or an Affiliate of the Acquired Party following a Change in Ownership.


1.23. "Non-Antifuse Programmable Logic Device" shall mean any Programmable Logic Device that is not an Antifuse Programmable Logic Device.


1.24. Non-Assertion Patent" shall mean (a) any patent (including any utility patent, design patent, patent of importation, patent of addition, certificate of addition, certificate or model of utility) granted by the United States or any other country, (b) any reissue, continuation, parent, division, extension, renewal, or continuation-in-part of any of the foregoing, and (c) any counterpart anywhere in the world of any of the foregoing.


1.25. "Patent" shall mean (a) any patent (including any utility patent, design patent, patent of importation, patent of addition, certificate of addition, certificate or model of utility) the application for which had a first effective filing date in any country on or before the Effective Date, (b) any patent that may issue on any such application, (c) any reissue, continuation, parent, division, extension, renewal, or continuation-in-part of any of the foregoing, and (d) any counterpart anywhere in the world of any of the foregoing.


1.26. "Person" shall be used in this Agreement as defined under Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended.


1.27. "Programmable Logic Device" shall mean any integrated circuit that implements logic the operation of which is determined after the integrated circuit has been manufactured.


1.28. "Programmable Switching Element" shall mean a switch controlled by electrical voltage or electrical currents that is used to configure the logic function of a Programmable Logic Device. Programmable Switching Elements shall not include data registers or User Memories or switches controlled by lasers.


1.29. "QuickLogic" shall mean QuickLogic Corporation, a California corporation.


1.30. "QuickLogic Licensed Patents" shall all Patents (a) that QuickLogic or any of its Affiliates now own or may hereafter during the term of this Agreement own or (b) under which and to the extent that QuickLogic or any of its Affiliates have acquired or may hereafter during the term of this Agreement acquire the right to grant licenses without the payment of a royalty or other consideration to a third party (excluding consideration paid to an employee in connection with the assignment to QuickLogic of the employee's rights in an invention that resulted from any work performed by the employee for QuickLogic).


1.31. "Security Agreements" shall mean the security agreement of even date herewith pursuant to which Actel has granted a security interest to QuickLogic in the proceeds from the sale, assignment, or other transfer of the Actel Licensed Patents to secure Actel's obligations under Section 6.4.4 of this Agreement, and the security agreement of even date herewith pursuant to which QuickLogic has granted a security interest to Actel in the proceeds from the sale, assignment, or other transfer of the QuickLogic Licensed Patents to secure QuickLogic's obligations under Sections 3 and 6.4.5 hereof.


1.32. "SRAM" shall mean static random access memory.


1.33. "SRAM Programmable Logic Device" shall mean a Programmable Logic Device in which any of the Programmable Switching Elements is controlled by SRAM.


1.34. "Termination Event" shall mean any of the following:


1.34.1. the filing by a party of a petition in Bankruptcy or insolvency; or


1.34.2. any adjudication that a party is bankrupt or insolvent; or


1.34.3. the appointment of a receiver for all or substantially all of the property of a party; or


1.34.4. the making by a party of any assignment or attempted assignment for the benefit of creditors; or


1.34.5. the institution of any proceedings for the liquidation or winding up of a party's business or for the termination of its corporate charter; or


1.34.6. any assignment of this Agreement or any exercise of rights under this Agreement by any successor or assign of a party, except in accordance with Section 8.


1.35. "Total Voting Power" shall mean the total number of votes that may be cast in the election of directors at a meeting of the shareholders of a corporation if all Voting Securities are present and voted to the fullest extent possible at such meeting.


1.36. "User Memory" shall mean random access memory (RAM), SRAM, read only memory (ROM), or programmable read only memory (PROM), erasable programmable read only memory (EPROM), electrically erasable programmable read only memory (EEPROM), Flash, or variations thereof, used for storing data and control bits during the logic operation of a Programmable Logic Device. The circuitry of a Programmable Logic Device controlled by Programmable Switching Elements and the circuitry of a Programmable Logic Device containing User Memories are mutually exclusive.


1.37. "Voting Securities" shall mean all securities of a corporation entitled to vote generally in the election of directors.


2. LICENSES


2.1. Subject to Sections 2.3 and 6.4.2 hereof, QuickLogic hereby grants to Actel a nonexclusive, royalty-free, worldwide license under the QuickLogic Licensed Patents (a) to make, have made only for Actel, use, import, offer to sell, sell, lease, distribute, and otherwise transfer Programmable Logic Devices, and (b) to grant sublicenses to make, have made only for the sublicensee, use, import, offer to sell, sell, lease, distribute, and otherwise transfer Embedde ...