Document:

Exhibit
10.2

TAX INDEMNIFICATION AND ALLOCATION
AGREEMENT

This Tax Indemnification and Allocation Agreement (the
“Agreement”) is entered into as of ________ __, 2002, by and between DSP
Group Inc., a Delaware corporation (“DSPGI”), and Ceva, Inc., a Delaware
corporation (“Ceva”).  (DSPGI and Ceva
are sometimes collectively referred to herein as the “Companies”).

RECITALS

A.    DSPGI is the common parent of an affiliated group of
corporations, which includes Ceva.  The
members of the affiliated group have heretofore joined in filing consolidated
Federal Income Tax returns.

B.    DSPGI and Ceva have entered into the Separation Agreement
(defined below) providing for the Separation and Distribution, each as fully
described in such Agreement.

C.    After the stock of Ceva is distributed to DSPGI’s shareholders
pursuant to the Distribution, Ceva and its subsidiaries will no longer be
members of the affiliated group of which DSPGI is the common parent.

D.    DSPGI and Ceva desire to provide for and agree upon the
allocation between them of liabilities for Taxes (as defined herein) arising
prior to, as a result of, and subsequent to the actions contemplated by the
Separation Agreement and the entitlement to refunds thereof, allocate
responsibility and provide for cooperation in connection with the filing of
returns in respect of Taxes, and provide for certain other matters relating to
Taxes.

NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter set forth, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

SECTION
1.           DEFINITION OF TERMS.

                For
purposes of this Agreement (including the recitals hereof), the following terms
have the following meanings:

 

“Affiliate” means any entity that directly or
indirectly is “controlled” by the person or entity in question.  “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a person, whether through ownership of voting securities, by
contract or otherwise.  Except as
otherwise provided herein, the term Affiliate shall refer to Affiliates of a
person as determined immediately after the Distribution.  The term “Affiliate” includes a Subsidiary
of an entity.

“Agreement” shall mean this Tax Indemnification and
Allocation Agreement.

 

1

 

“Code” means the U.S. Internal Revenue Code of 1986,
as amended, or any successor law.

“Companies” means DSPGI and Ceva, collectively, and
“Company” means any one of DSPGI and Ceva.

“Consolidated or Combined Income Tax” means any Income
Tax computed by reference to the assets or activities of a Group.

“Consolidated or Combined State Income Tax” means any
State Income Tax computed by reference to the assets or activities of a Group.

“Consolidated or Combined Foreign Income Tax” means
any Foreign Income Tax computed by reference to the assets or activities of a
Group.

“Consolidated Tax Liability” means, with respect to
any DSPGI Federal Consolidated Return, the tax liability of the group as that
term is used in Treasury Regulation Section 1.1552–1(a)(1)
(including applicable interest, additions to the tax, additional amounts and
penalties as provided in the Code), provided that such tax liability shall be
treated as including any alternative minimum tax liability under Code
Section 55.

“Ceva Group” means Ceva and its Subsidiaries and
wholly-owned limited liability companies as determined immediately after the
Distribution Date.

“DSPGI Federal Consolidated Return” means any United
States Federal Tax Return for the affiliated group (as that term is defined in
Code Section 1504) that includes DSPGI as the common parent and any member
of the Ceva Group.

“DSPGI Group” means DSPGI and its Subsidiaries and
wholly owned limited liability companies, excluding any entity that is a member
of the Ceva Group.

“Distribution” shall have the meaning set forth in the
Separation Agreement.

“Distribution Date” means the Distribution Date as
that term is defined in the Separation Agreement.

“Federal Income Tax” means any Tax imposed by Subtitle
A or F of the Code.

“Foreign Income Tax” means any Tax imposed by any
foreign country or any possession of the United States, or by any political
subdivision of any foreign country or United States possession, which is an
income tax as defined in Treasury Regulation Section 1.901–2.

“Group” means the DSPGI Group or the Ceva Group, as
the context requires.

“Income Tax” means any Federal Income Tax, State
Income Tax, or Foreign Income Tax.

 

2

 

“Payment Date” means (i) with respect to any
DSPGI Federal Consolidated Return, the due date for any required installment of
estimated taxes determined under Code Section 6655, the due date
(determined without regard to extensions) for filing the return determined
under Code Section 6072, and the date the return is filed, and
(ii) with respect to any Tax Return for any Consolidated or Combined State
Income Tax, the corresponding dates determined under the applicable Tax Law.

“Post-Distribution Period” shall have the meaning set
forth in Section 2.5(b).

“Post-Distribution Tax Return” means any Tax Return
for any Tax Period beginning after the Distribution Date.

“Pre-Distribution Period” shall have the meaning set
forth in Section 2.5(b).

“Pre-Distribution Tax Return” means any Tax Return for
any Tax Period beginning on or before the Distribution Date.

“Prime Rate” means the rate which _______________ (or
any successor thereto or other money center commercial bank agreed to by DSPGI
and Ceva) announces from time to time as its prime lending rate, as in effect
from time to time.

“Responsible Company” means, with respect to any Tax
Return, the Company having responsibility for preparing and filing such Tax
Return under this Agreement.

“Separate Company Tax” means any Tax computed by
reference to the assets and activities of a member or members of a single
Group.

“Separation Agreement” means the Separation Agreement
by and among DSP Group Inc., DSP Group Ltd., Ceva, Inc., DSP Ceva Inc. and
Corage, Ltd. Dated _______, 2002

“State Income Tax” means any Tax imposed by any State
of the United States or by any political subdivision of any such State which is
imposed on or measured by net income, including state and local franchise or
similar Taxes measured by net income.

“Subsequent Tax Opinion/Ruling” shall have the meaning
set forth in the Separation Agreement.

“Subsidiary” shall have the meaning set forth in
Treasury Regulations section 1.1502–1(c).

“Tax” or “Taxes” means any income, gross income, gross
receipts, profits, capital stock, franchise, withholding, payroll, social
security, workers compensation, unemployment, disability, property, ad valorem,
stamp, excise, severance, occupation, service, sales, use, license, lease,
transfer, import, export, value added, alternative minimum, estimated or other
tax of any kind (including any fee, assessment, or other charge in the nature
of or in lieu of any tax) imposed by any governmental entity or 

 

3

 

political subdivision thereof, and any interest,
penalties, additions to tax, or additional amounts in respect of the foregoing.

“Tax Authority” means, with respect to any Tax, the
governmental entity, or political subdivision thereof that imposes such Tax,
and the agency (if any) charged with the collection of such Tax for such entity
or subdivision.

“Tax Item,” means, with respect to any Income Tax, any
item of income, gain, loss, deduction, and credit.

“Tax Law” means the law of any governmental entity or
political subdivision thereof relating to any Tax.

“Tax Period” means, with respect to any Tax, the
period for which the Tax is reported as provided under the Code or other
applicable Tax Law.

“Tax Records” means Tax Returns, Tax Return workpapers,
documentation relating to any Tax contests, and any other books of account or
records required to be maintained under the Code or other applicable Tax Laws
or under any record retention agreement with any Tax Authority.

“Tax Return” means any report of Taxes due, any claims
for refund of Taxes paid, any information return with respect to Taxes, or any
other similar report, statement, declaration, or document required to be filed
under the Code or other Tax Law, including any attachments, exhibits, or other
materials submitted with any of the foregoing, and including any amendments or
supplements to any of the foregoing.

“Tax Rulings” shall have the meaning set forth in the
Separation Agreement.

“Treasury Regulations” means the regulations
promulgated from time to time under the Code as in effect for the relevant Tax
Period.

SECTION
2.           ALLOCATION OF TAX LIABILITIES.

2.1     General Rule.

(a)   DSPGI Liability.  DSPGI shall be liable for Taxes not
specifically allocated to Ceva under this Section 2.  DSPGI shall indemnify and hold harmless the
Ceva Group from and against any liability for Taxes for which DSPGI is liable
under this Section 2.1(a).

(b)   Ceva Liability.  Ceva shall be liable for, and shall
indemnify and hold harmless the DSPGI Group from and against, any liability for
Taxes that are allocated to Ceva under this Agreement.

 

4

 

2.2     Allocation of United States Federal
Income Tax.

(a)   Pre-Distribution Period.  DSPGI shall be liable for, and shall hold
the Ceva Group harmless for, any Federal Income Tax relating to the DSPGI
Federal Consolidated Return for all Tax Periods ending on or before the
Distribution Date and for the Pre-Distribution Period.  DSPGI is entitled to any refunds of Federal
Income Tax for Tax Periods ending on or before the Distribution Date and for
the Pre-Distribution Period.

(b)   Post-Distribution Period.  The DSPGI Group and the Ceva Group shall
each be liable for, and shall indemnify the other against, its respective
liability for Federal Income Taxes for the Post-Distribution Period and for all
Tax Periods beginning on or after the Distribution Date.

2.3   Allocation of State and Foreign Income
Taxes.

(a)   Separate Company Taxes.  In the case of any State Income Tax or
Foreign Income Tax which is a Separate Company Tax:

(i)            Pre-Distribution Period.  DSPGI shall be liable for, and shall
indemnify the Ceva Group against, any Separate Company Tax for all Tax Periods
ending on or before the Distribution Date and for the Pre-Distribution Period.  DSPGI is entitled to any refunds of Separate
Company Taxes for Tax Periods ending on or before the Distribution Date and for
the Pre-Distribution Period.

(ii)            
Post-Distribution Period. 
Ceva shall be liable for, and shall hold the DSPGI Group harmless against,
any Separate Company Taxes imposed on any member of the Ceva Group for the
Post-Distribution Period and for any Tax Periods beginning after the
Distribution Date.  DSPGI shall be
liable for, and shall hold the Ceva Group harmless against, any Separate
Company Taxes of any member of the DSPGI Group for the Post-Distribution Period
and for any Tax Periods beginning after the Distribution Date.

(b)   Allocation of Consolidated or Combined
Income Taxes.  In the case of any
State Income Tax or Foreign Income Tax which is a Consolidated or Combined
Income Tax:

(i)            Pre-Distribution Period.  DSPGI shall be liable for, and shall hold
Ceva Group harmless for, any State Income Tax or Foreign Income Tax relating to
Consolidated or Combined Returns for all Tax Periods ending on or before the
Distribution Date and for the Pre-Distribution Period.  DSPGI is entitled to any refunds of Tax
attributable to Tax Periods ending on or before the Distribution Date and for
the Pre-Distribution Period.

(ii)           Post-Distribution Period.  The DSPGI Group and the Ceva Group shall
each be liable for, and shall indemnify the other against, its respective
liability for Consolidated or Combined State Income Taxes and Consolidated or 

 

5

 

Combined Foreign Income Taxes for any Tax Period
beginning after the Distribution Date and for the Post-Distribution Period.

2.4     Other Taxes; Allocation.

(a)   Other Taxes.  All Taxes other than those specifically allocated pursuant to
Sections 2.2 and 2.3 shall be allocated based on the legal entity on which
the legal incidence of the Tax is imposed. 
As between the parties to this Agreement, Ceva shall be liable for all
Taxes imposed on any member of the Ceva Group. 
The Companies believe that there is no Tax not specifically allocated
pursuant to Sections 2.2 and 2.3 which is legally imposed on more than one
legal entity (e.g., joint and several liability); however, if there is any such
Tax, it shall be allocated in accordance with past practices as reasonably
determined by the affected Companies, or in the absence of such practices, in
accordance with any allocation method agreed upon by the affected Companies.

(b)   Allocation of Straddle Periods.  In the case of any Tax Period beginning on
or before the Distribution Date and ending after the Distribution Date (a
“Straddle Period”), Tax Items shall be apportioned between the portion of the
Straddle Period ending on the Distribution Date (the “Pre-Distribution Period”)
and the portion of the Straddle Period beginning after the Distribution Date
(the “Post-Distribution Period”) in accordance with the principles in Treasury
Regulation Section 1.1502-76(b) using a closing-of-the-books method.  However, Tax Items (other than extraordinary
items within the meaning of Treasury Regulation
Section 1.1502-76(b)(2)(ii)(C)) for the month including the Distribution
Date will be allocated to the Pre-Distribution Period and the Post-Distribution
Period using the principles of the ratable allocation method of Treasury Regulation
Section 1.1502-76(b)(2)(iii).  In
determining the apportionment of Tax Items between the Pre-Distribution Period
and the Post-Distribution Period, any Tax Items arising as a result of the
Separation or the Distribution shall be treated as extraordinary items
described in Treasury Regulation Section 1.1502-76(b)(2)(ii)(C) and shall
be allocated to the Pre-Distribution Period.

2.5    Indemnification Payments.  If any Company (the “Payor”) is required to
pay to a Tax Authority a Tax that is properly allocated to another Company (the
“Responsible Party”) under this Agreement, the Responsible Party shall
reimburse the Payor within ninety (90) days of delivery by the Payor to the
Responsible Party of an invoice for the amount due, accompanied by evidence of
payment and a statement detailing the Taxes paid and decribing in reasonable
detail the particulars relating thereto. 
The reimbursement shall include interest on the Tax payment computed at
the Prime Rate based on the number of days from the date of the payment to the
Tax Authority to the date of reimbursement under this Section 2.5.

2.6     Limitation.  Notwithstanding anything herein to the contrary, to the extent
that responsibility for Taxes is allocated among DSPGI and Ceva by the
Separation Agreement, the Separation Agreement shall govern and this Agreement
shall not govern.

 

6

 

SECTION
3.           PREPARATION AND FILING OF TAX RETURNS.

3.1   General.  Except as otherwise provided in this Section 3, Tax Returns
shall be prepared and filed when due (including extensions) by the person
obligated to file such Tax Returns under the Code or applicable Tax Law.  The Companies shall provide, and shall cause
their Affiliates to provide, assistance and cooperate with one another in accordance
with Section 4 with respect to the preparation and filing of Tax Returns,
including providing information required to be provided in Section 4.

3.2   DSPGI’s Responsibility.  DSPGI has the exclusive obligation and right
to prepare and file, or to cause to be prepared and filed:

(a)   DSPGI Federal Consolidated Returns for all
Tax Periods;

(b)   DSPGI Consolidated or Combined State Income
Tax Returns for all Tax Periods and DSPGI Consolidated or Combined Foreign
Income Tax Returns for all Tax Periods; and

(c)   Tax Returns for State Income Taxes and
Foreign Income Taxes that are Separate Company Taxes for members of the DSPGI
Group (excluding for this purpose members of the Ceva Group).

3.3   Ceva’s Responsibility.  Ceva shall prepare and file, or shall cause
to be prepared and filed, all Tax Returns required to be filed by or with
respect to the Ceva or members of the Ceva Group other than those Tax Returns
which DSPGI is required to prepare and file under Section 3.2.

3.4   Tax Accounting Practices.

(a)   General.  Except as otherwise provided in this Section 3.4, any
Pre-Distribution Tax Return, and any Post-Distribution Tax Return to the extent
Tax Items reported on such Tax Return might reasonably affect Tax Items reported
on any Pre-Distribution Tax Return, shall be prepared in accordance with past
Tax accounting practices used with respect to the Tax Returns in question
(unless such past practices are no longer permissible under the Code or other
applicable Tax Law).  To the extent any
Tax Items are not covered by past practices (or in the event such past
practices are no longer permissible under the Code or other applicable Tax
Law), such Tax Items shall be reported in accordance with reasonable Tax
accounting practices selected by DSPGI or Ceva depending on whose Tax Liability
under Section 2 is affected thereby. 
If the Tax liability of both DSPGI and Ceva under Section 2 would
be affected by the reporting of the Tax Item, the parties shall negotiate in
good faith to determine the reporting of the Tax Item.  Any dispute regarding the proper tax
treatment of the Tax Item shall be referred for resolution pursuant to
Section 6.2, sufficiently in advance of the filing date of such Tax Return
(including extensions) to permit timely filing of the return.

(b)   Reporting of Separation and Distribution
Tax Items.  The tax treatment
reported on any Tax Return of Tax Items relating to the Separation and
Distribution shall be consistent with the treatment of such item in the Tax
Rulings or any Subsequent Tax 

 

7

 

Tax Opinion/Ruling (unless such treatment is not
permissible under the Code).  To the
extent there is a Tax Item relating to the Separation or Distribution which is
not covered by the Tax Rulings or any Subsequent Tax Opinion/Ruling, the
Companies shall agree on the tax treatment of any such Tax Item reported on any
Tax Return.  For this purpose, the tax
treatment of such Tax Items on a Tax Return shall be determined by the Responsible
Company with respect to such Tax Return and shall be agreed to by the other
Company unless either (i) there is no reasonable basis as defined under
Section 6662 of the Code for such tax treatment, or (ii) such tax
treatment would have a material impact on the other Company or the Tax Rulings
or any Subsequent Tax Opinion/Ruling. 
Such Tax Return shall be submitted for review pursuant to
Section 3.5(a), and any dispute regarding such proper tax treatment shall
be referred for resolution pursuant to Section  6.2, sufficiently in advance
of the filing date of such Tax Return (including extensions) to permit timely
filing of the return.

3.5   Right to Review Tax Returns.

(a)   General.  The Responsible Company with respect to any Tax Return shall make
such Tax Return and related workpapers available for review by the other
Company, if requested, to the extent (i) such Tax Return relates to Taxes
for which the requesting party may be liable, (ii) such Tax Return relates
to Taxes for which the requesting party may be liable in whole or in part or
for any additional Taxes owing as a result of adjustments to the amount of
Taxes reported on such Tax Return, or (iii) the requesting party reasonably
determines that it must inspect such Tax Return to confirm compliance with the
terms of this Agreement.  The
Responsible Company shall use its commercially reasonable efforts to make such
Tax Return available for review as required under this paragraph sufficiently
in advance of the due date for filing such Tax Returns to provide the
requesting party with a meaningful opportunity to analyze and comment on such
Tax Returns and have such Tax Returns modified before filing, taking into
account the person responsible for payment of the tax (if any) reported on such
Tax Return and the materiality of the amount of Tax liability with respect to
such Tax Return.  The Companies shall
attempt in good faith to resolve any issues arising out of the review of such
Tax Returns.  Issues that cannot be
resolved in the Companies shall be resolved in the manner set forth in Section
6.2.

(b)   Execution of Returns Prepared by Other
Party.  In the case of any Tax
Return which is required to be prepared and filed by one Company under this
Agreement and which is required by law to be signed by another Company (or by
its authorized representative), the Company which is legally required to sign
such Tax Return shall not be required to sign such Tax Return under this
Agreement if there is no reasonable basis for the tax treatment of any material
items reported on the Tax Return.

SECTION
4.             ASSISTANCE AND COOPERATION.

4.1   General.  After the Distribution Date, each of the Companies shall
cooperate (and cause their respective Affiliates to cooperate) with each other
and with each other’s agents, including legal counsel and accounting firms, in connection
with Tax matters relating to the Companies and their Affiliates including
(i) preparation and filing of Tax 

 

8

 

Returns, (ii) determining the liability for and
amount of any Taxes due (including estimated Taxes) or the right to and amount
of any refund of Taxes, (iii) examinations of Tax Returns, and
(iv) any administrative or judicial proceeding in respect of Taxes
assessed or proposed to be assessed. 
Such cooperation shall include making all information and documents in
their possession relating to the other Company and their Affiliates available
to such other Company as provided in Section 5.  Each of the Companies shall also make available to each other, as
reasonably requested and available, personnel (including officers, directors,
employees and agents of the Companies or their respective Affiliates)
responsible for preparing, maintaining, and interpreting information and
documents relevant to Taxes, and personnel reasonably required as witnesses or
for purposes of providing information or documents in connection with any
administrative or judicial proceedings relating to Taxes.  Any information or documents provided under
this Section 4 shall be kept confidential by the Company receiving the information
or documents, except as may otherwise be necessary in connection with the
filing of Tax Returns or in connection with any administrative or judicial
proceedings relating to Taxes.

4.2     Income
Tax Return Information.  Each
Company will provide to the other Company information and documents relating to
their respective Groups required by the other Company to prepare Tax
Returns.  The Responsible Company shall
determine a reasonable compliance schedule in accordance with past
practice.  Any additional information or
documents the Responsible Company requires to prepare such Tax Returns will be
provided in accordance with past practices, if any, or as the Responsible
Company reasonably requests and in sufficient time for the Responsible Company
to file such Tax Returns on a timely basis.

SECTION
5.           TAX RECORDS.

5.1     Retention
of Tax Records.  Each Company shall
preserve and keep all Tax Records for so long as the contents thereof may
become material in the administration of any matter under the Code or other
applicable Tax Law, but in any event until the later of (i) the expiration
of any applicable statutes of limitation, and (ii) seven years after the
Distribution Date.  If, prior to the
expiration of the applicable statute of limitation and such seven-year period,
a Company reasonably determines that any Tax Records which it is required to
preserve and keep under this Section 5 are no longer material in the
administration of any matter under the Code or other applicable Tax Law, such
Company may dispose of such records upon 90 days prior notice to the other
Company.  Such notice shall include a
list of the records to be disposed of describing in reasonable detail each
file, book, or other records being disposed. 
The notified Company shall have the opportunity, at its cost and
expense, to copy or remove, within such 90-day period, all or any part of such
Tax Records.

5.2     Access
to Tax Records.  The Companies and
their respective Affiliates shall make available to each other for inspection
and copying during normal business hours upon reasonable notice all Tax Records
in their possession to the extent reasonably required by the other Company in
connection with the preparation of Tax Returns, audits, litigation, or the
resolution of items under this Agreement.

 

9

 

SECTION
6.           TAX DISPUTES.

6.1     Tax
Disputes Relating to the Separation and Distribution.  Notwithstanding anything herein to the
contrary, Article IV of the Separation Agreement shall govern and shall be the
exclusive remedy with respect to any Tax dispute related to the Separation and
Distribution.

 

6.2     Other
Tax Disputes.  To the extent that
there is any dispute between the Companies relating to this Agreement (other
than a dispute governed by Section 6.1 hereof), the provisions of Article VIII
of the Separation Agreement shall govern the resolution of such dispute.

 

SECTION 7.           EFFECTIVE DATE.

 

                This Agreement
shall be effective on the Distribution Date.

 

SECTION 8.           INTEREST UNDER THIS AGREEMENT.

 

                Anything herein to
the contrary notwithstanding, to the extent one Company (“indemnitor”) makes a
payment of interest to another Company (“Indemnitee”) under this Agreement with
respect to the period from the date that the indemnitee made a payment of Tax
to a Tax Authority to the date that the indemnitor reimbursed the indemnitee
for such Tax payment, the interest payment shall be treated as interest expense
to the indemnitor (deductible to the extent provided by law) and as interest
income by the indemnitee (includable in income to the extent provided by
law).  The amount of the payment shall
not be adjusted to take into account any associated Tax benefit to the
indemnitor or increase in Tax to the indemnitee.

 

SECTION 9.             LATE
PAYMENTS.

 

                Any amount owed by
one party to another party under this Agreement which is not paid when due
shall bear interest at the Prime Rate plus two percent, compounded
semiannually, from the due date of the payment to the date paid.  To the extent interest required to be paid
under this Section 9 duplicates interest required to be paid under any
other provision of this Agreement, interest shall be computed at the higher of
the interest rate provided under this Section 9 or the interest rate
provided under such other provision.

 

SECTION 10.         EXPENSES.

 

                Except as provided
in Section 11, each party and its Affiliates shall bear their own expenses
incurred in connection with preparation of Tax Returns, Tax Contests, and other
matters related to Taxes under the provisions of this Agreement.

 

SECTION
11.         GENERAL PROVISIONS.

11.1      Addresses and Notices.  Any notice, demand, claim, or other
communication under this Agreement shall be in writing and shall be deemed to
have 

 

10

 

been given upon the
delivery or mailing hereof, as the case may be, if delivered personally or sent
by certified mail, return receipt requested, postage prepaid, to the parties at
the following addresses (or at such other address as a party may specify by
notice to the other):

 

	
  If
  to DSPGI, to:

  	
   

  	
  DSP
  Group Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:
  _______________, DSP Group Inc.

  
	
   

  	
   

  	
   

  
	
  If
  to Ceva, to:

  	
   

  	
  Ceva,
  Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:
  _______________, Ceva, Inc.

  

 

11.2      Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns.

11.3      Waiver.  No failure by any party to insist upon the strict performance of
any obligation under this Agreement or to exercise any right or remedy under
this Agreement shall constitute waiver of any such obligation, right, or remedy
or any other obligation, rights, or remedies under this Agreement.

11.4      Invalidity of Provisions.  If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity,
legality, and enforceability of the remaining provisions contained herein shall
not be affected thereby.

11.5      Further Action.  The parties shall execute and deliver all
documents, provide all information, and take or refrain from taking action as
may be necessary or appropriate to achieve the purposes of this Agreement,
including the execution and delivery to the other parties and their Affiliates
and representatives of such powers of attorney or other authorizing
documentation as is reasonably necessary or.

11.6      Integration.  This Agreement and the other agreements,
including the Separation Agreement, being entered into concurrently herewith,
constitute the entire agreement among the parties pertaining to the subject
matter hereof and thereof and supersedes all prior agreements and
understandings pertaining thereto.

11.7      Construction.  The language in all parts of this Agreement
shall in all cases be construed according to its fair meaning and shall not be
strictly construed for or against any party.

11.8      No Double Recovery Subrogation.  No provision of this Agreement shall be
construed to provide an indemnity or other recovery for any costs, damages, or
other amounts for which the damaged party has been fully compensated under any
other 

 

11

 

provision of this Agreement or under any other
agreement or action at law or equity. 
Unless expressly required in this Agreement, a party shall not be
required to exhaust all remedies available under other agreements or at law or
equity before recovering under the remedies provided in this Agreement.  Subject to any limitations provided in this
Agreement, the indemnifying party shall be subrogated to all rights of the
indemnified party for recovery from any third party.

11.9      Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
taken together shall constitute one and the same instrument.

11.10    Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.

IN WITNESS WHEREOF, each
of the parties has caused this Agreement to be executed on its behalf by its
officers thereunto duly authorized, all as of the day and year first written
above.

 

	
   

  	
  DSP GROUP INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CEVA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  

 

 

12Exhibit 10.3

CEVA, INC. TECHNOLOGY TRANSFER AGREEMENT

This
Technology Transfer Agreement (this “Agreement”), effective as of
_______________, 2002 (the “Effective Date”), is entered into by and between
DSP Group Inc. (“DSPGI”), a Delaware corporation, and Ceva, Inc. (“Ceva”), a
Delaware corporation and a wholly owned subsidiary of DSPGI.

RECITALS

A.            DSPGI is engaged in the business of
designing, manufacturing and marketing high performance digital signal
processing integrated circuit devices for cordless telephone, computer
telephony, voice-over-broadband and other products.

B.            Ceva is engaged in the business of
developing and licensing to third parties digital signal processing cores for
the manufacture of integrated circuit devices.

C.            DSPGI owns or otherwise holds
certain intellectual property rights and other assets relating to the digital
signal processing cores described on Exhibit A to this Agreement, which
intellectual property rights and other assets it desires to assign to Ceva, and
Ceva desires to receive such assignment of intellectual property rights and
other assets from DSPGI, in accordance with the terms and conditions set forth
herein.

AGREEMENTS

Now,
therefore, in consideration of the mutual covenants and the other terms and
conditions contained herein, the Parties (as defined below) hereby agree as
follows:

ARTICLE I

DEFINITIONS

In
addition to the capitalized terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:

Section 1.1.            “Additional Necessary Licensed IP”
shall mean all technology, information and materials of any kind, such as designs, development kits, emulators, tools, libraries, test
suites, documentation, parts lists, board layouts, design materials, databases,
know-how, methods, processes, and work in progress, each to the extent that
they are necessary to continue operating the Licensing Business as currently
conducted by the licensing division of DSPGI, but are not included in the
Licensing Business Assets.  The parties
acknowledge and agree that the Additional Necessary Licensed IP does not
include the Licensed IP Modules or Process Information.

Section 1.2.            Affiliate.  “Affiliate” of any Person shall mean a Person that
controls, is controlled by, or is under common control with such Person.  As used herein, “control” of a 

 

1

 

Person means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting securities or other interests,
by contract or otherwise.  A Person
shall be deemed an Affiliate only for so long as such control exists.  Notwithstanding the foregoing, DSPGI and
Ceva shall not be considered Affiliates of each other, and DSPGI shall not be
deemed to control Ceva.

Section 1.3.            Combination Agreement.  “Combination Agreement” shall have the
meaning set forth in the Separation Agreement.

Section 1.4.            Confidential Information.  “Confidential Information” shall mean the
Ceva Confidential Information or DSPGI Confidential Information, as applicable.

Section
1.5.            Ceva Confidential
Information.  “Ceva Confidential Information” shall mean any and
all (a) Existing Cores, Other Transferable Licensing IP, patent applications
and provisional patent applications included in the Transferable Patents, Other
Transferable Assets, Third Party Licenses, Other Contracts and Employee
Proprietary Information Agreements, including all technology, information and
materials included in such items, and (b) other technology, information and
materials related to research, products, services, hardware or software,
inventions, processes, designs, drawings, engineering or other technology which
is supplied or licensed by Ceva (in this capacity, the “Disclosing Party”) to
DSPGI (in this capacity, the “Receiving Party”) after the Effective Date and
which is designated in writing as proprietary or confidential (or with a
similar designation) or, if disclosed orally or by demonstration, is designated
as confidential or proprietary at the time of disclosure and summarized in a
writing so designated within thirty (30) days of the initial disclosure.  Ceva Confidential Information shall not
include, however, information or material which (i) is or becomes available to
the relevant public other than as a result of a wrongful act or omission by the
Receiving Party, (ii) except with respect to the items described in subsection
(a) above, was available to the Receiving Party (without a duty of
confidentiality owed to the Disclosing Party with respect to such information
or material) prior to its receipt from the Disclosing Party, (iii) becomes
available to the Receiving Party from a Person not otherwise bound by a
confidentiality agreement with the Disclosing Party with respect to such
information or material, or (iv) except with respect to the items described in
subsection (a) above, was independently developed by the Receiving Party.

Section
1.6.            Ceva Employees.  “Ceva Employees” shall have the meaning set
forth in the Separation Agreement.

Section 1.7.            Ceva
Licensed Products.  “Ceva
Licensed Products” shall mean digital signal processing
cores designed and developed by or for Ceva, its
successors or assigns, and its or their Affiliates, that consist principally of
an Existing Core and that also incorporate one or more of the Licensed Chip
Modules, where such Licensed Chip Modules are bundled with, and are used with,
such Existing Core.

Section 1.8.            Corage, Ltd. Technology Transfer
Agreement.  “Corage, Ltd. Technology
Transfer Agreement” shall mean the Corage, Ltd. Technology Transfer Agreement
of even date herewith by and between Corage, Ltd. and DSP Group Ltd.

 

2

 

Section
1.9.            Disclosing Party.  “Disclosing
Party” shall have the meaning set forth in Sections 1.5 and 1.10, as
applicable.

Section
1.10.          DSPGI Confidential
Information.  “DSPGI Confidential Information” shall mean any and
all (a) Licensed IP Modules and Process Information and all technology,
information and materials included in such items, and (b) other technology,
information and materials related to research, products, services, hardware or
software, inventions, processes, designs, drawings, engineering or other
technology which is supplied or licensed by DSPGI (in this capacity, the
“Disclosing Party”) to Ceva (in this capacity, the “Receiving Party”) after the
Effective Date and which is designated in writing as proprietary or
confidential (or with a similar designation) or, if disclosed orally or by
demonstration, is designated as confidential or proprietary at the time of
disclosure and summarized in a writing so designated within thirty (30) days of
the initial disclosure.  DSPGI
Confidential Information shall not include, however, information or material
which (i) is or becomes available to the relevant public other than as a result
of a wrongful act or omission by the Receiving Party, (ii) except with respect
to the items described in subsection (a) above, was available to the Receiving
Party (without a duty of confidentiality owed to the Disclosing Party with
respect to such information or material) prior to its receipt from the
Disclosing Party, (iii) becomes available to the Receiving Party from a Person
not otherwise bound by a confidentiality agreement with the Disclosing Party
with respect to such information or material, or (iv) except with respect to
the items described in subsection (a) above, was independently developed by the
Receiving Party.

Section
1.11.          DSPGI Products.  “DSPGI
Products” shall mean any products now or hereafter manufactured, sold or
otherwise distributed by, for or under license from DSPGI, its successors and
assigns, or its or their current or future Affiliates.

Section
1.12.          Effective Date.  “Effective
Date” shall have the meaning set forth in the Preamble.

Section
1.13.          Existing Cores.  “Existing
Cores” shall mean the digital signal processing cores set forth on Exhibit A
to this Agreement, including the designs that constitute such cores.

Section 1.14.          Governmental
Authority.  “Governmental
Authority” shall mean any federal, state, local, foreign or international
court, government, department, commission, board, bureau, agency, official or
other regulatory, administrative or governmental authority.

Section
1.15.          Licensed Chip Modules.  “Licensed
Chip Modules” shall mean the chip modules set forth in item G.2 of Exhibit G
to this Agreement.

Section
1.16.          Licensed IP Modules.  “Licensed IP Modules” shall mean the Licensed Chip Modules and the
Licensed Software Modules.

Section
1.17.          Licensed Software
Modules.  “Licensed Software Modules” shall mean (a) the software modules set forth
in item G.1 of Exhibit G to this Agreement, and (b) the database set
forth in item G.3 of Exhibit G to this Agreement.

Section 1.18.          Licensing Business.  “Licensing Business” shall have the meaning
set forth in the Separation Agreement.

 

3

 

Section 1.19.          Licensing
Business Assets.  “Licensing Business Assets” shall have the
meaning set forth in the Separation Agreement.

Section
1.20.          Other Contracts.  “Other
Contracts” shall have the meaning set forth in Section 5.2.

Section
1.21.          Other Intangible
Property Rights.  “Other Intangible Property Rights” shall mean
copyrights, rights in mask works (including, but not limited to, the rights
protected under 17 U.S.C. §§ 901-914 or any successor statute), trade secrets,
and other rights with respect to confidential or proprietary information,
database rights, and other intellectual property rights, but specifically excluding
(a) patents and patent applications, (b) trademarks, service marks and trade
names, and registrations of, and applications to register, trademarks, service
marks and trade names, and other rights with respect to source or origin, (c)
Internet domain names and registrations thereof, and (d) rights with respect to
the items in clauses (a) through (c).

Section
1.22.          Other Transferable
Assets.  “Other Transferable Assets” shall have the meaning set
forth in Article IV.

Section
1.23.          Other Transferable Licensing
IP.  “Other Transferable Licensing IP” shall mean the development
kits, emulators, tools, libraries, test suites, documentation, parts lists,
board layouts, design materials, databases, work in progress, and other
technology and materials set forth in items B.3 through B.7 of Exhibit B
to this Agreement.

Section
1.24.          Party or Parties.  “Party” or “Parties” shall mean DSPGI and/or
Ceva, including their permitted successors and assigns.

Section
1.25.          Person.  “Person”
shall mean an individual, a general or limited partnership, a corporation, a
trust, a joint venture, an unincorporated organization, a limited liability
entity, any other entity and any Governmental Authority.

Section 1.26.          Process
Information.  “Process Information” shall mean the information set forth in item G.4 of
Exhibit G to this Agreement.

Section 1.27.          Products Business.  “Products Business” shall have the meaning
set forth in the Separation Agreement.

Section
1.28.          Receiving Party.  “Receiving
Party” shall have the meaning set forth in Sections 1.5 and 1.10, as
applicable.

Section
1.29.          Representative.  “Representative”
shall mean with respect to a Person, any and all directors, officers,
employees, representatives, or agents of such Person.

Section 1.30.          Separation Agreement.  “Separation Agreement” shall mean the
Separation Agreement of even date herewith by and among DSPGI, DSP Group
Ltd., Ceva, Inc., DSP Ceva, Inc. and Corage, Ltd.

Section
1.31.          Third Party or Third
Parties.  “Third Party” or “Third Parties” shall mean any entity
other than a Party or an Affiliate of a Party.

 

4

 

Section
1.32.          Third Party Licenses.  “Third
Party Licenses” shall have the meaning set forth in Section 5.1.

Section
1.33.          Transferable Domain
Names.  “Transferable Domain Names” shall mean the Internet domain names set forth in part B.2.3 of Exhibit B
to this Agreement, including the registrations of such domain names and any
rights under contract (including agreements with domain name registrars) for
registrations of such domain names.

Section
1.34.          Transferable Licensing
IP.  “Transferable Licensing IP” shall mean (a) the Transferable
Domain Names, Transferable Marks and Transferable Patents, and (b) the Other
Intangible Property Rights in and to (i) the Existing Cores and (ii) the Other
Transferable Licensing IP.

Section
1.35.          Transferable Marks.  “Transferable
Marks” shall mean the trademarks, service marks and trade names set forth in
parts B.2.1 and B.2.2 of Exhibit B to this Agreement, including any
registrations of, and applications to register, such trademarks, service marks
and trade names.

Section
1.36.          Transferable Patents.  “Transferable
Patents” shall mean all patents, patent applications and provisional patent
applications (including any patents issuing in respect of such patent
applications and provisional patent applications) set forth in part B.1 of Exhibit B
to this Agreement, together with any continuations, continuations-in-part, reissues,
divisionals and  renewals of any such
patents and patent applications and any foreign counterparts thereof.

Section
1.37.          Transferring Entities.  “Transferring Entities” shall mean DSPGI and
all of its Affiliates immediately prior to the Effective Date, other than DSP
Group Ltd., Corage, Ltd., Ceva, Inc. and their subsidiaries.

ARTICLE II

TRANSFER OF INTELLECTUAL PROPERTY RIGHTS

Section
2.1.            Assignment.  Except only for the rights retained by, or
granted back to, DSPGI (for itself, its successors and assigns, and its and
their current and future Affiliates) elsewhere in this Agreement, DSPGI, on
behalf of itself and the Transferring Entities, hereby irrevocably assigns,
sells, transfers and sets over to Ceva, and its successors and assigns, all
right, title and interest of the Transferring Entities throughout the world in
and to the Transferable Licensing IP, including, but not limited to, all
benefits, privileges, causes of action, and remedies relating to the
Transferable Licensing IP, whether before or hereafter accrued, including,
without limitation, the exclusive rights to (a) apply for and maintain all
registrations, applications, renewals and/or extensions therefor, (b) bring
actions (at law, in equity or otherwise) for all past, present and/or future
infringements or misappropriations thereof, (c) settle and retain proceeds from
any such actions, and (d) grant licenses or other interests therein to any
Person.  The foregoing includes (and
DSPGI, on behalf of itself and the Transferring Entities, hereby irrevocably
assigns, sells, transfers and sets over to Ceva, and its successors and
assigns) the goodwill and reputation of the business connected
with and symbolized by the Transferable Marks.  Ceva hereby accepts such assignment and
assumes (and shall pay, perform and discharge 

 

5

 

when due) all obligations
with respect to such Transferable Licensing IP accruing from and after the
Effective Date.

Section
2.2.            Retention of Certain
Rights.

(a)           Subject to the terms and conditions
of this Agreement, and notwithstanding Section 2.1, DSPGI retains for itself,
its successors and assigns, and its and their current and future Affiliates
(and Ceva hereby grants to DSPGI, its successors and assigns, and its and their
current and future Affiliates), a nonexclusive, perpetual, irrevocable,
royalty-free, worldwide right and license to prepare derivative works of and
otherwise modify, make, reproduce, sell and otherwise distribute, transmit,
import, and otherwise use and exploit the Transferable Licensing IP (except for
the Transferable Domain Names and Transferable Marks) solely in connection with
the design, development, testing, manufacture, sale and other distribution,
support, and other use and exploitation of DSPGI Products, including the right
and license to prepare derivative works of and otherwise modify, make,
reproduce, sell and otherwise distribute, transmit, import, and otherwise use
and exploit any DSPGI Products based on, incorporating or otherwise using all
or any portion of the Transferable Licensing IP.  Subject to the limitations set forth Section 2.2(b) below, the
rights and licenses set forth in this Section 2.2(a) include (i) the right
to disclose the Transferable Licensing IP, provided that such disclosure is
solely for use and exploitation in connection with DSPGI Products and in
accordance with the confidentiality obligations set forth in this Agreement,
and (ii) a license under the Transferable Patents to make, use and sell DSPGI
Products.  Subject to the limitations
set forth in Section 2.2(b) below, the rights and licenses set forth in this
Section 2.2(a) also include the right to grant licenses and/or sublicenses
(with the rights of the licensees and/or sublicensees to grant further
sublicenses) of any of the foregoing rights and licenses, provided that the
licenses and/or sublicenses of (A) the Existing Cores are limited to use and
exploitation as part of DSPGI Products that offer material functions and
features in addition to the Existing Cores themselves, and (B) the Other
Transferable Licensing IP are limited to use and exploitation in connection
with DSPGI Products.

 

(b)           Notwithstanding any rights retained
by or granted to DSPGI or any other Transferring Entity in this Agreement or
otherwise, DSPGI shall not, and shall ensure that each Transferring Entity
shall not, under any circumstances grant any licenses or sublicenses of the
Existing Cores (or disclose the designs of the Existing Cores constituting Ceva
Confidential Information) to any third party, during the Noncompetition Period
(as that term is defined in the Separation Agreement) other than in connection
with the contracted design or manufacture of DSPGI Products by third parties
for DSPGI, its successors and assigns, and its and their current and future
Affiliates, provided that DSPGI, its successors and assigns, and its and their
current and future Affiliates shall not provide any such designs of the
Existing Cores to any such third party that has not previously executed a
license/sublicense and/or confidentiality agreement on terms and conditions
generally imposed by DSPGI for its own comparable materials, and provided
further, that such licenses/sublicenses shall cover only the technology or
information reasonably required by such contract designer or manufacturer in
order to manufacture or design, as applicable, the DSPGI Products for DSPGI,
its successors and assigns, and its and their current and future Affiliates.

 

6

 

(c)           During the Noncompetition Period, if
DSPGI desires to license and/or sublicense the Existing Cores to a customer or
potential customer in a manner prohibited by Section 2.2(b), Ceva will, at its
option, either (i) negotiate in good faith with DSPGI a non-exclusive,
commercial license permitting such license and/or sublicense on terms and
conditions and at pricing comparable to those Ceva makes generally available to
other customers of such Existing Cores, or (ii) negotiate in good faith with
such customer or potential customer such license and/or sublicense on terms and
conditions and at pricing comparable to those Ceva makes generally available to
other customers of such Existing Cores.

Section 2.3.            License
of Transferable Marks.  Subject
to the terms and conditions of this Agreement, Ceva hereby grants to DSPGI, its
successors and assigns, and its and their current and future Affiliates, a
nonexclusive, perpetual, royalty-free, worldwide license to use the
Transferable Marks solely in connection with DSPGI Products that incorporate,
are based on or otherwise use the Transferable Licensing IP to which such
Transferable Marks relate, including the marketing, advertising, packaging,
sales and distribution of such DSPGI Products. 
DSPGI agrees that all goodwill arising out of the use of the
Transferable Marks by DSPGI, its successors and assigns, and its and their
current and future Affiliates will inure exclusively to the benefit of
Ceva.  DSPGI agrees to use the
appropriate trademark legend (either “TM” or circled “R”) with the first
prominent use of the Transferable Marks in any marketing, advertising and
packaging materials, to indicate Ceva’s ownership of the Transferable Marks in
accordance with the practices DSPGI generally uses to identify the owners of
third-party marks that DSPGI is authorized to use, and, in connection with the
use of the Transferable Marks, to conform substantially with other written
trademark usage guidelines of Ceva notified to DSPGI which Ceva imposes on its
licensees generally (and with which Ceva itself complies), provided that DSPGI,
its successors and assigns, and its and their current and future Affiliates
will have a reasonable opportunity to comply with any new or modified usage
guidelines.  DSPGI agrees to provide
samples of such materials using the Transferable Marks to Ceva for its inspection
upon Ceva’s reasonable request, and DSPGI shall use commercially reasonable
efforts to remedy any defect in its use of the Transferable Marks.  If DSPGI fails to remedy any such defect
within sixty (60) days of receiving Ceva’s written notice describing such
defect in detail, Ceva will have the right, upon written notice to DSPGI, to
suspend DSPGI’s license set forth in this Section 2.3 with respect to the DSPGI
materials that contain such defect until such defect is remedied.

Section
2.4.            Support.  Ceva
shall make available (or cause to be made available) to DSPGI, its successors
and assigns, and its and their current and future Affiliates, maintenance and
support services for the Existing Cores and the Other Transferable Licensing IP
solely to support the use and exploitation thereof authorized by this
Agreement.  Such maintenance and support
services shall be of a scope and at rates comparable to those of and at which
Ceva makes (or causes to be made) similar maintenance and support services
available to its customers generally or, if it does not make such services
available to its customers generally, it shall do so at market rates.  For purposes of the determination of rates
and other terms and conditions for the maintenance and support services, DSPGI,
its successor and assigns, and its and their Affiliates shall be treated as a
single customer.  The maintenance and
support services provided under this Section 2.4 shall include:

(a)           providing error corrections and other
modifications to the Existing Cores and Other Transferable Licensing IP,
telephone and email support, and assistance in diagnosis 

 

7

 

and remedying of errors
and defects in the Existing Cores and the Other Transferable Licensing IP, each
in accordance with Ceva’s standard support policies and practices; and

(b)           providing updates, upgrades, new
versions and successors to the Existing Cores and Other Transferable Licensing
IP, provided that Ceva shall have no obligation under this Section 2.4(b) until
the Parties enter into a maintenance and support services agreement expressly
covering such updates, upgrades, new versions or successor versions.  The Parties shall negotiate the terms and
conditions of a maintenance and support services agreement which is reasonably
acceptable to both Parties.

ARTICLE III

EMPLOYEE PROPRIETARY INFORMATION AGREEMENTS

                DSPGI,
on behalf of itself and the Transferring
Entities, hereby transfers and assigns to Ceva, and Ceva hereby accepts such
transfer and assumes, all of the rights and obligations of the Transferring
Entities under all agreements entered into
by the Ceva Employees with the Transferring
Entities, or any of them, relating to confidentiality, assignment of inventions
and similar matters (“Employee Proprietary Information Agreements”), which
agreements shall remain in full force and effect in accordance with their
terms, provided that DSPGI shall retain its rights under the Employee
Proprietary Information Agreements to the extent required to bring actions (at
law, in equity or otherwise) for any breach of such Employee Proprietary
Information Agreements relating to acts or omissions prior to the Effective
Date by the Ceva Employees who become employees of Ceva.  The Parties shall reasonably cooperate in
connection with any action against any of the Ceva Employees.

ARTICLE IV

TRANSFER OF OTHER TRANSFERABLE ASSETS

DSPGI,
on behalf of itself and the Transferring Entities, hereby irrevocably assigns
and transfers to Ceva, and its successors and assigns, all of the right, title
and interest of the Transferring Entities in and to the tangible assets,
licenses and permits of its Licensing Business as described on Exhibit D
to this Agreement and such other equipment, furniture and furnishings as are
used principally by the Licensing Business (“Other Transferable Assets”), and
Ceva and its successors and assigns hereby accept such assignment and transfer,
and assume (and shall pay, perform and discharge when due) all obligations in
respect to such Other Transferable Assets accruing from and after the Effective
Date.

ARTICLE V

TRANSFER OF CERTAIN RELATED RIGHTS AND OBLIGATIONS

Section
5.1.            Assignment and
Assumption of License Agreements.  DSPGI, on behalf of itself and
the Transferring Entities, hereby assigns and delegates to Ceva all of the
rights and obligations of the Transferring Entities under all agreements under
which the Transferring Entities, or any of them, have granted licenses of the
Existing Cores to Third Parties, as described on Exhibit E to this
Agreement (the “Third Party Licenses”), including all rights to royalties,
license fees and other amounts payable thereunder, and Ceva hereby accepts such
assignment and delegation, and assumes (and shall pay, perform and discharge
when due) all 

 

8

 

obligations under the
Third Party Licenses accruing from and after the Effective Date.  DSPGI represents and warrants to Ceva that
the Transferring Entities and DSP Group Ltd. have not granted to any Third
Party any licenses of the Existing Cores except pursuant to the Third Party
Licenses described on Exhibit E to this Agreement.

Section
5.2.            Assignment and
Assumption of Other Contracts.  DSPGI, on behalf of itself and
the Transferring Entities, hereby assigns and delegates to Ceva all of the
rights and obligations of the Transferring Entities under the other contracts
relating to the Transferable Licensing IP, Ceva Employees and/or the Other
Transferable Assets described on Exhibit F to this Agreement (the
“Other Contracts”), and Ceva hereby accepts such assignment and assumes (and
shall pay, perform and discharge when due) all obligations under the Other
Contracts accruing from and after the Effective Date.

ARTICLE VI

LICENSE TO CEVA OF CERTAIN INTELLECTUAL PROPERTY

Section
6.1.            Licensed Software
Modules. Subject to the terms and conditions of this Agreement, DSPGI, on
behalf of itself and the Transferring Entities, hereby grants to Ceva, its
successors and assigns, and its and their current and future Affiliates a nonexclusive,
perpetual, irrevocable, royalty-free, worldwide right and license, under the
intellectual property rights of the Transferring Entities in and to the
Licensed Software Modules and Licensed Chip Modules, to prepare derivative
works of and otherwise modify, reproduce, and otherwise use such Licensed
Software Modules and Licensed Chip Modules solely for internal use by Ceva, its
successors and assigns, and its and their current and future Affiliates, for
research and development (e.g., testing, benchmarking, etc.) of its and their
own respective products.  The parties
agree to discuss in good faith broadening the scope of the license granted in
this Section 6.1 to allow Ceva to sell and otherwise distribute particular
Licensed Software Modules and Licensed Chip Modules on a case-by-case basis
upon mutually agreeable terms and conditions.

Section
6.2.            VP140 License.  The Parties will negotiate in good faith an
agreement under which VoicePump, Inc., a subsidiary of DSPGI, will grant to
Ceva the right to sublicense to third-party semiconductor makers the right to
develop and make semiconductor products based on the design of VoicePump’s
VP140 chip in exchange for a share of revenue (as defined by the mutual
agreement of the Parties) derived by Ceva from such sublicenses in an amount
equal to twenty-five percent (25%).

Section 6.3.            Process Information.  Subject to the terms and conditions of this
Agreement, DSPGI, on behalf of the Transferring Entities, hereby grants to
Ceva, its successors and assigns, and its and their current and future
Affiliates a nonexclusive, perpetual, irrevocable, royalty-free, worldwide
right and license, under the intellectual property rights of the Transferring
Entities in and to the Process Information, to prepare derivative works of and
otherwise modify, reproduce, and otherwise use such Process Information solely
for internal use by Ceva, its successors and assigns, and its and their current
and future Affiliates, for the design and development of its and their own
respective products.

Section 6.4.            Additional
Necessary Licensed IP.

 

9

 

(a)           To the extent, if any,
that there is any Additional Necessary Licensed IP (e.g., development tools
necessary for implementing the Existing Cores), DSPGI, on behalf of itself and
the Transferring Entities, hereby grants to Ceva, its successors and assigns,
and its and their current and future Affiliates a nonexclusive, perpetual,
irrevocable, royalty-free, worldwide right and license, under the intellectual
property rights of the Transferring Entities in and to such Additional
Necessary Licensed IP, to prepare derivative works of and otherwise modify,
make, reproduce, sell and otherwise distribute, transmit, import, and otherwise
use and exploit such Additional Necessary Licensed IP to the extent
necessary to continue operating the Licensing Business as currently conducted
and currently contemplated to be conducted by the licensing division of
DSPGI.  Such
right and license includes (i) the right to disclose such Additional Necessary
Licensed IP, provided that such disclosure is in accordance with the
confidentiality obligations set forth in this Agreement, and (ii) the right to
grant licenses and/or sublicenses (with the rights of the licensees and/or
sublicensees to grant further sublicenses) of all or any of the foregoing
rights, in each case, to the extent necessary to continue operating the
Licensing Business as currently conducted and currently contemplated to be
conducted by the licensing division of DSPGI.  Such Additional Necessary
Licensed IP, if any, will be identified by Ceva during
the two (2) year period commencing on the Effective Date, and DSPGI shall, from time to time upon the request of Ceva during such two
(2) year period and without further
consideration, deliver to Ceva, as applicable, copies of any tangible
embodiments of any such Additional Necessary Licensed IP which DSPGI has not
previously delivered to Ceva pursuant to this Agreement.

(b)           In addition, to the extent, if any, that any patents owned
or licensed (with the right to sublicense) by the Transferring Entities as of
the Effective Date or any patents issuing in respect of applications owned or
licensed (with the right to sublicense) by the Transferring Entities as of the
Effective Date are necessary to the continued development, distribution and
licensing of the Existing Cores and Other Transferable Licensing IP as
currently carried out and currently contemplated to be carried out by the
licensing division of DSPGI, DSPGI, on behalf of itself and the Transferring
Entities, hereby grants to Ceva, its successors and assigns, and its and their
current and future Affiliates, a non-exclusive, perpetual, irrevocable,
royalty-free, worldwide right and license to make, use and sell such Existing
Cores and Other Transferable IP (provided that (i) any sublicense to Ceva, its
successors and assigns, and its and their current and future Affiliates of any
patents licensed to the Transferring Entities shall be subject to any
restrictions and other terms and conditions of the license to the Transferring
Entities or under which the Transferring Entities have the right to grant such
sublicense and, without limitation of the generality of the foregoing, shall be
subject to Ceva’s making any payments required by the sublicense or the
exercise of rights thereunder, and (ii) Ceva, its successors and assigns, and
its and their current and future Affiliates indemnify and hold harmless (and
shall indemnify and hold harmless) the Transferring Entities from any damages
or other liabilities resulting from or relating to any breach of any terms and
conditions of the license or sublicense by Ceva, its successors and assigns,
and its and their current and future Affiliates).

 

10

 

ARTICLE VII

CONSIDERATION

                In partial consideration of the assignments and
licenses set forth herein, as of the Effective Date Ceva has issued and/or will
issue to DSPGI shares of its Common Stock in accordance with the Separation Agreement.

ARTICLE VIII

CONFIDENTIALITY

Section
8.1.            Disclosure Limitation.  Each
Party (as Receiving Party) shall use the same care and measures to protect the
confidentiality of the Confidential Information of the other Party (as
Disclosing Party) as the Receiving Party uses for its own confidential or
proprietary information or material of a similar nature, but no less than a
reasonable degree of care.  Such
measures shall include instructing and requiring all recipients of Confidential
Information to maintain the confidentiality of such Confidential Information
and restricting disclosure of such Confidential Information to those
Representatives of the Receiving Party and its Affiliates, its and their
contractors, suppliers and licensees, and other authorized third parties who
have a “need to know” consistent with the purposes for which such Confidential
Information is disclosed.  The Receiving
Party further agrees not to remove or destroy any proprietary rights or confidentiality
legends or markings placed upon any documentation or other materials.  Nothing in the foregoing will preclude the
Receiving Party from performing its obligations or exercising its rights under
this Agreement, including, without limitation, any disclosure inherent in any
commercial activities authorized by this Agreement.

Section
8.2.            Permitted Disclosures.  Notwithstanding
Section 8.1, the Receiving Party may disclose the Disclosing Party’s
Confidential Information in the event that the Receiving Party is required (by
the disclosure requirements of any rule, regulation, or form of any
Governmental Authority or by interrogatories, requests for information or
documents by any Governmental Authority or other Person in legal proceedings,
subpoenas, civil investigative demands, or other similar processes) to disclose
such Confidential Information, provided that the Receiving Party so required
shall provide the Disclosing Party with prompt written notice of any such
requirement so that the Disclosing Party may object to production and seek a
protective order or other appropriate remedy, and/or waive compliance with the
provisions of this Agreement.  If the
Disclosing Party objects to production and seeks a protective order or other
appropriate remedy, the Receiving Party shall exercise commercially reasonable
efforts (at the sole expense of the Disclosing Party) to cooperate, including,
without limitation, by cooperating with the Disclosing Party to obtain an
appropriate protective order or other reasonable assurance that confidential
treatment will be accorded such Confidential Information.

ARTICLE IX

WARRANTY AND DISCLAIMERS

Section
9.1.            Authority.  Each
of DSPGI and Ceva hereby represents and warrants to the other that it has the
corporate authority to enter into and perform its obligations under this
Agreement, and its execution, delivery and performance of this Agreement have
been duly and validly authorized.

 

11

 

Section 9.2.            Sufficiency.  DSPGI,
on behalf of itself and the Transferring Entities,  hereby represents and warrants to Ceva that:

(a)           the Transferable Licensing IP (together with the
Transferable Licensing IP under the Corage, Ltd. Technology Transfer Agreement)
constitutes all of the intellectual property assets of the Transferring
Entities and DSP Group Ltd. that are used principally in the Licensing Business
(as opposed to the Products Business) as currently conducted by the licensing
division of the Transferring Entities and DSP Group Ltd.;

(b)           the assignments, licenses and other rights granted by the
Transferring Entities to Ceva under this Agreement (together with the
assignments, licenses and other rights granted by DSP Group Ltd. to Corage,
Ltd. under the Corage, Ltd. Technology Transfer Agreement) accord to Ceva and
Corage, Ltd. the rights (as between the Transferring Entities and DSP Group
Ltd., on one hand, and Ceva and Corage, Ltd., on the other hand) with respect
to the intellectual property assets of the Transferring Entities and DSP Group
Ltd. that are necessary for continued operation of the Licensing Business as
currently conducted by the licensing division of the Transferring Entities and
DSP Group Ltd.;

(c)           the assignment and delivery of the Existing Cores, Other
Transferable Licensing IP, Transferable Domain Names, Transferable Marks,
Transferable Patents, and Other Transferable Assets to Ceva pursuant to this
Agreement (together with the assignment and delivery of such assets to Corage,
Ltd. pursuant to the Corage, Ltd. Technology Transfer Agreement) has vested or will
vest good title to such assets free and clear of all material liens, mortgages,
pledges, security interests, prior assignments and similar encumbrances; and

(d)           the Other Contracts (together with
the Other Contracts under the Corage, Ltd. Technology Transfer Agreement) include all of the licenses under which the Transferring Entities and
DSP Group Ltd. have obtained from third parties designs, development
kits, emulators, tools, libraries, test suites, documentation, parts lists,
board layouts, design materials, databases, know-how, methods, processes and
work in progress used principally in the Licensing Business (as opposed to the
Products Business) as currently conducted by the licensing division of Transferring Entities and DSP Group Ltd.

(e)           DSPGI’s sole and exclusive liability, and Ceva’s sole and
exclusive remedy, for any breach by DSPGI of the warranties set forth in this
Section 9.2 will be that (i) the DSPGI will assign or license, and will cause
the Transferring Entities to assign or license, to Ceva, at no cost to Ceva,
any omitted assets to the extent necessary for DSPGI to achieve compliance with
such warranties or DSPGI will obtain, or will cause the Transferring Entities
to obtain, for Ceva, at no cost to Ceva, a reasonable substitute to such
omitted assets, and (ii) if DSPGI fails to achieve such compliance within a
reasonable period of time following receipt of notice of such breach from Ceva,
DSPGI will pay the direct damages resulting from such breach.  The rights and remedies set forth herein
shall not be cumulative with those for breach of Section 11.2(b).

Section
9.3.            Limitation of
Warranties.  EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE IX, ALL
OF THE ASSETS, RIGHTS, TECHNOLOGY, AND OTHER INFORMATION AND MATERIALS
ASSIGNED, LICENSED OR OTHERWISE 

 

12

 

CONVEYED IN CONNECTION
WITH THIS AGREEMENT ARE PROVIDED “AS IS.” 
NEITHER PARTY MAKES, AND NEITHER PARTY RECEIVES, ANY OTHER WARRANTIES,
WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, OR NON-INFRINGEMENT OF THIRD-PARTY RIGHTS.  WITHOUT LIMITATION OF THE GENERALITY OF THE FOREGOING, NEITHER
PARTY MAKES, OR SHALL BE DEEMED TO MAKE, ANY REPRESENTATION OR WARRANTY THAT
THE USE OR EXPLOITATION OF ANY PRODUCT WILL BE FREE FROM INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHT OTHER THAN THE RIGHTS EXPRESSLY GRANTED
HEREIN.  THE FOREGOING WILL NOT
SUPERSEDE OR LIMIT IN ANY WAY ANY REPRESENTATIONS OR WARRANTIES EXPRESSLY MADE
BY THE PARTIES IN THE SEPARATION AGREEMENT OR THE COMBINATION AGREEMENT.

ARTICLE X

LIMITATION OF LIABILITY

NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, NEITHER PARTY SHALL HAVE ANY LIABILITY
WHATSOEVER FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR SPECIAL
DAMAGES OF ANY KIND, OR ANY LOSS OF REVENUE OR PROFITS, LOSS OF BUSINESS, OR
LOSS OF DATA, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF (OR THE CORAGE, LTD. TECHNOLOGY TRANSFER AGREEMENT OR THE PROVISIONS OF
THE SEPARATION AGREEMENT RELATED TO THIS AGREEMENT OR THE CORAGE, LTD.
TECHNOLOGY TRANSFER AGREEMENT), HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF
LIABILITY (INCLUDING CONTRACT, TORT, OR OTHERWISE), EVEN IF INFORMED IN ADVANCE
OF THE POSSIBILITY OF SUCH DAMAGES.  IN
ADDITION, IN NO EVENT WILL THE AGGREGATE LIABILITY OF EITHER PARTY AND ITS
AFFILIATES (INCLUDING, IN THE CASE OF DSPGI, DSP GROUP, LTD.) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER
HEREOF (OR THE CORAGE, LTD. TECHNOLOGY TRANSFER AGREEMENT OR THE PROVISIONS OF
THE SEPARATION AGREEMENT RELATED TO THIS AGREEMENT OR THE CORAGE, LTD.
TECHNOLOGY TRANSFER AGREEMENT) CUMULATIVELY EXCEED TEN MILLION US DOLLARS
($10,000,000).  THE FOREGOING WILL NOT
SUPERSEDE OR LIMIT IN ANY WAY THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THE COMBINATION AGREEMENT.

ARTICLE XI

OTHER AGREEMENTS

Section
11.1.          No Rights to Updates.  Except as otherwise expressly provided in
this Agreement, (a) the assets, rights, technology, and other information and
materials assigned, licensed or otherwise conveyed by each Party under this
Agreement, including the Existing Cores, the Other Transferable Licensing IP,
the Licensed IP Modules and the Process Information, are assigned, licensed and
otherwise conveyed as such assets, rights, technology, and other information
and materials exist as of the Effective Date, and (b) each Party retains all
right, title and interest in and to any modifications made by or for such
Party, and shall have no 

 

13

 

obligation to provide
such modifications to the other Party. 
In addition, neither Party assumes any obligations other than those
expressly set forth in this Agreement. 
Without limitation of the generality of the foregoing, neither Party is
obligated to provide any consulting or technical assistance except as otherwise
provided herein.

Section
11.2.          Further Assurances.

(a)           At any time and from time to time
after the Effective Date, at the request of a Party, the other Party shall
execute and deliver such written instruments and extend such other cooperation
as may be necessary in the reasonable opinion of the other Party to effect,
evidence, record or perfect any of the assignments, transfers, licenses and
other rights (including retentions thereof) set forth in this Agreement,
including execution and acknowledgement of assignments and other instruments.

(b)           To the extent that DSPGI or any
Transferring Entity retains ownership of any assets or intellectual property
rights used principally in the Licensing Business (as opposed to the Products
Business), but which are not included in the Licensing Business Assets, at the
request of Ceva during the two (2) year period commencing on the Effective
Date, DSPGI, on behalf of itself and the Transferring Entities, covenants and
agrees to transfer such assets and intellectual property rights to Ceva without
any additional consideration, provided that such additional assets or
intellectual property rights shall be subject to all the rights of DSPGI, its
successors and assigns, and its and their current and future Affiliates set
forth herein, including, without limitation, those set forth in Sections 2.2,
2.3 and 2.4.  The rights and
remedies for breach of this Section 11.2(b) shall be only those set forth in
Section 9.2 and shall not be cumulative with any other rights or remedies.

Section
11.3.          No Obligation to Obtain
New Rights.  Ceva acknowledges that, from and after the Effective
Date, except only as set forth above in Section 11.2 and Article VIII, DSPGI
has no obligation to preserve, protect, obtain or enforce any rights in the
Transferable Licensing IP, including, without limitation, any obligation to
register any copyright, to file or prosecute any patent application, or to
bring actions for infringement or misappropriation of any Transferable
Licensing IP.  Neither this Agreement
nor the conduct of either Party under this Agreement imposes or shall be deemed
to impose any such obligation, by implication, estoppel, inference, or
otherwise.

Section
11.4.          Maintenance of
Transferable Licensing IP.  As of the Effective Date, Ceva shall
have the sole responsibility to execute and deliver such documents, pay such
maintenance and other fees, and take such other measures as may be necessary or
desirable to preserve, protect, obtain or enforce the Transferable Licensing IP
and Ceva’s rights therein, including, without limitation, prosecution and
maintenance of any Transferable Patents, registration and maintenance of any Transferable
Marks and Transferable Domain Names, and registration, renewal and recordation
of any Other Intangible Property Rights, provided that DSPGI shall assist Ceva
in connection with the foregoing in accordance with Section 11.2 without any
additional consideration but subject to reimbursement of expenses.

Section
11.5.          Delivery.  Upon the Effective Date, DSPGI shall deliver
to Ceva (a) the tangible Other Transferable Assets, and (b) to the extent in
DSPGI’s possession, copies of 

 

14

 

tangible embodiments of
the Transferring Entities of the Transferable Licensing IP, Third Party
Licenses, employment agreements of Transferred Employees, intangible Other
Transferable Assets, and Other Contracts. 
Notwithstanding the foregoing, each Party may retain copies of any
assets, technology, and other information and materials assigned, licensed or
otherwise conveyed to the other Party under this Agreement (except for tangible
Other Transferable Assets as to which no copies can be made), solely to the
extent necessary for such Party to exercise the rights expressly granted to
such Party under this Agreement, and subject to the rights and obligations with
respect thereto as set forth in this Agreement.

Section
11.6.          Residuals.  Notwithstanding anything herein to the
contrary, each Party may use residual information for any purpose, including
without limitation use in development, manufacture, promotion, sale and
maintenance of its products and services; provided that this right to residual
information does not represent a license under any patents or copyrights of the
other Party.  The term “residual
information” means any information that is retained in the unaided memories of
a Party’s personnel who have had access to the other Party’s Confidential
Information in accordance with this Agreement. 
An individual’s memory is unaided if the individual has not
intentionally memorized the Confidential Information for the purpose of retaining
and subsequently using or disclosing it. 
This Section 11.6 does not imply any exception to, or limitation of, the
obligations of the Parties under Section 6.3 of the Separation Agreement.

Section
11.7.          Interpretation of Rights.  The Parties acknowledge and agree that (a)
any right of a Party granted or referenced herein includes the right (i) to
have such right exercised for the benefit of such Party (e.g., the right to
make includes the right to have made, the right to reproduce includes to right
to have reproduced, etc.), and (ii) to make offers of such right (e.g., a right
to sell includes the right to offer to sell), and (b) the right to distribute
includes the right to distribute through multiple layers of distribution.  In addition, the Parties acknowledge and
agree that (1) an Affiliate of a Party shall have the right to
exercise a right or license granted to such Affiliate hereunder only to the
extent such Party so authorizes, and such Affiliate must be subject to (and
agree to) any terms and conditions of this Agreement applicable to such right
or license (e.g., limitations on use or confidentiality obligations with
respect to the subject matter of such right or license), and (2) a successor or
assign of DSPGI or Ceva shall have the right to exercise the rights and
licenses granted to such successor or assign hereunder only if such successor
or assign is subject to (and agrees to be bound by) all of the terms and
conditions of this Agreement, to the same extent as DSPGI or Ceva, in
accordance with Section 12.8.

Section
11.8.          Subject to Third Party
Rights.  Notwithstanding anything else in this Agreement,
neither Party shall be obligated to assign, license or otherwise convey, or be
deemed to assign, license or otherwise convey, any assets,
rights, technology, or other information or materials owned by, or
subject to the rights of, a Third Party, or any agreement with a Third Party,
if and to the extent such Party does not have the right so to assign, license
or convey, provided that such Party shall use commercially reasonable efforts to
obtain the consent of the Third Party to any assignment, license or other
conveyance contemplated by this Agreement at no charge to the assignee or
licensee, as applicable (such efforts will include payment of any fees to the
Third Party required to effect the assignment, license or conveyance). Each Party acknowledges and agrees that all assignments, licenses and
other conveyances made hereunder are subject to the Third Party Licenses
granted before the Effective Date.

 

15

 

Section 11.9.          No
Obligation to Bring or Defend Legal Actions.  Neither Party shall have any obligation
hereunder to bring any claim or action against any third party for infringement
or misappropriation of any of the intellectual property rights assigned or
licensed hereunder, or to defend any claim or action brought by a third party
with respect to any such intellectual property rights (including, without
limitation, a claim or action with respect to the validity or enforceability of
any such rights).

Section
11.10.        No Other Rights.  The
assignments, licenses and other conveyances of rights are only those expressly
set forth in this Agreement.  Neither
Party assigns, licenses or otherwise conveys (or shall be deemed to assign,
license or otherwise convey) any rights (whether by implication, estoppel,
inference or otherwise, or by any conduct of a Party under this Agreement)
other than as expressly set forth in this Agreement.

ARTICLE XII

MISCELLANEOUS

Section
12.1.          Relationship of Parties.  Nothing
contained in this Agreement shall be deemed to constitute either Party or any
of its Affiliates the partner, agent, or legal representative of the other
Party or its Affiliates or to create any fiduciary relationship for any purpose
whatsoever.  Except as otherwise
specifically provided in this Agreement, nothing in this Agreement shall confer
on either Party or any of its Affiliates any authority to act for, bind, or
create or assume any obligation or responsibility on behalf of the other Party
or its Affiliates.

Section
12.2.          Notices.  All
notices provided pursuant to this Agreement shall be delivered by personal
delivery, overnight courier, or facsimile, and shall be deemed effective on the
date on which delivery to the intended recipient of the notice was
accomplished.  Such notices shall be
delivered to the following addresses:

 

	
  If
  to DSPGI:

  	
   

  	
  If
  to Ceva:

  
	
   

  	
   

  	
   

  
	
  Moshe
  Zelnick

  	
   

  	
  [Name]

  
	
  Chief
  Financial Officer

  	
   

  	
  [Position]

  
	
  DSP
  Group Ltd.

  	
   

  	
  Corage,
  Ltd.

  
	
  5
  Shenkar Street

  	
   

  	
  [address]

  
	
  Herzeliya
  46120 Israel

  	
   

  	
  [address]

  
	
  Fax:  972-9-954-1513

  	
   

  	
  Fax:

  

 

Section
12.3.          Choice of Law.  This
Agreement shall be governed by and construed and interpreted in accordance with
the laws of the State of Delaware (other than as to its laws of
arbitration which shall be governed under the Arbitration Act (as defined in
the Separation Agreement) or other applicable federal law pursuant to Section
8.10 of the Separation Agreement), irrespective of the choice of laws
principles of the State of Delaware, as to all matters, including matters of
validity, construction, effect, enforceability, performance and remedies.  Any
dispute by either Party arising out of or relating to this Agreement shall be
finally settled in accordance with the procedures and terms set forth in
Article VIII of the Separation Agreement.

 

16

 

Section
12.4.          Entire Agreement.  This
Agreement constitutes the entire agreement between the Parties pertaining to
the subject matter hereof and supersedes all previous communications,
agreements, and understandings between the Parties relating to the subject
matter hereof.  Neither Party has
entered into this Agreement in reliance upon any representation, warranty, or
undertaking of the other Party that is not set out or referred to in this
Agreement.  If there is a conflict
between this Agreement and the Separation and Distribution Agreement, the terms
of this Agreement will govern

Section
12.5.          Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

Section
12.6.          Headings.  The
section or other headings herein are inserted only for convenience and ease of
reference and are not to be considered in the construction or interpretation of
any provision of this Agreement.  Unless
otherwise stated, references to Sections herein are references to Sections
hereof.

Section
12.7.          Amendments; Waivers.  This
Agreement may be amended, and the taking of any action required hereunder may
be waived, by the written consent of each Party at the time such amendment or
waiver is sought.  No such waiver shall
operate as a waiver of, or estoppel with respect to, any other action.  No failure to exercise, and no delay in
exercising, any right, remedy, or power hereunder shall operate as a waiver
thereof, nor shall single or partial exercise of any right, remedy, or power
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, or power provided herein or by law or at equity.  The waiver of the time for performance of
any act or condition hereunder does not constitute a waiver of the act or
condition itself.

Section
12.8.          Successors; No
Assignment.  Each Party agrees that it will not assign, sell,
delegate, or otherwise transfer, whether voluntarily or involuntarily, any
right or obligation under this Agreement, provided, however, that
either Party (“Assigning Party”) may assign,
sell, delegate and otherwise transfer this Agreement, together with all of the
Assigning Party’s rights and obligations hereunder without such approval in connection with a merger, reorganization, reincorporation into
another state, or sale of all, or substantially all, of such Party’s business
and assets relating to this Agreement, if the assignee agrees to be bound by
all of the terms and conditions of this Agreement to the same extent as the
Assigning Party.  For the purposes of
this Section 12.8, the Parties hereby consent to the transactions contemplated
by the Combination Agreement to occur on the Effective Date, provided that any
successor to Ceva is subject to (and has agreed in writing to assume) any and
all obligations, limitations, and liabilities applicable to Ceva set forth in
this Agreement.  Any purported
assignment, sale, delegation or other transfer in violation of this Section
12.8 shall be null and void.  Subject to
the foregoing limits on assignment and delegation, this Agreement shall be
binding upon and shall inure to the benefit of the Parties and their respective
successors and assigns.

 

17

 

Section
12.9.          Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same
Agreement.

Section
12.10.        Recovery of Costs and
Attorney’s Fees.  In any legal action, or other proceeding
brought to enforce or interpret the terms of this Agreement, the substantially
prevailing Party shall be entitled to reasonable attorney’s fees and any other
costs incurred in that proceeding in addition to any other relief to which it
is entitled.

Section 12.11.        Third Party Beneficiaries.  The provisions of this Agreement are solely
for the benefit of the Parties (including their permitted successors and
assigns), and not for the benefit of any Third Party.

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly authorized Representatives as of the day and year first written above.

	
   

  	
  DSP
  GROUP INC.

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

	
   

  	
  CEVA
  INC.  

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

 

18

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