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Exhibit 2.02
AMENDED AND RESTATED MASTER SEPARATION AGREEMENT
BY AND AMONG
CADENCE DESIGN SYSTEMS, INC.,
CADENCE HOLDINGS, INC.,
TALITY, LP
AND
TALITY CORPORATION
DATED AS OF
OCTOBER 4, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS..........................................................................................2
Section 1.1 Affiliate............................................................................2
Section 1.2 Applicable Law.......................................................................2
Section 1.3 Business Day.........................................................................2
Section 1.4 Cadence's Auditors...................................................................2
Section 1.5 Cadence Group........................................................................2
Section 1.6 Canadian APA.........................................................................2
Section 1.7 Class A Common Stock.................................................................2
Section 1.8 Class B Common Stock.................................................................2
Section 1.9 Class C Common Stock.................................................................2
Section 1.10 Contracts............................................................................2
Section 1.11 Foreign Transfer Agreement...........................................................2
Section 1.12 General Partner......................................................................2
Section 1.13 Governmental Approvals...............................................................3
Section 1.14 Governmental Authority...............................................................3
Section 1.15 Information..........................................................................3
Section 1.16 IPO Closing Date.....................................................................3
Section 1.17 Person...............................................................................3
Section 1.18 Subsidiary...........................................................................3
Section 1.19 Tality's Auditors....................................................................3
Section 1.20 Tality Group.........................................................................3
Section 1.21 Third-Party Approvals................................................................3
ARTICLE II SEPARATION..........................................................................................4
Section 2.1 Separation Date......................................................................4
Section 2.2 Documents to be Delivered by Cadence and Tality......................................4
Section 2.3 Governmental Approvals...............................................................5
Section 2.4 Third-Party Approvals................................................................5
Section 2.5 No Representations or Warranties.....................................................5
ARTICLE III THE IPO AND REGISTRATION RIGHTS....................................................................6
Section 3.1 Transactions Prior to the IPO........................................................6
Section 3.2 Cooperation..........................................................................6
Section 3.3 Conditions Precedent to Consummation of the IPO......................................6
Section 3.4 Registration Rights..................................................................7
ARTICLE IV COVENANTS AND OTHER MATTERS........................................................................16
Section 4.1 Further Instruments.................................................................16
Section 4.2 Agreement for Exchange of Information...............................................17
Section 4.3 Auditors and Audits; Annual and Quarterly Statements and Accounting.................18
Section 4.4 Dispute Resolution..................................................................20
Section 4.5 Non-Solicitation of Employees.......................................................21
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Section 4.6 Employee Agreements.................................................................21
Section 4.7 Government and Third Party Approvals................................................23
Section 4.8 Relationship with Scottish Enterprise and Scottish Executive........................24
ARTICLE V MISCELLANEOUS.......................................................................................26
Section 5.1 Limitation of Liability.............................................................26
Section 5.2 Entire Agreement....................................................................26
Section 5.3 Governing Law.......................................................................26
Section 5.4 Termination.........................................................................26
Section 5.5 Notices.............................................................................26
Section 5.6 Counterparts........................................................................27
Section 5.7 Binding Effect; Assignment..........................................................27
Section 5.8 Severability........................................................................27
Section 5.9 Failure or Delay not Waiver; Remedies Cumulative....................................27
Section 5.10 Amendment...........................................................................28
Section 5.11 Authority...........................................................................28
Section 5.12 Interpretation......................................................................28
Section 5.13 Conflicting Agreements..............................................................28
Section 5.14 Payment of Expenses.................................................................28
Section 5.15 Prior Agreement Superseded..........................................................29
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AMENDED AND RESTATED MASTER SEPARATION AGREEMENT
THIS AMENDED AND RESTATED MASTER SEPARATION AGREEMENT (this
"AGREEMENT") is entered into 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 and wholly owned subsidiary of Cadence
("HOLDINGS" and, together with Cadence, the "CADENCE PARTIES"), on the one hand,
and Tality Corporation, a Delaware corporation ("TALITY"), and Tality, LP, a
Delaware limited partnership (the "PARTNERSHIP", and, together with Tality, the
"TALITY PARTIES"), on the other hand. Capitalized terms used herein and not
defined elsewhere herein shall have the meanings ascribed to them in Article I.
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 and its
Subsidiaries (the "SEPARATION") associated with the operation of the business of
providing design engineering services, and intellectual property in connection
therewith, to electronic equipment manufacturers and other customers, all as
described in the Registration Statement (the "TALITY BUSINESS");
WHEREAS, Cadence, Holdings, the Partnership and Tality currently
contemplate that, immediately following the contribution of such assets to and
assumption of such liabilities by the Partnership, Tality shall commence an
initial public offering ("IPO") of its Class A Common Stock, par value $0.001
per share (the "CLASS A COMMON STOCK"), pursuant to a registration statement on
Form S-1 promulgated by the Securities and Exchange Commission (the
"REGISTRATION STATEMENT");
WHEREAS, Cadence, Holdings and Tality entered into that certain Master
Separation Agreement, dated as of July 14, 2000, which prior to the date hereof
has governed the matters described above (the "PRIOR AGREEMENT");
WHEREAS, each of the parties now desires to amend and restate the
Prior Agreement in its entirety pursuant to Section 5.10 thereof; and
WHEREAS, the parties intend for this Agreement to set forth the
principal arrangements between them regarding the Separation.
AGREEMENT
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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 "AFFILIATE" of any Person means any other Person that
controls, is controlled by, or is under common control with, such first 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 a
Person, whether through ownership of voting securities or other interests, by
contract or otherwise.
Section 1.2 "APPLICABLE LAW" means all laws and regulations of
Governmental Authorities applicable to the transaction, property or Persons at
issue.
Section 1.3 "BUSINESS DAY" means any day that is not a Saturday, a
Sunday or a day on which banks are required or permitted to be closed in the
State of California.
Section 1.4 "CADENCE'S AUDITORS" means Cadence's independent certified
public accountants from time to time.
Section 1.5 "CADENCE GROUP" means Cadence and each of its Subsidiaries
(other than any member of the Tality Group) on and after the Separation Date.
Section 1.6. "CANADIAN APA" means the Asset Purchase Agreement by and
among Cadence, Cadence Design Systems (Canada) Limited and Tality Canada
Corporation dated as of October 3, 2000.
Section 1.7 "CLASS A COMMON STOCK" has the meaning set forth in the
recitals.
Section 1.8 "CLASS B COMMON STOCK" means the Class B Common Stock,
par value $0.001 per share, of Tality.
Section 1.9 "CLASS C COMMON STOCK" means the Class C Common Stock, par
value $0.001 per share, of Tality.
Section 1.10 "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 1.11 "FOREIGN TRANSFER AGREEMENT" means the Canadian APA and
any of the other agreements identified on SCHEDULE 1.11 relating to the
Separation outside of the United States.
Section 1.12 "GENERAL PARTNER" shall have the meaning specified in the
Partnership Agreement.
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Section 1.13 "GOVERNMENTAL APPROVALS" means any notices, reports or
other filings to be made with, or any consents, registrations, approvals,
permits or authorizations to be obtained from, any Governmental Authority.
Section 1.14 "GOVERNMENTAL AUTHORITY" means any federal, state, local,
foreign or international court or government of competent jurisdiction, or any
political subdivision thereof, or any department, commission, board, bureau,
agency, official or other regulatory, administrative body of any such government
of competent jurisdiction or political subdivision thereof.
Section 1.15 "INFORMATION" means information, whether or not
patentable or copyrightable, in written, oral, electronic or other tangible or
intangible form, 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.
Section 1.16 "IPO CLOSING DATE" means the date on which the first
closing of the IPO occurs.
Section 1.17 "PERSON" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization or a Governmental
Authority.
Section 1.18 "SUBSIDIARY" of any Person means any other Person of
which at least a majority of the securities or other interests having by their
terms ordinary voting power to elect at least a majority of the board of
directors or other body performing similar functions with respect to such other
Person is directly or indirectly owned or controlled (including by contract) by
such first Person. By way of example and not limitation, the Partnership shall
be deemed to be a Subsidiary of Tality.
Section 1.19 "TALITY'S AUDITORS" means the Tality Parties' independent
certified public accountants from time to time.
Section 1.20 "TALITY GROUP" means Tality and each of its Subsidiaries
on and after the Separation Date.
Section 1.21 "THIRD-PARTY APPROVALS" means any notices, consents or
authorizations of third parties (other than Governmental Approvals) required to
consummate the Separation.
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ARTICLE II
SEPARATION
Section 2.1 SEPARATION DATE. Unless otherwise expressly provided in
this Agreement, any Ancillary Agreement (as defined in Section 2.2), the
Agreement of Limited Partnership of the Partnership, any Foreign Transfer
Agreement or any other agreement among the parties, the effective time and date
of each transfer of assets and property, assumption of liability, license,
undertaking or other agreement in connection with the Separation shall be 12:00
a.m., Pacific Time, October 1, 2000, or such other date as may be fixed by the
Board of Directors of Cadence or a duly authorized officer of Cadence (the
"SEPARATION DATE").
Section 2.2 DOCUMENTS TO BE DELIVERED BY THE CADENCE PARTIES AND THE
TALITY PARTIES. On the Separation Date, each of the parties shall duly execute
and deliver, or shall cause its appropriate Subsidiaries to duly execute and
deliver, to the other parties all of the following agreements, documents and
other instruments (collectively, together with all agreements and documents
contemplated by such agreements, the "ANCILLARY AGREEMENTS"):
(a) The General Assignment and Assumption Agreement in
substantially the form attached hereto as EXHIBIT A (the "ASSIGNMENT
AGREEMENT");
(b) The Master Intellectual Property Ownership and
License Agreement in substantially the form attached hereto as EXHIBIT
B (the "MASTER INTELLECTUAL PROPERTY AGREEMENT");
(c) The Employee Matters Agreement in substantially
the form attached hereto as EXHIBIT C (the "EMPLOYEE MATTERS
AGREEMENT");
(d) The Master Corporate Services Agreement in
substantially the form attached hereto as EXHIBIT D (the "MASTER
CORPORATE SERVICES AGREEMENT");
(e) The Real Estate Matters Agreement in substantially
the form attached hereto as EXHIBIT E (the "REAL ESTATE MATTERS
AGREEMENT");
(f) The Master Confidentiality Agreement in
substantially the form attached hereto as EXHIBIT F (the "MASTER
CONFIDENTIALITY AGREEMENT");
(g) The Indemnification and Insurance Matters
Agreement in substantially the form attached hereto as EXHIBIT G (the
"INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT");
(h) The EDA Tools Agreement in substantially the form
attached hereto as EXHIBIT H (the "EDA TOOLS AGREEMENT");
(i) The Joint Technology Development and Support
Agreement in substantially the form attached hereto as EXHIBIT I (the
"JOINT TECHNOLOGY SUPPORT AGREEMENT");
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(j) The Joint Sales Agreement in substantially the
form attached hereto as EXHIBIT J (the "JOINT SALES AGREEMENT");
(k) The resignation of each individual who is an
officer or director of Cadence or any member of the Cadence Group,
immediately prior to the Separation Date, and who shall be an employee
of any of the Tality Parties from and after the Separation Date; and
(l) Such other agreements, documents or instruments as
the parties may agree are necessary or desirable in order to achieve
the purposes hereof.
Section 2.3 GOVERNMENTAL APPROVALS. To the extent that the Separation
requires any Governmental Approvals, the parties shall use all commercially
reasonable efforts to obtain such Governmental Approvals on or prior to the
Separation Date.
Section 2.4 THIRD-PARTY APPROVALS. The parties shall use all
commercially reasonable efforts to obtain all Third-Party Approvals on or prior
to the Separation Date.
Section 2.5 NO REPRESENTATIONS OR WARRANTIES. Neither of the Cadence
Parties nor any other member of the Cadence Group makes, either in this
Agreement or any Ancillary Agreement, any representation as to, warranty of or
covenant with respect to:
(a) the value of any asset, property or other thing of
value to be transferred to the Partnership or any of its Subsidiaries;
(b) the kind, character, nature or extent of any
liabilities to be assumed by the Partnership or any of its
Subsidiaries;
(c) the freedom from encumbrance of any asset,
property or other thing of value to be transferred to the Partnership
or any of its Subsidiaries;
(d) the absence of defenses or freedom from set-offs
or counterclaims with respect to any claim to be transferred to the
Partnership or any of its Subsidiaries; or
(e) the legal sufficiency of any assignment, document
or instrument delivered hereunder to convey title to any asset,
property or other thing of value upon its execution and delivery or
filing.
Except as may be expressly set forth herein or in any Ancillary
Agreement, all assets, properties and other things of value to be transferred
to, and all liabilities to be assumed by, the Partnership or any of its
Subsidiaries shall be transferred or assumed, as applicable, "AS IS, WHERE IS,"
and the Partnership and its Subsidiaries shall bear the economic and legal risk
that any conveyance shall prove to be insufficient to vest in the Partnership
and its Subsidiaries good and marketable title, free and clear of any lien,
claim, equity or other encumbrance.
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ARTICLE III
THE IPO AND REGISTRATION RIGHTS
Section 3.1 TRANSACTIONS PRIOR TO THE IPO. Subject to the conditions
set forth in Section 3.3, each of the parties shall use all commercially
reasonable efforts to consummate the IPO. Such efforts shall include the
following:
(a) REGISTRATION STATEMENT. Tality shall file the
Registration Statement, and such amendments or supplements thereto as
may be necessary in order to cause the same to become and remain
effective as required by Applicable Law or by the managing
underwriters for the IPO (the "UNDERWRITERS"), including filing such
amendments to the Registration Statement as may be required by the
underwriting agreement to be entered into between Tality and the
Underwriters (the "UNDERWRITING AGREEMENT"), the Securities and
Exchange Commission (the "COMMISSION") or federal, state or foreign
securities laws. The parties shall also cooperate in preparing, filing
with the Commission and causing to become effective a registration
statement registering the Class A Common Stock under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and any
registration statements or amendments thereof which are required to
reflect the establishment of, or amendments to, any employee benefit
and other plans necessary or appropriate in connection with the IPO,
the Separation or any of the other transactions contemplated by this
Agreement.
(b) UNDERWRITING AGREEMENT. Tality shall enter into
the Underwriting Agreement, in form and substance reasonably
satisfactory to Cadence and Tality, and shall comply with its
obligations thereunder.
(c) NASDAQ LISTING. Tality shall prepare, file and use
all commercially reasonable efforts to seek to make effective an
application for quotation of the Class A Common Stock issued in the
IPO on the Nasdaq National Market (the "NASDAQ"), subject to official
notice of issuance.
Section 3.2 COOPERATION. Tality shall consult with, and cooperate in
all respects with, Cadence in connection with the pricing of the Class A Common
Stock to be offered in the IPO and shall, at Cadence's direction, promptly take
any and all actions necessary or desirable to consummate the IPO as contemplated
by the Registration Statement and the Underwriting Agreement.
Section 3.3 CONDITIONS PRECEDENT TO CONSUMMATION OF THE IPO. The
obligations of the parties to use all commercially reasonable efforts to
consummate the IPO shall be conditioned on the satisfaction of all of the
following conditions:
(a) REGISTRATION STATEMENT. The Registration Statement
shall have been declared effective by the Commission, and there shall
not have been issued or threatened any stop order with respect thereto
which remains in effect.
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(b) BLUE SKY. The actions and filings with regard to
state securities and blue sky laws of the United States (and any
comparable laws under any foreign jurisdictions) shall have been taken
and, where applicable, have become effective or been accepted.
(c) NASDAQ LISTING. The Class A Common Stock to be
issued in the IPO shall have been accepted for quotation on the
Nasdaq, upon official notice of issuance.
(d) UNDERWRITING AGREEMENT. Tality shall have entered
into the Underwriting Agreement and all conditions to the obligations
of Tality and the Underwriters thereunder shall have been satisfied or
waived.
(e) COMMON STOCK OWNERSHIP. Cadence shall be satisfied
in its sole discretion that the Cadence Group shall own voting
securities of Tality having at least 80% of the voting rights of all
Tality securities outstanding immediately following the IPO Closing
Date.
(f) NO LEGAL RESTRAINTS. No order, injunction or
decree issued by any Governmental Authority of competent jurisdiction
or other legal restraint or prohibition preventing the consummation of
the Separation or the IPO or any of the other transactions
contemplated by this Agreement shall be in effect or been threatened.
(g) SEPARATION. The Separation Date shall have
occurred.
(h) NO TERMINATION. This Agreement shall not have been
terminated.
Section 3.4 REGISTRATION RIGHTS
(a) DEFINITIONS. For purposes of this Section 3.4
only:
(i) "REGISTER", "REGISTERED" and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933, as
amended, (the "SECURITIES ACT"), and the declaration or ordering of
effectiveness of such registration statement.
(ii) "REGISTRABLE SECURITIES" means (A) any
Class A Common Stock or Class C Common Stock issued or issuable upon conversion
of Class B Common Stock, or in exchange for Limited Partnership Units in the
Partnership originally issued to Cadence, Holdings or any other member of the
Cadence Group (the "LP UNITS"); (B) all shares of Class A Common Stock held by
Cadence Group members' officers or employees as of the date on which the
Registration Statement was first filed with the Commission; (C) any Class A
Common Stock or Class C Common Stock issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of the securities described in (A) or (B) above; and (D) all other
shares of Class A Common Stock or Class C Common Stock hereafter acquired by
members of the Cadence Group. Notwithstanding the foregoing, "Registrable
Securities" shall exclude any Registrable Securities sold by a Person in a
transaction in which rights under this Section 4.4 are not assigned in
accordance with this Agreement or any Registrable Securities sold in a public
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offering, whether sold pursuant to Rule 144 promulgated under the Securities
Act, or in a registered offering, or otherwise.
(iii) "HOLDER" means any Person owning of
record Registrable Securities (or any security convertible into or exchangeable
for Registrable Securities), that have not been sold in a public offering and
any permitted assignee of such Registrable Securities (or securities convertible
into or exchangeable into Registrable Securities) to whom rights under this
Section 3.4 have been duly assigned in accordance with this Agreement.
(iv) "FORM S-3" means such form under the
Securities Act as is in effect on the date hereof, or any successor registration
form under the Securities Act subsequently adopted by the Commission, which
permits inclusion or incorporation of substantial information by reference to
other documents filed by Tality with the Commission.
(b) DEMAND REGISTRATION.
(i) REQUEST BY HOLDERS. If Tality shall, at
any time after the expiration of the 180-day "lock-up" period pursuant to the
Underwriting Agreement (the "LOCK-UP EXPIRATION DATE"), receive a written
request from Cadence, Holdings or any subsequent Holder of LP Units originally
issued to Cadence, Holdings or any other member of the Cadence Group (or any
Registrable Securities issued in exchange therefor) holding at least ten percent
(10%) of the aggregate outstanding number of such LP Units that Tality file a
registration statement on form S-1 (or any successor form thereto) under the
Securities Act covering the registration of Registrable Securities pursuant to
this Section 3.4(b), then Tality shall, within ten (10) Business Days after the
receipt of such written request, give written notice of such request ("REQUEST
NOTICE") to all Holders, and use its best efforts to effect, as soon as
practicable, the registration under the Securities Act of all Registrable
Securities that Holders request to be registered and included in such
registration by written notice given by such Holders to Tality within twenty
(20) days after receipt of the Request Notice, subject only to the limitations
of this Section 3.4(b); PROVIDED, HOWEVER, that the Registrable Securities
requested by all Holders to be registered pursuant to such request must be at
least ten percent (10%) of all Registrable Securities then held by or issuable
to them; PROVIDED FURTHER, that Tality shall not be obligated to effect any such
registration if Tality has, within the six (6) month period preceding the date
of such request, already effected a registration under the Securities Act
pursuant to this Section 3.4(b) or Section 3.4(d), or in which the Holders had
an opportunity to participate pursuant to Section 3.4(c), other than a
registration from which the Registrable Securities of Holders have been excluded
(with respect to all or any portion of the Registrable Securities the Holders
requested be included in such registration) pursuant to Section 3.4(c)(i).
(ii) UNDERWRITING. If the Holders initiating
the registration request under this Section 3.4(b) (the "INITIATING HOLDERS")
intend to distribute the Registrable Securities covered by their request by
means of an underwriting, then they shall so advise Tality as a part of their
request made pursuant to this Section 3.4(b)(i) and Tality shall include such
information in the Request Notice. In such event, the right of any Holder to
include such Holder's Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the initiating Holders
and such
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Holder) to the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriters selected for
such underwriting by the Holders of a majority of the Registrable Securities
being registered and reasonably acceptable to Tality (including a market
stand-off agreement of up to 180 days if required by such underwriters).
Notwithstanding any other provision of this Section 3.4(b), if the
underwriter(s) advise(s) Tality in writing that marketing factors require a
limitation of the number of securities to be underwritten, then Tality shall so
advise all Holders of Registrable Securities which would otherwise be registered
and underwritten pursuant hereto, and the number of Registrable Securities that
may be included in the underwriting shall be reduced as required by the
underwriter(s) and allocated among the Holders of Registrable Securities on a
pro rata basis according to the number of Registrable Securities of each Holder
requesting registration (including the initiating Holders); PROVIDED, HOWEVER,
that the number of Registrable Securities to be included in such underwriting
and registration shall not be reduced unless all other securities of Tality and
the employees, officers and directors (who are not also officers or directors of
Cadence) of Tality (or any Subsidiary of Tality) are first entirely excluded
from the underwriting and registration. Any Registrable Securities excluded and
withdrawn from such underwriting shall be withdrawn from the registration.
(iii) MAXIMUM NUMBER OF DEMAND REGISTRATIONS.
Tality shall be obligated to effect only three (3) such registrations pursuant
to this Section 3.4(b).
(iv) DEFERRAL. Notwithstanding the foregoing,
if Tality shall furnish to Holders requesting the filing of a registration
statement pursuant to this Section 3.4(b), a certificate signed by the President
or Chief Executive Officer of Tality stating that in the good faith judgment of
the Board of Directors of Tality, it would be materially detrimental to Tality
and its stockholders for such registration statement to be filed, then Tality
shall have the right to defer such filing for a period of not more than ninety
(90) days after receipt of the request of the initiating Holders; PROVIDED,
HOWEVER, that Tality may not utilize this right more than once in any twelve
(12) month period.
(v) EXPENSES. All expenses incurred in
connection with any registration pursuant to this Section 3.4(b), including all
federal and "blue sky" registration, filing and qualification fees, printer's
and accounting fees, and fees and disbursements of counsel for Tality and one
counsel for the Holders, reasonably acceptable to Tality (but excluding
underwriters' discounts and commissions relating to shares sold by the Holders),
shall be borne by Tality. Each Holder participating in a registration pursuant
to this Section 3.4(b) shall bear such Holder's proportionate share (based on
the total number of shares sold in such registration other than for the account
of Tality) of all discounts, commissions or other amounts payable to
underwriters or brokers in connection with such offering by the Holders.
Notwithstanding the foregoing, Tality shall not be required to bear any expenses
of any registration proceeding begun pursuant to this Section 3.4(b) if the
registration request is subsequently withdrawn at the request of the Holders of
a majority of the Registrable Securities to be registered, unless the Holders of
a majority of the Registrable Securities agree that such registration
constitutes the use by the Holders of one (1) demand registration pursuant to
this Section 3.4(b) (in which case such registration shall also constitute the
use by all Holders of Registrable Securities of one (l) such demand
registration); PROVIDED FURTHER, that if at the time of such withdrawal, the
Holders have
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learned of a material adverse change in the condition (financial or otherwise),
business or prospects of Tality not known to the Holders at the time of their
request for such registration and have withdrawn their request for registration
with reasonable promptness after learning of such material adverse change, then
the Holders shall not be required to pay any of such expenses and such
registration shall not constitute the use of a demand registration pursuant to
this Section 3.4(b).
(c) PIGGYBACK REGISTRATIONS. Tality shall notify all
Holders of Registrable Securities in writing at least thirty (30) days prior to
filing any registration statement under the Securities Act for purposes of
effecting a public offering of securities of Tality (including registration
statements relating to secondary offerings of securities of Tality, but
excluding registration statements relating to any registration under Section
3.4(b) or Section 3.4(d) or to any employee benefit plan or a corporate
reorganization) and shall afford each such Holder an opportunity to include in
such registration statement all or any part of the Registrable Securities of
such Holder. Each Holder desiring to include in any such registration statement
all or any part of such Holder's Registrable Securities shall within twenty (20)
days after receipt of the above-described notice from Tality, so notify Tality
in writing, and in such notice shall inform Tality of the number of Registrable
Securities such Holder wishes to include in such registration statement. If a
Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by Tality, such Holder shall
nevertheless continue to have the right to include any of such Holder's
Registrable Securities in any subsequent registration statement or registration
statements as may be filed by Tality with respect to offerings of its
securities, all upon the terms and conditions set forth herein.
(i) UNDERWRITING. If a registration
statement as to which Tality gives notice under this Section 3.4(c) is for an
underwritten offering, then Tality shall so advise the Holders of Registrable
Securities. In such event, the right of any such Holder's Registrable Securities
to be included in a registration pursuant to this Section 3.4(c) shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriters selected for
such underwriting (including a market stand-off agreement of up to 180 days if
required by such underwriters). Notwithstanding any other provision of this
Agreement, if the managing underwriter(s) determine(s) in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude Registrable
Securities from the registration and the underwriting, and the number of shares
that may be included in the registration and the underwriting shall be
allocated, FIRST to Tality and, SECOND, to each of the Holders requesting
inclusion of their Registrable Securities in such registration statement on a
pro rata basis based on the total number of Registrable Securities of each such
Holder; PROVIDED, HOWEVER, that the right of the underwriters to exclude
Registrable Securities from the registration and underwriting as described above
shall be restricted so that (A) the number of Registrable Securities included in
any such registration is not reduced below twenty-five percent (25%) of the
aggregate number of Registrable Securities for which inclusion has been
requested; and (B) all shares that are not Registrable Securities and are held
by any other Person, including any employee, officer or director (other than a
director who is also an officer or director of Cadence) of Tality (or any
Subsidiary of Tality) shall first be excluded from
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such registration and underwriting before any Registrable Securities are so
excluded. If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to Tality and the
underwriter(s), delivered at least ten (10) Business Days prior to the effective
date of the registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. For any Holder that is a partnership, the Holder and the partners
and retired partners of such Holder, or the estates and family members of any
such partners and retired partners and any trusts for the benefit of any of the
foregoing Persons, and for any Holder that is a corporation, the Holder and all
corporations that are affiliates of such Holder, shall be deemed to be a single
"Holder," and any pro rata reduction with respect to such "Holder" shall be
based upon the aggregate amount of shares carrying registration rights owned by
all entities and individuals included in such "Holder," as defined in this
sentence.
(ii) EXPENSES. All expenses incurred in
connection with a registration pursuant to this Section 3.4(c), including fees
and disbursements of one counsel for the Holders, reasonably acceptable to
Tality (but excluding underwriters' and brokers' discounts and commissions
relating to shares sold by the Holders), including all federal and "blue sky"
registration, filing and qualification fees, printers' and accounting fees, and
fees and disbursements of counsel for Tality, shall be borne by Tality.
(iii) NOT DEMAND REGISTRATION. Registration
pursuant to this Section 3.4(c) shall not be deemed to be a demand registration
pursuant to Section 3.4(b) above. Except as otherwise provided herein, there
shall be no limit on the number of times the Holders may request registration of
Registrable Securities under this Section 3.4(c).
(d) FORM S-3 REGISTRATION. In case Tality shall, at
any time after the Lock-Up Expiration Date, receive a written request from
Cadence, Holdings or any subsequent Holder of LP Units originally issued to
Cadence, Holdings or any other member of the Cadence Group (or any Registrable
Securities issued in exchange therefor) holding at least ten percent (10%) of
the aggregate outstanding number of such LP Units that Tality effect a
registration on Form S-3, and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, then Tality shall:
(i) NOTICE. Promptly give written notice of
the proposed registration and the Holder's or Holders' request therefor, and any
related qualification or compliance, to all other Holders of Registrable
Securities; and
(ii) REGISTRATION. As soon as practicable,
effect such registration and all such qualifications and compliances as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Holder's or Holders' Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any other Holder or Holders joining in such request as are
specified in a written request given within twenty (20) days after Tality
provides the notice contemplated by Section 3.4(d)(i); PROVIDED, HOWEVER, that
Tality shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section 3.4(d):
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(A) if Form S-3 is not available
to Tality for such offering by the Holders;
(B) if the Holders, together with
the holders of any other securities of Tality entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public of less than $5,000,000;
(C) if Tality shall furnish to the
Holders a certificate signed by the President or Chief Executive Officer of
Tality stating that in the good faith judgment of the Board of Directors of
Tality, it would be materially detrimental to Tality and its stockholders for
such Form S-3 Registration to be effected at such time, in which event Tality
shall have the right to defer the filing of the Form S-3 registration statement
no more than once during any twelve month period for a period of not more than
ninety (90) days after receipt of the request of the Holder or Holders under
this Section 3.4(d);
(D) if Tality has, within the six
(6) month period preceding the date of such request, already effected a
registration under the Securities Act other than a registration from which the
Registrable Securities of Holders have been excluded (with respect to all or any
portion of the Registrable Securities the Holders requested be included in such
registration) pursuant to Section 3.4(c)(i); or
(E) in any particular jurisdiction
in which Tality would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
(iii) EXPENSES. Tality shall pay all expenses
incurred in connection with each registration requested pursuant to this Section
3.4(d), including federal and "blue sky" registration, filing and qualification
fees, printers' and accounting fees and fees and disbursements of counsel,
including one counsel for the Holders, reasonably acceptable to Tality, but
excluding underwriters' or brokers' discounts and commissions relating to shares
sold by the Holders.
(iv) NOT DEMAND REGISTRATION. Form S-3
registrations shall not be deemed to be demand registrations as described in
Section 3.4(b) above. Except as otherwise provided herein, there shall be no
limit on the number of times the Holders may request registration of Registrable
Securities under this Section 3.4(d).
(e) OBLIGATIONS OF TALITY. Whenever required to effect
the registration of any Registrable Securities under this Agreement Tality
shall, as expeditiously as reasonably possible:
(i) REGISTRATION STATEMENT. Prepare and file
with the Commission a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective; PROVIDED, HOWEVER, that Tality shall not be required to keep
any such registration statement effective for more than ninety (90) days.
(ii) AMENDMENTS AND SUPPLEMENTS. Prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection with such registration statement
as may be necessary to comply
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with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(iii) PROSPECTUSES. Furnish to the Holders
whose Registrable Securities are requested to be included in the registration
such number of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by them that are included in such registration.
(iv) BLUE SKY. Use its best efforts to
register and qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as shall be
reasonably requested by the Holders, provided that Tality shall not be required
in connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions.
(v) UNDERWRITING. In the event of any
underwritten public offering, enter into and perform its obligations under an
underwriting agreement in usual and customary form, with the managing
underwriter(s) of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.
(vi) NOTIFICATION. Notify each Holder of
Registrable Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(vii) OPINION AND COMFORT LETTER. Furnish, at
the request of any Holder requesting registration of Registrable Securities, on
the date that such Registrable Securities are delivered to the underwriters for
sale, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (A) an
opinion, dated as of such date, of the counsel representing Tality for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably satisfactory to a
majority in interest of the Holders requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities and (B) a "comfort" letter dated as of such date, from the
independent certified public accountants of Tality, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders requesting registration, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.
(f) FURNISH INFORMATION. It shall be a condition
precedent to the obligations of Tality to take any action pursuant to Section
3.4(b), (c) or (d) that the selling Holders shall furnish to Tality such
information regarding themselves, the Registrable Securities held by them, and
the intended method of disposition of such securities as shall be reasonably
required to timely effect the Registration of their Registrable Securities.
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(g) INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under Section 3.4(b), (c) or
(d):
(i) BY TALITY. To the extent permitted by
Applicable Law, Tality shall indemnify and hold harmless each Holder, the
partners, officers and directors of each Holder, any underwriter (as determined
in the Securities Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Securities Act or the
Exchange Act, as amended, against any losses, claims, damages or liabilities
(joint or several) to which they may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations (collectively, a
"VIOLATION"):
(A) any untrue statement or
alleged untrue statement of a material fact contained in
such registration statement, including any preliminary
prospectus or final prospectus contained therein or any
amendments or supplements thereto;
(B) the omission or alleged
omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein
not misleading, or
(C) any violation or alleged
violation by Tality of the Securities Act, the Exchange Act,
any federal or state securities law or any rule or
regulation promulgated under the Securities Act, the
Exchange Act or any federal or state securities law in
connection with the offering covered by such registration
statement;
and Tality shall reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this subsection 3.4(g)(i) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of Tality (which consent
shall not be unreasonably withheld or delayed), nor shall Tality be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by such Holder, partner, officer,
director, underwriter or controlling person of such Holder.
(ii) BY SELLING HOLDERS. To the extent
permitted by Applicable Law, each selling Holder shall indemnify and hold
harmless Tality, each of its directors, each of its officers who have signed the
registration statement, each person, if any, who controls Tality within the
meaning of the Securities Act, any underwriter and any other Holder selling
securities under such registration statement or any of such other Holder's
partners, directors or officers or any person who controls such Holder within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities (joint or several) to which Tality or any
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such director, officer, controlling person, underwriter or other such Holder,
partner or director, officer or controlling person of such other Holder may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder shall
reimburse any legal or other expenses reasonably incurred by Tality or any such
director, officer, controlling person, underwriter or other Holder, partner,
officer, director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection
3.4(g)(ii) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably withheld or
delayed); and PROVIDED FURTHER, that the total amounts payable in indemnity by a
Holder under this Section 3.4(g)(ii) in respect of any Violation shall not
exceed the net proceeds received by such Holder in the registered offering out
of which such Violation arises.
(iii) NOTICE. Promptly after receipt by an
indemnified party under this Section 3.4(g) of notice of the commencement of any
action (including any action by a Governmental Authority), such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 3.4(g), deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; PROVIDED,
HOWEVER, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to an actual or potential conflict
of interests between such indemnified party and any other party represented by
such counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of liability to the indemnified
party under this Section 3.4(g) to the extent (but only to the extent) the
indemnifying party is materially prejudiced as a result thereof, but the
omission so to deliver written notice to the indemnified party shall not relieve
it of any liability that it may have to any indemnified party otherwise than
under this Section 3.4(g).
(iv) DEFECT ELIMINATED IN FINAL PROSPECTUS.
The foregoing indemnity agreements of Tality and the Holders are subject to the
condition that, insofar as they relate to any Violation made in a preliminary
prospectus but eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes effective
or the amended prospectus filed with the Commission pursuant to Commission Rule
424(b) (the "FINAL PROSPECTUS"), such indemnity agreement shall not inure to the
benefit of any Person if a copy of the Final Prospectus was timely furnished to
the indemnified party and was not furnished to the Person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
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(v) CONTRIBUTION. In order to provide for
just and equitable contribution to joint liability under the Securities Act in
any case in which either (A) any Holder exercising rights under this Agreement,
or any controlling person of any such Holder, makes a claim for indemnification
pursuant to this Section 3.4(g) but it is judicially determined (by the entry of
a final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the fact
that this Section 3.4(g) provides for indemnification in such case, or (B)
contribution under the Securities Act may be required on the part of any such
selling Holder or any such controlling person in circumstances for which
indemnification is provided under this Section 3.4(g); then, and in each such
case, Tality and such Holder shall contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of its Registrable
Securities offered by and sold under the registration statement bears to the
public offering price of all securities offered by and sold under such
registration statement, and Tality and other selling Holders are responsible for
the remaining portion; PROVIDED, HOWEVER, that, in any such case: (1) no such
Holder shall be required to contribute any amount in excess of the public
offering price of all such Registrable Securities offered and sold by such
Holder pursuant to such registration statement; and (2) no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
(vi) SURVIVAL. The obligations of Tality and
Holders under this Section 3.4(g) shall survive until the fifth anniversary of
the completion of any offering of Registrable Securities in a registration
statement, regardless of the expiration of any statutes of limitation or
extensions of such statutes.
(h) TERMINATION OF TALITY'S OBLIGATIONS. Tality shall
have no obligations pursuant to Sections 3.4(b) through (d) with respect to any
Registrable Securities proposed to be sold by a Holder in a registration
pursuant to Section 3.4(b), (c) or (d) more than seven (7) years after the
Separation Date, or, if, in the opinion of independent counsel to Tality (and
acceptable to the Holders), all such Registrable Securities proposed to be sold
by a Holder may then be sold under Rule 144 in one transaction without exceeding
the volume limitations thereunder.
(i) NO REGISTRATION RIGHTS TO THIRD PARTIES. Without
the prior written consent of Cadence, Tality covenants and agrees that it shall
not grant, or cause or permit to be created, for the benefit of any Person any
registration rights of any kind (whether similar to the demand, "piggyback" or
Form S-3 registration rights described in this Section 3.4 or otherwise)
relating to any equity securities of Tality, other than rights that are
subordinate in right to those granted hereunder.
ARTICLE IV
COVENANTS AND OTHER MATTERS
Section 4.1 FURTHER INSTRUMENTS. At the request of either of the
Tality Parties, and without further consideration, the Cadence Parties shall
execute and deliver, and shall cause all
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other members of the Cadence Group to execute and deliver, to the Partnership
and its Subsidiaries such other instruments of transfer, conveyance, assignment,
substitution and confirmation and take such action as either of the Tality
Parties may reasonably deem necessary in order to effectively transfer, convey
and assign to the Partnership and its Subsidiaries and confirm the Partnership's
and its Subsidiaries' title to all of the assets and rights contemplated to be
transferred to the Partnership and its Subsidiaries pursuant to this Agreement
and the Ancillary Agreements to put the Partnership and its Subsidiaries in
actual possession and operating control thereof and to permit the Partnership
and its Subsidiaries to exercise all rights with respect thereto (including
rights under contracts and other arrangements as to which the consent of any
third party to the transfer thereof shall not have previously been obtained). At
the request of either of the Cadence Parties and without further consideration,
the Tality Parties shall execute and deliver, and shall cause all other members
of the Tality Group to execute and deliver, to Cadence and its Subsidiaries all
instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as Cadence may reasonably deem necessary in
order to have the Partnership fully and unconditionally assume and discharge the
liabilities contemplated to be assumed by the Partnership and its Subsidiaries
under this Agreement and the Ancillary Agreements and to relieve each member of
the Cadence Group of any liability or obligation with respect thereto and
evidence the same to third parties. Neither the Cadence Parties nor the Tality
Parties shall be obligated, in connection with the foregoing, to expend money
other than reasonable out-of-pocket expenses, attorneys' fees and disbursements
and recording or similar fees. Furthermore, each party hereto, at the request of
the other party, shall execute and deliver such other instruments and do and
perform such other acts and things as may be necessary or desirable for
effecting completely the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements.
Section 4.2 AGREEMENT FOR EXCHANGE OF INFORMATION.
(a) GENERALLY. Each of the parties agrees to provide,
or cause to be provided, to any of the other parties, at any time
before or after the Separation Date, as soon as reasonably practicable
after written request therefor, any Information in the possession or
under the control of such party that the requesting party reasonably
needs (i) to comply with reporting, disclosure, filing or other
requirements imposed on the requesting party (including under
applicable securities laws) by a Governmental Authority having
jurisdiction over the requesting party; (ii) for use in any other
judicial, regulatory, administrative or other proceeding, or in order
to satisfy audit, accounting, claims, regulatory, litigation or other
similar requirements; (iii) to comply with its obligations under this
Agreement or any Ancillary Agreement; or (iv) in connection with the
ongoing businesses of the Cadence Parties or the Tality Parties, as
the case may be; PROVIDED, HOWEVER, that if a party determines that
providing its Information to the other parties could be commercially
detrimental to such party, violate any law or agreement, or waive any
attorney-client privilege, the parties shall take all reasonable
measures to permit its compliance with such disclosure obligation in a
manner that avoids any such harm or consequence.
(b) INTERNAL ACCOUNTING CONTROLS; FINANCIAL
INFORMATION. After the Separation Date, each party shall (i) maintain
in effect at its own cost and expense adequate systems and controls
for its business to the extent necessary to enable the other parties
to satisfy
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their reporting, accounting, audit and other obligations; and (ii)
provide, or cause to be provided, to the other parties and their
Subsidiaries in such form as requested and at no charge to the
requesting party, all financial and other data and information as the
requesting party determines necessary or advisable in order to prepare
its financial statements and reports or filings with any Governmental
Authority.
(c) OWNERSHIP OF INFORMATION. Any Information owned by
a party that is provided to a requesting party pursuant to this
Section 4.2 shall remain the property of the providing party. Unless
specifically set forth herein, nothing contained in this Agreement
shall be construed as granting or conferring ownership or license
rights in any such Information or varying an attorney-client or other
privilege applicable to such Information.
(d) LIMITATION OF LIABILITY. No member of either the
Cadence Group or the Tality Group shall have any liability to a member
of the Tality Group or Cadence Group, respectively, in the event that
any Information exchanged or provided pursuant to this Section 4.2 is
found to be incomplete or inaccurate, in the absence of gross
negligence or willful misconduct by the party providing such
Information.
(e) OTHER AGREEMENTS PROVIDING FOR EXCHANGE OF
INFORMATION. The rights and obligations granted under this Section 4.2
are subject to any specific limitations, qualifications or additional
provisions on the sharing, exchange or confidential treatment of
Information set forth in this Agreement and any Ancillary Agreement,
including the Master Confidentiality Agreement.
(f) PRODUCTION OF WITNESSES; RECORDS; COOPERATION.
After the Separation Date, except in the case of a legal or other
proceeding by a party hereto against another party hereto (which shall
be governed by such discovery rules as may be applicable under Section
4.4 or otherwise), each party hereto shall use all commercially
reasonable efforts to make available to the other parties, upon
written request, the former, current and future directors, officers,
employees, other personnel and agents of such party 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 legal, administrative or other proceeding in which the
requesting party may from time to time be involved, regardless of
whether any such legal, administrative or other proceeding is a matter
with respect to which indemnification may be sought hereunder. The
requesting party shall bear all costs and expenses in connection
therewith.
Section 4.3 AUDITORS AND AUDITS; ANNUAL AND QUARTERLY STATEMENTS AND
ACCOUNTING. For so long as Cadence is required in accordance with United States
generally accepted accounting principles to consolidate Tality's results of
operations and financial position:
(a) SELECTION OF AUDITORS. The Tality Parties shall
ensure that the Tality Auditors are the same as the Cadence Auditors.
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(b) FISCAL YEAR. The Tality Parties shall ensure that
their fiscal years for financial, accounting and federal, state and
local income tax purposes shall be the same as Cadence's fiscal year.
(c) DATE OF AUDITORS' OPINION AND QUARTERLY REVIEWS.
The Tality Parties shall use all commercially reasonable efforts to
enable and cause the Tality Auditors to complete their audit such that
they shall date their opinion on Tality's audited annual financial
statements on the same date that the Cadence Auditors date their
opinion on Cadence's audited annual financial statements, and to
enable Cadence to meet its timetable for the printing, filing and
public dissemination of Cadence's annual financial statements. The
Tality Parties shall use all commercially reasonable efforts to enable
and cause the Tality Auditors to complete their quarterly review
procedures such that they shall provide clearance on Tality's
quarterly financial statements on the same date that Cadence's
Auditors provide clearance on Cadence's quarterly financial
statements.
(d) ANNUAL, QUARTERLY AND OTHER FINANCIAL STATEMENTS.
The Tality Parties shall provide to Cadence on a timely basis all
Information that Cadence requests to meet its schedule for the
preparation, printing, filing and public dissemination of Cadence's
annual, quarterly and other financial statements. Without limiting the
generality of the foregoing, the Tality Parties shall provide all
required financial Information with respect to the Tality Parties and
their Subsidiaries to the Tality Auditors in a sufficient and
reasonable time and in sufficient detail to permit the Tality Auditors
to take all steps and perform all reviews necessary to provide
sufficient assistance to the Cadence Auditors with respect to
financial Information to be included or contained in Cadence's annual,
quarterly and other financial statements. Similarly, the Cadence
Parties shall provide to Tality on a timely basis all financial
Information that Tality reasonably requires to meet its schedule for
the preparation, printing, filing and public dissemination of Tality's
annual and quarterly financial statements. Without limiting the
generality of the foregoing, the Cadence Parties shall provide all
required financial Information with respect to the Cadence Parties and
their Subsidiaries to the Cadence Auditors in a sufficient and
reasonable time and in sufficient detail to permit the Cadence
Auditors to take all steps and perform all reviews necessary to
provide sufficient assistance to the Tality Auditors with respect to
Information to be included or contained in Tality's annual and
quarterly financial statements.
(e) IDENTITY OF PERSONNEL PERFORMING THE ANNUAL AUDIT
AND QUARTERLY REVIEWS. The Tality Parties shall authorize the Tality
Auditors to make available to the Cadence Auditors both the personnel
who performed or shall perform the annual audits and quarterly reviews
of Tality and work papers related to the annual audits and quarterly
reviews of Tality, in all cases within a reasonable time prior to the
Tality Auditors' opinion date, so that the Cadence Auditors are able
to perform the procedures they consider necessary to take
responsibility for the work of the Tality Auditors as it relates to
the Cadence Auditors' report on Cadence's financial statements, all
within sufficient time to enable Cadence to meet its timetable for the
printing, filing and public dissemination of Cadence's annual and
quarterly statements. Similarly, the Cadence Parties shall authorize
the Cadence Auditors to make available to the Tality Auditors both the
personnel who performed or shall perform the annual audits and
quarterly reviews of
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Cadence and work papers related to the annual audits and quarterly
reviews of Cadence, in all cases within a reasonable time prior to the
Cadence Auditors' opinion date, so that the Tality Auditors are able
to perform the procedures they consider necessary to take
responsibility for the work of the Cadence Auditors as it relates to
the Tality Auditors' report on Tality's statements, all within
sufficient time to enable Tality to meet its timetable for the
printing, filing and public dissemination of Tality's annual and
quarterly financial statements.
(f) ACCESS TO BOOKS AND RECORDS. The Tality Parties
shall, as requested by Cadence, provide Cadence's internal auditors
and their designees access to the Tality Parties' and their
Subsidiaries' books and records so that Cadence may conduct reasonable
audits relating to the financial statements provided by Tality
pursuant hereto as well as to the internal accounting controls and
operations of Tality and its Subsidiaries. Similarly, the Cadence
Parties shall provide Tality's internal auditors and their designees
access to the Cadence Parties' and their Subsidiaries' books and
records so that Tality may conduct reasonable audits relating to the
financial statements provided by Cadence pursuant hereto as well as to
the internal accounting controls and operations of Cadence and its
Subsidiaries.
(g) NOTICE OF CHANGE IN ACCOUNTING PRINCIPLES. The
Tality Parties shall provide Cadence with as much prior notice as
reasonably practicable (but in no event less than 30 days notice) of
any proposed determination of, or any significant changes in, its
accounting estimates, principles or methods from those in effect on
the Separation Date. The Tality Parties shall consult with Cadence
and, if requested by Cadence, the Tality Parties shall consult with
the Cadence Auditors with respect to any such proposed determination
or change.
Section 4.4 DISPUTE RESOLUTION.
(a) NEGOTIATION/MEDIATION. If a dispute, controversy
or claim (a "DISPUTE") arises between the parties or any of their
Subsidiaries relating to the interpretation or performance of this
Agreement or any Ancillary Agreement, or any grounds for the
termination hereof, duly authorized officers or employees of each
party shall meet to attempt in good faith to negotiate a resolution of
the Dispute prior to pursuing other available remedies. The date of
receipt of written notice of a Dispute given by either of the Tality
Parties to either of the Cadence Parties, or vice versa, with a
request for a meeting between the parties shall be referred to herein
as the "DISPUTE RESOLUTION COMMENCEMENT DATE." Discussions and
correspondence relating to trying to resolve such Dispute shall be
treated as confidential information developed for the purpose of
settlement and shall be exempt from discovery or production and shall
not be admissible in court or any arbitration proceeding. If the
parties are unable to resolve the Dispute within thirty (30) days
after the Dispute Resolution Commencement Date, and any of the parties
wishes to pursue its rights relating to such Dispute, then the Dispute
shall be mediated by a mutually acceptable mediator appointed pursuant
to the mediation rules of JAMS/Endispute within thirty (30) days after
written notice by one party to the other demanding non-binding
mediation. No party may unreasonably withhold consent to the selection
of a mediator or the location of the mediation. The Cadence Parties
and the
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Tality Parties shall share the costs of the mediation equally between
them, except that each party shall bear its own costs and expenses,
including attorneys' fees and expenses, witness fees and expenses,
travel expenses and preparation costs. The parties may also agree to
replace mediation with some other form of non-binding or binding
alternative dispute resolution ("ADR").
(b) ARBITRATION. Any Dispute which the parties cannot
resolve through mediation within ninety (90) days after the Dispute
Resolution Commencement Date, unless otherwise mutually agreed in
writing, shall be submitted to final and binding arbitration under the
then current Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"), by one (1) arbitrator in Santa Clara County,
California. Such arbitrator shall be selected by the mutual agreement
of the parties or, failing such agreement, shall be selected according
to the aforesaid AAA rules. The arbitrator shall be instructed to
prepare and deliver a written, reasoned opinion stating his decision
within thirty (30) days of the completion of the arbitration. The
prevailing party in such arbitration shall be entitled to expenses,
including costs and reasonable attorneys' and other professional fees,
incurred in connection with the arbitration (but excluding any costs
and fees associated with prior negotiation or mediation). The decision
of the arbitrator shall be final and non-appealable and may be
enforced in any court of competent jurisdiction. The use of any ADR
procedures shall not be construed under the doctrine of laches, waiver
or estoppel to adversely affect the rights of any party.
(c) EXCEPTIONS. Any Dispute regarding any of the
following matters is not required to be negotiated, mediated or
arbitrated prior to seeking relief from a court of competent
jurisdiction: breach of any obligation of confidentiality; or any
other claim where interim relief from the court is sought to prevent
serious and irreparable injury to one of the parties or to others.
However, the parties to the Dispute shall make a good faith effort to
negotiate and mediate such Dispute, according to the above procedures,
while such court action is pending.
(d) CONTINUITY OF SERVICE AND PERFORMANCE. Unless
otherwise agreed in writing, the parties shall 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 Section 4.4 with respect to all matters not
subject to any particular Dispute.
Section 4.5 NON-SOLICITATION OF EMPLOYEES. For a period of one (1)
year following the Separation Date, the Tality Parties agree (and shall cause
their Subsidiaries) not to solicit or recruit or hire employees of any member of
the Cadence Group, without the prior consent of Cadence's Senior Vice President
of Human Resources (or his or her designee). Notwithstanding the foregoing, this
prohibition on solicitation, recruitment or hiring shall not apply to actions
taken by any member of the Tality Group either (a) solely as a result of an
employee's affirmative response to a general recruitment effort carried out
through a public solicitation or (b) as a result of an employee's initiative.
Section 4.6 EMPLOYEE AGREEMENTS. As used in this Section 4.6,
"EMPLOYEE AGREEMENT" means the Employee Proprietary Information and Inventions
Agreement and
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corresponding agreements in foreign countries executed by each employee of
Cadence or any of its Subsidiaries.
(a) SURVIVAL OF EMPLOYEE AGREEMENT OBLIGATIONS AND
CADENCE'S COMMON LAW RIGHTS. The Employee Agreements of all Cadence
employees transferring to Tality or one of its Subsidiaries as of the
Separation Date shall remain in full force and effect according to
their terms; PROVIDED, HOWEVER, that none of the following acts
committed by former Cadence employees within the scope of their
employment with Tality or one of its Subsidiaries shall constitute a
breach of such Employee Agreements: (i) the use or disclosure of
Confidential Information (as that term is defined in the former
Cadence employee's Employee Agreement) for or on behalf of Tality or
one of its Subsidiaries, if such disclosure is consistent with the
rights granted to Tality and its Subsidiaries and restrictions imposed
on Tality and its Subsidiaries under this Agreement or any Ancillary
Agreement; (ii) the disclosure and assignment to Tality or one of its
Subsidiaries of rights in proprietary developments authored or
conceived by the former Cadence employee after the Separation Date and
resulting from the use of, or based upon intellectual property
(whether patented or not) which is retained by Cadence, provided that
in no event shall such disclosure and assignment be regarded as
assigning or licensing the underlying intellectual property to Tality
or one of its Subsidiaries; (iii) the rendering of any services,
directly or indirectly, to Tality or one of its Subsidiaries to the
extent such services are consistent with the assignment or license of
rights granted to Tality and the restrictions imposed on Tality and
its Subsidiaries under this Agreement, any Ancillary Agreement or any
other agreement between the parties; and (iv) solicitation of the
employees of one party by the other party prior to the Separation Date
(so long as such solicitation does not violate Section 4.5). Further,
Cadence retains any rights it has under statute or common law with
respect to actions by its former employees to the extent such actions
are inconsistent with the rights granted to Tality and restrictions
imposed on Tality under this Agreement or any Ancillary Agreement.
(b) ASSIGNMENT, COOPERATION FOR COMPLIANCE AND
ENFORCEMENT. To the extent permissible under Applicable Law, the
following shall apply:
(i) Cadence retains all rights under the
Employee Agreements of all former Cadence employees
necessary to permit Cadence to protect the rights and
interests of Cadence, but hereby transfers and assigns to
Tality and its Subsidiaries its rights under the Employee
Agreements of all former Cadence employees to the extent
required to permit Tality to enjoin, restrain, recover
damages from or obtain specific performance of the Employee
Agreements or obtain other remedies against any employee who
breaches his/her Employee Agreement; PROVIDED, HOWEVER, that
if such partial transfer and assignment is not permissible
under Applicable Law, Cadence shall be deemed to have
transferred and assigned all such rights.
(ii) Each of Cadence and Tality agrees, at
its own cost and expense, to cooperate with the other as
follows: (A) Tality shall advise Cadence of: (1) any
violation(s) of the Employee Agreement by former Cadence
employees, and (2) any violation(s) of the Tality Employee
Agreement which affect Cadence's
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rights; and (B) Cadence shall advise Tality of any
violations of the Employee Agreement by current or former
Cadence employees which affect Tality's rights; PROVIDED,
HOWEVER, that the foregoing obligations shall only apply to
violations which become known to an attorney within the
legal department of the party obligated to provide notice
thereof.
(iii) Tality may enforce all rights
transferred and assigned to it under this Agreement relating
to the Employee Agreements. In addition, if Cadence has
retained any rights under the Employee Agreements, Tality
shall, if requested by Cadence, enforce the Employee
Agreements of former Cadence employees to the extent
necessary to reasonably protect the interests of any member
of the Cadence Group; PROVIDED, HOWEVER, that Tality shall
not commence any legal action relating thereto without first
consulting with Cadence's General Counsel (or his/her
designee). If Tality, in seeking to enforce any Employee
Agreement, notifies Cadence that it requires, or desires,
Cadence to join in such action, then Cadence shall do so. In
addition, if Cadence commences or becomes a party to any
action to enforce a Employee Agreement of a former Cadence
employee, Cadence shall, whether or not it becomes a party
to the action, cooperate with Tality by making available its
files and employees who have information or knowledge
relevant to the dispute, subject to appropriate measures to
protect the confidentiality of any proprietary or
confidential information that may be disclosed in the course
of such cooperation or action and subject to any relevant
privacy laws and regulations. Any such action shall be
conducted at the expense of Tality and Cadence and Tality
shall agree on a case by case basis on compensation, if any,
of Cadence for the value of the time of Cadence employees as
reasonably required in connection with the action.
(iv) Cadence and Tality understand and
acknowledge that matters relating to the making,
performance, enforcement, assignment and termination of
employee agreements are typically governed by the laws and
regulations of the national, federal, state or local
governmental unit where an employee resides, or where an
employee's services are rendered, and that such laws and
regulations may supersede or limit the applicability or
enforceability of this Section 4.6. In such circumstances,
Cadence and Tality agree to take action with respect to the
employee agreements that best accomplishes the parties'
objectives as set forth in this Section 4.6 and that is
consistent with applicable law.
Section 4.7 GOVERNMENT AND THIRD PARTY APPROVALS. If and to the extent
that the valid, complete and perfected transfer, assignment or novation of any
asset or liability pursuant to the Assignment Agreement would be a violation of
Applicable Law or require any Third-Party Approval or Governmental Approval in
connection with the Separation or the IPO, then, unless Cadence shall otherwise
determine, the transfer or assignment to, or novation by, the Tality Group, as
the case may be, of such assets or liabilities shall be automatically deemed
deferred and any such purported transfer, assignment or novation shall be null
and void until such time as all such Third-Party Approvals or Governmental
Approvals have been obtained. Notwithstanding the foregoing, any asset allocated
to the Partnership the transfer of which is so delayed shall still be considered
an asset of the Partnership for purposes of determining whether
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any associated liability is a liability of the Partnership; PROVIDED, HOWEVER,
that if such Third-Party Approvals or Governmental Approvals have not been
obtained within six months after the Separation Date, the parties shall use all
commercially reasonable efforts to achieve an alternative solution in accordance
with the parties' intentions. Tality shall (and it shall cause its Subsidiaries
to) reimburse Cadence for all additional costs and expenses incurred by Cadence
or any other member of the Cadence Group in connection with the performance of
its obligations under this Section 4.7.
Section 4.8 RELATIONSHIPS WITH SCOTTISH ENTERPRISE AND SCOTTISH
EXECUTIVE. As to the facilities owned by Cadence Design Systems Limited
("CADENCE UK") located in Livingston, United Kingdom, and the relationships
between (i) Scottish Enterprise, on the one hand, and Cadence and Cadence UK, on
the other hand, and (ii) Scottish Executive, on the one hand, and Cadence and
Cadence UK, on the other hand, the parties agree as follows:
(a) TRANSFER OF SCOTTISH ENTERPRISE CONTRACTUAL RIGHTS
AND OBLIGATIONS. Subject to the consent of Scottish Enterprise, and as
promptly as practicable after the receipt of such consent, Cadence
shall transfer (or cause to be transferred) to Symbionics Limited, a
company organized under the laws of the United Kingdom and which will
become an indirect wholly owned subsidiary of the Partnership
("SYMBIONICS"), all of the rights and interests, and Symbionics shall
assume the liabilities, obligations and commitments, of Cadence,
Cadence UK and their Subsidiaries under that certain Master Agreement
between Cadence UK and Scottish Enterprise dated March 24, 1998, as
amended (the "MASTER AGREEMENT"), and all the agreements related
thereto (collectively, the "SERVICE CONTRACT"); PROVIDED, HOWEVER,
that (i) Cadence UK shall, and Cadence shall cause Cadence UK to,
retain its obligations and continue to be bound by certain mutually
agreed upon provisions of the Master Agreement and by that certain
Premises Agreement between Cadence UK and Scottish Enterprise dated
March 24, 1998, that certain Methodologies and Materials License
between Cadence UK and Scottish Enterprise dated March 24, 1998, that
certain Software License between Cadence UK and Scottish Enterprise
dated March 24, 1998 and that certain Beta Software License between
Cadence UK and Scottish Enterprise dated March 24, 1998 (the "RETAINED
OBLIGATIONS"); (ii) Symbionics shall not assume certain mutually
agreed upon obligations included among the Retained Obligations; and
(iii) Cadence shall retain its obligations and continue to guaranty
the performance of Symbionics under the Service Contract pursuant to
that certain Guarantee by Cadence in favor of Scottish Enterprise
dated March 24, 1998.
(b) TRANSFER OF SCOTTISH EXECUTIVE CONTRACTUAL RIGHTS
AND OBLIGATIONS. Subject to the consent of Scottish Executive, and as
promptly as practicable after the receipt of such consent, Cadence
shall cause Cadence-UK to, and the Tality Parties shall cause
Symbionics to, agree upon their respective rights, interests,
liabilities, obligations and commitments under that certain Offer of
Regional Selective Assistance between Cadence UK and the Scottish
Office dated December 5, 1997, as amended (the "RSA GRANT"); PROVIDED,
HOWEVER, that such rights, interests, liabilities, obligations and
commitments shall include compliance with the obligations of each
party pursuant to Sections 4.8(c), (d), (e) and (f) below.
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(c) CADENCE CAPITAL AND HEADCOUNT COMMITMENTS. Cadence
shall cause Cadence UK to meet or exceed and the Tality Parties shall
cause Symbionics to meet or exceed its respective (i) capital
expenditure commitments in relation to the Service Contract, the RSA
Grant and the Livingston facility set forth on SCHEDULE 4.8(a) and
(ii) employee commitments in relation to the Service Contract, the RSA
Grant and the Livingston facility set forth on SCHEDULE 4.8(b).
(d) FACILITY ARRANGEMENT. Notwithstanding anything to
the contrary contained herein, Cadence shall cause Cadence UK to
retain ownership of the Livingston facility and lease a certain
portion of that space to Symbionics pursuant to the Real Estate
Matters Agreement. The Tality Parties shall cause Symbionics to
compensate Cadence UK for services related to its occupancy of the
Livingston facility pursuant to the Master Corporate Services
Agreement.
(e) SUBSIDIES. After the Separation Date, if subsidy
payments received prior to the Separation Date by any member of the
Cadence Group pursuant to the Service Contract or the RSA Grant must
be refunded, the Cadence Group shall be responsible for contributing
95% of any such payments and the Tality Group shall contribute the
remaining 5%. All subsidy payments received after the Separation Date
by Cadence UK, the Partnership, Symbionics or any of their respective
Subsidiaries pursuant to the Service Contract or the RSA Grant
("POST-SEPARATION SUBSIDY"), and any obligation to refund any
Post-Separation Subsidy (a "POST-SEPARATION SUBSIDY CLAWBACK"), shall
be shared between the Cadence Group and the Tality Group based upon
Cadence UK's and Symbionics' respective pro rata portion of (i) (A)
the additional full time equivalent positions ("FTEs") considered for
the subsidy determination during the relevant period under the Service
Contract and the RSA Grant, multiplied by (B) five hundred thousand
dollars ($500,000), four hundred thousand dollars ($400,000), three
hundred thousand dollars ($300,000), two hundred thousand dollars
($200,000) or one hundred thousand dollars ($100,000) for subsidies
based on the additional FTE's provided in 2000, 2001, 2002, 2003 or
2004, respectively; plus (ii) the additional capital expenditures
considered for the subsidy determination during the relevant period
under the Service Contract and the RSA Grant (each party's respective
"SUBSIDY ALLOCATION", in the case of a Post-Separation Subsidy, or
"CLAWBACK ALLOCATION", in the case of a Post-Separation Subsidy
Clawback). The Cadence Group's and the Tality Group's "NET ALLOCATION"
shall equal the Cadence Group's or the Tality Group's respective
Subsidy Allocation less its Clawback Allocation, if any. If any
Post-Separation Subsidy is reduced or a Post-Separation Subsidy
Clawback occurs due to the failure of either Cadence UK or Symbionics
to achieve the commitments set forth on SCHEDULE 4.8(a) or SCHEDULE
4.8(b), the Cadence Group or the Tality Group, respectively, shall be
liable to the other for the difference between the Net Allocation
actually received by the other party and the Net Allocation the other
party would have received had both Cadence UK and Symbionics satisfied
in full their respective commitments under SCHEDULE 4.8(a) or SCHEDULE
4.8(b), as applicable.
(f) COOPERATION AND SUPPORT. The Cadence Parties
shall, and shall cause Cadence UK to, cooperate with Tality, the
Partnership and Symbionics in good faith to
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assist in the management and administration of Symbionics' obligations
under the Service Contract and the RSA Grant.
ARTICLE V
MISCELLANEOUS
Section 5.1 LIMITATION OF LIABILITY. IN NO EVENT SHALL ANY MEMBER OF
THE CADENCE GROUP OR TALITY GROUP BE LIABLE TO ANY MEMBER OF THE TALITY GROUP OR
CADENCE GROUP, RESPECTIVELY, 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
(OTHER THAN AS SET FORTH IN ARTICLE III) 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 ENTIRE AGREEMENT. This Agreement, the Ancillary Agreements
and the Exhibits and Schedules referenced or attached hereto and thereto,
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof and thereof.
Section 5.3 GOVERNING LAW. This Agreement shall be construed in
accordance with and all Disputes hereunder shall be governed by the laws of the
State of Delaware, excluding its conflict of law rules. The Superior Court of
Santa Clara County and/or the United States District Court for the Northern
District of California shall have jurisdiction and venue over all Disputes
between the parties that are permitted to be brought in a court of law pursuant
to Section 4.4.
Section 5.4 TERMINATION. This Agreement and all Ancillary Agreements
(and any transaction in furtherance thereof) may be terminated at any time prior
to the IPO Closing Date by and in the sole discretion of Cadence without the
approval or consent of Tality. This Agreement may be terminated at any time
after the IPO Closing Date by mutual consent of Cadence and Tality. In the event
of termination pursuant to this Section 5.4, no party shall have any liability
of any kind to the other party.
Section 5.5 NOTICES. Notices, offers, requests or other communications
required or permitted to be given by either party pursuant to the terms of this
Agreement shall be given in writing to the respective parties to the following
addresses:
if to the Cadence Parties:
Cadence Design Systems, Inc.
2655 Seely Avenue
Building 5
San Jose, California 95134
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Attention: R.L. Smith McKeithen, General Counsel
Fax: (408) 944-6855
if to the Tality Parties:
Tality Corporation
2655 Seely Avenue
Building 3
San Jose, California 95134
Attention: Duane W. Bell, Chief Financial Officer
Fax: (408) 894-2605
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified U.S. mail, return receipt requested. All other notices may
also be sent by fax, confirmed by first class mail. All notices shall be deemed
to have been given and received on the earlier of actual receipt and three (3)
days from the date of postmark.
Section 5.6 COUNTERPARTS. This Agreement and each of the Ancillary
Agreements, and the Exhibits and Schedules hereto and thereto, and the other
documents referred to herein or therein, may be executed in counterparts, each
of which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
Section 5.7 BINDING EFFECT; ASSIGNMENT. This Agreement and each
Ancillary Agreement shall inure to the benefit of and be binding upon the
parties hereto and thereto and their respective legal representatives and
successors, and nothing in this Agreement or any Ancillary Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. No party may assign
this Agreement or any rights or obligations hereunder, without the prior written
consent of Cadence, in the case of the Tality Parties, or Tality, in the case of
the Cadence Parties (except in connection with a merger, consolidation or sale
of all or substantially all of the party's assets), and any such attempted
assignment shall be void and in violation hereof.
Section 5.8 SEVERABILITY. If any term or other provision of this
Agreement or any Ancillary Agreement, or any of the Exhibits and Schedules
attached hereto is determined by a court, administrative agency or arbitrator to
be invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the fullest extent
possible.
Section 5.9 FAILURE OR DELAY NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or
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be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right. All rights and remedies existing under this Agreement or any
Ancillary Agreement, or the Exhibits or Schedules attached hereto or thereto are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
Section 5.10 AMENDMENT. No modification or amendment shall be made to
this Agreement or any Ancillary Agreement, or the Exhibits or Schedules attached
hereto or thereto, except by an instrument in writing signed on behalf of each
of the parties to such agreement.
Section 5.11 AUTHORITY. Each of the parties hereto and each of the
Ancillary Agreements represents to the other that (a) it has the corporate or
other requisite power and authority to execute, deliver and perform this
Agreement or such Ancillary Agreement, as the case may be; (b) the execution,
delivery and performance of this Agreement and each of the Ancillary Agreements
by it have been duly authorized by all necessary corporate or other actions; (c)
it has duly and validly executed and delivered this Agreement and each of the
Ancillary Agreements; and (d) this Agreement and each of the Ancillary
Agreements is a legal, valid and binding obligation, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles.
Section 5.12 INTERPRETATION. The headings contained in this Agreement
and each of the Ancillary Agreements, in any Exhibit or Schedule hereto and in
the table of contents to this Agreement and each of the Ancillary Agreements are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement or such Ancillary Agreement. Any capitalized
term used in any Exhibit or Schedule hereto or to any Ancillary Agreement but
not otherwise defined therein, shall have the meaning assigned to such term in
this Agreement or such Ancillary Agreement, as the case may be. When a reference
is made in this Agreement or any Ancillary Agreement to an Article or a Section,
Exhibit or Schedule, such reference shall be to an Article or Section of, or an
Exhibit or Schedule to, this Agreement or such Ancillary Agreement, as the case
may be, unless otherwise indicated. All Exhibits and Schedules hereto and to
each Ancillary Agreement are incorporated into and made a part of this Agreement
and the applicable Ancillary Agreement, respectively. The terms "including" and
"include" employed in this Agreement or any Ancillary Agreement (including any
of the Exhibits and Schedules incorporated into and made a part of this
Agreement or any such Ancillary Agreement) mean "including, without limitation,"
and "includes, without limitation," respectively.
Section 5.13 CONFLICTING AGREEMENTS. In the event of any
irreconcilable conflict between this Agreement and any Ancillary Agreement or
other agreement executed in connection herewith, the provisions of such
Ancillary Agreement shall prevail to the extent that they specifically address
the subject matter of the conflict.
Section 5.14 PAYMENT OF EXPENSES. Except as otherwise provided in this
Agreement or any of the Ancillary Agreements or any other agreement related to
the IPO, all costs and expenses of the parties hereto in connection with the
Separation and the IPO (including
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underwriting discounts and commissions) shall be allocated between the Tality
Parties and the Cadence Parties as determined by Cadence in its sole and
absolute discretion.
Section 5.15 PRIOR AGREEMENT SUPERSEDED. This Agreement supersedes and
replaces in its entirety the Prior Agreement, which shall no longer be of any
force or effect.
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WHEREFORE, the parties have executed and delivered this Amended and
Restated Master Separation Agreement effective as of the date first set forth
above.
CADENCE DESIGN SYSTEMS, INC. TALITY, LP
By: /s/R.L. Smith McKeithen By: TALITY CORPORATION,
--------------------------------- AS GENERAL PARTNER
Name: R.L. Smith McKeithen By: /s/Duane W. Bell
Title: Senior Vice President ------------------------
and General Counsel Name: Duane W. Bell
Title: Senior Vice President,
Chief Financial Officer
CADENCE HOLDINGS, INC. TALITY CORPORATION
By: /s/R.L. Smith McKeithen By: /s/DUANE W. BELL
---------------------------------- --------------------------
Name: R.L. Smith McKeithen Name: Duane W. Bell
Title: Secretary Title: Senior Vice President,
Chief Financial Officer
30
