December 4, 1995
Re: Patent License Agreement between American Telephone
and telegraph Company, now AT&T Corp. (AT&T) Integrated
Device Technology, Inc. (IDT) effective May 1, 1992 and
relating to Silicon Semiconductor Devices and Information
Handling Systems (the "Agreement")
Based upon recent discussions between our companies concerning modifying the
Agreement the following is proposed:
1. AT&T recently announced that it is restructuring itself to conduct its
business in the form of three separate legal entities. These three entities will
include a Service Company, a Systems and Technology Company, and AT&T Global
Information Solutions (GIS). AT&T shareholders will hold shares in each of these
entities. It is possible that either IDT or any of these three entities may at
some time in the future wish to divest all or part of its business.
Thus, we wish to clarify the licenses, rights and obligations under the
Agreement of IDT, the three entities, and any future divested present business.
First although each of the three entities will have its own patent portfolio,
IDT will have the same licenses and rights (and any corresponding obligations)
after the restructuring (including patents originating from the three entities
through April 30, 1997) as it would have had under the Agreement and this Letter
Agreement from AT&T if the restructuring had not occurred. Second, the three
entities will have the same licenses and rights (and any corresponding
obligations) after restructuring (including patents originating from IDT through
April 30, 1997) that AT&T had under the Agreement and this Letter Agreement
prior to such restructuring. Third, in the future, if IDT or any of the three
entities divest a portion of its present business, the licenses and rights
granted in the subject agreement may be sublicensed to the divested business by
the divesting company. Such sublicenses may be granted and retained only while
the future divested business operates as a separately identifiable business and
only to the extent applicable to products and services sold by the future
divested business prior to its divestiture. The payment obligations of IDT under
the Agreement and this Letter Agreement shall be only to one of the three
entities.
2. The Technology Credit which IDT granted to AT&T in Section 2.02 of the
Agreement may be used by any of the three entities at any time prior to April
30, 2002, however the total amount of the credit shall not exceed
[ REDACTED * ], including portions of the credit
previously used by AT&T.
3. IDT and the three entities agree that for the period from May 1, 1997 through
April 30, 2002, neither they nor any of their RELATED COMPANIES or assigns shall
bring any legal action against the other party or any of their RELATED COMPANIES
alleging infringement by such other party or any of their RELATED COMPANIES of
any patent issued from May 1, 1997 through April 30, 2002 with respect to any
product which is a LICENSED PRODUCT. Nothing herein, however, shall be construed
as a waiver of any party's (or any of their RELATED COMPANIES') rights against
the other party or any of their RELATED COMPANIES with
* Confidential treatment has been requested for certain portions of this
document.
Amendment to Patent License Agreement
December 1, 1995
Page 2
respect to acts of infringement after April 30, 2002, nor shall any party (or
any of their RELATED COMPANIES) be estopped from bringing any legal action
against the other party or any of their RELATED COMPANIES after April 30, 2002,
to enforce any and all of their rights, including the rights to obtain monetary
damages and injunctive relief, based on any act of infringement occurring after
April 30, 2002. Nothing contained in the Agreement or this amendment thereto
shall be construed as granting to AT&T or IDT a patent or other license under
any of the other's patents having a first filing date after April 30, 1997.
4. In lieu of paying royalties to AT&T in accordance with Section 2.05 of the
Agreement for the period from May 1, 1997 until April 30, 2002 and for agreement
by the parties not to bring any legal action in paragraph 3 herein, the
following shall apply
(a) With respect to REPORTABLE PRODUCTS (as defined in the agreement) Sold,
leased or put into use from May 1, 1997 until April 30, 2002, IDT shall
semiannually pay to AT&T Corp. royalty at the rate of [
REDACTED * ] of all of IDT's gross
sales less MODULES plus the components in the MODULES which are
manufactured by IDT. The total of such payments shall not exceed
[ REDACTED * ].
(b) IDT shall, within sixty (60) days after the end of each of the following
semiannual periods:
October 31, 1997
April 30, 1998
October 31, 1998
April 30, 1999
October 31, 1999
April 30, 2000
October 31, 2000
April 30, 2001
October 31, 2001
April 30, 2002
send to Contract Administrator, Liberty Corner Division 150 Allen Road
Suite 2000, Liberty Corner, New Jersey 07938-1955, a statement certified
by a responsible official of IDT showing all of IDT's gross sales less
MODULES plus the components in the MODULES which are manufactured by
IDT during each semiannual period and pay AT&T, or their designee, at
Sun Bank, P.O. Box 913021, Orlando, Florida 32891-3021, or
alternatively, by bank wire transfers to AT&T's account: AT&T Licensing
Payments, Metrotech Center, Brooklyn, New
* Confidential treatment has been requested for certain portions of this
document.
Amendment to Patent License Agreement
December 1, 1995
Page 3
York 11245, United States of America, the royalties payable in
accordance with such statement. After payment of [ REDACTED * ],
IDT will have no further obligation to issue reports to AT&T.
MODULES means any multiplicity of SILICON SEMICONDUCTIVE DEVICES on a
connectorized printed circuit board or equivalent.
5. The terms and conditions in Sections 2.07, 2.08, 2.09, 2.11 and 2.12 of the
Agreement shall apply to royalties payable pursuant to paragraph 4, above,
provided, however, that [ REDACTED * ] in Section
2.12 shall be deleted and the amount [ REDACTED * ]
shall be substituted in lieu thereof. Additionally, with regard to Section 2.12
only, the term LIMITED PERIOD shall extend until April 30, 2002.
6. Any term in capital letters which is defined in the Definitions Appendix of
the Agreement shall retain the meaning specified therein except as otherwise
herein specified.
To ensure that the parties are in agreement with respect to this matter and
can act with a common understanding, please indicate your confirmation of the
above by signing and dating this letter in the space provided below. Kindly
return an executed copy to AT&T in the enclosed envelope at your earliest
convenience. Thank you for your cooperation.
Very truly yours
AT&T Corp.
/s/ M. R. GREENE
M. R. Greene
Vice President, Intellectual Property
& Licensing Counsel
ACCEPTED AND AGREED:
Integrated Device Technology, Inc.
/s/ LEONARD C. PERHAM
Leonard C. Perham
President and Chief Executive Officer
* Confidential treatment has been requested for certain portions of this
document.