EXHIBIT 10.17
**Confidential treatment has been requested for certain portions of this
document.
AMENDMENT NO. 4
TO
This Amendment to (this "Amendment") is entered into
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as of October 11, 1996 (the "Effective Date") by and between Xxxxxx & Chyan
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Technology, Inc., a Delaware corporation with principal offices at 0000 Xxxxx Xx
Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxx 00000 ("CCT"), and Mentor
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Graphics Corporation, an Oregon corporation with principal offices at 0000 X.X.
Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxx 00000-0000 ("Mentor Graphics").
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RECITALS
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A. CCT and Mentor Graphics entered into that certain dated January 27, 1992, amended on January 27, 1994, November
8, 1994 and May 9, 1995 (as amended to date, the "OEM Agreement").
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B. CCT and SETO Software GmbH, now a wholly owned subsidiary of Mentor
Graphics ("SETO"), entered into that certain Router Partner Distribution
----
Agreement dated January 15, 1996 (the "SETO Agreement").
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C. The parties hereto desire to amend the OEM Agreement and provide for the
assignment to and assumption by Mentor Graphics of the SETO Agreement.
In consideration of the mutual promises contained herein, the parties agree as
follows:
1. Definitions. Section 1(e) of the OEM Agreement is deleted in its entirety
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and replaced by the following:
(e) "Board Station" means the Mentor Graphics Board Station CAD system used
on Unix based platforms for the computer-aided design and layout of
printed circuit boards and multi-chip modules.
2. Product Development and Porting. Section 2 of the OEM Agreement and
-------------------------------
Attachment B to the OEM Agreement are deleted in their entirety.
3. Term of Agreement. Section 3 of the OEM Agreement is deleted in its entirety
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and replaced by the following:
3. Term of Agreement. This Agreement takes effect on the Effective Date
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of this Agreement and expires March 31, 1998, unless terminated earlier
in accordance with its terms. This Agreement will automatically remain
in effect for additional
[**] Confidential treatment has been requested for certain portions of
this document.
periods of six (6) months, unless either party gives the other party
notice at least six (6) months prior to the automatic renewal date.
4. Grant of Licenses. Section 5.2 of the OEM Agreement is deleted in its
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entirety.
5. Royalties and Payment. Section 6.1 of the OEM Agreement is deleted in its
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entirety and replaced by the following:
6.1 Mentor Graphics shall pay CCT royalties, as specified in Attachment
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A, for each copy of the CCT Products sublicensed under Sections
-
5.1(a) or (b). Mentor Graphics will be responsible for paying all
shipping costs, insurance charges, and miscellaneous charges
associated with CCT Product distribution and sublicensing.
Cumulative royalty payments payable to CCT under this Section 6.1
shall be payable [**]. All payments due under this Agreement are
to be made by wire transfer to:
Xxxxxx & Chyan Technology, Inc.
First National Bank of Boston
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
ABA # 000000000
A/C # 532-72010
or to any other bank that an authorized officer of CCT designates in
writing.
Mentor Graphics shall prepare and deliver to CCT, (i) within forty-
five (45) days after the end of each calendar quarter, a report
detailing Mentor Graphics' distribution activity for the quarter,
itemizing the number of copies of each CCT Product distributed and/or
sublicensed by Mentor Graphics during such quarter and including a
calculation of the royalties due to CCT pursuant to this Section 6,
and (ii) within fifteen (15) days after the end of each calendar
month, a report, which may be preliminary and unaudited, detailing
Mentor Graphics' distribution activity for the month, itemizing the
number of copies of each CCT Product distributed and/or sublicensed
by Mentor Graphics during such month including the geographic
distribution of such sublicenses by continent and, within the United
States, by region.
6. Stock Purchase Rights. Section 6.3 of the OEM Agreement is deleted in its
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entirety.
7. Price Warranty. The first three sentences of Section 8 of the OEM Agreement
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are deleted in their entirety and replaced by the following:
8. Price Warranty. For new agreements with other parties after the
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Effective Date, CCT guarantees that Mentor Graphics pricing and
discounts for the CCT Products shall be at least as favorable, in the
aggregate, as the most favorable pricing and discounts for CCT
Products extended to other similarly situated OEM's that purchase a
comparable volume of licenses of CCT Products
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("Comparable Channels"). If CCT, after the Effective Date, extends
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prices or discounts to any Comparable Channel that are more
favorable, in the aggregate, than the pricing and discounts extended
to Mentor Graphics under this Agreement, then Mentor Graphics shall
receive corresponding prices and discounts effective as of the date
on which such prices and discounts are extended to such other
Comparable Channel.
8. Status of the Parties. Sections 11.1, 11.3 and 11.4 of the OEM Agreement
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and Attachment G to the OEM Agreement are deleted in their entirety. Section
11.1 of the OEM Agreement is replaced with the following:
11.1 Mentor Graphics agrees that during the term of this Agreement it
will actively and aggressively promote the sale of licenses of the
CCT Products to its customers for use with Board Station. Mentor
Graphics will not directly or indirectly sell any autorouting
products, either on a stand alone basis or bundled with other
products, for use with Board Station other than the CCT Products,
except for Mentor Graphic's existing grid-based routing product.
Notwithstanding the foregoing, Mentor Graphics may sell the
Interconnectix routing technology provided that such technology is
bundled with the Interconnectix synthesis tool suite and is not sold
as a stand alone router.
CCT agrees that during the term of this Agreement it will not
directly or indirectly (except through OEMs, VARs and distributors)
sell (i) licenses of the CCT Products, either on a stand alone basis
or bundled with other products, for use with Board Station to the
existing customers of Mentor Graphics, or (ii) licenses of any
translator designed to provide an interface between the CCT Products
and Board Station. CCT further agrees that during the term of this
Agreement it will not sell, as a stand alone layout system, the
product known in the marketplace as "CBDS" (regardless of whether
such product is renamed) to the existing customers of Mentor Graphics
using Board Station who are not also existing users of CBDS.
Notwithstanding the foregoing, CCT may sell products that integrate
and include tools from, or other portions of, the CBDS code or
derivatives thereof.
Each of Mentor Graphics and CCT agree (i) that within fifteen (15)
business days after the execution of this Amendment they will notify
their respective sales and marketing personnel of the covenants in
the preceding two paragraphs, and (ii) that such notification shall
contain instructions to faithfully honor such covenants.
In the event that either party commits a breach of any of the terms
or conditions of this Section 11.1 then, the other party may, in its
sole discretion, (i) terminate this Agreement in accordance with the
terms of Section 25, (ii) immediately terminate the provisions of
this Section 11.1 in their entirety upon written notice to the
breaching party (in which case all of Section 11.1 will be deemed
deleted from this Agreement and the other provisions of this
Agreement will remain in full force and effect), or (iii) seek
equitable or other relief pursuant to the dispute resolution
procedures described in Section 27.3. Any such termination of this
Agreement or termination of the provisions of
3
**Confidential treatment has been requested for certain portions of this
document.
this Section 11.1 will be a non-exclusive remedy for any breach of
this Section 11.1 and will be without prejudice to any other right or
remedy of such party.
In the event that (i) the functionality of the Interconnectix routing
technology referred to in the first paragraph of this Section 11.1 is
enhanced or updated such that it provides routing functionality that
is substantially equivalent to that provided by the CCT Products and
such enhanced or updated technology is marketed, or (ii) Mentor
Graphics fails during any quarter to timely make payments of
royalties due pursuant to Section 6.1 (or to make payments in the
form of nonrefundable prepayments of royalties) that, in the
aggregate, are at least equal to the minimum cumulative amounts for
each quarter as follows:
For the period: Minimum Cumulative Amount
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10/1/96 - 12/31/96 $[ ]**
10/1/96 - 3/31/97 $[ ]**
10/1/96 - 6/30/97 $[ ]**
10/1/96 - 9/30/97 $[ ]**
10/1/96 - 12/31/98 $[ ]**
10/1/96 - 3/31/98 $[ ]**
then, CCT may, in its sole discretion, immediately terminate the
provisions of this Section 11.1 in their entirety upon written notice
to Mentor Graphics (in which case all of Section 11.1 will be deemed
deleted from this Agreement and the other provisions of this
Agreement will remain in full force and effect).
9. Distribution. Sections 12.2, 12.3 and 12.4 of the OEM Agreement are
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deleted in their entirety.
10. Continuing Support and Source Code. The last sentence of Section 17.6,
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the last sentence of Section 17.7 and all of Section 21 of the OEM Agreement are
deleted in their entirety. The Escrow Agreement attached as Attachment F to the
OEM Agreement shall be terminated. Mentor Graphics and CCT shall execute, and
shall instruct the Escrow Agent to execute, a Termination Amendment to such
Escrow Agreement in the form attached to this Amendment as Exhibit B.
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11. Termination and Default. Section 25.3 of the OEM Agreement is amended to
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replace "Section 17.7 and 17.8 Maintenance and Support" with "Section 17.8
Maintenance and Support", and to delete "Section 21.3 Escrow of Source Code" and
"Attachment F Escrow Agreement." Section 25.4 of the OEM Agreement is deleted in
its entirety.
12. Disputes. The second sentence of Section 27.3 of the OEM Agreement is
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deleted in its entirety and replaced by the following:
4
If the representatives are unable to resolve the dispute in a mutually
satisfactory manner within the next five working days, either party may
submit the dispute to an arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association ("AAA Rules")
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then in effect, including, without limitation the expedited procedures
described in Rules 53-57 of the AAA Rules. The American Arbitration
Association will have the authority to select an arbitrator from a list
of arbitrators who are lawyers experienced in the representation of
software companies; provided, however, that such arbitrator cannot be the
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legal counsel to any party and each party will have the opportunity to
make such reasonable objection to any of the arbitrators listed as such
party may wish and that the American Arbitration Association will select
the arbitrator from the list of arbitrators as to whom neither party
makes any such objection. Each party shall pay one-half (1/2) of the
compensation to be paid to the arbitrator in any such arbitration and
one-half (1/2) of the costs of transcripts and other expenses of the
arbitration proceedings; provided, however, that in the event that the
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arbitrator finds that one party has substantially prevailed in the
arbitration, the prevailing party shall be entitled to an award of
attorney's fees and costs, arbitrator's fees and costs, and all other
costs of arbitration to be paid by the losing party. For any claim
submitted to arbitration, the burden of proof shall be as it would be if
the claim were litigated in a judicial proceeding. The arbitrator shall
have the power to grant equitable relief. Any judgment upon the award
rendered by the arbitrator may be entered in any court having
jurisdiction of the subject matter thereof.
13. Nonassignment. Section 27.7 of the OEM Agreement is deleted in its
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entirety and replaced by the following:
27.7 Nonassignment. This Agreement is not assignable by either party
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without the prior written consent of the other except to a successor to
all or substantially all of the business of such party by reason of
merger, sale of assets or other form of acquisition.
14. Severability. Section 27.10 of the OEM Agreement is deleted in its
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entirety and replaced by the following:
27.10 Severability. If any provision of this Agreement is found
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invalid, illegal or unenforceable, such provision will be enforced only
to the maximum extent permissible, and the other provisions of this
Agreement will remain in full force and effect. Notwithstanding the
foregoing, if any provision of Section 11.1 is found invalid, illegal or
unenforceable, all of Section 11.1 will be deemed deleted from this
Agreement and the other provisions of this Agreement will remain in full
force and effect.
15. Attachments. Section 27.14 of the OEM Agreement is amended to delete
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"Attachment B CCT Product Development and Porting", "Attachment F Escrow
Agreement", and "Attachment G List of Competitors", and "Attachment I CCT
Domestic Distributor Price List."
16. Equitable Relief. A new Section 27.15 is added to the OEM Agreement as
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follows:
27.15 Equitable Relief. The parties agree that, due to the potentially
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large size of the market for the sophisticated software licensed
hereunder, the subject matter of this
5
Agreement is of inestimable value. Accordingly, the parties hereto will
have the right to preliminary and permanent injunctive relief and/or
specific performance to remedy violations of the provisions of this
Agreement.
17. CCT Products and Royalties. Attachment A to the OEM Agreement is deleted
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in its entirety and replaced by the new Attachment A, attached as Exhibit A to
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this Amendment.
18. SETO Agreement. Upon execution of this Amendment, CCT agrees to execute,
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and Mentor Graphics agrees to execute and cause SETO to execute, the Assignment
of Router Partner Distribution Agreement in the form attached hereto as Exhibit
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C providing for the assignment to and assumption by Mentor Graphics of the SETO
-
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment through the
signatures of their duly authorized representatives as set forth below.
XXXXXX & CHYAN TECHNOLOGY, INC. MENTOR GRAPHICS CORPORATION
/s/XXXXXX X. XXXXX /s/XXXXXXX XXXXX
By: ______________________________ By: _______________________________
Xxxxxx X. Xxxxx Xxxxxxx Xxxxx
Name: ____________________________ Name: _____________________________
Chief Financial Officer Director of Contracts
Title: ___________________________ Title: ____________________________
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EXHIBIT A
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**Confidential treatment has been requested for certain portions of this
document.
ATTACHMENT A
CCT PRODUCTS AND ROYALTIES
1. Mentor Graphics shall pay royalties and fees based on a discount from CCT's
then-current license fee schedules for the SPECCTRA for Unix Products listed
in the current attachments to this Exhibit A.
2. Mentor Graphics shall receive a [ ]** discount from CCT's
then-current domestic end-user prices listed in CCT's then-current license
fee schedule. With respect to each one year period following the Effective
Date, the royalties payable by Mentor Graphics to CCT shall equal a
[ ]** discount off CCT's then-current domestic end-user
prices solely with respect to licenses of CCT Products occurring after the
cumulative royalties received in such year by CCT from Mentor Graphics for
new Product licenses (excluding maintenance) exceed $[ ]**.
All above discounts apply to the Product license only.
A copy of the appropriate CCT license fee schedules and product descriptions,
effective as of the date of this Agreement, is appended to this Exhibit A.
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3. CCT reserves the right to amend the published license fee schedule at any
time. Mentor Graphics will have thirty (30) days written notice prior to any
price change.
4. For discontinued CCT Products, Mentor Graphics will follow CCT's product
discontinuation policy. For example, if a CCT Product is discontinued and
CCT is replacing it with another CCT Product at no charge, then Mentor
Graphics will similarly replace existing CCT Products without charge and no
royalty shall be payable to CCT for such replacement.
5. Software licenses may be transferred from the workstation where a CCT Product
is then-currently installed to a different workstation. Mentor Graphics
shall pay CCT a one-time transfer fee per license per transfer should Mentor
Graphics adopt CCT's software security scheme for CCT Products and require
changes to the authorization scheme to facilitate a license transfer.
6. CCT Marks: Logo:
SPECCTRA(R)
SPECCTEQ(R) (Japan and Taiwan)
[LOGO]
Trade Names:
XXXXXX & CHYAN TECHNOLOGY, INC.
CCT
XXXXXX & CHYAN TECHNOLOGY GMBH
XXXXXX & CHYAN KABUSHIKI KAISHA
CCT K. K.
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EXHIBIT B
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TERMINATION AMENDMENT
TO
ESCROW AGREEMENT
Mentor Graphics Corporation, an Oregon corporation ("Mentor Graphics"),
Xxxxxx & Chyan Technology, Inc., a Delaware corporation ("CCT"), and the First
Interstate Bank of Oregon ("Escrow Agent") entered into that certain Escrow
Agreement dated January 27, 1992 (the "Escrow Agreement") in connection with and
pursuant to that certain (the "OEM Agreement") between
Mentor Graphics and CCT dated of even date therewith. Mentor Graphics and CCT
have amended the OEM Agreement to provide for termination of the Escrow
Agreement, and hereby instruct the Escrow Agent to execute this Termination
Amendment and return all copies of the Source Code to CCT in accordance with
Section 14 of the Escrow Agreement. Pursuant to Section 10 of the Escrow
Agreement, Mentor Graphics shall remain liable for any unpaid fees of the Escrow
Agent.
In Witness Whereof, the undersigned parties have executed this Termination
Amendment to Escrow Agreement, and the Escrow Agreement shall be terminated
effective as of October 11, 1996.
MENTOR GRAPHICS CORPORATION XXXXXX & CHYAN TECHNOLOGY, INC.
/s/XXXXXXX XXXXX /s/XXXXXX X. XXXXX
By: _________________________ By: __________________________
Xxxxxxx Xxxxx Xxxxxx Xxxxx
Name: _______________________ Name: ________________________
Director of Contracts Chief Financial Officer
Title: ______________________ Title: _______________________
FIRST INTERSTATE BANK OF OREGON
/s/X. XXXXXXX
By: _________________________
X. Xxxxxxx
Name: _______________________
Vice President
Title: ______________________
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EXHIBIT C
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ASSIGNMENT OF
ROUTER PARTNER DISTRIBUTION AGREEMENT
SETO Software GmbH ("SETO"), now a wholly owned subsidiary of Mentor
Graphics Corporation, an Oregon corporation ("MENTOR GRAPHICS"), and Xxxxxx &
Chyan Technology, Inc., a Delaware corporation ("CCT"), entered into that
certain Router Partner Distribution Agreement dated January 15, 1996 (the "SETO
AGREEMENT") prior to Mentor Graphics' acquisition of SETO. In connection with
and pursuant to Section 18 of Amendment No. 4 dated October 11, 1996 to the (the "OEM AGREEMENT") between Mentor Graphics and CCT
dated January 27, 1992, SETO hereby conveys and assigns all of SETO's right,
title and interest in the SETO Agreement to Mentor Graphics, including a
transfer of all of SETO's rights and a delegation of all of SETO's obligations
thereunder, and Mentor Graphics hereby accepts such assignment, agrees to
perform all of SETO's obligations thereunder, and acknowledges that all
references therein to SETO will be deemed to be references to Mentor Graphics.
In Witness Whereof, the undersigned parties have executed this Assignment as of
October 11, 1996.
MENTOR GRAPHICS CORPORATION XXXXXX & CHYAN TECHNOLOGY, INC.
/s/XXXXXXX XXXXX /s/XXXXXX X. XXXXX
By: _________________________ By: __________________________
Xxxxxxx Xxxxx Xxxxxx X. Xxxxx
Name: _______________________ Name: ________________________
Director of Contracts Chief Financial Officer
Title: ______________________ Title: _______________________
SETO SOFTWARE GmbH
/s/XXXX XXXXX
By: _________________________
Xxxx Xxxxx
Name: _______________________
Director
Title: ______________________
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