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EXHIBIT 10.10
MASTER CORPORATE SERVICES AGREEMENT
BY AND AMONG
CADENCE DESIGN SYSTEMS, INC.,
CADENCE HOLDINGS, INC.,
TALITY, LP
AND
TALITY CORPORATION
DATED AS OF
__________, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...........................................................2
Section 1.1 Additional Services........................................2
Section 1.2 Corporate Service Schedule.................................2
Section 1.3 Impracticability...........................................2
Section 1.4 Party......................................................2
Section 1.5 Separation Agreement.......................................2
Section 1.6 Service(s).................................................2
Section 1.7 Software...................................................2
ARTICLE II CORPORATE SERVICE SCHEDULES..........................................2
Section 2.1 Execution of Schedules.....................................2
Section 2.2 Schedule Contents..........................................2
ARTICLE III SERVICES............................................................3
Section 3.1 Services Generally.........................................3
Section 3.2 Service Boundaries.........................................3
Section 3.3 Impracticability...........................................3
Section 3.4 Additional Resources.......................................3
Section 3.5 Additional Services........................................3
ARTICLE IV TERM & TERMINATION...................................................4
Section 4.1 Term.......................................................4
Section 4.2 Termination................................................4
Section 4.3 Survival...................................................4
Section 4.4 User Ids, Passwords and Other Access.......................4
ARTICLE V COMPENSATION..........................................................4
Section 5.1 Charges For Services.......................................4
Section 5.2 Payment Terms..............................................5
Section 5.3 Error Correction; True-Ups; Accounting.....................5
Section 5.4 Pricing Adjustments........................................5
ARTICLE VI GENERAL OBLIGATIONS; STANDARD OF CARE................................6
Section 6.1 Performance Metrics........................................6
Section 6.2 Disclaimer Of Warranties...................................6
Section 6.3 Transitional Nature Of Services; Changes...................6
Section 6.4 Responsibility For Errors; Delays..........................6
Section 6.5 Good Faith Cooperation; Consents...........................6
Section 6.6 Alternatives...............................................7
ARTICLE VII RELATIONSHIP AMONG THE PARTIES......................................7
ARTICLE VIII SUBCONTRACTORS.....................................................7
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ARTICLE IX INTELLECTUAL PROPERTY................................................7
Section 9.1 Allocation Of Rights By Ancillary Agreements...............7
Section 9.2 Existing Ownership Rights Unaffected.......................7
ARTICLE X CONFIDENTIALITY.......................................................8
ARTICLE XI LIMITATION OF LIABILITY..............................................8
ARTICLE XII FORCE MAJEURE.......................................................8
ARTICLE XIII MISCELLANEOUS......................................................8
Section 13.1 Incorporation by Reference.................................8
Section 13.2 Conflicting Agreements.....................................8
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MASTER CORPORATE SERVICES AGREEMENT
THIS MASTER CORPORATE SERVICES AGREEMENT (this "Agreement"), dated and
effective as of _______, 2000, among Cadence Design Systems, Inc., a Delaware
corporation (together with its Subsidiaries, "Cadence"), Cadence Holdings, Inc.,
a Delaware corporation ("Holdings"), Tality, LP, a Delaware limited partnership
(the "Partnership") and Tality Corporation, a Delaware corporation ("Tality").
Capitalized terms used herein and not defined elsewhere herein shall have the
meaning ascribed to them in Article I or in the Separation Agreement (as defined
below).
RECITALS
WHEREAS, Holdings currently owns approximately 98% of the issued and
outstanding shares of the capital stock of Tality;
WHEREAS, Tality 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 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; 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 Master Corporate Services Agreement to set forth certain
arrangements regarding the provision of services between Cadence, on the one
hand, and Tality and the Partnership, on the other.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following capitalized terms shall
have the meanings assigned to them below:
Section 1.1 "Additional Services" shall have the meaning set forth in
Section 3.5.
Section 1.2 "Corporate Service Schedule" means a corporate service
schedule in the form attached hereto.
Section 1.3 "Impracticability" shall have the meaning set forth in
Section 3.3.
Section 1.4 "Party" means Cadence or Holdings, on the one hand, and
Tality or the Partnership, on the other, and members of the Cadence Group or the
Tality Group, as applicable.
Section 1.5 "Separation Agreement" has the meaning set forth in the
recitals.
Section 1.6 "Service(s)" shall have the meaning set forth in Section
3.1.
Section 1.7 "Software" means a Service Provider's software program(s),
in object code only, listed and described in the relevant Corporate Service
Schedule.
ARTICLE II
CORPORATE SERVICE SCHEDULES
Section 2.1 Execution of Schedules. This Agreement shall govern
individual corporate services as requested by Tality or the Partnership and
provided by Cadence or requested by Cadence and provided by the Partnership, the
details of which are set forth in the Corporate Service Schedules attached to
this Agreement. Each Service shall be covered by this Agreement upon execution
of a Corporate Service Schedule. Each Corporate Service Schedule executed by the
parties hereto shall be incorporated by reference and become an integral part of
this Agreement as if fully set forth herein.
Section 2.2 Schedule Contents. For each Service, the Parties shall set
forth, among other things, (a) the time period during which the Service shall be
provided if different from the term of this Agreement determined pursuant to
Article IV; (b) a summary of the Service to be provided; (c) a description of
the Service; (d) the cost methodology to be employed (including an estimated
total charge), if any, for the Service and any other terms applicable thereto on
the Corporate Service Schedule. Obligations regarding each Corporate Service
Schedule shall be effective upon execution and delivery thereof.
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ARTICLE III
SERVICES
Section 3.1 Services Generally. Except as otherwise provided herein,
during the term hereof, Cadence or the Partnership, as applicable (each, a
"Service Provider"), shall provide or cause to be provided to Tality, the
Partnership or Cadence, as applicable (each, a "Service Recipient"), the
activities and services described in the Corporate Service Schedule(s) attached
hereto. Each activity or service described on a Corporate Service Schedule shall
be referred to herein as a "Service." Collectively, the services described on
all the Corporate Service Schedules (including Additional Services) shall be
referred to herein as "Services."
Section 3.2 Service Boundaries. Except as provided in a Corporate
Service Schedule for a specific Service: (i) the Service Providers shall be
required to provide their respective Services in substantially the same manner
as such Services are being provided immediately prior to the date hereof, unless
Cadence and the Partnership agree otherwise; and (ii) the Services shall be
available only for purposes of (A) if Tality or the Partnership is the Service
Recipient, conducting the business of the Partnership in substantially the same
manner as it was conducted prior to the date hereof, unless Cadence and the
Partnership agree otherwise, or (B) if Cadence is the Service Recipient,
conducting the business of Cadence in substantially the same manner as it was
conducted prior to the date hereof, unless Cadence and the Partnership agree
otherwise.
Section 3.3 Impracticability. No Service Provider shall be required to
provide any Service to the extent the performance of such Service becomes
impracticable as a result of a cause or causes outside the reasonable control of
the Service Provider, including unfeasible technological requirements, or to the
extent the performance of such Service would require the Service Provider to
violate any Applicable Law or would result in the breach of any software license
or other contract to which the Service Provider is a party or by which it or any
of its assets and properties is bound ("Impracticability").
Section 3.4 Additional Resources. Except as provided in a Corporate
Service Schedule for a specific Service, in providing the Services, the Service
Providers shall not be obligated to: (i) hire any additional employees; (ii)
maintain the employment of any specific employee; (iii) purchase, lease or
license any additional equipment or software; or (iv) pay any costs related to
the transfer or conversion of the Service Recipient's data to the Service
Recipient or any alternative supplier of Services.
Section 3.5 Additional Services. From time to time during the term
hereof, the Parties may identify additional services that the Parties may agree
to provide to each other in accordance with the terms of this Agreement (the
"Additional Services"). Accordingly, the Parties shall execute additional
Corporate Service Schedules for such Additional Services pursuant to Article II.
The Parties may agree in writing on Additional Services during the term of this
Agreement.
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ARTICLE IV
TERM & TERMINATION
Section 4.1 Term. The term of this Agreement shall commence on the date
hereof and shall remain in effect until two (2) years after the date hereof (the
"Expiration Date"), unless earlier terminated under Section 4.2. This Agreement
may be extended by the parties in writing, either in whole or with respect to
one or more of the Services; provided, however, that any such extension shall
only apply to the Services for which the Agreement was extended. The parties
shall be deemed to have extended this Agreement with respect to a specific
Service if the Corporate Service Schedule for such Service specifies a
completion date beyond the aforementioned Expiration Date. The parties may agree
on an earlier expiration date respecting a specific Service by specifying such
date on the Corporate Service Schedule for that Service. Services shall be
provided up to and including the date set forth in the applicable Corporate
Service Schedule, subject to earlier termination as provided herein.
Section 4.2 Termination. A Party may terminate this Agreement with
respect to any one or more of the Services provided to the Party hereunder, for
any reason or for no reason, at any time upon six (6) months prior written
notice to the other Party. The Parties may terminate this Agreement, by mutual
consent, with respect to any one or more of the Services provided hereunder
without notice. In addition, subject to Section 4.4 of the Separation Agreement,
either Party may terminate this Agreement with respect to a specific Service if
the other Party materially breaches a material provision with regard to that
particular Service and does not cure such breach (or does not take reasonable
steps required under the circumstances to cure such breach going forward) within
sixty (60) days after being given notice of the breach; provided, however, that
the non-terminating Party may request that the Parties engage in a dispute
resolution negotiation as specified in Section 4.4 of the Separation Agreement
prior to termination for breach.
Section 4.3 Survival. Those Sections of this Agreement that, by their
nature, are intended to survive termination shall survive in accordance with
their terms. Notwithstanding the foregoing, in the event of any termination with
respect to one or more, but less than all Services, this Agreement shall
continue in full force and effect with respect to any Services not terminated
hereby.
Section 4.4 User Ids, Passwords and Other Access. The Parties shall use
good faith efforts at the termination or expiration of this Agreement or any
specific Service hereto to ensure that all applicable user IDs and passwords or
other means of access to sites, systems and information are canceled or returned
to the other Party as applicable.
ARTICLE V
COMPENSATION
Section 5.1 Charges For Services. Each Service Recipient shall pay the
Service Provider of the relevant Service the charges determined in accordance
with the pricing methodology set forth on the Corporate Service Schedules for
each of the Services listed therein,
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as adjusted, from time to time, in accordance with the procedures set forth in
Sections 5.3 and 5.4. Such fees shall include the direct costs, as determined
using the process described in such Corporate Service Schedule, and indirect
costs of providing the Services. The Parties shall discuss in good faith any
situation in which the actual charge for a Service is reasonably expected to
exceed the estimated charge, if any, set forth on a Corporate Service Schedule
for a particular Service; provided, however, that the incurrence of charges in
excess of any such estimate shall not justify stopping the provision of, or
payment for, Services under this Agreement.
Section 5.2 Payment Terms. Each Service Provider shall xxxx the relevant
Service Recipients quarterly for all charges accrued for Services to such
Service Recipients during the quarter pursuant to the budgeted amounts set forth
in each Corporate Service Schedule to this Agreement (the "Quarterly Invoice");
provided, however, that to the extent such charges exceed one hundred ten
percent (110%) of the estimated quarterly costs stated in the relevant Corporate
Service Schedule, the excess amount shall be included in the Quarterly Invoice
for the following quarter. The Quarterly Invoices shall be accompanied by
reasonable documentation or other reasonable explanation supporting such
charges. Each Service Recipient shall pay the relevant Service Provider the
amount of the Quarterly Invoices (the "Quarterly Payments") for all Services
provided to the Service Recipient within thirty (30) days after receipt of an
invoice therefore. Late payments shall bear interest at the lesser of twelve
percent (12%) and the maximum rate allowed by law.
Section 5.3 Error Correction; True-Ups; Accounting. Unless otherwise
agreed by Cadence and the Partnership, no later than forty-five (45) days
following the end of each quarter, representatives of each of Cadence and the
Partnership shall meet to reconcile the Quarterly Payments made during the prior
quarter with the actual costs incurred by the Service Providers during such
period. If a Service Provider's actual costs were in excess of the amount of
Quarterly Payments for such period, the Service Recipient shall transfer to the
Service Provider the difference in immediately available funds no later than
thirty (30) days following the end of such period. If a Service Provider's
actual cash payments were less than the amount of Quarterly Payments for such
period, the Service Provider shall transfer to the Service Recipient the
difference in immediately available funds no later than thirty (30) days
following the end of such period.
Section 5.4 Pricing Adjustments. In the event of a tax audit adjustment
relating to the pricing of any or all Services provided pursuant to this
Agreement in which it is determined by a taxing authority that any of the
charges, individually or in combination, did not result in an arm's-length
payment, as determined under internationally accepted arm's-length standards,
then the parties, including any subcontractor providing Services hereunder, may
agree to make corresponding adjustments to the charges in question for such
period to the extent necessary to achieve arm's-length pricing. Any adjustment
made pursuant to this Section 5.4 at any time during the term of this Agreement
or after termination of this Agreement and shall be reflected in the parties'
books and records, and the resulting underpayment or overpayment shall create,
respectively, an obligation to be paid in the manner specified in Section 5.2 or
shall create a credit against amounts owed under this Agreement, as the case may
be.
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ARTICLE VI
GENERAL OBLIGATIONS; STANDARD OF CARE
Section 6.1 Performance Metrics. Subject to Section 3.4 and any other
terms of this Agreement, each Service Provider shall use all commercially
reasonable efforts to maintain sufficient resources to perform its obligations
hereunder. Specific performance metrics for a Service Provider for a specific
Service may be set forth in the corresponding Corporate Service Schedule. Where
none is set forth, the Service Provider shall use reasonable efforts to provide
Services in accordance with the policies, procedures and practices in effect
before the date hereof and shall exercise the same care and skill as it
exercises in performing similar services for itself.
Section 6.2 Disclaimer Of Warranties. THE PARTIES MAKE NO WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
SERVICES, SOFTWARE OR OTHER DELIVERABLES PROVIDED BY IT HEREUNDER.
Section 6.3 Transitional Nature Of Services; Changes. The parties
acknowledge the transitional nature of the Services and that a Service Provider
may make changes from time to time in the manner of performing its Services if
such Service Provider is making similar changes in performing similar services
for itself and if the Service Provider furnishes to the Service Recipient sixty
(60) days written notice regarding such changes.
Section 6.4 Responsibility For Errors; Delays. Each Service Provider's
sole responsibility to its Service Recipients:
(a) for errors or omissions in Services, shall be to furnish correct
information, payment and/or adjustment in the Services, at no additional cost or
expense to the Service Recipients, as appropriate; provided, however, that each
Service Recipient must promptly advise its Service Provider of any such error or
omission of which it becomes aware after having used reasonable efforts to
detect any such errors or omissions in accordance with the standard of care set
forth in Section 6.1; and
(b) for failure to deliver any Service because of Impracticability,
shall be to use reasonable efforts, subject to Section 3.3, to make the Services
available and/or to resume performing the Services as promptly as reasonably
practicable.
Section 6.5 Good Faith Cooperation; Consents. The parties shall
cooperate in good faith with each other in all matters relating to the provision
and receipt of Services. Such cooperation shall include exchanging information,
performing true-ups and adjustments, and obtaining all third party consents,
licenses, sublicenses or approvals necessary to permit each party to perform its
obligations hereunder (including rights to use third party software needed for
the performance of Services). The costs of obtaining any such third party
consents, licenses, sublicenses or approvals shall be borne by the relevant
Service Recipient. Each of the parties shall maintain, in accordance with its
standard document retention procedures, documentation supporting the information
relevant to cost calculations contained in the Corporate Service
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Schedules and cooperate with each other in making such information available as
needed in the event of a tax audit, whether in the United States or any other
country.
Section 6.6 Alternatives. If a Service Provider reasonably believes it
is unable to provide any Service because of a failure to obtain necessary
consents, licenses, sublicenses or approvals pursuant to Section 6.5 or because
of Impracticability, the parties shall cooperate to determine the best
alternative approach. Until such alternative approach is found or the problem
otherwise resolved to the satisfaction of the parties, the Service Provider
shall use reasonable efforts, subject to Section 3.3 and Section 3.4, to
continue providing the Service. To the extent an agreed upon alternative
approach increases the cost of such Service Provider performing such Service
above that which is included in the Service Provider's charge for the Service in
question, the Service Recipient shall fully bear such increase unless they
otherwise agree in writing.
ARTICLE VII
RELATIONSHIP AMONG THE PARTIES
The relationship between the Cadence Parties, on the one hand, and the
Tality Parties, on the other hand, established under this Agreement is that of
independent contractors, and neither Party is, or shall be construed to be, an
employee, agent, partner or joint venturer of or with the other. Each Service
Provider shall be solely responsible for any employment-related taxes, insurance
premiums or other employment benefits respecting its performance of Services
under this Agreement. The Service Recipients agree to grant the Service
Providers' personnel access to sites, systems and information as necessary for
the Service Providers to perform their obligations hereunder.
ARTICLE VIII
SUBCONTRACTORS
In its sole discretion, a Service Provider may engage a subcontractor to
perform all or any portion of the Service Provider's duties under this
Agreement; provided, however that any such subcontractor agrees in writing to be
bound by confidentiality obligations at least as protective as the terms of the
Master Confidentiality Agreement; and provided further that in such event the
Service Provider shall remain responsible for the performance of such
subcontracted Service.
ARTICLE IX
INTELLECTUAL PROPERTY
Section 9.1 Allocation Of Rights By Ancillary Agreements. This Agreement
and the performance of this Agreement shall not affect the ownership of any
intellectual property or rights thereto allocated in the Ancillary Agreements
(including the Master Intellectual Property Agreement).
Section 9.2 Existing Ownership Rights Unaffected. Neither Party shall
gain, by virtue of this Agreement, any rights of ownership of copyrights,
patents, trade secrets, trademarks or any other intellectual property rights
owned by the other.
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ARTICLE X
CONFIDENTIALITY
The terms of the Master Confidentiality Agreement shall apply to any
Confidential Information (as defined therein) which is the subject matter of
this Agreement or that may be obtained in the course of performing the Services.
ARTICLE XI
LIMITATION OF LIABILITY
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOST PROFITS, LOSS OF
DATA, LOSS OF USE, COST OF COVER, BUSINESS INTERRUPTION OR OTHER SPECIAL,
INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, UNDER
ANY THEORY OF LIABILITY, ARISING FROM THE PERFORMANCE OF, OR RELATING TO, THIS
AGREEMENT.
ARTICLE XII
FORCE MAJEURE
Service Providers shall be excused for any failure or delay in
performing any of their obligations under this Agreement, if such failure or
delay is caused by Force Majeure. For purposes hereof, "Force Majeure" means any
act of God or the public enemy, any accident, explosion, fire, storm,
earthquake, flood, or any other circumstance or event beyond the reasonable
control of the party relying upon such circumstance or event.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Incorporation by Reference. Section 4.4 and all of the
provisions of Article V (except for Section 5.13 thereof) of the Separation
Agreement are incorporated into and made a part of this Agreement, as if fully
set forth herein.
Section 13.2 Conflicting Agreements. In the event of any irreconcilable
conflict between this Agreement and the Separation Agreement, other Ancillary
Agreement (including the Master Intellectual Property Agreement) or other
agreement executed in connection herewith or therewith, the provisions of such
other agreement shall prevail to the extent that they specifically address the
subject matter of the conflict.
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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: By: TALITY CORPORATION,
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Name: AS GENERAL PARTNER
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Title: By:
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Name:
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Title:
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CADENCE HOLDINGS, INC. TALITY CORPORATION,
By: By:
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Name: Name:
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Title: Title:
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