Document:

exv10w11

Exhibit 10.11

ARM7201TDSP Device Licence Agreement

This device licence agreement (“The Agreement”) is made the 26th day of
August 1997

between

ADVANCED RISC MACHINES LIMITED

whose registered office is situated at 90, Fulbourn Road, Cherry Hinton, Cambridge, CB1 4JN
(“ARM”)

and

LG SEMICON COMPANY LIMITED

whose principle place of business is situated at 16 Woomyeon-dong, Seocho-qu, Seoul 137-140
Korea (“LGS”)

IT IS HEREBY AGREED AS FOLLOWS;

Except to the extent that the terms of this Agreement are inconsistent with the terms of the
1996 Agreement, in which event the terms of this Agreement shall prevail, this Agreement shall be
without prejudice to the terms of the 1996 Agreement and the terms of the 1996 Agreement shall
apply.

	1.	 	Definitions
	 
	 	 	The following terms shall have the following meanings where used in this Agreement;
	 
	1.1	 	“1996 Agreement” shall mean the Technology Licence Agreement
between ARM and LGS dated the 16th December 1996.
	 
	1.2	 	“ARM Services” shall mean the services described in Schedule 1
which ARM shall provide to LGS pursuant to this Agreement.
	 
	1.3	 	“ARM Compliant Product” shall mean any single silicon chip
developed by LGS which contains, at a minimum; (i) an ARM7TDMI
Core or a Modified ARM7TDMI Core as defined in the 1996
Agreement; or (ii) an ARM720T Core or a Modified ARM720T Core,
which has been verified in accordance with the provisions of
Clause 3 of the 1996 Agreement mutatis mutandis.
	 
	1.4	 	“ARM720T Core” shall mean the ARM720T Core specified in the
ARM720T Datasheet identified in Schedule 3 Part A.
	 
	1.5	 	“ARM720T Model” shall mean the ARM720T Model identified in Schedule 3 Part B.
	 
	1.6	 	“ARM720T Core Transfer Materials” shall mean the items in respect
of the ARM720T Core identified in Schedule 3.
	 
	1.7	 	“ARM7201TDSP Device” shall mean the device specified in the
device specification approved by LGS in accordance with Clause
3.3 together with any changes thereto mutually agreed between the
parties in writing from time to time. A preliminary specification
is set out in Schedule 11.

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	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

	1.8	 	“ARM7201TDSP Transfer Materials” shall mean the items identified in Schedule 2 Parts A.
	 
	1.9	 	“ARM720TDSP” shall mean the combined core of the ARM720T Core and the Piccolo Core
	 
	1.10	 	“ARM720TDSP Transfer Materials” shall mean the items identified in Schedule 2 Part B.
	 
	1.11	 	“ARM Deliverables” shall mean the ARM720T Core Transfer
Materials, ARM720TDSP Core Transfer Materials, the ARM7201TDSP
Transfer Materials and the Piccolo Core Transfer Materials.
	 
	1.12	 	“Beta Release” shall mean a version of the Software which,
subject to Known exceptions (which will be documented and
provided to LGS);

	 	(i)	 	substantially conforms with the Specification; and
	 
	 	(ii)	 	is free from significant bugs.

	1.13	 	“Delivery Schedule” shall mean the dates set out in the various
schedules of this Agreement for performance of the ARM Services
for and delivery of the ARM720T Core Transfer Materials, the
ARM720TDSP Core Transfer Materials, the ARM7201TDSP Transfer
Materials, the Piccolo Core Transfer Materials, and the Software
to LGS.
	 
	1.14	 	“Design Win Event” shall mean for each different ARM Compliant
Product or semiconductor product incorporating the Piccolo Core,
the point in time of sale, supply or other distribution by LGS
of ten thousand (10,000) units of such product.
	 
	1.15	 	“Device Driver Software” shall mean the source and object code
versions of the computer programs and documentation identified
in Schedule 5 Part A.
	 
	1.16	 	“Effective Date” shall mean the date of this Agreement or date
upon which the Korean Government gives approval to this
Agreement, whichever is the later, subject always to the
provision of Clause 13.3.
	 
	1.17	 	“Final Release” shall mean a version of the Software which;

	 	(i)	 	conforms with the Specification;
	 
	 	(ii)	 	is free from significant bugs; and
	 
	 	(iii)	 	is supported by such documentation as is necessary
for its, installation, operation and
interpretation.

	1.18	 	“FPGA Board” shall mean the hardware identified in Schedule 5 Part B.
	 
	1.19	 	“OAL Software” shall mean the source and object code versions of
the computer programs and documentation identified in Schedule 5
Part A.
	 
	1.20	 	“Intellectual Property” shall mean patents and patent rights,
trade marks, service marks, registered designs, applications for
any of the foregoing, design rights,

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topography or mask rights, copyright, know-how, Confidential
Information, any Intellectual Property Derivatives, and any other
similar protected rights in any country.

	1.21	 	“Intellectual Property Derivatives” shall mean; (i) for
copyrightable or copyrighted material, any translation,
abridgement, revision or other form in which an existing work
may be recast, transformed or adapted; (ii) for work protected
by topography or maskwork right, any translation, abridgement,
revision or other form in which an existing work may be recast,
transformed or adapted; (iii) for patented or patentable
material, any improvement; and (iv) for material protected by
trade secret any new material derived from or employing such
trade secret.
	 
	1.22	 	“LGS Deliverables” shall mean the items in respect of the
ARM7201TDSP Device identified in Schedule 8 Part A.
	 
	1.23	 	“LGS Services” shall mean the services as set out in Schedule 9 which LGS shall provide to ARM.
	 
	1.24	 	“LG Affiliates” shall mean each of the companies set out in Schedule 10.
	 
	1.25	 	“Microsoft” shall mean Microsoft Corporation, One Microsoft Way,
Redmond, WA 9052-6399 USA.
	 
	1.26	 	“Modified ARM720T Core” shall mean any ARM720T Core modified in
accordance with the provisions of Clause 2.2 of the 1996
Agreement mutatis mutandis.
	 
	1.27	 	“Modified ARM720TDSP Core” shall mean any ARM720TDSP Core
modified in accordance with the provisions of Clause 2.2 of the
1996 Agreement mutatis mutandis.
	 
	1.28	 	“Model” shall mean: (i) the object code and source code of the
Design Transfer Model identified in Schedule 2, Schedule 3 and
Schedule 4; (ii) the object code and such source code of the
Design Simulation Models and Design Simulation Model Options
identified in Schedule 2, Schedule 3 and Schedule 4 as may be
necessary (at ARM’s absolute discretion) to allow the support of
subsequent releases of the specified simulator; together with
such Updates thereof, if any, as are developed by or for ARM.
	 
	1.29	 	“NSP” shall mean the net sales price of any ARM Compliant
Products calculated by taking the aggregate invoice price
charged on arm’s length terms by LGS and its Subsidiaries in the
sale or distribution of any ARM Compliant Product, less any (i)
value added, turnover, import, or other tax, duty or tariff
payable thereon (ii) freight and insurance costs incurred and
(iii) amounts actually repaid or credited with respect to any
ARM Compliant Products returned.
	 
	1.30	 	“OEM Agreement” shall mean a separate royalty license and
distribution agreement by which MS licenses an original
equipment manufacturer (OEM) the right to distribute Windows CE
with a Windows CE Device designed by such OEM.
	 
	1.31	 	“Piccolo Coprocessor” shall mean the ARM SP7 as described and
identified in the ARM SP7 datasheet. ARM DDI — 0089
	 
	1.32	 	“Piccolo Core” shall mean an implementation which

	 	(i)	 	executes each and every instruction in the Piccolo Instruction Set;

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	 	(ii)	 	executes no additional instructions to those contained in the Piccolo Instruction Set; and
	 
	 	(iii)	 	has been verified using ARM720TDSP test chip in
accordance with the provisions of Clause 3 of the
1996 Agreement.

	1.33	 	“Piccolo Instruction Set” shall mean the Piccolo Instruction Set
as defined in the Piccolo Architecture Specification: ARM IPU -
0025 including all amendments and architectural enhancements
made thereto within a period of ten (10) years from the
Effective Date.
	 
	1.34	 	“Piccolo Core Transfer Materials” shall mean the items in
respect of the Piccolo Core identified in Schedule 4.
	 
	1.35	 	“Software” shall mean together the OAL Software and the Device Driver Software.
	 
	1.36	 	“ARM Software” shall mean together the Models, Tools, Test
Programs, Embedded ICE and Vectors for the ARM720T Core, the
ARM720TDSP, the ARM7201TDSP Device and the Piccolo Core
identified in Schedule 2, Schedule 3 and Schedule 4.
	 
	1.37	 	“Software Transfer Materials” shall mean the items identified in Schedule 5.
	 
	1.38	 	“Specification” shall mean the specification for the Software as set out in Schedule 5.
	 
	1.39	 	“Subsidiary” shall mean any company the majority of shares is
now or hereafter owned or controlled, directly or indirectly, by
a party hereto or any company a majority of whose voting shares
is now or hereafter owned or controlled, directly or indirectly,
by any of the aforementioned entities. A company shall be
considered a Subsidiary only so long as such control exists.
	 
	1.40	 	“Test Programs” shall mean the source code and object code of
the programs identified in Schedule 2, Schedule 3 and Schedule 4
together with such Updates, if any, as are developed by or for
ARM.
	 
	1.41	 	“Tools” shall mean: (i) the source and object code of the
programs identified in Schedule 4 Part C Section 1; and (ii) the
documentation identified in Schedule 4 Part C Section 2,
together with such Updates, if any, as are developed by or for
ARM.
	 
	1.42	 	“Updates” shall mean; (i) for the ARM Software, any bug fixes or
enhancements to the Software the incorporation of which ARM, in
its absolute discretion, decides does not cause to be created a
new product; and (ii) for the ARM Deliverables, all
modifications, enhancements and updates to the ARM Deliverables,
created by ARM, including such modifications to the ARM
Deliverables as are made by ARM’s other licensees and adopted by
ARM for general release as an update provided that ARM may
exclude any modification, enhancement or update which ARM, in
its absolute discretion decides, results in the creation of a
new product
	 
	1.43	 	“Validation Card” shall mean the hardware identified in Schedule 2 Part D.
	 
	1.44	 	“Vectors” shall mean together the Test Chip functional vectors
and Test Chip characterisation vectors identified in Schedule 2,
Schedule 3 and Schedule 4.
	 
	1.45	 	“Windows CE” or “WinCE” shall mean any version Microsoft’s
hand-held operating system and applications platform software
delivered by Microsoft to ARM.

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	1.46	 	“Windows CE OAK” shall mean the Windows CE OEM adaptation kit.
	 
	1.47	 	“Windows CE Device” or “WinCE Device” shall mean any
semiconductor device designed and/or assembled by LGS which
incorporates the WinCE operating system software.
	 
	2.	 	ARM Deliverables and Provision of ARM Services
	 
	2.1	 	ARM shall deliver the ARM Deliverables and the Software Transfer
Materials, to LGS, in accordance with the Delivery Schedule.
	 
	2.2	 	ARM shall apply reasonable skill and care in the provision of the ARM Services to LGS.
	 
	2.3	 	LGS shall provide, to ARM, all necessary accurate information,
support and cooperation that may be reasonably required to enable
ARM to provide the ARM Services to LGS in accordance with the
Delivery Schedule.
	 
	2.4	 	ARM shall provide the following services to LGS;

	 	(i)	 	the Core Maintenance Services for the ARM720T Core,
the ARM720TDSP Core and the Piccolo Core in
accordance with the provisions of the Clause 12 of
the 1996 Agreement mutatis mutandis.
	 
	 	(ii)	 	the Software Maintenance Services for the ARM
Software in accordance with the provisions of the
Clause 13 of the 1996 Agreement mutatis mutandis.
	 
	 	(iii)	 	the Training for the ARM720T Core, the ARM720TDSP
Core and the Piccolo Core in accordance with the
provisions of the Clause 12 of the 1996 Agreement
mutatis mutandis.

For the avoidance of doubt, LGS do not need to pay any additional Core Maintenance Fee or
Software Maintenance Fee set out in Schedule 12 of the 1996 Agreement for such services.

	2.5	 	LGS acknowledges that adherence to the Delivery Schedule by ARM
is dependent upon the receipt by ARM of certain deliverables from
Microsoft. ARM shall not be liable for any departure from the
Delivery Schedule which results directly or indirectly from any
failure by Microsoft to deliver such deliverables to ARM in a
timely manner provided that ARM has used reasonable efforts to
secure timely delivery from Microsoft.
	 
	3.	 	ARM7201TDSP Device Development
	 
	3.1	 	Subject to the provisions of Clauses 6.2 and 2.5, ARM shall use
reasonable efforts to develop and deliver the ARM7201TDSP
Transfer Materials to LGS in accordance with the Delivery
Schedule.
	 
	3.2	 	Where LGS provides a requirements specification to ARM for the
ARM Deliverables, ARM shall review the requirements specification
in good faith and if the requirements specification is acceptable
to ARM, then ARM shall approve it in writing prior to
commencement of work under this Agreement. If the requirements
specification is not acceptable to ARM then ARM shall recommend
the changes to the requirements

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specification that would make it acceptable to ARM. If, after
ARM has approved the requirements specification, LGS requires that
the requirements specification be revised for any reason, LGS shall
be liable for the cost of any work required to comply with such
revisions. ARM shall review any such requirement in good faith and
shall deliver a reasonable quote for the performance of the
additional work, to LGS, based on ARM’s then standard scale of
consulting charges.

Where ARM provides a device specification to LGS, LGS shall review the device
specification and shall report, to ARM, in writing, within three(3) weeks of receipt of the
device specification whether or not it is approved (such approval not to be unreasonably
withheld) and if not approved the reasons for withholding approval. If the device
specification is not approved by LGS because it fails to comply with LGS requirements
specification as approved in Clause 3.2 then, ARM shall revise the device specification
accordingly and resubmit it to LGS. This process shall be repeated until the device
specification is approved by LGS. If, after LGS has approved the device specification, LGS
requires that the device specification be revised for any reason, LGS shall be liable for the
cost of any work required to comply with such revisions. ARM shall review any such requirement
in good faith and shall deliver a reasonable quote for the performance of the additional work,
to LGS, based on ARM’s then standard scale of consulting charges.

ARM shall deliver, to LGS, a behavioural model which conforms to the device specification
as approved under Clause 3.3. LGS, with ARM’s support, shall check the behavioural model to
determine whether or not the behavioural model conforms to the device specification as
approved under Clause 3.3. LGS shall complete the checking of the behavioural model within
thirty (30) days of its receipt from ARM, and upon completion of the checking shall promptly
report, to ARM, in writing whether or not the behavioural model complies with the device
specification. If LGS demonstrates that the behavioural model fails to comply with the device
specification, ARM shall be responsible for Identifying the cause of such failure and shall
use reasonable efforts to correct the problem and expedite the delivery to LGS of a corrected
behavioural model. The parties shall repeat the above process until the behavioural model is
approved by LGS. If, after LGS has approved the behavioural model, LGS requires that the
behavioural model be revised for any reason, LGS shall be liable for the cost of any work
required to comply with such revisions. ARM shall review any such requirement in good faith
and shall deliver a reasonable quote for the performance of the additional work, to LGS, based
on ARM’s standard scale of consulting charges.

Where ARM is delivering layout to LGS, ARM shall;

	 	(i)	 	perform an LVS check in respect of such layout. The
LVS check shall be deemed complete when either; (i)
the LVS check indicates an exact match between the
layout and the schematic netlist; or (ii) where all
discrepancies between the layout and the schematic
netlist have been reviewed by the parties with the
foundry in good faith and a waiver agreed between
ARM, LGS and the foundry;
	 
	 	(ii)	 	perform layout simulation and provide test vectors for layout verification; and
	 
	 	(iii)	 	perform a design rule check in respect of such
layout by reference to the DRC file provided by LGS
(where, for the purposes of this Clause 3.5(iii),
LGS shall mean LGS or LGS chosen foundry, as
appropriate) to ARM. The layout delivered to LGS by
ARM shall be deemed to comply with the LGS design
rules if the layout passes the DRC provided by LGS.
The layout shall be deemed to pass the DRC when
either, (i) The DRC log generated by

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running the DRC on the layout reports no breach or breaches of
the LGS design rules; or (ii) where all reported breach or breaches
have been reviewed by the parties and where appropriate the LGS
chosen foundry in good faith and a waiver agreed between ARM, LGS
and the foundry. ARM shall have no responsibility for any
inconsistency between the DRC file provided by LGS and LGS
corresponding design rules nor shall ARM be responsible for any
failure by the DRC provided by LGS to comprehensively test for
compliance with the LGS corresponding design rules.

	3.6	 	Following delivery of any complete layout, by ARM, to LGS, LGS
shall manufacture the ARM7201TDSP Device. With support from ARM,
LGS shall test the prototypes of the ARM7201TDSP Device to
determine whether or not the functionality and performance of the
prototypes conforms to the device specification approved by LGS
in accordance with the provisions of Clause 3.3. ARM shall
continue to support LGS in the testing of the ARM7201TDSP Device
until such device is approved by LGS. Upon completion of the
testing of the prototypes, LGS shall promptly report to ARM, in
writing, whether or not the prototypes comply with the device
specification and in the event that LGS believes that the
prototypes do not comply with the device specification, LGS shall
provide ARM with details of such non-compliance. ARM shall be
responsible for identifying the cause of such non-compliance and
shall use reasonable endeavours to amend the layout such that
revised prototypes can be manufactured which do comply with the
device specification. The parties shall repeat the above process
until the prototypes are approved by LGS.
	 
	4.	 	Software Development
	 
	4.1	 	Subject to the provisions of Clauses 6.2 and 2.5, ARM shall use
reasonable efforts to develop and deliver the Software and the
Software Transfer Materials to LGS in accordance with the
Delivery Schedule.
	 
	4.2	 	LGS shall review the Specification and shall report, to ARM, in
writing, within thirty (30) days of receipt of the Specification
whether or not it is approved (such approval not to be
unreasonably withheld) and if not approved the reasons for
withholding approval. If the Specification is not approved by
LGS, ARM shall revise the Specification accordingly and resubmit
it to LGS. This process shall be repeated until the Specification
is approved by LGS. If, after LGS has approved the Specification,
LGS requires that the Specification be revised for any reason,
LGS shall be liable for the cost of any work required to comply
with such revisions. ARM shall review any such requirement in
good faith and shall deliver a reasonable quote for the
performance of the additional work, to LGS, based on ARM’s then
standard scale of consulting charges.
	 
	4.3	 	Within forty (40) days of receipt of each Beta Release by LGS,
LGS shall test the Beta Release and report any bugs or
non-compliance with the Specification to ARM. If any bugs or
non-compliance are reported, ARM shall revise the Beta Release
accordingly and resubmit it to LGS within twenty (20) days of
receipt of the non-compliance report regarding the Beta Release.
This process shall be repeated until the Beta Release is approved
by LGS, provided, however, that the total period of time for such
repeat shall be limited to eighty (80) days. It LGS fails to test
a Beta Release and deliver a report of non-compliance to ARM
within forty (40) days of receipt of the Beta Release, then such
Beta Release shall be deemed to be accepted by LGS.
	 
	4.4	 	Within forty (40) days of receipt of the Final Release by LGS,
LGS shall provide written confirmation of approval of the Final
Release to ARM. If any bugs or

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	 	 	non-compliance are reported. ARM shall revise the Final
Release accordingly and resubmit it to LGS within twenty (20) days
of receipt of the non-compliance report regarding the Final
Release. This process shall be repeated until the Final Release is
approved by LGS, provided, however, that the total period of time
for such repeat shall be limited to sixty (60) days. If LGS fails
to-deliver confirmation of approval to ARM within forty (40) days
of receipt of the Final Release by LGS, then the Final Release
shall be deemed to be approved by LGS.
	 
	5.	 	Fees and Terms of Payment
	 
	5.1	 	In consideration of the licenses granted by ARM, to LGS, for the
ARM7201TDSP Device, the ARM720T Core, the Piccolo Core, the
Software and other ARM Deliverables and the Win CE Consortium
rights set out in Schedule 12, LGS shall pay to ARM; (i) a tee
(Technology Fee”) of [*****] in accordance with the provisions of
Schedule 7 allocated as follows;

	 	 	 	 	 
	ARM7201TDSP Device, ARM720T Core,
	 	 	 	 
	Win CE Consortium rights set out in Schedule 12 and Software
	 	 	[*****]	 
	Piccolo Core with WinCE Device
	 	 	[*****]	 
	Piccolo Core with any integrated circuit
	 	 	[*****]	 

and (ii) Running Royalties in accordance with the provisions of Clause 5.

	5.2	 	LGS shall pay, to ARM, all reasonable travelling accommodation
and sustenance expenses necessarily incurred by ARM when visiting
LGS, or LGS agent’s premises in performance of ARM’s obligations
under this Agreement.
	 
	5.3	 	For each unit of ARM Compliant Product incorporating an ARM720T
Core or a Modified ARM720T Core sold, supplied or distributed by
LGS, LGS shall pay a royalty (“Running Royalty”) in accordance
with the Running Royalty table set out in Schedule 6.
	 
	5.4	 	For each unit of ARM Compliant Product or other integrated
circuit which incorporates a Piccolo Core sold, supplied or
distributed by LGS, LGS shall pay a royalty (“Running Royalty”)
calculated in accordance with the Running Royalty Rate tables set
out in Schedule 6.
	 
	5.5	 	LGS shall pay the fees, to ARM, in accordance with the provisions of this Clause 5.
	 
	5.6	 	Reporting and payment any Running Royalties shall be submitted to
ARM, by LGS, in accordance with the terms set out in Schedule 6
of the 1996 Agreement.
	 
	5.7	 	The Element of the Technology Fee due in respect of the Win CE
Consortium rights shall be due as follows;

	 	 	 	 	 
	On the Effective Date
	 	 	[*****]	 
	On availability of Beta of Tools Port from Microsoft (ARMv4 version only)
	 	 	[*****]	 

 

			
	[*****]	 -	Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

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	On Release To Manufacturing by Microsoft of OAK
for ARM (ARMv4 version only) Birch Version
	 	 	[*****]	 
	On Release To Manufacturing by Microsoft of the
Windows CE Port for ARM (ARMv4 version only)
Birch version
	 	 	[*****]	 

The balance of the Technology Fee shall be due under this Agreement in accordance with
the payment schedule set out in Schedule 7.

	5.8	 	In consideration of the Support and Maintenance Services provided
by ARM, to ARM Partner, under Schedule 12, for a period of two
(2) years from the Effective Date, ARM Partner shall pay to ARM,
in advance, an annual fee (“Maintenance Fee”) of [*****]. The
Maintenance Fee for the first year following the Effective Date
shall be deemed included within the Consortium Fee. The
Maintenance Fee for the second year following the Effective Date
shall be due upon the anniversary of the Effective Date.
	 
	 
	5.9	 	In consideration of the Development Services provided by ARM, to
ARM Partner, under Schedule 12, for the period of two (2) years
ending on the 30th June 1999, ARM Partner shall
pay to ARM an annual development services fee (“Development
Fee”). The Development Fee for the first year following the
Effective Date shall be [*****] and shall be deemed included
within the Consortium Fee. The Development Fee for the second
year following the Effective Date shall be due in accordance with
the provisions of Clause 5.10 and shall be determined by
reference to the number of Members on the anniversary of the
Effective Date as follows:

	 	 	 	 	 
	Number of Members	 	Development Fee (US$)
	1 - 2
	 	 	[*****]	 
	3
	 	 	[*****]	 
	4
	 	 	[*****]	 
	5 and above
	 	 	[*****]	 

	5.10	 	Fifty percent (50%) of the Development Fee for the second year
following the Effective Date shall be due on the first
anniversary of the Effective Date. If provision of the
Development Services is substantially procured by ARM by
payments to BSquare or any third party contractor, then the
balance of the Development Fee for the second year following the
Effective Date shall be due only when ARM makes such payments to
the third party. The amount of each installment due from ARM
Partner shall be the same proportion of the balance of the
Development Fee as the payment by ARM to the third party is a
proportion of ARM’s committed expenditure to the third party in
that period. If provision of the Development Services is not
substantially procured by ARM by payment to a third party, then
the Development Fee shall be due only where ARM can demonstrate
to ARM Partner a reasonable schedule for the availability of the
next version of the Tools Port and in such event the balance of
the Development Fee shall be due in four equal quarterly
installments with the first installment due on the first
anniversary of the Effective Date.
	 
	5.11	 	ARM warrants to ARM Partner that, for the period from the
30th June 1997 to 30th
June 2000 (the “Initial Period”), the Consortium
Fee payable by any third party shall be one million
US dollars (US$1,000,000). If any more favourable rate is agreed
with any third party during the Initial Period, then ARM shall
refund, to ARM Partner, the difference between the Consortium
Fee and the more favourable rate payable by the third party.

 

			
	[*****]	  -	Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

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	5.12	 	ARM further warrants to ARM Partner that the Maintenance Fees and
Development Fees due in respect of the two (2) year period expiring
on the 30th June 1999 (the “Initial Support Period”), shall be the
same rates as set out in this Win CE Agreement for all Founder
Members (together with, after the expiry of the Initial Period,
Ordinary Members) subject always to the effect of the discount
schedule applicable in respect of the second year of this Win CE
Agreement as set forth in Clause 5.9 (the “Discount Schedule”). If
any more favourable rates are agreed with another Founder or Ordinary
Member during the Initial Support Period (other than where such more
favourable rate is obtained by virtue of the operation of the
Discount Schedule), then ARM shall refund, to ARM Partner, the
difference between the Maintenance Fee or Development Fee, as
appropriate, and the more favourable rate.
	 
	5.13	 	All sums due to ARM under this Agreement shall be paid net
thirty (30) days of receipt by ARM Partner of an invoice
therefor.
	 
	5.14	 	Any income or other tax which LGS is required by law to pay or
withhold on behalf of ARM with respect to any license fees
and/or royalties payable to ARM under this Agreement shall be
deducted from the amount of such of license fees and/or
royalties otherwise due, provided, however, that in regard to
any such deduction, LGS shall give to ARM such assistance as may
be necessary to enable or assist ARM to claim exemption
therefrom, or credit therefor, and shall upon request furnish to
ARM such certificates and other evidence of deduction and
payment thereof as ARM may properly require.
	 
	5.15	 	If any sum due under this Agreement is not paid within thirty
(30) days of receipt, by LGS, of an invoice therefor then,
without prejudice to ARM’s other rights and remedies, ARM
reserves the right to charge interest on such sum on a day to
day basis (as well after as before any judgement) from the date
that such sum became due to the date of payment at the rate of
two (2) per cent per annum above the base rate of Barclays Bank
PLC from time to time in force.
	 
	6.	 	LGS Deliverables
	 
	6.1	 	LGS shall deliver the LGS deliverables, to ARM, in accordance
with the delivery schedule set out in Schedule 8 Part B.
	 
	6.2	 	If LGS fails to deliver the LGS Deliverables in accordance with
the delivery schedule set out in Schedule 8 Part B and such
failure prevents ARM from meeting any of its obligations under
Clause 3.1, ARM shall be permitted to extend any relevant
dependent dates in the Delivery Schedule for such period as is
reasonable.
	 
	6.3	 	To the extent that it does not result in a disclosure of
Confidential Information or a breach of LGS’s or any third party
Intellectual Property, nothing in this Agreement shall be
construed to prevent ARM from using, in furtherance of ARM’s
normal business, ideas and know-how gained during the performance
of the ARM Services and development of the ARM Deliverables and
Software.
	 
	7.	 	Provision of LGS Services
	 
	7.1	 	For the duration of this Agreement LGS shall provide the LGS Services, as required by ARM.
	 
	7.2	 	LGS shall apply reasonable skill and care in the provision of the LGS Services to ARM.

10

 

	7.3	 	ARM shall provide, to LGS, all necessary accurate information, support
and cooperation that may be reasonably required to enable LGS to
provide the LGS Services to ARM.
	 
	8.	 	Intellectual Property and Licences
	 
	 	 	General
	 
	8.1	 	Except as set out in this Agreement, all right, title and
interest in any Intellectual Property in any or all of the ARM
Deliverables and ARM Software shall vest in and be owned by ARM.
	 
	 	 	ARM720T Core Licence
	 
	8.2	 	Except to the extent that such terms and conditions have been
varied by the terms of this Agreement, ARM hereby grants to LGS a
licence, in respect of the ARM720T Core, the Modified ARM720T
Core and/or the ARM720T Core Transfer Materials, upon the terms
and conditions set out in Clause 2 of the 1996 Agreement (mutatis
mutandis) in respect of the ARM7TDMI Core, the Modified ARM7TDMI
Core and the ARM7TDMI Core Transfer Materials.
	 
	 	 	ARM Software Licence
	 
	8.3	 	Except to the extent that such terms and conditions have been
varied by the terms of this Agreement, ARM hereby grants to LGS a
licence, in respect of the ARM Software, upon the terms and
conditions set out in the 1996 Agreement (mutatis mutandis) in
respect of the Models, Embedded ICE, PID7T, Configurable Device
Programs, and Verification and Test as defined in the 1996
Agreement except that LGS shall also have the right to modify the
ARM Software and the rights granted under the 1996 Agreement
shall apply mutatis mutandis to any modified ARM Software
developed by LGS by exercising such right.
	 
	 	 	Piccolo Core Licence
	 
	8.4	 	In consideration of the payment in accordance with the provisions
set out in Schedule 7 in respect of the Piccolo Core, ARM hereby
grants to, LGS, subject to the terms and conditions of the 1996
Agreement mutatis mutandis a non-transferable, non-exclusive,
world-wide licence, with the right to sub-license to LGS’s
Subsidiary, to use, modify (subject to the provisions of Clauses
2.2 and 2.3 of the 1996 Agreement mutatis mutandis) and copy the
Piccolo Core and/or the Piccolo Transfer Materials for the
purposes of creating, developing, having developed,
manufacturing, having manufactured (subject to the provisions of
Clauses 2.4 and 2.5 of the 1996 Agreement mutatis mutandis), and
selling, supplying and distributing to any third party, ARM
Compliant Products or any other semiconductor products.
	 
	 	 	Software Modem Licence
	 
	8.5	 	In the event that ARM owns or has secured the right from a third
party to sub-licence, a 56K6bps software modem, ARM shall not
unreasonably withhold a licence, to LGS, in respect of such
56K6bps software modem on usual commercial terms.

11

 

	 	 	Software Licence
	 
	8.6	 	LGS hereby acknowledges and represents that ARM has advised LGS
that an OEM Agreement with Microsoft is necessary in order to
obtain license rights to the Microsoft WinCE software and that
LGS’s intended customers should communicate with Microsoft
concerning such a proposed license agreement prior to signature
of this Agreement.
	 
	8.7	 	ARM shall use reasonable efforts to secure the rights from
Microsoft, subject to Microsoft’s rights and interests in the
Device Driver Software to sub-license, to Recipient the
non-exclusive, non-transferable, worldwide right under ARM’s
Intellectual Property, to copy, use, modify, sell, supply and
distribute the Device Driver Software in conjunction with
software licensed from Microsoft. ARM shall use reasonable
efforts to assist LGS in entering into a Microsoft Windows CE
Development and Testing Agreement (or its equivalent) with
Microsoft.

	8.8	 	ARM shall use reasonable efforts to secure the rights from
Microsoft, subject to Microsoft’s rights and interests in the OAL
Software to sub-license, to Recipient, the non-exclusive,
non-transferable, worldwide right under Intellectual Property
jointly owned by ARM and Microsoft, to copy, use, modify, sell,
supply and distribute the OAL Software in conjunction with
software licensed from Microsoft. ARM shall use reasonable
efforts to assist LGS in entering into a Microsoft Windows CE
Development and Testing Agreement (or its equivalent) with
Microsoft.
	 
	 	 	ARM7201TDSP Device Licence
	 
	8.9	 	Except to the extent that such terms and conditions are varied by
the terms and conditions of this Agreement, the ARM7201TDSP
Device shall be deemed to be an ARM Compliant Product and the
terms of the 1996 Agreement shall apply accordingly.
	 
	8.10	 	ARM hereby grants, to LGS, under ARM’s Intellectual Property, a
worldwide, non-exclusive, perpetual (subject to termination in
accordance with the provisions of Clause 13), non-transferable,
licence to use, modify (subject to the provisions of Clause 2.2
of the 1996 Agreement in respect of the ARM720T Core and Piccolo
Core), have modified (subject to the provisions of Clause 2.4 of
the 1996 Agreement mutatis mutandis and the provisions of Clause
2.2 of the 1996 Agreement mutatis mutandis in respect of the
ARM720T Core and Piccolo Core), design, have designed (subject
to the provisions of Clause 2.4 of the 1996 Agreement mutatis
mutandis and the provisions of Clause 2.2 of the 1996 Agreement
mutatis mutandis in respect of the ARM720T Core and Piccolo
Core) and copy the ARM7201TDSP Transfer Materials for the
purpose of exercising the licence granted below;
	 
	 	 	ARM hereby grants to LGS under ARM’s Intellectual Property a worldwide, exclusive,
perpetual (subject to termination in accordance with the provisions of Clause 13),
transferable licence to use, modify (subject to the provisions of Clause 2.2 of the 1996
Agreement mutatis mutandis in respect of the ARM720T Core and Piccolo Core), have modified
(subject to the provisions of Clause 2.4 of the 1996 Agreement mutatis mutandis and the
provisions of Clause 2.2 of the 1996 Agreement mutatis mutandis in respect of the ARM720T Core
and Piccolo Core) copy, manufacture, have manufactured (subject to the provisions of Clause
2.4 of the 1996 Agreement) sell, supply and distribute to third parties the ARM7201TDSP Device
and any derivative of the ARM7201TDSP Device created under the licences granted in this
Clause.

12

 

	 	 	Other ARM Deliverables Licence
	 
	8.11	 	ARM shall, under ARM’s Intellectual Property, grants to LGS a
worldwide, non-exclusive, non-transferable, paid-up and
perpetual license, with the right to sub-license to LGS’s
Subsidiary, to use, modify, design, have designed and copy the
peripheral circuits incorporated in the ARM7201TDSP Device for
the purpose of creating, developing, having developed,
manufacturing, having manufactured, and selling, supplying and
distributing to any third party, ARM Compliant Products and/or
any semiconductor product which incorporates the peripheral
circuits incorporated in the ARM7201TDSP Device.
	 
	 	 	LG Affiliates’s Licence
	 
	8.12	 	LGS may exercise the right to include any LG Affiliate as a licencee of ARM provided that:

	 	(i)	 	such LG Affiliate agrees in writing to be bound by
the obligations of LGS and to comply with all the
terms and conditions of this Agreement. LGS shall
deliver to ARM a copy of the LG Affiliate’s
undertaking within thirty (30) days of the execution
of such undertaking;
	 
	 	(ii)	 	any breach of the terms and conditions of this
Agreement by a LG Affiliate shall constitute a
breach of this Agreement by LGS;
	 
	 	(iii)	 	any termination of this Agreement shall be effective in respect of all LG Affiliates.

	 
	 	 	LGS Deliverables Licence
	 
	8.13	 	All right, title and interest in any intellectual property in
the LGS Deliverables shall vest in and be owned by LGS.
	 
	8.14	 	LGS hereby grants, to ARM, a non-exclusive licence to use, copy
and modify LGS Deliverables solely for the purpose of developing
the ARM7201TDSP Device.
	 
	9.	 	Confidentiality
	 
	9.1	 	During the course of this development, ARM and LGS may exchange
information which is of a secret or confidential nature and which
is neither already known to the recipient nor in the public
domain either at the time of disclosure or subsequently through
no fault of the recipient (the “Confidential Information”). ARM
Confidential Information shall include but shall not be limited
to; (i) the source code for the Software; and (ii) all underlying
ideas, principles and information derived by LGS from observing,
studying and testing the functioning of the Software. The party
receiving Confidential Information hereunder (the “Recipient”)
shall use the same standard of care, but in any event no less
than a reasonable standard of care, to prevent the unauthorised
use, dissemination or publication of such Confidential
Information, as it uses to protect its own confidential
information of a similar nature.
	 
	9.2	 	The Recipient is hereby authorised to disclose such of the
Confidential Information to third party sub-contractors or
consultants as is necessary for the performance by the
sub-contractor or consultant of any of the work under this
Agreement that is assigned to it provided always that any such
subcontractor or consultant is bound by provisions of
confidentiality no less stringent than those provided by Clause
9.1.
	 
	9.3	 	Except as provided by this Agreement the Recipient shall not
commercially exploit nor permit others to commercially exploit
any Confidential Information.

13

 

	9.4	 	Except with the other party’s express prior written consent (which
shall not be unreasonably withheld), neither party shall make any
press announcements or publicise the contents or existence of this
Agreement in any way.
	 
	10.	 	ARM Warranties and Indemnities
	 
	10.1	 	Except as expressly provided in this Agreement, the ARM720T Core
Transfer Materials, ARM7201TDSP Transfer Materials, Piccolo Core
Transfer Materials and Software are supplied “as is” and ARM
makes no representations and gives no warranties express,
implied or statutory, including, without limitation, the implied
warranties of satisfactory quality or fitness for a particular
purpose in respect thereof.
	 
	10.2	 	ARM warrants that; (i) the ARM7201TDSP Transfer Materials shall
be consistent and sufficient for a competent semiconductor
manufacturer to fabricate the ARM7201TDSP Device which conforms
to the device specification approved by LGS in accordance with
the Clause 3.2 and 3.3; (ii) the ARM720T Core Transfer Materials
shall be consistent and sufficient for a competent semiconductor
manufacturer to fabricate the ARM720T Core which conforms to the
functionality specified in the ARM Datasheet Doc. No. ARM DDI
(00XX); and (iii) the Piccolo Core Transfer Materials shall be
consistent and sufficient for a competent semiconductor
manufacturer to fabricate the Piccolo Core which conforms to the
functionality specified in the ARM Datasheet Doc. No. ARM DDI
0089. LGS sole and exclusive remedy for any breach of this
warranty shall be for ARM to correct any errors in the ARM
Deliverables and deliver such corrected deliverables to LGS.
	 
	10.3	 	ARM does not warrant the adequacy of any device specification,
approved by LGS, with respect to LGS intended use and ARM shall
not be responsible for the circuit performance of the
ARM7201TDSP Device in LGS intended application.
	 
	10.4	 	ARM shall not be liable for any;

	 	(i)	 	recoverable or non-recoverable costs incurred,
directly or indirectly, in the processing, or
manufacture of masks and prototypes, characterisation
or manufacture of production quality silicon in
whatever quantity; or
	 
	 	(ii)	 	defect in the ARM7201TDSP Device caused by a fault
in the LGS or LGS agent’s manufacturing process.

	10.5	 	After the period of sixty (60) days following approval of the
prototypes of the ARM7201 Device in accordance with the
provisions of Clause 3.6, ARM shall not be liable for any
changes necessary to any layout.
	 
	10.6	 	LGS acknowledges that the Software cannot be tested in every
possible operation, and accordingly ARM does not warrant that
the Software will be free from all defects or that there will be
no interruption in its use. ARM warrants for the period of
twelve (12) months from the delivery of the Software to LGS that
the Software will be complete and exhibit the functionality
described in the Specification. LGS’s sole and exclusive remedy
for any breach of the warranty in this Clause 10.6 shall be for
ARM, as soon as is reasonably practicable, to correct any errors
in the Software and deliver such corrected Software to LGS.

14

 

	10.7	 	ARM warrants, to LGS, that;

	 	(i)	 	to ARM’s knowledge (but expressly without having
undertaken any searches for prior art) the
Intellectual Property in the ARM720T Core Transfer
Materials, ARM7201TDSP Transfer Materials, Piccolo
Core Transfer Materials and Software does not
infringe any third party copyright, design right,
registered design right, trade secret or maskwork
right; and
	 
	 	(ii)	 	as at the date of entering into this Agreement, ARM
has not received written notice of any claim, and no
actions have been commenced or threatened, against
ARM for infringement of any third party Intellectual
Property; and
	 
	 	(iii)	 	ARM has the right to enter into this Agreement.

	10.8	 	If any part of the ARM720T Core Transfer Materials, ARM7201TDSP
Transfer Materials, Piccolo Core Transfer Materials and Software
becomes the subject of a claim brought against LGS on the issue
of infringement of the Intellectual Property of any third party
or if the use or licensing of any part of the ARM720T Core
Transfer Materials, ARM7201TDSP Transfer Materials, Piccolo Core
Transfer Materials and Software is restricted in any way, then
ARM at its option and expense may;

	 	(i)	 	obtain for LGS the right to continue to use the
ARM720T Core Transfer Materials, ARM7201TDSP Transfer
Materials, Piccolo Core Transfer Materials and
Software;
	 
	 	(ii)	 	replace or modify the ARM720T Core Transfer
Materials, ARM7201TDSP Transfer Materials, Piccolo
Core Transfer Materials and Software so that they
become non-infringing; or
	 
	 	(iii)	 	offer reasonable compensation to LGS for the direct
loss suffered by LGS up to a maximum of all sums
paid by LGS to ARM under this Agreement.

ARM shall have no liability under this Clause it the alleged infringement results from;

	 	(a)	 	compliance with the LGS requirement specification or
the Specification, as the case may be, and such
alleged infringement is unavoidable in providing such
compliance;
	 
	 	(b)	 	the combination, use or operation of the ARM720T Core
Transfer Materials, ARM7201TDSP Transfer Materials,
Piccolo Core Transfer Materials and Software in
connection or combination with any equipment, device
or software not developed and supplied by ARM and
such alleged infringement would have been avoided in
the absence of such combination; or
	 
	 	(c)	 	the modification of the ARM720T Core Transfer
Materials, ARM7201TDSP Transfer Materials, Piccolo
Core Transfer Materials and Software by the LGS or
any third party unless the modification was made or
approved by ARM,
	 
	 	(d)	 	infringement by any manufacturing process applied to
the ARM720T Core Transfer Materials, ARM7201TDSP
Transfer Materials, Piccolo Core Transfer Materials
and Software.

	10.9	 	The foregoing states the entire liability of ARM for
infringement by the Intellectual Property in the ARM
Deliverables and Software, of third party Intellectual Property.

15

 

	11.	 	LGS Warranties and Indemnities
	 
	11.1	 	LGS warrants, to ARM, that;

	 	(i)	 	to LGS knowledge (but expressly without having
undertaken any searches for prior art), the
Intellectual Property in the LGS Deliverables does
not infringe any third party copyright, design right,
registered design right, maskwork right, or trade
secret; and
	 
	 	(ii)	 	LGS has the right to enter into this Agreement.

	11.2	 	If compliance, by ARM, with LGS designs, specifications or
instructions, or use, by ARM, of Intellectual Property received
from LGS or LGS agent, results in ARM being subject to a claim
for infringement of any Intellectual Property of a third party,
LGS, at its option and expense, may;

	 	(i)	 	obtain for ARM the right to continue to use the LGS Deliverables;
	 
	 	(ii)	 	replace or modify the LGS Deliverables so that they become non-infringing; or
	 
	 	(iii)	 	offer reasonable compensation to ARM for the direct
loss suffered by ARM up to a maximum of all sums
paid by LGS to ARM under this Agreement.

	11.3	 	The foregoing states the entire liability of LGS for
infringement by the Intellectual Property in the LGS
Deliverables, of third party Intellectual Property.
	 
	12.	 	Limitation of Liability
	 
	12.1	 	IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER THE AGREEMENT FOR
ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
WHETHER SUCH DAMAGES ARE ALLEGED AS A RESULT OF TORTIOUS CONDUCT
OR BREACH OF CONTRACT OR OTHERWISE EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SUCH DAMAGES
SHALL INCLUDE BUT SHALL NOT BE LIMITED TO THE COST OF REMOVAL
AND REINSTALLATION OF GOODS, LOSS OF GOODWILL, LOSS OF PROFITS,
LOSS OR USE OF DATA, INTERRUPTION OF BUSINESS OR OTHER ECONOMIC
LOSS BUT NOTHING IN THIS CLAUSE SHALL OPERATE TO EXCLUDE
LIABILITY FOR DEATH OR PERSONAL INJURY RESULTING FROM EITHER
PARTY’S NEGLIGENCE.
	 
	12.2	 	EACH PARTY’S LIABILITY FOR THE AGGREGATE OF ALL CLAIMS IN ANY
WAY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL
NOT EXCEED THE SUM OF ALL FEES PAID TO ARM BY LGS UNDER THE
PROVISIONS OF THIS AGREEMENT.
	 
	13.	 	Term and Termination
	 
	13.1	 	This Agreement shall commence on the Effective Date and shall
continue in force until termination in accordance with the
provisions of Clause 13.2.
	 
	13.2	 	Without prejudice to any other right or remedy which may be
available to it and except as provided to the contrary elsewhere
in this Agreement, either party shall be entitled summarily to
terminate this Agreement by giving written notice to the other;

	 	(i)	 	If the other party has committed a material breach of
any of its obligations hereunder which is not capable
of remedy; or

16

 

	 	(ii)	 	if the other party has committed a material breach
of any of its obligations hereunder which is capable
of remedy but which has not been remedied within a
period of thirty (30) days following receipt of
written notice to do so; or
	 
	 	(iii)	 	if the other party makes any voluntary arrangement
with its creditors or becomes subject to an
administration order; or
	 
	 	(iv)	 	if the other party has an order made against it, or
passes a resolution, for its winding-up (except for
the purpose of bona fide solvent amalgamation or
reconstruction) or has an encumbrancer take
possession or has a receiver or similar officer
appointed over a material part of its property or
assets.

	13.3	 	LGS and ARM acknowledge that each and every term and condition
of this Agreement has been fully and completely negotiated and
such terms and conditions closely related to each other. In the
event that the Korean Governmental authorities, including the
Korean Fair Trade Commission, during the review of this
Agreement require a modification to one or more of the clauses
of this Agreement, ARM shall have the option to renegotiate the
entire Agreement or accept the applicable modification of the
Agreement as required by such governmental authorities.
	 
	14.	 	Effect of Termination
	 
	14.1	 	Upon termination of this Agreement by ARM In accordance with the
provisions of Clause 13.2, the license and rights granted by ARM
to LGS hereunder shall terminate. LGS shall, at ARM’s option,
either destroy or return to ARM any Confidential Information,
including any copies thereof and any ARM Deliverables in LGS’s
possession. Within one month after termination of this Agreement
in accordance with this Clause 14.1, LGS will furnish to ARM a
certificate signed by a duly authorised officer of LGS that to
the best of his or her knowledge, information and belief, LGS
has complied with provisions of this Clause.
	 
	14.2	 	Upon termination of this Agreement, by LGS under the provisions
of Clause 13.2; (i) the rights granted to LGS under Clause 8
(except the licence granted under Clause 8.4) shall survive such
termination; (ii) LGS shall be entitled to retain any ARM
Deliverables delivered by ARM to LGS prior to such termination;
and (iii) ARM shall deliver any then partially completed ARM
Deliverables to LGS. The licence granted under Clause 8.4 shall
survive only in respect of any semiconductor product which is
already under development by LGS at the date of termination
under the provisions of this Clause and the survival of such
licence shall be subject to a continuing obligation for LGS to
pay the appropriate fee in the event that such product is the
subject of a Design Win Event.
	 
	14.3	 	The provisions of Clauses 1, 5 (to the extent that any payment
has accrued and is outstanding) 8, 9, 10, 11, 12, 13, 14 and
Schedule 12 shall survive termination of this Agreement.

17

 

	15.	 	General

	 	 	 
	Notices

	 	All notices which are required to be
given hereunder shall be in writing and
shall be sent to the address of the
recipient set out in this Agreement or such
other address as the recipient may designate
by notice given in accordance with the
provisions of this Clause. Any such notice
may be delivered personally, by commercial
overnight courier, or facsimile transmission
which shall be followed by a hard copy and
shall be deemed to have been served if by
hand when delivered, if by commercial
overnight courier 48 hours after deposit
with such courier, and it by facsimile
transmission when transmitted.
	 
	 	 
	Assignment

	 	Neither party shall assign or otherwise
transfer this Agreement or any of its rights
and obligations hereunder whether in whole
or in part without the prior written consent
of the other, such consent not to be
unreasonably withheld.
	 
	 	 
	Non-association

	 	ARM and LGS are independent parties.
Neither party’s company nor their employees,
consultants, contractors or agents, are
agents, employees or joint venturers of the
other party, nor do they have the authority
to bind the other party by contract or
otherwise to any obligation. Neither party
shall represent to the contrary, either
expressly, or implicitly.
	 
	 	 
	Waiver

	 	Failure by either party to enforce any
provision of this Agreement shall not be
deemed a waiver of the right to enforce that
or any other provision in the future.
	 
	 	 
	Force Majeure

	 	ARM shall not be liable to LGS for any
delay in or failure to perform its
obligations under this Agreement as a result
of any cause beyond ARM’s reasonable
control, including but not limited to any
industrial dispute or failure by a supplier
to deliver a relevant deliverable to ARM on
time. If such delay continues for a period
of more than ninety (90) days, then either
party shall be entitled to terminate this
Agreement by written notice and the
provisions of Clause 14.2 shall apply.
	 
	 	 
	Entire Agreement

	 	These terms and conditions apply in
preference to and supersede any terms and
conditions referred to, offered or relied
upon by LGS whether in negotiation or at any
stage in the dealings between ARM and LGS
with reference to this Agreement. Without
prejudice to the generality of the
foregoing, ARM will not be bound by any
standard or printed terms and conditions
furnished by LGS in any of its documents. No
amendment to, or modification of, this
Agreement shall be binding unless in writing
and signed by a duly authorised
representative of both parties.
	 
	 	 
	Severance

	 	If any provision of this contract is
held invalid, illegal or unenforceable for
any reason by any court of competent
jurisdiction such provision shall be severed
and the remainder of the provisions shall
continue in full force and effect as if this
Agreement had been executed with the invalid
provisions eliminated. In the event of a
holding of invalidity so fundamental as to
prevent the accomplishment of the purpose of
this Agreement, ARM and LGS shall
immediately commence good faith negotiations
to remedy such invalidity.
	 
	 	 
	English Law

	 	This Agreement shall be considered as a
contract made in England and according to
English Law. In the event that ARM commences
proceedings against LGS under this
Agreement, the parties agree to submit to
the jurisdiction of the Seoul District
Court, Korea, for the purpose of hearing and
determining

18

 

	 	 	 
	 

	 	any disputes arising out of this Agreement. In the event that
LGS commence proceedings against ARM under this Agreement, the
parties agree to submit to the jurisdiction of the High Court of
Justice, London, England, for the purpose of hearing and
determining any disputes arising out of this Agreement.

IN WITNESS WHEREOF the parties have caused this Agreement to be signed by their duly
authorised representative:

	 	 	 	 	 	 	 	 	 	 	 
	ADVANCED RISC MACHINES LIMITED	 	 	 	LG SEMICON CO., LIMITED	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BY:

	 	/s/ R.K.Saxby
	 	 	 	BY:
	 	/s/ B. D. Sun	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	NAME:

	 	R.K.Saxby
	 	 	 	NAME:
	 	Sun Byung-Don	 	 
	TITLE:

	 	President & Ceo
	 	 	 	TITLE:
	 	Executive Vice Presidentexv10w12

Exhibit 10.12

TECHNOLOGY LICENCE AGREEMENT

between

ADVANCED RISC MACHINES LIMITED

and

LG SEMICON COMPANY LIMITED

dated

5th OCTOBER 1995

 

 

			
	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

	 	 	 
	 

	 	This Technology Licence Agreement (the “Agreement”) is made the 5th day of October
1995
	 
	 	 
	 

	 	BETWEEN
	 
	 	 
	 

	 	ADVANCED RISC MACHINES LIMITED whose registered office is situated at
Fulbourn Road, Cherry Hinton, Cambridge CB1 4JN, England (“ARM”)
	 
	 	 
	 

	 	and.
	 
	 	 
	 

	 	LG SEMICON COMPANY LIMITED whose principal place of business is situated at 16
Woomyeon-dong, Seocho-gu, Seoul 137-140, Korea (“LGS”)
	 
	 	 
	 

	 	WHEREAS
	 
	 	 
	 

	 	ARM is the owner of certain Intellectual Property, Intellectual Property Derivatives and the
know-how to manufacture the ARM Cores, AMBA and the Peripherals as such terms are
defined below.
	 
	 	 
	 

	 	LGS has requested ARM, and ARM has agreed, to license LGS to manufacture and distribute certain ARM products and thereby to make use of certain portions of the
Intellectual Property and Intellectual Property Derivatives as set forth in this Agreement.
	 
	 	 
	 

	 	Therefore, in consideration of the mutual representations, warranties, covenants, and other
terms and conditions contained herein, the parties agree as follows:
	 
	 	 
	1.

	 	Definitions
	 
	 	 
	1.1

	 	“ARM Compliant Product” shall mean any single silicon chip developed by LGS which:
	 
	 	 
	 

	 	(i) contains, at a minimum, an ARM Core or Modified ARM Core; and
	 
	 	 
	 

	 	(ii) implements an ARM Core or Modified ARM Core which has been verified in
accordance with the provisions of Clause 3.
	 
	 	 
	1.2

	 	“ARM7 Core” shall mean the device as described and identified in the ARM7 datasheet:
	 

	 	ARM DDI-0020C.
	 
	 	 
	1.3

	 	“ARM7l0a Core” shall mean the device as described and identified in the ARM710a
Macrocell datasheet: ARM DDI — 0033C.
	 
	 	 
	1.4

	 	“ARM Core(s)” shall mean, jointly and severally where the context admits, the ARM7 and
ARM710a Cores.
	 
	 	 
	1.5

	 	“ARM Instruction Set” shall mean the instruction set as defined in the ARM7 datasheet
	 
	 	 
	1.6

	 	“Authorized Distributor” shall mean those distributors appointed, in writing, by LGS.
	 
	 	 
	1.7

	 	“Confidential Information” shall mean: (i) any trade secrets relating to the ARM Cores and
Transfer Materials (ii) any information designated in writing by either party as
confidential which if disclosed verbally is reduced to writing within thirty (30) days after its oral
disclosure; and (iii) the terms and conditions of this Agreement
	 
	 	 

ARM/LGS
Confidential

Page 1

 

	 	 	 
	1.8

	 	“Effective Date” shall mean the date of this Agreement or the date upon which the Korean
Government gives approval to this Agreement, whichever is the later, subject always to the
provisions of Clause 18.4.
	 
	 	 
	1.9

	 	“End User Licence” shall mean a licence agreement substantially conforming to that
agreement set forth in Schedule 9.
	 
	 	 
	1.10

	 	“Half Year” shall mean each calendar half year ending the 30th June and 31st December of
any year.
	 
	 	 
	1.11

	 	“HP” shall mean any Hewlett Packard compatible computer running HP-UX v9.0.3 (and later
versions as may be mutually agreed).
	 
	 	 
	1.12

	 	“IBM PC” shall mean any computer, 486 (or above) processor based IBM AT architecture,
having, at a minimum, 16Mb RAM, 10Mb hard disc space and running Microsoft DOS v6.2
(and later versions as may be mutually agreed) and, where appropriate, Microsoft Windows
v3.11, Windows 95 or Windows NT. ARM will use reasonable endeavours, in collaboration
with LGS, to ensure the Software operates on reputable IBM PC compatible computers
provided that such operation is not constrained by significant hardware or software
deficiencies.
	 
	 	 
	1.13

	 	“Intellectual Property” shall mean any patents, patent rights, trade marks, service marks,
registered designs, topography or semiconductor maskwork rights, applications for any of the
foregoing, copyright, know-how, unregistered design right, confidential information, any
Intellectual Property Derivatives, and any other similar protected rights in any country,
which
are taken into use in the design, use or production of ARM Cores, AMBA, Peripherals,
Software or Transfer Materials.
	 
	 	 
	1.14

	 	“Intellectual Property Derivatives” shall include: (i) for copyrightable or copyrighted
material, any translation, abridgement, revision or other form in which an existing work may
be recast, transformed or adapted; (ii) for work protected by topography or mask right, any
translation, abridgement, revision or other form in which an existing work may be recast,
transformed or adapted; (iii) for patentable or patented material, any improvement created by
ARM; and (iv) for material protected by trade secret any new material derived from or
employing such existing trade secret.
	 
	 	 
	1.15

	 	“LG Affiliate” shall mean each of the companies set forth in Schedule 13.
	 
	 	 
	1.16

	 	“LG Group Company” shall mean each of the companies identified in Schedule 10.
	 
	 	 
	1.17

	 	“LGS Users” shall mean LGS (or any LG Group Company) when incorporating an ARM
Compliant Product, distributed pursuant to this Agreement, for use in LGS’s (or such LG
Group Company’s) end user products.
	 
	 	 
	1.18

	 	“LGS Materials” shall mean such of the Transfer Materials (or any additional materials) as
are necessary to enable ARM, in respect of any Modified ARM Core and modified
Peripheral, to exercise the rights set forth in Clause 2.3.
	 
	 	 
	1.19

	 	“Models” shall mean the source code and object code of the programs described in Schedule
4 together with such Updates, if any, as are developed by or for ARM.
	 
	 	 
	1.20

	 	“Modified ARM Core” shall mean any ARM Core modified in accordance with the
provisions of Clause 2.2.
	 
	 	 
	1.21

	 	“NSP” shall mean the net sales price of any ARM Compliant Product calculated by taking
the aggregate invoice price charged on arm’s length terms by LGS and its Subsidiaries in the
sale or distribution of any ARM Compliant Product, less any (i) value added, turnover,
import, or other tax, duty or tariff payable thereon (ii) freight and insurance costs incurred

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	 	and (iii) amounts actually repaid or credited with respect to any ARM Compliant Products
returned.
	 
	 	 
	 

	 	In the event that ARM, in its discretion, considers that the NSP for any ARM Compliant
Product charged to LGS Users is materially below the open market value for such ARM
Compliant Product, the NSP shall be deemed to be: in the case of the sale or distribution of
any ARM Compliant Product to LGS Users, the net sales price for such ARM Compliant
Product sold by LGS to third parties; and in the case of the sale or distribution of ARM
Compliant Products manufactured for, and supplied solely to, LGS Users, at a minimum, the
sum of:
	 
	 	 
	 

	 	(i) the cost of materials and the cost of fabrication or such other processing of such ARM
Compliant Product; and
	 
	 	 
	 

	 	(ii) an amount for general expenses and profit equal to that usually reflected in the sales
to third parties of products of the same general class or kind as the ARM Compliant
Product; and
	 
	 	 
	 

	 	(iii) the cost of all packaging.
	 
	 	 
	1.22

	 	“Peripherals” shall mean the macrocells designs as each are described and identified in
Schedule 2.
	 
	 	 
	1.23

	 	“PIE Card” shall mean the device identified in the ARM7 PIE Card User Guide: ARM DUI -
0011B together with the Release Notes for the ARM710a PIE Card Kit.
	 
	 	 
	1.24

	 	“Software” shall mean together the Models, Tools and Test.
	 
	 	 
	1.25

	 	“Subsidiary” shall mean any company the majority of whose voting shares is now or
hereafter owned or controlled, directly or indirectly, by a party hereto or any company a
majority of whose voting shares is now or hereafter owned or controlled, directly or
indirectly, by any of the aforementioned entities. A company shall be considered a
Subsidiary only so long as such control exists.
	 
	 	 
	1.26

	 	“Sun/SPARC” shall mean
any Sun/SPARC compatible computer running SunOS v4.1.3_ul
(and later versions as may be mutually agreed).
	 
	 	 
	1.27

	 	“Test” shall mean the source code and object code of the programs described in Schedule 6
together with such Updates, if any, as are developed by or for ARM.
	 
	 	 
	1.28

	 	“Tools” shall mean the Sun/SPARC, IBM PC and HP versions of source code and object
code of the programs described in Schedule 5 together with such Updates, if any, as are
developed by or for ARM.
	 
	 	 
	1.29

	 	“Trademarks” shall mean the trademarks, service marks and logos set forth in Schedule 7.
	 
	 	 
	1.30

	 	“Transfer Materials” shall mean that technical information with respect to the ARM Cores,
AMBA and Peripherals as set forth in Schedule 3.
	 
	 	 
	1.31

	 	“Updates” shall mean any bug fixes or enhancements to the Software the incorporation of
which ARM, in its absolute discretion, decides does not cause to be created a new product.
	 
	 	 
	1.32

	 	“Use” shall mean copying the programs identified in Schedule 4 and Schedule 5 Part A onto
a computer for the purposes of processing the instructions or statements contained therein,
but excluding disassembly, reverse assembly, or reverse compiling except as permitted by
local legislation implementing Article 6 of the EC Software Directive and only to the extent
necessary to achieve interoperability of an independently created program with other

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	 	programs. Disassembly, reverse assembly, or reverse compiling for the purpose of error
correction is specifically prohibited.
	 
	 	 
	1.33

	 	“Validation Vectors” and “Functional Test Vectors” shall mean those test patterns identified
in Schedule 3 as items B7a, B7b, B9, D7a and D7b respectively.
	 
	 	 
	1.34

	 	“AMBA” shall mean ARM’s Advanced Module Bus Architecture as identified in the AMBA
Draft Specification, document reference ARM IHI-0001C, and any future version thereof
released by ARM.
	 
	 	 
	2.

	 	Licence

	 	 	 
	2.1

	 	ARM hereby grants to LGS, under ARM’s Intellectual Property rights, a perpetual (subject to Clause 18), non-transferable (subject to Clause 20.3), non-exclusive, world-wide right and licence to:
	 
	 	 
	 

	 	(i)    use, modify (subject to the provisions of Clauses 2.2 and 2.3) and copy the Transfer
Materials and/or any Intellectual Property solely for the purposes of creating,
developing, manufacturing, having manufactured (subject to the provisions of
Clauses 2.4 and 2.5), and selling, supplying and distributing to any third party
(subject to the provisions of Clause 2.6), ARM Compliant Products;

	 
	 	 
	 

	 	(ii)   use and copy the Transfer Materials and/or any Intellectual Property specific to
AMBA for the purposes of creating, developing, manufacturing, having manufactured
(subject to the provisions of Clauses 2.4 and 2.5), and selling, supplying and
distributing to any third party any product developed by LGS;

	 
	 	 
	 

	 	(iii)  modify, translate, reproduce and distribute, subject to the confidentiality obligations
set forth in Clause 14, the documentation identified in Schedule 3.

	 
	 	 
	2.2

	 	LGS may modify:
	 
	 	 
	 

	 	(i)    the internal logic of any ARM Core and/or Peripheral;

	 
	 	 
	 

	 	(ii)   the layout of any ARM Core and/or Peripheral where necessary for the purposes of
manufacturing such ARM Core or Peripheral on another CMOS process;

	 
	 	 
	 

	 	(iii)  the ARM710a Core (provided that ARM7 Core contained therein shall not be modified except as provided by (i) and (ii) above).

	 
	 	 
	 

	 	PROVIDED ALWAYS THAT the ARM7 Core retains compatibility with the ARM Instruction Set. A modified ARM Core will be deemed compatible provided that ARM7 Core contained therein (i) executes each and every instruction contained in the ARM7 Core’s Instruction Set; (ii) executes the instructions at an identical rate of clocks per instruction as the ARM7 Core from which it was derived; and (iii) runs the Validation Vectors and Functional Test Vectors.
	 
	 	 
	2.3

	 	LGS hereby grants to ARM, in respect of all modifications made to the ARM Cores and Peripherals
 (“Modifications”), a perpetual and irrevocable, royalty-free, non-transferable, non-exclusive, world-wide right
 and licence to manufacture, have manufactured, modify, create derivative works of, use, sell, supply and distribute all
Modifications and sub-license others to exercise similar rights with respect to such Modifications. In pursuance of the licence to all
Modifications hereby granted, LGS shall:
	 
	 	 
	 

	 	2.3.1
 prior to any prototype production of the first ARM Compliant Product including any
Modification, deliver to ARM, in writing, a full technical description of such
proposed Modification; and

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	 	2.3.2  within thirty (30) days of the first shipment of the first ARM Compliant Product
including any Modification, deliver to ARM the LGS Materials for such ARM
Compliant Product including the Modification.

	 
	 	 
	 

	 	For the avoidance of doubt, nothing in this Clause 2.3 shall be construed as granting to ARM
any right or licence to any peripheral devices owned by LGS which are integrated around the
ARM Core.
	 
	 	 
	2.4

	 	LGS may exercise its right to have manufactured ARM Compliant Products provided that:
	 
	 	 
	 

	 	(i)    LGS notifies ARM of the identity of LGS’s subcontracted manufacturer
(“Manufacturer”) not less than thirty (30) days prior to first prototype production by
the Manufacturer, and

	 
	 	 
	 

	 	(ii)   LGS ensures that any Manufacturer agrees (i) to be bound by the same obligations of
confidentiality as are contained in this Agreement and (ii) to supply the ARM
Compliant Products solely to LGS.

	 
	 	 
	 

	 	In the event that any Manufacturer breaches the provisions referred to in Clause 2.4, LGS
agrees that such breach shall be treated as a material breach of this Agreement by LGS which
is incapable of remedy. Further LGS hereby undertakes to keep ARM indemnified against all
and any loss, liability, costs, damages, expenses (including the fees of lawyers and other
professionals), suffered, incurred or sustained as a result of or in relation to such breach.
	 
	 	 
	 

	 	For the avoidance of doubt, in the event that LGS subcontracts only the packaging of ARM
Compliant Products to a third party, LGS shall be released from the obligations of this Clause
2.4.
	 
	 	 
	2.5

	 	In the event that LGS subcontracts the packaging of ARM Compliant Products, LGS shall
	 
	 

	 	(i)    ensure that the packaging company agrees to supply the ARM Compliant Products
solely to LGS; and

	 
	 

	 	(ii)   undertake to keep ARM indemnified against all and any loss, liability, costs,
damages, expenses (including the fees of lawyers and other professionals), suffered,
incurred or sustained as a result of or in relation to the breach of the provisions of
Clause 2.5(i).

	 
	2.6

	 	Notwithstanding anything to the contrary contained in this Agreement, for a period of fifteen
(15) calendar months from the Effective Date, LGS shall not sell, supply or distribute any
ARM Compliant Product to any third party other than a LGS User or ARM and/or its
Subsidiaries. In the event that any LG User distributes any ARM Compliant Product, other
than either (i) as a constituent part of LGS’s (or such LG Group Company’s) end user
products or (ii) to ARM and/or its Subsidiaries, within the period specified in this Clause
2.6,
LGS agrees that such use or distribution shall be treated as a material breach of this
Agreement by LGS which is incapable of remedy thus entitling ARM to summarily terminate
this Agreement in accordance with the provisions of Clause 18.2.
	 
	2.7

	 	For the avoidance of doubt, no right is granted to LGS to:
	 
	 

	 	(i)    sublicense the rights licensed to LGS pursuant to Clause 2.1;

	 
	 

	 	(ii)   distribute any ARM Compliant Product prior to verification in accordance with
Clause 3 except that in the event that it is the intention of LGS, and LGS do proceed,
to verify a device in accordance with Clause 3, LGS may distribute (subject always to
the provisions of Clause 2.6) a maximum of one hundred (100) prototype units of
such device without having verified such device.

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	2.8

	 	Save as licensed in Clause 2.1, LGS acquires no right, title or interest in and to the ARM
Cores, AMBA, Peripherals, Transfer Materials and Intellectual Property. In no event shall the
licence grant set forth in Clause 2.1 be construed as granting LGS, expressly or by
implication, estoppel or otherwise, a licence to use any ARM technology or intellectual
property other than that pertaining to the ARM Cores, AMBA and Peripherals.
	 
	 	 
	2.9

	 	During the term of this Agreement, LGS may exercise the right to include any Subsidiary as
a licenece of ARM provided that:
	 
	 	 
	 

	 	(i)    such Subsidiary agrees in writing, as set forth in Schedule 1, to be bound by the
obligations of LGS and to comply with all the terms and conditions of this
Agreement. LGS shall deliver to ARM a copy of the Subsidiary’s undertaking within
thirty (30) days of the execution of such undertaking;

	 
	 	 
	 

	 	(ii)  any breach of the terms and conditions of this Agreement by a Subsidiary shall
constitute a breach of this Agreement by LGS;

	 
	 	 
	 

	 	(iii) any termination of this Agreement as provided by Clause 18 shall be effective in
respect of all Subsidiaries;

	 
	 	 
	 

	 	(iv) any licence, granted in accordance with the provisions of this Clause 2.9, shall
automatically terminate upon any Subsidiary ceasing to be a Subsidiary.

	 
	 	 
	2.10

	 	During the term of this Agreement, but subject to the provisions of Clause 2.11, LGS may
exercise the right to include any LG Affiliate as a licencee of ARM provided that:
	 
	 	 
	 

	 	(i)    such LG Affiliate agrees in writing, as set forth in Schedule 14, to be bound by the
obligations of LGS and to comply with all the terms and conditions of this
Agreement. LGS shall deliver to ARM a copy of the LG Affiliate’s undertaking
within thirty (30) days of the execution of such undertaking;

	 
	 	 
	 

	 	(ii)  any breach of the terms and conditions of this Agreement by a LG Affiliate shall
constitute a breach of this Agreement by LGS;

	 
	 	 
	 

	 	(iii) any termination of this Agreement as provided by Clause 18 shall be effective in
respect of all LG Affiliates;

	 
	 	 
	 

	 	(iv) any licence, granted in accordance with the provisions of this Clause 2.10, shall
automatically terminate upon any LG Affiliate ceasing to be a member of the LG
Group.

	 
	 	 
	2.11

	 	LGS shall not be entitled to exercise the rights granted under Clause 2.10 unless and until
ARM and LGS have agreed, in writing, upon the critieria to determine the point at which a
LG Affiliate ceases to be a member of the LG Group. The parties shall negotiate in good
faith with the objective of agreeing such criteria as soon as is reasonably practicable.
	 
	 	 
	2.12

	 	ARM hereby grants to LGS, under ARM’s Intellectual Property rights, a perpetual (subject to
Clause 18), non-transferable (subject to Clause 20.3), non-exclusive, world-wide right and
licence to:
	 
	 	 
	 

	 	(i) manufacture and have manufactured, the PIE Card; and
	 
	 	 
	 

	 	(ii) supply the PIE Card within the LG Group: and
	 
	 	 
	 

	 	(iii) supply the PIE Card, free of charge, solely for evaluation purposes, to any LG Group
customers; and

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	(iv)  	reproduce and distribute, and sub-license (provided that the end user agrees to be
bound by the End User Licence) the use of the object code of the PIE Card software;
	 
	 	 
	 

	(v)  	reproduce and distribute, in connection with the PIE Card, the documentation relevant
thereto.

	 	 	 
	 

	 	For the avoidance of doubt, no right or licence is granted to LGS to distribute the PIE Card to
third parties for revenue or other consideration.
	 
	 	 
	3.

	 	Verification of ARM Compliant
Products
	 
	 	 
	3.1

	 	LGS shall develop, manufacture and characterize an ARM710a Core test chip (the “Test
Chip”) which complies with the test chip specification set forth in Schedule 3 (Item D16).
	 
	 	 
	3.2

	 	LGS shall run the Validation Vectors and Functional Test Vectors (together the “Vectors”),
on the Test Chip and deliver to ARM a copy of the log (“the Log Results”) generated by
running the Vectors together with five (5) samples of the applicable Test Chip. ARM may, at
ARM’s discretion, exercise the right to run the Vectors on the Test Chip. The ARM Core
shall be verified for a that process upon ARM’s acceptance of either the Log Results (i)
delivered by LGS or (ii) generated by ARM. The Log Results shall
be accepted when they
indicate that no errors have been detected or where any errors detected have been jointly
agreed, in good faith, and a waiver agreed between the parties. ARM shall notify LGS, in
writing, within thirty (30) days of delivery by LGS of the Log Results and Test Chip samples
to ARM (the “Verification Period”), whether the Test Chip has been verified or has failed the
verification process. In the event that the Test Chip fails the verification process, ARM shall
provide details of the errors which cause the failure to LGS and LGS shall endeavour to
correct the errors with ARM’s assistance as provided under the terms of Clause 12. The
parties shall repeat the above process until either: (i) the Test Chip is verified; or (ii) LGS
withdraws the Test Chip from the verification process. In the event that ARM fails to confirm
the result of the verification process within the Verification Period, the Test Chip subject to
the verification process shall be deemed verified.
	 
	 	 
	3.3

	 	Provided that: (a) the Test Chip has been verified in accordance with the provisions of Clause
3.2; and (b) the ARM Compliant Product containing the ARM Core contained in the Test
Chip runs the Functional Test Vectors and they indicate that no errors have been detected (or
where any errors detected have been jointly agreed, in good faith, and a waiver agreed
between the parties); except as hereafter provided, LGS may distribute such ARM Compliant
Product without further verification. However, in the event that LGS modifies the internal
logic of the ARM7 Core or ports any ARM Core to a new process LGS shall not be entitled
to distribute any such modified or ported ARM Compliant Product until:

	 	 	 
	 

	(i)  	in respect of an ARM Compliant Product containing the ARM710a Core, a Test Chip
has been verified in accordance with the provisions of Clause 3.2; or
	 
	 	 
	 

	(ii)  	in respect of an ARM Compliant Product containing the ARM7 Core (other than an
ARM Compliant Product as specified in Clause 3.3(i)), an ARM7 test chip, which
complies with the test chip specification set forth in Schedule 3 (Item B12), has been
verified, mutatis mutandis, in accordance with the provisions of Clause 3.2.
	 
	 	 
	3.4

	LGS shall provide to ARM, free of charge, fifty (50) samples of each Test Chip
manufactured by LGS on each process utilized for such manufacture so that ARM, at its
option, may, inter alia, test the compatibility of each Test Chip
with the ARM Instruction Set.
For the avoidance of doubt, there shall be no restriction on ARM’s use of such samples
provided that ARM shall not reverse engineer such Test Chips.

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	4.

	 	Models Licence
	 
	 	 
	4.1

	 	ARM hereby grants to LGS a non-transferable (subject to Clause 20.3), non-exclusive,
world-wide right and licence under the ARM’s Intellectual Property rights, to:
	 
	 	 
	 

	 	(i) reproduce, modify and use, internally and for third party support purposes, the
Models and relevant documentation;
	 
	 	 
	 

	 	(ii) reproduce and distribute, and sub-license (provided that the end user agrees to be bound by the End User Licence) the Use of the object code of the Models including
any modified versions thereof; 
	 
	 	 
	 

	 	(iii)
modify, reproduce, use and distribute, in connection with the Models including any
modified versions thereof, the documentation (including any modified
documentation) relevant thereto;
	 
	 	 
	 

	 	(iv) sub-license the distribution rights granted to LGS under Clauses 4.1(ii) and (iii) to
Authorized Distributors only.
	 
	 	 
	4.2

	 	For the avoidance of doubt, except as provided by Clause 4.1(iv), no right is granted to LGS
to sub-license the right to sell, supply or otherwise distribute the Models.
	 
	 	 
	5.

	 	Tools Licence
	 
	 	 
	5.1

	 	ARM hereby grants to LGS a non-transferable (subject to Clause 20.3), non-exclusive,
world-wide right and licence under the ARM’s Intellectual Property rights, to:
	 
	 	 
	-

	 	(i) reproduce and use the Tools and relevant documentation, internally and for third
party support purposes;
	 
	 	 
	 

	 	(ii) modify the Tools solely for the purpose of providing Hangul language support and incorporating any LGS logo;
	 
	 	 
	 

	 	(iii)
reproduce and distribute, and sub-license (provided that the end user agrees to be
bound by the End User Licence) the Use of the object code of the Tools identified in
Schedule 5 Part A (including the Tools modified in accordance with Clause 5.l(ii));
	 
	 	 
	 

	 	(iv) reproduce and distribute, and sub-license (provided that the end user agrees to be
bound by the End User Licence) the use of the Tools identified in Schedule 5 Part B
(including the Tools modified in accordance with Clause 5.1 (ii));
	 
	 	 
	 

	 	(v) modify, reproduce, use and distribute the Tools documentation (including any
modified Tools documentation);
	 
	 	 
	 

	 	(vi) sub-license the distribution rights granted to LGS under Clauses 5.1(iii) — (v) to
Authorized Distributors only.
	 
	 	 
	5.2

	 	For the avoidance of doubt, except as provided by Clause 5.1(vi), no right is granted to LGS
to sub-license the right to sell, supply or otherwise distribute the Tools.
	 
	 	 
	6.

	 	Test Licence
	 
	 	 
	6.1

	 	ARM hereby grants to LGS a non-transferable (subject to Clause 20.3), non-exclusive,
world-wide right and licence under the ARM’s Intellectual Property rights, to reproduce,
modify, have modified, and use internally only, the Test and relevant Test documentation
(including modified Test and modified Test documentation).

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	6.2

	 	For the avoidance of doubt, no right is granted to LGS to sell, supply or otherwise distribute
the Test.
	 
	 	 
	7.

	 	Ownership of the Software
	 
	 	 
	7.1

	 	In no event shall the licence grants set forth in Clauses 4.1, 5.1 and 6.1 be construed as
granting LGS, expressly or by implication, estoppel or otherwise, a licence under any ARM
technology other than the Software and related documentation.
	 
	 	 
	7.2

	 	Except as licensed to LGS in Clauses 4.1, 5.1 and 6.1 all right, title and interest in and to the
Software and related documentation shall remain vested in ARM.
	 
	 	 
	7.3

	 	LGS shall reproduce and not remove or obscure any notice incorporated in the Software or
related documentation by ARM to protect ARM’s Intellectual Property Rights or to
acknowledge the copyright and/or contribution of any third party developer. LGS shall
incorporate corresponding notices and/or such other markings and notifications as ARM may
reasonably require on all copies of Software and related documentation used or distributed by
LGS.
	 
	 	 
	8.

	 	Trademark Licence
	 
	 	 
	8.1

	 	ARM hereby grants to LGS a non-transferable (subject to Clause 20.3), non-exclusive,
royalty-free, world-wide right and licence under ARM’s Intellectual Property rights, to use
the Trademarks in the promotion and sale of ARM Compliant Products.
	 
	 	 
	8.2

	 	LGS shall use the Trademarks, in accordance with ARM’s guidelines set forth in Schedule 7
(the “Guidelines”), on (i) all ARM Compliant Products sold or distributed by LGS and (ii) all
documentation, promotional materials and software associated with such ARM Compliant
Products. ARM shall have the right to revise Schedule 7 and the Guidelines (including the
right to add further trademarks or modify the Trademarks) provided that such revisions are
made in respect of the Guidelines issued to all licencees of the Trademarks. Any such
revisions shall be effective, upon ninety (90) days written notice to LGS.
	 
	 	 
	8.3

	 	LGS shall be released from the provisions of Clause 8.2 in the case of any ARM Compliant
Product, created or developed by LGS, solely for a specific customer of LGS PROVIDED
THAT (a) the customer has notified LGS, in writing, that the customer wishes the ARM
Compliant Product packaging not to bear any Trademark and (b) the ARM Compliant
Product does not bear the LGS name or trademark.
	 
	 	 
	8.4

	 	LGS shall submit samples of documentation, packaging, and promotional or advertizing
materials bearing the Trademarks to ARM from time to time in order that ARM may verify
compliance with the Guidelines. In the event that any documentation, packaging,
promotional or advertizing material fails to comply with the Guidelines, ARM shall notify
LGS and LGS shall rectify such documentation, packaging, and promotional or advertizing
materials so as to comply with the Guidelines and cease using any such non-compliant
materials within thirty (30) days of the date of ARM’s notice. Any documentation,
packaging, and promotional or advertizing materials not rejected for failing to comply with
the Guidelines by ARM within thirty (30) days after delivery to ARM shall be deemed
approved.
	 
	 	 
	8.5

	 	LGS agrees to assist ARM in maintaining the validity of the Trademarks by retaining a
record of its use of the Trademarks. Such records shall include samples of the use of each of
the Trademarks as well as information regarding the first use of the Trademarks in each
country. Upon request, LGS shall make available all such records.

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	8.6

	 	Upon ARM’s request, LGS shall provide, free of charge, samples of the use of the
Trademarks for the purpose of trademark registration or renewal. LGS shall support ARM in
the application and maintenance of any registration for the Trademarks in the name of ARM.
Upon request, LGS shall execute any documents required by the applicable laws of any
jurisdiction for the purpose of registering and/or maintaining the Trademarks. In the event
that LGS fails to timely execute any such documents, LGS hereby irrevocably appoints ARM
as its attorney with respect to such matters. Any and all registrations for the Trademarks shall
be procured by and for ARM, at ARM’s expense.
	 
	 	 
	8.7

	 	Except as provided by the terms of this Agreement, LGS shall not use or register any
trademark, service mark, device or logo, any of the Trademarks or any word or mark
confusingly similar to any of the Trademarks, in any jurisdiction.
	 
	 	 
	9.

	 	Licence Fees and Royalties
	 
	 	 
	9.1

	 	LGS shall pay a non-refundable licence fee (the “Technology Licence Fee”) of [*****]
upon the terms set forth in Clause
9.1(i), together with for each ARM Compliant Product sold, supplied or distributed by LGS
(including as permitted by this Agreement, any Subsidiary and/or LG Affiliate), an additional
royalty (“Running Royalty”) upon the terms set forth in Clause 9.1(ii).
	 
	 	 
	 

	 	(i) The Technology Licence Fee shall be paid by instalments as follows:
	 
	 	 
	 

	 	On the Effective Date         
                    
                
                  [*****]

	 
	 	 
	 

	 	On delivery of the design databases for the ARM Cores    
        [*****]

	 
	 	 
	 

	 	On acceptance of the Test Chip (as defined in
Clause 10.4)       [*****]

	 
	 	 
	 

	 	(ii) The Running Royalty for each ARM Compliant Product shall be determined by
reference to the NSP of such ARM Compliant Product and the total number of ARM
Compliant Product chips sold or distributed by LGS (including as permitted by this
Agreement, any Subsidiary and/or LG Affiliate) in accordance with the following
table:

	 
	 	 

	 	 	 
	Cumulative Volume	 	Running Royalty as %age of NSP
	[*****]

[*****]

[*****]

	 	[*****]

[*****]

[*****]

	 	 	 
	 

	 	For the avoidance of doubt, in no event shall the Technology Licence Fee be construed as
being an advance payment of Running Royalties and no right of set off of Running Royalties
against the Technology Licence Fee shall exist.
	 
	 	 
	9.2

	 	Running Royalties due to ARM under this Agreement shall be paid in accordance with the
terms set forth in Schedule 8.
	 
	 	 
	9.3

	 	After a period of ten (10) years from the first commercial shipment of the first
manufactured ARM Compliant Product (the “Initial Period”), LGS shall be entitled to either (i) require
ARM to enter into good faith negotiations to revise the Running Royalty rates for the
remainder of the term of this Agreement or (ii) require ARM to enter into good faith
negotiations to agree a sum payable by LGS to ARM in lieu of the Running Royalties which
would otherwise fall due in accordance with the provisions of Clauses 9.1. LGS shall
exercise its rights under this Clause 9.3 upon written notice to ARM, referring to this Clause

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	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

	 	 	 
	 

	 	9.3, served not less that six (6) months prior to the expiry of the Initial Period. For the
avoidance of doubt, in the event that:
	 
	 	 
	 

	 	(i) LGS fails to serve any notice in accordance with the provisions of Clause 9.3, the
rights set forth in Clause 9.3 shall lapse; or
	 
	 	 
	 

	 	(ii) the parties fail to reach agreement prior to the expiry of the Initial Period and LGS
does not terminate this Agreement, LGS shall continue to pay the Running Royalties
at the rates specified in Clause 9.1(ii).
	 
	 	 
	9.4

	 	LGS shall keep all records of account as are necessary to demonstrate compliance with its
obligations under this Clause 9.
	 
	 	 
	9.5

	 	ARM shall have the right for representatives of a firm of independent Chartered Accountants
to which LGS shall not unreasonably object (“Auditors”), to make an examination and audit,
by prior appointment during normal business hours, not more frequently than once annually,
of all records and accounts as may under recognized accounting practices contain
information bearing upon (i) the number of chips and the NSP of ARM Compliant Products
sold or distributed by LGS under this Agreement and (ii) the amounts of Running Royalties
payable to ARM under this Clause 9. The Auditors will report to ARM only upon whether
the Running Royalties paid to ARM by LGS were or were not correct, and if incorrect, what
are the correct amounts for the Running Royalties. LGS shall be supplied with a copy of or
sufficient extracts from any report prepared by the Auditors. The Auditors report shall (in the
absence of clerical or manifest error) be final and binding on the parties. Such audit shall be
at ARM’s expense unless it reveals an underpayment of Running Royalties of five per cent
(5%) or more, in which case LGS shall reimburse ARM for the costs of such audit LGS shall
make good any underpayment of royalties forthwith. If the audit identifies that LGS has
made an overpayment, such overpayment will be credited to the next such payment or
payments to be made by LGS.
	 
	 	 
	9.6

	 	In consideration of the payment by LGS of the Technology Licence Fee, ARM shall provide
the support and maintenance services for a period of two (2) years from the Effective Date.
In the event that LGS requests that ARM continue to provide the support and maintenance
services after the expiration of the initial two (2) year period, the annual support and
maintenance fees payable in respect of any such subsequent year shall be determined by good
faith negotiations between the parties. However, ARM shall be under no obligation to
provide the support and maintenance services, in respect of any subsequent year, until the
annual support and maintenance fees have been agreed and paid to ARM.
	 
	 	 
	9.7

	 	Any income or other tax which LGS is required by law to pay or withhold on behalf of ARM
with respect to any licence fees and/or royalties payable to ARM under this Agreement shall
be deducted from the amount of such licence fees and/or royalties otherwise due, provided,
however, that in regard to any such deduction, LGS shall give to ARM such assistance as
may be necessary to enable or assist ARM to claim exemption therefrom, or credit therefor,
and shall upon request furnish to ARM such certificates and other evidence of deduction and
payment thereof as ARM may properly require.
	 
	 	 
	9.8

	 	LGS shall pay all instalments of the Technology Licence Fee due to ARM under the terms of
this Agreement within thirty (30) days of receipt of ARM’s invoice therefor (the “Due
Date”). The Due Date in respect of the payment of Running Royalties shall be forty five (45)
days from the end of each Half Year.
	 
	 	 
	9.9

	 	If any sum under this Agreement is not paid by the Due Date, then (without prejudice to
ARM’s other rights and remedies) ARM reserves the right to
charge interest on such sum on
a day to day basis (as well after as before any judgment) from the Due Date to the date of
payment at the rate of five (5) per cent per annum above the base rate of Barclays Bank PLC
from time to time in force.

ARM/LGS
Confidential

Page 11

 

	 	 	 
	10.

	 	Delivery, Acceptance and Production Costs
	 
	 	 
	10.1

	 	The database tapes in respect of the ARM Cores delivered to LGS shall conform to the LGS
0.6um ASIC Design Rules (Rev 1.1) dated February 1995 using three layers of metal.
	 
	 	 
	10.2

	 	ARM shall deliver the Transfer Materials and Software in accordance with the delivery
schedule set forth in Schedule 11.
	 
	 	 
	10.3

	 	Unless otherwise agreed in writing, delivery:

	 	 	 
	 

	(i)  	by LGS, shall take place at Advanced RISC Machines Limited, Fulbourn Road,
Cherry Hinton, Cambridge CB1 4JN, England marked for the attention of the
Engineering Director;
	 
	 	 
	 

	(ii)  	by ARM, shall take place at 16 Woomyeon-dong, Seocho-gu, Seoul 137-140, Korea
marked for the attention of Mr Hag-Keun Kim.

	 	 	 
	10.4

	 	For the purposes of Clause 9.1(i):

	 	 	 
	 

	(i)	 LGS shall use best efforts to manufacture (or have manufactured) the Test Chip and
comply with the provisions of Clause 10.4(ii).
	 
	 	 
	 

	(ii)	 LGS shall run the Vectors on the Test Chip and forthwith deliver to ARM a copy of
the log results generated by running the Vectors, together with five (5) samples of the
Test Chip. The Test Chip shall be deemed accepted when the log results indicate that
no errors have been detected or where any errors detected have been jointly agreed, in
good faith, and a waiver agreed between the parties.
	 
	 	 
	 

	However, in the event that:
	 
	 	 
	 

	(a) 	LGS fails to manufacture the Test Chip within nine (9) months of delivery of the
ARM710a Core design database, LGS shall pay to ARM the third instalment of the
Technology Licence Fee irrespective of the provisions of Clause 9. l(i); or
	 
	 	 
	 

	(b) 	due to a LGS manufacturing fault, the Test Chip does not pass the Vectors within
nine (9) months of delivery of the ARM710a Core design database, LGS shall pay to
ARM the third instalment of the Technology Licence Fee irrespective of the
provisions of Clause 9.1(i).

	 	 	 
	10.5

	 	ARM shall not be responsible for any recoverable or non-recoverable costs incurred,
directly
or indirectly, by LGS in the design translation (except as provided by Clause 10.1),
processing, or manufacture of masks and prototypes, characterization or manufacture of
production quality silicon in whatever quantity.
	 
	 	 
	10.6

	 	Within six (6) months of the Effective Date, the parties will work together in the
creation of a
development, sales and marketing plan indicating the milestones, resource and activity that
LGS will use to develop ARM Compliant Products.
	 
	 	 
	11.

	 	Contract Administrators
	 
	 	 
	11.1

	 	The parties hereby appoint the following individuals as their respective contract
administrators between ASM and LGS with respect to this Agreement:

ARM/LGS
Confidential

Page 12

 

	 	 	 
	ARM:	 	LGS:
	 
	For
legal notices:
	 	 
	 
	 	 
	David N MacKay

	 	Jong-Taek Hong
	Director of Legal Affairs

	 	General Manager Legal Affairs Department
	Advanced RISC Machines Limited

	 	LG Semicon Co Limited
	Fulbourn Road

	 	891 Daechi-dong
	Cherry Hinton

	 	Kangnarm-ku
	Cambridge

	 	Seoul
	CB14JN

	 	Korea
	England
	 	 
	 
	 	 
	For
corporate issues:
	 	 
	 
	 	 
	James S Urquhart

	 	Dr Min-Sung Choi
	Sales Director

	 	Managing Director
	Advanced RISC Machines Limited

	 	LG Semicon Co Limited
	Fulbourn Road

	 	16 Woomyeon-dong
	Cherry Hinton

	 	Seocho-gu
	Cambridge

	 	Seoul
	CB14JN

	 	137-140
	England

	 	Korea
	 
	 	 
	For
Confidential Information:
	 	 
	 
	 	 
	Peter King

	 	Dr Min-Sung Choi
	Partner Support Manager

	 	Managing Director
	At the address set forth above

	 	At the address set forth above
	 
	 	 
	For
financial issues:
	 	 
	 
	 	 
	John Martyn

	 	Dr Min-Sung Choi
	Financial Controller

	 	Managing Director
	At the address set forth above

	 	At the address set forth above
	 
	 	 
	For
applications support:
	 	 
	 
	 	 
	Peter King

	 	Hag-Keun Kim
	Partner Support Manager

	 	Department Manager Multimedia Device #2
	At the address set forth above

	 	At the address set forth above
	 
	 	 
	For software support:
	 	 
	 
	 	 
	Peter King

	 	Hag-Keun Kim
	Partner Support Manager

	 	Department Manager Multimedia Device #2
	At the address set forth above

	 	At the address set forth above
	 
	 	 
	For
design transfer:
	 	 
	 
	 	 
	Tudor Brown

	 	Hag-Keun Kim
	Engineering Director

	 	Department Manager Multimedia Device #2

ARM/LGS
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	 	At the address set forth above

	At the address set forth above

	 	 	 
	11.2

	 	The contract administrators identified herein are appointed by the parties for the receipt
and dispatch on their behalf of all communications relating to the administrators’ above
designated areas of responsibility. The contract administrators shall also be responsible for
the good progress of the parties’ performance under this Agreement and the timely resolution
of all technical, administrative and commercial issues which may arise from time to time
during the execution of this Agreement.
	 
	 	 
	11.3

	 	Each party reserves the right to change its appointment as above upon seven (7) days written
notice to the other party’s then current corresponding liaison.
	 
	 	 
	12.

	 	Macrocell Maintenance Services
	 
	 	 
	12.1

	 	ARM shall provide to LGS, in respect of the ARM Cores, AMBA and Peripherals (the
“Macrocells”), through the parties’ applicable contract administrator, the following
maintenance services;

	 	 	 
	 

	(i)	the correction, to the extent reasonably possible, of any defects in any Macrocell
which cause such Macrocell not to operate in accordance with the functionality
described in the applicable documentation. If ARM determines that such defects are
due to errors in such description, ARM shall promptly issue corrections to the
applicable documentation and shall not be required to correct the Transfer Materials
provided that LGS is not thereby prevented from commercially exploiting such
Macrocell.
	 
	 	 
	 

	(ii)	 reasonable telephone and written consultation pertaining to the operation and
application of the Macrocells;
	 
	 	 
	 

	(iii)	any bug-fixes or corrections to the Macrocells made available by ARM to any third
party;
	 
	 	 
	 

	(iv)	 all modifications, enhancements and updates to the Macrocells, created by ARM,
including such modifications to the Macrocells as are made by ARM’s other licencees
and adopted by ARM for general release as an update PROVIDED THAT ARM may
exclude any modification, enhancement or update which ARM, in its absolute
discretion decides, results in the creation of a new product;
	 
	 	 
	 

	(v)	the provision of ARM-related training;
	 
	 	 
	 

	The services provided under Clauses 12.1(ii), 12.1(v) and 13.1(ii) shall together be limited
to a total of Thirty (30) man days per annum.
	 
	 	 
	12.2

	Upon LGS requesting ARM’s assistance pursuant to the provisions of Clause 12.1, LGS shall
promptly provide to ARM such samples and technical information as ARM may reasonably
require to enable ARM to provide such assistance.
	 
	 	 
	12.3

	In notifying ARM of any defects or problems LGS shall use a format and medium reasonably
requested by ARM. Notwithstanding the foregoing, LGS shall provide ARM promptly with
any information or assistance reasonably requested by ARM to enable ARM to provide the
maintenance service hereunder.
	 
	12.4

	The maintenance services shall be provided at ARM’s UK premises. Nevertheless, ARM will
use reasonable efforts to provide maintenance services to LGS, at LGS’s premises, subject to
LGS meeting all reasonable travelling, accommodation and sustenance expenses.

ARM/LGS
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	12.5

	 	For the avoidance of doubt, ARM’s obligation under this Clause 12 is limited expressly to
the provision of the maintenance services to LGS and ARM shall be under no obligation to
provide the maintenance services to LGS’s customers.
	 
	 	 
	13.

	 	Software Maintenance Services
	 
	 	 
	13.1

	 	ARM shall provide to LGS, in respect of the Software, through the parties’ applicable
contract administrator, the following maintenance services:
	 
	 	 
	 

	 	(i)    to correct, to the extent reasonably possible, any defects in the Software which cause
the Software not to operate in accordance with the description of the Software’s
function in the applicable documentation. If ARM determines that such defects are
due to errors in such description, ARM shall promptly issue corrections to the
documentation and shall not be required to alter the Software provided that LGS is
not thereby prevented from commercially exploiting the Software.

	 
	 	 
	 

	 	(ii)  to provide reasonable telephone and written consultation pertaining to the operation
and application of the Software.

	 
	 	 
	 

	 	(iii) to provide as available Updates to the Software.

	 
	 	 
	13.2

	 	In notifying ARM of any defects or problems LGS shall use a format reasonably requested
by ARM. LGS shall provide ARM promptly with any information or assistance reasonably
requested by ARM to enable ARM to provide the maintenance service hereunder.
	 
	 	 
	13.3

	 	For the avoidance of doubt, ARM’S obligation under this Clause 13 is limited expressly to
the provision of the Software maintenance services to LGS and ARM shall be under no
obligation to provide the maintenance services to LGS’s sub-licensees of the Software.
	 
	 	 
	14.

	 	Confidentiality
	 
	 	 
	14.1

	 	Save as provided by Clause 14.2, each party shall maintain in confidence the Confidential
Information disclosed by the other party and apply security measures no less stringent than
the measures that such party applies to protect its own like information, but not less than a
reasonable degree of care, to prevent unauthorized disclosure and use of the Confidential
Information. The period of confidentiality shall be (i) indefinite with respect to the terms
of this Agreement, pattern generation tapes and photomasks and (ii) twenty (20) years with
respect to all other information.
	 
	 	 
	14.2

	 	In the event that either party qualifies the confidentiality of any Confidential Information
in writing by marking such Confidential Information with the words “Limited Confidentiality”,
such Confidential Information may be disclosed to a third party who has entered into a non
disclosure agreement (“NDA”) with the recipient containing substantially similar terms to
this Clause 14. A NDA in respect of the disclosure of business Confidential Information may
be limited in duration to a period of not less than three (3) years from the date of
disclosure. A NDA in respect of the disclosure of technical Confidential Information may be limited in
duration to a period of not less than five (5) years from the date of disclosure.
	 
	 	 
	14.3

	 	The provisions of this clause shall not apply to information which:-
	 
	 	 
	 

	 	(i)    is known and has been reduced to tangible form by the receiving party prior to
disclosure by the other party; or

	 
	 	 
	 

	 	(ii)  is, or becomes through no fault of the receiving party, generally known; or

ARM/LGS
Confidential

Page 15

 

	 	 	 
	 

	 	(iii)  is disclosed to the receiving party by a third party having the lawful right to make
such disclosure; or

	 
	 	 
	 

	 	(iv)  is independently conceived by the receiving party provided that the receiving party is
able to provide evidence of such independent conception in the form of written
records; or

	 
	 	 
	 

	 	(v)   is released to the receiving party for disclosure to any third party, other than on a
confidential basis, by the disclosing party in writing; or

	 
	 	 
	 

	 	(vi)  as required by any court or other governmental body.

	 
	 	 
	14.4

	 	For the avoidance of doubt, LGS Royalty Reports may be disclosed to, in confidence,
ARM’s financial and/or legal advisors. In addition, ARM may disclose the total unit sales of
ARM Compliant Products.
	 
	 	 
	14.5

	 	The parties agree that the disclosure of Confidential Information to a party hereunder shall be
co-ordinated through the appointed contract administrators identified for such purpose in
Clause 11.1.
	 
	 	 
	15.

	 	Warranties
	 
	 	 
	15.1

	 	ARM warrants that the materials delivered to LGS will be sufficient for a competent
semiconductor manufacturer to produce the ARM Cores, AMBA and Peripherals which meet
the functionality specified in the applicable documentation. LGS’s sole and exclusive remedy
for any breach of such warranty shall be for ARM to correct any errors in the materials and
deliver such corrected materials to LGS or replace the materials at ARM’s discretion.
	 
	 	 
	15.2

	 	LGS acknowledges that the Software cannot be tested in every possible operation, and
accordingly ARM does not warrant that the Software will be free from all defects or that
there will be no interruption in its use. However, ARM warrants that the Software will be
complete and comply with the description of its functionality specified in the documentation.
LGS’s sole and exclusive remedy for any breach of such warranty shall be for ARM, as soon
as is reasonably practicable, to correct any errors in the Software and deliver such corrected
Software to LGS.
	 
	 	 
	15.3

	 	ARM further warrants that to ARM’s knowledge and belief, but expressly without having
undertaken any searches for prior art, that:
	 
	 	 
	 

	 	(i)    the ARM Cores, AMBA, Peripherals and Software do not infringe any third party
copyright, maskwork right or trade secret; and

	 
	 	 
	 

	 	(ii)  there are no pending claims that have been made, or actions commenced, against
ARM for breach of any third party copyright, maskwork right, patent or trade secret;
and

	 
	 	 
	 

	 	(iii) ARM, or its applicable licensor, is the owner of the properties to be delivered to LGS;
and

	 
	 	 
	 

	 	(iv)  ARM has the right to enter into the Agreement.

	 
	 	 
	15.4

	 	Except as expressly provided in this Agreement, the ARM Cores, AMBA, Peripherals
Software, Intellectual Property, and Transfer Materials are licensed “as is” and ARM makes
no warranties express, implied or statutory, including, without limitation, the implied
warranties of merchantability or fitness for a particular purpose with respect to the ARM
Cores, AMBA, Peripherals Software, Intellectual Property and Transfer Materials.

ARM/LGS
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	15.5

	 	LGS warrants that LGS shall:

	 	 	 
	 

	(i) 	submit this Agreement for approval by the Korean Government forthwith upon
signature by the parties; and
	 
	 	 
	 

	(ii)	use all reasonable endeavours to obtain all or any tax exemption or tax credits
applicable to the technology licensed and monies payable under this Agreement.

	 	 	 
	16.

	 	Infringement
	 
	 	 
	16.1

	 	Each party (the “Delivering Party”) will support the other party (the “Receiving Party”) in
any action based on a claim that the materials delivered by the Delivering Party to the
Receiving Party under this Agreement (the “Delivered Materials”), when used in accordance
with this Agreement, infringe any patent, copyright or trade secret provided that the
Receiving Party shall notify the Delivering Party promptly in writing of each such suit.
However, a party shall not be obliged to support the other party in any action based upon an
infringement or alleged infringement of any patent, copyright, trade secret, mask work,
trademark or other property right by: (a) the Receiving Party’s manufacturing process; (b)
any modification of the Delivered Materials not made by the Delivering Party; or (c) the use
of the Delivered Materials in combination with other equipment, technology or software not
purchased or licensed from the Delivering Party, provided that such claim would not have
occurred but for such combination, modification or enhancement.
	 
	 	 
	16.2

	 	The Receiving Party will support the Delivering Party in any action based on a claim that
(a)
the process used by or on behalf of the Receiving Party in manufacturing products
incorporating, embodying or based upon the Delivered Materials, (b) any modification of the
Delivered Materials made by or on behalf of the Receiving Party, or (c) the use of the
Delivered Materials in combination with other equipment, software or technology not
purchased or licensed from the Delivering Party, provided that such claim would not have
occurred but for such combination, modification or enhancement, has infringed any patent,
copyright or trade secret provided that the Delivering Party shall notify the Receiving
Party
promptly in writing of such suits.
	 
	 	 
	16.3

	 	If any Delivered Materials provided to LGS by ARM, or any portion thereof, is finally
adjudged to infringe a patent or copyright, ARM shall, at ARM’s election, use its reasonable
efforts to: (a) procure the right to continue using the unmodified Delivered Materials; (b)
modify the Delivered Materials so that they become non-infringing; (c) replace the
unmodified Delivered Materials, or infringing portions thereof, with reasonably equivalent
non-infringing products; or (d) pay compensatory damages to LGS, subject to the limitations
of Clause 16.6. The provisions of this Clause 16.3 do not extend to any suit based upon an
infringement or alleged infringement of any patent, copyright, trade secret, mask work,
trademark or other property right by: (a) the LGS manufacturing process; (b) any
modification of the Delivered Materials not made by ARM; or (c) the use of the Delivered
Materials in combination with other equipment, technology or software not purchased or
licensed from ARM, provided that such claim would not have occurred but for such
combination, modification or enhancement
	 
	 	 
	16.4

	 	If any Delivered Materials provided to ARM by LGS, or any portion thereof, is finally
adjudged to infringe a patent or copyright, LGS shall, at LGS’s election, use its reasonable
efforts to: (a) procure the right to continue using the unmodified Delivered Materials; (b)
modify the Delivered Materials so that they become non-infringing; (c) replace the
unmodified Delivered Materials, or infringing portions thereof, with reasonably equivalent
non-infringing products; or (d) pay compensatory damages to ARM subject to the limitations
of Clause 16.6. The provisions of this Clause 16.4 do not extend to any suit based upon an
infringement or alleged infringement of any patent, copyright, trade secret, mask work,
trademark or other property right by any modification of the Delivered Materials not made by
LGS.

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	16.5

	 	In the event that there is a final adjudication of infringement, the liability of the
Delivering Party for such infringement shall terminate with respect to all damages regarding the
infringing intellectual property arising after the date of such final adjudication.
	 
	 	 
	16.6

	 	THE FOREGOING STATES THE ENTIRE LIABILITY OF THE PARTIES, AND THE
EXCLUSIVE REMEDY FOR THE PARTIES, FOR ANY INFRINGEMENT OF ANY
PATENT, COPYRIGHT, TRADEMARK, TRADE SECRET, MASK WORK OR OTHER
PROPRIETARY RIGHT OF A THIRD PARTY. ARM AND LGS DISCLAIM ALL
OTHER LIABILITY FOR ANY SUCH INFRINGEMENT, INCLUDING ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, NEITHER
PARTY SHALL BE LIABLE FOR ANY AMOUNTS IN EXCESS OF THE SUM OF
FOUR HUNDRED AND SEVENTY FIVE THOUSAND US DOLLARS (US$475,000) IN
THE AGGREGATE FOR ALL PAYMENTS, ROYALTIES OR FEES MADE PURSUANT
TO ALL CLAIMS IN ANY WAY ARISING OUT OF OR IN CONNECTION WITH THE
PROVISIONS OF THIS CLAUSE 16.
	 
	 	 
	17.

	 	Disclaimer of Consequential Damages
	 
	 	 
	17.1

	 	IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES WHETHER SUCH DAMAGES ARE
ALLEGED AS A RESULT OF TORTIOUS CONDUCT OR BREACH OF
CONTRACT OR OTHERWISE EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SUCH DAMAGES
SHALL INCLUDE BUT SHALL NOT BE LIMITED TO THE COST OF
REMOVAL AND REINSTALLATION OF GOODS, LOSS OF GOODWILL, LOSS
OF PROFITS, LOSS OF USE OF DATA, INTERRUPTION OF BUSINESS OR
OTHER ECONOMIC LOSS BUT NOTHING IN THIS CLAUSE SHALL OPERATE
TO EXCLUDE LIABILITY FOR DEATH OR PERSONAL INJURY RESULTING FROM
EITHER PARTY’S NEGLIGENCE.
	 
	 	 
	18.

	 	Term and Termination
	 
	 	 
	18.1

	 	This Agreement shall commence on the Effective Date and continue in force, except as
provided by Clause 18.3, unless and until terminated in accordance with the provisions of
Clause 18.2.
	 
	 	 
	18.2

	 	Without prejudice to any other right or remedy which may be available to it, either party
shall be entitled summarily to terminate this Agreement by giving written notice to the other:

	 	 	 
	 

	(i) 	if the other party has committed a material breach of any of its obligations hereunder
which is not capable of remedy; or
	 
	 	 
	 

	(ii) 	 if the other party has committed a material breach of any of its obligations hereunder
which is capable of remedy but which has not been remedied within a period of sixty
(60) days following receipt of written notice to do so; or
	 
	 	 
	 

	(iii)	makes any voluntary arrangement with its creditors for the settlement of its debts or
becomes subject to an administration order; or
	 
	 	 
	 

	(iv)	has an order made against it, or passes a resolution, for its winding-up (except for
the purposes of amalgamation or reconstruction) or has an encumbrancer take possession
or has a receiver or similar officer appointed over all or substantially all of its
property or assets.

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	18.3

	 	After a period of seven (7) years from the Effective Date (the “Initial Period”),
the licence set forth in Clause 5 shall expire automatically whereupon LGS shall have no further right or
licence in respect of the Tools. However, LGS may renew the licence granted under the
provisions of Clause 5, subject to the provisions of Clauses 18.3(i) and (ii), for a farther
term of seven (7) years upon payment of a Renewal Fee.

	 	 	 
	 

	(i)	 LGS may exercise its rights to renew, as provided by this Clause 18.3, provided that
LGS gives to ARM not less than six (6) months notice in writing of its intention to so
renew, expiring on the seventh anniversary of the Effective Date.
	 
	 	 
	 

	(ii)	Upon receipt of LGS’s notice served in accordance with Clause 18.3(i), the parties
shall enter into good faith negotiations to agree a reasonable Renewal Fee. For the
avoidance of doubt, LGS shall not be entitled to exercise any of the rights contained
in Clause 5 unless and until agreement has been reached and the Renewal Fee has
been paid to ARM.

	 	 	 
	18.4

	 	LGS and ARM acknowledge that each and every term and condition of this Agreement has
been fully and completely negotiated and such terms and conditions closely relate to each
other. In the event that the Korean governmental authorities, including the Korean Fair Trade
Commission, during the review of this Agreement require a modification to one or more of
the clauses of this Agreement, ARM shall have the option to renegotiate the entire
Agreement or accept the applicable modification of the Agreement as required by such
governmental authorities.
	 
	 	 
	19.

	 	Effect of Termination
	 
	 	 
	19.1

	 	Upon termination of this Agreement by either party pursuant to Clause 18.2, LGS will
immediately discontinue any use and distribution of all ARM Compliant Products, Software,
Intellectual Property, Transfer Materials and ARM Confidential Information. LGS shall, at
ARM’s option, either destroy or return to ARM any Confidential Information, including any
copies thereof in its possession, together with the Transfer Materials and all copies of the
Software in its possession. Within one month after termination of this Agreement LGS will
furnish to ARM a certificate signed by a duly authorised officer of LGS that to the best of his
or her knowledge, information and belief, after due enquiry, LGS has complied with
provisions of this Clause. For the avoidance of doubt, any sub-licences of the Software
granted by LGS prior to the termination of this Agreement shall survive such termination.
	 
	 	 
	19.2

	 	Upon termination of this Agreement the termination date shall be treated as the end of a Half
Year for the purposes of accounting for all Running Royalties due to ARM. Thereafter LGS
shall submit a royalty report to ARM in accordance with the provisions of Schedule 8.
	 
	 	 
	19.3

	 	The provisions of Clauses 2.3, 9, 14, 16, 17, 19, and 20 shall survive termination or
expiration of this Agreement.
	 
	 	 
	20.

	 	General
	 
	 	 
	20.1

	 	All communications between the parties including, but not limited to, notices, royalty reports,
error or bug reports, the exercise of options, and support requests shall be in the English
language.
	 
	 	 
	20.2

	 	All notices which are required to be given hereunder shall be in writing and shall be sent to
the address of the recipient set out in this Agreement or such other address as the recipient
may designate by notice given in accordance with the provisions of this Clause. Any such
notice may be delivered personally, by commercial overnight courier or facsimile
transmission which shall be followed by a hard copy and shall be deemed to have been

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	 	served if by hand when delivered, if by commercial overnight courier 48 hours after deposit
with such courier, and if by facsimile transmission when dispatched.
	 
	 	 
	20.3

	 	Neither party shall assign or otherwise transfer this Agreement or any of its rights and
obligations hereunder whether in whole or in part without the prior written consent of the
other.
	 
	 	 
	20.4

	 	Neither party shall be liable for any failure or delay in its performance under this Agreement
due to causes, including, but not limited to, acts of God, acts of civil or military authority,
fires, epidemics, floods, earthquakes, riots, wars, sabotage, third party industrial disputes and
governments actions, which are beyond its reasonable control; provided that the delayed
party: (i) gives the other party written notice of such cause promptly, and in any event within
fourteen (14) days of discovery thereof; and (ii) uses its reasonable efforts to correct such
failure or delay in its performance. The delayed party’s time for performance or cure under
this Clause 20.4 shall be extended for a period equal to the duration of the cause.
	 
	 	 
	20.5

	 	ARM and LGS are independent parties. Neither company nor their employees, consultants,
contractors or agents, are agents, employees or joint venturers of the other party, nor do they
have the authority to bind the other party by contract or otherwise to any obligation. Neither
party will represent to the contrary, either expressly, implicitly, by appearance or otherwise.
	 
	 	 
	20.6

	 	The parties agree that the terms and conditions of this Agreement shall be treated as
Confidential Information hereunder and shall not be disclosed without the consent of both
parties.
	 
	 	 
	20.7

	 	Failure by either party to enforce any provision of this Agreement shall not be deemed a
waiver of future enforcement of that or any other provision.
	 
	 	 
	20.8

	 	If any provision of this Agreement, or portion thereof, is determined to be invalid or
unenforceable the same 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.
	 
	 	 
	20.9

	 	The headings to the Clauses of this Agreement are for ease of reference only and shall not
affect the interpretation or construction of this Agreement.
	 
	 	 
	20.10

	 	This Agreement may be executed in one or more counterparts each of which shall be deemed
an original, but all of which shall constitute one and the same instrument.
	 
	 	 
	20.11

	 	This Agreement, including all Schedules and documents referenced herein, constitutes the
entire agreement between the parties with respect to the subject matter hereof, and supersedes
and replaces all prior or contemporaneous understandings or agreements, written or oral,
regarding the subject matter. No amendment to, or modification of, this Agreement shall be
binding unless in writing and signed by a duly authorized representative of both parties.
	 
	 	 
	20.12

	 	This Agreement shall be governed by and construed in accordance with the laws of England.
In the event that ARM commences proceedings against LGS under this Agreement, the
parties agree to submit to the jurisdiction of the Seoul District Court, Korea, for the purpose
of hearing and determining any disputes arising out of this Agreement. In the event that LGS
commences proceedings against ARM under this Agreement, the parties agree to submit to
the jurisdiction of the High Court of Justice, London, England, for the purpose of hearing and
determining any disputes arising out of this Agreement.

ARM/LGS
Confidential

Page 20

 

IN WITNESS WHEREOF the parties have caused this Agreement
to be executed by their
duly authorized representative:

	 	 	 	 	 	 	 	 	 
	ADVANCED RISC MACHINES
LIMITED:	 	 	 	LG SEMICON
COMPANY LIMITED:
	 
	SIGNED:
	 	/s/ R. K Sayby	 	 	 	SIGNED:	 	/s/ Chung Hwan Mun
	 
	 	 	 	 	 	 
	NAME:
	 	ROBIN K. SAYBY	 	 	 	NAME:	 	CHUNG HWAN MUN
	TITLE:
	 	PRESIDENT	 	 	 	TITLE:	 	PRESIDENT

ARM/LGS
Confidential

Page 21

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