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EXHIBIT 10.24
JOINT DEVELOPMENT AND LICENSE AGREEMENT
CONCERNING EDA SOFTWARE AND RELATED INTELLECTUAL PROPERTY
BETWEEN
SYNOPSYS, INC.
AND
INTERNATIONAL BUSINESS MACHINES CORPORATION
This Joint Development and Licensing Agreement Concerning Electronic Design
Automation ("EDA") Software and Related Intellectual Property (the "Agreement")
is entered into as of this January 1, 1996, ("Effective Date") by and between
International Business Machines Corporation, a New York corporation, having an
office at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("IBM"), and
Synopsys, Inc., a Delaware corporation, with its principal place of business at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Synopsys").
RECITALS
A. Synopsys and IBM would like to jointly develop new EDA tools, based
initially on the IBM EDA Base Products (as hereinafter defined) and
certain Synopsys technology. The goals and objectives of the parties,
as well as the terms and conditions governing this joint development
and licensing arrangement, are set forth in this Agreement.
B. As a result of this Agreement, IBM and Synopsys anticipate being able
to develop EDA tools sooner, with less development expense and lower
risk, than would otherwise have been possible, with resulting
significant benefits to the parties, their customers and the industry.
AGREEMENT
1.0 DEFINITIONS
1.1 "ALLIANCE" means a joint semiconductor design or development
undertaking which IBM deems to be strategic to its business involving
IBM and one or more third parties. Somerset (as hereinafter defined) is
an Alliance.
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1.2 "ALPHA RELEASE" means a preliminary version of a Joint Product (as
hereinafter defined) that has been tested by the Joint Development Team
(as hereinafter defined) and is released for initial testing at IBM and
Synopsys sites with their respective third-party customers, which
customers include ASIC Vendors other than IBM. The Joint Development
Team will provide direct support for Alpha Releases.
1.3 "ANNUAL JOINT DEVELOPMENT PLAN" means a detailed work scope and work
plan for developing the Joint Products and NGSS as determined by the
Joint Development Team (as hereinafter defined) each year in the fourth
quarter for the subsequent year, during the term of this Agreement. The
Annual Joint Product Development Plan will include, at a minimum,
specifications for any new release of each Joint Product and NGSS,
allocation of development responsibilities, any deliverable to be
provided by either party sufficient to determine milestone payments
under the Promissory Note (as hereinafter defined), and a schedule for
delivery of any such deliverable.
1.4 "ASIC" means application specific integrated circuit.
1.5 "ASIC VENDOR" means any developer, manufacturer or distributor of
ASICs.
1.6 "BEST EFFORTS" means an obligation to pursue all reasonable means
consistent with the total applicable capabilities of the party owing
such obligation.
1.7 "BETA RELEASE" means a version of a Joint Product subsequent to the
Alpha Release, ready to be field tested by customers at customers'
sites.
1.8 "CHANGE OF CONTROL" means an event that will be deemed to have occurred
if (1) there shall be consummated (a) any consolidation or merger of a
party in which such party is not the continuing or surviving
corporation, or pursuant to which shares of such party's common stock
would be converted into cash, securities or other property, other than
a merger of such party in which the holders of such party's common
stock immediately prior to the merger have substantially the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (b) any sale, lease, exchange or other
transfer (in one transaction or a series or related transactions) of
all or substantially all the assets of such party; or (2) the
stockholders of a party shall approve any plan or proposal for the
liquidation or dissolution of such party; or (3) any person (as such
term is used in Section 13(d) and 14(d)(2) of the Securities and
Exchange Act of 1934 (the "Exchange Act")) other than a party or any
employee benefit plans sponsored by such party, shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of securities of the company representing thirty-seven percent
(37%) or more (in the case where such acquiring person meets the
criteria (i) or (ii) of Section 8.5.3.2(a)), or fifty percent (50%) or
more (in the case of any other person) of voting securities having the
voting power of such party's then outstanding securities ordinarily
(and apart from rights accruing in special circumstances) having the
right to vote in the election of directors, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases,
or otherwise, or (4) at any time during a period of twelve
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(12) consecutive months, individuals who at the beginning of such
period of twelve (12) consecutive months, constituted the Board of
Directors of a party shall cease for any reason to constitute at least
a majority thereof, unless the election of, or the nomination for
election by such party's stockholders of each new director during such
twelve-month period was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the beginning
of such twelve (12) month period.
1.9 "CODE" means software for execution by a computer which consists of
both Source Code and Object Code.
(a) "Object Code" shall mean Code, other than Source Code,
substantially or entirely in the binary form, which is
directly executable by a computer after suitable processing,
but without the intervening steps of compilation or assembly.
(b) "Source Code" shall mean Code, other than Object Code, and
related system and design Documentation, including, but not
limited to, programmers' comments and the like which may be
printed out or displayed in a form readable and understandable
by a programmer of ordinary skill. As used in this Agreement,
"Source Code" also includes, but is not limited to, any
software tool or similar material that is reasonably necessary
to use, modify, and understand and test Source Code and that
is not generally available from third party vendors.
1.10 "CONFIDENTIALITY DISCLOSURE AGREEMENT" means the agreement governing
confidentiality between IBM and Synopsys dated November 30, 1995.
1.11 "COMPLEMENTARY PRODUCT" means a computer software program licensed by
Synopsys to its Joint Product or NGSS licensees, provided that: (a)
such product is typically sold as part of a written proposal to a
Synopsys customer consisting of Joint Products or NGSS, and
Complementary Products, (b) such product is typically invoiced to a
Synopsys customer together with Joint Products or NGSS, and (c) the
total sales in any calendar year of Complementary Products does not
exceed sixty percent (60%) of the total revenue from Joint Products and
NGSS in such calendar year.
1.12 "DEFECT" includes, but is not limited to, any occurrence in the
Documentation that renders it inaccurate or unreliable.
1.13 "DESIGN COMPILER" means a Synopsys EDA software product that performs
logic synthesis.
1.14 "DESIGN PLANNER" means a Joint Product that performs physical design
planning and analysis for integrated circuits. The initial
specification of Design Planner is attached to this Agreement as
Exhibit A-1.
1.15 "DOCUMENTATION" means any user manual or other written material that
relates to Code, including, but not limited to, material useful for
design (for example: logic manuals, flow
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charts, and principles of operation), and machine-readable text or any
graphic file subject to display or printout.
1.16 "EDA FIELD OF USE" means technology related to the transfer of
functional specifications of systems into information necessary and
sufficient to specify and test integrated circuits.
1.17 "ENHANCED DESIGN COMPILER" means a version of Design Compiler that is
developed during the term of this Agreement and which is enhanced by
incorporation of any Code, feature or function contained in BooleDozer
which Code, feature or function was not part of Design Compiler prior
to the Effective Date.
1.18 "ERROR" means an occurrence in the Code that: (a) causes such Code not
to operate in accordance with an applicable specification or testing
requirement provided in this Agreement or otherwise made generally
commercially available by the developing party; (b) causes system
failure; (c) causes a serious degradation of performance; (d) causes
such Code to fail to integrate in a simple, complex or networked
environment; (e) causes an incorrect result, or (f) causes an incorrect
function to occur.
1.19 "HARMFUL CODE" means any Code that is constructed with the ability to
damage, interfere with or otherwise adversely affect any
computer-program, data file or hardware without the consent or intent
of the computer user. This definition includes, but is not limited to,
any self-replicating or self-propagating programming instruction
commonly called a "virus" or "worm."
1.20 "IBM DESIGN CENTER" means a third party under contract with IBM which
party supports or enables design work performed by an IBM ASIC customer
to render such ASIC customer's design suitable for volume production.
An IBM Design Center performs design flow or design kit support for an
IBM ASIC customer, which consists of training on the IBM ASIC design
flow or design kit, reproducing bugs in such design flow or design kit,
or answering questions about the design flow or design kit. The list of
IBM Design Centers identified in Exhibit E may be updated with
additional IBM Design Centers from time to time upon written notice
from IBM to Synopsys.
1.21 [ * * * ].
1.22 [ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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1.23 "INFORMATION" means such Synopsys or IBM information in visual, oral,
written or other tangible form (including, but not limited to,
information recorded in a medium such as a tape or disk, or inherently
disclosed in a sample), as may be disclosed under either the
Confidentiality Disclosure Agreement or this Agreement by one party to
the other, or as may be created by one or both parties pursuant either
to the Confidentiality Disclosure Agreement or this Agreement.
1.24 "INVENTION" means any discovery or improvement, conceived or first
reduced to practice during the term of this Agreement in the
performance of this Agreement, solely or jointly by one or more
employees of Synopsys, or solely or jointly by one or more employees of
IBM.
1.25 "JOINT INVENTION" means an Invention conceived or first reduced to
practice by one or more employees of one party jointly with one or more
employees of the other party.
1.26 [ * * * ].
1.27 "JOINT PRODUCT INFORMATION" means Information generated by the Joint
Development Team, relating to any specific result of the parties'
partial or completed development work relating to a Joint Product.
Joint Product Information shall include, but not be limited to, the
following: any tool specification, design Information, Code,
Documentation, specification, quality Information, or reliability
Information for any Joint Product.
1.28 "MAJOR RELEASE OF A JOINT PRODUCT" means a new release of a Joint
Product other than an Error correction, that improves function, adds
new function, significantly improves performance, or significantly
impacts design flow or any library and is made generally commercially
available. The parties anticipate that Major Releases of a Joint
Product will not occur any more frequently than one (1) time every
eight (8) months during the term of this Agreement.
1.29 "MINOR RELEASE OF A JOINT PRODUCT" means a new release of a Joint
Product that primarily provides Error correction, but may incidentally
also improve function, add new function or improve performance. Minor
Releases have no significant impact on design flow or on any library.
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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1.30 "NET REVENUE" means revenue recognized by Synopsys under generally
accepted accounting principles (hereinafter "GAAP"), including, but not
limited to, advances, with respect to any transaction for which
Synopsys receives such revenue, for any distribution or use of any
Joint Product or NGSS, or any portion thereof, to or by a third party
after deduction, as applicable to such transaction, of: (a) any
discount, rebate, credit for return and allowance for any
non-conforming product, and (b) any charge for freight, insurance or
packing, and sales, use, value-added or other tax or duty, and any
revenue for maintenance or support services provided by Synopsys for
any Joint Product or NGSS. If a Joint Product or NGSS is combined with
any other product for a single license fee, the Net Revenue
attributable to the Joint Product or NGSS will be determined by
prorating the revenue for the license according to the suggested retail
prices for the components of the compilation. In the event that any
component does not carry a suggested retail price, the single combined
license fee for the component and Joint Product or NGSS will constitute
Net Revenue. Foreign income will be included in revenue when such
income is received by Synopsys or when credited to Synopsys' account.
Foreign income will be calculated at the exchange rate in effect at the
time when such revenue is received by Synopsys. Any discount, loss,
costs or expense of transmittal and conversion of such foreign income
into United States currency may be deducted from such revenue in
calculating Net Revenue. Synopsys will immediately notify IBM when any
foreign income is not immediately liquid. If IBM requests, and if
legally permissible, Synopsys will deposit in a bank account designated
by IBM in any foreign country where funds are blocked, that share of
such blocked funds to which IBM is entitled.
1.31 [ * * * ].
1.32 "NGSS INFORMATION" means Information generated by the Joint Development
Team relating to any specific result of the parties' partial or
completed development work relating to NGSS. NGSS Information shall
include, but is not limited to, any tool specification, design
Information, Code, Documentation, specification, or quality or
reliability Information for any NGSS.
1.33 [ * * * ].
1.34 "PROMISSORY NOTE" means the four (4) promissory notes in favor of IBM
executed by the parties concurrently with this Agreement and attached
to this Agreement as Exhibit B. There will be a separate promissory
note for each Joint Product and NGSS.
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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1.35 "SOMERSET" means the technology alliance between IBM, Motorola,
Incorporated ("Motorola") and Apple Computer, Incorporated ("Apple")
for the design and development of PowerPC microprocessors and other
technology.
1.36 "STATIC TIMING" means a Joint Product that estimates delays in
integrated circuits being designed. The initial specification for
Static Timing is attached to this Agreement as Exhibit A-2.
1.37 "SUBSIDIARY" means a corporation, company or other entity:
(a) more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of
directors or other managing authority) are, now or hereafter,
owned or controlled, directly or indirectly, by a party
hereto, but such corporation, company or other entity shall be
deemed to be a Subsidiary only so long as such ownership or
control exists; or
(b) which does not have outstanding shares or securities, as may
be the case -in a partnership, joint venture or unincorporated
association, but more than fifty percent (50%) of whose
ownership interest representing the right to make the
decisions for such corporation, company or other entity is now
or hereafter, owned or controlled, directly or indirectly, by
a party hereto, but such corporation, company or other entity
shall be deemed to be a Subsidiary only so long as such
ownership or control exists.
1.38 "SYNOPSYS EDA BASE PRODUCT" shall mean any Synopsys EDA software
product, as it exists as of the Effective Date, that are to be utilized
by the parties in the development of the Joint Products or NGSS.
1.39 [ * * * ].
1.40 "TEST" is a Joint Product. The initial specification for Test is
attached to this Agreement as Exhibit A-3.
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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2.0 DEVELOPMENT OF JOINT PRODUCTS AND NGSS; PRIORITY SETTING AND
RELATIONSHIP TO IBM ASIC ORGANIZATION
2.1 Development Objectives. Synopsys and MM each agree to develop the Joint
Products and NGSS jointly and cooperatively with one another, and to
perform their respective development obligations in conformance with
each Annual Joint Development Plan. All Annual Joint Development Plans
will be created pursuant to Section 3.0 below by the Joint Development
Team, and will be designed to achieve both the common and individual
objectives of the parties. [ * * * ]. In case of a conflict with respect
to the individual objectives of the parties, the parties agree to work
together, pursuant to Section 3.0 below, and to establish a mutually
agreeable resolution based on the course of action best calculated to
achieve the parties' common objectives. In case of a deadlock, the
parties agree to utilize the dispute resolution procedure outlined in
Section 3.3 below.
2.2 Common Objectives. The parties specifically agree that their common
primary objective in developing the Joint Products and NGSS is to
produce sophisticated and advanced, commercially viable EDA software
tools capable of supporting the design and testing of integrated
circuits with one million (1,000,000) gates or more. The parties
recognize that, to the extent that their individual objectives may
diverge, the Annual Joint Development Plans must be focused on the
common objectives, keeping in mind the needs of both IBM's ASIC
customers and Synopsys' EDA software tool customers including, but not
limited to, ASIC Vendors other than IBM. [ * * * ]. The parties' joint
development efforts will be directed at creating Joint Products and
NGSS that reduce integrated circuit design time, and thereby reduce
a customer's time to market, by improving accuracy, increasing
density, improving quality of results and improving application
performance. The parties will strive to develop Joint Products and NGSS
that are successful commercial products that are extensible, modular,
high-capacity, high performance and that will interoperate with other
leading EDA software tools from other EDA tool vendors.
2.3 Hardware Development Platform. The parties agree to develop, at least
in part, the Joint Products and NGSS on IBM workstations or servers
running IBM operating systems, including, but not limited to, AIX.
Synopsys will support the Joint Products and NGSS on IBM platforms
(e.g., workstations and servers running IBM-supported operating
systems, such as AIX) [ * * * ]. Such support shall consist of
releasing the Joint Products and NGSS on equivalent schedules therewith
and providing the Joint Products and NGSS with equivalent
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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functionality and ease-of-use; provided that Synopsys' obligation to do
so is dependent upon: (i) IBM's loaning Synopsys the needed hardware
platforms as described below, and (ii) IBM's platforms having the
functionality needed to achieve these commitments. To enable Synopsys
to conduct such development, IBM will loan Synopsys a quantity of IBM
workstations that will be mutually agreed upon by the parties, in
writing, periodically throughout the term of this Agreement, at no
charge to Synopsys, under a separate IBM Equipment and Program Loan
Agreement attached to this Agreement as Exhibit C. [ * * * ].
2.4 Joint Product and NGSS Development. IBM and Synopsys will work together
to develop the Joint Products and NGSS in accordance with Exhibit A and
the Annual Joint Development Plans. The of IBM resources that will be
provided by IBM for the development of NGSS is contained in Exhibit
A-4.
2.5 IBM Access to Pre-Alpha and Alpha Release Versions of the Joint
Products. [ * * * ] The policies and procedures set forth below shall
be subject to modification by written agreement of the parties.
2.5.1 Pre-Alpha Releases of Joint Products. [ * * * ].
2.5.2 Alpha Release of Joint Products. [ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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[ * * * ].
2.6 Beta Release. The Product R&D Team for each Joint Product and NGSS, as
well as field engineers from each party, will provide direct support
for the Beta Release of the Joint Products and NGSS.
2.7 Development Information. The parties will provide each other, during
development, with continuous on-line access to Source Code of the Joint
Products and NGSS. IBM will provide Synopsys with a tape containing
Source Code of the IBM EDA Base Products to permit Synopsys to develop
Joint Products and NGSS.
2.8 Direction of Development Effort. Each party will perform its own
development obligations hereunder, and will organize its efforts to
complete all development projects efficiently, with adequate resources,
and in a timely manner.
2.9 Cooperation and Assistance. Synopsys and IBM will provide each other
with the such training, promotional materials and technical assistance
as is necessary for successfully developing, testing and marketing the
Joint Products and NGSS.
3.0 CONDUCT OF DEVELOPMENT ACTIVITIES
3.1 Joint Development Team. On the Effective Date, the parties will create
a team framework (the "Joint Development Team") in which to conduct the
joint development activities. The Joint Development Team will consist
of the following:
3.1.1 the Sponsoring Executives of each party,
3.1.2 Steering Team,
3.1.3 Alliance Management Team, and
3.1.4 Product R&D Teams.
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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3.2 Sponsoring Executives. The Sponsoring Executives under this Agreement
will be:
3.2.1 for IBM: IBM's Vice President and General Manager,
Microprocessors and ASIC Products, or his/her designee, and
3.2.2 for Synopsys: Synopsys' Chief Executive Officer or his/her
designee.
3.3 Composition of Steering Team. The Steering Team shall consist of one
executive level representative from each party.
3.3.1 The Steering Team members will:
(i) review the objectives and direction of the
development activities, and will be the approval
authority for the Annual Joint Development Plans;
(ii) oversee the joint development effort and review its
progress on a regular basis; and
(iii) pursue the parties' objectives as set forth in
Section 2.0 of this Agreement and in Exhibits A, ▇-▇,
▇-▇, ▇-▇ & ▇-▇ of this Agreement.
3.3.2 On the Effective Date, the Steering Team will be:
(i) for IBM: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Director of EDA, and
(ii) for Synopsys: Dr. Chi-▇▇▇▇ ▇▇▇▇
3.3.3 The Steering Team shall conduct regular meetings, to be
conducted at least quarterly. Each such meeting shall be
convened after prior written notice has been provided to each
member, unless otherwise agreed in writing by both parties.
Each such notice shall set out the agenda for the meeting in
sufficient detail to allow each party to prepare adequately
therefor. Meetings of the Steering Team may be held in person,
by teleconference, or by videoconference.
The Steering Team representative requesting the meeting shall
record detailed minutes of the technical aspects of such
meeting except upon written agreement otherwise.
3.3.4 All decisions of the Steering Team with respect to the Joint
Products and NGSS must be unanimous, subject to Section 3.3.5
of this Agreement.
3.3.5 In the event of a deadlock regarding any Steering Team
decision-making, either party shall have the option to refer
the deadlocked matter to the Sponsoring Executives for
resolution. In addition to the responsibilities listed in
Section 3.3.1
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to this Agreement, the Steering Team and Sponsoring Executives
Will attempt to resolve any disputes between Synopsys and IBM
arising out of or in connection with this Agreement, and any
dispute giving rise to a notice of default or notice of
intention to terminate for default. Prior to submitting any
such disputes to the Steering Team, however, such dispute will
be fully discussed by the Product R&D Team involved in such
dispute and the Alliance Management Team to attempt to achieve
its prompt resolution. If the Alliance Management Team is
unable to resolve such dispute by mutual written agreement,
such dispute will be submitted to Steering Team for
resolution. The Steering Team, together with the Alliance
Management Team will meet and fully discuss such dispute in an
attempt to achieve its prompt resolution. In the event that
such dispute is not promptly resolved by the mutual written
agreement of the Steering Team, the dispute will be submitted
to the Sponsoring Executives. The Sponsoring Executives shall
then meet and fully discuss such dispute in an attempt to
achieve its prompt resolution. With respect to the Joint
Products, if such dispute is not promptly resolved by the
mutual written agreement of the Sponsoring Executives within
thirty (30) days from the date of the first written notice by
the party invoking the dispute escalation procedure, the
matter shall be tabled and shall not be subject to
reconsideration except upon mutual agreement of the parties,
and with respect to NGSS, the Sponsoring Executive from
Synopsys shall make the final decision to resolve any dispute
[ * * * ]. Provided, however, at the end of the foregoing
dispute resolution or decision-making steps, IBM and Synopsys
will then be free to seek any of the remedies available under
this Agreement and, such remedies proving inadequate, IBM and
Synopsys will then be free to pursue any remedies available at
law or in equity in accordance with the terms and conditions
of this Agreement.
3.4 The Alliance Management Team. The Alliance Management Team shall be
comprised of one member from IBM and one member from Synopsys,
appointed by each party's, respective representative on the Steering
Team. The Alliance Management Team's sole responsibility under this
Agreement will be to focus on the joint development efforts. The
Alliance Management Team's primary focus will be on the success of this
Agreement; specifically, the Alliance Management Team's areas of
responsibility will consist of:
3.4.1 management of the relationship between the parties and
attempting to resolve any conflict;
3.4.2 organization and coordination of the parties' joint
development effort, including, but not limited to, management
of the resources dedicated to the effort;
3.4.3 coordination of the overall strategy for the joint development
effort; and
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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3.4.4 coordination of the development and implementation of the
Annual Joint Development Plan.
3.5 New Members. Each party may change its representatives on the Steering
Team or the Alliance Management Team by written notice to the other
party.
3.6 Product Research and Development ("R&D") Teams. A Product R&D Team will
be established for each Joint Product, as well as for NGSS. Each
Product R&D Team will have a single manager from either IBM or Synopsys
who is appointed by the mutual written agreement of the Steering Team
and who will direct the efforts of both parties with respect to the
Joint Product or NGSS. The Product R&D Team for NGSS will have a
manager from Synopsys. The objective is to have the management of the
teams be balanced between the parties, with the general target being
that two (2) of the four (4) teams are managed by an IBM representative
and two (2) of the four (4) teams are managed by a Synopsys
representative.
The Product R&D Teams will be responsible for annually establishing an
Annual Joint Development Plan, as well as a two-year product plan and a
three-year vision statement. The annual review process shall be
conducted as follows:
3.6.1 Within ninety (90) days prior to each year anniversary of the
Effective Date, the Product R&D Teams for each of [ * * * ]
will meet and develop the Annual Joint Development Plan. The
Alliance Management Team will review the Annual Joint
Development Plan and submit it to the Steering Team for
approval.
3.6.2 Any issue relating to an Annual Joint Development Plan that
cannot be resolved by the Alliance Management Team before
thirty (30) days prior to the upcoming anniversary of the
Effective Date shall be submitted to the Steering Team for
resolution in accordance with the terms and conditions of
Sections 3.3.5 of this Agreement.
During the term of this Agreement, other than with respect to an
Alliance, should IBM wish [ * * * ] should Synopsys wish to develop
[ * * * ] the Product R&D Team for that product will decide
whether to incorporate such [ * * * ] to make such [ * * * ] part of
the [ * * * ]. Should the Product R&D Team decline to do so,
[ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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3.7 Joint Methodology Team. To help achieve the common objectives which
implicate methodology, the parties will establish a Joint Methodology
Team consisting of [ * * * ]. The Joint Methodology Team will be
responsible for gathering requirements for [ * * * ], requesting
development priorities, ensuring that [ * * * ] are consistent with
the mutually agreed upon design methodology and providing early
[ * * * ]. The most important common objective that will direct the
decisions and actions taken by the Joint Methodology Team will be
[ * * * ].
4.0 OWNERSHIP AND LICENSES
4.1 Ownership. The ownership of the intellectual property of each party
relevant to the present Agreement shall be as follows:
4.1.1 Each party shall retain full ownership rights to its
pre-existing intellectual property or independently developed
intellectual property (i.e. intellectual property developed
separate from the product development activities of this
Agreement) that is incorporated into Joint Product
Information, NGSS Information or Enhanced Design Compiler.
4.1.2 As to the Joint Products and NGSS:
4.1.2.1 Any Invention made by one party shall be owned by
that party, subject to the patent license granted to
the other party elsewhere in this Section 4.0. Any
Joint Invention shall be jointly owned, title to all
patents issued thereon shall be joint, all expenses
incurred in obtaining and maintaining such patents,
except as provided hereinafter, shall be jointly
shared, and the parties shall have the unrestricted
right to license Subsidiaries (who may
correspondingly sublicense Subsidiaries) and third
parties thereunder without accounting. In the event
that either party elects not to seek patent
protection for any Joint Invention in any particular
country, or not to share equally in the expense
thereof with the other, the other party shall have
the right to seek or maintain such protection at its
own expense in such country and shall have full
control over the prosecution and maintenance thereof
even though title to any patent issuing therefrom
shall be joint without accounting.
4.1.2.2 Other than any Invention or Joint Invention as set
forth above, the Joint Products shall be jointly
owned by the parties, and NGSS shall be solely owned
by Synopsys. All right, title, and interest in and to
the Joint
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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Products shall be jointly held, and such ownership
rights shall be exercised without accounting other
than as set forth in Section 7.0 below. To the extent
that the Joint Products or NGSS incorporate the
pre-existing or independently developed intellectual
property of either party as set forth in Section
4.1.1 to this Agreement, such ownership rights for
Joint Products or NGSS shall be subject to the rights
and licenses granted in this Section 4.0 as to such
intellectual property, which in any case shall
survive expiration or termination of the Agreement
unless such rights apply only during the term of this
Agreement or are modified or terminated pursuant to
Section 8.0 below. During the term of this Agreement
the exercise of the ownership rights set forth in
this Section 4.1.2.2 shall be further subject to
Sections 9.1 and 9.2 below.
4.2 IBM License to Synopsys of Intellectual Property In IBM EDA Base
Products Incorporated In Joint Products. IBM hereby grants to Synopsys
an irrevocable, non-exclusive, non-transferable, worldwide,
royalty-bearing (as set forth in Section 7.0 below) right and license
under its pre-existing or independently developed trade secrets,
knowhow, and copyrights (including, but not limited to, the Source Code
to the IBM EDA Base Products) in Joint Product Information as set forth
in Section 4.1.1 of this Agreement to use, reproduce, execute, display,
perform, market, license, and prepare derivative works of the Code to
the IBM EDA Base Products for the purpose of developing, marketing,
licensing and supporting the Joint Products. The foregoing license does
not grant Synopsys any right or license to sublicense, sell or transfer
IBM EDA Base Products to any third party.
[ * * * ].
4.3 Synopsys License to IBM of Intellectual Property Incorporated In Joint
Products. Synopsys hereby grants to IBM a worldwide, non-exclusive,
irrevocable, non-transferable royalty-free right and license under its
pre-existing or independently developed trade secrets, know-how, and
copyrights in Joint Product Information as set forth in Section 4.1.1
of this Agreement internally to do the following: to use, execute,
display, perform, reproduce, and prepare derivative works of all
versions of the Code to the Joint Products (up to and including, the
last version made generally commercially available by Synopsys prior to
the expiration or other termination of this Agreement) and to carry out
the aforementioned rights and licenses with respect to such Code
including to do so in furtherance of an Alliance as set forth in
Section 4.6 below, and, in addition, as follows:
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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[ * * * ].
During the term of this Agreement (and thereafter, subject to the
licenses and rights of IBM upon termination or expiration of this
Agreement as set forth in Section 8.0), IBM agrees that [ * * * ],
any third party who wishes to utilize the Joint Products will require
an end-user license to the Joint Products from Synopsys. Synopsys
agrees to license Joint Products to any IBM Alliance participant under
terms and conditions and at rates consistent with those used for
Synopsys' best similarly situated customer with respect to Joint
Products. Synopsys recognizes that IBM's use of the Joint Products may
have indirect benefit to a customer's design in the form of training,
reproduction of Errors and answers to technical questions. [ * * * ].
4.3.1 After expiration or termination of this Agreement, IBM may use
the Code of the Joint Products (up to and including, the last
version made generally commercially available by Synopsys
prior to such expiration or termination) as set forth above,
as well as in Sections 4.6 and Sections 8.0 of this Agreement.
4.4 IBM License to Synopsys of Intellectual Property in IBM EDA Base
Products Incorporated in NGSS. IBM hereby grants to Synopsys an
irrevocable, non-exclusive, non-transferable, world-wide,
royalty-bearing (as set forth in Section 7.0 below) right and license
under its pre-existing trade secrets, know-how, and copyrights
(including, but not limited to, the Code for IBM EDA Base Products) in
NGSS Information as set forth in Section 4.1.1 to this Agreement to
use, execute, display, perform, market, license, and prepare derivative
works of the Code for IBM EDA Base Products for the purpose of
developing, marketing, licensing and supporting NGSS. The foregoing
license does not grant Synopsys any right or license to sublicense,
sell or transfer IBM EDA Base Products to any third party.
4.4.1 IBM License to Synopsys of Intellectual Property in IBM EDA
Base Products Incorporated in Enhanced Design Compiler. IBM
hereby grants to Synopsys an irrevocable, non-exclusive,
non-transferable, world-wide, fully paid-up right and license
under its pre-existing trade secrets, know-how, and copyrights
(including,
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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but not limited to, the Code for IBM EDA Base Products) in
Enhanced Design Compiler as set forth in Section 4.1.1 to this
Agreement to use, execute, display, perform, market, license,
and prepare derivative works of the Code of IBM EDA Base
Products solely for the purpose of developing, marketing,
licensing and supporting Enhanced Design Compiler. The
foregoing license does not grant Synopsys any right or license
to sublicense, sell or transfer IBM EDA Base Products to any
third party.
4.5 Synopsys License of NGSS to IBM. Synopsys hereby grants to IBM an
irrevocable, nonexclusive, non-transferable, worldwide, royalty-free
right and license under its trade secrets, know-how, and copyrights in
NGSS internally to do the following: to use, execute, display, perform,
reproduce, and prepare derivative works of NGSS Information based upon
all versions of the Code to NGSS (up to and including, the last version
made generally commercially available by Synopsys prior to the
expiration or other termination of this Agreement) and to carry out the
aforementioned rights and licenses with respect to such Code including
to do so in furtherance of an Alliance as set forth in Section 4.6
below, and, in addition, as follows:
(a) in IBM's ASIC operation and in IBM Design Centers
within the scope of the definition of "IBM Design
Center" in Section 1.20 of this Agreement, and
(b) IBM may sublicense its Subsidiaries (who may
correspondingly sublicense Subsidiaries) to practice
any and all of the foregoing rights.
IBM agrees that [ * * * ], any third party who wishes to utilize NGSS
will require an end-user license to NGSS from Synopsys. Synopsys
agrees to license NGSS to any IBM Alliance participant under terms and
conditions and at rates consistent with those used for Synopsys' best
similarly situated customer with respect to NGSS. Synopsys recognizes
that IBM's use of NGSS may have indirect benefit to a customer's
design in the form of training, reproduction of Errors and answers to
technical questions. [ * * * ].
4.6 Development and License of Joint Project and NGSS Custom Versions for
an Alliance. Notwithstanding the other provisions of this Section 4.0,
Synopsys agrees that IBM will have the worldwide, non-exclusive,
non-transferable, irrevocable, royalty-free right and license during
the term of this Agreement to use the Code of a Joint Product or NGSS
to develop custom versions of such Joint Product or NGSS which IBM may
sublicense in Object Code form [ * * * ] to an Alliance participant.
[ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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each of the Alliance participants will require the Synopsys license(s)
appropriate for the relevant Joint Product or NGSS in order to use any
such custom version. Synopsys agrees to license Joint Product or NGSS
to such IBM Alliance participants for this purpose under terms and
conditions and at rates consistent with those used for Synopsys' best
similarly situated customer with respect to Joint Products or NGSS. IBM
agrees, however, that [ * * * ] it will not provide any Alliance
participant with Source Code to the Joint Products or NGSS without
Synopsys' prior written approval during the term of this Agreement.
[ * * * ]. When jointly approved by the Product R&D Team for a Joint
Product or NGSS, as the case may be and to the extent IBM has the
right to do so, IBM will grant Synopsys an exclusive, worldwide, non-
transferable, irrevocable, and royalty-free right and license to the
Code of such custom version for the purpose of developing and
licensing future versions of the Joint Product or NGSS for general
commercial availability. IBM is not obligated to seek or obtain any
such right to use, in future releases of Joint Product or NGSS, any
derivative of Joint Product or NGSS that is developed in an Alliance.
4.7 Sublicense Restrictions. As a condition of the rights granted herein,
each party agrees to obtain from end-user sublicensees binding written
agreements calculated to prevent the unauthorized use and distribution
of the licensed software, with such provisions as the sub-licensing
party normally obtains with respect to its own software of a similar
type. In any case, all such license agreements will contain provisions
that are no less restrictive, and materially no less protective of the
Joint Products, and than the applicable provisions of this Agreement.
4.8 Proprietary Notices and Other Labeling Requirements. As a further
condition of the license rights granted hereunder in the Joint
Products, each party agrees not to remove any copyright notice, patent
notice, restricted fights legend, or other proprietary notice or
legends of the other or those of any third party displayed on or
contained in any Code or Documentation provided by the other, and to
reproduce any such notice and legend on all copies of such Code or
Documentation made hereunder.
4.9 Patent License. IBM hereby grants to Synopsys a non-transferable,
non-exclusive, worldwide, royalty-bearing (subject to Section 7.0
below) right and license under the IBM EDA Patents to make, have made,
use, have used, import, lease, practice and have practiced Joint
Products, Enhanced Design Compiler, NGSS, and Complementary Products,
to utilize the IBM technology specified in Section 4.13 in the manner
set forth therein, and to license customers to use such Joint Products,
Enhanced Design Compiler NGSS, and Complementary Products, all to the
extent Synopsys is otherwise licensed by IBM to do so elsewhere in this
Section 4.0 and in Section 8.0. Synopsys hereby grants to IBM a
non-transferable, non-exclusive, world-wide, royalty-free right and
license under the Synopsys EDA Patents to make, have made, use, have
used, import, lease, practice and have practiced Joint Products, NGSS,
to utilize the Synopsys technology specified in Section 4.13 in the
manner set forth therein and to license customers to use such Joint
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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Products and NGSS, all to the extent IBM is otherwise licensed to do so
elsewhere in this Section 4.0 and in Section 8.0. Nothing contained in
this Section will be deemed to grant, either directly or by
implication, estoppel, or otherwise, any license under any patent or
patent application arising out of any other inventions or patents of
either party, or under any patents of either party relating to any
combination other than as explicitly licensed above. The patent
licenses of this Section 4.9 shall be irrevocable as to Joint Products,
and [ * * * ].
4.10 No Other License. The parties understand and agree that no license or
other right is granted herein to either party, directly or by
implication, estoppel or otherwise, with respect to any patents, trade
secrets, know-how, masks works, copyrights or other intellectual
property rights, except as specifically provided in Section 4.0 and
Section 8.0 of this Agreement.
4.11 [ * * * ].
4.12 [ * * * ].
4.13 Incidental Technology Use. Each party hereby agrees that it will extend
the licenses of Sections 4.1, 4.2, 4.3, 4.4, 4.5 and 4.6 of this
Agreement, as modified upon expiration or termination pursuant to
Section 8.0 of this Agreement, to specified intellectual property on a
royalty-free basis for incorporation into specified products of the
other party, as set forth below and as may be agreed to from time to
time by the parties in writing. [ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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[ * * * ].
5.0 SUPPORT
5.1 Support for Joint Products and NGSS. Synopsys agrees to provide its
full range of commercial support services for the Joint Products and
NGSS to all third party customers of the Joint Products and NGSS,
except IBM Design Centers. IBM will provide all support services for
the Joint Products and NGSS to IBM, its Subsidiaries or IBM Design
Centers. The support services described in the preceding two (2)
sentences will include First-Level, Second-Level and Third-Level
Support. "First- Level Support" will consist of detecting problems and
providing education about the Joint Products and NGSS. "Second-Level
Support" will consist of answering questions about the Joint Products
and NGSS. "Third-Level Support" will consist of fixing Errors and
Defects in the Joint Products and NGSS.
5.2 IBM Third-Level Support of Synopsys Customers. IBM will [ * * * ]
to provide Third-Level Support directly to Synopsys in support of
Synopsys' customers concerning the aspects of any Joint Product and
NGSS developed by the IBM portion of the Joint Product R&D Team that
Synopsys, despite its Best Efforts, is unable to provide to its
customer; provided that such questions are asked of IBM solely by
Synopsys employees identified in writing by Synopsys to IBM. IBM will
provide such Third-Level Support at no charge to Synopsys. Synopsys
agrees to compensate IBM at a rate as set forth in Section 7.2 below
for any customer support provided by IBM for the Joint Products or NGSS
other than Third-Level Support described in this Section 5.2.
5.3 Synopsys Support of IBM. Synopsys agrees to make its full range of
commercial support services available to IBM for IBM's use of the Joint
Products and NGSS, in IBM's capacity as a consumer and marketer of EDA
software tools and as an ASIC Vendor, at the fees, rates and terms and
conditions consistent with those used for Synopsys' best similarly
situated customer.
6.0 INFORMATION TRANSFERS AND RIGHTS IN DATA
6.1 Any Information of either party constituting: (a) Source Code (or
Object Code prior to its general availability) of the [ * * * ]
(b) algorithms (i.e., a unique sequence of steps for manipulating data
or data structures to achieve a desired result, and which is the direct
precursor of Source Code); (c) benchmark data (i.e.
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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data describing a performance or functional comparison between two or
more computer programs or algorithms, which assists potential users in
evaluating and deciding among these programs or algorithms); and (d)
test cases (i.e., sets of data normally operated upon by computer
programs and used to validate the correct operation or performance of
such programs, or to make comparisons between programs), shall be
treated as confidential Information pursuant to this Section 6.0. Any
other Information disclosed by one party to the other in performance of
Joint Product or NGSS development will be treated as nonconfidential
unless it is clearly designated (in writing, orally or otherwise), at
the time of disclosure, as confidential to the disclosing party, with a
designation such as IBM Confidential" or "Synopsys Confidential" in
case of documents. The parties' Alliance Management Team representative
shall be responsible for monitoring the disclosure of confidential
Information.
6.2 Except as otherwise provided in this Agreement, with respect to the
confidential Information of either party, for a period of [ * * * ]
from the date of disclosure in the case of the Source Code as set
forth in Section 6.1, and for a period of [ * * * ] from the date
of disclosure for all other Information, the receiving party shall use
the same efforts to avoid its publication or dissemination and to
disclose it only to its employees who have a need to know as it employs
with respect to confidential Information of its own which it does not
desire to be published or disseminated. Prior to making available any
confidential Information, the receiving party shall have entered into
appropriate confidentiality agreements with each of such employees.
6.3 [ * * * ]. It is understood that receipt of any confidential
Information under this Agreement shall not create any obligation in
any way limiting or restricting the assignment or reassignment of MM
employees within MM or any of its Subsidiaries.
6.4 The announcement, marketing or support of any product or service by
either party or its Subsidiaries, including, but not limited to, any
supporting Documentation thereof, which inherently discloses the
confidential Information of either party shall not in itself be deemed
publication or disclosure of such Information as contemplated by
Section 6.2 of this Agreement. This Section 6.4 shall not apply to any
Information which is not part of NGSS Information or Joint Product
Information.
6.5 Disclosure of confidential Information shall not be precluded, if such
disclosure is:
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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6.5.1 in response to a valid order of a court or other governmental
body of the United States or any political subdivision
thereof, provided, however, that the receiving party shall
first have given, immediately upon receipt of such order,
notice to the disclosing party and made a reasonable effort to
obtain a protective order requiring that such confidential
Information so disclosed be used only for the purposes for
which the order was issued; or
6.5.2 otherwise required by law or regulation, including, but not
limited to, SEC regulations.
6.6 Notwithstanding any other provisions of this Agreement, the
non-disclosure obligations specified in Section 6.2 of this Agreement
shall not apply to any Information which:
6.6.1 is already in the possession of the receiving party without
obligation of confidence; or
6.6.2 becomes publicly available without breach of this Agreement;
or
6.6.3 is released for disclosure by the disclosing party with its
written consent; or
6.6.4 is rightfully received independent of this Agreement from a
third party under no obligation of confidentiality; or
6.6.5 is internally developed by it independent of this Agreement;
or
6.6.6 is nonconfidential at the time of disclosure as set in Section
6.1 of this Agreement, or becomes nonconfidential upon
expiration of the term set forth in Section 6.2 of this
Agreement.
6.7 Notwithstanding the foregoing, the parties' Alliance Management Team
representative shall mutually agree in writing [ * * * ]. In
identifying the portions of the Joint Product Information described in
the preceding sentence, the parties' Alliance Management Team
representatives shall give serious consideration to, among other
things, the sensitivity, value, and potential for intellectual property
protection of such Information, and will therefore exercise sensitivity
to security concerns in all their decisions. The parties will
periodically make an assessment of all such selected Information, as it
accumulates, to reduce the possibility that disclosure, even pursuant
to confidentiality restrictions, would place intellectual property
rights or value at risk, and will modify or reduce the scope of future
disclosures of the Information accordingly. [ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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6.8 Notwithstanding the foregoing, the receiving party may disclose the
confidential Information of the disclosing party incorporated in NGSS
Information or Joint Product Information to a subcontractor or other
third party, solely for the purpose of enabling such third party to
perform software development or support services for, or on behalf of,
the receiving party, on the condition that such third party agrees not
to use such confidential Information for any other purpose, and is
bound by terms and conditions that are at least as-restrictive as the
parties' respective obligations of Section 6.2 of this Agreement as to
such Information. Both parties agree that this Section 6.8 shall not
apply to any Information which is not part of NGSS Information or Joint
Product Information.
6.9 [ * * * ]. Such information shall be in the form of design data or
database information contained on a tape, disk, or other electronic
storage medium. No other confidential information of a third party
customer shall be disclosed under this Agreement. In addition to the
receiving party uses pursuant to Section 6.2 of this Agreement as to
its own confidential information, the receiving party agrees to carry
out the following steps with regard to such third party customer
confidential information:
- Maintain a log or other listing that identifies the
information, sets forth the date of receipt, and indicates who
has been granted access to such information;
- To the extent such information is made available on a computer
system having multiple user access, utilize RACF or on other
access protection procedure to limit access to only those
individuals within the receiving party having a need-to-know;
and
- Instruct employees of the receiving party that they shall not
decompile or otherwise reverse engineer the information other
than as permitted by the disclosing party.
The disclosing party shall cause such information to bear a label or
other designation indicating that it is customer confidential
information. In disclosing such information to the receiving party
hereunder, the disclosing party hereby represents that the disclosing
party has been authorized by the third party to disclose such
information to the receiving party hereunder, and that the receiving
party's confidentiality obligations as to such information are no more
restrictive than the obligations of this Section 6.0. Should any of the
obligations be more restrictive than those set forth in this Section
6.0, the disclosing party may not disclose such information to the
receiving party without first describing the nature of any such
restriction and obtaining the written approval of the receiving party
to receive such information.
7.0 CONSIDERATION
* * * Confidential treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
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7.1 Cash Payment and Promissory Note. Synopsys agrees to pay IBM eleven
million dollars ($11,000,000) within thirty (30) days following the
Effective Date and to execute four (4) seven million five hundred
thousand dollar (7,500,000) Promissory Notes contemporaneously with the
execution of this Agreement, in consideration for the license rights,
transfers, and agreements of IBM as set forth in this Agreement. The
parties agree that performance under this Agreement entails shared
effort and shared risk, and, therefore, that IBM's performance under
this Agreement is conditioned upon Synopsys' execution of and
performance pursuant to the Promissory Notes.
7.2 Support Payments. IBM will provide the Third-Level Support Services
described in Section 5.2 of this Agreement at no charge for the Joint
Products and NGSS. IBM will also provide First-Level and Second-Level
Support Services for the Joint Products and NGSS in forty (40) hour
work week increments and at rates contained in the Annual Joint
Development Plans. For one (1) year immediately following the Effective
Date, IBM will charge Synopsys at the rate of $165,000 per year (on the
basis that one (1) year is equivalent to one thousand nine hundred and
twenty (1,920 hours) for First-Level and Second-Level Support Services.
7.3 Synopsys Payment of Royalties on Joint Products and NGSS. In
consideration for the licenses granted by IBM to Synopsys hereunder and
for the development activities that IBM performs pursuant to this
Agreement, Synopsys agrees to pay royalties to IBM in accordance with
the terms and conditions set forth in this Section 7.3 on Net Revenues
Synopsys receives from licenses of the [ *** ] that Synopsys grants for
six (6) years following the Effective Date. In calculating Net Revenue
for the Test Joint Product only for the years listed below, Synopsys
may deduct the following amounts:
1996 [ * * * ]
1997 [ * * * ]
1998 [ * * * ]
1999 [ * * * ]
2000 and subsequent years [ * * * ]
[ * * * ].
7.3.1 For six (6) years, beginning on the Effective Date, Synopsys
agrees to pay royalties to IBM based upon the cumulative Net
Revenue received by Synopsys during the term of this Agreement
according to the following schedule (the "Royalty"):
Royalty for Joint Products:
Net Revenue Percentage of Net
* * * Confidential treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
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[ * * * ] [ * * * ]
1. More than [ * * * ] but [ * * * ], and
less than [ * * * ]
2. [ * * * ] or more [ * * * ]
Royalty for [ * * * ]:
[ * * * ] [ * * * ]
[ * * * ] [ * * * ]
7.3.2 Following the [ * * * ] and ending on [ * * * ], Synopsys' obligation
to pay the Royalty will be as follows. The Royalty percentage of
[ * * * ] shall be [ * * * ]. The Royalty percentage of [ * * * ]
shall be either [ * * * ] (if the cumulative Net Revenue received by
Synopsys during the term of this Agreement as of [ * * * ] is less
than [ * * * ]) or [ * * * ] (if the cumulative Net Revenue received
by Synopsys during the term of this Agreement as of [ * * * ]).
7.3.2.1 From [ * * * ] until and including [ * * * ], Synopsys shall
pay a Royalty equal to [ * * * ] of an amount equal to: (a)
[ * * * ] received by Synopsys in [ * * * ] and (b) the
applicable Royalty percentage for [ * * * ] of the Net
Revenue for [ * * * ].
7.3.2.2 From [ * * * ] until and including [ * * * ], Synopsys shall
pay a Royalty equal to [ * * * ] of an amount equal to: (a)
[ * * * ] of the [ * * * ] received by Synopsys in [ * * * ],
and (b) the applicable Royalty percentage for [ * * * ] of
the Net Revenue for [ * * * ].
* * * Confidential treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
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7.3.2.3 From [ * * * ] until and including [ * * * ], Synopsys shall
pay a Royalty equal to [ * * * ] of an amount equal to: (a)
[ * * * ] of the [ * * * ] received by Synopsys in [ * * * ]
and (b) the applicable Royalty percentage for Joint Products
(as set forth in Section 7.3.2 of this Agreement) of the Net
Revenue for Joint Products received by Synopsys in [ * * * ].
7.4 Royalty Payments and Reports. The Royalty will be payable on a calendar
quarterly basis within forty-five (45) days after the close of each
calendar quarter with respect to Net Revenue received during the
immediately preceding calendar quarter. At the time when such royalty
payments are due, Synopsys will deliver to IBM a written report setting
forth the number of: licenses of the Joint Products, NGSS, and
Complementary Products and any other transaction in which Synopsys
distributes or permits the use of any Joint Product, NGSS, or
Complementary Product, or any portion thereof Such report will also set
forth the gross revenue and deductions from gross revenue used to
calculate Net Revenue for the immediately preceding calendar quarter,
as well as the cumulative Net Revenue received by Synopsys since the
Effective Date, together with a calculation of the Royalty due and
owing to IBM, if any. Such report will be accompanied by payment of the
Royalty.
7.5 Royalty Payments. All Royalty payments due and owing to IBM under this
Section 7.0 shall be sent via wire transfer to IBM at:
Director of Licensing
IBM Corporation
The Bank of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[ * * * ]
With a copy to:
Director of Licensing
IBM Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
7.6 Late Payments. Synopsys will be obligated to pay IBM eighteen percent
(18%) annual simple interest or the highest rate permitted by law,
whichever is less, on any late payment that is due and owing to IBM
pursuant to this Section 7.0.
* * * Confidential treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
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7.7 Audit Rights. IBM will have the right at its expense to have a single
certified public accounting firm selected from the list in Exhibit D
audit the records of Synopsys to verify the information required to be
provided in the reports described in Section 7.4 of this Agreement.
Such audit may be performed on not less than thirty (30) days' prior
written notice to Synopsys, may not be performed more than once for any
given calendar quarter, and may not be performed more than once in any
twelve (12) month period. Any such audit shall be limited in scope to
the three (3) years immediately preceding. In the event any report or
payment includes any inconsistency or mistake, Synopsys will
immediately rectify such report and will immediately make any payment
required by such rectification. If an error of more than ten percent
(10%) is found in favor of IBM as a result of such audit, Synopsys will
reimburse IBM for the cost of such audit within thirty (30) days of
such finding. Synopsys will keep and maintain books and records
sufficient for the verification of the information required to be
provided with each payment pursuant to Section 7.4 of this Agreement
for a period of three (3) years following the quarterly period to which
such books and records relate.
8.0 TERM AND TERMINATION
8.1 Term. The term of this Agreement shall begin on the Effective Date, and
unless previously terminated as hereinafter set forth, shall remain in
force until December 31, 2001, or such other date as the parties
hereafter agree in writing (the "Term").
8.2 [ * * * ].
8.3 Cause. Either party shall have the right to terminate this Agreement
for cause by giving written notice of termination to the other party,
upon the happening of any of the following events:
8.3.1 a determination by a court of competent jurisdiction that
makes it unlawful for the parties to continue the relationship
contemplated by this Agreement;
8.3.2 if either party is in default of any material obligation under
this Agreement and such default is not cured within thirty
(30) days after receipt of a written notice from the other
party specifying such default;
8.3.3 either party files a petition in bankruptcy, undergoes a
reorganization pursuant to a petition in bankruptcy, is
adjudicated a bankrupt, becomes insolvent, becomes dissolved
or liquidated, files a petition for dissolution or
liquidation, makes an assignment for benefit of creditors, or
has a receiver appointed for its business;
* * * Confidential treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
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8.3.4 either party is subject to property attachment or court
injunction or court order which has a substantial negative
effect on its ability to fulfill its obligations under this
Agreement; or
8.3.5 Change of Control of either party.
Termination under Section 8.3.2 of this Agreement will become effective
automatically upon the date the dispute escalation process described in
Section 3.3.5 of this Agreement is complete. Termination under Sections
8.3.1, 8.3.3, 8.3.4, and 8.3.5 of this Agreement will become effective
immediately upon receipt of written notice of termination by the
terminating party at any time after the specified event.
8.4 Effects of Termination or Expiration - General. Upon
termination of this Agreement with or without cause, or upon
expiration of this Agreement, except as set forth in this
Section 8.0 or Section 12.4 of this Agreement, this Agreement
will be of no further effect and both parties' development
obligations under this Agreement with respect to the Joint
Products or NGSS will immediately end.
8.4.1 Effect of Expiration. Upon expiration of this Agreement at the
end of the Term, for the [ * * * ] after the date of such
expiration this Agreement, IBM shall have the right and
license to utilize any Joint Product and Joint Product
Information for any purpose; (provided that IBM shall hold no
additional rights with respect to Synopsys intellectual
property of Section 4.1.1 of this Agreement which,
notwithstanding anything to the contrary in this Section
8.4.1, shall continue to be subject to the licenses of
Section 4.0 of this Agreement) provided, however, that IBM
may not sublicense any Joint Product or Joint Product
Information to any third party other than to the extent it is
authorized to do so pursuant to Section 4.0 and Section 6.0
of this Agreement. After such period, in addition to rights
and licenses set forth in the preceding sentence, IBM shall
have the right to sublicense any Joint Product or Joint
Product Information to any third party for the development of
any new product derived in whole or in part from any Joint
Product or Joint Product Information; provided, however, that
for [ * * * ] at the conclusion of the preceding [ * * * ]
IBM will not market and license, or license any third party
to market and license such new products, other than as
authorized in Section 4.0 and Section 6.0 of this Agreement.
After [ * * * ], IBM and any third party licensee shall have
the fight and license to utilize any Joint Product, any Joint
Product Information, or any such new products, for any
purpose. None of this Section 8.4 will apply to [ * * * ] or
[ * * * ].
8.5 Termination by IBM for Cause or by Synopsys Without Cause. In the event
that this Agreement is terminated by IBM for cause or by Synopsys
without cause, the following rights and obligations of the parties will
survive or become effective:
* * * Confidential treatment requested pursuant to a request for
confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the
Commission.
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8.5.1 On the date of termination by IBM for cause, Synopsys'
obligation to pay IBM under the Promissory Note shall
accelerate and all payments owing by Synopsys to IBM under
such Promissory Note shall become due and owing to IBM on the
date of termination.
8.5.2 Synopsys shall continue to pay Royalties to IBM in accordance
with Sections 7.3, 7.4, 7.5, 7.6, and 7.7, of this Agreement.
8.5.3 On the date of termination by IBM for cause, IBM shall have
the right and license to utilize any Joint Product and Joint
Product Information for any purpose (provided that IBM shall
have no additional right with respect to the Synopsys base
intellectual property of Section 4.1.1 of this Agreement,
which, notwithstanding anything to the contrary in this
Section 8.5.3, shall continue to be subject to the licenses of
Section 4.0 of this Agreement); including the right to
sublicense any Joint Products or Joint Product Information to
any third party for the development of any new product derived
in whole or in part from any Joint Product or Joint Product
Information; provided, however, that for the [ * * * ] after
the date of such termination, IBM will not market or license,
or license any third party to market and license, such new
products, other than as authorized in Section 4.0 and Section
6.0 of this Agreement. After such [ * * * ] year period IBM
and any third party licensee shall have the right and license
to utilize any Joint Product, any Joint Product Information,
or any such new products, for any purpose. None of this
Section 8.5.3 applies to [ * * * ] or [ * * * ].
8.5.3.1 Breach of Best Efforts Obligation of Section 4.2 of
This Agreement. If Synopsys fails to meet its Best
Efforts obligations of Section 4.2 as to any one of
the Joint Products, the rights set forth in Section
8.5.3 above shall apply as to only that Joint
Product, and the parties respective rights and
obligations as to that Joint Product shall be the
same as if this Agreement were terminated by IBM for
cause; provided, however, that breach of such Best
Efforts obligation as to a single one of the Joint
Products shall not be cause for termination of the
Agreement, and the parties' respective rights and
obligations as to the other Joint Products shall
remain in full force and effect. Should Synopsys fail
to meet its Best Efforts obligations of Section 4.2
as to more than one of the Joint Products, such
failure shall constitute a default of a material
obligation of this Agreement and the previous
sentence shall not apply.
8.5.3.2 Termination for Change of Control. Should the
termination by IBM be [ * * * ] will instead be as
follows:
(a) [ * * * ] after the date of such Change of
Control of Synopsys, if the person acquiring Synopsys
[ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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[ * * * ].
(b) [ * * * ] if the party acquiring Synopsys is any
other corporation or entity.
In the event of (a) above, should IBM exercise its
rights pursuant to Section 8.5.3 prior to [ * * * ]
from the date of Change of Control of Synopsys, for a
period of [ * * * ] after such [ * * * ] IBM will
pay Synopsys a royalty of [ * * * ] of Synopsys'
average license fee of any of such product that
utilizes such Joint Product or Joint Product
Information; provided, however, that during such
period, if the applicable Joint Product or Joint
Product Information is deleted from any such
product, no further royalty shall be owed with
respect to such product.
8.5.4 Upon termination of this Agreement by Synopsys without cause,
for [ * * * ] after the date of such termination of this
Agreement, IBM shall have the fight and license to utilize any
Joint Product and Joint Product Information for any purpose
(provided that IBM shall have no additional right with respect
to Synopsys intellectual property of Section 4.1.1 of this
Agreement which, notwithstanding anything to the contrary in
this Section 8.5.4, shall continue to be subject to the
licenses of Section 4.0 of this Agreement); provided, however,
that IBM may not sublicense any Joint Product or Joint Product
Information to any third party other than to the extent it is
authorized to do so pursuant to Section 4.0 and Section 6.0
of this Agreement. After such period, in addition to the
rights and licenses set forth in the preceding sentence, IBM
shall have the right to sublicense any Joint Product or Joint
Product Information to any third party for the development
any new product derived in whole or in part from any Joint
Product or Joint Product Information; provided, however, that
for an [ * * * ] after conclusion of the [ * * * ], IBM will
not market and license, or license any third party to market
and license, such new products, other than as authorized in
Section 4.0 and Section 6.0 of this Agreement. After a
[ * * * ] after the date of such expiration of this Agreement,
IBM and any third party licensee shall have the right and
license to utilize any Joint Product, any Joint Product
Information, any or such new products, for any purpose. None
of this Section 8.5.4 will apply to [ * * * ] or [ * * * ].
8.6 Termination by IBM Without Cause. In the event that this Agreement is
terminated by IBM without cause, the following rights and obligations
of the parties will survive or become effective:
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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8.6.1 Synopsys' payment obligations under the Promissory Note will
continue thereunder.
8.6.2 Synopsys' remaining royalty obligations under Sections 7.3.1
and 7.3.2 of this Agreement will cease, and Synopsys will
become obligated to pay the royalty payments set forth below
to IBM for [ * * * ]:
(a) [ * * * ] of the Royalty during the [ * * * ]
immediately following the date of termination.
(b) [ * * * ] of the Royalty during the [ * * * ]
immediately following the [ * * * ] period
contained in Section 8.6.2(a) of this Agreement.
(c) [ * * * ] of the Royalty during the [ * * * ] months
immediately following the [ * * * ] contained
in Section 8.6.2(b) of this Agreement.
8.6.3 Upon termination of this Agreement by IBM without cause,
for the period of [ * * * ] after the date of such termination
IBM shall have the right and license to utilize any Joint
Product and Joint Product Information for any purpose
(provided that IBM shall have no additional right with respect
to the Synopsys intellectual property of Section 4.1.1 of this
Agreement, which, notwithstanding anything to the contrary in
this Section 8.6.3, shall continue to be subject to the
licenses of Section 4.0 4 of this Agreement); provided,
however, that during such period IBM may not sublicense any
Joint Product or Joint Product Information to any third party
other than to the extent it is authorized to do so pursuant to
Section 4.0 and Section 6.0 of this Agreement. After such
period of time, in addition to carrying out the rights and
licenses as set forth in the preceding sentence, IBM shall
have the right to sublicense any Joint Products or Joint
Product Information to any third party for the development of
any new product derived in whole or in part from any Joint
Product or Joint Product Information; provided, however, that
for an additional [ * * * ] after the conclusion of the
[ * * * ], IBM will not market and license, or license any
third party to market and license such new products, other
than as authorized in Section 4.0 and Section 6.0 of this
Agreement. Should the parties mutually agree to terminate this
Agreement without cause, the foregoing [ * * * ] will
apply [ * * * ] After a total period of [ * * * ], after
the date of such termination of this Agreement (except
for the foregoing mutually agreed to termination, in which
case the total period shall be [ * * * ], IBM and any third
party licensee shall have the right and license to utilize any
Joint Product, any Joint Product Information, or any such new
products, for any purpose. None of this Section 8.6.3 applies
to [ * * * ].
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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8.7 Termination by Synopsys for Cause. In the event that Synopsys
terminates this Agreement for cause, the following rights and
obligations of the parties will survive:
8.7.1 Synopsys' outstanding payment obligations remaining under the
Promissory Note will continue thereunder.
8.7.2 Upon termination of this Agreement for cause by Synopsys, for
the period of [ * * * ] after the date of such termination,
MM shall have the right and license to utilize any Joint
Product and Joint Product Information for any purpose
(provided that MM shall have no additional rights with
respect to the Synopsys intellectual property of Section 4.1.1
of this Agreement, which, notwithstanding anything to the
contrary in this Section 8.7.2, shall continue to be subject
to the licenses of Section 4.0 of this Agreement); provided,
however, that during such period MM may not sublicense any
Joint Product or Joint Product Information to any third party
other than to the extent it is authorized to do so pursuant to
Section 4.0 and Section 6.0 of this Agreement. After such
period of time, in addition to carrying out the rights and
licenses as set forth in the preceding sentence, MM shall have
the right to sublicense any Joint Products or Joint Product
Information to any third party for the development any of new
product derived in whole or in part from any Joint Product or
Joint Product Information; provided, however, that for an
additional [ * * * ] after the conclusion of the [ * * * ]
MM will not market and license, or license any third party
to market, and license such new products, other than as
authorized in Section 4.0 and Section 6.0 of this Agreement.
After a total period of [ * * * ] after the date of such
termination of this Agreement, MM and any third party licensee
shall have the right and license to utilize any Joint Product,
any Joint Product Information, or any such new products, for
any purpose. None of this Section 8.7.2 applies to [ * * * ].
8.8 Refund. In the event of expiration under Section 8.1 of this Agreement
or termination under Section 8.2 or 8.3 of this Agreement, in
consideration for payment by IBM of the fair market value of the
applicable [ * * * ], such fair market value to be negotiated by the
parties at the request of IBM taking into account the then current
business case for [ * * * ] and under mutually agreeable terms and
conditions including payment terms, IBM will be released from all
obligations and restrictions placed upon IBM in Sections 8.4, 8.5,
8.6 and 8.7 of this Agreement as to [ * * * ]. If IBM fully exercises
its rights and fulfills, or is paying, in accordance with agreed upon
payment terms, its repayment obligation under this Section 8.8,
Synopsys will have no further obligation to IBM under Section 7.1 of
this Agreement.
9.0 REPRESENTATIONS AND WARRANTIES
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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9.1 Joint Development Agreements - IBM. The parties anticipate that each of
the IBM EDA Base Products will be modified to form either a Joint
Product or NGSS [ * * * ] after the Effective Date. For [ * * * ] after
the Effective Date (or thereafter [ * * * ] provided that Synopsys is
using its Best Efforts consistent with the requirements of the then
current development plan to modify the EDA Base Products to form the
Joint Product and NGSS, and [ * * * ]. After this initial period, the
aforementioned restrictions will no longer apply [ * * * ]. For an
additional period of [ * * * ] after this initial period, with respect
to those IBM EDA Base Products that have been enhanced to form a Joint
Product or NGSS and made generally commercially available, IBM agrees
not to enter into a joint development agreement with another EDA
marketing and development company whereby such IBM EDA Base Products
will be enhanced for the creation of new EDA products that: (i) are
made generally commercially available, and (h) will have the same
function as a Joint Product or NGSS.
9.2 Joint Development Agreements - Synopsys. For [ * * * ] after the
Effective Date (or thereafter until at least one of the Joint Products
is made generally commercially available, provided that IBM is using
its Best Efforts consistent with the requirements of the then current
development plan, but [ * * * ] Synopsys [ * * * ]. After this initial
period, the aforementioned restrictions will no longer apply with
respect to [ * * * ]. For an additional period of up to [ * * * ] after
this initial period with respect to those IBM EDA Base Products that
have been enhanced to form a Joint Product or NGSS and made generally
commercially available, Synopsys agrees not to enter into a joint
development agreement with another semiconductor vendor to develop
products which incorporate EDA technology from such semiconductor
vendor and which: (i) have the same function as an IBM EDA Base
Product, Joint Product or NGSS, and (ii) are made generally
commercially available; provided, however that the total period set
forth in this Section 9.2 shall not exceed [ * * * ] from the Effective
Date.
9.3 Third Party Licensed Technology. Either party, at any time, may license
technology from a third party to be incorporated into Joint Products,
and Synopsys may license technology from a third party to be
incorporated into NGSS, provided that the agreement with such third
party enables the non-licensing party hereto to receive such licensed
technology and
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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to enjoy all of its rights and licenses provided hereunder for the
Joint Products or NGSS with such licensed technology.
9.4 Ownership. Each party represents and warrants that it is the rightful
owner, or authorized licensee (with all requisite rights to sublicense)
of all designs, information (including, but not limited to,
Information) and material supplied to the other party under this
Agreement.
9.5 Employees. Each party represents and warrants that it has agreements
with its employees and any other person with whom such agreement may be
necessary sufficient to meet its obligations under this Agreement.
9.6 Representation. Each party represents and warrants, that, to the best
of its knowledge as of the Effective Date, no claim of infringement or
violation of any intellectual property right has been asserted by a
third party against it in connection with the designs, information
(including, but not limited to, Information) and material supplied to
the other party under this Agreement.
9.7 Infringement - Licenses. Other than as set forth in Section 9.6 of this
Agreement, neither party makes any representation or warranty,
expressed or implied, to the party or assumes any liability with
respect to the infringement of any patent or other intellectual
property right of any third party which may arise out of the other
party's operation under any of the license granted herein. Each party
understands that no license or other right is extended to it under any
such third party patent or right.
9.8 Infringement-Information. Other than as set forth in Section 6.10 and
Section 9.6 of this Agreement, neither party makes any representation
or warranty, express or implied, to the other party or assumes any
liability with respect to the infringement of any patent or other right
of any third party which may arise out of the use by the other party of
any of the Information disclosed to the other party pursuant to this
Agreement.
9.9 Harmful Code. The parties represent and warrant:
(1) that the Joint Products and NGSS are free from any Harmful
Code at the time of completion; and
(2) that the Parties will implement procedures adequate to prevent
the contamination with Harmful Code of the Joint Products and
NGSS provided to each other.
9.10 Compliance with Governmental Law. The parties represent and warrant
that they shall comply with all governmental laws, statutes,
ordinances, administrative orders, rules and regulations while
performing work under this Agreement.
9.11 THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR APPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
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WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE.
10.0 LIMITATION OF REMEDIES
10.1 Exclusive Remedy. In addition to any remedies available to the parties
under Section 8.0 of this Agreement, each party's entire liability and
exclusive remedy shall be as set forth in Sections 10.2 and 10.3 below.
10.2 Limitation. For any claim concerning performance or failure to perform
by either party pursuant to, or in any way related to the subject
matter of, this Agreement, the damaged party shall only be entitled to
recover actual damages to the limits set forth in this Section 10.2.
[ * * * ]. This limitation will apply, except as otherwise stated
in this Section , regardless of the form of action. This limitation
will not apply to claims by one party for bodily injury or damage to
real property or tangible personal property for which the other party
is legally liable.
10.3 Disclaimed Damages. Except for royalties set forth in Section 7.0 of
this Agreement, in no event shall either party be liable to the other
party for incidental damages, lost profits, lost savings or any other
consequential damages, regardless of whether the claim is for breach of
contract, warranty, tort (including, but not limited to, negligence),
failure of a remedy to accomplish its purpose or otherwise, even if
such party has been advised of the possibility of such damages. Neither
party will be liable for any damages claimed by the other party based
on any third party claim.
11.0 COPYRIGHT REGISTRATION
11.1 Copyright Notices. Any publication of a Joint Product shall contain an
appropriate copyright notice in a manner to be determined solely by
Synopsys.
11.2 Registration. Synopsys shall be responsible for registration of the
Joint Product with the U.S. Copyright Office. IBM will assist Synopsys
in obtaining such registration. Synopsys 'will also perform all acts
and prepare any documents necessary to acknowledge that IBM is a joint
owner of the copyrights of Joint Products (without accounting) and to
enable IBM to maintain any such copyright including, but not limited
to, the execution of any necessary instrument or document.
11.3 Enforcement of Copyright. Should a party-to this Agreement militate
legal proceedings against an unlicensed third party as to such
unlicensed third party's use of the Joint Products, and as part of such
legal proceedings the other party hereto is required to execute papers
or provide evidence as to the Joint Products, the other party hereto
agrees to do so at the expense of the party initiating such legal
proceedings. Furthermore, once
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
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such legal proceedings are initiated, the other party agrees to not
grant any sublicense or covenant not to ▇▇▇ to the unlicensed third
party as to the Joint Products without the consent of the party
initiating such legal proceedings.
12.0 GENERAL
12.1 No Implied Licenses. Neither party may use, modify, reproduce,
distribute, sublicense or otherwise transfer Code provided hereunder by
the other party, in whole or in part, except as expressly permitted by
this Agreement.
12.2 Governing Law. The Agreement will be governed by the laws of the State
of New York, without reference to the conflicts of law principles
thereof Any proceeding to resolve any dispute relating to this
Agreement shall be commenced in the State of New York. The parties
hereto expressly waive any right they may have to a jury trial and
agree that any proceeding under this Agreement will be tried by a judge
without a jury.
12.3 Relationship of Parties. Each party is an independent contractor to the
other. Neither party nor its respective employees, consultants,
contractors or agents are by virtue of this Agreement agents, employees
or joint ventures of the other party, nor do they have any authority to
bind such other party by contract or otherwise to any obligation. They
will not represent to the contrary, either expressly, implicitly, by
appearance or otherwise. Each party will determine, in its sole
discretion, the manner and means by which it performs its obligations
hereunder, subject to the express condition that each party will at all
times comply with Section 9.8 of this Agreement.
12.4 No Waiver; Survival. Failure by either party to enforce any provision
of this Agreement will not be deemed a waiver of enforcement of that or
any other provision. The following Sections of this Agreement shall
survive termination or expiration of this Agreement, Will remain in
effect until fulfilled and shall apply to respective successors and
assignees of the parties: 1.0; 4.1, 4.2 (except for the second sentence
of the second paragraph of Section 4.2), 4.3 through 4.13 (except for
the first sentence of Section 4.13); 6.1 through 6.6, 6.8, 6.9, 7.0;
8.0; 9.4 through 9.11; 10.0; 11.0 and 12.0.
12.5 Notices. All notices required or permitted under this Agreement will be
in writing, reference this Agreement and be deemed given: (a) when
delivered personally; (b) when sent by confirmed telex or facsimile;
(c) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a commercial overnight carrier, with written
verification of receipt by the carrier. All communications will be sent
to the addresses set forth below:
Synopsys IBM
General Counsel Lincoln ▇▇▇▇
Synopsys, Inc. IBM Corporation
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▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
12.6 Headings and References. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
12.7 Severability. If for any reason a court of competent jurisdiction finds
any provision of this Agreement, or portion thereof, to be
unenforceable, that provision will be enforced to the maximum extent
permissible so as to effect the intent of the parties, and the
remainder of this Agreement will continue in full force and effect
unless the intent of the parties cannot be satisfied by such
remainder-12.8 Force . Neither party will be liable for any failure or
delay in its performance under this Agreement due to causes, including,
but not limited to, acts of God, acts of civil or military authority,
fires, epidemics, floods, earthquakes, riots, wars, sabotage, labor
shortages and governmental actions, which are beyond its reasonable
control, provided that the affected party: (a) gives the other party
written notice of such cause promptly, and in any event within fifteen
(I 5) days of discovery thereof, and (b) uses its reasonable efforts to
correct such failure or delay in its performance.
12.8 Force Majeure. Neither party will be liable for any failure or delay in
its performance under this Agreement due to causes, including, but not
limited to, acts of God, acts of civil or military authority, fires,
epidemics, floods, earthquakes, riots, wars, sabotage, labor shortages
and governmental actions, which are beyond reasonable control, provided
that the affected party: (a) gives the other party written notice of
such cause promptly, and in any event within fifteen (15) days of
discovery thereof; and (b) uses its reasonable efforts to correct such
failure or delay in its performance.
12.9 Assignment. The rights and liabilities of the parties hereto will bind
and inure to the benefit of their respective successors, executors and
administrators, as the case may be; provided, however, that neither
party may assign its rights or delegate its obligations under this
Agreement, either in whole or in part, without the prior written
consent of the other party. Notwithstanding the foregoing, IBM may
assign its lights or delegate its obligations under this Agreement in
whole without Synopsys' prior written consent in the event of a sale or
other transfer to any third party of IBM Microelectronics Division in
whole or in part, or all or part of such division's assets to the third
party acquiring such assets; provided that (1) such sale or other
transfer involves all of such division's organization responsible for
the development and maintenance of EDA products, and (2) such acquiring
third party must assume all of the rights and obligations under this
Agreement other than residual rights. Any attempted assignment or
delegation in violation of the provisions of this Section will be void,
and any assignment for reason of Change of Control by a party will
entitle the non-assigning party to terminate this Agreement in
accordance with Section 8.0 of this Agreement.
12.10 Insurance. Each party will maintain insurance to protect itself from
claims: (a) by its employees, agents and subcontractors under workers'
compensation and disability acts; (b) for damages because of bodily
injury, sickness, disease or death of its employees or of any other
person that arise out of any negligent act or omission or willful
misconduct of it or its employees, agents or subcontractors; and (c)
for damages because of injury to or destruction of tangible property
including, but not limited to, loss of use resulting therefrom that
arise out of any negligent act or omission or willful misconduct by it
or its employees, agents or subcontractors. Each party will insure all
property of the other in its
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possession or control, including, but not limited to, any loaned
equipment, against all loss and damage and will reimburse the other for
any such loss or damage.
12.11 Publicity. Any public statement concerning the existence or nature of
this Agreement must have the prior written consent of both parties.
12.12 No Solicitation. During the term of this Agreement, neither party will
solicit for employment purposes the employees of the other party who
have, are, or will be performing services under this Agreement,
provided, however, that if an employee of one party responds to an
advertisement regarding possible employment by the other party, the
other party may consider and hire, if it wishes, such employee.
12.13 Actions. Except for actions for enforcement of intellectual property
rights, no actions, regardless of form, arising out of the Agreement
may be brought by either party more than two (2) years after the cause
of action has arisen.
12.14 Trademarks. Neither this Agreement or the sale or license of any
products hereunder shall be deemed to give either party any right to
use any of the other party's trademarks, trade names or trade dress
without the prior written consent of the other party.
Each party recognizes the ownership of and title to the other party's
trademarks and trade names, and the goodwill attaching thereto and
agrees that any goodwill which accrues because of the party's use of
such trademarks and trade names shall vest in and become the property
of the owner of the ▇▇▇▇ or name. Each party further agrees not to use,
employ or attempt to register any trademark or trade name which is
confusingly similar to any trademark or trade name of the other party.
12.15 No Oral Modification. No amendment to, or modification of, this
Agreement will be binding unless in writing and signed by duly
authorized representatives of both parties.
12.16 Freedom of Action. Except as otherwise provided herein, this Agreement
shall not prevent either party from marketing, acquiring, developing,
or otherwise dealing in, materials, products or services whether or not
competitive with those of the other party, or from pursuing such
activities with any third party.
12.17 Merger. This Agreement, including,'but not limited to, all Exhibits
referenced herein, collectively constitutes the entire agreement
between the parties with respect to the subject matter hereof, and
supersedes and replaces all prior or contemporaneous understandings or
agreements, whether oral or written, regarding such subject matter.
12.18 Execution. The parties may execute this Agreement in counterparts
provided they exchange signed signature pages via receipted fax, to be
followed by transmittal by each party via overnight delivery service of
the entire original of this Agreement, which original must be identical
to the original of the other party, containing its original signature.
This Agreement shall be considered entered into and in full force and
effect as of the Effective
Page 38 of 39
IBM Confidential
39
Date of this Agreement provided the aforementioned exchange of
receipted taxed signature pages and the aforementioned exchange of
original documents occurs.
AGREED TO AND ACCEPTED BY:
INTERNATIONAL BUSINESS SYNOPSIS, INC.
MACHINES CORPORATION
BY: /s/ Illegible BY: /s/ Aart de Gues
------------------------ ----------------------------
TITLE: GM, Microprocessors TITLE: CEO & President
DATE: 2/20/96 DATE: February 1, 1996
Page 39 of 39
IBM Confidential
40
EXHIBIT A
JOINT PRODUCTS AND NGSS
41
Exhibit A [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
42
Exhibit A [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
43
Exhibit A [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
44
Exhibit A [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
45
Exhibit A [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
46
Exhibit A-1 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
47
Exhibit A-1 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
48
Exhibit A-2 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
49
Exhibit A-2 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
50
Exhibit A-2 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
51
Exhibit A-3 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
52
Exhibit A-3 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
53
Exhibit A-3 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
54
Exhibit A-4 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
55
Exhibit A-4 [ * * * ]
--------------------------------------------------------------------------------
[ * * * ]
IBM Confidential
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
56
EXHIBIT B
PROMISSORY NOTE
57
STATIC TIMING
NON-NEGOTIABLE PROMISSORY NOTE
$7,500,000 Dated: January 1, 1996
FOR VALUE RECEIVED, Synopsys, Inc., a Delaware corporation (the
"Company"), HEREBY PROMISES TO PAY, without set-off or counterclaim, to
International Business Machines Corporation (the "Payee"), the aggregate
principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000),
together with interest as set forth below, subject to, and in accordance with,
the terms and conditions of the Joint Development and License Agreement
Concerning EDA Software and Related Intellectual Property dated as of January 1,
1996 between the Company and Payee (the "Joint Development Agreement").
1. Principal. Unless earlier prepaid pursuant to Section 4 of this Note
or accelerated in accordance with terms and conditions of the Joint Development
Agreement, the entire unpaid aggregate principal amount of this Note shall be
due and payable, together with all accrued but unpaid interest thereon in
accordance with Section 2 below, on January 1, 2006 (the "Maturity Date").
2. Interest. Interest shall begin to accrue on February 1, 1996.
Interest shall be payable to Payee at the rate of three percent (3%) per annum,
simple interest. Upon the occurrence and continuance of an Event of Default (as
defined in Section 6 below) and for so long as such Event of Default continues,
from the date due until the date paid interest shall accrue and be due and
payable on the outstanding principal and on any accrued but unpaid interest, but
only as to such principal and interest that the Company has failed to pay, at
the rate of eighteen (18%) simple interest per annum, or the highest rate
allowed by law, whichever is less (such rate, the "Late Payment Rate"). Interest
payable under this Note shall be computed on the basis of a three hundred
sixty-five (365) day year and shall be due and payable on each January 31, April
30, July 31, and October 31, and on the Maturity Date, commencing on April 30,
1996 (each such date, a "Payment Date").
3. Payments on Business Days. If the due date of any payment under this
Note would otherwise fall on a day that is not a business day, such due date
shall be extended to the next succeeding business day, and interest shall be
payable on any payment so extended for the period of such extension.
4. Prepayment.
(a) Outstanding principal and any accrued interest may be
prepaid at any time without penalty. All payments shall first be applied against
payment of interest and then against payment of principal.
58
(b) Notwithstanding anything in this Note to the contrary, if
a "Milestone" for any calendar quarter (each, a "Quarter") is achieved on or
before the date set for its completion (the "Milestone Date" for such
Milestone), as determined pursuant to the Joint Development Agreement, the
Company shall prepay an amount of principal of this Note equal to the Prepayment
Amount for such Quarter on the first Payment Date following the last day of such
Quarter. Schedule 1 sets forth Milestones, Milestone Dates, Prepayment Amounts
and Payment Dates for each Quarter. The notations under the heading "Milestones"
refer to Milestones set forth in Exhibit A of the Joint Development Agreement.
Milestones after 1996 will be determined pursuant to the Annual Joint
Development Plans provided for in the Joint Development Agreement.
(c) If a Milestone for a Quarter (the "Due Quarter") is not
achieved on or before its Milestone Date, but is achieved on or before the last
day of the Quarter following the Due Quarter, then the Prepayment Amount for
such Milestone shall be paid on the first Payment Date following such next
Quarter. If such Milestone is not achieved on or before the last day of such
next Quarter but is achieved on or before the last day of the second Quarter
after the Due Quarter, then the Prepayment Amount for such Milestone shall be
paid on the first Payment Date following such second Quarter. If a Milestone is
not achieved on or before the end of such second Quarter, then there will be no
Prepayment Amount for such Milestone and the principal amount that would have
been prepaid shall be paid on the Maturity Date in accordance with the other
provisions of this Note.
5. Manner of Payment. All payments hereunder shall be made in lawful
money of the United States of America at such place and to such account as Payee
from time to time shall designate in a written notice to the Company. In the
absence of any such designation, all such payments shall be made to the address
for Payee as set forth in the Joint Development Agreement.
6. Event of Default.
(a) Defined. An "Event of Default" shall be deemed to have
occurred upon (i) the Company's failure to pay within twenty (20) days of the
due date any amount of principal or interest then due under this Note or (ii)
the commencement by or against the Company of any case or proceeding under any
bankruptcy, reorganization, insolvency or moratorium law, or any other law or
laws for the relief of debtors, or the appointment of any receiver, trustee or
assignee to take possession of the properties of the Company or any of its
affiliates. Notwithstanding the preceding sentence, the failure to pay any
Prepayment Amount shall not constitute an Event of Default if the Company has
not paid such Prepayment Amount because it believes in good faith that a
Milestone has not been achieved on or before a Milestone Date or any other date
(as described in Section 4(c)) on or before which a Milestone must be achieved
in order for a prepayment obligation to arise (any such date, a "Deadline") and
the Company provides written notice to Payee's Alliance Management Team member
within ten (10) business days of the end of the Due Quarter and, if applicable,
any later Deadline for such Milestone, of the reasons why it believes the
Milestone has not been met. If it is subsequently determined that such Milestone
was met by a Deadline, then the Company shall be obligated to pay the Prepayment
Amount on or before the next Payment Date, plus interest calculated at the Late
Payment Rate from the date such Prepayment Amount would have been payable until
the date paid.
-2-
59
(b) Default Remedies. If any Event of Default shall occur and
be continuing, Payee may, in its sole discretion and without prejudice to any
other right it may have at law or under any other agreement, by ten (10) days'
written notice to the Company, declare the entire unpaid principal amount of
this Note and all interest accrued and unpaid thereon to be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Company, unless, in the case of an
Event of Default described in clause (i) of Section 6(a), the Company cures such
Event of Default by the payment of all amounts of principal and interest then
due and payable on or before the last day of such ten (10) day notice period.
(c) Costs of Collection. The Company promises to pay all
collection costs, including, without limitation, reasonable attorney's fees
incurred by the Payee in connection with any Event of Default hereunder or the
enforcement of any of the provisions of this Note.
7. Assignment. This Note shall be binding on the Company and its
successors. The Company may only assign this Note upon receipt of the prior
written approval of Payee. Payee may not assign or transfer this Note or any
rights it may have with respect to this Note and any purported assignment or
transfer of this Note or any rights of the Payee hereunder shall be void.
8. Waiver. The Company hereby waives presentment, protest and demand,
notice of protest, demand and of dishonor and non-payment of this Note, and
expressly agrees that this Note, and any payment hereunder, may be extended from
time to time, but only with the express prior written approval of Payee, without
in any way affecting the liability of the Company hereunder.
9. Governing Law. This Note will be governed by the laws of the State
of New York, without reference to the conflicts of law principles thereof. Any
proceeding to resolve any dispute relating to this Note shall be commenced in
the State of New York. The parties hereto expressly waive any right they may
have to a jury trial and agree that any proceeding under this Note will be tried
by a judge without a jury.
10. Tax Consequences. Payee represents and warrants that it has
considered the tax and other ramifications of entering into this Note.
11. Entire Understanding. This Note and the Joint Development Agreement
contain the entire agreement and understanding of the parties regarding the
subject matter hereof and supersede all prior or contemporaneous written or oral
understandings, agreements or commitments relating to the subject matter of this
Note. The waiver of or breach of any term or provision of this Note shall not
operate as or be construed to be a waiver of any other previous or subsequent
breach of this Note. In the event of any conflict between the terms of this Note
and the terms of the Joint Development Agreement, the terms of the Joint
Development Agreement shall be controlling.
12. No Oral Modification. No amendment to, or modification of, this
Note will be binding unless in writing and signed by duly authorized
representatives of both parties.
-3-
60
13. Notices. All notices required or permitted under this Note shall be
made in writing and delivered personally to the Company or Payee at the
designated addresses set forth in the Joint Development Agreement, or sent by
certified or registered mail, return receipt requested and postage prepaid.
14. Counterparts. This Note may be executed in counterparts, each of
which shall constitute one and the same Note.
IN WITNESS WHEREOF, the Payee and the Company has duly executed this
Note as of the date first above written.
SYNOPSYS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Secretary
------------------------
AGREED TO AND ACCEPTED:
PAYEE:
INTERNATIONAL BUSINESS MACHINES CORPORATION
By:
---------------------------
Title:
------------------------
-4-
61
SCHEDULE 1
STATIC TIMING
PREPAYMENT
QUARTER ENDING MILESTONE MILESTONE DATE AMOUNT PAYMENT DATE
-------------- --------- -------------- ------ ------------
March 31, 1996 ST1-96 February 29, 1996 $562,500 April 30, 1996
June 30, 1996 ST3-96 May 30, 1996 $562,500 July 31, 1996
September 30, 1996 ST6-96 September 30, 1996 $562,500 October 31, 1996
December 31, 1996 ST7-96 October 30, 1996 $562,500 January 31, 1997
March 31, 1997 $500,000 April 30, 1997
June 30, 1997 $500,000 July 31, 1997
September 30, 1997 $500,000 October 31, 1997
December 31, 1997 $500,000 January 31, 1998
March 31, 1998 $437,500 April 30, 1998
June 30, 1998 $437,500 July 31, 1998
September 30, 1998 $437,500 October 31, 1998
December 31, 1998 $437,500 January 31, 1999
March 31, 1999 $375,000 April 30, 1999
June 30, 1999 $375,000 July 31, 1999
September 30, 1999 $375,000 October 31, 1999
December 31, 1999 $375,000 January 31, 2000
-5-
62
TEST
NON-NEGOTIABLE PROMISSORY NOTE
$7,500,000 Dated: January 1, 1996
FOR VALUE RECEIVED, Synopsys, Inc., a Delaware corporation (the
"Company"), HEREBY PROMISES TO PAY, without set-off or counterclaim, to
International Business Machines Corporation (the "Payee"), the aggregate
principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000),
together with interest as set forth below, subject to, and in accordance with,
the terms and conditions of the Joint Development and License Agreement
Concerning EDA Software and Related Intellectual Property dated as of January 1,
1996 between the Company and Payee (the "Joint Development Agreement").
1. Principal. Unless earlier prepaid pursuant to Section 4 of this Note
or accelerated in accordance with terms and conditions of the Joint Development
Agreement, the entire unpaid aggregate principal amount of this Note shall be
due and payable, together with all accrued but unpaid interest thereon in
accordance with Section 2 below, on January 1, 2006 (the "Maturity Date").
2. Interest. Interest shall begin to accrue on February 1, 1996.
Interest shall be payable to Payee at the rate of three percent (3%) per annum,
simple interest. Upon the occurrence and continuance of an Event of Default (as
defined in Section 6 below) and for so long as such Event of Default continues,
from the date due until the date paid interest shall accrue and be due and
payable on the outstanding principal and on any accrued but unpaid interest, but
only as to such principal and interest that the Company has failed to pay, at
the rate of eighteen (18%) simple interest per annum, or the highest rate
allowed by law, whichever is less (such rate, the "Late Payment Rate"). Interest
payable under this Note shall be computed on the basis of a three hundred
sixty-five (365) day year and shall be due and payable on each January 31, April
30, July 31, and October 31, and on the Maturity Date, commencing on April 30,
1996 (each such date, a "Payment Date").
3. Payments on Business Days. If the due date of any payment under this
Note would otherwise fall on a day that is not a business day, such due date
shall be extended to the next succeeding business day, and interest shall be
payable on any payment so extended for the period of such extension.
4. Prepayment.
(a) Outstanding principal and any accrued interest may be
prepaid at any time without penalty. All payments shall first be applied against
payment of interest and then against payment of principal.
63
(b) Notwithstanding anything in this Note to the contrary, if
a "Milestone" for any calendar quarter (each, a "Quarter") is achieved on or
before the date set for its completion (the "Milestone Date" for such
Milestone), as determined pursuant to the Joint Development Agreement, the
Company shall prepay an amount of principal of this Note equal to the Prepayment
Amount for such Quarter on the first Payment Date following the last day of such
Quarter. Schedule 1 sets forth Milestones, Milestone Dates, Prepayment Amounts
and Payment Dates for each Quarter. The notations under the heading "Milestones"
refer to Milestones set forth in Exhibit A of the Joint Development Agreement.
Milestones after 1996 will be determined pursuant to the Annual Joint
Development Plans provided for in the Joint Development Agreement.
(c) If a Milestone for a Quarter (the "Due Quarter") is not
achieved on or before its Milestone Date, but is achieved on or before the last
day of the Quarter following the Due Quarter, then the Prepayment Amount for
such Milestone shall be paid on the first Payment Date following such next
Quarter. If such Milestone is not achieved on or before the last day of such
next Quarter but is achieved on or before the last day of the second Quarter
after the Due Quarter, then the Prepayment Amount for such Milestone shall be
paid on the first Payment Date following such second Quarter. If a Milestone is
not achieved on or before the end of such second Quarter, then there will be no
Prepayment Amount for such Milestone and the principal amount that would have
been prepaid shall be paid on the Maturity Date in accordance with the other
provisions of this Note.
5. Manner of Payment. All payments hereunder shall be made in lawful
money of the United States of America at such place and to such account as Payee
from time to time shall designate in a written notice to the Company. In the
absence of any such designation, all such payments shall be made to the address
for Payee as set forth in the Joint Development Agreement.
6. Event of Default.
(a) Defined. An "Event of Default" shall be deemed to have
occurred upon (i) the Company's failure to pay within twenty (20) days of the
due date any amount of principal or interest then due under this Note or (ii)
the commencement by or against the Company of any case or proceeding under any
bankruptcy, reorganization, insolvency or moratorium law, or any other law or
laws for the relief of debtors, or the appointment of any receiver, trustee or
assignee to take possession of the properties of the Company or any of its
affiliates. Notwithstanding the preceding sentence, the failure to pay any
Prepayment Amount shall not constitute an Event of Default if the Company has
not paid such Prepayment Amount because it believes in good faith that a
Milestone has not been achieved on or before a Milestone Date or any other date
(as described in Section 4(c)) on or before which a Milestone must be achieved
in order for a prepayment obligation to arise (any such date, a "Deadline") and
the Company provides written notice to Payee's Alliance Management Team member
within ten (10) business days of the end of the Due Quarter and, if applicable,
any later Deadline for such Milestone, of the reasons why it believes the
Milestone has not been met. If it is subsequently determined that such Milestone
was met by a Deadline, then the Company shall be obligated to pay the Prepayment
Amount on or before the next Payment Date, plus interest calculated at the Late
Payment Rate from the date such Prepayment Amount would have been payable until
the date paid.
-2-
64
(b) Default Remedies. If any Event of Default shall occur and
be continuing, Payee may, in its sole discretion and without prejudice to any
other right it may have at law or under any other agreement, by ten (10) days'
written notice to the Company, declare the entire unpaid principal amount of
this Note and all interest accrued and unpaid thereon to be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Company, unless, in the case of an
Event of Default described in clause (i) of Section 6(a), the Company cures such
Event of Default by the payment of all amounts of principal and interest then
due and payable on or before the last day of such ten (10) day notice period.
(c) Costs of Collection. The Company promises to pay all
collection costs, including, without limitation, reasonable attorney's fees
incurred by the Payee in connection with any Event of Default hereunder or the
enforcement of any of the provisions of this Note.
7. Assignment. This Note shall be binding on the Company and its
successors. The Company may only assign this Note upon receipt of the prior
written approval of Payee. Payee may not assign or transfer this Note or any
rights it may have with respect to this Note and any purported assignment or
transfer of this Note or any rights of the Payee hereunder shall be void.
8. Waiver. The Company hereby waives presentment, protest and demand,
notice of protest, demand and of dishonor and non-payment of this Note, and
expressly agrees that this Note, and any payment hereunder, may be extended from
time to time, but only with the express prior written approval of Payee, without
in any way affecting the liability of the Company hereunder.
9. Governing Law. This Note will be governed by the laws of the State
of New York, without reference to the conflicts of law principles thereof. Any
proceeding to resolve any dispute relating to this Note shall be commenced in
the State of New York. The parties hereto expressly waive any right they may
have to a jury trial and agree that any proceeding under this Note will be tried
by a judge without a jury.
10. Tax Consequences. Payee represents and warrants that it has
considered the tax and other ramifications of entering into this Note.
11. Entire Understanding. This Note and the Joint Development Agreement
contain the entire agreement and understanding of the parties regarding the
subject matter hereof and supersede all prior or contemporaneous written or oral
understandings, agreements or commitments relating to the subject matter of this
Note. The waiver of or breach of any term or provision of this Note shall not
operate as or be construed to be a waiver of any other previous or subsequent
breach of this Note. In the event of any conflict between the terms of this Note
and the terms of the Joint Development Agreement, the terms of the Joint
Development Agreement shall be controlling.
12. No Oral Modification. No amendment to, or modification of, this
Note will be binding unless in writing and signed by duly authorized
representatives of both parties.
-3-
65
13. Notices. All notices required or permitted under this Note shall be
made in writing and delivered personally to the Company or Payee at the
designated addresses set forth in the Joint Development Agreement, or sent by
certified or registered mail, return receipt requested and postage prepaid.
14. Counterparts. This Note may be executed in counterparts, each of
which shall constitute one and the same Note.
IN WITNESS WHEREOF, the Payee and the Company has duly executed this
Note as of the date first above written.
SYNOPSYS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Secretary
------------------------
AGREED TO AND ACCEPTED:
PAYEE:
INTERNATIONAL BUSINESS MACHINES CORPORATION
By:
---------------------------
Title:
------------------------
-4-
66
SCHEDULE 1
TEST
PREPAYMENT
QUARTER ENDING MILESTONE MILESTONE DATE AMOUNT PAYMENT DATE
-------------- --------- -------------- ------ ------------
March 31, 1996 T2-96 March 30, 1996 $562,500 April 30, 1996
June 30, 1996 T4-96 April 30, 1996 $562,500 July 31, 1996
September 30, 1996 T7-96 September 30, 1996 $562,500 October 31, 1996
December 31, 1996 T9-96 November 15, 1996 $562,500 January 31, 1997
March 31, 1997 $500,000 April 30, 1997
June 30, 1997 $500,000 July 31, 1997
September 30, 1997 $500,000 October 31, 1997
December 31, 1997 $500,000 January 31, 1998
March 31, 1998 $437,500 April 30, 1998
June 30, 1998 $437,500 July 31, 1998
September 30, 1998 $437,500 October 31, 1998
December 31, 1998 $437,500 January 31, 1999
March 31, 1999 $375,000 April 30, 1999
June 30, 1999 $375,000 July 31, 1999
September 30, 1999 $375,000 October 31, 1999
December 31, 1999 $375,000 January 31, 2000
-5-
67
DESIGN PLANNER
NON-NEGOTIABLE PROMISSORY NOTE
$7,500,000 Dated: January 1, 1996
FOR VALUE RECEIVED, Synopsys, Inc., a Delaware corporation (the
"Company"), HEREBY PROMISES TO PAY, without set-off or counterclaim, to
International Business Machines Corporation (the "Payee"), the aggregate
principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000),
together with interest as set forth below, subject to, and in accordance with,
the terms and conditions of the Joint Development and License Agreement
Concerning EDA Software and Related Intellectual Property dated as of January 1,
1996 between the Company and Payee (the "Joint Development Agreement").
1. Principal. Unless earlier prepaid pursuant to Section 4 of this Note
or accelerated in accordance with terms and conditions of the Joint Development
Agreement, the entire unpaid aggregate principal amount of this Note shall be
due and payable, together with all accrued but unpaid interest thereon in
accordance with Section 2 below, on January 1, 2006 (the "Maturity Date").
2. Interest. Interest shall begin to accrue on February 1, 1996.
Interest shall be payable to Payee at the rate of three percent (3%) per annum,
simple interest. Upon the occurrence and continuance of an Event of Default (as
defined in Section 6 below) and for so long as such Event of Default continues,
from the date due until the date paid interest shall accrue and be due and
payable on the outstanding principal and on any accrued but unpaid interest, but
only as to such principal and interest that the Company has failed to pay, at
the rate of eighteen (18%) simple interest per annum, or the highest rate
allowed by law, whichever is less (such rate, the "Late Payment Rate"). Interest
payable under this Note shall be computed on the basis of a three hundred
sixty-five (365) day year and shall be due and payable on each January 31, April
30, July 31, and October 31, and on the Maturity Date, commencing on April 30,
1996 (each such date, a "Payment Date").
3. Payments on Business Days. If the due date of any payment under this
Note would otherwise fall on a day that is not a business day, such due date
shall be extended to the next succeeding business day, and interest shall be
payable on any payment so extended for the period of such extension.
4. Prepayment.
(a) Outstanding principal and any accrued interest may be
prepaid at any time without penalty. All payments shall first be applied against
payment of interest and then against payment of principal.
68
(b) Notwithstanding anything in this Note to the contrary, if
a "Milestone" for any calendar quarter (each, a "Quarter") is achieved on or
before the date set for its completion (the "Milestone Date" for such
Milestone), as determined pursuant to the Joint Development Agreement, the
Company shall prepay an amount of principal of this Note equal to the Prepayment
Amount for such Quarter on the first Payment Date following the last day of such
Quarter. Schedule 1 sets forth Milestones, Milestone Dates, Prepayment Amounts
and Payment Dates for each Quarter. The notations under the heading "Milestones"
refer to Milestones set forth in Exhibit A of the Joint Development Agreement.
Milestones after 1996 will be determined pursuant to the Annual Joint
Development Plans provided for in the Joint Development Agreement.
(c) If a Milestone for a Quarter (the "Due Quarter") is not
achieved on or before its Milestone Date, but is achieved on or before the last
day of the Quarter following the Due Quarter, then the Prepayment Amount for
such Milestone shall be paid on the first Payment Date following such next
Quarter. If such Milestone is not achieved on or before the last day of such
next Quarter but is achieved on or before the last day of the second Quarter
after the Due Quarter, then the Prepayment Amount for such Milestone shall be
paid on the first Payment Date following such second Quarter. If a Milestone is
not achieved on or before the end of such second Quarter, then there will be no
Prepayment Amount for such Milestone and the principal amount that would have
been prepaid shall be paid on the Maturity Date in accordance with the other
provisions of this Note.
5. Manner of Payment. All payments hereunder shall be made in lawful
money of the United States of America at such place and to such account as Payee
from time to time shall designate in a written notice to the Company. In the
absence of any such designation, all such payments shall be made to the address
for Payee as set forth in the Joint Development Agreement.
6. Event of Default.
(a) Defined. An "Event of Default" shall be deemed to have
occurred upon (i) the Company's failure to pay within twenty (20) days of the
due date any amount of principal or interest then due under this Note or (ii)
the commencement by or against the Company of any case or proceeding under any
bankruptcy, reorganization, insolvency or moratorium law, or any other law or
laws for the relief of debtors, or the appointment of any receiver, trustee or
assignee to take possession of the properties of the Company or any of its
affiliates. Notwithstanding the preceding sentence, the failure to pay any
Prepayment Amount shall not constitute an Event of Default if the Company has
not paid such Prepayment Amount because it believes in good faith that a
Milestone has not been achieved on or before a Milestone Date or any other date
(as described in Section 4(c)) on or before which a Milestone must be achieved
in order for a prepayment obligation to arise (any such date, a "Deadline") and
the Company provides written notice to Payee's Alliance Management Team member
within ten (10) business days of the end of the Due Quarter and, if applicable,
any later Deadline for such Milestone, of the reasons why it believes the
Milestone has not been met. If it is subsequently determined that such Milestone
was met by a Deadline, then the Company shall be obligated to pay the Prepayment
Amount on or before the next Payment Date, plus interest calculated at the Late
Payment Rate from the date such Prepayment Amount would have been payable until
the date paid.
-2-
69
(b) Default Remedies. If any Event of Default shall occur and
be continuing, Payee may, in its sole discretion and without prejudice to any
other right it may have at law or under any other agreement, by ten (10) days'
written notice to the Company, declare the entire unpaid principal amount of
this Note and all interest accrued and unpaid thereon to be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Company, unless, in the case of an
Event of Default described in clause (i) of Section 6(a), the Company cures such
Event of Default by the payment of all amounts of principal and interest then
due and payable on or before the last day of such ten (10) day notice period.
(c) Costs of Collection. The Company promises to pay all
collection costs, including, without limitation, reasonable attorney's fees
incurred by the Payee in connection with any Event of Default hereunder or the
enforcement of any of the provisions of this Note.
7. Assignment. This Note shall be binding on the Company and its
successors. The Company may only assign this Note upon receipt of the prior
written approval of Payee. Payee may not assign or transfer this Note or any
rights it may have with respect to this Note and any purported assignment or
transfer of this Note or any rights of the Payee hereunder shall be void.
8. Waiver. The Company hereby waives presentment, protest and demand,
notice of protest, demand and of dishonor and non-payment of this Note, and
expressly agrees that this Note, and any payment hereunder, may be extended from
time to time, but only with the express prior written approval of Payee, without
in any way affecting the liability of the Company hereunder.
9. Governing Law. This Note will be governed by the laws of the State
of New York, without reference to the conflicts of law principles thereof. Any
proceeding to resolve any dispute relating to this Note shall be commenced in
the State of New York. The parties hereto expressly waive any right they may
have to a jury trial and agree that any proceeding under this Note will be tried
by a judge without a jury.
10. Tax Consequences. Payee represents and warrants that it has
considered the tax and other ramifications of entering into this Note.
11. Entire Understanding. This Note and the Joint Development Agreement
contain the entire agreement and understanding of the parties regarding the
subject matter hereof and supersede all prior or contemporaneous written or oral
understandings, agreements or commitments relating to the subject matter of this
Note. The waiver of or breach of any term or provision of this Note shall not
operate as or be construed to be a waiver of any other previous or subsequent
breach of this Note. In the event of any conflict between the terms of this Note
and the terms of the Joint Development Agreement, the terms of the Joint
Development Agreement shall be controlling.
12. No Oral Modification. No amendment to, or modification of, this
Note will be binding unless in writing and signed by duly authorized
representatives of both parties.
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70
13. Notices. All notices required or permitted under this Note shall be
made in writing and delivered personally to the Company or Payee at the
designated addresses set forth in the Joint Development Agreement, or sent by
certified or registered mail, return receipt requested and postage prepaid.
14. Counterparts. This Note may be executed in counterparts, each of
which shall constitute one and the same Note.
IN WITNESS WHEREOF, the Payee and the Company has duly executed this
Note as of the date first above written.
SYNOPSYS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Secretary
------------------------
AGREED TO AND ACCEPTED:
PAYEE:
INTERNATIONAL BUSINESS MACHINES CORPORATION
By:
---------------------------
Title:
------------------------
-4-
71
SCHEDULE 1
DESIGN PLANNER
PREPAYMENT
QUARTER ENDING MILESTONE MILESTONE DATE AMOUNT PAYMENT DATE
-------------- --------- -------------- ------ ------------
March 31, 1996 DP2-96 February 29, 1996 $562,500 April 30, 1996
June 30, 1996 DP5-96 May 30, 1996 $562,500 July 31, 1996
September 30, 1996 DP9-96 September 30, 1996 $562,500 October 31, 1996
December 31, 1996 DP11-96 October 30, 1996 $562,500 January 31, 1997
March 31, 1997 $500,000 April 30, 1997
June 30, 1997 $500,000 July 31, 1997
September 30, 1997 $500,000 October 31, 1997
December 31, 1997 $500,000 January 31, 1998
March 31, 1998 $437,500 April 30, 1998
June 30, 1998 $437,500 July 31, 1998
September 30, 1998 $437,500 October 31, 1998
December 31, 1998 $437,500 January 31, 1999
March 31, 1999 $375,000 April 30, 1999
June 30, 1999 $375,000 July 31, 1999
September 30, 1999 $375,000 October 31, 1999
December 31, 1999 $375,000 January 31, 2000
-5-
72
NGSS
NON-NEGOTIABLE PROMISSORY NOTE
$7,500,000 Dated: January 1, 1996
FOR VALUE RECEIVED, Synopsys, Inc., a Delaware corporation (the
"Company"), HEREBY PROMISES TO PAY, without set-off or counterclaim, to
International Business Machines Corporation (the "Payee"), the aggregate
principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000),
together with interest as set forth below, subject to, and in accordance with,
the terms and conditions of the Joint Development and License Agreement
Concerning EDA Software and Related Intellectual Property dated as of January 1,
1996 between the Company and Payee (the "Joint Development Agreement").
1. Principal. Unless earlier prepaid pursuant to Section 4 of this Note
or accelerated in accordance with terms and conditions of the Joint Development
Agreement, the entire unpaid aggregate principal amount of this Note shall be
due and payable, together with all accrued but unpaid interest thereon in
accordance with Section 2 below, on January 1, 2006 (the "Maturity Date").
2. Interest. Interest shall begin to accrue on February 1, 1996.
Interest shall be payable to Payee at the rate of three percent (3%) per annum,
simple interest. Upon the occurrence and continuance of an Event of Default (as
defined in Section 6 below) and for so long as such Event of Default continues,
from the date due until the date paid interest shall accrue and be due and
payable on the outstanding principal and on any accrued but unpaid interest, but
only as to such principal and interest that the Company has failed to pay, at
the rate of eighteen (18%) simple interest per annum, or the highest rate
allowed by law, whichever is less (such rate, the "Late Payment Rate"). Interest
payable under this Note shall be computed on the basis of a three hundred
sixty-five (365) day year and shall be due and payable on each January 31, April
30, July 31, and October 31, and on the Maturity Date, commencing on April 30,
1996 (each such date, a "Payment Date").
3. Payments on Business Days. If the due date of any payment under this
Note would otherwise fall on a day that is not a business day, such due date
shall be extended to the next succeeding business day, and interest shall be
payable on any payment so extended for the period of such extension.
4. Prepayment.
(a) Outstanding principal and any accrued interest may be
prepaid at any time without penalty. All payments shall first be applied against
payment of interest and then against payment of principal.
73
(b) Notwithstanding anything in this Note to the contrary, if
a "Milestone" for any calendar quarter (each, a "Quarter") is achieved on or
before the date set for its completion (the "Milestone Date" for such
Milestone), as determined pursuant to the Joint Development Agreement, the
Company shall prepay an amount of principal of this Note equal to the Prepayment
Amount for such Quarter on the first Payment Date following the last day of such
Quarter. Schedule 1 sets forth Milestones, Milestone Dates, Prepayment Amounts
and Payment Dates for each Quarter. The notations under the heading "Milestones"
refer to Milestones set forth in Exhibit A of the Joint Development Agreement.
Milestones after 1996 will be determined pursuant to the Annual Joint
Development Plans provided for in the Joint Development Agreement.
(c) If a Milestone for a Quarter (the "Due Quarter") is not
achieved on or before its Milestone Date, but is achieved on or before the last
day of the Quarter following the Due Quarter, then the Prepayment Amount for
such Milestone shall be paid on the first Payment Date following such next
Quarter. If such Milestone is not achieved on or before the last day of such
next Quarter but is achieved on or before the last day of the second Quarter
after the Due Quarter, then the Prepayment Amount for such Milestone shall be
paid on the first Payment Date following such second Quarter. If a Milestone is
not achieved on or before the end of such second Quarter, then there will be no
Prepayment Amount for such Milestone and the principal amount that would have
been prepaid shall be paid on the Maturity Date in accordance with the other
provisions of this Note.
5. Manner of Payment. All payments hereunder shall be made in lawful
money of the United States of America at such place and to such account as Payee
from time to time shall designate in a written notice to the Company. In the
absence of any such designation, all such payments shall be made to the address
for Payee as set forth in the Joint Development Agreement.
6. Event of Default.
(a) Defined. An "Event of Default" shall be deemed to have
occurred upon (i) the Company's failure to pay within twenty (20) days of the
due date any amount of principal or interest then due under this Note or (ii)
the commencement by or against the Company of any case or proceeding under any
bankruptcy, reorganization, insolvency or moratorium law, or any other law or
laws for the relief of debtors, or the appointment of any receiver, trustee or
assignee to take possession of the properties of the Company or any of its
affiliates. Notwithstanding the preceding sentence, the failure to pay any
Prepayment Amount shall not constitute an Event of Default if the Company has
not paid such Prepayment Amount because it believes in good faith that a
Milestone has not been achieved on or before a Milestone Date or any other date
(as described in Section 4(c)) on or before which a Milestone must be achieved
in order for a prepayment obligation to arise (any such date, a "Deadline") and
the Company provides written notice to Payee's Alliance Management Team member
within ten (10) business days of the end of the Due Quarter and, if applicable,
any later Deadline for such Milestone, of the reasons why it believes the
Milestone has not been met. If it is subsequently determined that such Milestone
was met by a Deadline, then the Company shall be obligated to pay the Prepayment
Amount on or before the next Payment Date, plus interest calculated at the Late
Payment Rate from the date such Prepayment Amount would have been payable until
the date paid.
-2-
74
(b) Default Remedies. If any Event of Default shall occur and
be continuing, Payee may, in its sole discretion and without prejudice to any
other right it may have at law or under any other agreement, by ten (10) days'
written notice to the Company, declare the entire unpaid principal amount of
this Note and all interest accrued and unpaid thereon to be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Company, unless, in the case of an
Event of Default described in clause (i) of Section 6(a), the Company cures such
Event of Default by the payment of all amounts of principal and interest then
due and payable on or before the last day of such ten (10) day notice period.
(c) Costs of Collection. The Company promises to pay all
collection costs, including, without limitation, reasonable attorney's fees
incurred by the Payee in connection with any Event of Default hereunder or the
enforcement of any of the provisions of this Note.
7. Assignment. This Note shall be binding on the Company and its
successors. The Company may only assign this Note upon receipt of the prior
written approval of Payee. Payee may not assign or transfer this Note or any
rights it may have with respect to this Note and any purported assignment or
transfer of this Note or any rights of the Payee hereunder shall be void.
8. Waiver. The Company hereby waives presentment, protest and demand,
notice of protest, demand and of dishonor and non-payment of this Note, and
expressly agrees that this Note, and any payment hereunder, may be extended from
time to time, but only with the express prior written approval of Payee, without
in any way affecting the liability of the Company hereunder.
9. Governing Law. This Note will be governed by the laws of the State
of New York, without reference to the conflicts of law principles thereof. Any
proceeding to resolve any dispute relating to this Note shall be commenced in
the State of New York. The parties hereto expressly waive any right they may
have to a jury trial and agree that any proceeding under this Note will be tried
by a judge without a jury.
10. Tax Consequences. Payee represents and warrants that it has
considered the tax and other ramifications of entering into this Note.
11. Entire Understanding. This Note and the Joint Development Agreement
contain the entire agreement and understanding of the parties regarding the
subject matter hereof and supersede all prior or contemporaneous written or oral
understandings, agreements or commitments relating to the subject matter of this
Note. The waiver of or breach of any term or provision of this Note shall not
operate as or be construed to be a waiver of any other previous or subsequent
breach of this Note. In the event of any conflict between the terms of this Note
and the terms of the Joint Development Agreement, the terms of the Joint
Development Agreement shall be controlling.
12. No Oral Modification. No amendment to, or modification of, this
Note will be binding unless in writing and signed by duly authorized
representatives of both parties.
-3-
75
13. Notices. All notices required or permitted under this Note shall be
made in writing and delivered personally to the Company or Payee at the
designated addresses set forth in the Joint Development Agreement, or sent by
certified or registered mail, return receipt requested and postage prepaid.
14. Counterparts. This Note may be executed in counterparts, each of
which shall constitute one and the same Note.
IN WITNESS WHEREOF, the Payee and the Company has duly executed this
Note as of the date first above written.
SYNOPSYS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Secretary
------------------------
AGREED TO AND ACCEPTED:
PAYEE:
INTERNATIONAL BUSINESS MACHINES CORPORATION
By:
---------------------------
Title:
------------------------
-4-
76
SCHEDULE 1
NGSS
PREPAYMENT
QUARTER ENDING MILESTONE MILESTONE DATE AMOUNT PAYMENT DATE
-------------- --------- -------------- ------ ------------
March 31, 1996 NG1-96 March 30, 1996 $562,500 April 30, 1996
June 30, 1996 NG2-96 June 30, 1996 $562,500 July 31, 1996
September 30, 1996 NG3-96 August 15, 1996 $562,500 October 31, 1996
December 31, 1996 *To be set as part $562,500 January 31, 1997
of NG3-96's
completion
March 31, 1997 $500,000 April 30, 1997
June 30, 1997 $500,000 July 31, 1997
September 30, 1997 $500,000 October 31, 1997
December 31, 1997 $500,000 January 31, 1998
March 31, 1998 $437,500 April 30, 1998
June 30, 1998 $437,500 July 31, 1998
September 30, 1998 $437,500 October 31, 1998
December 31, 1998 $437,500 January 31, 1999
March 31, 1999 $375,000 April 30, 1999
June 30, 1999 $375,000 July 31, 1999
September 30, 1999 $375,000 October 31, 1999
December 31, 1999 $375,000 January 31, 2000
-5-
77
EXHIBIT C
EQUIPMENT AND PROGRAM LOAN AGREEMENT
78
[IBM LOGO]
[GRAPHIC OF HANDSHAKE]
EQUIPMENT AND PROGRAM LOAN AGREEMENT
--------------------------------------------------------------------------------
If you have signed the IBM Customer Agreement, its Attachment for Trial or Loan
of Products should be used in place of this Agreement.
The Recipient (you) and International Business Machines Corporation (IBM) agree
that the following terms and conditions apply when IBM loans you equipment and
programs including associated user manuals and similar documentation (Loaned
Items). Loaned Items may also be referred to as Loaned Equipment or Loaned
Programs, as applicable.
1. ASSOCIATED CONTRACT DOCUMENTS
The Attachment to this Agreement (Attachment) lists the Loaned Items and
specifies any additional terms and conditions. A revised Attachment sets forth
any additions or deletions to the listed Loaned Items and any changes to the
terms and conditions. Your continued use of the Loaned Items or acceptance of
additional Loaned Items after your receipt of a revised Attachment will
constitute your acceptance of such revised Attachment.
When the loan is made in conjunction with a referenced Agreement, IBM will
specify the Reference Agreement Number. In this event, the referenced Agreement
will describe the purpose of the loan. Otherwise, the purpose of the loan is
specified below (Purpose of Loan).
2. TERM AND TERMINATION
This Agreement ends on the earliest of 1) the specified Agreement
Expiration Date, 2) the date this Agreement is terminated in accordance with
this Section, or 3) the date the referenced Agreement, if any, is terminated.
The Agreement Expiration Date may only be extended by IBM's issuance and your
acceptance of a revised Attachment specifying such later date.
You may terminate this Agreement by providing written notice to IBM. If you
fail to meet any of your obligations under this Agreement or the referenced
Agreement, IBM may terminate this Agreement by giving written notice to you,
indicating the effective date of termination.
3. LOAN PERIOD
IBM will provide the Loaned Items to you on or about the Estimated Delivery
Date(s) specified in the Attachment. IBM provides this Estimated Delivery
Date(s) to you for planning purposes only. The Loan Period for each Loaned Item
will extend from the actual date IBM delivers the Loaned Item(s) to you, until
the earliest of:
a) the applicable Return Date specified in the Attachment or revised
Return Date specified in a revised Attachment;
--------------------------------------------------------------------------------
PAGES 2 AND 3 AND ___ ATTACHMENT PAGE(S) ARE ALSO PART OF THIS AGREEMENT.
The parties acknowledge that they have read this Agreement, understand it, and
agree to be bound by its terms and conditions. Further, they agree that the
complete and exclusive statement of the agreement between the parties relating
to the Loaned Items provided hereunder consists of 1) this Agreement, 2) its
Attachment(s) and 3) the referenced Agreement, if any, including those effective
in the future. This statement of the agreement supersedes all proposals or other
prior agreements, oral or written, and all other communications between the
parties relating to the Loaned Items provided hereunder.
International Business Machines Corporation Recipient's name:
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By:________________________________________ By:_______________________________
Authorized Signature Authorized Signature
Name (type or print) Name (type or print)
Date: Date:
This Agreement number: XXXXXXX Reference Agreement number:
IBM Office number: N/A Recipient's Customer number:
IBM Office address: Recipient's Address
IBM Microelectronics
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Agreement Expiration Date:
Purpose of Loan (To be completed only if no referenced Agreement):
Page 1 of 3
79
b) the date you acquire i) title to the Loaned Equipment or ii)
continuing license to the Loaned Program, should such acquisition or
licensing be available to you under Section 13; or
c) the date this Agreement ends.
4. AUTHORIZED USE
IBM provides Loaned Items to you solely for use in accordance with the
terms of this Agreement and for the purpose(s) described either in this
Agreement or in the referenced Agreement (Authorized Use). You may not use the
Loaned Items for any other purposes.
5. OWNERSHIP AND LICENSE
IBM or a third party retains title to all Loaned Items. You may not
transfer Loaned Items to anyone else. For Loaned Programs which are not subject
to another supplier's or publisher's license agreement, IBM grants you a license
to use, store, modify and make sufficient copies to support your Authorized Use
under this Agreement. Such copies will be deemed to be Loaned Items. For Loaned
Programs which are subject to another supplier's or publisher's license
agreement, however, the terms and conditions of that supplier or publisher are
passed to you through IBM. Such terms and conditions will be shipped with the
Loaned Program. Any authorized copies made by you will be deemed to be Loaned
Items.
6. LICENSED INTERNAL CODE
If the Loaned Equipment contains Licensed Internal Code (Code), so
identified by IBM, IBM grants you a license only to execute such Code to enable
the Loaned Equipment to perform in accordance with IBM's official published
specifications. You may not reverse assemble, reverse compile, decode,
translate, or make any other copies of the Code. You must return the original
copy of the Code to IBM at the conclusion of the Loan Period.
7. DELIVERY AND INSTALLATION
IBM will deliver the Loaned Items to the location(s) specified in the
Attachment.
You will 1) set-up all Loaned Equipment IBM designates as Customer Set-Up,
2) install all non-IBM equipment and 3) Install all Loaned Programs.
IBM will be responsible for the installation of all other Loaned Items.
Installation by IBM will be during IBM's normal business hours.
8. RISK OF LOSS OR DAMAGE
IBM relieves you of the risk of loss of, or damage to, all Loaned Items,
except for loss or damage resulting from your breach of this Agreement including
use other than Authorized Use.
9. SECURITY
You will provide, at no cost to IBM, adequate security to protect the
Loaned Items from theft, damage or misuse.
You will use reasonable care in the use of all Loaned Items. you will
provide an operating environment for the Loaned Items consistent with the
related user documentation.
You will keep the Loaned Items at the location(s) specified in the
Attachment. You will not move the Loaned Items to another location without IBM's
prior written approval.
10. SERVICE AND SUPPORT
IBM will use reasonable efforts to provide or arrange for service and
support to cause the Loaned Items to operate in accordance with applicable
published specifications.
You will permit IBM personnel full, free and safe access to your
facilities, during normal business hours, for the purpose of inspection,
preventive maintenance service or remedial maintenance service.
11. ALTERATIONS AND ATTACHMENTS
An alteration to Loaned Equipment may be made only upon IBM's prior written
approval. An attachment to Loaned Equipment may be made without notice to IBM.
You will remove any alteration or attachment and restore Loaned Equipment
to its unaltered condition before its return to IBM or upon IBM's notice to you
that the alteration or attachment creates a safety hazard or renders maintenance
of the Loaned Equipment impractical.
12. CHANGES
IBM may make substitutions for Loaned Items or may provide additional items
to you during the term of the Agreement. Such additions or deletions will be
specified in a revised Attachment.
13. DISPOSITION OF LOANED ITEMS
Return to IBM
You will return the Loaned Equipment to IBM at the end of the Loan Period,
except as may be provided for in this Section. You will return the Loaned
Equipment to IBM in the same condition as when delivered to you, reasonable wear
and tear excepted.
You will return the original and all copies of the Loaned Programs at the
end of the Loan Period, except as may be provided for in this Section.
You will permit IBM personnel access during IBM's normal business hours to
allow IBM to remove the Loaned Items. Acquisition and Continued Licensing
IBM will determine the availability of Loaned Equipment for your
acquisition and Loaned Programs for your continued licensing beyond the
applicable Loan Period. You must inform IBM, prior to the end of the applicable
Loan Period, of your interest in the acquisition of specific Loaned Equipment or
the continued licensing of specific Loaned Programs. IBM will then notify you in
writing either 1) of the terms and conditions under which you may acquire such
Loaned Equipment or continue to license such Loaned Programs or 2) that the
Loaned Items are not available for acquisition or continued licensing.
Purchase of Loaned Equipment will be governed by the provisions of the IBM
Customer Agreement and its applicable Attachments (or any equivalent agreement
signed by both of us).
Continued licensing of Loaned Programs will be governed by the provisions
of the applicable IBM license agreement or another supplier's or publisher's
Page 2 of 3
80
license agreement. IBM will identify to you the applicable agreement which
governs such licensing.
14. DISCLAIMER OF WARRANTY
IBM PROVIDES LOANED ITEMS ON AN "AS IS" BASIS. IBM MAKES NO WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO SUCH ITEMS, INCLUDING THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
15. PATENTS AND COPYRIGHTS
If the operation of a Loaned Item becomes, or IBM believes is likely to
become, the subject of a claim that infringes a patent or copyright in the
United States or Puerto Rico, you will permit IBM, at its option and expense,
either to secure the right for you to continue using the Loaned Item or to
replace or modify it so that it becomes noninfringing. However, if neither of
the foregoing alternatives is available on terms which are reasonable in IBM's
judgment, you will return the Loaned Item upon IBM's written request.
IBM will have no obligation with respect to any such claim based upon your
modification of IBM equipment, programs or programming or their combination,
operation or use with any non-IBM apparatus, data or programs.
IBM will not have any liability regarding patent or copyright infringement
for non-IBM Loaned Items.
This Section states IBM's entire obligation to you regarding infringement
or the like.
16. CONFIDENTIAL INFORMATION
The parties agree that all information exchanged hereunder will be
nonconfidential. If the loan requires the exchange of confidential information
or includes an unannounced IBM product, such loan will also require that you and
IBM enter into a separate confidentiality agreement.
17. LIMITATION OF REMEDIES
IBM's entire liability and your exclusive remedy for actual damages from
any cause whatsoever relating to the subject matter of this Agreement will be
limited to the amount of the actual loss or damage, up to the greater of
$100,000 or the charges for the Loaned Item that is the subject of the claim.
This limitation will apply, except as otherwise stated in this Section,
regardless of the form of action, whether in contract or in tort, including
negligence. This limitation will not apply to claims by you for bodily injury or
damage to real property or tangible personal property for which IBM is legally
liable.
In no event will IBM be liable for any lost profits, lost savings,
incidental damages, or other economic consequential damages, even if IBM has
been advised of the possibility of such damages. In addition, IBM will not be
liable for any damages claimed by you based on any third party claim.
In no event will IBM be liable for any damages caused by your failure to
perform your responsibilities.
18. GENERAL
You may not assign this Agreement without IBM's prior written consent. Any
attempted assignment without such consent is void.
Loaned Items are to be installed only in the United States and Puerto Rico.
IBM will pay normal transportation charges, both from and to IBM-designated
locations, for each Loaned Item. You will pay any rigging charges. You will
furnish all labor for unpacking and packing except as IBM otherwise specifies or
when performed at an IBM-designated location.
IBM may provide services described in this Agreement by using IBM-selected
independent contractors.
Neither party is responsible for failure to fulfill its obligations under
this Agreement due to causes beyond its control.
Neither party may bring an action, regardless of form, arising out of this
Agreement more than two years after the cause of action arose.
In the event of the termination or expiration of this Agreement, the
provisions of this Agreement which by their nature extend beyond the expiration
or termination of this Agreement shall remain in effect beyond such expiration
or termination until fulfilled.
If there is a conflict between this Agreement and an Attachment, the terms
and conditions of the Attachment will prevail. Except as modified by an
Attachment, the terms of this Agreement remain in full force and effect. The
terms of any Attachment not inconsistent with a subsequent Attachment remain in
full force and effect.
The laws of the State of New York govern this Agreement.
Page 3 of 3
81
EXHIBIT D
82
DESIGN CENTERS
[ * * * ]
* * * Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.
83
EXHIBIT E
84
CERTIFIED PUBLIC ACCOUNTING FIRMS
-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-KPMG, Inc.
-Deloitte & Touche
-Ernst & Young