Exhibit 10.16

 

BUSINESS DEVELOPMENT AGREEMENT

 

This BUSINESS DEVELOPMENT AGREEMENT (the “Agreement”) is made and entered into
as of the 28 day of December, 2005, (the “Effective Date”) by and between
MathStar, Inc., a Delaware corporation, with offices at 19075 Tanasbourne Drive,
Suite 200, Hillsboro, OR, 97124(“MathStar”), and Summit Design, Inc., a Delaware
corporation, with offices at 5150 El Camino Real, Suite C-10, Los Altos, CA
94022 (“Summit”).  This agreement supersedes the previous agreement between
MathStar and Summit dated the 30th day of November, 2003 and the parties agree
that such previous agreement is hereby terminated.

 

WHEREAS, MathStar intends to offer the electronic product design market a
programmable logic device that streamlines the implementation of complex system
logic designs and lowers the unit production cost of the end products.

WHEREAS, Summit is working to develop the electronic system level design market
by offering software that facilitates design definition and functional
verification at multiple abstraction levels, provides advanced performance
analysis for complex systems and facilitates the simultaneous development of
software with electronic hardware.

WHEREAS, because MathStar devices are constructed from objects more complex than
traditional logic gates, Summit’s software design environment is expected to be
well suited to help designers create logic designs in MathStar devices; and
because MathStar devices provide inherent uniqueness and are focused at complex
electronic product applications, they are expected to be successful with
customers who would also be good prospective customers for Summit software.

WHEREAS, MathStar and Summit desire to collaborate to develop a product that
provides an effective solution to the challenge of rendering logic designs in
MathStar Field Progammable Object Arrays (“FPOAs”) and to further collaborate on
the marketing and sale of such product.

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties agree as follows:

 

1.             DEFINITIONS.  Capitalized terms used in this Agreement are
defined herein and throughout the Agreement.  Terms not defined herein shall be
given their plain English meaning; provided, however, that those terms, acronyms
and phrases known in the computer software industry which are not defined shall
be interpreted in accordance with their generally accepted industry meaning.  As
used herein, the following terms shall have the meanings set forth below:

 

1.1           “PRODUCT” shall mean software used to define, refine, simulate and
analyze the functional logic design intended for rendering in a MathStar FPOA
and used to generate OHDL code for output to the MathStar COAST software.  Such
PRODUCT shall consist of the SUMMIT SOFTWARE, the MATHSTAR-SPECIFIC SOFTWARE and
the MATHSTAR LIBRARY.

 

1.2           “SUMMIT SOFTWARE” shall mean Summit’s Visual Elite ESL software.

 

1.3           “MATHSTAR LIBRARY” shall mean MathStar’s library of SystemC models
and their associated graphic symbols.

 

1.4           “MATHSTAR-SPECIFIC SOFTWARE” shall mean features of the SUMMIT
SOFTWARE specific to the MathStar FPOA design application and which are not
specific to any other manufacturer of any other programmable logic devices.

 

1.5           “EXTERNAL MATHSTAR-SPECIFIC SOFTWARE” shall mean any portion of
the MATHSTAR-SPECIFIC SOFTWARE that is located outside a publicly exposed
application programming interface within the PRODUCT.

 

 

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1.6           “End Users” shall mean users of the PRODUCT who have executed
Summit’s end user license agreement, the current version of which is attached
hereto as Exhibit A.

 

2.             INTENT AND PURPOSE; STATEMENTS OF WORK.

 

2.1           INTENT AND PURPOSE.  This Agreement contemplates certain joint
development activities between MathStar and Summit to develop the PRODUCT and
the marketing, sales and support activities for the PRODUCT (the “Activities”).

2.2           STATEMENTS OF WORK.  It is understood and agreed that the parties
have attempted to define their respective roles and responsibilities with
respect to the PRODUCT; however, the parties agree and acknowledge that an
exhaustive definition of each party’s roles and responsibilities at this time is
not feasible and therefore the parties may determine that it is appropriate to
execute and deliver a separate plan for some Activities undertaken (each, a
“Statement of Work”).  If and when executed, each Statement of Work will be
attached to and incorporated by reference into this Agreement, and the terms and
conditions of the Statement of Work shall control to the extent inconsistent
with the terms contained herein.  The parties agree that each Statement of Work
may set forth, among other things as the parties shall deem appropriate, the
following:

 

-                    a detailed description of the Activity;

-                    any design documents or specifications (unless the Activity
contemplates creation or development of the same);

-                    deliverables & delivery milestone dates, if any, that
either or both parties will be responsible for creating and developing; and

-            any other terms or conditions that vary from the terms and
conditions set forth in this Agreement.

 

3.0           THE ACTIVITIES

 

3.1           PRODUCT DEVELOPMENT.  Summit shall develop and maintain the SUMMIT
SOFTWARE and the MATHSTAR-SPECIFIC SOFTWARE.  MathStar shall develop and
maintain the MATHSTAR LIBRARY and deliver a copy of the MATHSTAR LIBRARY to
Summit as soon as reasonably practicable for incorporation into the PRODUCT. 
MathStar hereby grants to Summit the right to incorporate the MATHSTAR LIBRARY
with and into the PRODUCT and to grant sublicenses of the MATHSTAR LIBRARY to
End Users.  Each party will provide reasonable development support to the other
party as needed.

 

3.1.1        PRODUCT RELEASE SCHEDULE.  Summit shall control the master schedule
for the development and release of the PRODUCT and new versions thereof and
shall be responsible for defining which features and bug fixes will be available
within the PRODUCT and each Product release.

 

3.1.2        COMPUTING PLATFORM SUPPORT.  Summit shall release and support the
PRODUCT on the PC Windows (NT, 2000, XP), Solaris and Red Hat Linux platforms. 
Summit shall specify the support for specific operating system versions as a
requirement for each major PRODUCT version to be released.

3.1.3        FIELD TESTING ALPHA AND BETA SOFTWARE RELEASES.  MATHSTAR STAFF
SHALL ASSIST SUMMIT ENGINEERING IN THE FUNCTIONAL TESTING OF ALPHA AND BETA
VERSIONS OF NEW PRODUCT RELEASES, AS REASONABLY REQUESTED BY SUMMIT.

3.1.4        SOFTWARE QUALITY ASSURANCE.  SUMMIT SHALL PERFORM SOFTWARE QUALITY
ASSURANCE TESTING FOR EACH PRODUCT RELEASE, EXCEPT FOR PATCH DISTRIBUTION, BETA
RELEASES AND OTHER RELEASES WHERE THE PRODUCT IS MADE AVAILABLE PRIOR TO FULL
VERIFICATION.

3.2           MARKET DEVELOPMENT AND DEMAND GENERATION

3.2.1        TRADE SHOW SUPPORT.  EACH PARTY SHALL EXHIBIT THE PRODUCT OR
INFORMATION ABOUT THE PRODUCT AT TRADE SHOWS WHERE THE PARTY EXHIBITS THEIR
PRODUCTS.  IN CASES WHERE EXHIBITION OF THE PRODUCT WOULD CONFLICT WITH THE
INTERESTS OF THE TRADE SHOW SPONSOR, THIS OBLIGATION SHALL NOT APPLY.  WHEN THE
PRODUCT IS BEING EXHIBITED AT TRADE SHOWS, THE EXHIBITING PARTY MAY REQUEST
ASSISTANCE FROM THE OTHER PARTY IN SUPPORTING THE PRODUCT

 

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EXHIBITION OR DEMONSTRATIONS.  THE PARTIES SHALL MUTUALLY DETERMINE WHAT
INFORMATION ABOUT THE PRODUCT IS TO BE EXHIBITED AND HOW IT IS TO BE EXHIBITED.

3.2.2        TECHNICAL SEMINARS.  EACH PARTY MAY PROVIDE TECHNICAL SEMINARS
INVOLVING THE PRODUCT IN THE CONTEXT OF FPOA DESIGN AND EACH PARTY SHALL PROVIDE
REASONABLE SUPPORT TO THE OTHER IN FURTHERANCE OF SUCH SEMINARS.  THE PARTIES
SHALL MUTUALLY DETERMINE THE CONTENTS OF THE SEMINARS.

3.2.3        INTERNET PRESENCE AND WEBSITE RESOURCES. EACH PARTY SHALL DEDICATE
A PORTION OF ITS WEBSITE TO INFORMATION ABOUT THE PRODUCT, ITS PRIMARY VALUE
POINTS AND ITS ROLE IN THE FPOA DESIGN PROCESS.  THE PARTIES SHALL MUTUALLY
DETERMINE THE CONTENT OF SUCH INFORMATION TO BE SET FORTH ON THEIR WEBSITES. 
THE PARTIES SHALL COOPERATE ON THE DEVELOPMENT OF LINKS BETWEEN THEIR RESPECTIVE
WEBSITES, WHERE SUCH LINKS WOULD BE HELPFUL TO CUSTOMERS.

3.2.4        LEAD GATHERING AND DISSEMINATION. SALES LEADS REGARDING THE USE OF
THE PRODUCT FOR FPOA DESIGN SHALL BE SHARED BY THE PARTIES.  SHARED LEADS SHALL
BE DISTRIBUTED TO THE OTHER PARTY ON A REGULAR BASIS.  POINTS OF CONTACT SHALL
BE ESTABLISHED BETWEEN THE PARTIES IN ORDER TO FACILITATE SHARED LEAD
COMMUNICATION.

3.2.5        ADVERTISING. ADVERTISING DEVELOPED BY EITHER PARTY THAT INCLUDES
THE PRODUCT OR REFERENCES THE PRODUCT SHALL INCLUDE THE BRAND IDENTIFICATION OF
BOTH PARTIES WITHIN THE ADVERTISEMENT.  THE BRAND IDENTIFICATION SHALL INCLUDE
THE PARTY’S GRAPHIC LOGO AND, IF SUFFICIENT ROOM, THE PARTY’S TAG LINE.  EACH
PRESENTATION OF EACH PARTY’S BRAND IMAGE SHALL REQUIRE THE PRIOR APPROVAL OF THE
MARKETING LEADERSHIP OF THE OTHER PARTY.

3.2.6        PRINTED PRODUCT LITERATURE.  PRODUCT DATA SHEETS, APPLICATION
GUIDES AND OTHER PRODUCT LITERATURE DEVELOPED BY EITHER PARTY THAT INCLUDES THE
PRODUCT OR REFERENCES TO THE PRODUCT SHALL INCLUDE THE BRAND IDENTIFICATION OF
BOTH PARTIES WITHIN THE PUBLICATION.  THE BRAND IDENTIFICATION SHALL INCLUDE THE
PARTY’S GRAPHIC LOGO AND, IF SUFFICIENT ROOM, THE PARTY’S TAG LINE.  EACH
PRESENTATION OF EACH PARTY’S BRAND IMAGE SHALL REQUIRE THE PRIOR APPROVAL OF THE
MARKETING LEADERSHIP OF THE OTHER PARTY.

3.3           PRODUCT LICENSE SALES

3.3.1        DIRECT SALES CHANNELS.  THE PRODUCT SHALL BE SOLD THROUGH
COORDINATED ACTIONS OF THE MATHSTAR AND SUMMIT DIRECT SALES STAFFS, INCLUDING
FIELD SALES AND INSIDE SALES STAFF.  EITHER PARTY MAY INITIATE CUSTOMER
QUALIFICATION, PROSPECT FOR NEW SALES OPPORTUNITIES AND PERFORM TECHNICAL
QUALIFICATION OF AN OPPORTUNITY.  MATHSTAR SHALL BUNDLE THE PRODUCT ONLY WITH
OTHER MATHSTAR PRODUCTS AND SELL THE COMBINED PRODUCT(S).  MATHSTAR SHALL
ACTIVELY AND DILIGENTLY MARKET AND DISTRIBUTE THE PRODUCT AS PROVIDED HEREIN. 
MATHSTAR SHALL PURCHASE A BLOCK OF ONE-YEAR TERM LICENSES FOR THE PRODUCT PER
SECTION 4.2 FROM SUMMIT AND DISTRIBUTE SUCH PRODUCT TO END USERS BUNDLED AS
PROVIDED ABOVE.

3.4           PRODUCT DISTRIBUTION.

3.4.1        PRODUCT LICENSING.  THE PRODUCT SHALL BE DISTRIBUTED TO END USERS
BY MATHSTAR PURSUANT TO SUMMIT’S THEN CURRENT END USER LICENSE AGREEMENT AS A
COMBINED PRODUCT WITH OTHER MATHSTAR PRODUCTS.  THE CURRENT VERSION OF SUCH END
USER LICENSE AGREEMENT IS ATTACHED HERETO AS EXHIBIT A.  IF SUMMIT’S FORM OF END
USER LICENSE AGREEMENT CHANGES, IT SHALL GIVE NOTICE OF SUCH CHANGES TO
MATHSTAR, AND SUMMIT AND MATHSTAR SHALL AMEND THIS AGREEMENT BY ATTACHING THE
MOST CURRENT FORM OF SUMMIT’S END USER LICENSE AGREEMENT TO THIS AGREEMENT AS
NEW EXHIBIT A.

3.4.2        PACKAGING OF PRODUCT RELEASES.  THE PRODUCT AND ALL MAJOR VERSIONS
THEREOF SHALL CONSIST OF THE SUMMIT SOFTWARE, THE MATHSTAR-SPECIFIC SOFTWARE AND
THE MATHSTAR LIBRARY, PACKAGED TOGETHER BY SUMMIT AS A SINGLE PART NUMBER,
DOWNLOADABLE AS A SINGLE COMPLETE FILE IMAGE.  END USERS SHALL HAVE A SINGLE
INSTALLATION PROCESS THAT PLACES THE PRODUCT IN THE PROPER LOCATIONS IN THE END
USER’S ENVIRONMENT.

3.4.3        PRODUCT DISTRIBUTION LOGISTICS.  THE DISTRIBUTION MECHANISM FOR THE
PRODUCT SHALL BE FTP ACCESS VIA THE INTERNET.  THE DISTRIBUTION WEBSITE SHALL BE
DEVELOPED, HOSTED AND MAINTAINED BY SUMMIT OR ITS SUPPLIER WITH ASSISTANCE AND
SUPPORT FROM MATHSTAR.  THE WEBSITE SHALL PROVIDE FOR EFFECTIVE, SECURE UPLOAD
OF MODEL LIBRARY RELEASES AND PATCHES FROM MATHSTAR, AS WELL AS EFFECTIVE
LOCATION AND RETRIEVAL OF SOFTWARE AND PATCHES BY CUSTOMERS.  QUALIFIED
RESELLERS OF THE PRODUCT MAY PROVIDE LINKS TO THE SUMMIT WEBSITE IN ORDER TO ACT
AS DISTRIBUTION PORTALS.

 

 

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3.5           CUSTOMER SUPPORT.  MATHSTAR SHALL PROVIDE FIRST LINE SUPPORT OF
THE PRODUCT TO END USERS.  IF MATHSTAR DETERMINES THAT THE PROBLEM APPEARS TO BE
LOCATED WITHIN OR CAUSED BY THE SUMMIT PRODUCT, UPON MATHSTAR’S REQUEST, SUMMIT
SHALL PROVIDE TECHNICAL CUSTOMER SUPPORT EITHER TO MATHSTAR OR, IF REQUESTED,
DIRECTLY TO AN END USER.

3.5.1        BUG REPORTING AND TRACKING.  SUMMIT SHALL PROVIDE MATHSTAR ACCESS
TO SUMMIT’S BUG TRACKING SYSTEM FOR THE PURPOSE OF TRACKING PROBLEM REPORTS AND
BUGS IN THE PRODUCT.  PROBLEMS AND POTENTIAL BUGS IN THE PRODUCT SHALL BE
ENTERED INTO SUMMIT’S BUG TRACKING SYSTEM BY TECHNICAL SUPPORT STAFF OR
APPLICATION ENGINEERS FROM EITHER PARTY.  EACH PARTY SHALL IDENTIFY AND MAINTAIN
A TECHNICAL SUPPORT POINT OF CONTACT, WHO SHALL BE RESPONSIBLE FOR COMMUNICATING
TECHNICAL PROBLEM STATUS AND CUSTOMER IMPACT PRIORITY WITH THE OTHER PARTY AND
FOR INSURING THAT CUSTOMER PROBLEM REPORTS ASSOCIATED WITH THE PRODUCT ARE
RESOLVED IN A TIMELY MANNER.

3.5.2        BUG CONFIRMATION AND RESOLUTION.  SUMMIT SHALL CONFIRM AND RESOLVE
BUGS IN THE SUMMIT SOFTWARE AND MATHSTAR-SPECIFIC SOFTWARE IN ACCORDANCE WITH
ITS CUSTOMARY PROCEDURES FOR SUPPORT OF ITS PRODUCTS.  MATHSTAR SHALL CONFIRM
AND RESOLVE BUGS IN THE MATHSTAR LIBRARY.  EACH PARTY SHALL PROVIDE ENGINEERING
SUPPORT TO THE OTHER PARTY UPON REQUEST IN ORDER TO EXPEDITE THE RESOLUTION OF
BUGS.

3.5.3        FIELD SALES TECHNICAL STAFF.  EACH PARTY SHALL DEVELOP AND MAINTAIN
TRAINED TECHNICAL STAFF THAT WILL BE AVAILABLE IN THE FIELD TO VISIT END USERS
AND ASSIST WITH TECHNICAL PROBLEM SOLVING OR TROUBLESHOOTING AS REQUIRED.

3.6           END USER TRAINING.

3.6.1        END USERS TRAINING CLASS DEVELOPMENT.  MATHSTAR AND SUMMIT SHALL
COLLABORATE ON THE DEVELOPMENT OF AN END USER TRAINING COURSE THAT MAY BE
PROVIDED BY QUALIFIED STAFF MEMBERS OF EITHER PARTY OR BOTH PARTIES, DEPENDING
ON RESOURCE AVAILABILITY AND GEOGRAPHICAL CONVENIENCE.  CUSTOMER TRAINING
CLASSES SHALL CONSIST OF THE ESSENTIAL TRAINING ELEMENTS NECESSARY FOR END USERS
TO LEARN HOW TO USE THE PRODUCT FOR THE PURPOSE OF CREATING AND VERIFYING FPOA
DESIGNS.  EACH PARTY SHALL OWN THE PORTION OF THE COURSE MATERIALS SUCH PARTY
CONTRIBUTES TO THE END USER TRAINING COURSE AND HEREBY GRANTS TO THE OTHER PARTY
A NO CHARGE LICENSE TO USE AND DISTRIBUTE SUCH MATERIALS TO END USERS ATTENDING
SUCH TRAINING COURSES.

3.6.2        CUSTOMER TRAINING CLASS DELIVERY.  EACH PARTY MAY DELIVER THE
JOINTLY DEVELOPED TRAINING CLASS USING THEIR OWN INSTRUCTORS.  THE PARTIES SHALL
EXPLORE WAYS OF SHARING RESOURCES FOR TRAINING DELIVERY OR FOR CONTRACTING FOR
TRAINING INSTRUCTORS FROM ONE PARTY TO DELIVER TRAINING TO END USERS OF THE
OTHER PARTY PURSUANT TO A MUTUALLY AGREED AGREEMENT.  UNLESS OTHERWISE AGREED,
THE PARTY PROVIDING THE TRAINING SERVICES SHALL BE ENTITLED TO RECEIVE ALL FEES
ASSOCIATED WITH SUCH SERVICES.

3.7           USER MANUALS.

3.7.1        USER MANUAL DEVELOPMENT.  SUMMIT SHALL DEVELOP A SECTION OR
ADDENDUM TO THE SUMMIT SOFTWARE USER MANUAL THAT ADDRESSES THE USE OF THE
MATHSTAR-SPECIFIC SOFTWARE.  MATHSTAR SHALL DEVELOP ANY USER MANUAL
DOCUMENTATION REQUIRED FOR THE MATHSTAR LIBRARY.  SUMMIT SHALL ASSEMBLE THE USER
MANUAL FOR THE PRODUCT, CONSISTING OF THE STANDARD SUMMIT SOFTWARE USER MANUAL,
A SECTION OR ADDENDUM DEDICATED TO THE MATHSTAR-SPECIFIC SOFTWARE WITHIN THE
SUMMIT SOFTWARE AND A SECTION OR ADDENDUM WITH THE DOCUMENTATION FOR THE
MATHSTAR LIBRARY.  EACH PARTY SHALL OWN ALL RIGHT, TITLE AND INTEREST IN AND TO
THE PORTION OF THE USER MANUAL SUCH PARTY CONTRIBUTES TO THE USER MANUAL AND
HEREBY GRANTS TO THE OTHER PARTY A NO CHARGE LICENSE TO INCORPORATE SUCH PARTY’S
MATERIALS INTO THE USER MANUAL FOR THE PRODUCT AND TO DISTRIBUTE SUCH MATERIALS
TO END USERS AS PART OF THE USER MANUAL FOR THE PRODUCT.  EACH PARTY AGREES NOT
TO REMOVE THE COPYRIGHT NOTICES ON ANY USER MANUAL MATERIALS OF THE OTHER PARTY.

3.7.2        USER MANUAL DISTRIBUTION.  USER MANUALS SHALL BE UPDATED AND
DISTRIBUTED ELECTRONICALLY WITH EACH MAJOR RELEASE OF THE PRODUCT ONLY IN PDF
FILE FORMAT.  MATHSTAR SHALL HAVE THE RESPONSIBILITY OF ALIGNING THE USER MANUAL
INFORMATION WITH THE FUNCTIONALITY OF EACH MAJOR RELEASE OF THE PRODUCT.

 

 

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4              FINANCIAL CONSIDERATIONS.

4.1           PRODUCT PRICING

MathStar shall purchase a block of * based PRODUCT licenses for * per license. 
MathStar shall pay Summit * for such licenses in accordance with the following
schedule:  * on January 20, 2006, * on July 15, 2006 and * on December 15,
2006..  On January 20, 2006, MathStar shall also pay Summit * in consideration
of Summit’s support of MathStar pursuant to Section 3.5 hereof.  The term of
such support in connection with End User use of the PRODUCT shall be for the
initial eighteen (18) month term of this Agreement.  MathStar may purchase
incremental * based PRODUCT licenses during the term of this Agreement in blocks
of * based PRODUCT licenses for * per license.  Fees for such licenses shall be
due and payable upon receipt of an invoice therefor.  Summit agrees that the *
will be available for use by MathStar for the term of this Agreement.  *.  All
such time based licenses are for distribution to End Users and not for internal
use.  The parties agree that the term of any * based PRODUCT licenses commences
on the date that the End User licenses the PRODUCT; provided that such licenses
if not distributed during the term of this Agreement shall terminate upon the
termination or expiration of this Agreement.

4.2           * EVALUATION LICENSES

Summit will provide MathStar a block of * PRODUCT evaluation licenses * after
execution of this Agreement.  It is agreed that these * PRODUCT evaluation
licenses will be used by MathStar to provide prospective PRODUCT customers an
opportunity to evaluate the PRODUCT prior to purchase from MathStar.  Summit
also will provide * extensions for *% of these licenses during the period of
this Agreement.  For so long as MathStar can demonstrate to Summit that over *%
of these * PRODUCT evaluation licenses are converted to PRODUCT purchases,
Summit will continue to provide * PRODUCT evaluation licenses * to MathStar.

4.3           ENGINEERING PRODUCT ENHANCEMENTS

4.3.1                        SOURCE CONTROL AND COPY TREE SCRIPTS.  Summit will
provide to MathStar, *, * scheme scripts to enable source control, copy
tree/copy tree local as part of Summit’s MATHSTAR-SPECIFIC SOFTWARE.  Summit
shall use commercially reasonable efforts to make this software available for
release in the PRODUCT by March 15, 2006.

4.3.2                        FPOA TEMPLATE:  Summit will provide to MathStar, *,
up to * toward the development of the *scripts as part of Summit’s
MATHSTAR-SPECIFIC SOFTWARE.   Summit shall use commercially reasonable efforts
to make this software available for release in the PRODUCT by March 15, 2006.

4.3.3                        ENGINEERING TRAINING:  Summit will provide to
MathStar, *, * on-site advanced training for MathStar software engineers on
scheme scripting to enable FPOA template in Visual Elite.

4.3.4                        ADDITIONAL PRODUCT ENHANCEMENTS:  Summit will
provide to MathStar *, * for PRODUCT enhancements of MathStar’s choice. 
MathStar shall pay Summit engineering fees additional enhancements to the
PRODUCT that are requested by MathStar.  The parties shall agree on the amount
of the fee, sign a mutually agreed specifications document and sign a Statement
of Work prior to Summit performing such services.

4.3.5                        The parties agree that the development efforts set
forth in Sections 4.3.1 and 4.3.2 hereof shall be subject to the parties’ mutual
agreement on specifications.

4.4           ENGINEERING FEES FOR PRODUCT MAINTENANCE

After * from the Effective Date of this Agreement and on each * anniversary
thereafter MathStar shall pay * for continued maintenance for MathStar’s
internal use of the SUMMIT SFTWARE unless this Agreement is terminated pursuant
to Section 15.2.  Such fee shall be in consideration of Summit’s internal
maintenance services to MathStar relating to the MATHSTAR-SPECIFIC SOFTWARE
within the context of the constantly evolving SUMMIT SOFTWARE releases.  For
purposes of clarity, such fees are not for support of End Users pursuant to
Section 3.5 hereof.

4.5           SUMMIT SOFTWARE FOR MATHSTAR INTERNAL USE

Summit hereby grants to MathStar *, worldwide right and license to use Summit
Visual Elite ESL, System Architect and Virtual Prototype products for MathStar’s
internal use for an unlimited number of users and for the development

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* Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission

 

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of design application examples.  MathStar’s use of such products shall in all
events be subject to the terms and conditions of Summit’s end user license
agreement attached hereto as Exhibit A.

4.6           SUMMIT SOFTWARE FOR MATHSTAR 3rd PARTY FPOA APPLICATION DEVELOPERS

Summit will provide MathStar a block of * based PRODUCT licenses * after
execution of this Agreement.  It is agreed that these PRODUCT licenses will be
used by third party FPOA application developers managed by MathStar while
developing preprogrammed FPOA software.  MathStar’s use of such PRODUCTs shall
in all events be subject to the terms and conditions of Summit’s end user
license agreement attached hereto as Exhibit A.  MathStar shall require each
such third party FPOA application developers to agree to the terms and
conditions of Summit’s end user license agreement attached hereto as Exhibit A
and MathStar shall guaranty compliance of such third party FPOA application
developers with such terms and conditions.

5              ADDITIONAL AGREEMENTS OF THE PARTIES

5.1           LOGO USAGE.  MathStar hereby grants Summit the right to use
MathStar’s logo, subject to logo usage guidelines to be provided by MathStar to
Summit, as such guidelines may be amended by MathStar from time to time.  Summit
hereby grants MathStar the right to use Summit’s logo, subject to logo usage
guidelines to be provided by Summit to MathStar, as such guidelines may be
amended by Summit from time to time.

 

5.2           PUBLICITY; PRESS RELEASES.  The parties may by mutual consent
agree to issue a joint press release describing the collaboration of the
parties.  The parties shall also consult regularly during the term of the
Agreement and issue, as and when appropriate, such further press releases and/or
other publicity materials as may be appropriate.  The contents of any press
releases issued by the parties shall be subject to the approval of each party,
which approval shall not be unreasonably withheld or delayed.

 

5.3           USE OF NAME IN PROMOTIONAL MATERIALS.  Each party shall, with
prior approval of the other party (which will not be unreasonably withheld or
delayed), be permitted to identify the other party as a development partner, to
use the other party’s name in connection with proposals to prospective
customers, and to refer to the other party in print or electronic form for
marketing or reference purposes.

 

5.4           FREEDOM OF ACTION.  Except as specifically provided herein or in
any Statement of Work, either party may market and offer its own or third party
products or services (through any means) which are the same as or similar to and
which are competitive with the other party’s products and services.  Neither
party makes any assurances or representations to the other in connection with
any financial gain or other benefit that may result from the activities
contemplated in this Agreement.

 

5              ACTIVITY MANAGEMENT.

 

6.1           POINTS OF CONTACT.  Each of the parties agrees to appoint and keep
in place during the term of this Agreement a business point of contact and a
technical point of contact, each of whom will allocate such portion of his or
her working time as may be reasonably necessary to facilitate communications
between the parties.

 

6.2           SUPPLIER BUSINESS REVIEW MEETINGS.  The business points of contact
shall meet on a mutually agreed basis, at least twice per quarter, to review the
overall progress of the Activities contemplated hereunder and to provide overall
supervision and oversight.  Such meetings will be held at a mutually agreed
location.

 

7.             DEVELOPMENT EFFORTS; RESOURCE COMMITMENT; EXPENSES.

 

7.1           COST SHARING AND REIMBURSEMENT.  Except as may be provided in any
specific Statement of Work or as may be otherwise agreed by the parties or as
provided in Section 4.4 hereof, each of Summit and MathStar agrees that it shall
be responsible for its own expenses incurred in conjunction with this Agreement
and any attachments hereto, and with any undertakings and obligations
contemplated hereby.  Notwithstanding the foregoing, if development efforts are
undertaken at either MathStar or Summit offices, then the host party agrees to
provide the necessary office space at no cost to the other party.

 

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* Confidential Treatment has been requested, the portion indicated has been
redacted and the redacted portion has been separately filed with the Securities
and Exchange Commission

 

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7.2           INDEPENDENT CONTRACTORS.  Either party shall have the option to
utilize contractors in order to satisfy its obligation to supply personnel
resources to the Activities contemplated hereunder, but only to the extent and
insofar as reasonably required in connection with the performance of the
obligations of the party retaining the contractor under this Agreement, and
subject to the further requirements and limitations set forth herein.

 

8.             DISPUTE RESOLUTION PROCESS.

 

8.1           INITIAL CONSULTATION AND NEGOTIATION.  In the event a dispute
between Summit and MathStar arises under the Agreement or a party’s performance
thereunder, the matter shall first be escalated to each party’s business points
of contact in an attempt to settle such dispute through consultation and
negotiation in good faith and a spirit of mutual cooperation.

 

8.2           ESCALATION.  If the business party contacts are unable to resolve
the dispute within ten (10) days, it shall be referred to the Chief Executive
Officers of each party who shall attempt to resolve such dispute through
consultation and negotiation in good faith and a spirit of mutual cooperation.

 

8.3           CONTINUED PERFORMANCE.  Except where prevented from doing so by
the matter in dispute, the parties agree to continue performing their
obligations under this Agreement while any good faith dispute is being resolved
unless and until such obligations are terminated by the termination or
expiration of this Agreement.

 

9              OWNERSHIP.

 

9.1           OWNERSHIP BY SUMMIT.  As between MathStar and Summit, Summit shall
own all right, title, and interest in the SUMMIT SOFTWARE and MATHSTAR-SPECIFIC
SOFTWARE (the “Summit Intellectual Property”), except the EXTERNAL
MATHSTAR-SPECIFIC SOFTWARE, and MathStar shall have no ownership interest in the
Summit Intellectual Property.  MathStar hereby irrevocably transfers, conveys
and assigns to Summit all of its right, title, and interest in the Summit
Intellectual and in any property owned or to be owned by Summit under this
Agreement.  MathStar shall execute such documents, render such assistance, and
take such other action as Summit may reasonably request, at Summit’s expense, to
apply for, register, perfect, confirm, and protect Summit’s ownership rights set
forth in this Section, and Summit shall have the exclusive right to apply for or
register any patents, mask work rights, copyrights, and such other proprietary
protections with respect thereto.

 

9.2           OWNERSHIP BY MATHSTAR.  As between MathStar and Summit, MathStar
shall own all right, title, and interest in the MATHSTAR LIBRARY and the
EXTERNAL MATHSTAR-SPECIFIC SOFTWARE (the “MathStar Intellectual Property), and
Summit shall have no ownership interest in the MathStar Intellectual Property. 
Summit hereby irrevocably transfers, conveys and assigns to MathStar all of its
right, title, and interest in the MathStar Intellectual Property and in any
property owned or to be owned by MathStar under this Agreement.  Summit shall
execute such documents, render such assistance, and take such other action as
MathStar may reasonably request, at MathStar’s expense, to apply for, register,
perfect, confirm, and protect MathStar’s ownership rights set forth in this
Section, and MathStar shall have the exclusive right to apply for or register
any patents, mask work rights, copyrights, and such other proprietary
protections with respect thereto.

 

9.3           PARTY AS ATTORNEY-IN-FACT.  Summit agrees that if MathStar is
unable because of Summit’s dissolution or incapacity, or for any other reason,
to secure Summit’s signature to apply for or to pursue any application for any
United States or foreign patents or mask work or copyright registrations
covering the inventions assigned to MathStar above, then Summit hereby
irrevocably designates and appoints MathStar and its duly authorized officers
and agents as Summit’s agent and attorney-in-fact, to act for and in Summit’s
behalf and stead to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of patents,
copyright and mask work registrations thereon with the same legal force and
effect as if executed by Summit.  MathStar agrees that if Summit is unable
because of MathStar’s dissolution or incapacity, or for any other reason, to
secure MathStar’s signature to apply for or to pursue any application for any
United States or foreign patents or mask work or copyright registrations
covering the inventions assigned to Summit above, then MathStar hereby
irrevocably designates and appoints Summit and its duly authorized officers and
agents as MathStar ‘s agent and attorney-in-fact, to act for and in MathStar ‘s
behalf and stead to execute and file any such

 

 

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applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyright and mask work registrations
thereon with the same legal force and effect as if executed by MathStar.

 

9.4           NO REVERSE ENGINEERING.  Each of MathStar and Summit agrees that
it shall not (i) copy, adapt, modify, translate, localize, distribute, create
any derivative work of, or include in any other products any Summit Intellectual
Property (in the case of MathStar) or MathStar Intellectual Property (in the
case of Summit) or any portion thereof, or (ii) reverse assemble, decompile,
reverse engineer or otherwise attempt to derive source code (or the underlying
ideas, algorithms, structure or organization) from any such property, except as
specifically authorized in writing by the party owning the same or as
specifically provided under this Agreement.

 

9.5           COPYRIGHT NOTICES.  Each party shall ensure that all copies of any
software or other property in its possession or control incorporates all
copyright and other proprietary notices in the same manner that the party owning
the same incorporates such notices, or in any other manner reasonably requested
by the owner.  Each party shall promptly notify the other party in writing upon
its discovery of any unauthorized use of a party’s property or the infringement
of such party’s proprietary rights therein.

 

10.           TRADEMARKS, TRADE NAMES AND BRANDING.

 

10.1         USAGE GUIDELINES.  Summit shall comply with MathStar’s logo,
trademark and branding usage guidelines, which MathStar shall provide to Summit,
and as the same may be updated by MathStar from time to time.  MathStar shall
comply with Summit’s logo, trademark and branding usage guidelines, which Summit
shall provide to MathStar, and as the same may be updated by Summit from time to
time.  Neither party shall alter the other party’s marks.

 

10.2         OWNERSHIP.  All MathStar marks are and shall remain, as between
Summit and MathStar, the exclusive property of MathStar or its providers.  All
Summit marks are and shall remain, as between Summit and MathStar, the exclusive
property of Summit or its suppliers.  Neither party grants any rights in the
marks or in any other trademark, trade name, service mark, business name or
goodwill of the other except as expressly permitted hereunder or by separate
written agreement of the parties, and all use of a party’s marks shall inure to
the benefit of the owner of such mark.  Each party agrees that it shall not
challenge or assist others to challenge the rights of the other party or its
suppliers or licensors in the marks or the registration of the marks, or attempt
to register any trademarks, trade names or other proprietary indicia confusingly
similar to the marks.

 

11.           CONFIDENTIALITY.

 

11.1         AGREEMENT AS CONFIDENTIAL INFORMATION.  The parties shall treat the
terms and conditions and the existence of this Agreement as Confidential
Information (as the term “Confidential Information” is hereinafter defined). 
Each party shall obtain the other’s consent prior to any publication,
presentation, public announcement or press release concerning the existence or
terms and conditions of this Agreement.

 

11.2         DEFINITION OF CONFIDENTIAL INFORMATION.  “Confidential Information”
means the terms and conditions of this Agreement, the existence of the
discussions between the parties, any information disclosed in connection with
the Activities being undertaken as described herein, and any proprietary
information a party considers to be proprietary including, but not limited to,
information regarding each party’s product plans, product designs, product
costs, product prices, finances, marketing plans, business opportunities,
personnel, research and development activities, know-how and pre-release
products; provided that information disclosed by the disclosing party
(“Disclosing Party”) in written or other tangible form will be considered
Confidential Information by the receiving party (“Receiving Party”) only if such
information is conspicuously designated as “Confidential,” “Proprietary” or a
similar legend.  Information disclosed orally shall be considered Confidential
Information only if:  (i) it is identified as confidential, proprietary or the
like at the time of disclosure, and (ii) it is confirmed in writing within
thirty (30) days of disclosure.  Confidential Information disclosed to the
Receiving Party by any affiliate or agent of the Disclosing Party is subject to
this Agreement.

 

11.3         NONDISCLOSURE.  The Receiving Party shall not disclose or use,
except as permitted under this Agreement, the Confidential Information to any
third party other than employees and contractors of the Receiving Party who

 

 

8

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have a need to have access to and knowledge of the Confidential Information
solely for the purpose of performing its obligations under this Agreement.  The
Receiving Party shall have entered into non-disclosure agreements with such
employees and contractors having obligations of confidentiality as strict as
those herein prior to disclosure to such employees and contractors to assure
against unauthorized use or disclosure.

 

11.4         EXCEPTIONS TO CONFIDENTIAL INFORMATION.  The Receiving Party shall
have no obligation with respect to information which (i) was rightfully in
possession of or known to the Receiving Party without any obligation of
confidentiality prior to receiving it from the Disclosing Party; (ii) is, or
subsequently becomes, legally and publicly available without breach of this
Agreement; (iii) is rightfully obtained by the Receiving Party from a source
other than the Disclosing Party without any obligation of confidentiality; (iv)
is developed by or for the Receiving Party without use of the Confidential
Information and such independent development can be shown by documentary
evidence; (v) was publicly known at the time of the Disclosing Party’s
communication thereof to the Receiving Party; or (vi) is identified by the
Disclosing Party as no longer proprietary or confidential.  Further, the
Receiving Party may disclose Confidential Information pursuant to a valid order
issued by a court or government agency with jurisdiction, provided that the
Receiving Party provides the Disclosing Party:  (a) prior written notice of such
obligation; and (b) the opportunity to oppose such disclosure or obtain a
protective order.  The Receiving Party further agrees that if the Disclosing
Party is not successful in precluding the requesting legal body from requiring
the disclosure of the Confidential Information, it will furnish only that
portion of the Confidential Information which is legally required to be
disclosed and will exercise all reasonable efforts to obtain reliable assurances
that confidential treatment will be accorded the Confidential Information.

 

11.5         RETURN OR DESTRUCTION OF CONFIDENTIAL INFORMATION.  Upon written
demand by the Disclosing Party, and in any event upon termination of this
Agreement, the Receiving Party shall:  (i) cease using the Confidential
Information; (ii) return the Confidential Information and all copies, notes or
extracts thereof to the Disclosing Party within seven (7) calendar days of
receipt of demand; and (iii) upon request of the Disclosing Party, certify in
writing that the Receiving Party has complied with the obligations set forth in
this section.

 

11.6         INDEPENDENT DEVELOPMENT AND RESIDUALS.  The terms of
confidentiality under this Agreement shall not be construed to limit either
party’s right to develop independently or acquire products without use of the
other party’s Confidential Information.  The Disclosing Party acknowledges that
the Receiving Party may currently or in the future be developing information
internally, or receiving information from other parties, that is similar to the
Confidential Information.  Accordingly, except as provided in this Agreement,
neither party shall be prohibited from developing or having 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 in the
Confidential Information provided that the Receiving Party does not violate any
of its obligations under this Agreement in connection with such development. 
Further, subject to the other restrictions and limitations contained in this
Agreement, the residuals resulting from access to or work with such Confidential
Information shall not be subject to the confidentiality obligations contained in
this Agreement.  The term “residuals” means non-specific information in
non-tangible form, which may be retained by persons who have had access to the
Confidential Information, including general ideas, concepts, know-how or
techniques contained therein. Neither party shall have any obligation to limit
or restrict the assignment of such persons or to pay royalties for any work
resulting from the use of residuals.

 

12.           REPRESENTATIONS AND WARRANTIES.

 

12.1         SUMMIT’S REPRESENTATIONS AND WARRANTIES.  Summit represents and
warrants to MathStar as follows:  Summit and its licensors own or possess the
necessary rights, title and licenses necessary to perform its obligations
hereunder.  Summit has the right to enter into this Agreement and to perform its
obligations hereunder. Summit will perform all of its obligations in a
workmanlike manner.  EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION, SUMMIT
EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, TO THE
FULLEST EXTENT PERMITTED BY LAW, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT.

 

 

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12.2         MATHSTAR’S REPRESENTATIONS AND WARRANTIES.  MathStar represents and
warrants to Summit as follows:  MathStar and its licensors own or possess the
necessary rights, title and licenses necessary to perform its obligations
hereunder.  MathStar has the right to enter into this Agreement and to perform
its obligations hereunder. MathStar will perform all of its obligations in a
workmanlike manner.  EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION, MATHSTAR
EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, TO THE
FULLEST EXTENT PERMITTED BY LAW, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT.

 

13.           INDEMNITY.

 

13.1         INDEMNIFICATION BY MATHSTAR.  MathStar shall defend, indemnify and
hold harmless Summit and its officers, directors, employees, shareholders,
agents, successors and assigns from and against any and all loss, damage,
settlement, costs or expense (including legal expenses), as incurred, resulting
from, or arising out of any claim against Summit which alleges that the MathStar
Intellectual Property or the MATHSTAR-SPECIFIC SOFTWARE, infringes upon,
misappropriates or violates any patents, copyrights, trademarks or trade secret
rights or other proprietary rights of persons, firms or entities who are not
parties to this Agreement.

 

13.2         MATHSTAR EXCLUSIONS.  MathStar shall have no obligation under
Section 13.1 above to the extent any claim of infringement or misappropriation
results from:  (i) use by Summit of the MathStar Intellectual Property or the
MATHSTAR-SPECIFIC SOFTWARE  in combination with any other product (other than as
part of the PRODUCT) if the infringement would not have occurred but for such
combination; (ii) any claim based on Summit’s use of the MathStar Intellectual
Property or the MATHSTAR-SPECIFIC SOFTWARE as shipped after MathStar has
informed Summit of modifications or changes in the PRODUCT required to avoid
such claims and offered to implement those modifications or changes, if such
claim would have been avoided by implementation of MathStar’s suggestions; (iii)
use of the MathStar Intellectual Property or the MATHSTAR-SPECIFIC SOFTWARE
other than as permitted under this Agreement, if the infringement would not have
occurred but for such use; or (iv) compliance by MathStar with specifications or
instructions supplied by Summit.

 

13.3         INDEMNIFICATION BY SUMMIT.  Summit shall defend, indemnify and hold
harmless MathStar and its officers, directors, employees, shareholders, agents,
successors and assigns from and against any and all loss, damage, settlement,
costs or expense (including legal expenses), as incurred, resulting from, or
arising out of any claim against MathStar which alleges that the SUMMIT SOFTWARE
infringes upon, misappropriates or violates any patents, copyrights, trademarks
or trade secret rights or other proprietary rights of persons, firms or entities
who are not parties to this Agreement.

 

13.4         SUMMIT EXCLUSIONS.  Summit shall have no obligation under Section
13.3 above to the extent any claim of infringement or misappropriation results
from:  (i) use by MathStar of the SUMMIT SOFTWARE in combination with any other
product (other than as part of the PRODUCT) if the infringement would not have
occurred but for such combination; or (ii) use of the SUMMIT SOFTWARE other than
as permitted under this Agreement, if the infringement would not have occurred
but for such use.

 

13.5         CONTROL OF DEFENSE.  As a condition to such defense and
indemnification, the party seeking indemnification will provide the other party
with prompt written notice of the claim and permit such other party to control
the defense, settlement, adjustment or compromise of any such claim.  The party
seeking indemnification may employ counsel at its own expense to assist it with
respect to any such claim.

 

13.6         DISCLAIMER.  THE FOREGOING PROVISIONS OF THIS SECTION STATE THE
ENTIRE LIABILITY AND OBLIGATIONS OF THE PARTIES AND THE EXCLUSIVE REMEDY WITH
RESPECT TO ANY VIOLATION OR INFRINGEMENT OF PROPRIETARY RIGHTS INCLUDING, BUT
NOT LIMITED TO, ANY PATENT, COPYRIGHT, TRADEMARK, BY THE INTELLECTUAL PROPERTY
OF MATHSTAR AND SUMMIT, RESPECTIVELY, OR ANY PART THEREOF.  EACH PARTY’S
OBLIGATIONS UNDER THIS SECTION ARE SUBJECT TO THE LIMITATIONS SET FORTH IN
SECTION 14.

 

10

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14.           LIMITATION OF LIABILITY.

 

14.1         LIMITATION OF DAMAGES. EXCEPT FOR BREACH OF THE OBLIGATIONS OF
CONFIDENTIALITY SET FORTH HEREIN, NEITHER PARTY SHALL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, STRICT LIABILITY,
NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR LOST REVENUE OR PROFITS, OR COST OF PROCUREMENT OF
SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES.

 

14.2         LIMITATION OF LIABILITY. EXCEPT FOR BREACH OF THE OBLIGATIONS OF
CONFIDENTIALITY SET FORTH HEREIN AND THE INDEMNIFICATION OBLIGATIONS UNDER
SECTION 13, THE TOTAL DOLLAR LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT OR
OTHERWISE SHALL BE LIMITED TO THE LESSER OF $100,000 OR THE AMOUNT PAID TO
SUMMIT HEREUNDER.

 

15.           TERM AND TERMINATION.

 

15.1         TERM OF AGREEMENT.  This Agreement shall be effective upon the
Effective Date and shall remain in force for a period of 18 months, unless
otherwise terminated as provided herein.  Thereafter, this Agreement may  renew
for one or more terms of twelve months, upon mutual agreement of the parties.

 

15.2         TERMINATION FOR CAUSE.  This Agreement may be terminated by a party
for cause immediately upon the occurrence of and in accordance with the
following:  (a) Insolvency Event. Either may terminate this Agreement by
delivering written notice to the other party upon the occurrence of any of the
following events:  (i) a receiver is appointed for either party or its property;
(ii) either party makes a general assignment for the benefit of its creditors;
(iii) either party commences, or has commenced against it, proceedings under any
bankruptcy, insolvency or debtor’s relief law, which proceedings are not
dismissed within sixty (60) days; or (iv) either party is liquidated or
dissolved. (b) Default. Either party may terminate this Agreement effective upon
written notice to the other if the other party violates any covenant, agreement,
representation or warranty contained herein in any material respect or defaults
or fails to perform any of its obligations or agreements hereunder in any
material respect, which violation, default or failure is not cured within thirty
(30) calendar days after notice thereof from the non-defaulting party stating
its intention to terminate this Agreement by reason thereof.

 

 

15.3         SURVIVAL OF RIGHTS AND OBLIGATIONS UPON TERMINATION. Sections 4.1,
4.4, 5, 7, 8, 9, 10, 11, 13, 14, 15, 16 and all payment obligations of the
parties shall survive any expiration or termination of this Agreement.
Furthermore, in the event of any termination or expiration of this Agreement,
all licenses expressly granted to End Users shall survive.

 

15.4         EFFECT OF TERMINATION.  If this Agreement is terminated, (i) Summit
shall immediately document in detail the status of any Statement of Work then in
effect, and Summit shall deliver to MathStar all copies of MATHSTAR LIBRARIES,
EXTERNAL MATHSTAR — SPECIFIC SOFTWARE that are in its or any third party’s
possession (except in the possession of End Users), whether or not such External
MathStar — Specific Software has been completed or is still in progress, and
such External MathStar — Specific Software shall, for all purposes of this
Agreement, be deemed transferred to MathStar, with respect to which MathStar
shall have all applicable ownership and license rights; (ii) the parties shall
immediately cease work as of the effective date of termination as to any
Statement of Work then in process; (iii) MathStar shall pay Summit, within
thirty (30) days after the receipt by MathStar of a report from Summit
describing the work performed by Summit in reasonable detail, for any amount due
Summit for work performed under any Statement of Work, (iv) MathStar shall pay
Summit any amounts outstanding unless MathStar has terminated this Agreement for
cause pursuant to Section 15.2 hereof, and (v) any paid for licenses must be
granted to an End User or to MathStar within thirty (30) days of termination and
any unpaid for licenses terminate immediately.

 

 

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16.           MISCELLANEOUS.

 

16.1         FORCE MAJEURE.  Neither party shall be liable to the other for
delays or failures in performance resulting from causes beyond the reasonable
control of that party including, but not limited to, acts of God, labor disputes
or disturbances, material shortages or rationing, riots, acts of war,
governmental regulations, communication or utility failures, or casualties. 
However, the occurrence of a force majeure event shall not relieve either party
of its payment obligations under this Agreement.

 

16.2         EXPORT.  Each party hereby acknowledges that one or more
deliverables supplied under the Agreement are or may be subject to export or
import controls under the laws and regulations of the United States (U.S.). 
Each shall comply with such laws and regulations and agrees not to knowingly
export, re-export, import or re-import, or transfer products without first
obtaining all required U.S. Government authorizations or licenses.  MathStar and
Summit each agree to provide the other such information and assistance as may
reasonably be required by the other in connection with securing such
authorizations or licenses, and to take timely action to obtain all required
support documents.  Each party agrees to maintain a record of exports,
re-exports, and transfers of any such deliverables for five (5) years and to
forward within that time period any required records to the party needing the
same or, at such party’s request, the U.S. Government. Each party agrees to
permit audits as required under the regulations to assure compliance with this
Agreement.

 

16.3         RELATIONSHIP OF PARTIES.  The parties are independent contractors
under this Agreement, and no other relationship is intended, including a
partnership, franchise, joint venture, agency, employer/employee, fiduciary,
master/servant relationship, or other special relationship.  Neither party shall
act in a manner which expresses or implies a relationship other than that of
independent contractor, nor bind the other party.  Neither party is by virtue of
this Agreement authorized as an agent, employee or legal representative of the
other party.

 

16.4         NO THIRD PARTY BENEFICIARIES.  Unless otherwise expressly provided,
no provisions of this Agreement are intended or shall be construed to confer
upon or give to any person or entity other than MathStar and Summit any rights,
remedies or other benefits under or by reason of this Agreement.

 

16.5         EQUITABLE RELIEF.  Each party acknowledges that a breach by the
other party of any confidentiality or proprietary rights provision of this
Agreement may cause the non-breaching party irreparable harm, for which the
award of damages would not be adequate compensation.  Consequently, the
non-breaching party may institute an action to enjoin the breaching party from
any and all acts in violation of those provisions, which remedy shall be
cumulative and not exclusive, and a party may seek the entry of an injunction
enjoining any breach or threatened breach of those provisions in addition to any
other relief to which the non-breaching party may be entitled at law or in
equity.

 

16.6         ATTORNEYS’ FEES.  In addition to any other relief awarded, the
prevailing party in any action arising out of this Agreement shall be entitled
to its reasonable attorneys’ fees and costs.

 

16.7         NOTICES.  Any notice required or permitted to be given by either
party under this Agreement shall be in writing and shall be personally delivered
or sent by a reputable overnight mail service (e.g., Federal Express), or by
first class mail (certified or registered) to the business point of contact of
the other party.  Notices will be deemed effective (i) three (3) working days
after deposit, postage prepaid, if mailed, or (ii) the next day if sent by
overnight mail.  A copy of any notice shall be sent to the following:  Summit
Design, Inc., 35 Corporate Drive, Burlington, MA 01803, Attn:  VP, Finance, and
to:  MathStar, Inc., 19075 Tanasbourne Drive, Suite 200, Hillsboro, OR, 97124,
Attn:  CFO.

 

16.8         ASSIGNMENT.  Except as otherwise expressly provided herein with
respect to subcontractors, neither party may assign its rights or delegate its
obligations hereunder, either in whole or in part, whether by operation of law
or otherwise, without the prior written consent of the other party.  Any
attempted assignment or delegation without consent will be void.  The rights and
liabilities of the parties under this Agreement will bind and inure to the
benefit of the parties’ respective successors and permitted assigns.

 

16.9         WAIVER AND MODIFICATION. Failure by either party to enforce any
provision of this Agreement will not be deemed a waiver of future enforcement of
that or any other provision. Any waiver, amendment or other modification of any
provision of this Agreement will be effective only if in writing and signed by
the parties.

 

 

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16.10       SEVERABILITY.  If for any reason a court of competent jurisdiction
finds any provision of this Agreement to be unenforceable, that provision of the
Agreement will be enforced to the maximum extent permissible so as to effect the
intent of the parties, and the remainder of this Agreement will continue in full
force and effect.

 

16.11       CONTROLLING LAW.  This Agreement and any action related thereto
shall be governed, controlled, interpreted and defined by and under the laws of
the State of Delaware and the United States, without regard to the conflicts of
laws provisions thereof.  The parties specifically disclaim the UN Convention on
Contracts for the International Sale of Goods.

 

16.12       HEADINGS.  Headings used in this Agreement are for ease of reference
only and shall not be used to interpret any aspect of this Agreement.

 

16.13       ENTIRE AGREEMENT.  This Agreement, including all exhibits which are
incorporated herein by reference, constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes and replaces
all prior and contemporaneous understandings or agreements, written or oral,
regarding such subject matter.

 

16.14       COUNTERPARTS.  This Agreement may be executed in two counterparts,
each of which shall be an original and together which shall constitute one and
the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement by persons
duly authorized as of the date and year first above written.

 

SUMMIT DESIGN, INC.

 

By:

/s/Emil Girczyc

 

 

Name: Emil Girczyc

 

Title: Chief Executive Officer

 

MATHSTAR, INC.

 

By:

/s/ Daniel Sweeney

 

 

Name: Daniel Sweeney

 

Title: Chief Operating Officer

 

 

13

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EXHIBIT A

Summit End User License Agreement

 

 

        SUMMIT DESIGN LICENSE AND SERVICES AGREEMENT

[g78632kmi001.jpg]

 

 

Licensee:

 

 

 

 

Address:

 

 

 

 

By:

 

 

       (Signature)

 

Title:

 

 

 

 

Date:

 

 

 

This Agreement (“Agreement”) is between the purchaser of this license and its
agents and representatives (collectively, “Licensee”) and Summit Design, Inc., a
Delaware corporation, and its subsidiaries (collectively “Summit”).

 

This Agreement governs Summit’s grant of a license to Licensee to use this
Licensed Product(s), which is defined as, (i) this computer program and all
error corrections, Updates and Upgrades hereto (as defined below), solely in
machine readable form, furnished to Licensee under this Agreement (the
“Software”): (ii) all written and electronic materials generally made available
by Summit for the Software (the “Documentation”); and (iii) the code block(s)
software for use with the Software.

 

BY INSTALLING OR USING THE SOFTWARE, LICENSEE ACKNOWLEDGES THAT IT HAS READ ALL
OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, UNDERSTANDS THEM, AND AGREES TO
BE BOUND BY THEM. LICENSEE UNDERSTAND THAT, IF IT PURCHASED A COPY OF THE
LICENSED PRODUCT FROM AN AUTHORIZED RESELLER OF SUMMIT, THAT ANY SUCH RESELLER
IS NOT SUMMIT’S AGENT AND IS NOT AUTHORIZED TO MAKE ANY REPRESENTATIONS,
CONDITIONS OR WARRANTIES, STATUTORY OR OTHEWISE, ON SUMMIT’S BEHALF NOR TO VARY
ANY OF THE TERMS OR CONDITIONS OF THIS AGREEMENT. IF LICENSEE AND SUMMIT ARE
PARTIES TO A WRITTEN LICENSE AGREEMENT, DULY EXECUTED AND DELIVERED  BY EACH OF
THEM, WITH RESPECT TO LICENSEE’S USE OF THE SOFTWARE, IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS OF SUCH LICENSE AGREEEMNT AND THIS AGREEMENT. THE
RELEVANT PROVISION OF SUCH OTHER LICENSE AGREEMENT SHALL SUPERSEDE THE
CONTRADICTING TERM OF THIS AGREEMENT.

 

If Licensee does not agree to the terms of this Agreement and there is no other
agreement between the parties with respect to the Software, Licensee may
promptly (but in no event later than 7 days from the first attempted
installation) return this LICENSED PRODUCT to the place FROM WHICH it obtained
the LICENSED PRODUCT for a full refund.

 

1.             DEFINITIONS.

 

1.1.          “Designated Equipment” means (a) for licenses that are restricted
to Use on only one computer (“Node Locked License”), the individual computer on
which the Software is first installed and (b) for licenses that permit the Use
of the Software on more than one computer (“Floating License”), the computer
server on which the Software licensing mechanism is first installed and the
number of individual computers for which a license fee has been paid. If there
is no agreement between Licensee and Summit with respect to the type of license,
each license shall be deemed to be a Node Locked License.

 

1.2.          “Designated Location” means the street address of the Designated
Equipment.

 

10.12       “Licensed Product(s)” is defined as:

(i)       the computer program and all error corrections, Updates and Upgrades
hereto (as defined below), in machine readable form (the “Software”);

 

(ii)      all written and electronic materials generally made available by
Summit Design for the Software (the “Documentation”); and/or

 

(iii)     the code block(s) software for use with the Software;

 

provided that such was ordered by Licensee and provided by Summit Design while
this Agreement is in effect.

 

10.13       “Proprietary Information” means:

(a)           Summit’s marketing, product, business, and other strategies and
plans; (b) any other information of Summit disclosed in tangible form and marked
or identified as proprietary or confidential; and (c) the

 

 

14

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source code, object code, internal design and implementation techniques of the
Software. Excluded from Proprietary Information is any information that is: (d)
rightfully in the public domain; (e) rightfully in Licensee’s possession prior
to receipt from Summit; (f) rightfully learned by Licensee from a third party
not in violation of any obligation of confidentiality or other right; or (g)
developed independently by Licensee without benefit of the Proprietary
Information.

 

1.4.          “Territory” means the country of the Designated Location.

 

1.5.          “Update(s)” means a new release of a particular Software program
which provides error corrections or enhanced functionality and for which Summit
does not charge a license or update fee to licensees of that Software program.

 

1.6.          “Upgrade(s)” means a Software program with greater or different
capability than the Software program, but providing the same essential
functionality, to be upgraded and for which Summit charges a license fee to
licensees of the Software program to be upgraded.

 

1.7.          “Use” means copying all or any portion of the Software into a
computer or transmitting it to a computer for processing of its instructions or
displaying any portion of the Software in connection with the processing of such
machine instructions.

 

2              PAYMENT AND INSTALLATION.

 

2.1.          Payment. Licensee shall pay Summit in full for the Licensed
Product within thirty (30) days of the invoice date, provided, however, that
payment may become immediately due and payable if Licensee’s account becomes
delinquent. Licensee shall pay for each installment delivery of Licensed
Product.

 

2.2.          Installation. Licensee shall be responsible for installation of
the Licensed Product.

 

3.             LICENSE GRANT.

 

3.1.          Evaluation License. If this Software has been provided for
evaluation by Licensee or Licensee has not paid to Summit all applicable charges
for this Software, then Summit grants to Licensee only a non-exclusive,
non-transferable, limited-term evaluation license solely for internal use of the
Software, and solely for the purpose of testing and evaluating the Software to
determine if Licensee will purchase a license to the Software from Summit (an
“Evaluation License”). Licensee shall not use the Software pursuant to an
Evaluation License in the productive course of business or for any purpose other
than testing and evaluating the Software as described above. This Evaluation
License shall be effective as of the date Licensee first receives the Software
and shall remain in effect only for thirty (30) days, unless this Agreement is
terminated prior thereto by either party. During the term of an Evaluation
License, Summit shall provide Licensee with maintenance and support services for
the Software as follows, (i) telephone support from Summit customer support
personnel during Summit’s normal support business hours, subject to Summit’s
normal prioritization procedures; and (ii) software Updates for the Software as
deemed appropriate by Summit. Promptly upon the expiration of this Evaluation
License, and without any notice or demand from Summit, Licensee shall either:
(a) purchase a standard license for the Software pursuant to the terms of this
Agreement; or (b) return the Software and all related materials to Summit.
Failure to return the Software and all such materials to Summit within
thirty-five (35) days of first receipt shall be deemed to be an election by
Licensee to purchase a standard license for the Software pursuant to Section 3.3
hereof, and payment for such license shall become due and payable thirty (30)
days thereafter (65 days after first receipt).

 

3.2.          Beta License. If this Software has been provided for testing by
Licensee without charge, then Summit grants to Licensee only a non-exclusive,
non-transferable, limited-term evaluation license solely for internal use of the
Software, and solely for the purpose of testing the Software (a “Beta License”).
Licensee shall not use the Software pursuant to a Beta License in the productive
course of business or for any purpose other than testing the Software as
described herein. Such testing will include, but not be limited to (i)
development of a product design which uses the full capabilities of the
Software, (ii) reporting to Summit of all errors discovered in the Software and
working with Summit to isolate the causes of the errors, (iii) writing and
evaluation report of the Software at the conclusion of the testing and
submitting it to Summit, which report will include test results, bug reports,
suggested error corrections, suggestions for improvements to the Software and
any other information deemed important by Licensee and (iv) providing bi-weekly
status updates by phone to Summit. Licensee will make available to Summit all
reports and other

 

 

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materials relating to Licensee’s testing of the Software and Licensee will
review and discuss with Summit such reports and other materials, and the testing
of the Software generally, at times reasonably convenient to Licensee. All ideas
and suggestions for enhancement, improvement, correction and other changes to
the Software provided by Licensee to Summit shall become and remain the property
of Summit, exclusively, and Licensee shall have no rights therein and no right
to compensation therefor. This Beta License shall be effective as of the date
Licensee first receives the Software and shall remain in effect only for ninety
(90) days, unless this Agreement or this Beta License is terminated prior
thereto by either party. A Beta License may be terminated by either party at any
time for any reason or for no reason, upon prior written notice to the other
party. During the term of a Beta License, Summit shall provide Licensee with
telephone support from Summit customer support personnel during Summit’s normal
support business hours, subject to Summit’s normal prioritization procedures.
Promptly upon the expiration of this Beta License, and without any notice or
demand from Summit, Licensee shall return the Software and all related materials
to Summit.

 

3.3.          Standard License. If this Software has been provided to Licensee
for use in the productive course of business, Summit hereby grants, and Licensee
accepts, a non-transferable, non-sublicensable, perpetual or time-based,
non-exclusive, limited license to Use the Licensed Product in machine-readable
form only, and only on the Designated Equipment at the Designated Location, and
only for Licensee’s internal, normal business purposes: provided, however, that
if this Licensed Product was licensed under Summit’s University Program, the
Licensed Product shall be used only to train Licensee’s students and shall not
be used for any commercial purposes, including but not limited to the creation
of any commercial product. The Licensed Product shall not be used under any
circumstance whatsoever directly or indirectly in a computer service business or
in a rental or commercial timesharing arrangement.

 

3.4.          Intellectual Property Rights. All intellectual property rights in
and to the Licensed Product shall remain the sole and exclusive property of
Summit (and/or its suppliers, if applicable). Licensee shall have no rights,
title, or interest in or to the Licensed Product other than the license
expressly granted in this Agreement.

 

3.5.          Use on Designated Equipment. Use of the Software is restricted to
the Designated Equipment at the Designated Location on (a) a single computer, in
the case of a Node Locked License and (b) via a local-area network within the
Designated Location on the number of individual computers for which a license
fee has been paid, in the case of a Floating License. Accessing the Software
from any location other than the Designated Location via local- or wide-area
networking technology, or any other means, is prohibited unless Licensee has
paid the appropriate Summit wide-area network license fee for the applicable
Software and is subject to the restrictions set forth herein. Within five
business days of Installation of a Node Locked License, Licensee shall send to
Summit the serial number and type of the Designated Equipment to the following
e-mail address: licenses@sd.com.

 

3.6.          Transfers. Licensee may change the Designated Equipment or
Designated Location but only after giving five (5) days prior written notice to
Summit; provided, however, that if the Designated Equipment becomes inoperative
Licensee may change the Designated Equipment provided that Licensee notifies
Summit in writing (by hard copy and e-mail to the address set forth in Section
3.5 above) of the change promptly following such change. Licensee shall pay
Summit’s standard transfer charges prior to the change in Designated Location.
If the Licensed Product is not covered by a Software Maintenance Policy (as
described below) at the time of a change in Designated Equipment or Designated
Location, Licensee shall pay Summit’s then standard charges for any assistance
provided by Summit to change the Designated Equipment or Designated Location.
Licensee shall, upon request from Summit, certify to Summit in writing the
current Designated Equipment and Designated Location.

 

3.7.          License Terminates. Licensee’s license to Use the Licensed Product
that is replaced by an Update or an Upgrade shall terminate thirty (30) days
after the Update or Upgrade is first installed. Within such thirty (30) day
period, Licensee shall destroy or archive the original and all copies of the
Licensed Product that is replaced by the Update or Upgrade, and certify the
destruction or archiving in writing to Summit.

 

4              PROTECTION OF PROPRIETARY INFORMATION.

 

4.1.          Ownership. The Proprietary Information of Summit shall remain
confidential and proprietary to Summit.

 

 

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4.2.          Source Code. Licensee shall not attempt to reverse engineer,
decompile or disassemble the Software or any portion thereof, or otherwise
derive its source code.

 

4.3.          Copy. Licensee may make one copy of the Software and Documentation
solely for backup and archival use, retaining on such copy Summit’s and/or its
suppliers’ copyright, trademark, confidentiality, and other notices. Such backup
copy shall be delivered to Summit or destroyed upon the termination of this
Agreement.

 

4.4.          Destruction of Software. Licensee shall erase the Software from
all Designated Equipment prior to retiring such equipment from active use and in
the event of termination of this Agreement.

 

4.5.          Inclusion with Other Software. Licensee may Use the Software
within or in conjunction with any other software, but must comply with Section
4.4 above upon termination of this Agreement or change of the Designated
Equipment, and any Use shall always remain subject to this Agreement.

 

4.6.          Confidentiality. Licensee shall not disclose, provide or otherwise
make available the Proprietary Information of Summit to any person, other than
authorized employees of Licensee who have signed agreements with Licensee
providing for the protection of the Proprietary Information, without Summit’s
prior written consent, signed by an authorized officer of Summit. Licensee shall
also protect the Proprietary Information through instructions to its employees,
access limitations, and the like, no less securely than if it were Licensee’s
own intellectual property. Licensee shall not use the Proprietary Information
except to the extent permitted hereunder. No media containing the Software, nor
any Documentation, shall be transferred, reproduced, or used in any way, other
than as expressly permitted by this Agreement.

 

5.             SOFTWARE MAINTENANCE POLICY.

 

Summit recommends that all Software be covered by Summit’s standard Software
support services. In consideration of payment by Licensee of Summit’s standard
Software support fees, Summit will provide Summit’s standard Software support
services for the Software pursuant to Summit’s Software Maintenance Policy
described below. Software support reinstatement charges may be incurred in the
event of a lapse in Software support coverage and subsequent renewal.

 

5.1.          Term of Support. These support services shall be for an initial
support term of one year, and thereafter for successive periods of support
renewal terms of one year each, unless and until terminated pursuant to Section
5.7 below.

 

5.2.          Support Fee. To obtain support services under the Software
Maintenance Policy, Licensee shall pay to Summit Summit’s standard annual
service fee for the Licensed Product. All service fees are due and payable in
full at the start of each service term for such Licensed Product described in
Section 5.1 above. Summit may increase its annual service fees at, but only at,
the beginning of a service term. If Licensee and Summit agree, the term of
support may be modified and support fees prorated such that the term of support
for all Licensed Product used by Licensee expire on the same date. Service fees
do not include excise, sales, use, value added, or other similar taxes, nor any
duties. Licensee shall reimburse Summit for all such taxes and duties incurred
by Summit in connection with this Agreement. If an Upgrade is provided to
Licensee and covered by these support services, Licensee shall pay an additional
service fee equal to the amount by which the annual service fee for the Upgrade
exceeds the annual service fee for the Licensed Product.

 

5.3.          Support Services. Summit will provide Licensee with the following
support services during the support term for the Licensed Product: (a) telephone
diagnostics and assistance in the use of the Licensed Product in accordance with
the Documentation during normal, weekday EST business hours, excluding Summit
holidays; (b) repair or replacement, at Summit’s option, of any media that is
defective and which is returned to Summit in accordance with Section 6 below;
(c) delivery of the Updates upon their general commercial releases by Summit;
and (d) delivery of Upgrades upon their general commercial releases by Summit,
provided that Licensee has ordered the Upgrade and paid the applicable Upgrade
Fee. Summit will use commercially reasonable efforts to respond promptly to all
reasonable service requests from Licensee. Summit shall determine the timing and
frequency of its Update and Upgrade deliveries in its sole discretion. If
Licensee and Summit mutually agree, Summit will provide maintenance services to
Licensee that are not covered under this Section 5.3. If such services are
ordered by Licensee and provided by Summit, they shall be governed by this
Agreement, they shall be provided during normal business hours, excluding
holidays observed by

 

 

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Summit, and Licensee shall pay Summit’s then current standard charges for such
service.

 

5.4           Excluded Services.  The following services are not included under
this Section 5: (a) services necessitated by: (i) relocation, movement, improper
operation, neglect, or misuse of the Licensed Product; (ii) Licensee’s failure
to maintain proper site or environmental conditions; (iii) use of the Software
with any software or hardware for which its use is not recommended in the
documentation for the Software provided by Summit; (iv) the fault of Licensee or
Licensee’s agents or employees; (v) any attempt at repair, maintenance, or
modification of the Licensed Product performed by anyone other than authorized
Summit service personnel; (vi) casualty, act of God, or the unauthorized act of
any third party, (vii) failure or interruption of any electrical power,
telephone, or communication service or like cause; or (viii) any other cause
external to the Licensed Product except ordinary Use in accordance with the
license granted in Section 3.3 above; (b) any service or product not
specifically set forth in Section 5.3 above; and (c) service at Licensee’s
location.

 

5.5           Discontinued Licensed Product.  Summit reserves the right to
replace a Licensed Product that is discontinued or retired by Summit with a
replacement Licensed Product, and negotiate with Licensee the difference in
price, if any.

 

5.6           Support Services Cease.  If Licensee ceases paying for support
services as described herein.  Summit shall have no further obligations
hereunder, and Licensee shall promptly pay to Summit all fee and charges due
hereunder.

 

5.7           Renewal.  Either Summit or Licensee may choose not to renew this
Agreement for support services at any time by notifying the other party of this
fact prior to commencement of the next annual service term.  After notification,
Summit will continue to provide support services through the end of the paid
term.

 

5.8           University Program.  Any Licensee licensing the Licensed Product
through Summit’s University Program shall designate one person, who must be
properly trained in the operation and use of the Licensed Product, to serve as
Licensee’s contact person for all services performed under this Agreement.  All
requests for service under this Agreement shall be made by Licensee through such
contact person.

 

6              LIMITED WARRANTY AND DISCLAIMER

 

THE LICENSED PRODUCT AND ALL OTHER ITEMS AND SERVICES PROVIDED IN CONNECTION
WITH ANY EVALUATION LICENSE HEREUNDER ARE PROVIDED ON AN “AS IS” BASIS AND
WITHOUT ANY EXPRESS OR IMPLIED WARRANTY OF ANY KIND, EXCEPT AS SPECIFICALLY
PROVIDED IN THIS SECTION 6.  With respect to any license hereunder other than
Evaluation Licenses, Summit warrants that the Software will conform
substantially to its Documentation for thirty (30) days from delivery and that
the medium containing the Software will be free of defects in material and
workmanship under normal use for thirty (30) days from delivery.  Licensee must
obtain a return authorization number from Summit before returning the Software,
media, or a Peripheral to Summit.  If Summit confirms a material non-conformity
in the Software reported by Licensee in the unaltered Software, Summit will use
commercially reasonable efforts to remedy the nonconformance.  Summit does not
warrant that the operation of the Licensed Product will be uninterrupted or
error free, nor does it guarantee that its remedial efforts will correct any
nonconformance.  Corrections and replacements will be warranted for the
remainder of the original warranty period.  If any Software fails to comply
materially with any limited warranty set forth in this Section 6 and Summit does
not remedy such failure pursuant to this Section 6, Summit’s sole obligation and
liability, and Licensee’s exclusive remedy for such failure shall be limited:
(i) for nonconforming Software, to the refund of the license fee paid for such
Software, upon the return of such Software to Summit, in which event this
Agreement shall terminate; and (ii) for defective medium to replace the
defective media that are returned to Summit within the warranty period.  Some
jurisdictions do not allow the exclusion or limitation of relief, incidental or
consequential damages, so the above limitation or exclusion may not apply to
Licensee.  Summit will have no obligation for non-conformities in the Software
or defects in medium that are caused by accident, abuse, or misuse of the
Software, medium, or Peripheral.  In the event that Summit separately grants
Licensee in writing the right to modify the Licensed Product, Licensee shall
display Summit’s and/or its suppliers’ copyright, trademark, confidentiality and
other notices on any portion of the Licensed Product so Used.  SUMMIT MAKES NO
CONDITIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESSED OR IMPLIED, WRITTEN OR
ORAL, EXCEPT AS EXPRESSLY STATED IN THIS SECTION 6.  SUMMIT DISCLAIMS ALL OTHER
CONDITIONS AND WARRANTIES, EXPRESSED AND IMPLIED, STATUTORY OR OTHERWISE,
INCLUDING

 

 

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WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND FREEDOM FROM INFRINGEMENT WITH RESPECT TO THE LICENSED
PRODUCT AND ALL OTHER PRODUCTS, SUPPORT SERVICES, OTHER SERVICES, MATERIALS,
DOCUMENTATION, AND OTHER ITEMS FURNISHED UNDER, OR IN CONNECTION WITH THIS
AGREEMENT.

 

7              INFRINGEMENT.

 

7.1           Summit to Defend. Summit will defend, at its own expense, any
action against licenses based on a claim that the Licensed Product infringes a
United States patent or United States copyright or involves misappropriation of
a trade secret. Summit will pay such damages or costs as are finally awarded
against Licensee for such infringement or misappropriation provided that
Licensee gives Summit: (a) prompt written notice of any such action and of all
prior related claims; (b) sole control of the defense and settlement of such
action; and (c) full cooperation in any defense or settlement. Summit shall not
be liable for any fees, costs, or damages incurred without such prompt written
notice, control, and cooperation.

 

7.2           Exclusive Remedy. Should any Licensed Product become, or in
Summit’s opinion be likely to become, the subject of a claim of infringement or
trade secret misappropriation as set forth in Section 7.1 above, Summit shall,
at its option and expense: (a) obtain for Licensee the right to continue using
the Licensed Product, (b) replace or modify the Licensed Product so its use
becomes no infringing or otherwise lawful; or (c) terminate the license granted
hereunder with respect to the infringing Licensed Product or subcomponent and
refund the applicable license fee paid by Licensee for the Licensed Product or
subcomponent, less a reasonable allowance for past use based on straight-line
depreciation over a three-year period.

 

7.3           Disclaimer. Notwithstanding the foregoing, Summit shall have no
liability for any claim of infringement of a patent, copyright or other
intellectual property right or trade secret misappropriation, based on the use
of the Licensed Product: (a) on a computer for which it was not designed; (b)
with any other product not supplied by Summit; (c) in any manner or purpose for
which the Licensed Product was not designed; (d) if the infringement or
misappropriation would have been avoided by Licensee’s use of the most current
version of the Licensed Product; (e) if it has been modified by anyone other
than Summit; or (f) infringing on intellectual property rights or trade secrets
owned by Licensee or any of its affiliated companies.

 

7.4           Exclusive Remedy. THIS SECTION 7 STATES LICENSEE’S EXCLUSIVE
REMEDY AND SUMMIT’S SOLE LIABILITY FOR THE LICENSED PRODUCTS OR SOFTWARE
INFRINGING ON THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR CONSTITUTING
A MISAPPROPRIATION OF THE TRADE SECRETS OF THIRD PARTIES.

 

8              LIMITATION OF LIABILITY.

 

8.1           Limitation of Liability. EXCEPT AS OTHERWISE EXPRESSLY STATED IN
SECTION 7 (“INFRINGEMENT”) OF THIS AGREEMENT. SUMMIT’S (AND ITS SUPPLIERS’)
ENTIRE LIABILITY, AND LICENSEE’S EXCLUSIVE REMEDY, FOR ANY AND ALL CLAIMS
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR RELATED TO ANY ITEM OR
SERVICE PROVIDED UNDER OR IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE
FORM OF THE ACTION, WHETHER IN BREACH OF WARRANTY, CONTRACT, TORT, STRICT
LIABILITY OR OTHERWISE, SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE LICENSE FEE
PAID TO SUMMIT BY LICENSEE FOR THE LICENSED PRODUCT. IN NO EVENT SHALL SUMMIT
(NOR ANY OF ITS SUPPLIERS) BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
CONSEQUENTIAL, OR EXEMPLARY DAMAGES (INCLUDING WITHOUT LIMITATION LOSS OF DATA,
LOST PROFITS, AND COSTS OF PROCUREMENT OF SUBSTITUTE GOODS), ARISING OUT OF, OR
IN CONNECTION WITH, THIS AGREEMENT OR ANY PRODUCT SERVICE, OR OTHER ITEM
PROVIDED UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, WHETHER IN BREACH OF
WARRANTY, CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUMMIT HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

8.2           Limitations Period. Neither party may bring any action under this
Agreement for any cause whatsoever more that two (2) years after the occurrence
giving rise to such cause of action, regardless of the date of discovery
thereof, provided however, that this Section 8.2 shall not apply to any action
brought by Summit for violations of Section 3

 

 

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or Section 4 above and actions brought by Summit to protect its intellectual
property rights.

 

9              DEFAULT AND TERMINATION

 

9.1           Default.  Summit may, by written notice to Licensee, terminate
this Agreement, including the licenses granted hereunder, if any of the
following events occur: (a) the failure of Licensee  to pay Summit in full any
fee or charge due to Summit if payment is not rendered within ten (10) days
after Licensee receives written notice that payment is overdue; (b) any breach
of any material term or obligation of this Agreement if not remedied within
thirty (30) days after Licensee receives written notice of such breach; (c) any
material breach of Section 3 (License Grant) or Section 4 (Protection of
Proprietary Information) effective immediately upon written notice from Summit;
or (d) the insolvency of Licensee

 

9.2           Termination.  Licensee’s right to use the Licensed Product shall
cease upon termination without further action.  Within seven (7) days of
termination.  Licensee shall return to Summit the Licensed Product, including
the original and all copies of all, Documentation and Software, together with a
certification by a duly authorized representative of Licensee that all copies of
the Software not returned have been destroyed.

 

9.3           No Waiver; Remedies Cumulative.  Termination shall be in addition
to, and not a waiver of, any remedy available to Summit at law, equity or under
this Agreement.  All remedies hereunder and under applicable law shall be
cumulative.

 

9.4           Survival.  Notwithstanding the foregoing, the provisions of
Sections 2.1 (“Payment”), 4 (“Protection of Proprietary Information”), 6
(“Limited Warranty and Disclaimer”) and 8 (“Limitation of Liability”) shall
survive termination.

 

10            GENERAL

 

10.1         Other Agreements.  This Agreement supersedes all prior oral and
written agreements and understandings between the parties related to the subject
matter hereof, and constitutes the complete and exclusive statement of such
agreement.  All orders for Licensed Product issued by Licensee while this
Agreement is in effect shall be governed by the terms and conditions of this
Agreement exclusively, and the terms and conditions contained in any purchase
order issued by Licensee shall be of no force or effect, even if the order is
accepted by Summit.

 

10.2         Headings.  Headings in this Agreement are for convenience only, and
shall be disregarded when interpreting the terms hereof

 

10.3         Export Controls.  In the event Licensee exports the Licensed
Product from the Territory, Licensee assumes the responsibility for compliance
with all applicable export and re-export regulations, as the case may be.

 

10.4         Assignment.  Neither this Agreement nor any of Licensee’s rights or
obligations under this Agreement shall be assigned or transferred by Licensee
without Summit’s prior written consent and any attempted assignment or transfer
without such consent shall be void.  Licensee agrees that this Agreement binds
Licensee and each of its employees, agents and persons associated with it,
including Licensee’s affiliated and subsidiary firms, corporations and other
organizations.  Summit may assign this Agreement and its rights and obligations
hereunder without Licensee’s consent.

 

10.5         Force Majeure.  Neither party shall be liable for any failure or
delay in performing services or any other obligation under this Agreement (other
than payment obligations), nor for any damages suffered by reason of such
failure or delay, which is, indirectly or directly, caused by strike, riot,
natural catastrophe or other acts of God, or any other cause beyond either
party’s reasonable control.

 

10.6         No Waiver.  If either party fails to perform any of its obligations
hereunder and the other party fails to enforce the provisions relating thereto,
such party’s failure to enforce this Agreement shall not prevent its later
enforcement.

 

10.7         Severability.  If any provision of this Agreement is determined by
a court to be, or becomes, invalid, unenforceable or illegal, such provision
shall be (a) modified to be made valid, enforceable and legal in such a manner
as to best effectuate the intent of the parties on the date hereof or (b) deemed
eliminated where such modification is not predictable.  The remainder of this
Agreement shall remain in effect in accordance with its terms as modified by
such modification or deletion.

 

10.8         Notices.  All notices and correspondence under this Agreement shall
be in writing and shall be delivered by personal service, confirmed facsimile,
express courier, or certified mail, return receipt

 

 

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requested.  If to Summit, Licensee shall deliver notice to the last address to
which Licensee sent payment for Licensed Product, Software, or support services
(or to any subsequent address communicated to Licensee in writing).  If to
Licensee, notice shall be delivered to the last address to which Summit sent an
invoice (or to any subsequent address communicated to Summit in writing).  All
notices shall be deemed effective upon receipt if delivered personally or sent
by express courier or confirmed facsimile, and seven (7) days after mailing if
sent by certified mail.

 

10.9         Governing Law.  This Agreement, and all transactions hereunder,
shall be governed by, and any arbitration hereunder shall apply, the laws of the
Commonwealth of Massachusetts, excluding (a) its rules regarding conflict of
laws; (b) the United Nations Convention on Contracts for the International Sale
of Goods; (c) the 1974 Convention on the Limitation Period in the International
Sale of Goods; and (d) the Protocol amending the 1974 Convention, done at Vienna
April 11, 1980.

 

10.10       Attorney Fees and Costs.  If any legal action is brought in
connection with this Agreement, the prevailing party shall be entitled to
receive its reasonable attorney fees and costs in addition to any other relief
it may receive.

 

10.11       Modifications.  No modifications of this Agreement shall be binding
upon either party unless made in writing and signed and delivered by an
authorized representative of Summit and Licensee.

 

10.12       Government Use.  If Licensee is a U.S. Government entity, the
Software and the Documentation are “commercial computer software” or “commercial
computer software documentation.”  Absent a written agreement to the contrary,
the Government’s rights with respect to such Software or Documentation are
limited by the terms of this Agreement, pursuant to FAR  12.212(a) and/or DFARS
’ 227.7202-1(a), as applicable.

 

10.13       Dispute Resolution.  All disputes arising out of, or relating to,
this Agreement shall be finally resolved by arbitration conducted in the English
language in Boston, Massachusetts, U.S.A., under the arbitration rules of the
American Arbitration Association if Licensee is located in North America or
under the commercial arbitration rules of the United Nations Commission on
International Trade Law if the Licensee is located outside of North America. 
Three arbitrators shall be appointed by the President of the American
Arbitration Association.  Both parties shall bear equally the cost of the
arbitration (exclusive of legal fees and costs, all of which shall be allocated
in accordance with Section 10.10 above.)  All decisions of the arbitrators(s)
shall be final and binding on both parties and enforceable in any court of
competent jurisdiction.  Notwithstanding this, application may be made to any
court for a judicial acceptance of the award or order of enforcement. 
Notwithstanding anything contained in the Section to the contrary, each party
shall have the right to institute judicial proceedings against the other party
or anyone acting by, through or under such other party, in order to enforce the
instituting party’s rights hereunder through reformation of contract, specific
performance, injunction, or similar equitable relief.

 

10.14       Third Party Beneficiary Rights.  Licensee acknowledges that portions
of the Software and related Documentation are licensed to Licensor by third
parties for inclusion in the Products(s) and that such third parties are
intended third party beneficiaries of the provisions of this Agreement.

 

 

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