Exhibit 10.24
AGREEMENT
THIS AGREEMENT is entered into this 31st day of October, 1997 between
GateField Corporation, a Delaware Corporation, ("GATEFIELD"); and Zycad Japan
(GateField) KK, ("Zycad Japan") and Zycad TSS Corporation, a California
Corporation ("ZYCAD TSS").
WHEREAS, GateField desires to assign and transfer to Zycad TSS GateField's
LightSpeed and XP/PXP maintenance and support contracts and the right to
provide maintenance support services to GateField's installed LightSpeed and
XP/PXP customer base; and
WHEREAS, GateField desires to provide Zycad TSS with a source code license
to certain Software for the purpose of providing LightSpeed and XP/PXP
Maintenance Services; and
WHEREAS, Zycad TSS desires to perform the above LightSpeed and XP/PXP
Services;
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS
1.1 LIGHTSPEED AND XP/PXP MAINTENANCE CUSTOMERS shall mean all GateField
customers as specified on Exhibit A who have current maintenance contracts
for LightSpeed, XP or PXP Products installed at a customer site as of the
Effective Date of this Agreement as specified on Exhibit A or who purchase
PXP Products from GateField after the Effective Date through November 30,
1997. GateField agrees to provide Zycad TSS with customer site information
in a format similar to Exhibit A for all PXP Products sold by GateField after
the Effective Date.
1.2 LIGHTSPEED AND XP/PXP CUSTOMERS shall mean those customers as
specified on Exhibit B who have purchased LightSpeed, XP or PXP Products,
whether they are currently on maintenance or not.
1.3 LIGHTSPEED AND XP/PXP PRODUCTS shall mean those products set forth in
Exhibit C, including hardware, microcode and software.
1.4 LIGHTSPEED AND XP/PXP SERVICE INVENTORY shall mean all LightSpeed, XP
and PXP modules, cabinets and components currently owned by GateField for
field spares as specified on Exhibit D.
1.5 LIGHTSPEED AND XP/PXP PRODUCTION INVENTORY shall mean all LightSpeed,
XP and PXP modules, cabinets and components currently owned by GateField for
production inventory as specified on Exhibit E.
1.6 LIGHTSPEED AND XP/PXP MAINTENANCE REVENUE shall mean the actual gross
revenue collected from customer purchase orders for maintenance service for
LightSpeed and XP/PXP Products net of any reasonable and customary sales
commission paid.
1.7 LIGHTSPEED AND XP/PXP MAINTENANCE SERVICES shall mean maintenance
services for LightSpeed and XP/PXP Products as specified in GateField's
standard maintenance agreement, a copy of which is attached as Exhibit F.
1.8 LIGHTSPEED AND XP/PXP WARRANTY SERVICES shall mean warranty services
for XP/PXP Products sold by Gatefield on or before November 30, 1997 pursuant
to Zycad's standard warranty provisions, a copy of which is specified in
Exhibit G.
1.9 MAINTENANCE RELATED EQUIPMENT shall mean the equipment specified in
Exhibit H.
1.10 SOFTWARE shall mean the software specified in Exhibit I.
1.11 EFFECTIVE DATE. The Effective Date of this Agreement shall be October 1,
1997.
2. LIGHTSPEED AND XP/PXP MAINTENANCE
2.1 ASSIGNMENT OF RIGHT. GateField assigns to Zycad TSS for a period of five
(5) years from August 18, 1997 all of its right, title and interest in and to
the LightSpeed and XP/PXP Maintenance Contracts as well as the exclusive right
to provide LightSpeed and XP/PXP Maintenance Service to LightSpeed and XP/PXP
Maintenance Customers and to the LightSpeed and XP/PXP Install Base. Zycad TSS
agrees to provide LightSpeed and XP/PXP Maintenance Service to all LightSpeed
and XP/PXP Maintenance Customers pursuant to the provisions of GateField
standard maintenance terms and conditions, a copy of which is attached hereto as
Exhibit F. This obligation of Zycad TSS to provide maintenance service shall
cease on a customer by customer basis when the LightSpeed and XP/PXP maintenance
contract for each customer expires and is not renewed.
2.2 MAINTENANCE RENEWALS. Zycad TSS shall be solely responsible for
getting LightSpeed and XP/PXP Customers to sign new maintenance contracts or
renew maintenance contracts for PXP Products after current purchase orders
for maintenance and support expire. Zycad TSS shall do all contract
negotiation, invoicing and collecting for all LightSpeed and XP/PXP
Maintenance Revenue, except for Japan.
2.3 TERMINATION OF RIGHT. All rights to provide LightSpeed and XP/PXP
Maintenance Services under this Agreement shall terminate on August 17, 2002
unless mutually extended by Zycad TSS, GateField and IKOS.
3.0 LightSpeed and XP/PXP Maintenance Revenue Sharing
3.1 For a period of 24 months after the Effective Date or until Gatefield
has received $1,800,000 worldwide in revenue sharing, GateField and Zycad TSS
agree to share LightSpeed and XP/PXP Maintenance Revenue at a rate of 30% to
GateField and 70% to Zycad TSS, except in Japan.
3.2 For a period of 25 months after the effective date through 36 months
after the Effective Date, Gatefield and Zycad TSS agree to share LightSpeed
and XP/PXP Maintenance Revenue at a rate of 10% to Gatefield and 90% to Zycad
TSS, except in Japan.
3.3 For a period of 12 months after the Effective Date through 60 months
after the Effective Date, GateField and Zycad TSS agree to share LightSpeed
and XP/PXP Maintenance Revenue in Japan at the rate of 40% to Gatefield and
60% to Zycad TSS provided that Gatefield Japan does all billing, invoicing,
collections, local customer support and reasonable sales support to renew
customers contracts for LightSpeed and XP/PXP customers in Japan. If
Gatefield Japan ceases these activities GateField agrees to provide ninety
(90) days prior written notice and LightSpeed and XP/PXP Maintenance Revenue
in Japan will be shared 30% to GateField and 70% to Zycad TSS until Gatefield
has received $1,800,000 worldwide in revenue at which time the maintenance
split will be 10% to GateField and 90% to Zycad TSS.
3.4 Prepaid Maintenance. GateField agrees to pay to Zycad TSS the sum of
$455,000 for LightSpeed and XP/PXP Maintenance Services to be performed by
Zycad TSS for which GateField has collected the LightSpeed and XP/PXP
Maintenance revenue. Payment will be made within thirty (30) days of the date
of the Agreement. Final figures to be reconciled by November 10, 1997.
3.5 GateField will pay Zycad TSS the actual operating expenses incurred by
Zycad TSS and facility use expenses for the period of time between the
Effective Date and GateField's payment of Maintenance Revenue defined in
Paragraph 3.4 above. Gatefield will deduct these expense payments from the
sum due Zycad TSS under paragraph 3.4 above.
3.6 GateField will collect current receivables invoiced by GateField prior
to Effective Date. GateField will deduct
its proportionate share from receivables and pass the balance onto Zycad TSS
payable net fifteen (15) days from the date collected.
3.7 In Japan, GateField KK will invoice and collect all receivables from
customer as long as GateField KK is providing service as specified in
paragraph 3.3 above. GateField will forward to Zycad TSS 60% of the
receivables collected.
4. MAINTENANCE RELATED EQUIPMENT AND INVENTORY
4.1 EQUIPMENT AND SERVICE INVENTORY. GateField agrees to transfer the
Maintenance Related Equipment and LightSpeed and XP/PXP Service Inventory to
Zycad TSS by Xxxx of Sale at Closing.
4.2 PRODUCTION INVENTORY. GateField agrees to consign the LightSpeed and
XP/PXP Production Inventory to Zycad TSS for the purpose of selling such
inventory to LightSpeed and XP/PXP Customers solely for replacement and
repair. For all such inventory sold, Zycad TSS shall pay GateField the
standard costs for such inventory as specified in Exhibit E plus ten percent
(10%), payable net thirty (30) days after the month during which such
inventory was sold.
4.3 FINAL INVENTORY LISTS. A final List of Service Inventory and
Production Inventory shall be compiled and attached to this Agreement by
December 10, 1997. Zycad TSS agrees to provide GateField with quarterly
reports of inventory transactions.
5. INVENTORY RESTRICTIONS
Zycad TSS may only use the LightSpeed and XP/PXP Product Inventory for
Board or component replacement and not for upgrades, add-ons or capacity
expansion.
6. MAINTENANCE BILLING AND ACCOUNT TRANSITION.
6.1 MAINTENANCE BILLING. GateField will xxxx and collect all LightSpeed
and XP/PXP Maintenance Revenue which are outstanding as of the Effective Date.
6.2 ACCOUNT TRANSITION. LightSpeed and XP/PXP maintenance contracts and
billing would be transitioned to Zycad TSS upon the Effective Date so that
new maintenance PO's would issue to Zycad TSS, the maintenance contract would
be between Zycad TSS and the Customer, and Zycad TSS would invoice and
collect PXP Maintenance Revenue except in Japan where the maintenance
contracts will remain between GateField Japan KK and the customer. In Japan
GateField KK will do all maintenance billing, invoicing and collections from
customers in Japan as long as GateField KK is providing maintenance services
in Japan as specified in paragraph 3.3 above. GateField KK will collect from
the customers and transfer to Zycad TSS 60% of the revenue collected. Monthly
revenue due Zycad TSS will be in accordance with Exhibit K.
6.3 WARRANTY SERVICES. GateField and Zycad TSS agree that Zycad TSS shall
perform all LightSpeed and PXP Warranty Services for PXP Products and PXP
Products sold by GateField on a time and material basis. Zycad TSS' time and
material expenses for PXP Warranty Services shall be invoiced to Gatefield
and shall be setoff against maintenance revenue sharing due hereunder.
7. SOURCE CODE LICENSE
7.1 GateField grants Zycad TSS a worldwide, non-revocable, royalty free
Source Code license for the Software specified in Exhibit I for the purposes
of providing LightSpeed and XP/PXP Maintenance Services to LightSpeed and
XP/PXP Customers for a period of five (5) years from August 18, 1997. IKOS
owns all modifications, including enhancements and derivative Software, but
grants to Zycad TSS a non-exclusive, non-transferable, worldwide source code
license for all modifications, enhancements and derivative Software as stated
above.
7.2 GateField assigns to Zycad TSS all of its interest in the Software
License Agreement dated August 18, 1997 between Zycad Corporation and Provis
Corporation, except for the provisions of Sections 4 and 5.
8. EMPLOYMENT MATTERS
8.1 EMPLOYEE SOLICITATION BY ZYCAD TSS Zycad TSS shall have the right, but
not the obligation, to offer employment to any of GateField's employees
listed on Exhibit J ("Employees") at the salary levels and on other terms and
conditions to be determined in Zycad TSS' sole discretion effective as of
the Effective Date. Zycad TSS shall have no liability for accrued wages
(including salaries and commissions), severance pay, sick leave or other
benefits, or employee plans of any type or nature on account of GateField's
employment of or termination of such employees', and GateField shall
indemnify Zycad TSS and hold Zycad TSS harmless against any liability arising
out of any claims for such pay or benefits or any other claims arising from
GateField's employment of or termination of employment of such employees.
Employees shall continue to be employed by GateField through the date that
Zycad TSS is incorporated and has workers compensation and health insurance
in place and GateField shall continue in force all current salaries and
benefits through such date.
8.2 EMPLOYEE PLANS. Zycad TSS is not assuming any of the employee plans of
GateField and Zycad TSS shall have no liability whatsoever to employees of
GateField with respect to accrued or future benefits under any such employee
plans, whether or not any of such employees are offered employment by, or
become employees of, Zycad TSS, and GateField shall defend, indemnify and
hold Zycad TSS harmless against any claims that it has liability under such
employee plans.
8.3 NONSOLICITATION. Zycad TSS agrees not to solicit the employment of any
individual who is a GateField employee as of the date of this Agreement
(other than an Employee) for a period of one year after the Effective Date.
GateField agrees not to solicit the employment of any individual who is an
employee of Zycad TSS as of the date of this Agreement for a period of one
year after the Effective Date.
8.4 STOCK OPTIONS
8.4.1 VESTED OPTIONS. Those Employees with vested stock options have
ninety (90) days after the date of employment with Zycad TSS to exercise
these options, plus an additional two months for every full month employed by
Zycad TSS after the Effective Date, up to a maximum of an additional six (6)
months.
8.4.2 UNVESTED OPTIONS. Those Employees with unvested options will
have their options vested 100% on the date they become employees of Zycad
TSS, but these options are not exercisable unless the employee has been
continuously employed by Zycad TSS for a period of one (1) year after the
date of employment with Zycad TSS. Employees have ninety (90) days after this
one (1) year period to exercise their stock options.
8.4.3 VESTED AND UNVESTED OPTIONS. Those Employees with both vested
and unvested options would apply the rules for both vested and unvested
options respectively as described in the previous paragraph.
9. TERM AND TERMINATION
9.1 TERM. The term of this Agreement shall be for a period of five (5)
years from August 18, 1997 at which time this Agreement shall automatically
terminate.
9.2 FINANCIAL DIFFICULTIES. Either party may terminate this Agreement
effective immediately upon written notice to the other party if the other
party files a voluntary petition in bankruptcy or otherwise seeks protection
under any law for the protection of debtors; has a proceeding instituted
against it under any provision of the bankruptcy laws which is not dismissed
within sixty (60) days; is adjudged a bankrupt; has a court assume
jurisdiction of its assets under a reorganization act; has a trustee or
receiver appointed by a court for all or a substantial portion of its assets;
suspends or ceases to do business; makes an assignment of all or a
substantial portion of its assets for the benefit of credits; or
admits in writing its inability to pay its debts as they become due.
9.3 MATERIAL BREACH. Except as otherwise provided in this Agreement,
either party may terminate this Agreement if the other party breaches any
material term or condition of this Agreement and fails to cure that breach
within thirty (30) days after receiving written notice of the breach.
9.4 EFFECT OF TERMINATION. Upon termination of this Agreement, except as
expressly provided herein, (a) the rights granted to Zycad TSS by GateField
pursuant to this Agreement automatically terminate; (b) Zycad TSS shall,
within thirty (30) days, ship to GateField any inventory or source code
acquired from GateField and any documented GateField Proprietary Information
it has in its possession; (c) all outstanding invoices for amounts owed to
GateField shall become due and payable on the effective date of termination;
and (d) all obligations of Zycad TSS to perform services or other obligations
under this Agreement shall automatically and immediately terminate.
10. GENERAL
10.1 EXPORT. Zycad TSS agrees that it will not, directly or indirectly,
export or re-export or knowingly permit the export or re-export of LightSpeed
and XP/PXP Products or GateField Proprietary Information to any country for
which the U.S. Export Administration Act, any regulation thereunder, or any
similar U.S. law or regulation requires an export license or other United
States government approval unless the appropriate export license or approval
has been obtained.
10.2 TRADEMARKS. GateField has the right to grant to Zycad TSS the right
to use its LightSpeed and XP/PXP Product logo and trademarks during the term
of this Agreement for the purposes set forth in this Agreement. Any use of
trademarks shall contain a statement identifying said trademarks as being
trademarks of IKOS.
10.3 ARBITRATION. Any unresolved dispute arising pursuant to this Agreement
shall be settled by arbitration before one (1) arbitrator for disputes under
$100,000, otherwise before three (3) arbitrators, provided that nothing in
this Section shall restrict either party from applying for emergency relief
pending final determination of a claim by arbitration or restrict either
party from bringing action against the other for infringement of any of their
respective intellectual property rights or for breach of any of the
obligations hereunder relating to confidentiality and protection of
proprietary information. All arbitration shall be conducted in Santa Clara,
California in accordance with the rules and regulations of the American
Arbitration Association. The expenses associated with such arbitration,
including the expenses of the neutral arbitrator(s) shall be made a part of
the Arbitration Award. The judgment of the arbitrators shall be binding and
entered in any court having jurisdiction thereof. Each party shall be
responsible for their own Attorney's fees.
10.4 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when received, or when
sent by certified or registered mail-return receipt requested, or by prepaid
telex or telegram, as follows:
A. If to GateField:
GateField Corporation
00000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Title: President and CEO
Copy to General Counsel
B. If to Zycad TSS Corporation:
Zycad TSS
00000 Xxxxxxx Xxxxxxx, Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx
Title: President
C. If to Zycad Japan KK
Toshin 00 Xxxx-Xxxxxxxx
Xxxx. X-0X
0-0-0 Xxxx-Xxxxxxxx, Xxxxxx-xx
Xxxxxxxx, 000 Xxxxx
Attention: Manager, Director
or to such other addresses as shall be designated by any of such parties to the
other by such a notice.
10.5 EXCLUSIVE AGREEMENT. This Agreement including the attached
Exhibits is the complete and exclusive statement of the agreement between the
parties and supersedes all prior agreements and communications with respect
to the subject matter. All modifications shall be in writing and signed by
authorized representatives of each party.
10.6 ASSIGNMENT PROHIBITION. Neither this Agreement nor individual rights
or transactions under it shall be assigned by Zycad TSS without the prior
written consent of GateField.
10.7 GOVERNING LAW. This Agreement and all transactions under it shall be
governed by the laws of the State of California, excluding its conflict of
law rules. Any item or service furnished by GateField or the Zycad TSS in
furtherance of this Agreement, although not specifically identified in it,
shall nevertheless be covered by this Agreement unless specifically covered
by some other written agreement executed by GateField and an authorized
representative of Zycad TSS GateField agrees that Zycad TSS may use
GateField's name in lists of representatives Zycad TSS Customers.
10.8 HEADINGS. The headings used in this Agreement are only for
convenience, and are not to be used in interpreting it.
10.9 NO AGENT. Neither party shall not be deemed an agent of the other and
both parties agree not to make any representations on behalf of the other.
In Witness whereof, the parties have signed this Agreement as indicated below.
GATEFIELD CORPORATION ZYCAD TSS CORPORATION
By: /s/ XXXXX X. XXXXXXXX By: /s/ XXXX X. XXXXX
Name: XXXXX X. XXXXXXXX Name: XXXX X. XXXXX
Title: President & CEO Title: PRESIDENT
By: /s/ Xxxxxxx Xxxxx ZYCAD JAPAN KK
Name: Xxxxxxx Xxxxx
Title: CFO By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: CFO
By: /s/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: VP, Secretary & General Counsel
