PATENT
AND TECHNOLOGY LICENSE AGREEMENT
This
Patent and Technology License Agreement ("License Agreement") is entered into
and effective as of the 9th day of March, 2006 (the "Effective Date"), by and
between INTERNATIONAL RECTIFIER CORPORATION, a company organized under the
laws
of the State of Delaware ("IR"), and APA Enterprises, Inc., a company organized
under the laws of the State of Minnesota ("APA"). IR and APA each may be
referred to herein as a "Party" and collectively as the "Parties."
WHEREAS,
IR and APA are parties to that certain Asset Purchase Agreement, dated as of
March 9, 2006, pursuant to which APA sold to IR certain assets, including
without limitation certain patents and technology relating to the development
and production of products utilizing Gallium Nitride ("GaN").
WHEREAS,
APA desires to obtain a license to such patents and technology to design,
develop, make, have made, market, sell and service products for applications
greater than 1.0 GHz and desires to share the value of any benefit attributable
to certain licenses IR may grant to a third party.
WHEREAS,
IR is prepared to cause such technology and patents to be licensed to APA and
share revenue upon the terms and conditions set forth herein.
NOW,
THEREFORE, the Parties agree as follows:
Article
1- Definitions
1.1 "Affiliate"
means any person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
the
person specified. For purposes of this definition, control of a person means
the
power, direct or indirect, to direct or cause the direction of the management
and policies of such person, whether by contract or otherwise.
1.2 "Field
of
Use" means applications greater than 1.0 GHz.
1.3 "Licensed
Patents" means
the
patents and patent applications therefor identified on Schedule A, attached
hereto and made a part hereof.
1.4 "Licensed
Technology" means the documented disclosures, know-how, technical information,
trade secrets and other intellectual property or rights listed on Schedule
B,
attached hereto and made a part hereof.
1.5 "Licensed
IP Rights" shall mean Licensed Patents and Licensed Technology.
1.6 "APA's
IP
Rights" means:
1.6.1 The
patents and applications therefor (and patents which may issue on such
applications) covering APA's inventions applicable to the Licensed IP Rights
with respect to which the first application for a patent anywhere was filed
prior to the date of termination of this Agreement; and
1.6.2 Know-how,
technical information, trade secrets and other intellectual property or rights
applicable to the Licensed IP Rights that APA develops or acquires during the
term of this Agreement.
1.7 "Licensed
Products" means products that utilize the Licensed IP Rights within the Field
of
Use.
Article
2 - Grants of Licenses
2.1 IR
hereby
grants to APA a fully paid, non-exclusive, non-transferable, world-wide right
and license to use the Licensed IP Rights within the Field of Use to design,
develop, make, have made, use, market, sell and service Licensed Products
manufactured by or for APA. The license granted herein does not include the
right to sublicense any third party, except that APA may grant a sublicense
to
one or more of its Affiliates provided that such Affiliate agrees in writing
to
comply with all of the provisions of this License Agreement.
2.2 APA
hereby grants to IR a non-exclusive, non-transferable, world-wide, royalty-free
right and license, with the right to sublicense to its Affiliates, to use APA's
IP Rights for any purpose. This provision shall survive the termination or
expiration of this Agreement.
2.3 APA
hereby agrees not to assert or commence legal action against IR, or against
any
Affiliate of IR, or against the vendees of any of them, for any claim of
infringement of any patents of any country of the world which are now owned
or
which hereafter may be acquired by APA where such claim is based upon the
manufacture, use or sale by IR or its subsidiaries or their vendees of power
semiconductor products or devices.
2.4 Licensed
Technology will be disclosed in the language, form and system of measurements
in
which it is available at IR at the time of its disclosure to APA. IR will not
be
obligated under this License Agreement to make up any special drawings,
specifications, translations, or other similar documents for APA.
Article
3 - Representations; No Indemnification
3.1 Each
Party represents that it has the right to license and to furnish to the other
Party the Licensed IP Rights or APA's IP Rights, as the case may
be.
3.2 Neither
Party makes any representation concerning the existence, scope or validity
of
any of its patents.
3.3 Neither
IR nor APA makes any representation or warranty as to the value or utility
of
the Licensed IP Rights or APA's IP Rights licensed hereunder. Neither IR nor
APA
makes any warranty that the use of the Licensed IP Rights or APA's IP Rights
does not infringe or will not cause infringement of any intellectual property
rights owned or controlled by any third party. Each Party understands and agrees
that neither IR nor APA makes any warranty that any manufacture, use, offer
for
sale, sale or other disposal of Licensed Products will be free from infringement
of any third party intellectual property rights. Neither IR nor APA makes any
representation or warranty, expressed or implied, statutory or otherwise, and
each Party expressly disclaims implied warranties of merchantability, fitness
for a particular purpose and non-infringement, and any equivalents under the
laws of any jurisdictions that might arise from any activities or information
disclosures relating to this License Agreement.
3.4 Notwithstanding
the foregoing, APA agrees to hold IR harmless from and against any third party
claims, including infringement claims, asserted, against IR arising directly
or
indirectly from (a) APA's failure to properly use the Licensed Technology;
(b)
APA's modification of the Licensed Technology; or (c) use of the Licensed
Technology in combination with information not supplied by IR.
Article
4 - United States Government Export Administration Regulations
4.1 APA
hereby gives to IR its written assurance that it will comply with all applicable
export laws and regulations, including but not limited to, the export control
laws and regulations of the United States.
Article
5 - Third Party Licensing
5.1 Upon
the
request of APA, IR shall use reasonable commercial efforts to negotiate and
enter into a licensing agreement with one or more of the third parties listed
in
Schedule C on terms and conditions acceptable to IR. Such licensing agreement
shall allow the third party to use the Licensed IP Rights within the Field
of
Use to design, develop, make, use, market, sell and service Licensed Products
for APA or in a joint venture with APA.
Article
6 - Confidentiality
6.1 Confidential
information which either Party discloses to the other Party hereunder shall
remain the property of the disclosing Party. If disclosed in written form,
it
shall be identified as confidential information by an appropriate legend. If
disclosed orally or visually, it shall be identified as confidential information
at the time of disclosure and shall be confirmed by written outline mailed
to
the other Party by registered or certified mail, return receipt requested,
within thirty (30) days of the original disclosure. For a period of ten (10)
years from the date of first receipt thereof, the receiving Party
shall:
6.1.1 Treat
all
such information in the same manner as it treats its own confidential
information, in any event exercising reasonable precautions to prevent the
disclosure of such information to others; and
6.1.2 Use
such
information only for the purposes set forth herein.
6.2 The
foregoing commitments shall impose no obligation with respect to any information
which:
6.2.1 Is
now or
hereafter becomes, through no act or failure to act on the part of the receiving
Party, part of the public domain;
6.2.2 Is
hereafter furnished to the receiving Party by a third party as a matter of
right
and without restriction on disclosure;
6.2.3 Is
supplied by the disclosing Party to a third party without restrictive
obligations similar to those imposed herein; or
6.2.4 Is
independently developed by or for the receiving Party.
Article
7 - Term and Termination
7.1 This
License Agreement shall become effective on the Effective Date.
7.2 Unless
sooner terminated in accordance with the provisions of this Article 7, or by
operation of law or otherwise, this License Agreement shall terminate on the
date that the last of the Licensed Patents expires.
7.3 This
License Agreement shall be subject to termination by IR upon written notice
to
APA in the event that, in IR's reasonable judgment:
7.3.1 Such
termination is necessary to comply with any order, decree or request of any
court of competent jurisdiction or any competent governmental authority or
any
department or agency thereof; or
7.3.2 Normal
conduct of the business of APA as an ongoing enterprise ceases or is
substantially altered as a consequence of any action taken by governmental,
judicial, or any other authority; or
7.3.3 APA
fails
or becomes substantially unable to perform any of its material obligations
or
undertakings under this License Agreement, or violates any material right or
license granted to it by IR hereunder, and the default, inability, or violation
is not corrected within thirty (30) days after written notice from IR specifying
the nature of such default, inability, or violation; or
7.3.4 APA
makes
any use or disclosure of Licensed IP Rights not authorized by this License
Agreement.
7.4 In
the
event that either Party becomes bankrupt or insolvent, or makes an assignment
for the benefit of creditors, or a receiver is appointed for it, or it otherwise
takes advantage of any insolvency law, the other Party may terminate this
License Agreement upon one (1) day's written notice.
7.5 Upon
termination of this License Agreement prior to the full term hereof, all rights
granted and obligations undertaken hereunder with respect to this License
Agreement shall terminate forthwith except:
7.5.1 Unless
this License Agreement is terminated by IR pursuant to Sections 7.3.3, 7.3.4
or
7.4, APA may continue to use the Licensed IP Rights to fulfill its obligations
under contracts with customers in effect on the date APA received notice of
termination, provided that APA, within thirty (30) days of the termination
date,
provides written notice of each such contract to IR, including the identity
of
the customer and the Licensed Products, and the expected date of expiration
or
termination of such contract;
7.5.2 The
provisions of Sections 2.3, 3.4, 4.1, Article 5, Article 6, and Sections 10.9
and 10.10 shall survive termination of this Agreement.
7.6 Upon
expiration of the full term of this License Agreement, APA shall have a fully
paid non-exclusive license, with no right to sublicense, except to one or more
of its Affiliates, to use the Licensed IP Rights to make, use and sell Licensed
Products.
7.7 Expiration
or termination of this License Agreement or termination of the licenses granted
herein shall not relieve either Party of any liability or obligations accruing
as of the effective date of such expiration or termination.
Article
8- General Limitations
8.1 The
obligations and rights of the Parties under this License Agreement shall be
subject to the following:
8.1.1 Neither
Party shall be obligated to disclose any proprietary information of a third
party without the consent of such third party or any information the furnishing
of which would require the payment of consideration to a third party, other
than
an employee of the Party furnishing such information;
8.1.2 Neither
Party shall be obligated to disclose any information which the laws and
regulations of any government which has jurisdiction over such matters do not
permit to be disclosed; and
8.1.3 Neither
Party shall be obligated to take any action which would violate the laws,
regulations or requirements of any government or any agency thereof which has
jurisdiction over such matters.
Article
9
- Third
Party Revenue
9.1 If,
during the term of this License Agreement, IR grants a license to use the
Licensed IP Rights in the Field of Use to any third party, IR shall pay to
APA
twenty-five percent (25%) of the Net Revenues received from such third party
during the term of this License Agreement. As used in this Section, "Net
Revenues" means all amounts received by IR in payment for such license less
all
costs incurred by IR in connection with such license (including without
limitation all costs incurred in connection with the negotiation, implementation
and administration of such license), as determined by IR in its sole discretion.
Such payments shall be made to APA within thirty (30) days of IR's receipt
of
the corresponding payment from the third party.
9.2 If,
during the term of this License Agreement, IR receives a payment from a third
party by reason of such third party's infringement of the Licensed Patents
in
the Field of Use (whether by reason of legal action, settlement or otherwise),
IR shall pay to APA twenty-five percent (25%) of the Net Recovery received
from
such third party. As used in this Section, "Net Recovery" means all amounts
received by IR by reason of such third party's infringement of the Licensed
Patents in the Field of Use less all costs incurred by IR in connection with
obtaining such payment (including without limitation attorneys' fees and fees
of
experts and accountants), as determined by IR in its sole discretion. Such
payments shall be made to APA within thirty (30) days of IR's receipt of the
corresponding payment from the third party.
9.3 APA
promptly shall inform IR in writing of any actual or suspected infringement
of
any of the Licensed Patents of which APA becomes aware during the term of this
License Agreement.
Article
10 - Miscellaneous
10.1 Notices.
All
notices, requests and other communications hereunder must be in writing and
shall be deemed to have been duly given if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the other Party at
the
following addresses or facsimile numbers:
If
to
APA, to:
APA
Enterprises, Inc.
2950
N.E.
84th
Lane
Blaine,
MN 55449
Facsimile
No.: (763) 784-2038
Attn:
President
If
to IR,
to:
International
Rectifier Corporation
233
Kansas Street
El
Segundo, CA 90245
Facsimile
No.: (310) 726-8484
Attn:
Executive Vice President and General Counsel
All
such
notices, requests and other communications shall be deemed given upon receipt.
Either Party from time to time may change its address, facsimile number or
other
information for the purpose of notices to that Party by giving notice specifying
such change to the other Party.
10.2 Severability.
If any
provision of this License Agreement shall be held to be illegal, invalid or
unenforceable, and if the rights or obligations of a Party hereunder will not
be
materially adversely affected thereby, the Parties agree that such provision
will be enforced to the maximum extent permissible so as to effect the intent
of
the Parties, and the validity, legality and enforceability of the remaining
provisions of this License Agreement shall not in any way be affected or
impaired thereby. If necessary to effect the intent of the Parties, the Parties
will negotiate in good faith to amend this License Agreement to replace the
unenforceable language with enforceable language which as closely as possible
reflects such intent.
10.3 Amendments.
This
License Agreement may be amended or modified only by a written instrument signed
by both Parties.
10.4 Waiver.
Any
waiver by a Party of an instance of the other Party's noncompliance with any
obligation or responsibility hereunder shall be in writing and signed by the
waiving Party and shall not be deemed a waiver of other instances of the other
Party's noncompliance hereunder.
10.5 No
Assignment.
This
License Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the Parties.
Nothing in this License Agreement shall confer any rights upon any person other
than the Parties and their respective successors and permitted assigns. Neither
Party may assign this License Agreement or its rights hereunder to any person
without the written consent of the other Party. No assignment by either Party
of
this License Agreement or of any of such Party's rights hereunder shall release
such Party from any of its obligations hereunder. Any attempted assignment
of
this License Agreement in violation of this Section shall be void and of no
effect.
10.6 Construction.
This
License Agreement has been negotiated by the Parties and their respective
counsel and shall be fairly interpreted in accordance with its terms and without
any strict construction in favor of or against either Party.
10.7 No
Agency.
This
License Agreement shall not constitute either Party as a legal representative
or
agent of the other Party, nor shall a Party have the right or authority to
assume, create or incur any liability of any kind, expressed or implied, against
or in the name or on behalf of the other Party.
10.8 Relationship
of the Parties.
Nothing
in this License Agreement is intended to, or shall be deemed to, create a
partnership or joint venture relationship between the Parties or any of their
Affiliates for any purpose.
10.9 Governing
Law.
This
License Agreement shall be governed by and construed in accordance with the
Laws
of the State of California applicable to a contract executed and performed
in
such State, without giving effect to the conflicts of law principles
thereof.
10.10 Jurisdiction;
Waiver of Jury Trial.
The
Parties hereby agree that any action or proceeding arising out of or related
to
this License Agreement shall be conducted only in the County of Los Angeles,
California. Each Party hereby irrevocably consents and submits to the exclusive
personal jurisdiction of and venue in the federal and state courts located
in
the County of Los Angeles, California. Each Party hereby waives to the fullest
extent permitted by applicable Law, any right it may have to a trial by jury
in
respect of any litigation directly or indirectly arising out of, under or in
connection with this License Agreement or any transaction contemplated hereby.
Each Party agrees that service of any summons, complaint or other initial
pleading made in the manner provided for the giving of notices in Section 10.1
shall be effective service in such action or proceeding. Nothing in this
Section, however, shall affect the right of a Party to serve such summons,
complaint or initial pleading in any other manner permitted by Law.
10.11 Counterparts.
This
License Agreement may be signed in two or more counterparts, each of which
shall
be an original, with the same effect as if the signatures were upon the same
instrument, and all of which together shall constitute one and the same
instrument.
10.12 Entire
Agreement.
This
License Agreement constitutes the entire agreement among the Parties with
respect to the subject matter hereof and supersedes all prior agreements,
understandings and negotiations, both written and oral, between the Parties
with
respect to the subject matter of this License Agreement. Each Schedule referred
to herein and attached hereto is an integral part of this License Agreement
and
is incorporated herein by reference. No representation, inducement, promise,
understanding, condition or warranty not set forth herein has been made or
relied upon by either Party. Neither this License Agreement nor any provision
hereof is intended to confer any rights or remedies upon any person other than
the Parties hereto.
IN
WITNESS WHEREOF, the Parties hereto have caused this License Agreement to be
executed by their duly authorized officers or representatives as of the date
first written above.
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APA
ENTERPRISES, INC.
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INTERNATIONAL
RECTIFIER CORPORATION
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By:
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/s/
Anil K. Jain
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By:
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/s/
Alexander Lidow
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Anil
K. Jain
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Alexander
Lidow
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CEO
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CEO
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SCHEDULE
A
LICENSED
PATENTS
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1.
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United
States patent 5,192,987 titled “High Electron mobility transistor with
GaN/AlGaN Heterojunction”
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2.
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United
States patent 5,296,395 titled “Method of making a high electron mobility
transistor”
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3.
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United
States patent application filed November 25 2002, claiming priority
of
United States provisional application No. 60/428,856 titled “Super lattice
modification of overlying transistor”
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SCHEDULE
B
LICENSED
TECHNOLOGY
Limited
solely to technology and intellectual property acquired by International
Rectifier from APA under the Asset Purchase Agreement dated March 9, 2006.
A
complete description of the technology is provided in items (4) and (5) of
Schedule 1.1(a)(v) of the Asset Purchase Agreement.
SCHEDULE
C
APA
THIRD PARTY LICENSING PROSPECTS
The
following includes companies with whom APA Enterprises, Inc. intends to
work:
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Company
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Function
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Transistors:
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Eudyna
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transistor
supply
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TriQuint
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processing
contract for devices
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RFMD
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processing
of devices/transistor supply
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Power
Amplifiers:
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Chelton
Micro
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PA/transistor
design
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Powerwave
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NextNet
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ADC
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