Exhibit 2.03
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
BY AND AMONG
CADENCE DESIGN SYSTEMS, INC.,
TALITY CORPORATION,
TALITY, LP
AND
CADENCE HOLDINGS, INC.
DATED AS OF
OCTOBER 4, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...........................................................................................1
Section 1.1 Action................................................................................1
Section 1.2 Assets................................................................................2
Section 1.3 Contracts.............................................................................3
Section 1.4 Delayed Transfer Assets...............................................................3
Section 1.5 Delayed Transfer Liabilities..........................................................3
Section 1.6 Excluded Assets.......................................................................3
Section 1.7 Excluded Liabilities..................................................................4
Section 1.8 Foreign Transfer Agreement............................................................4
Section 1.9 Insurance Policies....................................................................4
Section 1.10 Insurance Proceeds....................................................................4
Section 1.11 Insured Tality Liabilities............................................................4
Section 1.12 Intellectual Property.................................................................4
Section 1.13 Liabilities...........................................................................5
Section 1.14 Security Interest.....................................................................5
Section 1.15 Tality Assets.........................................................................5
Section 1.16 Tality Balance Sheet..................................................................6
Section 1.17 Tality Contingent Liability...........................................................6
Section 1.18 Tality Contracts......................................................................6
Section 1.19 Tality Liabilities....................................................................7
Section 1.20 Tality Special Gain...................................................................8
Section 1.21 Taxes.................................................................................8
ARTICLE II CONTRIBUTION AND ASSUMPTION..........................................................................9
Section 2.1 Contribution of Assets and Assumption of Liabilities..................................9
Section 2.2 Methods of Transfer and Assumption....................................................9
Section 2.3 Delayed Transfers....................................................................11
Section 2.4 Novation of Assumed Tality Liabilities...............................................11
ARTICLE III LITIGATION.........................................................................................12
Section 3.1 Allocation...........................................................................12
Section 3.2 Cooperation..........................................................................13
ARTICLE IV MISCELLANEOUS.......................................................................................13
Section 4.1 Incorporation by Reference...........................................................13
Section 4.2 Conflicting Agreements...............................................................13
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GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT (this "ASSIGNMENT")
is entered into and effective as of October 4, 2000 by and among Cadence Design
Systems, Inc., a Delaware corporation ("CADENCE"), Tality Corporation, a
Delaware corporation ("TALITY"), Tality, LP, a Delaware limited partnership (the
"PARTNERSHIP"), and Cadence Holdings, Inc., a Delaware corporation ("HOLDINGS").
Capitalized terms used herein and not defined elsewhere herein shall have the
meanings 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;
WHEREAS, all conditions to the Separation have been satisfied or
waived; and
WHEREAS, Cadence, Tality, the Partnership and Holdings now desire to
execute and deliver this Assignment to effectuate the transfer of assets and
assumption of liabilities contemplated by the Separation Agreement.
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
Section 1.1 "ACTION" means any demand, action, suit, countersuit,
arbitration, inquiry, audit, proceeding or investigation by or before any
federal, state, local, foreign or international Governmental Authority or any
arbitration or mediation tribunal.
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Section 1.2 "ASSETS" means assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or other
third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, 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, including the following:
(i) all accounting and other books, records and files
whether in paper, microfilm, microfiche, computer tape or disc,
magnetic tape or any other form;
(ii) all apparatus, computers and other electronic data
processing equipment, automobiles, trucks, aircraft, rolling stock,
vessels, motor vehicles and other transportation equipment, special
and general tools, test devices, prototypes and models and other
tangible personal property, but excluding fixtures, machinery,
equipment, furniture and office equipment (other than computers);
(iii) all inventories, parts, raw materials, supplies,
work-in-process and finished goods and products;
(iv) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of a
Security Interest, lessor, sublessor, lessee, sublessee or otherwise;
(v) all interests in any capital stock or other equity
interests of any Subsidiary or any other Person; all bonds, notes,
debentures or other securities issued by any Subsidiary or any other
Person; all loans, advances or other extensions of credit or capital
contributions to any Subsidiary or any other Person; and all other
investments in securities of any Person;
(vi) all license agreements, leases of personal
property, open purchase orders for raw materials, supplies, parts or
services, unfilled orders for the manufacture and sale of products and
other contracts, agreements or commitments;
(vii) all deposits, letters of credit and performance
and surety bonds;
(viii) all written technical information, data,
specifications, research and development information, engineering
drawings, operating and maintenance manuals, and materials and
analyses prepared by consultants and other third parties;
(ix) all Intellectual Property and licenses from third
Persons granting the right to use any Intellectual Property;
(x) all computer applications, programs and other
software, including operating software, network software, firmware,
middleware, design software, design tools, systems documentation and
instructions;
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(xi) all cost information, sales and pricing data,
customer prospect lists, supplier records, customer and supplier
lists, customer and vendor data, correspondence and lists, product
literature, artwork, design, development and manufacturing files,
vendor and customer drawings, formulations and specifications, quality
records and reports and other books, records, studies, surveys,
reports, plans and documents;
(xii) all prepaid expenses, trade accounts and other
accounts and notes receivables;
(xiii) all rights under contracts or agreements, all
claims or rights against any Person arising from the ownership of any
Asset, all rights in connection with any bids or offers and all
claims, choses in action or similar rights, whether accrued or
contingent;
(xiv) all rights under insurance policies and all rights
in the nature of insurance, indemnification or contribution;
(xv) all licenses, permits, approvals and
authorizations which have been issued by any Governmental Authority;
(xvi) cash or cash equivalents, bank accounts, lock
boxes and other deposit arrangements; and
(xvii) interest rate, currency, commodity or other swap,
collar, cap or other hedging or similar agreements or arrangements.
Section 1.3 "CONTRACTS" means any contract, agreement, lease,
license, sales order, purchase order, instrument or other commitment that is
binding on any Person or any part of its property under Applicable Law.
Section 1.4 "DELAYED TRANSFER ASSETS" means any Tality Assets that
are expressly provided in this Assignment, the Separation Agreement or any
other Ancillary Agreement to be transferred after the date of this Assignment.
Section 1.5 "DELAYED TRANSFER LIABILITIES" means any Tality
Liabilities that are expressly provided in this Assignment, the Separation
Agreement or any other Ancillary Agreement to be transferred after the date of
this Assignment.
Section 1.6 "EXCLUDED ASSETS" means:
(i) the Assets listed or described on SCHEDULE 1.6(i);
(ii) all Assets of Cadence not reflected on the Tality
Balance Sheet;
(iii) any cash or other Assets held by Cadence that
would be classified as "current assets," in accordance with U.S.
generally accepted accounting principles ("GAAP"); and
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(iv) any other Assets that are not expressly
contemplated by the Separation Agreement, any Foreign Transfer
Agreement, this Assignment or any other Ancillary Agreement (or the
Schedules hereto or thereto) as Assets of Cadence or any other member
of the Cadence Group to be transferred to the Partnership or any other
member of the Tality Group.
Section 1.7 "EXCLUDED LIABILITIES" means:
(i) all Liabilities listed or described in SCHEDULE
1.7(i);
(ii) all Liabilities of Cadence not reflected on the
Tality Balance Sheet;
(iii) all accounts payable and other Liabilities of
Cadence that would be classified as "current liabilities," other than
deferred revenue and the current portion of capital lease obligations,
in accordance with U.S. GAAP;
(iv) all Insured Tality Liabilities; and
(v) all Liabilities that are expressly contemplated by
this Assignment, any Foreign Transfer Agreement, the Separation
Agreement or any other Ancillary Agreement (or the Schedules hereto or
thereto) as Liabilities to be retained or assumed by Cadence or any
other member of the Cadence Group, and all agreements and obligations
of any member of the Cadence Group under the Separation Agreement,
this Assignment or any other Ancillary Agreement.
Section 1.8 "FOREIGN TRANSFER AGREEMENT" has the meaning set forth
under the Separation Agreement.
Section 1.9 "INSURANCE POLICIES" means insurance policies pursuant to
which a Person makes a true risk transfer to an insurer.
Section 1.10 "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; from Insurance Policies.
Section 1.11 "INSURED TALITY LIABILITIES" means any Tality Liability
to the extent that (i) it is covered under the terms of Cadence's Insurance
Policies in effect prior to the Separation Date and (ii) neither Tality nor any
of its Subsidiaries is a named insured under, or otherwise entitled to the
benefits of, such Insurance Policies.
Section 1.12 "INTELLECTUAL PROPERTY" means all domestic and foreign
patents and patent applications, together with any continuations,
continuations-in-part or divisional applications thereof, and all patents
issuing thereon (including reissues, renewals and re-examinations of the
foregoing); design patents, invention disclosures; mask works; copyrights, and
copyright
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applications and registrations; Web addresses, trademarks, service marks, trade
names, and trade dress, in each case together with any applications and
registrations therefor and all appurtenant goodwill relating thereto; trade
secrets, commercial and technical information, know-how, proprietary or
confidential information, including engineering, production and other designs,
notebooks, processes, drawings, specifications, formulae, and technology;
computer and electronic data processing programs and software (object and source
code), data bases and documentation thereof; inventions (whether patented or
not); registered designs, certificates of invention and all other intellectual
property under the laws of any country throughout the world.
Section 1.13 "LIABILITIES" means all debts, liabilities, guarantees,
assurances, commitments and obligations, whether fixed, contingent or absolute,
asserted or unasserted, matured or unmatured, liquidated or unliquidated,
accrued or not accrued, known or unknown, due or to become due, whenever or
however arising (including whether arising out of any Contract or tort based on
negligence or strict liability) and whether or not the same would be required by
U.S. GAAP to be reflected in financial statements or disclosed in the notes
thereto.
Section 1.14 "SECURITY INTEREST" means any mortgage, security
interest, pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.
Section 1.15 "TALITY ASSETS" means (without duplication) the
following Assets (other than those Assets constituting Excluded Assets or as
otherwise provided for in any other Ancillary Agreement or other express
agreement of the parties):
(i) all Assets reflected on the Tality Balance Sheet,
subject to any dispositions of such Assets after the date of the
Tality Balance Sheet;
(ii) all Assets that have been written off, expensed or
fully depreciated that, had they not been written off, expensed or
fully depreciated, would have been reflected on the Tality Balance
Sheet in accordance with the principles and accounting policies under
which the Tality Balance Sheet was prepared;
(iii) all Assets acquired by Cadence or any of its
Subsidiaries after the date of the Tality Balance Sheet that would be
reflected on the consolidated balance sheet of Tality as of the
Separation Date if such consolidated balance sheet was prepared using
the same principles and accounting policies under which the Tality
Balance Sheet was prepared, including any business transaction
processing that may occur on Cadence systems on behalf of Tality
during the period between separation date to initialization of the
processing systems required by Tality;
(iv) all Assets that are used solely by the Tality
Business at the Separation Date but are not reflected on the Tality
Balance Sheet due to mistake or omission (as determined by Cadence in
its sole and absolute discretion);
(v) all Tality Special Gains;
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(vi) all Tality Contracts;
(vii) to the extent permitted by Applicable Law and
subject to the Indemnification and Insurance Matters Agreement, all
rights of any member of the Tality Group under any of Cadence's
Insurance Policies; and
(viii) all Assets that are expressly contemplated by this
Assignment, any Foreign Transfer Agreement, the Separation Agreement
or any other Ancillary Agreement (or SCHEDULE 1.15(viii) or any other
Schedule hereto or thereto) as Assets to be transferred to the
Partnership or any other member of the Tality Group.
Section 1.16 "TALITY BALANCE SHEET" means the consolidated balance
sheet (including the notes thereto) of the Tality Business as of July 1, 2000
that is included in the Registration Statement.
Section 1.17 "TALITY CONTINGENT LIABILITY" means any Liability, other
than Liabilities for Taxes, of a member of the Cadence Group or the Tality Group
that is reflected on, or, were it not for the reasons noted in clause (ii)
below, would have been reflected on, the Tality Balance Sheet, whenever arising,
to any Person other than a member of the Cadence Group or the Tality Group, if
and to the extent that (i) such Liability arises out of the events, acts or
omissions occurring before the Separation Date and (ii) the existence or scope
of the obligation of a member of the Cadence Group or the Tality Group as of the
Separation Date with respect to such Liability was not acknowledged, fixed or
determined in any material respect, due to a dispute or other uncertainty as of
the Separation Date or as a result of the failure of such Liability to have been
discovered or asserted as of the Separation Date (it being understood that the
existence of a litigation or other reserve with respect to any Liability shall
not be sufficient for such Liability to be considered acknowledged, fixed or
determined); PROVIDED, HOWEVER, that the only Liabilities relating to, arising
out of or resulting from litigation matters pending on the date hereof that
shall constitute Tality Contingent Liabilities are Liabilities relating to,
arising out of or resulting from the matters identified on SCHEDULE 1.17. In the
case of any Liability a portion of which arises out of events, acts or omissions
occurring prior to the Separation Date and a portion of which arises out of
events, acts or omissions occurring on or after the Separation Date, only that
portion that arises out of events, acts or omissions occurring prior to the
Separation Date shall be considered a Tality Contingent Liability. For purposes
of the foregoing, a Liability shall be deemed to have arisen out of events, acts
or omissions occurring prior to the Separation Date if all the elements
necessary for the assertion of a claim with respect to such Liability shall have
occurred on or prior to the Separation Date, such that the claim, were it
asserted in an Action on or prior to the Separation Date, would not be dismissed
by a court on ripeness or similar grounds. For purposes of clarifying the
foregoing, the parties agree that no Liability relating to, arising out of or
resulting from any obligation of any Person to perform the executory portion of
any contract or agreement existing as of the Separation Date, or to satisfy any
obligation accrued under any Plan (as defined in the Employee Matters Agreement
entered into by the parties as of the date hereof) as of the Separation Date,
shall be deemed to be a Tality Contingent Liability.
Section 1.18 "TALITY CONTRACTS" means the following contracts and
agreements to which Cadence or one of its Subsidiaries is a party or by which
it or any of its Assets is bound, whether
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or not in writing, except for any such contract or agreement that is
contemplated to be retained by Cadence or any member of the Cadence Group
pursuant to this Assignment or any other Ancillary Agreement:
(i) any contract or agreement reflected on the Tality
Balance sheet;
(ii) any contract or agreement entered into after July
1, 2000 and designated by Cadence (subject to the consent of the
Partnership, which shall not be unreasonably withheld) as a Tality
Contract;
(iii) any contract or agreement that is otherwise
expressly contemplated pursuant to this Assignment, any Foreign
Transfer Agreement, the Separation Agreement or any of the other
Ancillary Agreements to be assigned to the Partnership; and
(iv) any contract or agreement set forth on SCHEDULE
1.18(iv).
Section 1.19 "TALITY LIABILITIES" means (without duplication) the
following Liabilities (other than those Liabilities constituting Excluded
Liabilities or as otherwise provided for in any other Ancillary Agreement or
other express agreement of the parties):
(i) all Liabilities reflected on the Tality Balance
Sheet, subject to any discharge of such Liabilities subsequent to the
date of the Tality Balance Sheet;
(ii) all Liabilities of Cadence or its Subsidiaries
that arise after the date of the Tality Balance Sheet that would be
reflected on the consolidated balance sheet of Tality as of the
Separation Date if such consolidated balance sheet was prepared using
the same principles and accounting policies under which the Tality
Balance Sheet was prepared;
(iii) all Liabilities that are related solely to the
Tality Business at the Separation Date but are not reflected on the
Tality Balance Sheet due to mistake or unintentional omission (as
determined by Cadence in its sole and absolute discretion);
(iv) all Tality Contingent Liabilities;
(v) all Liabilities (other than Liabilities for
Taxes), whether arising before, on or after the Separation Date,
solely relating to, arising out of or resulting from:
(1) the operation of the Tality Business, as
conducted at any time prior to, on or after the Separation Date
(including any Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer, employee, agent or
representative (whether or not such act or failure to act is or was
within such Person's authority));
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(2) the operation of any business conducted
by any member of the Tality Group at any time after the Separation
Date (including any Liability relating to, arising out of or resulting
from any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to act is
or was within such Person's authority)); or
(3) any Tality Assets;
(vi) all Liabilities relating to, arising out of or
resulting from any of the terminated, divested or discontinued
businesses and operations listed or described on SCHEDULE 1.19(vi);
and
(vii) all Liabilities that are expressly contemplated by
this Assignment, SCHEDULE 1.19(vii), any Foreign Transfer Agreement,
the Separation Agreement or any other Ancillary Agreement (or the
Schedules hereto or thereto) as Liabilities to be assumed by the
Partnership or any member of the Tality Group, and all agreements,
obligations and Liabilities of any member of the Tality Group under
this Assignment, any Foreign Transfer Agreement or any of the
Ancillary Agreements.
Section 1.20 "TALITY SPECIAL GAIN" means any claim or other right
of a member of the Cadence Group or the Tality Group that is reflected on,
or, were it not for the reasons noted in clause (ii) below, would have been
reflected on, the Tality Balance Sheet, whenever arising, against any Person
other than a member of the Cadence Group or the Tality Group, if and to the
extent that (i) such claim or right arises out of the events, acts or
omissions occurring before the Separation Date (based on then existing law)
and (ii) the existence or scope of the obligation of such other Person as of
the Separation Date was not acknowledged, fixed or determined in any material
respect, due to a dispute or other uncertainty as of the Separation Date or
as a result of the failure of such claim or other right to have been
discovered or asserted as of the Separation Date. A claim or right meeting
the foregoing definition shall be considered a Tality Special Gain regardless
of whether there was any Action pending, threatened or contemplated as of the
Separation Date with respect thereto. In the case of any claim or right a
portion of which arises out of events, acts or omissions occurring prior to
the Separation Date and a portion of which arises out of events, acts or
omissions occurring on or after the Separation Date, only that portion that
arises out of events, acts or omissions occurring prior to the Separation
Date shall be considered a Tality Special Gain. For purposes of the
foregoing, a claim or right shall be deemed to have accrued as of the
Separation Date if all the elements of the claim necessary for its assertion
shall have occurred on or prior to the Separation Date, such that the claim
or right, were it asserted in an Action on or prior to the Separation Date,
would not be dismissed by a court on ripeness or similar grounds.
Notwithstanding the foregoing, none of (i) any Insurance Proceeds, (ii) any
Excluded Assets, (iii) any reversal of any litigation or other reserve, and
(iv) any matters relating to Taxes shall be deemed to be a Tality Special
Gain.
Section 1.21 "TAXES" has the meaning set forth in the Indemnification
and Insurance Matters Agreement.
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ARTICLE II
CONTRIBUTION AND ASSUMPTION
Section 2.1 CONTRIBUTION OF ASSETS AND ASSUMPTION OF LIABILITIES.
(a) CONTRIBUTION OF ASSETS. Cadence, on behalf of
Holdings, and Holdings hereby assign, transfer, convey and deliver (or shall
cause each and every of their applicable Subsidiaries to assign, transfer,
convey and deliver) to the Partnership, or, pursuant to Section 2.4, to any
applicable Subsidiary of the Partnership, and the Partnership hereby accepts
from Cadence, Holdings or their applicable Subsidiary, and agrees to cause its
applicable Subsidiary to accept, all of Cadence's, Holdings' and their
applicable Subsidiaries' respective right, title and interest in and to the
Tality Assets, other than the Delayed Transfer Assets; PROVIDED, HOWEVER, that
any Tality Assets that are specifically assigned or transferred pursuant to
another Ancillary Agreement or a Foreign Transfer Agreement shall not be
assigned or transferred pursuant to this Section 2.1(a).
(b) ASSUMPTION OF LIABILITIES. The Partnership hereby
assumes and agrees faithfully to perform and fulfill (or shall cause any
applicable Subsidiary of the Partnership to assume, perform and fulfill), all
the Tality Liabilities owed by Cadence, Holdings or their Subsidiaries, other
than the Delayed Transfer Liabilities, in accordance with their respective
terms; PROVIDED, HOWEVER, that any Tality Liabilities that are specifically
assumed pursuant to another Ancillary Agreement or a Foreign Transfer Agreement
shall not be assumed pursuant to this Section 2.1(b). Thereafter, the
Partnership shall be responsible (or shall cause any applicable Subsidiary of
the Partnership to be responsible) for all Tality Liabilities held by Cadence,
Holdings or their Subsidiaries, regardless of when or where such Liabilities
arose or arise, or whether the facts on which they are based occurred prior to,
on or after the date hereof, regardless of where or against whom such
Liabilities are asserted or determined (including any Tality Liabilities arising
out of claims made by Cadence's, Holdings', Tality's or the Partnership's
respective directors, officers, consultants, independent contractors, employees
or agents against any member of the Cadence Group or the Tality Group) or
whether asserted or determined prior to the date hereof, and regardless of
whether arising from or alleged to arise from negligence, recklessness,
violation of law, fraud or misrepresentation by any member of the Cadence Group
or the Tality Group or any of their respective directors, officers, employees or
agents.
(c) DELAYED TRANSFER ASSETS AND LIABILITIES. Each of
the parties hereto agrees that the Delayed Transfer Assets shall be assigned,
transferred, conveyed and delivered, and the Delayed Transfer Liabilities shall
be assumed as set forth on SCHEDULE 2.1(c). Following such assignment, transfer,
conveyance and delivery of any Delayed Transfer Asset, or the assumption of any
Delayed Transfer Liability, the applicable Delayed Transfer Asset or Delayed
Transfer Liability shall be treated for all purposes of this Assignment and the
other Ancillary Agreements as a Tality Asset or as a Tality Liability, as the
case may be.
Section 2.2 METHODS OF TRANSFER AND ASSUMPTION.
(a) TERMS OF CERTAIN OTHER AGREEMENTS GOVERN.
Substantially concurrently with this Assignment, the parties shall enter into
the other Ancillary Agreements that have not
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been entered into as of the date hereof. To the extent that the transfer of any
Tality Asset or the assumption of any Tality Liability is expressly provided for
by the terms of any other Ancillary Agreement or a Foreign Transfer Agreement,
the terms of such other Ancillary Agreement or Foreign Transfer Agreement shall
effect, and determine the manner of, the transfer or assumption. It is the
intent of the parties hereto that pursuant to Section 2.1 the transfer and
assumption of all other Tality Assets and Tality Liabilities, other than Delayed
Transfer Assets, Delayed Transfer Liabilities and any other Tality Assets and
Tality Liabilities heretofore transferred to the Partnership, shall be made
effective as of the Separation Date; PROVIDED, HOWEVER, that circumstances in
various jurisdictions outside the United States may require the transfer of
certain Assets and the assumption of certain Liabilities to occur in such other
manner and at such other time as the parties shall agree.
(b) MISTAKEN ALLOCATIONS. In addition to those
transfers and assumptions accurately identified and designated by the parties to
take place but which the parties are not able to effect prior to the Separation
Date, there may exist (i) Assets that the parties discover were, contrary to the
agreements between the parties, by mistake or omission, transferred or not
transferred, as the case may be, to the Partnership (or its applicable
Subsidiaries) or (ii) Liabilities that the parties discover were, contrary to
the agreements between the parties, by mistake or omission, assumed or not
assumed, as the case may be, by the Partnership (or its applicable
Subsidiaries). The parties hereto shall cooperate in good faith to effect the
transfer or re-transfer of such Assets, and/or the assumption or re-assumption
of such Liabilities, to or by the appropriate party with respect to the Assets
to be transferred to or Liabilities to be assumed by the Partnership (or its
applicable Subsidiaries). Prior to any such transfer, the Person receiving or
possessing such Asset shall hold such Asset in trust for the other Person. Each
party shall reimburse the other or make other financial adjustments (including
cash reserves) or other adjustments to remedy any mistakes or omissions relating
to any of the Assets transferred hereby or any of the Liabilities assumed
hereby.
(c) DOCUMENTS RELATING TO OTHER TRANSFERS OF ASSETS
AND ASSUMPTION OF LIABILITIES. In furtherance of the assignment, transfer and
conveyance of Tality Assets and the assumption of Tality Liabilities set forth
in Sections 2.2(a) and (b) and certain other Ancillary Agreements,
simultaneously with the execution and delivery hereof or as promptly as
practicable thereafter, (i) Cadence, on behalf of Holdings, and Holdings shall
execute and deliver, and shall cause their respective Subsidiaries to execute
and deliver, such bills of sale, stock powers, certificates of title,
assignments of contracts and other instruments of transfer, conveyance and
assignment as and to the extent necessary to evidence the transfer, conveyance
and assignment of all of Cadence's, Holdings' and their respective Subsidiaries'
right, title and interest in and to the Tality Assets to the Partnership (or its
applicable Subsidiaries) effected by this Assignment; and (ii) the Partnership
shall, or shall cause its Subsidiaries to, execute and deliver such assumptions
of contracts and other instruments of assumption as and to the extent necessary
to evidence the valid and effective assumption of the Tality Liabilities by the
Partnership (or its applicable Subsidiaries) effected by this Assignment.
(d) RECONCILIATION OF ACCOUNTS RECEIVABLE. Within
thirty (30) days after the end of Cadence's first full fiscal year to be
completed subsequent to the Separation Date (the "RECONCILIATION DATE"),
Cadence, on behalf of Holdings, shall deliver to the Partnership a written
reconciliation of the actual amounts collected prior to such date in respect of
the accounts
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receivable included on the Tality Balance Sheet ("COLLECTED AMOUNTS"). If the
Collected Amounts exceed the accounts receivable net of any reserves for
doubtful accounts included on the Tality Balance Sheet, Holdings or Cadence, on
behalf of Holdings, shall transfer the difference in immediately available funds
to the Partnership no later than thirty (30) days after the Reconciliation Date.
If the Collected Amounts are less than the accounts receivable net of any
reserves for doubtful accounts included on the Tality Balance Sheet, the
Partnership shall transfer the difference in immediately available funds to
Holdings no later than thirty (30) days after the Reconciliation Date.
Section 2.3 DELAYED TRANSFERS.
(a) TRANSFERS NOT CONSUMMATED PRIOR TO SEPARATION
DATE. If the transfer, assignment or novation of any Assets (other than Delayed
Transfer Assets) intended to be transferred or assigned hereunder is not
consummated prior to or on the Separation Date, whether pursuant to Section 4.7
of the Separation Agreement or for any other reason, then the Person retaining
such Asset shall thereafter hold such Asset for the use and benefit, insofar as
reasonably possible, of the Person entitled thereto (at the expense of the
Person entitled thereto). In addition, the Person retaining such Asset shall
take such other actions as may be reasonably requested by the Person to whom
such Asset is to be transferred in order to place such Person, insofar as
reasonably possible, in the same position as if such Asset had been transferred
as contemplated hereby and so that all the benefits and burdens relating to such
Tality Assets (or such Excluded Assets, as the case may be), including
possession, use, risk of loss, potential for gain and dominion, control and
command over such Assets, are to inure from and after the Separation Date to the
Tality Group (or the Cadence Group, as the case may be). If and when the
Third-Party Approvals and/or Governmental Approvals, the absence of which caused
the deferral of transfer of such Asset pursuant to Section 4.7 of the Separation
Agreement, are obtained or such other reason for the delay no longer exists, the
transfer of the Asset shall be effected in accordance with the terms of this
Assignment and/or such other applicable Ancillary Agreement.
(b) EXPENSES. The Person retaining an Asset (other
than Delayed Transfer Assets) due to the deferral of the transfer of such Asset
shall not be obligated, in connection with the foregoing, to expend any money
unless the necessary funds are advanced by the Person entitled to the Asset,
other than reasonable out-of-pocket expenses, attorneys' fees and recording or
similar fees, all of which shall be promptly reimbursed by the Person entitled
to such Asset.
Section 2.4 NOVATION OF ASSUMED TALITY LIABILITIES.
(a) REASONABLE COMMERCIAL EFFORTS. Each of the
parties, at the request of either Cadence or Holdings, on the one hand, or the
Partnership or Tality, on the other, shall use all commercially reasonable
efforts to obtain, or to cause to be obtained, any consent, substitution,
approval or amendment required to novate (including with respect to any federal
government contract) or assign all rights and obligations under agreements,
leases, licenses and other obligations or Liabilities of any nature whatsoever
that constitute Tality Liabilities or to obtain in writing the unconditional
release of all parties to such arrangements other than any member of the Tality
Group, so that, in any such case, Tality and its Subsidiaries shall be solely
responsible for such Liabilities; PROVIDED, HOWEVER, that none of the parties or
their respective
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Subsidiaries shall be obligated to pay any consideration therefor to any third
party from whom such consents, approvals, substitutions and amendments are
requested.
(b) INABILITY TO OBTAIN NOVATION. If the parties are
unable to obtain, or to cause to be obtained, any such required consent,
approval, release, substitution or amendment, the applicable member of the
Cadence Group shall continue to be bound by such agreements, leases, licenses
and other obligations and, unless prohibited by law or the terms thereof (except
to the extent expressly set forth in this Assignment, the Separation Agreement
or any other Ancillary Agreement), the Partnership shall, as agent or
subcontractor for Cadence, Holdings or such other Person, as the case may be,
pay, perform and discharge fully, or cause to be paid, transferred or discharged
all the obligations or other Liabilities of Cadence, Holdings or such other
Person, as the case may be, thereunder from and after the date hereof. Cadence
shall, on behalf of Holdings, or Holdings shall, without further consideration,
pay and remit, or cause to be paid or remitted, to the Partnership or its
appropriate Subsidiary promptly all money, rights and other consideration
received by it or any member of the Cadence Group in respect of such performance
(unless any such consideration is an Excluded Asset). If and when any such
consent, approval, release, substitution or amendment shall be obtained or such
agreement, lease, license or other rights or obligations shall otherwise become
assignable or able to be novated, Cadence, on behalf of Holdings, or Holdings
shall thereafter assign, or cause to be assigned, all its rights, obligations
and other Liabilities thereunder or any rights or obligations of any member of
the Cadence Group to the Partnership (or its appropriate Subsidiary) without
payment of further consideration and the Partnership (or its appropriate
Subsidiary) shall, without the payment of any further consideration, assume such
rights and obligations.
ARTICLE III
LITIGATION
Section 3.1 ALLOCATION.
(a) LITIGATION TO BE TRANSFERRED TO THE PARTNERSHIP.
Notwithstanding any contrary provisions in the Indemnification and Insurance
Matters Agreement, on the Separation Date, the responsibilities for management
of the litigation identified on SCHEDULE 3.1(a), as such Schedule is updated by
Cadence and delivered to the Partnership immediately prior to the Separation
(the "LITIGATION SCHEDULE"), shall be transferred in their entirety from
Cadence, on behalf of Holdings, Holdings or their respective Subsidiaries to the
Partnership or its applicable Subsidiaries. From and after the Separation Date,
the Partnership shall manage the defense of such litigation and shall cause its
applicable Subsidiaries to do the same. Cadence and its Subsidiaries must first
obtain the prior consent of the Partnership or its applicable Subsidiary for any
action taken subsequent to the Separation Date in connection with the litigation
identified in the Litigation Schedule, which consent cannot be unreasonably
withheld or delayed. All other matters relating to such litigation, including
any indemnification for such claims, shall be governed by the provisions of the
Indemnification and Insurance Matters Agreement.
(b) LITIGATION TO BE DEFENDED BY CADENCE AT THE
PARTNERSHIP'S EXPENSE. Notwithstanding any contrary provisions in the
Indemnification and Insurance Matters Agreement, Cadence, on behalf of Holdings,
and Holdings shall defend, and shall cause their
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applicable Subsidiaries to defend, the litigation identified in the Litigation
Schedule that is not delivered by Cadence, on behalf of Holdings, Holdings or
their applicable Subsidiaries, to the Partnership on the Separation Date. All
other matters relating to such litigation, including indemnification for such
claims, shall be governed by the provisions of the Indemnification and Insurance
Matters Agreement.
Section 3.2 COOPERATION. The parties and their respective Subsidiaries
shall cooperate with each other in the defense of any litigation covered under
this Article III and afford to each other reasonable access upon reasonable
advance notice to witnesses and Information (other than Information protected
from disclosure by applicable privileges) that is reasonably required to defend
this litigation. The foregoing agreement to cooperate includes an obligation to
provide access to qualified assistance to provide information, witnesses and
documents to respond to discovery requests in specific lawsuits. In such cases,
cooperation shall be timely so that the party responding to discovery may meet
all court-imposed deadlines. The party requesting information shall reimburse
the party providing information consistent with the terms of Section 4.2 of the
Separation Agreement. The obligations set forth in this paragraph are more
clearly defined in Section 4.2 of the Separation Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.1 INCORPORATION BY REFERENCE. Sections 4.4 and 4.7 and all
of the provisions of Article V of the Separation Agreement (except for Sections
5.13 and 5.15 thereof) are incorporated into and made a part of this Agreement,
as if fully set forth herein.
Section 4.2 CONFLICTING AGREEMENTS. In the event of any irreconcilable
conflict between this Agreement and the Separation Agreement, any Foreign
Transfer Agreement, any other Ancillary 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 Assignment
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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