Exhibit 2.13
JOINT TECHNOLOGY DEVELOPMENT AND SUPPORT AGREEMENT
BY AND AMONG
CADENCE DESIGN SYSTEMS, INC.,
CADENCE HOLDINGS, INC.,
TALITY, LP
AND
TALITY CORPORATION
DATED AS OF
OCTOBER 4, 2000
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS...........................................................................................2
ARTICLE II PURPOSES OF THE OF JOINT DEVELOPMENT AND TECHNOLOGY SUPPORT AGREEMENT...............................3
ARTICLE III PLANNING AND MANAGEMENT OF JOINT DEVELOPMENT AND TECHNOLOGY SUPPORT.................................3
ARTICLE IV TERM..................................................................................................6
ARTICLE V MISCELLANEOUS.........................................................................................6
JOINT TECHNOLOGY DEVELOPMENT AND SUPPORT AGREEMENT
THIS JOINT TECHNOLOGY DEVELOPMENT AND SUPPORT AGREEMENT (this
"AGREEMENT"), is dated and effective as of October 4, 2000, by and among Cadence
Design Systems, Inc., a Delaware corporation ("CADENCE") and Cadence Holdings,
Inc., a Delaware corporation ("HOLDINGS" and, together with Cadence, the
"CADENCE PARTIES"), on the one hand, and Tality, LP, a Delaware limited
partnership (the "PARTNERSHIP"), and Tality Corporation, a Delaware corporation
("TALITY" and, together with the Partnership, the "TALITY PARTIES"), on the
other hand. Capitalized terms used herein and not defined elsewhere herein shall
have the meaning ascribed to them in Article I or in the Separation Agreement or
Master Intellectual Property Agreement (each as defined below).
RECITALS
WHEREAS, Holdings currently owns approximately 98% of the issued and
outstanding shares of the capital stock of Tality;
WHEREAS, Cadence is the sole general partner of, and owns both a
general and limited partnership interest in, the Partnership;
WHEREAS, each of the Boards of Directors of Cadence, Tality Corporation
and Holdings determined that it would be appropriate and desirable for Cadence
to transfer (or cause to be transferred) to the Partnership, on behalf of
Holdings, and for the Partnership to receive and assume, directly or indirectly,
as a contribution from Holdings, certain assets and liabilities of Cadence
associated with the Tality Business;
WHEREAS, Cadence, Tality and Holdings are parties to that certain
Master Separation Agreement, dated as of July 14, 2000, as amended or restated
(the "SEPARATION AGREEMENT"), pursuant to which Cadence, Tality, Holdings and
the Partnership have agreed, subject to certain conditions, to the legal
separation of the Tality Business from Cadence's other businesses and to have
the Partnership and its Subsidiaries own and operate the entire Tality Business;
WHEREAS, Cadence, Tality and Holdings are parties to that certain
Master Intellectual Property Ownership and License Agreement, dated as of
October 4, 2000 (the "MASTER INTELLECTUAL PROPERTY AGREEMENT") and
WHEREAS, all conditions to the Separation have been satisfied or
waived, and Cadence, Holdings, the Partnership and Tality now desire to execute
and deliver this Agreement to effect and implement future joint development and
technology support as the parties deem mutually beneficial.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following capitalized terms shall
have the meanings assigned to them below.
Section 1.1 "DELIVERABLES" means the specific services, software,
materials, products or other deliverables provided by the Partnership to Cadence
as a result of performing services which are specified in the Statement of Work
of a MTD Project.
Section 1.2 "JOINT DEVELOPMENT PLAN" or "JDP" shall have the meaning
set forth in Section 3.2.
Section 1.3 "JOINT DEVELOPMENT TEAM" or "JDT" shall have the meaning
set forth in Section 3.1.
Section 1.4 "METHODOLOGY TECHNOLOGY DEVELOPMENT" or "MTD" means those
professional services, including without limitation methodology, design
environment and design process services, to be provided by the Partnership
pursuant to a Statement of Work, pursuant to an approved and authorized MTD
Project, in the nature of applying engineering expertise to produce new
Methodology Technology, or a new electronic design environment or an improvement
thereto, or which otherwise could be adopted or incorporated into a product or
service of Cadence, including Methodology Services, EDA Tools and Design Tool
Technology.
Section 1.5 "MTD INNOVATIONS" mean any invention development or
innovation conceived or developed by the Parties solely or jointly during the
term of this Agreement and in the performance of a MTD Project and whether or
not forming part of a Deliverable, including, but not limited to, blocks, cells,
models, libraries, formulas, algorithms, methods, libraries, design flows,
processes, databases, mechanical and electronic hardware, electronic components,
computers and their parts, computer languages, software, programs and their
documentation, encoding techniques, articles, writings, compositions, works of
authorship and improvements.
Section 1.6 "MTD PROJECT" or "PROJECT" shall have the meaning set forth
in Section 3.3.
Section 1.7 "SERVICE TASK ORDER" means the description of the
Specialized Services and deliverables thereto to be provided pursuant to Section
3.4 hereof from time to time, which may include single or multiple Service Task
Orders.
Section 1.8 "SPECIALIZED SERVICES" includes PDK development and support
to EDA Tool Enhancement and other scientific and technical services, as
previously have been provided to Cadence by resources of the Partnership, such
as Silicon Test Services Support; calibration of
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EDA tools and compatible library interfaces; third-party EDA tool "library" and
technology validation support; confirmation of functionality of EDA Tools for
specific client environments or system projects; and evaluation, calibration and
interface check in established or new design platforms.
Section 1.9 "SPONSORING EXECUTIVES" under this Agreement shall be, for
each Party, the most senior Executive assigned to have responsibility for the
performance of this Agreement.
Section 1.10 "STATEMENT OF WORK" means the description of the MTD
services and Deliverables to be provided hereunder from time to time, pursuant
to an approved and ordered MTD project, which may include single or multiple
Statements of Work.
ARTICLE II
PURPOSES OF THE JOINT DEVELOPMENT AND TECHNOLOGY SUPPORT AGREEMENT
This Agreement is for the purposes of (a) enabling the Cadence Parties
to benefit from the expertise, technology and resources of the Tality Parties
for Methodology Technology Development, and to support the Methodology Services,
Design Tool and EDA Tools business of the Cadence Parties; (b) to provide, for
the Tality Parties, the support of the Cadence Parties for development and
iteration of Electronic Design Technology, and for enhancement and support of
the Tality Parties' Electronic Design products and services; and (c) for each
Party, to provide to one another scientific and technical support, including
Specialized Services, as further described below, for PDKs and other specialized
needs. Methodology Technology Development shall be undertaken for jointly
approved MTD Projects and in accordance with MTD Statement(s) of Work, issued
pursuant to Section 3.3.
ARTICLE III
PLANNING AND MANAGEMENT OF JOINT DEVELOPMENT AND TECHNOLOGY SUPPORT
Section 3.1 JOINT DEVELOPMENT TEAM.
(a) Cadence and the Partnership will jointly manage the activities
undertaken pursuant to this Agreement through a joint development team (the
"JOINT DEVELOPMENT TEAM" or "JDT").
(b) The JDT will consist of three representatives of each of Cadence
and the Partnership. One representative, the JDT Manager, shall be a senior
executive of the assigning party. The second member of the JDT, the JDT
Technical Lead, shall be a person of technical background and responsibilities.
The third member of the JDT, the JDT Finance Lead, shall be a person of finance
background and responsibilities. Either Party may change its designees on the
JDT at any time and from time to time upon written notice to the other Party.
(c) The JDT shall conduct regular meetings, to be conducted at least
quarterly, and more frequently, if reasonably requested by either JDT Manager.
Each such meeting shall be
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convened after prior written notice has been provided to each member, unless
otherwise agreed in writing by both parties. Each such notice shall set out the
agenda for the meeting in sufficient detail to allow each party to prepare
adequately therefore. Meetings of the JDT may be held in person, by
teleconference, or by videoconference.
(d) The JDT acts by consensus as to Methodology Technology Development
and, accordingly, neither Party is obligated to perform or accept, or pay for or
incur costs, for any Project, task or other assignment, where not approved by
the JDT or, in its stead, both the Cadence and the Partnership JDT Manager. In
the event of a deadlock regarding any JDT decision-making, either party shall
have the option to refer the deadlocked matter to the Sponsoring Executives for
resolution. In addition, the JDT and the Sponsoring Executives will attempt to
resolve any disputes between Cadence and Tality arising out of or in connection
with this Agreement. Where the JDT is unable to resolve a disagreement or
dispute, the matter will be submitted to the Sponsoring Executives, who shall
then meet and fully discuss such dispute in an attempt to achieve its prompt
resolution.
(e) The JDT will execute the JDP by preparation, approval, funding,
oversight and management of MTD Projects, inclusive of Deliverables, Statements
Of Work, budgets, specifications, schedules and such other elements of
performance as the JDT may determine. The JDT shall review the key resources
each performing party intends to assign to Projects. The JDT shall oversee the
preparation of a mutually satisfactory means to account for costs expended on
Project and tasks, to monitor and report on cost/performance. The JDT shall have
responsibility and authority to approve changes to a Statement of Work,
specification or schedule, as may be requested by either Party. The parties may
agree to a separate and distinct means to manage and coordinate Specialized
Services, reporting to the JDT.
Section 3.2 JOINT DEVELOPMENT PLAN.
(a) The JDT shall be responsible for the development of a mutually
agreeable, annual joint development plan for each year of the Term ( a "JOINT
DEVELOPMENT PLAN" or "JDP"). The JDP shall contain a detailed statement of the
agreed-upon business and technology objectives for the applicable 12-month
period. The annual JDP shall, to the extent feasible, define Projects, work
scope, work plan and tasks and forecast funding. It shall also forecast needs
for resources capable of performing Specialized Services.
(b) The first JDP shall be prepared and submitted to the Sponsoring
Executives no later than ninety (90) days from the effective date hereof. The
JDT shall meet not less than quarterly, and otherwise as either Party's lead JDT
Manager may reasonably request, to agree upon additional Projects and tasks, and
to review progress on pending Projects and tasks, or otherwise to consider
matters within the scope of the JDT's authority and responsibility.
(c) No later than ninety (90) days prior to the end of each calendar
year subject to this Agreement, the JDT shall meet to review and evaluate the
results of this Agreement for the prior period and to commence preparation of
the JDP for the successive year. On or before the last business day of 2001, and
annually thereafter for the duration of the Term, the JDT shall produce and
deliver a JDP for the next performance year to the Sponsoring Executives, such
JDP to state technology objectives and planned Projects.
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Section 3.3 MTD PROJECTS.
(a) Methodology technology development projects ("MTD PROJECTS" or
"PROJECTS") are to be performed only where mutually agreed and pursuant to the
direction and authorization of the JDT. When so authorized, the JDT shall
establish and provide to the Partnership a Statement of Work for each Project,
and shall specify, as it deems applicable, the Project Deliverables, schedule,
milestones and such other requirements or goals as it deems appropriate. For
each MTD Project, the Parties shall mutually agree on an approved budget and
expenditure plan, at or prior to the time that work on the Project is authorized
to commence. The Parties may agree, for particular MTD Projects, to
cost-sharing, whereby each will bear a portion of the total costs of performing
the Project Scope of Work. In respect to each MTD Project as to which an MTD
Innovation may result, the Parties shall specially negotiate and agree to
Intellectual Property Rights that respect and recognize the respective financial
contribution to the Project effort and results.
(b) Cadence and the Partnership will agree, through the JDT, on a means
to track MTD Project costs and achievement of Project objectives on a real-time
basis. The Partnership is to notify Cadence when costs incurred on any Project
equal or exceed approximately 85% of the budgeted Project amount. Except as the
Parties may otherwise agree, Cadence is not obligated to reimburse greater than
110% of its agreed-upon share of each approved Project budget, where a Project
is performed on the basis of time and materials, or in excess of the firm fixed
price amount, for Projects performed on that basis.
(c) During each performance year, the Parties may agree to increase,
but not decrease, the actual funding in response to costs incurred on authorized
MTD Projects. Subject to the foregoing, during each performance year, the
Parties may add MTD Projects or increase (or decrease) scope for approved
Projects, with corresponding increases (or decreases) to funding.
(d) Notwithstanding anything to the contrary contained in this
Agreement (or the Master Intellectual Property Agreement), neither the
Partnership nor any other member of the Tality Group shall be entitled to use
the Project Alba Methodologies or to grant any license or sublicense to the
Project Alba Methodologies to any third-party for the use of the Project Alba
Methodologies in relation to education, research or industrial retraining by any
academic higher education institution or research institute or to enable any
governmental agency economic development body or other educational establishment
to commence a project to establish a design factory in the Project Alba
Territory for research into the use of the Project Alba Methodologies for the
design of system on chip products, including hardware products.
Section 3.4 SPECIALIZED SERVICES.
(a) Specialized Services are to be performed by the Partnership for
Cadence only pursuant to mutual agreement and are to be ordered by the Cadence
JDT Manager through the use of a Service Task Order. Prior to issuing a Service
Task Order, the Cadence JDT Manager shall secure the consent of the Partnership
JDT Manager for the contemplated scope of each Service Task Order. Each approved
Service Task Order shall state the budgeted amount for the
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services ordered and shall indicate whether the Partnership is to be paid for
such services on a time and materials, firm fixed price, or other basis.
(b) For mutually approved Service Task Orders for Specialized Services,
Cadence shall pay the Partnership on a time & materials, firm fixed price or
other basis as specified in the applicable Order.
ARTICLE IV
TERM
Section 4.1 TERM. The term of this Agreement shall commence on the
effective date hereof and shall continue for two (2) successive one-year terms.
Should neither Party object prior to six (6) months before the expiration of the
second performance year, the term shall extend automatically for a third and
final year.
Section 4.2 TERMINATION. Either Party may withdraw from this Agreement
upon the giving of 60 days written notice to the other Party; PROVIDED, HOWEVER,
that such termination shall not affect the Parties' then-existing obligations
arising under this Agreement or under any Statement of Work.
ARTICLE V
MISCELLANEOUS
Section 5.1 EXCLUSION OF CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL ANY
PARTY HEREUNDER BE LIABLE TO ANOTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON
ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS
AGREEMENT OR ANY ANCILLARY AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING
LIMITATIONS SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS FOR
LIABILITIES AS SET FORTH IN THE INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT.
Section 5.2 INCORPORATION BY REFERENCE. Section 4.4 and all of the
provisions of Article V (except for Sections 5.1, 5.7 and 5.13 thereof) of the
Separation Agreement are incorporated into and made a part of this Agreement, as
if fully set forth herein.
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WHEREFORE, the Parties have executed and delivered this Agreement
effective as of the date first set forth above.
CADENCE DESIGN SYSTEMS, INC. TALITY, LP
By: /s/ X.X. Xxxxx XxXxxxxxx By: TALITY CORPORATION,
----------------------------- AS GENERAL PARTNER
Name: X. X. Xxxxx XxXxxxxxx By: /s/ Xxxxx X. Xxxx
Title: Senior Vice President and ----------------------------
General Counsel Name: Xxxxx X. Xxxx
Title: Senior Vice President,
Chief Financial Officer
CADENCE HOLDINGS, INC. TALITY CORPORATION
By: /s/ X.X. Xxxxx XxXxxxxxx By: /s/ Xxxxx X. Xxxx
----------------------------- -------------------------------
Name: X.X. Xxxxx XxXxxxxxx Name: Xxxxx X. Xxxx
Title: Secretary Title: Senior Vice President,
Chief Financial Officer
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