8-K

As filed with the Securities and Exchange Commission on November 13, 2002

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 1, 2002

DSP GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

0-23006	94-2683643
(Commission File Number)	(I.R.S. Employer Identification No.)

3120 Scott Boulevard, Santa Clara, CA	95054
(Address of Principal Executive Offices)	(Zip Code)

408/986-4300

(Registrant’s Telephone Number, Including Area Code)

With a copy to:

Bruce Alan Mann, Esq.

Morrison & Foerster LLP

425 Market Street

Item 2.    ACQUISITION OR DISPOSITION OF ASSETS.

On November 1, 2002, DSP Group, Inc., a Delaware corporation (“DSP Group” or the “Company”) completed the spin-off (the “Spin-off”) of its DSP Cores licensing division to Ceva, Inc. (“Ceva”), and the immediately subsequent combination (the “Combination”) of Ceva with Parthus Technologies plc (“Parthus”) in a scheme of arrangement, which, as previously announced by the parties, was approved by the High Court of Ireland on October 21, 2002.

The transactions, including the Spin-off and Combination, were governed by a Combination Agreement, dated as of April 4, 2002, and amended as of August 29, 2002, by and among the Company, Parthus and Ceva (the “Combination Agreement”), which are filed herewith as Exhibits 10.1 and 10.2. The Spin-off was completed by means of a Separation Agreement by and among the Company, Ceva and Parthus, filed herewith as Exhibit 10.3; a Technology Transfer Agreement between the Company and Ceva, filed herewith as Exhibit 10.4; a Technology Transfer Agreement between DSP Group, Ltd. (a wholly-owned subsidiary of the Company) and Corage Ltd. (a wholly-owned subsidiary of Ceva), filed herewith as Exhibit 10.5; a Tax Indemnification and Allocation Agreement between the Company and Ceva, filed herewith as Exhibit 10.6; and a Transition Services Agreement between DSP Group, Ltd. and Corage, Ltd., filed herewith as Exhibit 10.7, each dated as of November 1, 2002, and each of which is described in Ceva’s Form S-1 Registration Statement (333-97353), as amended (the “S-1”).

Under the terms of the Spin-off, the Company contributed its DSP Cores licensing division to Ceva in exchange for Ceva stock and distributed all of the Ceva stock it held to the Company’s stockholders of record as of 5:00 p.m. EST on October 31, 2002. Ceva then immediately acquired Parthus and issued stock to the former Parthus shareholders pursuant to the scheme of arrangement, and Ceva changed its name to ParthusCeva, Inc. (“ParthusCeva” (Nasdaq: PCVA, London: PCV)). Pursuant to the terms agreed to by the parties, as part of the assets contributed to Ceva, DSP Group also contributed a sum of $40 million plus cash equal to the amount by which the transaction costs of the Spin-off and Combination exceeded $2 million, and Parthus also made a $60 million capital repayment to its shareholders immediately prior to the Combination. The Company received private letter rulings from the IRS to the effect that, among other things, the Spin-off was tax-free under Section 355 of the Internal Revenue Code of 1986 for federal income tax purposes, except with respect to cash received in lieu of fractional shares. A full description of the Spin-off and Combination is contained in the S-1.

At the effective time of the Spin-off, each stockholder of record of the Company on October 31, 2002 received one share of ParthusCeva’s common stock for every three shares of the Company’s common stock held by them on that date. Fractional shares were not issued. Instead, fractional interests were aggregated and sold on the market on the first day after the closing of the transactions, and cash in lieu of fractional shares was distributed ratably to the Company’s stockholders who would otherwise have received a fraction of a ParthusCeva share. The distribution was made to the Company’s stockholders without payment of any consideration or the exchange of any shares by the Company’s stockholders. At the effective time of the Combination, each shareholder of Parthus received 0.015141 shares of ParthusCeva’s common stock for each ordinary share of Parthus held by them (0.15141 shares per Parthus ADS) on October 31, 2002, the record date for the Combination, and

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cash in lieu of fractional shares, in exchange for their Parthus stock, which was cancelled as part of the scheme of arrangement.

As a result of the Spin-off and Combination the Company distributed 9,041,851 shares of ParthusCeva common stock to its stockholders (50.1% of ParthusCeva after the transactions) and ParthusCeva issued 8,998,887 shares of its common stock to the former Parthus shareholders (49.9% of ParthusCeva after the transactions) and assumed options to purchase approximately 1,644,435 shares of ParthusCeva stock (based on Parthus options outstanding as of June 30, 2002). The relative ratio of shares distributed to the Company’s stockholders and issued to the former Parthus shareholders, as well as the other material terms of the transactions, were determined pursuant to arms-length negotiations between the parties. Based on the last reported trade price of the ParthusCeva common stock on the Nasdaq National Market on November 1, 2002 ($5.27), the value of the shares of common stock distributed to the Company’s stockholders was approximately $47,651,000. Options to purchase DSP Group’s common stock outstanding under DSP Group’s stock option plans were also adjusted as of the closing date to reflect the distribution of assets to ParthusCeva.

The Company is not aware of any material relationship between ParthusCeva and the Company or its affiliates, any director or officer of the Company or any associate of any such director or officer that existed at the date of the Spin-off, except as disclosed in the S-1.

On October 31, 2002, the Company issued a press release announcing further details regarding the impending closing of the Spin-off and Combination. The press release is attached and filed herewith as Exhibit 99.1 and is incorporated herein by reference.

On November 1, 2002, the Company, Parthus and ParthusCeva issued a joint press release announcing, among other things, that the Spin-off and Combination had closed. The joint press release is attached and filed herewith as Exhibit 99.2 and is incorporated herein by reference.

Item 7.    FINANCIAL STATEMENTS AND EXHIBITS.

b.  Pro-Forma Financial Information

The pro-forma financial information required by this item will be filed by amendment to this Current Report on Form 8-K not later than 60 days after the date that the initial report on this Form 8-K must be filed.

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c.  Exhibits

Exhibit No.	Description
10.1	Combination Agreement, by and among DSP Group, Inc., Parthus Technologies plc and Ceva, Inc., dated as of April 4, 2002 (incorporated by reference to Exhibit 2.1 to Ceva, Inc.’s registration statement on Form 10 (File No. 000-49842), filed with the Commission on June 3, 2002).
10.2	Amendment No. 1 to Combination Agreement, by and among DSP Group, Inc., Parthus Technologies plc and Ceva, Inc., dated as of August 29, 2002 (incorporated by reference to Exhibit 2.2 to Ceva, Inc.’s registration statement on Form S-1 (File No. 333-97353), filed with the Commission on July 30, 2002).
10.3	Separation Agreement by and among DSP Group, Inc., DSP Group, Ltd., Ceva, Inc., DSP Ceva, Inc. and Corage, Ltd., dated as of November 1, 2002.
10.4	Technology Transfer Agreement between DSP Group, Inc. and Ceva, Inc., dated as of November 1, 2002.
10.5	Technology Transfer Agreement between DSP Group, Ltd. and Corage Ltd., dated as of November 1, 2002.
10.6	Tax Indemnification and Allocation Agreement between DSP Group, Inc. and Ceva, Inc., dated as of November 1, 2002.
10.7	Transition Services Agreement between DSP Group, Ltd. and Corage, Ltd., dated as of November 1, 2002.
99.1	Press Release of DSP Group, Inc., dated October 31, 2002.
99.2	Joint Press Release of DSP Group, Inc., Ceva, Inc. and Parthus Technologies plc, dated November 1, 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

DSP GROUP, INC.
By:	/s/    MOSHE ZELNIK
	Moshe Zelnik Vice President, Finance, Chief Financial Officer and Secretary

Date: November 13, 2002

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EX-10.3

Exhibit 10.3

SEPARATION AGREEMENT

This Separation Agreement (this “Agreement”) is made and entered into as of November 1, 2002, by and among DSP Group, Inc., a Delaware corporation (“DSPGI”), DSP Group Ltd., an Israeli corporation (“DSPGL”), Ceva, Inc., a Delaware corporation (“Ceva, Inc.”), DSP Ceva, Inc., a Delaware corporation (“DSP Ceva”), and Corage, Ltd., an Israeli corporation (“Corage, Ltd.”).

Recitals

A.  DSPGI owns all of the issued and outstanding capital stock of DSPGL and Ceva, Inc.

B.  Ceva, Inc. owns all of the issued and outstanding capital stock of DSP Ceva.

C.  DSPGL owns all of the issued and outstanding capital stock of Corage, Ltd.

D.  DSPGI and DSPGL are in the Products Business (as defined herein) and in the Licensing Business (as defined herein).

E.  DSPGI and DSPGL collectively own and license certain intangible property, including but not limited to patents, trademarks and other intellectual property, relating to the Licensing Business, the beneficial rights to which in the United States are owned by DSPGI and in the rest of the world are owned by DSPGL.

F.  The Boards of Directors of DSPGI and DSPGL have determined that it is appropriate and desirable, on the terms and conditions contemplated by this Agreement, for the parties to separate the Licensing Business and its assets from the Products Business by taking the following actions (such actions collectively constituting the “Separation”):

(i)  DSPGL will transfer to Corage, Ltd. all of its right, title and interest in the Licensing Business Assets (but reserving the right to use certain Transferable Licensing IP, as it currently exists, in the Products Business), in exchange for the issuance by Corage, Ltd. to DSPGL of shares of Corage, Ltd. capital stock;

(ii)  DSPGL will distribute to DSPGI all of the issued and outstanding capital stock of Corage, Ltd.;

(iii)  In exchange for the issuance by Ceva, Inc. to DSPGI of shares of Ceva, Inc. capital stock, DSPGI simultaneously will contribute and transfer to Ceva, Inc. (A) all right, title and interest of DSPGI in the Licensing Business Assets (but reserving the right to use

certain Transferable Licensing IP (as defined in the Technology Transfer Agreements), as it currently exists, in the Products Business), and (B) all of the issued and outstanding shares of capital stock of Corage, Ltd.; and

(iv)  In exchange for the issuance to Ceva, Inc., of shares of DSP Ceva capital stock, Ceva, Inc. in turn will contribute and transfer to DSP Ceva (A) all of the issued and outstanding shares of capital stock of Corage, Ltd., so that Corage, Ltd. will be a wholly-owned subsidiary of DSP Ceva; and (B) all of the right, title and interest of Ceva, Inc. in the Licensing Business Assets.

G.  The Boards of Directors of DSPGI and Ceva, Inc. have determined further that, following completion of the Separation, it is appropriate and desirable, on the terms and conditions of this Agreement and the Combination Agreement, for DSPGI to distribute to holders of shares of DSPGI Common Stock the outstanding shares of Ceva, Inc. Common Stock owned directly or indirectly by DSPGI (the “Distribution”).

H.  DSPGI and Ceva, Inc. intend that the Separation shall qualify as either a reorganization under Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”) or as an exchange under Section 351 of the Code and intend that the Separation and the Distribution qualify under Section 355 of the Code and that Section 355(e) of the Code shall not apply to the Separation and the Distribution.

I.  DSPGI and Ceva, Inc. have entered into the Combination Agreement dated April 4, 2002, as amended, with Parthus Technologies plc (the “Combination Agreement”), providing, among other things, for the combination of Parthus Technologies plc and Ceva, Inc. in a transaction in which shares of Ceva, Inc. will be issued to the shareholders of Parthus Technologies plc, and Ceva, Inc. will acquire all of the outstanding capital stock of Parthus Technologies plc (the “Combination”).

J.  The consummation of the Separation and the Distribution is a condition to the consummation of the Combination.

K.  The parties wish to set forth the principal corporate transactions required to effect the Separation and the Distribution and certain other agreements that will govern certain matters relating to the Separation and the Distribution, and the relationship of the parties following the Separation and the Distribution.

Agreements

For good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

For the purpose of this Agreement the following terms shall have the following meanings:

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“Action” means any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

“Active Trade or Business” means the active conduct of the trade or business (as defined in Section 355(b)(2) of the Code) conducted by Ceva, Inc. immediately prior to the Distribution Date.

“Affiliate” of any Person means a Person that controls, is controlled by, or is under common control with such Person. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities or other interests, by contract or otherwise.

“Agent” means the distribution agent to be appointed by DSPGI to distribute to the stockholders of DSPGI pursuant to the Distribution the shares of Ceva, Inc. Common Stock held by DSPGI.

“Agreed Amount” means part, but not all, of the Claimed Amount.

“Ancillary Agreements” means the documents executed and delivered by the parties pursuant to Section 2.2 of this Agreement

“Applicable Deadline” has the meaning given in Section 8.3(b).

“Arbitration Act” means the United States Arbitration Act, 9 U.S.C. 1-14, as the same may be amended from time to time.

“Award” means any issuance of DSPGI Options to a single person with the same date of grant and exercise price.

“Claim Notice” means written notification which contains (i) a description of the Damages incurred or reasonably expected to be incurred by the Indemnitee and the Claimed Amount of such Damages, to the extent then known, (ii) a statement that the Indemnitee is entitled to indemnification under Article V for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment in the amount of such Damages.

“Claimed Amount” means the amount of any Damages incurred or reasonably expected to be incurred by the Indemnitee.

“Code” has the meaning given in the Recitals.

“Combination” has the meaning given in the Recitals.

“Combination Agreement” has the meaning given in the Recitals.

“Combination Closing” means the closing of the transactions contemplated under the Combination Agreement.

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“Combination Effective Date” means the date on which the Combination Closing occurs.

“Commission” means the United States Securities and Exchange Commission.

“Consents” means any consent, waiver or approval from, or notification requirements to, any third party.

“Corage Assumed Liabilities” has the meaning given in Section 2.5.

“Corage Balance Sheet” means the Most Recent Balance Sheet as such term is defined in the Combination Agreement.

“Ceva, Inc. Common Stock” means Common Stock, $.001 par value per share, of Ceva, Inc.

“Corage Employees” means the current employees of Ceva, Inc., Corage, Ltd. or DSP Ceva and any other employees who are hired by Ceva, Inc., Corage, Ltd. or DSP Ceva prior to the Distribution Date.

“Ceva, Inc. Group” means Ceva, Inc., and each Subsidiary of Ceva, Inc. (including any Subsidiary contributed to Ceva, Inc. pursuant to the Separation) immediately after the Combination Effective Date.

“Ceva, Inc. Indemnitees” has the meaning given in Section 5.3.

“Ceva, Inc. Technology Transfer Agreement” has the meaning given in Section 2.2(e).

“Corage, Ltd. Stock Certificates” has the meaning given in Section 2.2(c).

“Corage, Ltd. Stock Powers” has the meaning given in Section 2.2(c).

“Corage, Ltd. Technology Transfer Agreement” has the meaning given in Section 2.2(a).

“Cost Sharing Agreement” means the Cost Sharing Agreement dated as of January 1, 1998, between DSPGI and DSPGL.

“Damages” means any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation), other than those costs and expenses of arbitration of a Dispute which are to be shared equally by the Indemnitee and the Indemnifying Party as set forth in Article VIII.

“Definitive Guidance” means, with respect to the United States, temporary or final Treasury regulations, a Revenue Ruling, Revenue Procedure or Notice issued by the IRS or a

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final decision of the United States Tax Court, and with respect to any other jurisdiction, any similar guidance.

“Dispute” means the dispute resulting if the Indemnifying Party disputes its liability for all or part of the Claimed Amount.

“Distribution” has the meaning given in the Recitals.

“Distribution Date” means the date determined pursuant to Section 3.1 on which the Distribution occurs.

“DSP Europe” means DSP Group Europe Sarl, a French company.

“DSP Japan” means Nikon DSP K.K., a Japanese company.

“DSPGI Common Stock” means the Common Stock, $.001 par value per share, of DSPGI.

“DSPGI Group” means DSPGI and each Subsidiary of DSPGI (other than any member of the Ceva, Inc. Group) immediately after the Distribution Date.

“DSPGI Indemnitees” has the meaning given in Section 5.2.

“DSPGI Legacy Option” has the meaning set forth in Section 3.7(c).

“Employees Proprietary Information Agreements” shall have the meaning set forth in Section 2.6(c).

“Environmental Liabilities” means all Liabilities relating to, arising out of or resulting from any Environmental Law or contract or agreement relating to environmental, health or safety matters (including all removal, remediation or cleanup costs, investigatory costs, governmental response costs, natural resources damages, property damages, personal injury damages, costs of compliance with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.

“Environmental Law” means any federal, state, local, foreign or international statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent, common law (including tort and environmental nuisance law), legal doctrine, order, judgment, decree, injunction, requirement or agreement with any Governmental Authority, now or hereafter in effect relating to health, safety, pollution or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or to emissions, discharges, releases or threatened releases of any substance currently or at any time hereafter listed, defined, designated or classified as hazardous, toxic waste, radioactive or dangerous, or otherwise regulated, under any of the foregoing, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of any such substances, including the Comprehensive Environmental Response, Compensation and Liability Act, the Superfund

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Amendments and Reauthorization Act and the Resource Conservation and Recovery Act and comparable provisions in state, local, foreign or international law.

“Form 10” has the meaning given in Section 3.3.

“Governmental Approval” means any authorization, consent, order or approval of, or declarations or filings with, or expirations of any waiting period imposed by any Governmental Authority.

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

“Group” means with respect to Ceva, Inc., the Ceva, Inc. Group, and with respect to DSPGI, the DSPGI Group.

“Income Tax Return” shall mean any tax return relating to income tax.

“Indemnifying Party” has the meaning given in Section 5.4(a).

“Indemnitee” has the meaning given in Section 5.4(a).

“Indemnity Payment” has the meaning given in Section 5.4(a).

“Information” means information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

“Information Statement” has the meaning given in Section 3.3.

“Insurance Proceeds” means those monies:

(i)  received by an insured from an insurance carrier; or

(ii)  paid by an insurance carrier on behalf of the insured;

in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof.

“IRS” means the United States Internal Revenue Service.

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“Liabilities” means any and all losses, claims, charges, debts, demands, actions, causes of action, suits, damages, obligations, payments, costs and expenses, sums of money, accounts, reckonings, bonds, specialties, indemnities and similar obligations, exonerations, covenants, contracts, controversies, agreements, promises, doings, omissions, variances, guarantees, make whole agreements and similar obligations, and other liabilities, including all contractual obligations, whether absolute or contingent, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, and including those arising under any law, rule, regulation, Action, threatened or contemplated Action (including the costs and expenses of demands, assessments, judgments, settlements and compromises relating thereto and attorneys’ fees and any and all costs and expenses, whatsoever reasonably incurred in investigating, preparing or defending against any such Actions or threatened or contemplated Actions), order or consent decree of any Governmental Authority or any award of any arbitrator or mediator of any kind, and those arising under any contract, commitment or undertaking, including those arising under this Agreement or any Ancillary Agreement, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person.

“Licensing Business” means the business of developing and licensing designs for programmable digital signal processor cores, including, without limitation, digital signal processing cores used as the central processor in semiconductor chips for specific applications.

“Licensing Business Assets” means all of DSPGL’s and DSPGI’s right, title and interest in and to the following assets (all as defined in the Technology Transfer Agreements, to the extent not defined herein):

(a)  the Transferable Licensing IP;

(b)  the Other Transferable Assets;

(c)  the Third Party Licenses;

(d)  the Other Contracts; and

(e)  the Employee Proprietary Information Agreements.

Licensing Business Assets shall not include any accounts receivables or any other current assets. Corage Assumed Liabilities shall not include any accounts payable or any other current liabilities or any intercompany indebtedness of the Licensing Business.

“Licensing Business Employees” means the employees set forth on Schedule A attached hereto.

“Non-Assigned Assets” has the meaning set forth in Section 2.3.

“Non-Transferable Employee” shall have the meaning set forth in Section 2.6(b).

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

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“Post-Distribution DSPGI Adjusted Option” means an DSPGI Adjusted Option that vests after the Distribution Date.

“Pre-Distribution DSPGI Adjusted Option” means a DSPGI Adjusted Option that vested on or before the Distribution Date.

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

“Products Business” means the business of designing, manufacturing and marketing high performance digital signal processing integrated circuit devices for integrated digital cordless telephones and voice-over broadband products.

“Proposed Acquisition Transaction” means a transaction or series of transactions as a result of which any Person or any group of related Persons would (directly or indirectly) acquire, or have the right to acquire, (A) from Ceva, Inc. or one or more holders of outstanding shares of Ceva, Inc. capital stock, any shares of Ceva, Inc. capital stock or (B) from Ceva, Inc. or from any Ceva, Inc. Subsidiary any shares of capital stock of a Ceva, Inc. Subsidiary; except that none of the following shall be a Proposed Acquisition Transaction: (i) any transaction, whether having occurred prior to the Distribution or to occur after the Distribution, that the IRS rules in the Tax Rulings is not part of a plan or series of transactions related to the Distribution; (ii) the transactions contemplated by the Combination Agreement and any transactions that reasonably flow from the transactions contemplated by the Combination Agreement; (iii) the grant of stock options by Ceva, Inc. to any employee, independent contractor or director of the Ceva, Inc. Group which grant, based on the unqualified opinion of Hale and Dorr LLP or other Ceva, Inc. Tax Advisor acceptable to DSPGI, whose approval shall not be unreasonably withheld, would not under Section 355(e) of the Code and then-applicable Treasury Regulations be considered part of a plan or series of transactions related to the Distribution; (iv) the issuance of stock by Ceva, Inc. or its Subsidiaries to any employee, independent contractor or director of the Ceva, Inc. Group (including the issuance of stock upon the exercise of a stock option) which issuance, based on the unqualified opinion of Hale and Dorr LLP or other Ceva, Inc. Tax Advisor acceptable to DSPGI, whose approval shall not be unreasonably withheld, would not under Section 355(e) of the Code and then-applicable Treasury Regulations be considered part of a plan or series of transactions related to the Distribution; or (v) any other transactions specifically permitted by then-applicable Treasury Regulations promulgated under Section 355(e) of the Code and to which DSPGI has consented in its discretion, which discretion shall be exercised in good faith solely to preserve the Tax-Free Status of the Separation and Distribution.

“Record Date” means the close of business on the date to be determined by the DSPGI Board of Directors as the record date for determining stockholders of DSPGI entitled to receive shares of Ceva, Inc. Common Stock in the Distribution.

“Representation Date” means any date on which Ceva, Inc. makes any representation (i) to the IRS or a Tax Advisor for the purpose of obtaining a Subsequent Tax Opinion/Ruling, or (ii) to DSPGI for the purpose of any determination required to be made by DSPGI pursuant to Section 4.2.

“Representation Letters” means any representation letters and any other materials (including, without limitation, the ruling request and the related supplemental submissions to the IRS) delivered or deliverable by DSPGI or Ceva, Inc., as the case may be, in connection with the then

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issuance by the IRS of the Tax Rulings, or the rendering by a Tax Advisor and/or the issuance by the IRS of the Subsequent Tax Opinion/Ruling.

“Securities Act” means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.

“Separation” has the meaning given in the Recitals.

“Separation Closing” has the meaning given in Section 2.1.

“Subsequent Tax Opinion/Ruling” means either (i) any unqualified opinion of a Tax Advisor selected by Ceva, Inc. with the consent of DSPGI, which consent shall not be unreasonably withheld, confirming, in form and substance satisfactory to each of Ceva, Inc. and DSPGI in its discretion, which discretion shall be exercised in good faith solely to preserve the Tax-Free Status of the Separation and Distribution, that, as a consequence of the consummation of a subsequent transaction, no income, gain or loss for U.S. federal income tax purposes will be recognized by DSPGI, the stockholders or former stockholders of DSPGI, or any DSPGI Affiliate with respect to the Distribution, or (ii) an IRS private letter ruling to the same effect.

“Subsidiary” of any Person means any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided, however, that no Person that is not directly or indirectly wholly owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

“Tax Advisor” means the nationally recognized professional law firm or accounting firm designated by DSPGI or Ceva, Inc., as applicable, as its Tax Advisor.

“Tax-Free Status of the Separation and Distribution” means the nonrecognition of taxable gain or loss for U.S. federal income tax purposes and for Israeli tax purposes to DSPGI, DSPGI Affiliates and DSPGI’s stockholders in connection with the Separation and the Distribution.

“Tax Indemnification Agreement” means the Tax Indemnification and Allocation Agreement dated as of the date of this Agreement between DSPGI and Ceva, Inc.

“Tax-Related Losses” means (i) all U.S. federal, state, local and foreign income taxes (including interest and penalties thereon) imposed pursuant to any settlement, final determination, judgment or otherwise, and (ii) all legal, accounting and other professional fees and court costs incurred in connection with such taxes.

“Tax Rulings” means any rulings by the IRS deliverable to DSPGI in connection with the Separation and the Distribution.

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“Technology Transfer Agreements” means the Corage, Ltd. Technology Transfer Agreement and the Ceva, Inc. Technology Transfer Agreement.

“Third Party Claim” has the meaning given in Section 5.5(a).

“Transferable Employees” shall have the meaning set forth in Section 2.6(a).

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

ARTICLE II

THE SEPARATION

2.1.  Separation Closing.    Consummation of the Separation (the “Separation Closing”) shall take place on the Distribution Date but in any event prior to the Combination Effective Date, at such time and place as may be determined by the Board of Directors of DSPGI. All actions constituting the Separation shall be occur and be deemed to have occurred on and as of the Distribution Date, effective immediately prior to the Distribution becoming effective.

2.2.  Actions to be Taken at Separation Closing.    At Separation Closing, the parties shall take the actions described below in this Section 2.2, in the following order:

(a)  DSPGL and Corage, Ltd. shall execute and deliver a Technology Transfer Agreement substantially in the form attached as Exhibit 2.2(a) (the “Corage, Ltd. Technology Transfer Agreement”) and such other instruments of conveyance as Corage, Ltd. may reasonably request;

(b)  Corage, Ltd. shall issue to DSPGL, free and clear of all liens and encumbrances, certificates representing 1,000 shares of Corage, Ltd. common stock, $.001 per share par value, as consideration for the transfer of Licensing Business Assets as provided in this Agreement, the Corage, Ltd. Technology Transfer Agreement and other related documents;

(c)  DSPGL shall distribute to DSPGI all of the issued and outstanding shares of Corage, Ltd. capital stock, free and clear of all liens and encumbrances, by delivery to DSPGI of the original certificate or certificates therefor (the “Corage, Ltd. Stock Certificates”), together with stock powers executed in blank (the “Corage, Ltd. Stock Powers”);

(d)  DSPGI shall contribute to Ceva, Inc. all of the issued and outstanding shares of Corage, Ltd. capital stock, by delivery to Ceva, Inc. of the Corage, Ltd. Stock Certificates and the Corage, Ltd. Stock Powers;

(e)  DSPGI and Ceva, Inc. shall execute and deliver a Technology Transfer Agreement substantially in the form attached as Exhibit 2.2(e) (the “Ceva, Inc. Technology Transfer Agreement”) and such other instruments of conveyance as Ceva, Inc. may reasonably request;

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(f)  Ceva, Inc. shall issue to DSPGI, free and clear of all liens and encumbrances, certificates representing 1,000 shares of Ceva, Inc. Common Stock as consideration for the transfer of Licensing Business Assets as provided in this Agreement, the Ceva, Inc. Technology Transfer Agreement and other related documents and the contribution of capital stock of Ceva, Inc.;

(g)  Ceva, Inc. and DSP Ceva shall execute and deliver a Technology Transfer Assignment and Assumption Agreement substantially in the form attached as Exhibit 2.2(g) and such other instruments of conveyance as DSP Ceva may reasonably request;

(h)  Ceva, Inc. shall contribute to DSP Ceva all of this issued and outstanding shares of Corage, Ltd. capital stock, by delivery to DSP Ceva of the Corage, Ltd. Stock Certificates and the Corage, Ltd. Stock Powers;

(i)  DSP Ceva shall issue to Ceva, Inc., free and clear of all liens and encumbrances, certificates representing 1,000 shares of DSP Ceva common stock, $1.00 per share par value, as consideration for the transfer of Licensing Business Assets as provided in this Agreement, the DSP Ceva Technology Transfer Agreement and other related documents;

(j)  DSPGI, Ceva, Inc. and DSP Ceva shall execute and deliver a Transition Services Agreement in a form to be mutually agreed upon by the parties;

(k)  DSPGL, Corage, Ltd., DSP Japan and DSP Europe shall execute and deliver a Transition Services Agreement in a form to be mutually agreed upon by the parties;

(l)  DSPGI and DSPGL shall amend the Intercompany Services Agreement between them dated July 1, 1998, and Section 3.2 of the Cost Sharing Agreement, as necessary to delete or modify provisions that relate to the Licensing Business;

(m)  each of the parties shall deliver to the other a certificate substantially in the form attached as Exhibit 2.2(m), executed by one of its executive officers;

(n)  each of the parties shall deliver to the other a certificate substantially in the form attached as Exhibit 2.2(n), executed by its secretary, with true and correct copies of the attachments required thereby; and

(o)  each of the parties issuing or receiving shares of capital stock of any of the other companies pursuant to this Section shall execute and deliver cross-receipts evidencing their issuance or transfer and receipt of shares of such shares of capital stock;

and at any time, and from time to time, after the Distribution Date, at the request of Ceva, Inc. and without further consideration, DSPGI shall promptly execute and deliver (or shall cause its appropriate Subsidiary to execute and deliver) such instruments of sale, transfer, conveyance, assignment and confirmation as Ceva, Inc. may reasonably request, and take any and all such other action as Ceva, Inc. may reasonably request more effectively to transfer, convey and assign to Ceva, Inc. (or a Subsidiary of Ceva, Inc.) and to confirm Ceva, Inc.’s or a Subsidiary of Ceva, Inc.’s title to all of the Licensing Business Assets and all of the outstanding shares of capital stock of Corage, Ltd. and to put Ceva, Inc. in actual possession and operating control (through its

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ownership of the outstanding capital stock of Corage, Ltd., the Licensing Business Assets) of the Licensing Business Assets.

2.3.  Consents.     Schedule 2.3 lists all of the Consents. Each party hereto shall use commercially reasonable efforts to obtain, at its expense, all of the Consents. If any Consent shall not have been obtained by the Distribution Date, this Agreement and the Ancillary Agreements shall not constitute an assignment of the agreement, right or other Licensing Business Asset to which it relates (each a “Non-Assigned Asset”) unless and until such time as such Consent has been obtained. Following Separation Closing, DSPGI and Ceva, Inc. each shall (or shall cause their Subsidiaries to) use commercially reasonable efforts to obtain all such Consents as soon as practicable. Upon any such Consent being obtained, the Non-Assigned Assets to which it relates automatically shall be deemed to have been assigned as contemplated by the relevant Ancillary Agreements.

2.4.  Working Capital; Prorations of Certain Items.    As of the Combination Effective Date, the working capital of the Licensing Business calculated as the excess of the current assets of the Licensing Business over the current liabilities of the Licensing Business as of the Combination Effective Date (excluding the contribution of U.S.$40 million to Ceva, Inc. as contemplated by Section 3.2(e) of this Agreement), each determined on a basis consistent with the determination of current assets and current liabilities on the Corage Balance Sheet, shall be not less than zero. For purposes of this section, working capital shall not include any Taxes, as such term is defined in the Combination Agreement. The Parties further agree, that all accrued or prepaid income and accrued or prepaid expenses relating to the License Business, each as determined in accordance with U.S. generally accepted accounting principles consistently applied and included in the working capital, shall be appropriately allocated under U.S. generally accepted accounting principles for periods before and after the Combination Effective Date, and the Parties shall agree to settle the amounts thereof not more than sixty days following the Combination Effective Date.

2.5.  Assumption of Corage Assumed Liabilities.    After the Distribution Date, Ceva, Inc. shall assume, pay, discharge and perform in accordance with their terms the following (the “Corage Assumed Liabilities”): (i) any and all Liabilities that are expressly contemplated by this Agreement or any agreement or document contemplated by, or executed and delivered pursuant to, this Agreement (including but not limited to the Ancillary Agreements) as Liabilities to be assumed by any member of the Ceva, Inc. Group; (ii) all Liabilities, including Liabilities related to Corage Employees and product Liabilities, payable under or pursuant to, relating to, arising out of or resulting from (a) the operation of the Licensing Business, as conducted at any time prior to, on or after the Distribution Date, or (b) the Licensing Business Assets; (iii) all Liabilities, reflected on the Corage Balance Sheet, subject to the discharge of such Liabilities subsequent to the date of the Corage Balance Sheet; and (iv) all Liabilities of the DSPGI Group arising or assumed after the date of the Corage Balance Sheet which are of a nature or type that would have resulted in such Liabilities being included as Liabilities on the Corage Balance Sheet had they arisen or been assumed on or before the date of the Corage Balance Sheet, determined on a basis consistent with the determination of the Liabilities of the Licensing Business on the Corage Balance Sheet. Notwithstanding anything to the contrary in this Agreement, the Corage Assumed Liabilities excludes all Taxes (as defined in the Combination Agreement) except as provided in Article IV of this Agreement or in the Tax Indemnification Agreement.

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2.6.  Transfer of Employees.

(a)  Prior to the Separation Closing, DSPGI, on behalf of itself and the Transferring Entities, will transfer or release to Ceva, Inc. the employees of its licensing division described on Schedule 2.6(a) to this Agreement (“Transferable Employees”), and Ceva, Inc. shall accept such transfer and assume (and shall pay, perform and discharge when due) all obligations with respect to such employees accruing from and after the Separation Closing.

(b)  To the extent that any Transferable Employees shall have entered into assignable employment contracts with DSPGI, DSPGI shall assign, and shall cause other Transferring Entities to assign, all of the rights of the Transferring Entities under any such employment contracts to Ceva, Inc., to the extent such rights are assignable. For any Transferable Employee without an assignable employment contract (“Non-Transferable Employee”), DSPGI shall fully release, and shall cause other Transferring Entities to fully release, such employee from employment, thereby allowing Ceva, Inc., to use its best efforts to employ such Non-Transferable Employee.

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

ARTICLE III

THE DISTRIBUTION

3.1.  The Distribution.    Subject to Section 3.4, DPSGI shall effect the Distribution on the Distribution Date, as described in this Article III.

(a)  Subject to Section 3.4, on or prior to the Distribution Date, DSPGI shall deliver to the Agent for the benefit of holders of record of DSPGI Common Stock on the Record Date, a single stock certificate, endorsed by DSPGI in blank, representing all of the outstanding shares of Ceva, Inc. Common Stock, and shall cause the transfer agent for the shares of DSPGI Common Stock to instruct the Agent to distribute on the Distribution Date the appropriate number of such shares of Ceva, Inc. Common Stock to each such holder or designated transferee or transferees of such holder.

(b)  Subject to Section 3.5, each holder of DSPGI Common Stock on the Record Date (or such holder’s designated transferee or transferees) shall be entitled to receive in the Distribution a number of shares of Ceva, Inc. Common Stock equal to the number of shares

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of DSPGI Common Stock held by such holder on the Record Date multiplied by a fraction, the numerator of which is the number of shares of Ceva, Inc. Common Stock beneficially owned by DSPGI on the Record Date, and the denominator of which is the number of shares of DSPGI Common Stock outstanding on the Record Date.

(c)  Ceva, Inc. and DSPGI, as the case may be, shall provide to the Agent all share certificates and any information required in order to complete the Distribution on the basis specified above.

3.2.  Actions Prior to the Distribution.

(a)  DSPGI and Ceva, Inc. shall mail, prior to the date determined by the Board of Directors of DSPGI as the record date, to the holders of common stock of DSPGI, the Information Statement and such other information concerning Ceva, Inc., its business, operations and management, the Separation, the Distribution, and such other matters as DSPGI and Ceva, Inc. shall reasonably determine and as may be required by law.

(b)  DSPGI and Ceva, Inc. shall prepare and file with the appropriate Governmental Authority any documents or statements which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or appropriate in connection with the Separation and Distribution.

(c)  DSPGI and Ceva, Inc. shall take all such action as may be necessary or appropriate under the securities or Blue Sky laws of the United States (and any comparable laws under any foreign jurisdiction) in connection with the Distribution.

(d)  DSPGI and Ceva, Inc. shall take all reasonable steps necessary and appropriate to cause the conditions set forth in Section 3.4 (subject to Sections 3.5(d)) to be satisfied and to effect the Distribution on the Distribution Date.

(e)  Immediately prior to effecting the Distribution, DSPGI shall contribute to Ceva, Inc., in immediately available funds, U.S. $40 million; it being acknowledged by the Parties that, in accordance with Section 8.3 of the Combination Agreement, Ceva, Inc. will bear U.S.$2.0 million of the transaction fees and expenses.

3.3.  Form 10.    DSPGI and Ceva, Inc. shall prepare and file with the Commission the General Form for Registration of Securities on Form 10, including the Information Statement describing the Distribution and information concerning the business, operations and financial information of Ceva, Inc. to be distributed to the stockholders of DSPGI (the “Information Statement”), pursuant to which all the outstanding shares of common stock of Ceva, Inc. as of the Distribution Date will be registered under the Securities Exchange Act of 1934, as amended, (together with all amendments thereto, the “Form 10”). Each of DSPGI and Ceva, Inc. shall respond to any comments of the Commission and use such commercially reasonable efforts as may be necessary in order to cause the Form 10 to become and remain effective as required by law, including, but not limited to, filing such amendments to the Form 10 as may be required by the Commission or applicable securities laws. The Form 10 shall have become effective on or prior to the Distribution Date, and there shall be no stop-order in effect with respect thereto. DSPGI and Ceva, Inc. shall take such other actions and make any other filings as may be

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necessary or appropriate under the securities or blue sky laws of the United States or any other relevant jurisdiction in connection with the Distribution; and, with respect to any such actions and filings, where applicable, shall use commercially reasonable effort to have such filings become effective or accepted.

3.4.  Conditions to Distribution.    The obligation of DSPGI to effect the Distribution is subject to the satisfaction at or prior to the Distribution Date of the following conditions:

(a)  DSPGI and Ceva, Inc. shall have fulfilled these conditions set forth in Section 6.2(a) of the Combination Agreement;

(b)  all Governmental Approvals necessary to consummate the Distribution shall have been obtained and be in full force and effect;

(c)  DSPGI and Ceva, Inc. shall have fulfilled the conditions set forth in Section 7.4(c) of the Combination Agreement;

(d)  no order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Distribution shall be in effect and no other event outside the control of DSPGI shall have occurred or failed to occur that prevents the consummation of the Distribution;

(e)  the Combination Agreement shall not have been terminated, and all conditions to the obligations of the parties thereunder to consummate the Combination shall have been satisfied or waived, except only the consummation of the Distribution; and

(f)  each of the Licensing Business Employees shall be Corage Employees.

3.5.  Fractional Shares.    No fractional shares of Ceva, Inc. Common Stock shall be issued in connection with the Distribution. Any fractional interest shall be aggregated and sold by Ceva’s transfer agent, with the cash due to each stockholder for such fraction issued to any holder of record or beneficial owner of DSPGI Common Stock as of the Record Date that has such fractional share interest, or such other procedure as the parties may agree.

3.6.  The Ceva, Inc. Board of Directors. DSPGI and Ceva, Inc. each shall take all actions which may be required to elect or otherwise appoint as directors of Ceva, Inc., on or prior to the Distribution Date, such individuals as may be designated by Ceva, Inc. Board of Directors (which designation shall be approved by the majority of Ceva, Inc.’s directors who are at such time neither officers nor directors of DSPGI) as additional or substitute members of the Board of Directors of Ceva, Inc. on the Distribution Date.

3.7.  Adjustment of DSPGI Stock Options.

(a)  Each outstanding option to purchase DSPGI Common Stock granted prior to the Distribution Date and held by Corage Employees (each a “DSPGI Option”) shall be adjusted as set forth in this Section 3.7. Each DSPGI Option shall be converted as of the Distribution Date, into two options: an option (a “DSPGI Adjusted Option”) to purchase the same number of shares of DSPGI Common Stock covered by the DSPGI Option and as to which the DSPGI Option has not been exercised as of the Distribution Date (“DSPGI Option Number”)

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and an option (a “Ceva, Inc. Option”) to purchase a number of shares of Ceva, Inc. Common Stock equal to the DSPGI Option Number times a fraction, the numerator of which is the total number of shares of Ceva, Inc. Common Stock distributed to DSPGI stockholders in the Distribution and the denominator of which is the total number of shares of DSPGI Common Stock outstanding on the record date for the Distribution (the “Distribution Ratio”). The terms of the DSPGI Adjusted Option and the Ceva, Inc. Option (other than the exercise price and the number of shares) shall be substantially the same as the DSPGI Option from which they were converted. If and to the extent the vesting of any DSPGI Option is subject to vesting based on the continuous employment of the holder thereof with DSPGI or its Subsidiaries, the vesting of the DSPGI Adjusted Option and Ceva, Inc. Option into which it is converted shall be subject to the same vesting schedule and continuation of the holder’s employment with Ceva, Inc. or its Subsidiaries, giving credit for continuous employment with DSPGI or Ceva, Inc. or their respective Subsidiaries, prior to the Distribution Date. The exercise prices per share for each DSPGI Adjusted Option and the Ceva, Inc. Option shall be established in a manner so that: (1) the aggregate “intrinsic value” (i.e. the market value of the stock underlying the option, less the exercise price of such option, multiplied by the number of shares then covered by such option) after the Distribution of the DSPGI Adjusted Option plus the Ceva, Inc. Option is not greater than the intrinsic value of the related DSPGI Option immediately prior to the Distribution; and (2) the ratio of the exercise price per option to the market value per share after the Distribution is not lower than the ratio of the exercise price of the DSPGI Option to the market value per share of DSPGI Common Stock immediately prior to the Distribution. The determination of the exercise prices for each DSPGI Adjusted Option and Ceva, Inc. Option shall be made by DSPGI as advised by its professional advisors. The exercise prices for each DSPGI Adjusted Option and Ceva, Inc. Option shall be determined as follows:

(i)  Calculate the aggregate intrinsic value of the DSPGI Option immediately prior to the Distribution and determine the ratio of the exercise price for the DSPGI Option to the market value of DSPGI Common Stock immediately prior to the Distribution (the “Pre-Distribution Exercise Price to Market Price Ratio”).

(ii)  Calculate the preliminary DSPGI Adjusted Option exercise price by dividing (x) the market value of DSPGI Common Stock (without Ceva, Inc.) immediately after the Distribution by (y) the sum of (1) the market value of DSPGI Common Stock immediately after the Distribution and (2) the market value of Ceva, Inc. Common Stock immediately after the Distribution multiplied by the Distribution Ratio, and multiplying the result by the exercise price for the DSPGI Option.

(iii)  Divide the preliminary DSPGI Adjusted Option exercise price by the market value of DSPGI Common Stock immediately after the Distribution to determine the “DSPGI Adjusted Exercise Price to Market Price Ratio.” If the DSPGI Adjusted Exercise Price to Market Price Ratio is less than the Pre-Distribution Exercise Price to Market Price Ratio, increase the preliminary DSPGI Adjusted Option exercise price to align the DSPGI Adjusted Exercise Price to Market Ratio with the Pre-Distribution Exercise Price to Market Price Ratio in order to determine the final Adjusted DSPGI Option exercise price.

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(iv)  Calculate the preliminary Ceva, Inc. Option exercise price by multiplying the DSPGI Option exercise price by the result obtained by dividing (1) one minus the fraction calculated in paragraph (ii) above by (2) the Distribution Ratio.

(v)  Divide the preliminary Ceva, Inc. Option exercise price by the market value of Ceva, Inc. Common Stock immediately before the Distribution to determine the “Ceva, Inc. Adjusted Exercise Price to Market Price Ratio.” If the Ceva, Inc. Adjusted Exercise Price to Market Ratio is less than the Pre-Distribution Exercise Price to Market Price Ratio, increase the preliminary Ceva, Inc. Option exercise price to align the Ceva, Inc. Adjusted Exercise Price to Market Price Ratio with the Pre-Distribution Exercise Price to Market Price Ratio in order to determine the final Ceva, Inc. Option exercise price.

(vi)  Finally, add the aggregate intrinsic values of the DSPGI Adjusted Option and Ceva, Inc. Option and compare the sum to the aggregate intrinsic value calculated in paragraph (i) above and make final adjustments, if necessary, so that the aggregate intrinsic values of the DSPGI Adjusted Option and Ceva, Inc. Option do not exceed the original aggregate intrinsic value of the DSPGI Option.

(b)  The Ceva, Inc. Options to be granted with respect to each Adjusted Option shall be issued under Ceva, Inc.’s 2000 Stock Incentive Plan, and Ceva, Inc. shall take all corporate action and make all required filings under applicable state Blue Sky laws and the Securities Act to (i) issue the Ceva, Inc. Options required under this Section 3.7 and (ii) to register or qualify the Ceva, Inc. Options and/or the underlying shares of Ceva, Inc. Common Stock so that the shares of Ceva, Inc. Common Stock acquired upon exercise of each Ceva, Inc. Option are freely tradable under the Securities Act (except for shares acquired by Affiliates of Ceva, Inc.) and each applicable state’s Blue Sky laws.

(c)  Each outstanding DSPGI Option granted prior to the Distribution Date and not described in Section 3.7(a) (a “DSPGI Legacy Option”) shall be adjusted as set forth in this Section 3.7(c). As of the Distribution Date, the exercise price and, if appropriate, the number of shares subject to each DSPGI Legacy Option shall be adjusted to reflect the reduction in value of DSPGI Common Stock as a result of the Distribution. The exercise price per share and, if appropriate, the number of shares subject to each DSPGI Legacy Option shall be adjusted in a manner so that: (1) the aggregate “intrinsic value” (i.e. the market value of the stock underlying the option, less the exercise price of such option, multiplied by the number of shares then covered by such option) after the Distribution is not greater than the intrinsic value of the DSPGI Option immediately prior to the Distribution; and (2) the ratio of the exercise price of the DSPGI Legacy Option to the market value per share of DSPGI Common Stock after the Distribution is not lower than the ratio of the exercise price of the DSPGI Option to the market value per share of DSPGI Common Stock immediately prior to the Distribution. The determination of the exercise price and the number of shares subject to each DSPGI Legacy Option shall be made by DSPGI as advised by its professional advisors.

(d)  Notwithstanding anything herein or in the Ancillary Agreements to the contrary and the to extent permitted by applicable law:

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(i)  All compensation deductions attributable to the amounts included in the gross income of a Corage Employee as a result of the exercise of a Pre-Distribution DSPGI Adjusted Option shall be allocated to and claimed by the DSPGI Group, and the Ceva, Inc. Group shall not report such deductions on its Income Tax Returns.

(ii)  All compensation deductions attributable to the amounts included in the gross income of a Corage Employee as a result of the exercise of a Post-Distribution DSPGI Adjusted Option shall be allocated to and claimed by the Ceva, Inc. Group, and the DSPGI Group shall not report such deductions on its Income Tax Returns.

(iii)  To the extent that a Corage Employee exercises DSPGI Adjusted Options and such options are included in an Award some of which are Pre-Distribution DSPGI Adjusted Options and others of which are Post-Distribution DSPGI Adjusted Options, for purposes of this Agreement, all of the Pre-Distribution DSPGI Adjusted Options shall be deemed to have been exercised before any of the Post-Distribution DSPGI Adjusted Options are treated as having been exercised.

(iv)  All compensation deductions attributable to the amounts included in the gross income of a Corage Employee as a result of the exercise of a Ceva, Inc. Option after the Distribution Date shall be allocated to and claimed by the Ceva, Inc. Group, and the DSPGI Group shall not report such deductions on its Income Tax Returns.

(e)  Notwithstanding anything herein or in the Ancillary Agreements to the contrary, Ceva, Inc. shall be responsible for any payroll taxes and withholding taxes arising out of the exercise of a DSPGI Adjusted Option or a Ceva, Inc. Option by a Corage Employee. DSPGI Group shall provide the Ceva, Inc. Group with any information necessary to make such withholdings and shall collect any required withholdings upon the exercise of a DSPGI Adjusted Option (and shall not permit the exercise of any such option unless the optionee has made provisions for such withholding tax) and remit such withholding tax to the Ceva, Inc. Group.

(f)  Notwithstanding anything herein to the contrary, Section 3.7 of this Agreement shall terminate upon the publication of Definitive Guidance which the tax advisors for DSPGI and Ceva, Inc. mutually agree is contrary to the provisions of this Section 3.7, and nothing contained herein shall preclude DSPGI and Ceva, Inc. after such termination of this Section 3.7, from filing amended returns or refund claims with respect to exercise of options prior to the termination of this Section 3.7 in accordance with such Definitive Guidance.

ARTICLE IV

CERTAIN TAX MATTERS

4.1.  Representations and Warranties.

(a)  DSPGI.    DSPGI hereby represents and warrants that any facts presented or representations made in the Tax Rulings or the Representation Letters are true, correct and complete solely to the extent arising out of any information provided by or on behalf of DSPGI or, if made before the Distribution Date, Ceva, Inc.

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(b)  Ceva, Inc.    Ceva, Inc. hereby represents and warrants that any facts presented or representations made in the Tax Rulings or the Representation Letters are true, correct and complete solely to the extent arising out of any information provided by or on behalf of Parthus Technologies plc, or if made after the Distribution Date, by or on behalf of Ceva, Inc.

4.2.  Restrictions on Ceva, Inc.

(a)  Until the first day after the one-year anniversary of the Distribution Date, Ceva, Inc. shall not directly or indirectly enter into any agreement, understanding, arrangement or substantial negotiations, as such terms are defined in Treasury Regulation Section 1.355-7T(h)(1), regarding a Proposed Acquisition Transaction or, to the extent Ceva, Inc. has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur unless prior to the consummation of such Proposed Acquisition Transaction DSPGI has determined, in its sole and absolute discretion, which discretion shall be exercised in good faith solely to preserve the Tax-Free Status of the Separation and Distribution, that such Proposed Acquisition Transaction would not jeopardize the Tax-Free Status of the Separation and Distribution. The foregoing shall not prohibit Ceva, Inc. from entering into a contract or agreement to consummate any Proposed Acquisition Transaction if such contract or agreement requires satisfaction of the above-described requirement prior to the consummation of such Proposed Acquisition Transaction, such requirement to be satisfied through the cooperation of the parties as described in Section 4.3(b)(ii).

(b)  Until the first day after the two-year anniversary of the Distribution Date, (i) Ceva, Inc. shall continue to conduct the Active Trade or Business; and (ii) Ceva, Inc. shall not (A) liquidate, dispose of, or otherwise discontinue the conduct of all or a substantial portion (but in no instance more than 60% of the gross assets of Ceva, Inc. or 60% of the consolidated gross assets of the Ceva, Inc. Group) of the Active Trade or Business or (B) dispose of any business or assets that would cause Ceva, Inc. to be operated in a manner inconsistent in any material respect with the business purposes for the Distribution as set forth in the Representation Letters and Tax Rulings, in each case unless DSPGI has determined, in its sole and absolute discretion, which discretion shall be exercised in good faith solely to preserve the Tax-Free Status of the Separation and Distribution, that such liquidation, disposition, or discontinuance would not jeopardize the Tax-Free Status of the Separation and Distribution. Ceva, Inc. shall continue the active conduct of the Active Trade or Business primarily through officers and employees of Ceva, Inc. or its Subsidiaries (and not primarily through independent contractors). Notwithstanding the foregoing, (A) except with respect to any corporation or other entity the status of which as the direct owner of an active trade or business is material to the Tax-Free Status of the Separation and Distribution, liquidations of any of Ceva, Inc.’s Subsidiaries into Ceva, Inc. or one or more Subsidiaries directly or indirectly controlled by Ceva, Inc. shall not be deemed to breach this Section 4.2(b) and (B) Ceva, Inc. shall not be prohibited from liquidating, disposing of or otherwise discontinuing the conduct of one or more trades or businesses that constituted an immaterial part of the Active Trade or Business, or any portion thereof. For purposes of the preceding sentence and clause (b)(ii) above, asset retirements, sale-leaseback arrangements and discontinuances of product lines within a trade or business the active conduct of which is continued shall not be deemed a liquidation, disposition or discontinuance of a trade or business or portion thereof. Solely for purposes of this Section 4.2(b), Ceva, Inc. shall not be treated as directly or indirectly controlling a Subsidiary unless Ceva, Inc. owns, directly or

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indirectly, shares of capital stock of such Subsidiary constituting (A) 80% or more of the total combined voting power of all outstanding shares of voting stock of such Subsidiary and (B) 80% or more of the total number of outstanding shares of each class or series of capital stock of such Subsidiary other than voting stock. The foregoing shall not prohibit Ceva, Inc. from entering into a contract or agreement to consummate any transaction described in this paragraph if such contract or agreement requires satisfaction of the above-described requirements prior to the consummation of such transaction, such requirements to be satisfied through the cooperation of the parties as described in Section 4.3(b)(ii).

(c)  Prior to the Distribution Date, Ceva, Inc. shall fully discharge and satisfy all of the then existing indebtedness owed by it or its Subsidiaries to DSPGI or any DSPGI Affiliate (other than payables incurred in the ordinary course of the business). From such date until the first day after the two-year anniversary of the Distribution Date, Ceva, Inc. shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or allow to exist any such indebtedness (other than payables incurred in the ordinary course of the business) with DSPGI or any DSPGI Affiliate.

(d)  Notwithstanding the foregoing, the provisions of Section 4.2 shall not prohibit Ceva, Inc. from implementing any transaction upon which the IRS has granted a favorable ruling in, or which is described in reasonable detail in, the Tax Rulings or any Subsequent Tax Opinion/Ruling.

4.3.  Cooperation and Other Covenants.

(a)  Each of Ceva, Inc. and DSPGI shall furnish the other with a copy of any ruling requests or other documents delivered to the IRS that relates to the Distribution or that could otherwise be reasonably expected to have an impact on the Tax-Free Status of the Separation and Distribution.

(b)  (i)  Each of Ceva, Inc. and DSPGI shall cooperate with the other and shall take (or refrain from taking) all such actions as the other may reasonably request in connection with obtaining any DSPGI determination referred to in Section 4.2. Such cooperation shall include, without limitation, providing any information, and/or representations, and/or Powers of Attorney reasonably requested by Ceva, Inc. or DSPGI, as applicable to enable it (or its Tax Advisor) to obtain and maintain any Subsequent Tax Opinion/Ruling that would permit any action described in Section 4.2 to be taken by Ceva, Inc. or Ceva, Inc., DSPGI or their respective Affiliates. From and after any Representation Date in connection with obtaining any such determination or the receipt of a Subsequent Tax Opinion/Ruling and until the first day after the first anniversary of the date of such determination or receipt, neither party shall take (nor shall it refrain from taking) any action that would have caused such representation to be untrue unless the other party has determined, in its sole and absolute discretion, which discretion shall be exercised in good faith solely to preserve the Tax-Free Status of the Separation and Distribution, that such action would not jeopardize the Tax-Free Status of the Separation and Distribution.

(ii)  In the event that Ceva, Inc. notifies DSPGI that it desires to take one of the actions described in Section 4.2 and DSPGI concludes that such action might

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jeopardize the Tax-Free Status of the Separation and Distribution, Ceva, Inc., may seek a Subsequent Tax Opinion/Ruling that would permit Ceva, Inc. to take the specified action, and DSPGI shall use commercially reasonable efforts to assist Ceva, Inc. in obtaining such Subsequent Tax Opinion/Ruling; provided, however, that the reasonable costs and expenses of obtaining any such Subsequent Tax Opinion/Ruling shall be borne by Ceva, Inc.

(c)  (i)  Until all restrictions set forth in Section 4.2 have expired, Ceva, Inc. shall give DSPGI written notice of any intention to effect or permit an action or transaction described in Section 4.2 and which is prohibited thereunder at such time within a period of time reasonably sufficient to enable DSPGI to make the determination referred to in Section 4.2. Each such notice by Ceva, Inc. shall set forth the terms and conditions of the proposed action or transaction, including, without limitation, as applicable, the nature of any related action proposed to be taken by the Board of Directors of Ceva, Inc., the approximate number of shares of Ceva, Inc. capital stock proposed to be transferred or issued, the approximate value of Ceva, Inc.’s assets (or assets of any of Ceva, Inc.’s Subsidiaries) proposed to be transferred, the proposed timetable for such action or transaction, and the number of shares of Ceva, Inc. capital stock otherwise then owned by the other party to the proposed action or transaction, all with sufficient particularity to enable DSPGI to make any such required determination. All information provided by Ceva, Inc. to DSPGI pursuant to this Section 4.3 shall be deemed subject to the confidentiality obligations of this Agreement.

(ii)  Promptly, but in any event within ten business days, after DSPGI receives such written notice from Ceva, Inc., DSPGI shall evaluate such information and notify Ceva, Inc. in writing of (A) such determination or (B) DSPGI’s requirement that Ceva, Inc. obtain a Subsequent Tax Opinion/Ruling prior to undertaking such action or transaction. If DSPGI makes a determination that an action or transaction described in Section 4.2 would jeopardize the Tax-Free Status of the Separation and Distribution, such notice to Ceva, Inc. shall set forth, in reasonable detail, the reasons therefor. In the event that Ceva, Inc. does not receive written notice of DSPGI’s determination or requirement that Ceva, Inc. obtain a Subsequent Tax Opinion/Ruling within ten business days after the notification by Ceva, Inc., then DSPGI shall be deemed to have elected to require that Ceva, Inc. obtain a Subsequent Tax Opinion/Ruling prior to undertaking such action or transaction. Ceva, Inc. shall notify DSPGI promptly, but in any event within ten business days, after the receipt of a Subsequent Tax Opinion/Ruling.

4.4.  Indemnification For Tax Liabilities.

(a)  (i)  Notwithstanding any other provision of this Agreement to the contrary, subject to Section 4.4(b), Ceva, Inc. shall indemnify, defend and hold harmless DSPGI and each DSPGI Affiliate (or any successor to any of them) against any and all Tax-Related Losses incurred by DSPGI or any of them in connection with any proposed tax assessment or tax controversy with respect to the Distribution or the Separation to the extent caused by any breach by Ceva, Inc. of any of its representations, warranties or covenants made pursuant to Article IV of this Agreement or in any Representation Letter issued by Ceva, Inc. after the Combination Effective Date.

(ii)  Notwithstanding any other provision of this Agreement to the contrary, DSPGI shall indemnify, defend and hold harmless Ceva, Inc. and each Ceva, Inc.

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Affiliate (or any successor to any of them) against (A) any and all Tax-Related Losses incurred by Ceva, Inc. or any of them in connection with any proposed tax assessment or tax controversy with respect to the Distribution or the Separation other than a Tax-Related Loss incurred by Ceva, Inc. as a result of any breach by Ceva, Inc. of any of its representations, warranties or covenants made pursuant to Article IV of this Agreement or in any Representation Letter issued by Ceva, Inc. after the Combination Effective Date and (B) any sales and use, gross receipts, or other similar transfer taxes imposed on the transfers occurring pursuant to the Separation and Distribution.

(iii)  All interest or penalties incurred in connection with any Tax-Related Losses or any indemnification obligation under subsection (ii)(B) above shall be computed for the time period up to and including the date that the Indemnifying Party pays its indemnification obligation in full.

(b)  The Indemnifying Party shall pay any amount due and payable to the Indemnitee pursuant to this Section 4.4 on or before the 90th day following the earlier of agreement or determination that such amount is due and payable to the Indemnitee. All payments made pursuant to this Section 4.4 shall be made by wire transfer to the bank account designated by the Indemnitee for such purpose, and on the date of such wire transfer the Indemnifying Party shall give the Indemnitee notice of the transfer.

4.5.  Procedure For Indemnification For Tax Liabilities.

(a)  If an Indemnitee receives notice of the assertion of any Third-Party Claim with respect to which an Indemnifying Party may be obligated under Section 4.4 to provide indemnification, the Indemnitee shall give the Indemnifying Party notice thereof (together with a copy of such Third-Party Claim, process or other legal pleading) promptly after becoming aware of such Third-Party Claim; provided, however, that the failure of the Indemnitee to give notice as provided in this Section shall not relieve the Indemnifying Party of its obligations under Section 4.4, except to the extent that the Indemnifying Party is actually prejudiced by such failure to give notice. Such notice shall describe such Third-Party Claim in reasonable detail.

(b)  DSPGI and Ceva, Inc. shall jointly control the defense of, and cooperate with each other with respect to defending, any Third-Party Claim with respect to which either party is obligated under Section 4.4 to provide indemnification, provided that either party shall forfeit such joint control right with respect to a particular Third-Party Claim if such party or any Affiliate of such party makes any public statement or filing, or takes any action (including, but not limited to, the filing of any submission or pleading, or the giving of a deposition or production of documents, in any administrative or court proceeding) in connection with such Third-Party Claim that is inconsistent in a material respect with any representation or warranty made by such party in this Agreement, the Tax Rulings, the Subsequent Tax Opinion/Ruling or the Representation Letters.

(c)  Ceva, Inc. and DSPGI shall exercise their rights to jointly control the defense of any such Third-Party Claim solely for the purpose of defeating such Third-Party Claim and, unless required by applicable law, neither Ceva, Inc. nor DSPGI shall make any statements or take any actions that could reasonably result in the shifting of liability for any Tax-

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Related Losses arising out of such Third-Party Claim from the party making such statement or taking such action (or any of its Affiliates) to the other party (or any of its Affiliates).

(d)  Statements made or actions taken by either Ceva, Inc. or DSPGI in connection with the defense of any such Third-Party Claim shall not prejudice the rights of such party in any subsequent action or proceeding between the parties.

(e)  If either DSPGI or Ceva, Inc. fails to jointly defend any such Third-Party Claim, the other party shall solely defend such Third-Party Claim and the party failing to jointly defend shall use commercially reasonable efforts to cooperate with the other party in its defense of such Third-Party Claim; provided, however, that an Indemnitee may not compromise or settle any such Third-Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed. All costs and expenses of either party incurred in connection with, and during the course of, the joint control of the defense of any such Third-Party Claim shall be initially paid by the party that incurs such costs and expenses. Such costs and expenses shall be reallocated and reimbursed in accordance with the respective indemnification obligations of the parties at the conclusion of the defense of such Third-Party Claim.

4.6.  Survival.    The rights and obligations of each of DSPGI and Ceva, Inc. and their respective Indemnitees under this Article IV shall survive until thirty days following the expiration of the applicable statute of limitations.

4.7.  Section 355(e) Notice.    Promptly after the Combination Effective Date, DSPGI shall file with the appropriate Internal Revenue Service Center a notice under Section 355(e)(4)(E) of the Code substantially in the form of Exhibit A to this Agreement.

ARTICLE V

INDEMNIFICATION

5.1.  Release of Claims.

(a)  Except as provided in Section 5.1(c), effective as of the Distribution Date, Ceva, Inc. does hereby, for itself, its respective Affiliates (other than any member of the DSPGI Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of any member of the Ceva, Inc. Group (in each case, in their respective capacities as such), remise, release and forever discharge each of DSPGI, its respective Affiliates (other than any member of the Ceva, Inc. Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of DSPGI (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date (including any contractual arrangements or arrangements existing or alleged to exist between them on or before the Distribution Date).

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(b)  Except as provided in Section 5.1(c), effective as of the Distribution Date, DSPGI does hereby, for itself and its Affiliates (other than any member of the Ceva, Inc. Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of any member of the DSPGI Group (in each case, in their respective capacities as such), remise, release and forever discharge Ceva, Inc., the respective members of the Ceva, Inc. Group, their respective Affiliates (other than any member of the DSPGI Group), successors and assigns, and all Persons who at any time prior to the Distribution Date have been stockholders, directors, officers, agents or employees of any member of the Ceva, Inc. Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, from any and all Liabilities whatsoever, whether at law or in equity (including any right of contribution), whether arising under any contract or agreement, by operation of law or otherwise, existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date (including any contractual arrangements or arrangements existing or alleged to exist between them on or before the Distribution Date).

(c)  Nothing in Section 5.1(a) or (b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement, or the Tax Indemnification Agreement. Nothing in Section 5.1(a) or (b) shall release any Person from:

(i)  any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

(ii)  any Liability that the parties may have with respect to indemnification or contribution pursuant to this Agreement for claims brought against the parties by third Persons, which Liability shall be governed by the provisions of this Article V and Article VI and, if applicable, the appropriate provisions of the Ancillary Agreements; or

(iii)  any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 5.1; provided, however, that the parties shall not bring suit or permit any of their Subsidiaries to bring suit against any Person with respect to any Liability to the extent that such Person would be released with respect to such Liability by this Section 5.1 but for the provisions of this clause (iii).

(d)  Ceva, Inc. shall not make, and shall not permit any member of the Ceva, Inc. Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against DSPGI or any member of the DSPGI Group or any other Person released pursuant to Section 5.1(a), with respect to any Liabilities released pursuant to Section 5.1(a). DSPGI shall not, and shall not permit any member of the DSPGI Group, to make any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Ceva, Inc. or any member of the Ceva, Inc. Group, or any other Person released pursuant to Section 5.1(b), with respect to any Liabilities released pursuant to Section 5.1(b).

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(e)  It is the intent of each of DSPGI and Ceva, Inc., by virtue of the provisions of this Section 5.1, to provide for a full and complete release and discharge of all Liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the Distribution Date, between or among Ceva, Inc. or any member of the Ceva, Inc. Group, on the one hand, and DSPGI or any member of the DSPGI Group, on the other hand (including any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the Distribution Date), except as expressly set forth in Section 5.1(c). At any time, at the request of any other party, each party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions hereof.

5.2.  Indemnification by Ceva, Inc.    Except as provided in Section 5.4, Ceva, Inc. shall indemnify, defend and hold harmless DSPGI, each member of the DSPGI Group and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “DSPGI Indemnitees”), from and against any and all Liabilities of the DSPGI Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):

(a)  the failure of Ceva, Inc. or any other member of the Ceva, Inc. Group or any other Person to pay, perform, or discharge any Corage Assumed Liabilities in accordance with their respective terms, whether prior to or after the Combination Effective Date or the date of this Agreement;

(b)  any breach by Ceva, Inc. or any member of the Ceva, Inc. Group of this Agreement, any of the Ancillary Agreements, or the Tax Indemnification Agreement subject to any limitations set forth in the Ancillary Agreements or the Tax Indemnification Agreement; and

(c)  any breach by Ceva, Inc. or any member of the Ceva, Inc. Group of any covenants or obligations in the Combination Agreement or in any documents or instruments executed and delivered by Ceva, Inc. or any member of the Ceva, Inc. Group, occurring at any time on or after the Distribution Date.

5.3.  Indemnification by DSPGI.    Except as otherwise provided in Section 5.5, DSPGI shall indemnify, defend and hold harmless Ceva, Inc., each member of the Ceva, Inc. Group and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Ceva, Inc. Indemnitees”), from and against any and all Liabilities of the Ceva, Inc. Indemnitees relating to, arising out of or resulting from any of the following items (without duplication):

(a)  the failure of DSPGI or any other member of the DSPGI Group or any other Person to pay, perform or otherwise promptly discharge any Liabilities of DSPGI or the DSPGI Group, which includes any and all Liabilities which are not Corage Assumed Liabilities, whether prior to or after the Distribution Date or the date of this Agreement;

(b)  any breach by DSPGI or any member of the DSPGI Group of this Agreement, any of the Ancillary Agreements or the Tax Indemnification Agreement, including

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any breach or inaccuracy of any representation or warranty made herein or therein subject to any limitations set forth in the Ancillary Agreements or the Tax Indemnification Agreement; and

(c)  any breach by DSPGI or any member of the DSPGI Group of any covenants or obligations in the Combination Agreement or in any documents or instruments executed and delivered by DSPGI or any member of the DSPGI Group, occurring at any time after the Distribution Date.

5.4.  Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

(a)  The parties intend that any Liability subject to indemnification or reimbursement pursuant to this Article V or Article VI will be net of Insurance Proceeds that actually reduce the amount of the Liability. Accordingly, the amount which any party (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification hereunder (an “Indemnitee”) will be reduced by any Insurance Proceeds theretofore actually recovered by or on behalf of the Indemnitee in reduction of the related Liability. If an Indemnitee receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds, then the Indemnitee shall pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds had been received, realized or recovered before the Indemnity Payment was made.

(b)  An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other third party shall be entitled to a “windfall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof. Nothing in this Agreement or any Ancillary Agreement shall obligate any member of any Group to seek to collect or recover any Insurance Proceeds.

5.5.  Procedures for Indemnification of Third Party Claims.

(a)  If an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) of any claim or of the commencement by any such Person of any Action (collectively, a “Third Party Claim”) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 5.2 or 5.3, or any other Section of this Agreement, any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof within twenty days after becoming aware of such Third Party Claim. Any such notice shall describe the facts constituting the basis for the Third Party Claim and the amount of the claimed Damages in reasonable detail. Notwithstanding the foregoing, no delay or failure of any Indemnitee to give the notice as provided in this Section 5.5(a) shall not relieve the related Indemnifying Party of its obligations under this Article V, except to the extent of any damage or liability arising out of such delay or failure.

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(b)  An Indemnifying Party may elect to defend, with counsel reasonably satisfactory to the Indemnitee (and, unless the Indemnifying Party has specified any reservations or exceptions, to seek to settle or compromise), at such Indemnifying Party’s own expense, any Third Party Claim. Within thirty days after the receipt of the notice from an Indemnitee in accordance with Section 5.5(a) (or sooner, if the nature of such Third Party Claim so requires), the Indemnifying Party shall notify the Indemnitee of its election whether the Indemnifying Party shall assume responsibility for defending such Third Party Claim, which election shall specify any reservations or exceptions; provided that (i) the Indemnifying Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnitee that any Damages, fines, costs or other liabilities that may be assessed against the Indemnitee in connection with such Third Party Claim constitute Damages for which the Indemnitee shall be indemnified pursuant to this Article V and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article V and (ii) the Indemnifying Party may not assume control of the defense of Third Party Claim involving criminal liability or in which equitable relief is sought against the Indemnitee; provided however, with respect to a Third Party Claim involving both equitable relief and monetary damages and in which the liability and damages phases of the proceeding are separated, the Indemnifying Party may assume the defense of the portion of the proceeding solely as it relates to monetary damages. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall be the expense of such Indemnitee except as set forth in the next sentence. In the event that the Indemnifying Party has elected to assume the defense of the Third Party Claim but has specified, and continues to assert, any reservations or exceptions in such notice, then, in any such case, the reasonable fees and expenses of one separate counsel for all Indemnitees shall be borne by the Indemnifying Party.

(c)  If an Indemnifying Party elects not to assume responsibility for defending a Third Party Claim, or fails to notify an Indemnitee of its election as provided in Section 5.5(a), such Indemnitee may defend such Third Party Claim at the cost and expense of the Indemnifying Party.

(d)  Unless the Indemnifying Party has failed to assume the defense of the Third Party Claim in accordance with the terms of this Agreement, no Indemnitee may settle or compromise any Third Party Claim without the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, conditioned or delayed.

(e)  No Indemnifying Party shall consent to entry of any judgment or enter into any settlement of the Third Party Claim without the written consent of the Indemnitee; provided that the consent of the Indemnitee shall not be required if the Indemnifying Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such settlement or judgment includes a complete release of the Indemnitee from further liability and has no other adverse effect on the Indemnitee.

(f)  In order to seek indemnification under this Article V, an Indemnitee shall deliver a Claim Notice to the Indemnifying Party.

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(g)  During the thirty-day period following the delivery of a Claim Notice, the Indemnifying Party and the Indemnitee shall use good faith efforts to resolve the Claim described therein. If within the thirty-day period following delivery of the Claim Notice, the parties agree in writing that the Indemnitee is entitled to the Claimed Amount or the Agreed Amount, the Indemnifying Party shall within five days of such agreement deliver to the Indemnitee, a payment of the Claimed Amount or the Agreed Amount, whichever is applicable by check or by wire transfer. If the Claim is not entirely resolved within such thirty-day period, the Indemnifying Party and the Indemnitee shall discuss in good faith the submission of the Dispute to binding arbitration, and if the Indemnifying Party and the Indemnified Party agree in writing to submit the Dispute to such arbitration, then the provisions of Article VIII. The provisions of this Section 5.5(g) shall not obligate the Indemnifying Party and the Indemnitee to submit to arbitration or any other alternative dispute resolution procedure with respect to any Dispute, and in the absence of an agreement by the Indemnifying Party and the Indemnitee to arbitrate a Dispute, such Dispute shall be resolved in a state or federal court sitting in New York, New York.

5.6.  Additional Matters.

(a) Any claim on account of a Liability which does not result from a Third Party Claim shall be asserted by written notice given by the Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have a period of thirty days after the receipt of such notice within which to accept responsibility for such claim in writing. If such Indemnifying Party does not accept responsibility therefor within such thirty-day period, such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment. If such Indemnifying Party does not respond within such thirty-day period or rejects such claim in whole or in part, such Indemnitee shall be free to pursue such remedies as may be available to such party as contemplated by this Agreement, the Ancillary Agreements and the Tax Indemnification Agreement without prejudice to its right to receive indemnification from the Indemnifying Party if it is ultimately determined that such rejection was improper.

(b)  In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third Party Claim against any claimant or plaintiff asserting such Third Party Claim or against any other person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

(c)  In the event of an Action in which the Indemnifying Party is not a named defendant, if the Indemnifying Party shall so request, the parties shall endeavor to substitute the Indemnifying Party for the named defendant if at all practicable. If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in this Section and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts’ fees and all other external

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expenses), the costs of any judgment or settlement, and the cost of any interest or penalties relating to any judgment or settlement.

5.7.  Remedies Cumulative.    The remedies provided in this Article V shall be cumulative and, subject to the provisions of Article VIII, shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

5.8.  Survival of Indemnities.    The rights and obligations of each of DSPGI and Ceva, Inc. and their respective Indemnitees under this Article V shall survive the sale or other transfer by any party of any assets or businesses or the assignment by it of any Liabilities until the second anniversary following the Distribution Date.

5.9.  Tax-Related Losses.    Notwithstanding anything herein to the contrary, Article IV shall govern and shall be the exclusive remedy for any breach of any representation, warranty or covenant contained in Article IV of this Agreement; provided, however, that Article VIII shall govern any disputes among the parties arising out of Article IV. Except as otherwise specifically provided in this Agreement or in any Ancillary Agreement, as applicable, the indemnification rights afforded by this Article V are the exclusive remedy for all other matters relating to this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby.

ARTICLE VI

INTERIM OPERATIONS AND CERTAIN OTHER MATTERS

6.1.  Certain Business Matters.

(a)  Except as may be expressly set forth in Section 6.2 below or in any Ancillary Agreement, no member of any Group shall have any duty to refrain from (i) engaging in the same or similar activities or lines of business as any member of any other Group, (ii) doing business with any potential or actual supplier or customer of any member of any other Group, or (iii) engaging in, or refraining from, any other activities whatsoever relating to any of the potential or actual suppliers or customers of any member of any other Group.

(b)  Each of DSPGI and Ceva, Inc. is aware that from time to time certain business opportunities may arise which more than one Group may be financially able to undertake, and which are, from their nature, in the line of more than one Group’s business and are of practical advantage to more than one Group. In connection therewith, the parties agree that if, following the Distribution Date and prior to (but not following) the Combination Effective Date, any of DSPGI or Ceva, Inc. acquires knowledge of an opportunity that meets the foregoing standard with respect to more than one Group, none of DSPGI or Ceva, Inc. shall have any duty to communicate or offer such opportunity to any of the others and may pursue or acquire such opportunity for itself, or direct such opportunity to any other Person in each case subject to the provisions of Section 6.2.

6.2.  Non-Competition, Solicitation and Hiring.

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(a)  Subject to the restrictions and rights set forth in the Technology Transfer Agreements, the DSPGI Group acknowledges that, prior to the Distribution, it has and will have become privy to certain confidential information and trade secrets of Ceva, Inc. and further acknowledges that it will derive substantial benefits from the consummation of the transactions contemplated by this Agreement and that Ceva, Inc. is consummating such transactions in reliance upon the agreement in this Section 6.2 that the knowledge and expertise developed by Ceva, Inc. and available to the DSPGI Group will be preserved and will not be used in competition with Ceva, Inc. The DSPGI Group acknowledges that it is reasonable and necessary for the protection of Ceva, Inc. and its Subsidiaries that the DSPGI Group agree, and accordingly the DSPGI Group does agree that, for a period of five years following the Distribution Date (the “Noncompetition Period”), the DSPGI Group shall not, and shall ensure that Affiliates of the DSPGI Group shall not directly or indirectly engage in any business that is competitive with the Licensing Business.

(b)  Subject to the restrictions and rights set forth in the Technology Transfer Agreements, the Ceva, Inc. Group acknowledges that, prior to the Distribution, it has and will have become privy to certain confidential information of DSPGI and further acknowledges that it will derive substantial benefits from the consummation of the transactions contemplated by this Agreement and that DSPGI is consummating such transactions in reliance upon the agreement in this Section 6.2 that the knowledge and expertise developed by DSPGI and available to the Ceva, Inc. Group (and the rights to use which have not been conveyed to Ceva, Inc., DSP Ceva or Corage, Ltd. pursuant to the transactions contemplated by Section 2.2 of this Agreement) will be preserved and will not be used in competition with DSPGI. The Ceva, Inc. Group acknowledges that its is reasonable and necessary for the protection of DSPGI and its Subsidiaries that the Ceva, Inc. Group agree, and accordingly the Ceva, Inc. Group does agree that, during the Noncompetition Period, the Ceva, Inc. Group shall not and shall ensure that Affiliates of the Ceva, Inc. Group shall not directly or indirectly engage in any business that is competitive with the Products Business.

(c)  For a period of three years after the Distribution Date, each of DSPGI and Ceva, Inc. shall not, either directly or indirectly (including through an Affiliate), solicit for hire any employee of the other or its Subsidiaries; provided, however, that such restriction shall not apply to (i) any individual whose employment with such party has been terminated or (ii) any general employment solicitations that are not targeted at any such employees, such as advertisements in publications in general circulation.

(d)  For purposes of this Section 6.2, neither DSPGI nor Ceva, Inc. will be deemed to be engaged indirectly in an activity as a result of another Person engaging in that activity unless that Person is its Affiliate.

(e)  The invalidity or non-enforceability of this Section 6.2 in any respect shall not affect the validity or enforceability of this Section 6.2 in any other respect or of any other provisions of this Agreement. In the event that any provision of this Section 6.2 shall be held invalid or unenforceable by a court of competent jurisdiction by reason of the geographic or business scope or the duration thereof, such invalidity or unenforceability shall attach only to the scope or duration of such provision and shall not affect or render invalid or unenforceable any other provision of this Agreement, and, to the fullest extent permitted by law, this Agreement

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shall be construed as if the geographic or business scope or the duration of such provision had been more narrowly drafted so as not to be invalid or unenforceable.

(f)  Each of Ceva, Inc. and DSPGI acknowledges that the other party would suffer irreparable harm if it were to breach its obligations under Sections 6.2(a) or (b), respectively, and that the other party’s remedy at law for any such breach is and will be insufficient and inadequate and that the other shall be entitled to equitable relief, including by way of temporary and permanent injunction, in addition to any remedies the other party may have at law.

6.3.  Late Payments.    Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement or the Tax Indemnification Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within thirty days of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the Prime Rate plus two percent.

ARTICLE VII

EXCHANGE OF INFORMATION; CONFIDENTIALITY

7.1.  Agreement for Exchange of Information; Archives.

(a)  Each of DSPGI and Ceva, Inc., on behalf of its respective Group, agrees to provide, or cause to be provided, to the other Group, at any time before or after the Distribution Date, as soon as reasonably practicable after written request therefor, any Information in the possession or under the control of such Group which the requesting party reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on the requesting party (including under applicable securities or tax laws) by a Governmental Authority having jurisdiction over the requesting party, (ii) for use in any other judicial, regulatory, administrative, tax or other proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, tax or other similar requirements, or (iii) to comply with its obligations under this Agreement or any Ancillary Agreement; provided, however, that in the event that any party determines that any such provision of Information could be commercially detrimental, violate any law or agreement, or waive any attorney client privilege, the parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequences.

(b)  After the Combination Effective Date, Ceva, Inc. shall have access during regular business hours (as in effect from time to time) to the documents and objects of historic significance that relate to the business of Ceva, Inc. that are located in the records of DSPGI. Ceva, Inc. may obtain copies (but not originals) of documents for bona fide business purposes and Ceva, Inc. shall comply with any rules, procedures or other requirements, and shall be subject to any restrictions (including prohibitions on removal of specified objects), that are then applicable to DSPGI. Nothing herein shall be deemed to restrict the access of any member of the DSPGI Group to any such documents.

7.2.  Ownership of Information.    Any Information owned by one Group that is provided to a requesting party pursuant to Section 7.1 shall be deemed to remain the property

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and confidential information of the providing party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such Information.

7.3.  Compensation for Providing Information.    The party requesting such Information shall reimburse the other party for the reasonable costs, if any, of creating, gathering and copying such Information, to the extent that such costs are incurred for the benefit of the requesting party. Except as may be otherwise specifically provided elsewhere in this Agreement or in any other agreement between the parties, such costs shall be computed in accordance with the providing party’s standard methodology and procedures.

7.4.  Record Retention.    To facilitate the possible exchange of Information pursuant to this Article VII and other provisions of this Agreement after the Distribution Date, the parties shall exercise their reasonable best efforts to retain all Information in their respective possession or control on the Distribution Date. No party will destroy, or permit any of its Subsidiaries to destroy, any Information which the other party may have the right to obtain pursuant to this Agreement prior to the third anniversary of the date of this Agreement without first using its reasonable best efforts to notify the other party of the proposed destruction and giving the other party the opportunity to take possession of such information prior to such destruction; provided, however, that in the case of any Information relating to Taxes (as such term is defined in the Combination Agreement) or to Environmental Liabilities, such period shall be extended to the expiration of the applicable statute of limitations (giving effect to any extensions thereof).

7.5.  Limitation of Liability.    No party shall have any liability to any other party in the event that any Information exchanged or provided pursuant to this Agreement which is an estimate or forecast, or which is based on an estimate or forecast, is found to be inaccurate, in the absence of willful misconduct by the party providing such Information. No party shall have any liability to any other party if any Information is destroyed after reasonable best efforts by such party to comply with the provisions of Section 7.4.

7.6.  Other Agreements Providing for Exchange of Information.    The rights and obligations granted under this Article VII are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of Information set forth in any Ancillary Agreement.

7.7.  Production of Witnesses; Records; Cooperation.

(a)  After the Distribution Date, except in the case of an adversarial Action by one party against another party, each party hereto shall exercise its reasonable best efforts to make available to each other party, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action in which the requesting party may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder.

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(b)  If an Indemnifying Party chooses to defend or to seek to compromise or settle any Third Party Claim, the other parties shall make available to such Indemnifying Party or such other party, as the case may be, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be, and shall otherwise cooperate in such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be.

(c)  Without limiting the foregoing, the parties shall cooperate and consult to the extent reasonably necessary with respect to any Actions.

(d)  Without limiting any provision of this Section, each of the parties agrees to cooperate, and to cause each member of its respective Group to cooperate, with each other in the defense of any infringement or similar claim with respect to any intellectual property and shall not claim to acknowledge, or permit any member of its respective Group to claim to acknowledge, the validity or infringing use of any intellectual property of a third Person in a manner that would hamper or undermine the defense of such infringement or similar claim.

(e) The obligation of the parties to provide witnesses pursuant to this Section 7.7 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to provide as witnesses inventors and other officers without regard to whether the witness or the employer of the witness could assert a possible business conflict (subject to the exception set forth in the first sentence of Section 7.7(a)).

(f)  In connection with any matter contemplated by this Section 7.7, the parties shall enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of any Group.

7.8.  Confidentiality.

(a)  Subject to Section 7.9, each of DSPGI and Ceva, Inc., on behalf of itself and each member of its respective Group, agrees to hold, and to cause its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives to hold, in strict confidence, with at least the same degree of care that applies to DSPGI’s confidential and proprietary information pursuant to policies in effect as of the Distribution Date, all Information concerning each such other Group that is either in its possession (including Information in its possession prior to any of the date hereof, the Combination Effective Date or the Distribution Date) or furnished by any such other Group or its respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives at any time pursuant to this Agreement, any Ancillary Agreement, the Tax Indemnification Agreement or otherwise, and shall not use any such Information other than for such purposes as shall be expressly permitted hereunder or thereunder, except, in each case, to the extent that such

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Information has been (i) in the public domain through no fault of such party or any member of such Group or any of their respective directors, officers, employees, agents, accountants, counsel and other advisors and representatives, (ii) later lawfully acquired from other sources by such party (or any member of such party’s Group) which sources are not themselves bound by a confidentiality obligation), or (iii) independently generated without reference to any proprietary or confidential Information of the other party.

(b)  Each party agrees not to release or disclose, or permit to be released or disclosed, any such Information to any other Person, except its directors, officers, employees, agents, accountants, counsel and other advisors and representatives who need to know such Information (who shall be advised of their obligations hereunder with respect to such Information), except in compliance with Section 7.9. Without limiting the foregoing, when any Information is no longer needed for the purposes contemplated by this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement, each party shall promptly after request of any other party either return to the other party all Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the other party that it has destroyed such Information (and such copies thereof and such notes, extracts or summaries based thereon).

(c)  The terms and conditions of this Section 7.8 shall not apply to any Confidential Information (as defined in the Technology Transfer Agreements), which instead shall be subject to the confidentiality and other provisions of the Technology Transfer Agreements.

7.9.  Protective Arrangements.    If any party or any member of its Group either determines on the advice of its counsel that it is required to disclose any Information pursuant to applicable law or receives any demand under lawful process or from any Governmental Authority to disclose or provide Information of any other party (or any member of any other party’s Group) that is subject to the confidentiality provisions hereof, such party shall notify the other party prior to disclosing or providing such Information and shall cooperate at the expense of the requesting party in seeking any reasonable protective arrangements requested by such other party. Subject to the foregoing, the Person that received such request may thereafter disclose or provide Information to the extent required by such law (as so advised by counsel) or by lawful process or such Governmental Authority.

7.10.  Reimbursement.    Except to the extent otherwise contemplated by any Ancillary Agreement, a party providing information to the other party under this Article VII shall be entitled to receive from the recipient of such information, upon presentation of invoices thereof, payments for such amount relating to supplies, disbursements and other out-of-pocket expenses, as may be reasonably incurred in providing such information.

ARTICLE VIII

ARBITRATION; DISPUTE RESOLUTION

8.1.  Agreement to Arbitrate.    Except as otherwise specifically provided in any Ancillary Agreement, the procedures for discussion, negotiation and arbitration set forth in this

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Article VIII shall apply to all disputes, controversies or claims (whether sounding in contract, tort or otherwise) that may arise out of or relate to, or arise under or in connection with this Agreement or any Ancillary Agreement, or the transactions contemplated hereby or thereby (including all actions taken in furtherance of the transactions contemplated hereby or thereby on or prior to the date hereof), or the commercial or economic relationship of the parties relating hereto or thereto, between or among any member of the DSPGI Group and the Ceva, Inc. Group. Each party agrees on behalf of itself and each member of its respective Group that the procedures set forth in this Article VIII shall be the sole and exclusive remedy in connection with any dispute, controversy or claim relating to any of the foregoing matters and irrevocably waives any right to commence any Action in or before any Governmental Authority, except as expressly provided in Sections 8.7(b) and 8.8 and except to the extent provided under the United States Federal Arbitration Act in the case of judicial review of arbitration results or awards. Each party on behalf of itself and each member of its respective Group irrevocably waives any right to any trial by jury with respect to any claim, controversy or dispute set forth in the first sentence of this Section 8.1.

8.2.  Escalation.

(a)  It is the intent of the parties to exercise their respective reasonable best efforts to resolve expeditiously any dispute, controversy or claim between or among them with respect to the matters covered hereby that may arise from time to time on a mutually acceptable negotiated basis. In furtherance of the foregoing, any party involved in a dispute, controversy or claim may deliver a notice (an “Escalation Notice”) demanding an in person meeting involving representatives of the parties at a senior level of management of the parties (or if the parties agree, of the appropriate strategic business unit or division within such entity). A copy of any such Escalation Notice shall be given to the Chief Financial Officer, or like officer or official, of each party involved in the dispute, controversy or claim (which copy shall state that it is an Escalation Notice pursuant to this Agreement). Any agenda, location or procedure for such discussions or negotiations between the parties may be established by the parties from time to time; provided, however, that the parties shall exercise their reasonable best efforts to meet within thirty days of the Escalation Notice.

(b)  The parties may, by mutual consent, retain a mediator to aid the parties in their discussions and negotiations by informally providing advice to the parties. Any opinion expressed by the mediator shall be strictly advisory and shall not be binding on the parties, nor shall any opinion expressed by the mediator be admissible in any arbitration proceedings. The mediator may be chosen from a list of mediators previously selected by the parties or by other agreement of the parties.

(c)  Costs of the mediation shall be borne equally by the parties involved in the matter, except that each party shall be responsible for its own expenses. Mediation is not a prerequisite to a demand for arbitration under Section 8.3.

8.3.  Demand for Arbitration.

(a)  At any time after the first to occur of (i) the date of the meeting actually held pursuant to the applicable Escalation Notice or (ii) in the event no such meeting occurs,

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forty-five days after the delivery of an Escalation Notice, any party involved in the dispute, controversy or claim (regardless of whether such party delivered the Escalation Notice) may, unless the Applicable Deadline has occurred, make a written demand (the “Arbitration Demand Notice”) that the dispute be resolved by binding arbitration, which Arbitration Demand Notice shall be given to the parties to the dispute, controversy or claim in the manner set forth in Section 11.5. If party shall deliver an Arbitration Demand Notice to another party, such other party may itself deliver an Arbitration Demand Notice to such first party with respect to any related dispute, controversy or claim with respect to which the Applicable Deadline has not passed without the requirement of delivering an Escalation Notice. No party may assert that the failure to resolve any matter during any discussions or negotiations, the course of conduct during the discussions or negotiations or the failure to agree on a mutually acceptable time, agenda, location or procedures for the meeting, in each case, as contemplated by Section 8.2, is a prerequisite to a demand for arbitration under Section 8.3.

(b)  Except as may be expressly provided in any Ancillary Agreement, any Arbitration Demand Notice may be given until one year and forty-five days after the later of the occurrence of the act or event giving rise to the underlying claim or the date on which such act or event was, or should have been, in the exercise of reasonable due diligence, discovered by the party asserting the claim (as applicable and as it may in a particular case be specifically extended by the parties in writing, the “Applicable Deadline”). Any discussions, negotiations or mediations between the parties pursuant to this Agreement or otherwise shall not toll the Applicable Deadline unless expressly agreed in writing by the parties. Each of the parties agrees on behalf of itself and each member of its Group that if an Arbitration Demand Notice with respect to a dispute, controversy or claim is not given prior to the expiration of the Applicable Deadline, as between or among the parties and the members of their Groups, such dispute, controversy or claim will be barred, notwithstanding any longer statute of limitations afforded by any applicable law. Subject to Sections 8.7(d) and 8.8, upon delivery of an Arbitration Demand Notice pursuant to Section 8.3(a) prior to the Applicable Deadline, the dispute, controversy or claim shall be decided by a sole arbitrator in accordance with the rules set forth in this Article VIII.

8.4.  Arbitrators.

(a)  Within fifteen days after a valid Arbitration Demand Notice is given, the parties involved in the dispute, controversy or claim referenced therein shall attempt to select a sole arbitrator satisfactory to all such parties.

(b)  If such parties are not able jointly to select a sole arbitrator within such fifteen-day period, such parties shall each appoint an arbitrator within thirty days after delivery of the Arbitration Demand Notice. If one party appoints an arbitrator within such time period and the other party or parties fail to appoint an arbitrator within such time period, the arbitrator appointed by the one party shall be the sole arbitrator of the matter.

(c)  If a sole arbitrator is not selected pursuant to paragraph (a) or (b) above and, instead, two or more arbitrators are selected pursuant to paragraph (b) above, the arbitrators shall, within thirty days after the appointment of the later of them to be appointed, select an additional arbitrator who shall act as the sole arbitrator of the dispute. After selection of such

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sole arbitrator, the initial arbitrators shall have no further role with respect to the dispute. In the event that the arbitrators so appointed do not, within thirty days after the appointment of the later of them to be appointed, agree on the selection of the sole arbitrator, any party involved in such dispute may apply to the American Arbitration Association to select the sole arbitrator, which selection shall be made by such organization within thirty days after such application. Any arbitrator selected pursuant to this paragraph (c) shall be disinterested with respect to any of the parties and the matter and shall be reasonably competent in the applicable subject matter.

(d)  The sole arbitrator selected pursuant to paragraph (a), (b) or (c) above shall set a time for the hearing of the matter which will commence no later than ninety days after the date of appointment of the sole arbitrator pursuant to paragraph (a), (b) or (c) above and which hearing will be no longer than thirty days (unless in the judgment of the arbitrator the matter is unusually complex and sophisticated and thereby requires a longer time, in which event such hearing shall be no longer than ninety days). The final decision of such arbitrator will be rendered in writing to the parties not later than sixty days after the last hearing date, unless otherwise agreed by the parties in writing.

(e)  The place of any arbitration hereunder will be New York, New York, unless otherwise agreed by the parties.

8.5.  Hearings.    Within the time period specified in Section 8.4(d), the matter shall be presented to the arbitrator at a hearing by means of written submissions of memoranda and verified witness statements and exhibits, filed simultaneously, and responses, if necessary in the judgment of the arbitrator or both the parties. If the arbitrator deems it to be essential to a fair resolution of the dispute, live cross-examination or direct examination may be permitted, but is not generally contemplated to be necessary. The arbitrator shall actively manage the arbitration with a view to achieving a just, speedy and cost-effective resolution of the dispute, claim or controversy. The arbitrator may, in his or her discretion, set time and other limits on the presentation of each party’s case, its memoranda or other submissions, and refuse to receive any proffered evidence, which the arbitrator, in his or her discretion, finds to be cumulative, unnecessary, irrelevant or of low probative nature. Except as otherwise set forth herein, any arbitration hereunder will be conducted in accordance with the American Arbitration Association Commercial Rules then prevailing. Except as expressly set forth in Section 8.8(b), the decision of the arbitrator shall be final and binding on the parties, and judgment thereon may be had and shall be enforceable in any court having jurisdiction over the parties. Arbitration awards will bear interest at an annual rate of the Prime Rate plus two percent per annum. To the extent that the provisions of this Agreement and the prevailing rules of the American Arbitration Association conflict, the provisions of this Agreement shall govern.

8.6.  Discovery and Certain Other Matters.

(a)  Any party involved in the applicable dispute may request limited document production from the other party or parties of specific and expressly relevant documents, with the reasonable expenses of the producing party incurred in such production paid by the requesting party. Any such discovery (which rights to documents shall be substantially less than document discovery rights prevailing under the Federal Rules of Civil Procedure) shall be conducted expeditiously and shall not cause the hearing provided for in Section 8.5 to be

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adjourned except upon consent of all parties involved in the applicable dispute or upon an extraordinary showing of cause demonstrating that such adjournment is necessary to permit discovery essential to a party to the proceeding. Depositions, interrogatories or other forms of discovery (other than the document production set forth above) shall not occur except by consent of the parties involved in the applicable dispute. Disputes concerning the scope of document production and enforcement of the document production requests shall be determined by written agreement of the parties involved in the applicable dispute or, failing such agreement, will be referred to the arbitrator for resolution. All discovery requests will be subject to the proprietary rights and rights of privilege of the parties, and the arbitrator will adopt procedures to protect such rights and to maintain the confidential treatment of the arbitration proceedings (except as may be required by law). Subject to the foregoing, the arbitrator shall have the power to issue subpoenas to compel the production of documents relevant to the dispute, controversy or claim.

(b)  The arbitrator shall have full power and authority to determine issues of arbitrability but shall otherwise be limited to interpreting or construing the applicable provisions of this Agreement or any Ancillary Agreement, and shall have no authority or power to limit, expand, alter, amend, modify, revoke or suspend any condition or provision of this Agreement or any Ancillary Agreement; it being understood, however, that the arbitrator will have full authority to implement the provisions of this Agreement or any Ancillary Agreement, and to fashion appropriate remedies for breaches of this Agreement (including interim or permanent injunctive relief); provided, however, that the arbitrator shall not have (i) any authority in excess of the authority a court having jurisdiction over the parties and the controversy or dispute would have absent these arbitration provisions or (ii) any right or power to award punitive or multiple damages. It is the intention of the parties that in rendering a decision the arbitrator give effect to the applicable provisions of this Agreement and the Ancillary Agreements and follow applicable law (it being understood and agreed that this sentence shall not give rise to a right of judicial review of the arbitrator’s award).

(c)  If a party fails or refuses to appear at and participate in an arbitration hearing after due notice, the arbitrator may hear and determine the controversy upon evidence produced by the appearing party.

(d)  Arbitration costs will be borne equally by each party involved in the matter, except that each party will be responsible for its own attorney’s fees and other costs and expenses, including the costs of witnesses selected by such party.

8.7.  Certain Additional Matters.

(a)  Any arbitration award shall be a bare award limited to a holding for or against a party and shall be without findings as to facts, issues or conclusions of law (including with respect to any matters relating to the validity or infringement of patents or patent applications) and shall be without a statement of the reasoning on which the award rests, but must be in adequate form so that a judgment of a court may be entered thereupon. Judgment upon any arbitration award hereunder may be entered in any court having jurisdiction thereof.

(b)  Prior to the time at which an arbitrator is appointed pursuant to Section 8.4, any party may seek one or more temporary restraining orders in a court of competent

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jurisdiction if necessary in order to preserve and protect the status quo. Neither the request for, or grant or denial of, any such temporary restraining order shall be deemed a waiver of the obligation to arbitrate as set forth herein and the arbitrator may dissolve, continue or modify any such order. Any such temporary restraining order shall remain in effect until the first to occur of the expiration of the order in accordance with its terms or the dissolution thereof by the arbitrator.

(c)  Except as required by law, the parties shall hold, and shall cause their respective officers, directors, employees, agents and other representatives to hold, the existence, content and result of mediation or arbitration in confidence in accordance with the provisions of Article VIII and except as may be required in order to enforce any award. Each of the parties shall request that any mediator or arbitrator comply with such confidentiality requirement.

(d)  If at any time the sole arbitrator shall fail to serve as an arbitrator for any reason, the parties shall select a new arbitrator who shall be disinterested as to the parties and the matter in accordance with the procedures set forth herein for the selection of the initial arbitrator. The extent, if any, to which testimony previously given shall be repeated or as to which the replacement arbitrator elects to rely on the stenographic record (if there is one) of such testimony shall be determined by the replacement arbitrator.

8.8.  Limited Court Actions.

(a)  Notwithstanding anything herein to the contrary, in the event that any party reasonably determines the amount in controversy in any dispute, controversy or claim (or any series of related disputes, controversies or claims) under this Agreement or any Ancillary Agreement is, or is reasonably likely to be, in excess of $5 million, excluding any interest accrued thereon, and if such party desires to commence an Action in lieu of complying with the arbitration provisions of this Article, such party shall so state in its Arbitration Demand Notice. If the other parties to the arbitration do not agree that the amount in controversy in such dispute, controversy or claim (or such series of related disputes, controversies or claims) is, or is reasonably likely to be, in excess of $5 million, the arbitrator selected pursuant to Section 8.4 hereof shall decide whether the amount in controversy in such dispute, controversy or claim (or such series of related disputes, controversies or claims) is, or is reasonably likely to be, in excess of $5 million. The arbitrator shall set a date that is no later than ten days after the date of his or her appointment for submissions by the parties with respect to such issue. There shall not be any discovery in connection with such issue. The arbitrator shall render his or her decision on such issue within five days of such date so set by the arbitrator. If the arbitrator determines that the amount in controversy in such dispute, controversy or claim (or such series of related disputes, controversies or claims) is or is reasonably likely to be in excess of $5 million, the provisions of Sections 8.4(d) and (e), 8.5, 8.6, 8.7 and 8.10 hereof shall not apply and on or before (but, except as expressly set forth in Section 8.8(b), not after) the twentieth business day after the date of such decision, any party to the arbitration may elect, in lieu of arbitration, to commence an Action with respect to such dispute, controversy or claim (or such series of related disputes, controversies or claims) in any court of competent jurisdiction. If the arbitrator does not so determine, the provisions of this Article (including with respect to time periods) shall apply as if no determinations were sought or made pursuant to this Section 8.8(a).

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(b)  If an arbitration award in excess of $5 million is issued in any arbitration proceeding commenced hereunder, any party may, within sixty days after the date of such award, submit the dispute, controversy or claim (or series of related disputes, controversies or claims) giving rise thereto to a court of competent jurisdiction, regardless of whether such party or any other party sought to commence an Action in lieu of proceeding with arbitration in accordance with Section 8.8(a). In such event, the applicable court may elect to rely on the record developed in the arbitration or, if it determines that it would be advisable in connection with the matter, allow the parties to seek additional discovery or to present additional evidence. Each party shall be entitled to present arguments to the court with respect to whether any such additional discovery or evidence shall be permitted and with respect to all other matters relating to the applicable dispute, controversy or claim (or series of related disputes, controversies or claims).

8.9.  Continuity of Service and Performance.    Unless otherwise agreed in writing, the parties will continue to provide service and honor all other commitments under this Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of this Article VIII with respect to all matters not subject to such dispute, controversy or claim.

8.10.  Law Governing Arbitration Procedures.    The interpretation of the provisions of this Article VIII, only insofar as they relate to the agreement to arbitrate and any procedures pursuant thereto, shall be governed by the Arbitration Act and other applicable U.S. federal law. In all other respects, the interpretation of this Agreement shall be governed as set forth in Section 11.2.

ARTICLE IX

FURTHER ASSURANCES AND ADDITIONAL COVENANTS

9.1.  Further Assurances.

(a)  In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use its commercially reasonable efforts, prior to, on and after the Distribution Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement, the Ancillary Agreements and the Tax Indemnification Agreement.

(b)  Prior to the Distribution Date, if one or more of the parties identifies any commercial or other service that is needed to assure a smooth and orderly transition of the businesses in connection with the consummation of the transactions contemplated hereby, and that is not otherwise governed by the provisions of this Agreement or any Ancillary Agreement, the parties will cooperate in determining whether there is a mutually acceptable arm’s-length basis on which one or more of the other parties will provide such service.

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ARTICLE X

TERMINATION

10.1.  Termination by Mutual Consent.    This Agreement may be terminated at any time after the termination of the Combination Agreement by the mutual consent of DSPGI and Ceva, Inc.

10.2.  Other Termination.    The obligations of the parties under Article III (including the obligation to pursue or effect the Distribution) may be terminated by DSPGI if the Distribution Date shall not have occurred on or before December 31, 2002.

10.3.  Effect of Termination.    In the event of any termination of this Agreement prior to the Combination Effective Date, no party to this Agreement (or any of its directors or officers) shall have any Liability or further obligation to any other party. In the event of any termination of this Agreement on or after the Combination Effective Date, only the provisions of Article III will terminate and the other provisions of this Agreement, each Ancillary Agreement and the Tax Indemnification Agreement shall remain in full force and effect.

ARTICLE XI

MISCELLANEOUS

11.1.  Counterparts; Entire Agreement; Corporate Power.

(a)  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.

(b)  This Agreement, and the Exhibits, Schedules and Appendices hereto contain the entire agreement between the parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the parties other than those set forth or referred to herein or therein.

(c)  DSPGI represents on behalf of itself and each other member of the DSPGI Group and Ceva, Inc. represents on behalf of itself and each other member of the Ceva, Inc. Group as follows:

(i)  each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform each of this Agreement, each of the Ancillary Agreements and the Tax Indemnification Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and

(ii)  this Agreement, each Ancillary Agreement and the Tax Indemnification Agreement to which it is a party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.

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11.2.  Governing Law.    This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware (other than as to its laws of arbitration which shall be governed under the Arbitration Act or other applicable federal law pursuant to Section 8.10), irrespective of the choice of laws principles of the State of Delaware, as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies.

11.3.  Assignability.    Except as set forth in any Ancillary Agreement or the Tax Indemnification Agreement, this Agreement, each Ancillary Agreement and the Tax Indemnification Agreement shall be binding upon and inure to the benefit of the parties hereto and thereto, respectively, and their respective successors and assigns; provided, however, that no party hereto or thereto may assign its respective rights or delegate its respective obligations under this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement without the express prior written consent of the other parties hereto or thereto.

11.4.  Third Party Beneficiaries.    Except for the indemnification rights under this Agreement of any DSPGI Indemnitee or Ceva, Inc. Indemnitee in their respective capacities as such, (i) the provisions of this Agreement, each Ancillary Agreement and the Tax Indemnification Agreement are solely for the benefit of the parties and are not intended to confer upon any Person except the parties any rights or remedies hereunder, and (ii) there are no third party beneficiaries of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement and none of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement shall provide any third person with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement. No party hereto shall have any right, remedy or claim with respect to any provision of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement to the extent such provision relates solely to the other two parties hereto or the members of such other two parties’ respective Groups.

11.5.  Notices.    All notices requests, demands, waivers and other communications under this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement shall be in writing and shall be deemed to have been duly given if delivered personally or by facsimile transmission or mailed (certified or registered mail, postage prepaid, return receipt requested):

If to DSPGI:	DSP Group, Inc. 3120 Scott Boulevard Santa Clara, CA 95054 Attention:  Chief Financial Officer Fax No.:  408-986-4323
If to Ceva, Inc.:	Ceva, Inc.   2033 Gateway Place, Suite 150 San Jose, CA 95110 Attention: Chief Financial Officer Fax No.:  408-514-2995

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or to such other person or address as any party shall specify by notice in writing to the other party. All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date on which hand delivered, upon transmission of the facsimile transmission by the sender and issuance by the transmitting machine of a confirmation slip confirming that the number of pages constituting the notice have been transmitted without error, or on the third business day following the date on which so mailed, except for a notice of change of address, which shall be effective only upon receipt thereof. In the case of a notice sent by facsimile transmission, the sender shall contemporaneously mail a copy of the notice to the addressee at the address provided for above. However, such mailing shall in no way alter the time at which the facsimile notice is deemed received. In no event shall the provision of notice pursuant to this Section 11.5 constitute notice for service of process.

11.6.  Severability.    If any provision of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby or thereby, as the case may be, is not affected in any manner adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties.

11.7.  Force Majeure.    No party shall be deemed in default of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement to the extent that any delay or failure in the performance of its obligations under this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement results from any cause beyond its reasonable control and without its fault or negligence, such as acts of God, acts of civil or military authority, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, labor problems or unavailability of parts, or, in the case of computer systems, any failure in electrical or air conditioning equipment. In the event of any such excused delay, the time for performance shall be extended for a period equal to the time lost by reason of the delay.

11.8.  Publicity.    Prior to the Distribution, each of Ceva, Inc. and DSPGI shall consult with each other prior to issuing any press releases or otherwise making public statements with respect to the Separation and the Distribution or any of the other transactions contemplated hereby and prior to making any filings with any Governmental Authority with respect thereto.

11.9.  Expenses.    Except as expressly set forth in this Agreement (including Section 3.1(h) hereof) or in any Ancillary Agreement or in the Tax Indemnification Agreement, whether or not the Distribution is consummated, each party hereto shall bear its own respective third party fees, costs and expenses paid or incurred in connection with the Distribution.

11.10.  Headings.    The article, section and paragraph headings in this Agreement and in the Ancillary Agreements and the Tax Indemnification Agreement are for reference purposes

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only and shall not affect in any way the meaning or interpretation of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement.

11.11.  Waivers of Default.    Waiver by any party of any default by the other party of any provision of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement shall not be deemed a waiver by the waiving party of any subsequent or other default, nor shall it prejudice the rights of the other party.

11.12.  Specific Performance.    In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement, the party or parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, such Ancillary Agreement or the Tax Indemnification Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived.

11.13.  Amendments.  No provisions of this Agreement, any Ancillary Agreement or the Tax Indemnification Agreement shall be deemed waived, amended, supplemented or modified by any party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the party against whom it is sought to enforce such waiver, amendment, supplement or modification.

11.14.  Interpretation.    Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires. The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement or the Tax Indemnification Agreement) as a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement or the Tax Indemnification Agreement). Article, Section, Exhibit, Schedule and Appendix references are to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified. The word “including” and words of similar import when used in this Agreement (or the applicable Ancillary Agreement or the Tax Indemnification Agreement) shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive.

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The parties have caused this Agreement to be executed by their duly authorized representatives.

DSP GROUP INC.
By:	/s/    Eliyahu Ayalon
	Name:	Eliyahu Ayalon
	Title:	Chief Executive Officer

DSP GROUP LTD.
By:	/s/    Moshe Zelnik
	Name:	Moshe Zelnik
	Title:	VP Finance & CFO

CEVA INC.
By:	/s/    Yaniv Arieli
	Name:	Yaniv Arieli
	Title:	Chief Financial Officer

DSP CEVA, INC.
By:	/s/    Gideon Wertheizer
	Name:	Gideon Wertheizer
	Title:	Chief Executive Officer

CORAGE, LTD.
By:	/s/    Moshe Zelnik
	Name:	Moshe Zelnik
	Title:	VP Finance & CFO

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EX-10.4

Exhibit 10.4

CEVA, INC. TECHNOLOGY TRANSFER AGREEMENT

This Technology Transfer Agreement (this “Agreement”), effective as of November 1, 2002 (the “Effective Date”), is entered into by and between DSP Group Inc. (“DSPGI”), a Delaware corporation, and Ceva, Inc. (“Ceva”), a Delaware corporation and a wholly owned subsidiary of DSPGI.

RECITALS

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

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

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

AGREEMENTS

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

ARTICLE I

DEFINITIONS

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

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

SECTION 1.2.  Affiliate.    “Affiliate” of any Person shall mean a Person that controls, is controlled by, or is under common control with such Person. As used herein, “control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II

TRANSFER OF INTELLECTUAL PROPERTY RIGHTS

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

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

SECTION 2.2.  Retention of Certain Rights.

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

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

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

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

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

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

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

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

ARTICLE III

EMPLOYEE PROPRIETARY INFORMATION AGREEMENTS

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

ARTICLE IV

TRANSFER OF OTHER TRANSFERABLE ASSETS

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

ARTICLE V

TRANSFER OF CERTAIN RELATED RIGHTS AND OBLIGATIONS

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

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

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

ARTICLE VI

LICENSE TO CEVA OF CERTAIN INTELLECTUAL PROPERTY

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

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

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

SECTION 6.4.  Additional Necessary Licensed IP.

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

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

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ARTICLE VII

CONSIDERATION

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

ARTICLE VIII

CONFIDENTIALITY

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

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

ARTICLE IX

WARRANTY AND DISCLAIMERS

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

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

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

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

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

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

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

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

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

ARTICLE X

LIMITATION Of LIABILITY

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

ARTICLE XI

OTHER AGREEMENTS

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

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right, title and interest in and to any modifications made by or for such Party, and shall have no obligation to provide such modifications to the other Party. In addition, neither Party assumes any obligations other than those expressly set forth in this Agreement. Without limitation of the generality of the foregoing, neither Party is obligated to provide any consulting or technical assistance except as otherwise provided herein.

SECTION 11.2.  Further Assurances.

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

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

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

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

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SECTION 11.5.  Delivery.    Upon the Effective Date, DSPGI shall deliver to Ceva (a) the tangible Other Transferable Assets, and (b) to the extent in DSPGI’s possession, copies of tangible embodiments of the Transferring Entities of the Transferable Licensing IP, Third Party Licenses, employment agreements of Transferred Employees, intangible Other Transferable Assets, and Other Contracts. Notwithstanding the foregoing, each Party may retain copies of any assets, technology, and other information and materials assigned, licensed or otherwise conveyed to the other Party under this Agreement (except for tangible Other Transferable Assets as to which no copies can be made), solely to the extent necessary for such Party to exercise the rights expressly granted to such Party under this Agreement, and subject to the rights and obligations with respect thereto as set forth in this Agreement.

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

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

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

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acknowledges and agrees that all assignments, licenses and other conveyances made hereunder are subject to the Third Party Licenses granted before the Effective Date.

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

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

ARTICLE XII

MISCELLANEOUS

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

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

If to DSPGI:	If to Ceva:
Chief Financial Officer	Chief Financial Officer
DSP Group Inc.	Ceva, Inc.
3120 Scott Boulevard	2033 Gateway Place, Suite 150
Santa Clara, CA 95054	San Jose, CA 95110
Fax: 408-986-4323	Fax: 408-514-2995

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

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settled in accordance with the procedures and terms set forth in Article VIII of the Separation Agreement.

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

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

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

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

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

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

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

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

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

DSP GROUP INC
By:	/s/    Eliyahu Ayalon
	Name:	Eliyahu Ayalon
	Title:	Chief Financial Officer

CEVA, INC.
By:	/s/    Gideon Wertheizer
	Name:	Gideon Wertheizer
	Title:	President

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EX-10.5

Exhibit 10.5

CORAGE, LTD. TECHNOLOGY TRANSFER AGREEMENT

This Technology Transfer Agreement (this “Agreement”), effective as of November 1, 2002 (the “Effective Date”), is entered into by and between DSP Group Ltd. (“DSPGL”), an Israeli corporation, and Corage, Ltd. (“Corage”), an Israeli corporation and a wholly owned subsidiary of DSPGL.

RECITALS

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

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

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

AGREEMENTS

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

ARTICLE I

DEFINITIONS

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

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

SECTION 1.2  Affiliate.    “Affiliate” of any Person shall mean a Person that controls, is controlled by, or is under common control with such Person. As used herein, “control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction

of the management and policies of such Person, whether through ownership of voting securities or other interests, by contract or otherwise. A Person shall be deemed an Affiliate only for so long as such control exists. Notwithstanding the foregoing, DSPGL and Corage shall not be considered Affiliates of each other, and DSPGL shall not be deemed to control Corage.

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

SECTION 1.4.  Confidential Information.    “Confidential Information” shall mean the Corage Confidential Information or DSPGL Confidential Information, as applicable.

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

SECTION 1.6.  Corage Employees.    “Corage Employees” shall have the meaning set forth in the Separation Agreement.

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

SECTION 1.8.  Ceva Inc. Technology Transfer Agreement.    “Ceva Inc. Technology Transfer Agreement” shall mean the Ceva Inc. Technology Transfer Agreement of even date herewith by and between Ceva, Inc. and DSP Group Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 1.24.  Party or Parties.    “Party” or “Parties” shall mean DSPGL and/or Corage, including their permitted successors and assigns.

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II

TRANSFER OF INTELLECTUAL PROPERTY RIGHTS

SECTION 2.1.  Assignment.    Except only for the rights retained by, or granted back to, DSPGL (for itself, its successors and assigns, and its and their current and future Affiliates) elsewhere in this Agreement, DSPGL, on behalf of itself and the Transferring Entities, hereby irrevocably assigns, sells, transfers and sets over to Corage, and its successors and assigns, all right, title and interest of the Transferring Entities throughout the world in and to the Transferable Licensing IP, including, but not limited to, all benefits, privileges, causes of action, and remedies relating to the Transferable Licensing IP, whether before or hereafter accrued, including, without limitation, the exclusive rights to (a) apply for and maintain all registrations, applications, renewals and/or extensions therefor, (b) bring actions (at law, in equity or the Other Contracts (together with the Other Contracts under the Ceva Inc. Technology Transfer Agreement) include all of the licenses under which the Transferring Entities and DSP Group Inc. have obtained from third parties designs, development kits, emulators, tools, libraries, test suites, documentation, parts lists, board layouts, design materials, databases, know-how, methods, processes and work in progress used principally in the Licensing otherwise) for all past, present and/or future infringements or misappropriations thereof, (c) settle and retain proceeds from any such actions, and (d) grant licenses or other interests therein to any Person. The foregoing includes (and DSPGL, on behalf of itself and the Transferring Entities, hereby irrevocably assigns, sells, transfers and sets over to Corage, and its successors and assigns) the goodwill and reputation of the business connected with and symbolized by the Transferable Marks. Corage hereby accepts such assignment and assumes (and shall pay,

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

SECTION 2.2.  Retention of Certain Rights.

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

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

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

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

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

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(a)  providing error corrections and other modifications to the Existing Cores and Other Transferable Licensing IP, telephone and email support, and assistance in diagnosis and remedying of errors and defects in the Existing Cores and the Other Transferable Licensing IP, each in accordance with Corage’s standard support policies and practices; and

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

ARTICLE III

EMPLOYEE PROPRIETARY INFORMATION AGREEMENTS

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

ARTICLE IV

TRANSFER OF OTHER TRANSFERABLE ASSETS

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

ARTICLE V

TRANSFER OF CERTAIN RELATED RIGHTS AND OBLIGATIONS

SECTION 5.1.  Assignment and Assumption of License Agreements.    DSPGL, on behalf of itself and the Transferring Entities, hereby assigns and delegates to Corage all of the rights and obligations of the Transferring Entities under all agreements under which the Transferring Entities, or any of them, have granted licenses of the Existing Cores to Third Parties, as described on Exhibit E to this Agreement (the “Third Party Licenses”), including all rights to

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royalties, license fees and other amounts payable thereunder, and Corage hereby accepts such assignment and delegation, and assumes (and shall pay, perform and discharge when due) all obligations under the Third Party Licenses accruing from and after the Effective Date. DSPGL represents and warrants to Corage that the Transferring Entities and DSP Group Inc. have not granted to any Third Party any licenses of the Existing Cores except pursuant to the Third Party Licenses described on Exhibit E to this Agreement.

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

ARTICLE VI

LICENSE TO CORAGE OF CERTAIN INTELLECTUAL PROPERTY

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

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

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

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SECTION 6.4.  Additional Necessary Licensed IP.

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

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

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ARTICLE VII

CONSIDERATION

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

ARTICLE VIII

CONFIDENTIALITY

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

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

ARTICLE IX

WARRANTY AND DISCLAIMERS

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

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SECTION 9.2.  Sufficiency.    DSPGL, on behalf of itself and the Transferring Entities, hereby represents and warrants to Corage that:

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

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

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

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

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

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

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

ARTICLE X

LIMITATION OF LIABILITY

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

ARTICLE XI

OTHER AGREEMENTS

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

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right, title and interest in and to any modifications made by or for such Party, and shall have no obligation to provide such modifications to the other Party. In addition, neither Party assumes any obligations other than those expressly set forth in this Agreement. Without limitation of the generality of the foregoing, neither Party is obligated to provide any consulting or technical assistance except as otherwise provided herein.

SECTION 11.2.  Further Assurances.

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

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

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

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

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SECTION 11.5.  Delivery.    Upon the Effective Date, DSPGL shall deliver to Corage (a) the tangible Other Transferable Assets, and (b) to the extent in DSPGL’s possession, copies of tangible embodiments of the Transferring Entities of the Transferable Licensing IP, Third Party Licenses, employment agreements of Transferred Employees, intangible Other Transferable Assets, and Other Contracts. Notwithstanding the foregoing, each Party may retain copies of any assets, technology, and other information and materials assigned, licensed or otherwise conveyed to the other Party under this Agreement (except for tangible Other Transferable Assets as to which no copies can be made), solely to the extent necessary for such Party to exercise the rights expressly granted to such Party under this Agreement, and subject to the rights and obligations with respect thereto as set forth in this Agreement.

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

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

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

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acknowledges and agrees that all assignments, licenses and other conveyances made hereunder are subject to the Third Party Licenses granted before the Effective Date.

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

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

ARTICLE XII

MISCELLANEOUS

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

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

If to DSPGL:	If to Corage:
Chief Financial Officer	Chief Executive Officer
DSP Group Ltd.	Corage, Ltd
5 Shenkar Street	5 Shenkar Street
Herzeliya 46120 Israel	Herzeliya Pituach, 46120 Israel
Fax: 972-9-954-1513	Fax: 972-9-954-1513

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

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settled in accordance with the procedures and terms set forth in Article VIII of the Separation Agreement.

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

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

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

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

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

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

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

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

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

DSP GROUP LTD
By:	/s/    Eliyahu Ayalon
	Name:	Eliyahu Ayalon
	Title:	Chief Executive Officer

CORAGE, LTD.
By:	/s/     Moshe Zelnik
	Name:	Moshe Zelnik
	Title:	Vice President Finance

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EX-10.6

Exhibit 10.6

TAX INDEMNIFICATION AND ALLOCATION AGREEMENT

This Tax Indemnification and Allocation Agreement (the “Agreement”) is entered into as of November 1, 2002, by and between DSP Group, Inc., a Delaware corporation (“DSPGI”), and Ceva, Inc., a Delaware corporation (“Ceva”). (DSPGI and Ceva are sometimes collectively referred to herein as the “Companies”).

RECITALS

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

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

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

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

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

SECTION 1.  Definition of Terms.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Post-Distribution Period” shall have the meaning set forth in Section 2.4(b).

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

“Pre-Distribution Period” shall have the meaning set forth in Section 2.4(b).

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

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

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

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

“Separation Agreement” means the Separation Agreement by and among DSP Group Inc., DSP Group Ltd., Ceva, Inc., DSP Ceva Inc. and Corage, Ltd. Dated November 1, 2002

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 2.  Allocation of Tax Liabilities.

2.1  General Rule.

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

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

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2.2  Allocation of United States Federal Income Tax.

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

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

2.3  Allocation of State and Foreign Income Taxes.

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

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

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

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

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

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

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

2.4  Other Taxes; Allocation.

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

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

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

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

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SECTION 3.  Preparation and Filing of Tax Returns.

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

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

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

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

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

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

3.4   Tax Accounting Practices.

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

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

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

3.5  Right to Review Tax Returns.

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

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

SECTION 4.  Assistance and Cooperation.

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

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

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

SECTION 5.  Tax Records.

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

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

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SECTION 6.  Tax Disputes.

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

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

SECTION 7.  Effective Date.

This Agreement shall be effective on the Distribution Date.

SECTION 8.  Interest Under This Agreement.

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

SECTION 9.  Late Payments.

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

SECTION 10.  Expenses.

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

SECTION 11.  General Provisions.

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

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

If to DSPGI, to:	DSP Group Inc.
	3120 Scott Boulevard
	Santa Clara, CA 95054
	Attn: Chief Financial Officer, DSP Group Inc.

If to Ceva, to:	Ceva, Inc.
	2033 Gateway Place, Suite 150
	San Jose, CA 95110
	Attn: Chief Financial Officer, Ceva, Inc.

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

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

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

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

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

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

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

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

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

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

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

DSP GROUP, INC.

By:     /s/    Eliyahu Ayalon

Name:	Eliyahu Ayalon
Title:	Chief Executive Officer

CEVA, INC.
By:	/s/    Gideon Wertheizer

Name:	Gideon Wertheizer
Title:	President

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EX-10.7

EXHIBIT 10.7

TRANSITION SERVICES AGREEMENT

This Transition Services Agreement (this “Agreement”), effective as of the 1st day of November, 2002 (“Effective Date”), is entered into by and between DSP Group, Ltd. (“DSPGL”), an Israeli corporation having its principal place of business in Herzeliya, Israel and Corage, Ltd. (“Corage”), an Israeli corporation having its principal place of business in Herzeliya, Israel. (DSPGL and Corage sometimes are collectively referred to in this agreement as the “Parties” and each individually as a “Party”.)

RECITALS

A.    DSP Group, Inc. (“DSPGI”), is engaged in the Products Business and the Licensing Business.

B.    Pursuant to the terms of a Separation Agreement of even date with this Agreement by and among DSPGI, DSPGL, Ceva, Inc., Corage and DSP Ceva Inc. (the “Separation Agreement”), effective as of the Effective Date, DSPGL and DSPGI are transferring the Licensing Business and related assets to Corage, Ceva, Inc. and DSP Ceva Inc.

C.    In order to enable Corage to operate the Licensing Business in an effective manner, the Parties wish to provide for the provision by DSPGL to Corage of certain testing, design, purchasing, administrative, sales and marketing, and other services for the period and on the terms and conditions set forth herein.

AGREEMENTS

Now, therefore, in consideration of the mutual covenants and conditions contained herein, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Capitalized terms used but not otherwise defined in this Agreement have the meanings given in the Separation Agreement. In addition to the capitalized terms defined elsewhere in this Agreement, the following terms shall have the following meanings:

Section 1.1    Administrative Services.    “Administrative Services” shall mean administrative services of the types and scope normally performed by the Dedicated Administrative Employee.

Section 1.2    Aggregate Shared Fleet Expense.    “Aggregate Shared Fleet Expense” shall mean, for any period, (i) the compensation, benefits and other direct expense with respect to the Fleet Manager, and (ii) that portion of all other general and administrative and facilities expenses allocated by DSPGL to the Fleet Manager in accordance with DSPGL’s ordinary accounting principles consistently applied.

Section 1.3    Aggregate Shared MIS Expense.    “Aggregate Shared MIS Expense” shall mean, for any period, the aggregate amount of direct and indirect cost and expense incurred by DSPGL in that period for MIS Services provided for its own operations and for those of Corage, determined in accordance with DSPGL’s ordinary accounting principles, consistently applied, including but not limited to wages and salaries of personnel, depreciation of property, plant and equipment, costs of supplies and equipment, and general and administrative expenses and facilities costs, but excluding any direct cost or expense incurred solely for the benefit of any one party and chargeable directly to that party (such as costs of investment of new equipment or facilities dedicated to the use of that party).

Section 1.4    Confidential Information.    “Confidential Information” shall mean any and all information related to research, products, services, hardware or software, inventions, processes, designs, drawings,

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engineering, business plans, marketing, or finances, which is supplied by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) and which is designated in writing as proprietary or confidential (or with a similar designation) or, if disclosed orally, is designated as confidential or proprietary at the time of disclosure and set forth in a writing so designated within thirty days of the initial disclosure. Confidential Information shall not include, however, information which (i) is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party, (ii) was available to the Receiving Party in prior written documents on a non-confidential basis prior to its disclosure by the Disclosing Party, provided that, to the knowledge of the Receiving Party, the provision of such information did not constitute a breach of any obligation of confidentiality by the person disclosing the information to the Receiving Party, (iii) becomes available to the Receiving Party on a non-confidential basis from a person who is not, to the Receiving Party, otherwise bound by a confidentiality agreement with the Disclosing Party or is not otherwise prohibited from transmitting the information to the Receiving Party, or (iv) was independently developed by the Receiving Party without reference to or reliance upon any Confidential Information furnished by the Receiving Party or any of its Representatives by or on behalf of the Disclosing Party.

Section 1.5    Dedicated Administrative Employee.    “Dedicated Administrative Employee” shall mean the assistant to Mr. Eli Ayalon.

Section 1.6    Dedicated Administrative Employee Expense.    “Dedicated Administrative Employee Expense” shall mean (i) the compensation, benefits and other direct expense with respect to the Dedicated Administrative Employee, and (ii) that portion of all other general and administrative and facilities expenses allocated by DSPGL to the Dedicated Administrative Employee in accordance with DSPGL’s ordinary accounting principles consistently applied.

Section 1.7    Fleet Manager.    “Fleet Manager” shall mean DSPGL’s fleet manager.

Section 1.8    Fleet Manager Services.    “Fleet Manager Services” shall mean the services of the types and scope provided by the Fleet Manager.

Section 1.9    Effective Date.    “Effective Date” shall have the meaning set forth in the Preamble.

Section 1.10    Governmental Authority.    “Governmental Authority” shall mean any foreign or domestic national, provincial, territorial, or local: governmental authority; quasi-governmental authority; court; governmental organization; governmental commission; governmental board, bureau, or instrumentality; regulatory, administrative or other agency; or any political or other subdivision, department, or branch of any of the foregoing; or any other entity acting under color of law.

Section 1.11    MIS Services.    “MIS Services” shall mean management and information services of the types and scope provided by DSPGL for its own operations in the ordinary course of business, including but not limited to network, hardware and software maintenance and support services.

Section 1.12    Parties or Party.    “Parties” or “Party” shall have the meaning set forth in the Preamble.

Section 1.13    Person.    “Person” shall mean and include an individual, a partnership, a joint venture, a corporation,a limited liability company, a trust, an unincorporated organization, and any Governmental Authority.

Section 1.14    R&D Services.    “R&D Services” shall mean, collectively, Testing Services, CAD Services, Circuit Design Services, Project Control Services and Purchasing Services, all as defined on Exhibit A to this Agreement, and such other services as DSPGL and Corage from time to time agree to include in R&D Services.

Section 1.15    Representatives.    “Representatives” shall mean, with respect to a Person, any and all directors, officers, employees, representatives, or agents of such Person.

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Section 1.16    Services.    “Services” shall mean, collectively, R&D Services, Administrative Services, MIS Services and Fleet Manager Services.

ARTICLE II

SERVICES

Section 2.1    Provision of Services Generally.

(a)    Subject to the terms and conditions of this Agreement, during the term of this Agreement DSPGL shall provide to Corage such of the R&D Services, Administrative Services, MIS Services and Fleet Manager Services as Corage requires and requests, in accordance with this Article II.

(b)    Each Party shall cause its employees to reasonably cooperate with employees of the other Party to the extent required for effective delivery of the Services. In addition, each Party shall designate an individual to be responsible for day-to-day implementation of this Agreement on its part, including attempted resolution of any disputes regarding the provision of the Services.

Section 2.2    R&D, Testing and Purchasing Services.

(a)    At least 45 days prior to the commencement of each full or partial calendar quarter during which DSPGL provides R&D Services to Corage pursuant to this Agreement, Corage shall prepare and deliver to DSPGL its good faith estimate of the types and quantities of R&D Services that Corage will require during the next succeeding calendar quarter, and including, to the extent reasonably practicable, the scope of the R&D Services and any required standards, milestones and deadlines. Each quarterly estimate is referred to in this Agreement as a “Quarterly R&D Forecast.” DSPGL acknowledges that it has received from Corage the first Quarterly R&D Forecast. Upon Corage’s submission of each Quarterly R&D Forecast, DSPGL and Corage shall cause their respective technical personnel to coordinate with respect to the performance of the R&D Services ordered thereby.

(b)    Each Quarterly R&D Forecast shall constitute a binding purchase order for the R&D Services specified therein for the calendar quarter (or portions thereof) covered by such Quarterly R&D Forecast.

(c)    During any period during the term of this Agreement, DSPGL shall be obligated to provide the engineering personnel and facilities necessary to meet the requirements set forth in the Quarterly R&D Forecast (the “Commitment Level”), and shall be obligated to provide ordered R&D Services in excess of the Commitment Level only if and to the extent mutually agreed upon by the Parties in writing. Subject to the foregoing, DSPGL shall perform R&D Services of the quantity, scope and types, and within the time frames, ordered by Corage in accordance with Section 2.2(b).

(d)    If and when Corage desires DSPGL to provide R&D Services not specified in a Quarterly R&D Forecast, it shall submit to DSPGL a purchase order for such R&D Services in reasonable detail, including the scope of the R&D Services and all required standards, specifications, milestones and deadlines (each an “R&D Purchase Order”). DSPGL shall accept or reject the purchase order within fourteen days following receipt thereof. If any R&D Purchase Order is accepted, DSPGL and Corage shall cause their respective technical personnel to coordinate with respect to the performance of the R&D Services ordered thereby.

(e)    DSPGL shall perform all R&D Services in accordance with the applicable Quarterly R&D Forecasts and accepted R&D Purchase Orders, in a good and workmanlike manner, and in compliance with the highest industry standards. However, DSPGL shall have no obligation to perform R&D Services for which it does not possess the necessary expertise, or which require DSPGL to hire personnel it would not otherwise hire.

(f)    Corage shall compensate DSPGL for R&D Services rendered by DSPGL pursuant to this Agreement in accordance with the schedule of rates and charges attached as Exhibit B to this Agreement.

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Hourly rates for R&D Services shall not be subject to increase during the consecutive twelve calendar months following the Effective Date, but thereafter may be increased by DSPGL from time to time, upon at least ninety days’ advance written notice to Corage, to levels that do not exceed then-prevailing market rates for similar services provided by similarly qualified companies in Israel.

Section 2.3    Administrative Services, MIS Services and Fleet Manager Services.

(a)    DSPGL shall provide Administrative Services, MIS Services and Fleet Manager Services to Corage to the same standards, and in accordance with the same procedures, as apply when it is providing the same services for its own operation. DSPGL shall not be obligated to provide Corage Administrative Services, MIS Services or Fleet Manager Services of scope greater than the equivalent services it provides for its own operations as of the Effective Date. At any time upon at least thirty days’ advance written notice to DSPGL, Corage may terminate or limit the Administrative Services, MIS Services or Fleet Manager Services to be provided by DSPGL.

(b)    For the Administrative Services provided by DSPGL to Corage during any period, Corage shall pay to DSPGL an amount equal to fifty percent of the Dedicated Administrative Employee Expense during such period.

(c)    For the MIS Services provided by DSPGL to Corage during any period, Corage shall pay to DSPGL an amount equal to (i) its pro rata share of Aggregate Shared MIS Expense during such period, plus five percent of such pro rata share, plus (ii) DSPGL’s actual direct cost and expense of providing any MIS Services requested by Corage solely for its own benefit, plus five percent of such actual direct cost. For purposes of this Section, Corage’s pro rata share for any period shall be equal to a fraction (i) the numerator of which is the aggregate number of full time (or full time equivalent) employees of Corage, as of the last day of that period, with respect to which MIS Services are provided generally, and (ii) the denominator of which is the aggregate number of full time (or full time equivalent) employees in clause (i) plus the aggregate number of full time (or full time equivalent) employees of DSPGL, as of the last day of that period, with respect to which MIS Services are provided generally.

(d)    For the Fleet Manager Services provided by DSPGL to Corage during any period, Corage shall pay to DSPGL an amount equal to its pro rata share of Aggregate Shared Fleet Expense during such period, plus five percent of such pro rata share. For the purposes of this Section, Corage’s pro rata share for any period shall be equal to a fraction (i) the numerator of which is the aggregate number of full time (or full time equivalent) employees of Corage, as of the last day of that period, and (ii) the denominator of which is the aggregate number of full time (or full time equivalent) employees in clause (i) plus the aggregate number of full time (or full time equivalent) employees of DSPGL, as of the last day of that period.

(e)    Upon the request of Corage, DSPGL shall provide Corage with migration assistance and data as reasonably requested from time to time by Corage in order to enable Corage to provide its own MIS services. Such migration assistance services shall not be considered MIS Services for purposes of this Agreement and shall be agreed to between DSPGL and Corage in advance of the provision of any such services. Corage shall compensate DSPGL for such migration assistance services rendered by DSPGL at the then-prevailing market rates for similar services provided by similarly qualified companies in Israel.

Section 2.4    No Effect on Intellectual Property Rights.    Notwithstanding Sections 2.1, 2.2 or 2.3, the provision by DSPGL of the Services shall not affect the Parties’ respective intellectual property rights.

ARTICLE III

TELEPHONE SYSTEM

The Parties acknowledge that DSPGL’s telephone system services both DSPGL’s facilities and those occupied by Corage under certain leases assigned by DSPGL to Corage pursuant to the Separation Agreement. During the term of this Agreement, Corage shall be entitled to utilize such telephone system without charge.

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ARTICLE IV

PAYMENT

Section 4.1    Invoicing for R&D Services.    DSPGL shall invoice Corage for R&D Services on monthly basis, or on such other periodic basis as DSPGL and Corage shall have agreed upon in the case of any given R&D Services.

Section 4.2    Invoicing for Administrative Services, MIS Services and Fleet Manager Services.    DSPGL shall invoice Corage on a monthly basis for all amounts payable to DSPGI under this Agreement for MIS Services, Administrative Services and Fleet Manager Services, in each case with adequate supporting documentation.

Section 4.3    Payment Terms.    All invoiced amounts shall be payable within thirty days following the date of invoice, except amount disputed in good faith by written notice delivered to DSPGL within thirty days following the date of invoice. All amounts not paid when due shall bear interest until paid at the rate of nine percent per annum.

Section 4.4    Audit Rights.    Corage shall have the right, from time to time, to examine the books and records of DSPGL relating to the computation of amounts payable by Corage pursuant to this Agreement, during regular business hours and upon reasonable advance notice to DSPGL. Corage shall bear the expense of all such examinations, except that DSPGL shall reimburse Corage for the costs and expenses of any examination that discloses that Corage has been overcharged by more than ten percent in any three month period.

ARTICLE V

TERM AND TERMINATION

Section 5.1    Term; Termination.    This Agreement shall commence on the Effective Date and shall continue in effect until December 31, 2003 unless earlier terminated in accordance with the terms of this Agreement.

Section 5.2    Termination Events.    This Agreement may be terminated as follows:

(a)    Either Party (the “Non-Breaching Party”) may terminate this Agreement upon written notice to the other Party (the “Breaching Party”) if the Breaching Party has materially breached this Agreement and has failed to cure such breach within 30 days of the receipt of notice from the Non-Breaching Party of such breach, or, if such breach is not capable of being cured within 30 days, reasonable good faith efforts have not been performed by the Breaching Party to remedy such breach (failure to give such notice shall not constitute a waiver of such default or of any rights or interests arising hereunder); or

(b)    Either Party may terminate this Agreement upon written notice to the other Party, if: (i) a substantial portion of any Party’s assets or the conduct of the business of any Party shall be substantially encumbered by extraordinary governmental action or by operation of law, including but not limited to any of the following: the action by any Governmental Authority, quasi-governmental authority, or other entity acting under color of law to (A) condemn, nationalize, seize, expropriate, or assume custody or control of all or a substantial portion of its property or assets or business operations or of its share capital; (B) cause the dissolution or disestablishment of any Party; (C) prevent any Party or its officers from carrying on its business or operations or a substantial part thereof, including but not limited to the imposition of import or export restrictions which materially impair the ability of any Party to conduct the scope of business contemplated hereby; or (D) change the composition of any Party’s board of directors in a manner other than by voluntary action of its board; or (ii) any other Party initiates or is the subject of a winding-up proceeding, a bankruptcy proceeding, or a proceeding for the appointment of a judicial manager, suffers the appointment of a receiver of all or a substantial part of its assets or businesses, or makes an assignment for the benefit of its creditors.

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(c)    Corage may at its option terminate this Agreement at any time, for any or no reason, effective upon at least thirty days’ advance written notice to DSPGL.

Section 5.3    Effect of Termination.    Termination of this Agreement shall not limit or impair the rights or obligations of the Parties accruing under this Agreement during or with respect to periods prior to the effective date of termination.

Section 5.4    Survival.    The provisions of Articles IV, V, VI, VII and IX and Sections 10.2, 10.3, 10.6 and 10.7 of this Agreement shall survive the termination of this Agreement.

ARTICLE VI

MAIL AND NOTICES

The Parties acknowledge that each of them may receive mail, packages and other communications properly belonging to the other. The receiving Party shall promptly contact the other Party for delivery instructions and promptly shall forward such mail, packages or other communications (or, in case the same relate to both businesses, copies thereof) to the other Party in accordance with its delivery instructions. Neither Party shall have any liability to other for opening any mail, packages or other communications that are not clearly addressed to the other. The foregoing provisions of this Article VI shall constitute full authorization to the postal authorities, all telegraph and express companies and all other persons to make deliveries to DSPGL or Corage, as the case may be, addressed to any of them or to either of their officers and/or directors specifically in their capacities as such. The provisions of this Article VI are not intended to and shall not be deemed to constitute an authorization by DSPGL or Corage to permit the other to accept service of process on its behalf and no Party is or shall be deemed to be the agent of the other for service of process purposes.

ARTICLE VII

INDEMNIFICATION AND LIMITATION OF LIABILITY

Section 7.1    Indemnification.    Each Party shall indemnify the other Party and its Representatives for losses and damages arising out of any breach of its obligations under this Agreement in accordance with Article V of the Separation Agreement.

Section 7.2    Limitation of Liability.    The liability of DSPGI for any loss or damage, whether direct or indirect, arising in connection with this Agreement shall not exceed the total amount paid by Corage under this Agreement, except to the extent resulting from conduct of DSPGL that is either fraudulent or done with the intent to violate this Agreement or knowledge that it does so. IN NO EVENT WILL ANY PARTY BE LIABLE TO ANY OTHER FOR INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS OR DAMAGE TO OR LOSS OF USE OF ANY PROPERTY.

ARTICLE VIII

FORCE MAJEURE

DSPGL shall be excused for failure to provide the Services to the extent that such failure is directly or indirectly caused by an occurrence commonly known as “force majeure,” including, without limitation, delays arising out of acts of God, acts or orders of a government agency or instrumentality thereof, acts of public enemy, riots, embargoes, strikes or other concerted acts of workmen, casualties or accidents, deliveries of materials, transportation or shortage of cars, trucks, fuel, power, labor or materials, or any other causes, circumstances or contingencies within or without the United States of America, which are beyond the reasonable control of DSPGL. Notwithstanding any events operating to excuse the performance by DSPGL, this Agreement shall continue in full force for the remainder of its term and any extensions thereof.

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ARTICLE IX

CONFIDENTIALITY

Section 9.1    Disclosure Limitation.    Each Party shall maintain in confidence all Confidential Information (oral or written), shall use such Confidential Information only as expressly contemplated by this Agreement, and shall not disclose any such Confidential Information to a third party except as expressly permitted hereunder or make any unauthorized use thereof. Each Party shall treat such Confidential Information with the same degree of care against disclosure or unauthorized use which it affords to its own information of a similar nature, or a reasonable degree of care, whichever is greater.

Section 9.2    Required Actions.    In furtherance, and not in limitation, of the foregoing, each Party agrees to do the following with respect to all such Confidential Information of the other Party: (i) instruct and require all of its Representatives to maintain the confidentiality of such Confidential Information and not to use such Confidential Information except as expressly permitted herein; and (ii) restrict disclosure of such Confidential Information to those of its Representatives who have a “need to know” consistent with the purposes for which such Confidential Information was disclosed. Each Party further agrees not to remove or destroy any proprietary or confidential legends or markings placed upon any documentation or other materials.

Section 9.3    Permitted Disclosures.    Notwithstanding Section 9.1, each Party may disclose the other Party’s Confidential Information in the following circumstances:

(a)    As reasonably necessary and appropriate to provide the Services or receive the benefit of the Services.

(b)    In the event that a Party is requested or required (by the disclosure requirements of any rule, regulation, or form of any Governmental Authority or by oral questions, interrogatories, requests for information or documents by any Governmental Authority or other person in legal proceedings, subpoenas, civil investigative demands, or other similar processes) to disclose any of the Confidential Information received from a Disclosing Party, the Receiving Party so requested or required shall provide the Disclosing Party with prompt written notice of any such request or requirement so that the Disclosing Party may object to production, seek a protective order or other appropriate remedy, and/or waive compliance with the provisions of this Agreement. The Receiving Party shall exercise its best efforts (at the sole expense of the Disclosing Party) to preserve the confidentiality of such Confidential Information, including, without limitation, by cooperating with the Disclosing Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded such Confidential Information. If, in the absence of a protective order or other remedy or the receipt of a waiver from the Disclosing Party, such Receiving Party is nonetheless legally compelled to disclose such Confidential Information to any tribunal or else stand liable for contempt or suffer other censure or significant penalty, such Receiving Party may, without liability hereunder, disclose to such tribunal only that portion of the Confidential Information which is legally required to be disclosed.

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ARTICLE X

MISCELLANEOUS

Section 10.1    Notice.    All notices provided pursuant to this Agreement shall be delivered by personal delivery, overnight courier, or facsimile, and shall be deemed effective on the date on which delivery to the intended recipient of the notice was accomplished. Such notices shall be delivered to the following addresses:

If to DSPGL:

CEO

DSP Group, Ltd.

5 Shenkar Street

Herzlia, Israel

Fax: 972-9-954-1513

If to Corage:

CEO

Corage, Ltd.

5 Shenkar Street

Herzlia, Israel

Fax: 972-9-954-1513

Each Party may change the address to which notices, requests and other communications are to be sent by giving written notice of such change to the other Parties.

Section 10.2    Governing Law; Arbitration.    This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. Any dispute by any party arising out of or relating to this Agreement shall be governed by Article VIII of the Separation Agreement.

Section 10.3    Independent Contractors.    Corage agrees that DSPGL is an independent contractor in the performance of the Services. DSPGL does not possess the power or authority to bind Corage, or to assume or create any obligation or responsibility, express or implied, on behalf of Corage. DSPGL shall not represent to anyone that it possesses such power or authority.

Section 10.4    Headings.    The heading references herein are for convenience purposes only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

Section 10.5    Entire Agreement.    This Agreement contains the entire agreement of the Parties and supersedes any and all prior agreements between the Parties relating to the subject matter hereof.

Section 10.6    Amendments and Waivers.    This Agreement may be amended only by mutual written consent of the Parties hereto. The failure of any Party to require performance of any provision of this Agreement shall not be construed as a waiver of its rights to insist on performance of that same provision, or any other provision, at some other time. No right or breach may be waived except in writing signed by the Parties. The waiver by any Party of any right created by this Agreement in one or more instances shall not be construed as a further continuing waiver of such right or any other right created by this Agreement.

Section 10.7    Severability.    If any provision of this Agreement, or the application thereof to any person, place, or circumstance, shall be held by an arbitrator or a court of competent jurisdiction to be invalid, unenforceable, or void, the remainder of this Agreement and such provisions as applied to other persons, places, and circumstances shall remain in full force and effect.

Section 10.8    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement.

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Section 10.9    Further Assurances.    Subject to the terms and conditions hereof, each Party agrees to use its best efforts to do, or cause to be done, all things necessary, proper, or advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement as expeditiously as practicable, including, without limitation, the performance of such further acts or the execution and delivery of any additional instruments or documents as any Party may reasonably request in order to carry out the purposes of this Agreement and the transactions contemplated hereby.

Section 10.10    Successors; No Assignment.    Each Party agrees that it will not assign, sell, transfer, delegate, or otherwise dispose of, whether voluntarily or involuntarily, any right or obligation under this Agreement. Any purported assignment, sale, transfer, delegation or other disposition in violation of this Section 10.10 shall be null and void. Subject to the foregoing limits on assignment and delegation, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and assigns.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.

DSP GROUP, LTD.
By:	/s/    Eliyahu Ayalon
Name:	Eliyahu Ayalon
Title:	Chief Executive Officer

CORAGE, LTD.
By:	/s/    Moshe Zelnik
Name:	Moshe Zelnik
Title:	Vice President Finance

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EX-99.1

EXHIBIT 99.1

DSP Group, Inc. Will Distribute Shares of ParthusCeva as Dividend

to its Shareholders of Record on October 31, 2002

SANTA CLARA, Calif., October 31, 2002—DSP Group, Inc. (NASDAQ: DSPG) is pleased to announce that the spin-off of its DSP Cores Licensing Division (incorporated as Ceva, Inc.) and the combination of Ceva with Parthus Technologies plc, to form a new company, ParthusCeva, Inc., are expected to close on November 1, 2002.

Under the terms of the transaction, DSP Group will distribute all of the ParthusCeva common stock it holds, which represents 50.1% of the aggregate shares of ParthusCeva common stock outstanding as of the closing, to its stockholders as a dividend, and the former shareholders of Parthus will receive the remaining 49.9% of ParthusCeva’s common stock in exchange for their Parthus shares. ParthusCeva will be an independent, publicly traded company, listed under the symbol “PCVA” on the Nasdaq National Market and under the symbol “PCV” on the London Stock Exchange. DSP Group will not retain ownership of any of the ParthusCeva common stock after the distribution.

The terms of the dividend are as follows: DSP Group will distribute to the holders of DSP Group common stock one share of ParthusCeva common stock for every three shares of DSP Group common stock outstanding as of the close of business on October 31, 2002, the record date for the distribution. No fractional share of ParthusCeva common stock will be distributed, DSP Group stockholders will instead receive cash in lieu of any fraction of a ParthusCeva share due to them.

No action is required by DSP Group stockholders to receive their ParthusCeva stock, and they will not be required to pay anything to receive those shares. DSP Group stockholders who hold their shares in electronic form will be credited with electronic shares of ParthusCeva in the same account in which their DSP Group stock is held. Holders of DSP Group share certificates will receive a certificate for their ParthusCeva shares at the address of record on file with DSP Group's transfer agent as of the closing.

DSP Group has received a revenue ruling from the Internal Revenue Service declaring, for US Federal income tax purposes, that the distribution of the ParthusCeva common stock is tax-free to DSP Group and to its stockholders to the extent that they receive ParthusCeva

common stock. DSP Group will mail a prospectus to all stockholders entitled to receive ParthusCeva common stock. The prospectus will describe the new company, the procedure by which the ratios for the distribution are determined, the risks of holding ParthusCeva common stock and other details of the transaction.

Pursuant to the anticipated dividend distribution, the price per share of DSP Group’s common stock will trade ex-dividend and will be reduced at the open of trading on Monday, November 4, 2002, to reflect the value of the dividend distribution. Prior to that time sales of DSP Group common stock on NASDAQ will include due bills and the per share price will include the right to receive the dividend of ParthusCeva shares.

Stockholders with inquiries should contact Yaniv Arieli, President of US Operations and Investor Relations, DSP Group Inc. at (408) 986-4423.

About DSP Group, Inc.

DSP Group, Inc. is a semiconductor fabless company that is a leader in the wireless residential market. By combining its DSP Core technology with advanced RF, communication technology and speech-processing algorithms, DSP Group is a worldwide leader in developing and providing Total Telephony Solutions™. These applications include digital 900MHz, 2.4GHz, DECT and Bluetooth for residential and automotive applications. DSP Group's advanced RF CMOS and communications technology provides the company with a clear path to a Phone-on-a-Chip™ solution. DSP Group also develops and markets embedded, integrated silicon/software solution for Voice-over-Digital-Subscriber Line (VoDSL), voice-over-Internet-Protocol (VoIP) applications, and other voice over packet applications for Integrated Access Device (IAD) and IP Phone.

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EX-99.2

Exhibit 99.2

[LOGO OF PARTHUSCEVA]

COMBINATION OF PARTHUS AND CEVA COMPLETED TODAY;

PARTHUSCEVA LAUNCHES OPERATIONS

San Jose, Calif. —1 November 2002—ParthusCeva, Inc. (“ParthusCeva”) (NASDAQ: PCVA, LSE: PCV), Parthus Technologies plc (“Parthus”) and DSP Group, Inc. (“DSPG”) (NASDAQ: DSPG) jointly announce that the combination of Parthus and Ceva, Inc. has closed today.

The common stock of the combined company, now called ParthusCeva, is expected to begin trading today at 9:30 a.m., New York time (2:30 p.m., London time) on NASDAQ under the symbol “PCVA” and simultaneously on the London Stock Exchange under the symbol “PCV”. ParthusCeva management will host a conference call at 8.30 a.m. New York time (1.30 p.m. London time) today to introduce the combined company and its management. The broadcast can be accessed by all interested parties through the Investor Relations section of ParthusCeva’s website at www.parthusceva.com.

ParthusCeva

ParthusCeva has been formed by the combination of Parthus, a leading provider of platform-level intellectual property (IP), and Ceva, formerly the licensing division of DSP Group, and the leading provider of licensable DSP cores to the electronics industry. The new entity is positioned to be the leading licensor of DSP cores and associated platform-level IP.

ParthusCeva is in the strong position of being able to offer fully integrated IP solutions built around the leading licensed DSP architecture. We believe this leadership position will enable ParthusCeva to exploit the industry trend towards the licensing of open-standard processor architectures for the digital economy.

Kevin Fielding, CEO of ParthusCeva said:

“The launch today of ParthusCeva reflects several key trends in our industry. Increasingly our customers are demanding complete, fully-integrated IP solutions based on industry-standard architectures that they can access through a licensing model. As the leading licensor of DSP cores and the pioneer of platform-level IP, ParthusCeva is perfectly positioned to deliver these solutions to our worldwide customer base. We are confident that ParthusCeva can build upon this unique position to deliver increased value to our customers, employees, partners and shareholders.”

ParthusCeva’s families of DSP cores and IP platforms have been licensed by approximately 90 electronic and semiconductor partners’ worldwide, including nine of the world’s top ten semiconductor manufacturers.

DSP (Digital Signal Processing) expertise is central to the increasing consumer adoption of digital-based communications and entertainment devices. DSP cores are the key ‘processing engines’ for high-growth applications including wireless communications, mobile computing, consumer entertainment and computer networking.

Gideon Wertheizer, ParthusCeva Executive VP and CTO commented:

“The semiconductor industry is moving rapidly towards system-on-a-chip (SoC) solutions incorporating fully proven, industry-standard third-party IP. ParthusCeva’s broad offerings in DSP, wireless and mixed-signal technologies, along with the track records of Parthus and Ceva and our scale and financial stability allow us to further expand in the growing IP industry.”

ParthusCeva is headquartered in San Jose, with principal offices in Dublin, Ireland and Herzelia, Israel. ParthusCeva focuses on three principal product and technology areas: DSP and Application Processing IP; Mixed-Signal and Wireline Communications IP; and Wireless Communications IP. The company will maintain three principal development locations in Ireland, Israel and the United Kingdom and a global sales infrastructure to serve a world-wide customer base.

ParthusCeva Intellectual Property Portfolio

ParthusCeva develops and markets its integrated portfolio of open-licensable IP in three distinct areas; DSP cores; SoC sub-systems and application-specific platform IP. The company’s proven IP portfolio is critical in overcoming the silicon design productivity challenge of our licensing partners.

1) SmartCores^™ Programmable DSP Cores—ParthusCeva is the leading licensor of DSP cores with 69% market share in 2001 (Gartner—Dataquest: April 2002). SmartCores is a family of low power cost-effective DSP cores targeted at high-volume wireless, multimedia, computing and telecommunication markets. SmartCores comprise five distinct product offerings—PalmDSPCore, Teak, TeakLite, PineDSPCore, OakDSPCore, and the recently introduced CedarDSPCore. All are soft cores and thus can be manufactured at any foundry and are all complemented by a full set of development tools and software from third party developers.

2) System-on-a-Chip Sub-Systems—ParthusCeva’s SoC is a pre-integrated, DSP core-based subsystem platform incorporating a large set of system interface peripheral components, together with a full set of software and hardware development tools. Seamlessly interfacing with any Central Processing Unit (CPU), ParthusCeva’s SoC significantly lowers the complexity, cost of development, and time-to-market for SoC designs.

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3) Application-specific Platforms: ParthusCeva application-specific platforms consist of full, verified IP system-solutions in both hardware and software, pre-integrated with other industry-standard processors (typically ARM’s CPU). ParthusCeva’s comprehensive platform-IP targets two key market segments:

• Communication Platforms—Bluetooth, 802.11a/b/g, 2.5G, 3G and Multi-Gigabit serial comms.

• Consumer Electronic platforms—GPS, digital audio, Smartphone, PDA, and VoIP.

Shareholder Information

Holders of record of DSPG common stock as of 5 p.m. New York time on October 31, 2002 (the “record time”) will receive one share of ParthusCeva common stock for every three shares of DSPG common stock held at the record time. Holders of record of Parthus ordinary shares as of the record time will receive 0.015141 share of ParthusCeva common stock, as well as a capital repayment of $0.100894 (approximately GB£0.64 or EUR 0.10), per Parthus ordinary share held at the record time. Holders of record of Parthus American Depositary Shares (“ADSs”) (each representing 10 ordinary shares of Parthus) as of the record time will receive 0.151410 share of ParthusCeva common stock, as well as a capital repayment of $1.08940, per Parthus ADS held at the record time. The common stock of ParthusCeva and the capital repayment to former Parthus shareholders and ADS holders will be credited to shareholders’ electronic trading accounts or mailed to holders of certificated securities as quickly as possible following the closing.

About ParthusCeva

Headquartered in San Jose, with principal offices in Dublin, Ireland and Herzeliah, Israel, ParthusCeva (NASDAQ: PCVA; LSE: PCV) is a leading licensor of DSP and application-specific platform Intellectual Property (IP) to the semiconductor industry. ParthusCeva was created through the combination of Parthus Technologies plc, a leading provider of application-specific platform IP, and Ceva, formerly the licensing division of DSP Group, Inc.

The CUSIP number for the ParthusCeva common stock is 70212E106 and the ISIN number is 70212E1064.

For more information, visit us at www.parthusceva.com.

Company Contact:

Barry Nolan

ParthusCeva Inc.

2033 Gateway Place, Suite 150

San Jose, USA

Tel: +1 408 514 2900

Contact Today: +353 1 4025700

FD International

Deborah Ardern-Jones (US)                        +1 212 850 5626

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James Melville-Ross/ Ben Way (UK) +44 20 7831 3113

Industry Press Contact:

Josh Shuman = Ruder Finn                                +212 593 5886/+972-2-561-2005 ext 209

shumanj@ruderfinn.com

Safe Harbor Statement

This document contains “forward-looking statements”, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those stated. Any statements that are not statements of historical fact (including, without limitation, statements to the effect that the company or its management “believes,” “expects,” “anticipates,” “plans” and similar expressions) should be considered forward-looking statements. Important factors that could cause actual results to differ from those indicated by such forward-looking statements include uncertainties relating to the ability of management to successfully integrate the operations of Parthus and Ceva, uncertainties relating to the acceptance of our DSP cores and semiconductor intellectual property offerings, continuing or worsening weakness in our markets and those of our customers, quarterly variations in our results, and other uncertainties that are discussed in the registration statement on Form S-1 of ParthusCeva (formerly called Ceva, Inc.), on file with the U.S. Securities and Exchange Commission.

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