Document:

Exhibit 10.16

 

BUSINESS DEVELOPMENT
AGREEMENT

 

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

 

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

1

 

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

 

2.             INTENT AND PURPOSE; STATEMENTS OF WORK.

 

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

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

 

-                    a detailed description of the Activity;

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

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

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

 

3.0           THE
ACTIVITIES

 

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

 

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

 

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

3.1.3        FIELD
TESTING ALPHA AND BETA SOFTWARE RELEASES. 
MathStar staff shall assist Summit engineering in the functional testing
of alpha and beta versions of new PRODUCT releases, as reasonably requested by
Summit.

3.1.4        SOFTWARE
QUALITY ASSURANCE.  Summit shall perform
software quality assurance testing for each PRODUCT release, except for patch
distribution, beta releases and other releases where the PRODUCT is made
available prior to full verification.

3.2           MARKET DEVELOPMENT AND DEMAND
GENERATION

3.2.1        TRADE SHOW
SUPPORT.  Each party shall exhibit the
PRODUCT or information about the PRODUCT at trade shows where the party
exhibits their products.  In cases where
exhibition of the PRODUCT would conflict with the interests of the trade show
sponsor, this obligation shall not apply. 
When the PRODUCT is being exhibited at trade shows, the exhibiting party
may request assistance from the other party in supporting the PRODUCT

 

2

 

exhibition
or demonstrations.  The parties shall
mutually determine what information about the PRODUCT is to be exhibited and
how it is to be exhibited.

3.2.2        TECHNICAL
SEMINARS.  Each party may provide
technical seminars involving the PRODUCT in the context of FPOA design and each
party shall provide reasonable support to the other in furtherance of such
seminars.  The parties shall mutually
determine the contents of the seminars.

3.2.3        INTERNET
PRESENCE AND WEBSITE RESOURCES. Each party shall dedicate a portion of its
website to information about the PRODUCT, its primary value points and its role
in the FPOA design process.  The parties
shall mutually determine the content of such information to be set forth on
their websites.  The parties shall
cooperate on the development of links between their respective websites, where
such links would be helpful to customers.

3.2.4        LEAD
GATHERING AND DISSEMINATION. Sales leads regarding the use of the PRODUCT for
FPOA design shall be shared by the parties. 
Shared leads shall be distributed to the other party on a regular basis.  Points of contact shall be established
between the parties in order to facilitate shared lead communication.

3.2.5        ADVERTISING.
Advertising developed by either party that includes the PRODUCT or references
the PRODUCT shall include the brand identification of both parties within the
advertisement.  The brand identification
shall include the party’s graphic logo and, if sufficient room, the party’s tag
line.  Each presentation of each party’s
brand image shall require the prior approval of the marketing leadership of the
other party.

3.2.6        PRINTED
PRODUCT LITERATURE.  Product data sheets,
application guides and other Product literature developed by either party that
includes the PRODUCT or references to the PRODUCT shall include the brand
identification of both parties within the publication.  The brand identification shall include the
party’s graphic logo and, if sufficient room, the party’s tag line.  Each presentation of each party’s brand image
shall require the prior approval of the marketing leadership of the other
party.

3.3           PRODUCT LICENSE SALES

3.3.1        DIRECT
SALES CHANNELS.  The PRODUCT shall be
sold through coordinated actions of the MathStar and Summit direct sales
staffs, including field sales and inside sales staff.  Either party may initiate customer
qualification, prospect for new sales opportunities and perform technical
qualification of an opportunity. 
MathStar shall bundle the PRODUCT only with other MathStar products and
sell the combined product(s).  MathStar
shall actively and diligently market and distribute the PRODUCT as provided
herein.  MathStar shall purchase a block
of one-year term licenses for the PRODUCT per Section 4.2 from Summit and
distribute such PRODUCT to End Users bundled as provided above.

3.4           PRODUCT DISTRIBUTION.

3.4.1        PRODUCT
LICENSING.  The PRODUCT shall be distributed
to End Users by MathStar pursuant to Summit’s then current end user license
agreement as a combined product with other MathStar products.  The current version of such end user license
agreement is attached hereto as Exhibit A. 
If Summit’s form of end user license agreement changes, it shall give
notice of such changes to MathStar, and Summit and MathStar shall amend this
agreement by attaching the most current form of Summit’s end user license
agreement to this Agreement as new Exhibit A.

3.4.2        PACKAGING
OF PRODUCT RELEASES.  The PRODUCT and all
major versions thereof shall consist of the SUMMIT SOFTWARE, the
MATHSTAR-SPECIFIC SOFTWARE and the MATHSTAR LIBRARY, packaged together by
Summit as a single part number, downloadable as a single complete file image.  End Users shall have a single
installation process that places the PRODUCT in the proper locations in the End
User’s environment.

3.4.3        PRODUCT
DISTRIBUTION LOGISTICS.  The distribution
mechanism for the PRODUCT shall be FTP access via the internet.  The distribution website shall be developed,
hosted and maintained by Summit or its supplier with assistance and support
from MathStar.  The website shall provide
for effective, secure upload of model library releases and patches from
MathStar, as well as effective location and retrieval of software and patches
by customers.  Qualified resellers of the
Product may provide links to the Summit website in order to act as distribution
portals.

 

 

3

 

3.5           CUSTOMER SUPPORT.  MathStar shall provide first line support of
the PRODUCT to End Users.  If MathStar
determines that the problem appears to be located within or caused by the
Summit PRODUCT, upon MathStar’s request, Summit shall provide technical
customer support either to MathStar or, if requested, directly to an End User.

3.5.1        BUG
REPORTING AND TRACKING.  Summit shall
provide MathStar access to Summit’s bug tracking system for the purpose of
tracking problem reports and bugs in the PRODUCT.  Problems and potential bugs in the PRODUCT
shall be entered into Summit’s bug tracking system by technical support staff
or application engineers from either party. 
Each party shall identify and maintain a technical support point of
contact, who shall be responsible for communicating technical problem status
and customer impact priority with the other party and for insuring that
customer problem reports associated with the PRODUCT are resolved in a timely
manner.

3.5.2        BUG
CONFIRMATION AND RESOLUTION.  Summit
shall confirm and resolve bugs in the SUMMIT SOFTWARE and MATHSTAR-SPECIFIC
SOFTWARE in accordance with its customary procedures for support of its
products.  MathStar shall confirm and
resolve bugs in the MATHSTAR LIBRARY. 
Each party shall provide engineering support to the other party upon
request in order to expedite the resolution of bugs.

3.5.3        FIELD
SALES TECHNICAL STAFF.  Each party shall
develop and maintain trained technical staff that will be available in the
field to visit End Users and assist with technical problem solving or
troubleshooting as required.

3.6           END USER TRAINING.

3.6.1        END USERS
TRAINING CLASS DEVELOPMENT.  MathStar and
Summit shall collaborate on the development of an End User training course that
may be provided by qualified staff members of either party or both parties,
depending on resource availability and geographical convenience.  Customer training classes shall consist of
the essential training elements necessary for End Users to learn how to use the
PRODUCT for the purpose of creating and verifying FPOA designs.  Each party shall own the portion of the
course materials such party contributes to the End User training course and
hereby grants to the other party a no charge license to use and distribute such
materials to End Users attending such training courses.

3.6.2        CUSTOMER
TRAINING CLASS DELIVERY.  Each party may
deliver the jointly developed training class using their own instructors.  The parties shall explore ways of sharing
resources for training delivery or for contracting for training instructors
from one party to deliver training to End Users of the other party pursuant to
a mutually agreed agreement.  Unless
otherwise agreed, the party providing the training services shall be entitled
to receive all fees associated with such services.

3.7           USER MANUALS.

3.7.1        USER
MANUAL DEVELOPMENT.  Summit shall develop
a section or addendum to the SUMMIT SOFTWARE user manual that addresses the use
of the MATHSTAR-SPECIFIC SOFTWARE. 
MathStar shall develop any user manual documentation required for the
MATHSTAR LIBRARY.  Summit shall assemble
the user manual for the PRODUCT, consisting of the standard Summit Software
user manual, a section or addendum dedicated to the MATHSTAR-SPECIFIC SOFTWARE
within the SUMMIT SOFTWARE and a section or addendum with the documentation for
the MATHSTAR LIBRARY.  Each party shall
own all right, title and interest in and to the portion of the user manual such
party contributes to the user manual and hereby grants to the other party a no
charge license to incorporate such party’s materials into the user manual for
the PRODUCT and to distribute such materials to End Users as part of the user
manual for the PRODUCT.  Each party
agrees not to remove the copyright notices on any user manual materials of the
other party.

3.7.2        USER
MANUAL DISTRIBUTION.  User manuals shall
be updated and distributed electronically with each major release of the
PRODUCT only in PDF file format. 
MathStar shall have the responsibility of aligning the user manual
information with the functionality of each major release of the PRODUCT.

 

 

4

 

4              FINANCIAL
CONSIDERATIONS.

4.1           PRODUCT
PRICING

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

4.2           * EVALUATION LICENSES

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

4.3           ENGINEERING
PRODUCT ENHANCEMENTS

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

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

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

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

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

4.4           ENGINEERING FEES FOR PRODUCT MAINTENANCE

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

4.5           SUMMIT SOFTWARE FOR MATHSTAR INTERNAL
USE

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

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

 

5

 

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

4.6           SUMMIT SOFTWARE FOR MATHSTAR 3rd
PARTY FPOA APPLICATION DEVELOPERS

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

5              ADDITIONAL AGREEMENTS OF THE PARTIES

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

 

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

 

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

 

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

 

5              ACTIVITY MANAGEMENT.

 

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

 

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

 

7.             DEVELOPMENT
EFFORTS; RESOURCE COMMITMENT; EXPENSES.

 

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

 

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

 

6

 

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

 

8.             DISPUTE
RESOLUTION PROCESS.

 

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

 

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

 

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

 

9              OWNERSHIP.

 

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

 

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

 

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

 

 

7

 

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

 

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

 

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

 

10.           TRADEMARKS,
TRADE NAMES AND BRANDING.

 

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

 

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

 

11.           CONFIDENTIALITY.

 

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

 

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

 

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

 

 

8

 

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

 

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

 

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

 

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

 

12.           REPRESENTATIONS
AND WARRANTIES.

 

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

 

 

9

 

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

 

13.           INDEMNITY.

 

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

 

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

 

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

 

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

 

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

 

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

 

10

14.           LIMITATION
OF LIABILITY.

 

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

 

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

 

15.           TERM
AND TERMINATION.

 

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

 

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

 

 

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

 

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

 

 

11

 

16.           MISCELLANEOUS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  SUMMIT DESIGN, INC.

  
	
   

  
	
  By:

  	
  /s/Emil Girczyc

  	
   

  
	
   

  	
  Name: Emil Girczyc

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  
	
  MATHSTAR, INC.

  
	
   

  
	
  By:

  	
  /s/ Daniel Sweeney

  	
   

  
	
   

  	
  Name: Daniel Sweeney

  
	
   

  	
  Title: Chief Operating Officer

  
				

 

 

13

EXHIBIT
A

Summit
End User License Agreement

 

 

	
          SUMMIT DESIGN LICENSE AND SERVICES
  AGREEMENT

  	
  

  
	
   

  

 

	
  Licensee:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
         (Signature)

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
					

 

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

 

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

 

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

 

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

 

1.             DEFINITIONS.

 

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

 

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

 

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

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

 

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

 

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

 

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

 

10.13       “Proprietary Information” means:

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

 

 

14

 

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

 

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

 

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

 

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

 

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

 

2              PAYMENT AND INSTALLATION.

 

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

 

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

 

3.             LICENSE GRANT.

 

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

 

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

 

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

4              PROTECTION
OF PROPRIETARY INFORMATION.

 

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

 

 

16

 

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

 

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

 

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

 

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

 

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

 

5.             SOFTWARE MAINTENANCE POLICY.

 

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

 

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

 

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

 

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

 

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

6              LIMITED WARRANTY AND DISCLAIMER

 

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

 

 

18

 

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

 

7              INFRINGEMENT.

 

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

 

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

 

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

 

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

 

8              LIMITATION OF LIABILITY.

 

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

 

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

 

 

19

 

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

 

9              DEFAULT AND TERMINATION

 

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

 

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

 

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

 

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

 

10            GENERAL

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

20

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

21Exhibit 10.17

 

Schedule of
Executive Officer and Director Compensation for 2006

 

Set forth below is a
description of the compensation that MathStar, Inc. determined to pay its
executive officers (defined in Item 402(a)(3) of Regulation S-K) in their
current positions for the year ending December 31, 2006.

 

	
  Name

  	
   

  	
  2006 Base Salary

  	
   

  	
  Potential Bonus

  2006 Stock Option

  Awards (1)(2)

  	
   

  
	
  Douglas M. Pihl,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  President and Chief Executive Officer

  	
   

  	
  $

  	
  246,000

  	
   

  	
  3⁄4

  	
   

  
	
  Ronald K.
  Bell,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chief Technology Officer

  	
   

  	
  $

  	
  240,000

  	
   

  	
  3⁄4

  	
   

  
	
  Daniel J.
  Sweeney,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chief Operating Officer

  	
   

  	
  $

  	
  180,000

  	
   

  	
  $

  	
  90,000

  	
   

  
	
  Glen Wiley,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vice President, Sales(3)

  	
   

  	
  $

  	
  146,400

  	
   

  	
  $

  	
  130,000

  	
   

  
	
  James W.
  Cruckshank,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Chief Financial Officer and

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vice President, Administration

  	
   

  	
  $

  	
  175,000

  	
   

  	
  $

  	
  87,500

  	
   

  
	
  Sean P.
  Riley,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vice President, Marketing

  	
   

  	
  $

  	
  170,000

  	
   

  	
  $

  	
  65,000

  	
   

  
	
  Timothy A.
  Teckman,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vice President, Engineering

  	
   

  	
  $

  	
  150,000

  	
   

  	
  $

  	
  60,000

  	
   

  
	
  Bryon K.
  Bequette,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General Counsel

  	
   

  	
  $

  	
  30,000

  	
   

  	
  3⁄4

  	
   

  

 

(1)                    Reflects
the maximum potential bonus the named officer could earn under this bonus plan
adopted by the Compensation Committee.

 

(2)                    For
2006, Mr. Wiley’s bonus is based on the achievement of certain design wins
and revenue goals.

 

(3)                     Pro
rated from January 9, 2006.

 

Schedule of
Director Compensation for 2006

 

Set forth below is a
description of the compensation that MathStar, Inc. determined to pay to
its directors for the year ending December 31, 2006.

 

Cash
Compensation

 

	
  Retainer:

  	
   

  	
  $1,500 per
  quarter

  
	
  Board
  Meeting Fee

  	
   

  	
  $750 per
  meeting

  
	
  Audit
  Committee:

  	
   

  	
  $1,000 per
  meeting for chairman, $750 meeting for other members

  
	
  Other
  Committees:

  	
   

  	
  $750 per
  meeting for chairman, $500 per meeting for other members

  

 

 

Equity
Compensation to Non-Employee Directors

 

	
  Initial
  Option Grant:

  	
   

  	
  To new
  non-employee directors, ten-year option to purchase 25,000 shares, vesting
  over three years on the first, second and third anniversary dates of the date
  of grant if the director is then a director of MathStar, at an exercise price
  equal to the exercise price of the common stock on the date of grant.

  
	
   

  	
   

  	
   

  
	
  Annual
  Grant:

  	
   

  	
  Upon the
  re-election of each non-employee director to the board, ten-year option to
  purchase 5,000 shares, vesting one year after grant if the director is then a
  director of MathStar, at an exercise price equal to the exercise price of the
  common stock on the date of grant.

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