Exhibit 10.71
TRANSITION SERVICES
AGREEMENT
This Transition Services Agreement
(together with Annex A hereto) and the Transition Agreements
(as defined herein), collectively, this “ Agreement
”) is entered into as of the 1st day of June, 2006 (the
“ Separation Date ”), by and between Agilent
Technologies, Inc., a Delaware corporation (“
Agilent ”), and Verigy Ltd., a company organized
under the laws of Singapore (“ Verigy
”).
W I T N E S S E T
H:
WHEREAS, Agilent and Verigy have
entered into a Master Separation and Distribution Agreement (the
“ MSA ”) dated as of May 31, 2006, pursuant
to which, among other things, Verigy will acquire substantially all
of the assets and liabilities of the Business (as defined in the
MSA), all on the terms and conditions set forth in the MSA and the
certain other agreements between Agilent and Verigy (such other
agreements, together with the MSA, the “ Transaction
Documents ”), which are exhibits to the MSA;
WHEREAS, capitalized terms used in
this Agreement but not defined herein shall have the meanings given
to them in the Transaction Documents;
WHEREAS, Agilent has agreed to
provide to Verigy and its Subsidiaries certain services as
described herein; and
NOW, THEREFORE, in consideration of
the mutual covenants and agreements of the parties contained
herein, the parties agree as follows:
1.
Services Provided.
1.1
During the period commencing on the Separation Date and ending on
the Termination Date (as defined below), subject to the terms
hereof, Agilent shall provide to Verigy, or at Agilent’s
option shall cause one or more of its Subsidiaries or one or more
third parties to provide to Verigy and/or Verigy’s
Subsidiaries, the services and functions described in Annex
A to this Agreement (each a Service and collectively, the
“ Services ”), until such Services are
terminated in accordance with the terms hereof.
1.2
Agilent and Verigy shall negotiate in good faith more detailed
descriptions of the Services, including those activities necessary
to transition the Services to Verigy and any additional Services
agreed upon by the parties, in various sub-transition agreements
(“ Transition Agreements ” or “ TAs
”), and any services jointly agreed to by Agilent and Verigy
in such TAs will be deemed part of the Services. The Services shall
be no more extensive in scope and content than the services and
functions provided by Agilent to the Business immediately preceding
the Separation Date, and shall not include the exercise of business
judgment or general management for Verigy. The Services provided by
Agilent shall be delivered at a level and delivered with the same
degree of skill and care as Agilent exercises in providing similar
services to itself.
1.3
Subject to Section 1.4.2, Agilent and Verigy may also mutually
agree on consulting or similar services to be provided by Agilent
as Services hereunder (“ Additional Services ”),
which are not included in Annex A . Such Additional
Services, if any, will be of such scope and content as mutually
agreed upon by the Parties in an applicable TA.
1.4
TAs.
1.4.1
Verigy shall receive the Services under this Agreement and
the TAs. Agilent shall perform or shall cause its Subsidiaries to
perform the Services for the Verigy or its Subsidiaries in
accordance with the terms of this Agreement and the applicable TA.
Each such TA will incorporate the terms and conditions of this
Agreement by reference, will not deviate from such terms, except as
may be expressly set forth in each such TA. Each TA shall be
considered an exhibit to this Agreement and not a standalone
agreement. Unless otherwise expressly agreed in
writing by the parties, all invoices
for such Services will be paid by Verigy in accordance with
Section 3 below.
1.4.2
Any request by Verigy for additional TAs not specified on Annex A
shall be made by Verigy within thirty (30) days after the
Separation Date, unless such deadline is otherwise extended by
Agilent.
1.4.3
TAs may need to be executed at a local level between
Agilent’s Subsidiaries and Verigy’s Subsidiaries in
order to provide Services under this Agreement. Each such TA will
incorporate the terms and conditions of this Agreement by
reference, and may not deviate from such terms and conditions
except as required by local laws or except as may be set forth
therein, and only as documented in the applicable TA. However, no
such local TAs will be binding and enforceable against Agilent or
Verigy or their respective Subsidiaries unless and until they are
approved in writing by the Transition Managers (defined below). In
connection with such local TAs, Agilent shall issue or cause its
Subsidiaries to issue invoices to the Verigy’s ordering
Subsidiaries, and Verigy shall pay or shall cause its Subsidiary to
pay such invoices, subject to the terms and conditions of this
Agreement or the applicable TA.
1.5
Transition Management.
1.5.1
Agilent and Verigy each agree to (i) designate an appropriate
point of contact for all questions and issues relating to the
Services for each of the related Transition Agreements during the
term of this Agreement (“ Transition Managers ”)
and (ii) make available the services of appropriate qualified
employees and resources to allow for the provision of the Services
and to allow each party to perform its duties, responsibilities and
obligations related to the Services.
1.5.2
Agilent’s and Verigy’s designated transition team leads
for each of the TAs will be included in such TAs.
1.6
Verigy shall make a commercially reasonable and good faith effort
to assume performance of all of the Services and functions as soon
as practicable and for each service included in the Services on or
prior to the date specified for such service in any related TA. In
furtherance of the foregoing, Verigy shall use commercially
reasonable efforts to make or obtain any approvals, permits and
licenses and implement any systems as may be necessary for it to
provide the Services and functions independently in each pertinent
country as soon as practicable following the Separation
Date.
1.7
Verigy shall provide Agilent with such information and
documentation as is reasonably necessary for Agilent to perform the
Services and perform such other duties and tasks as may be
reasonably required to permit Agilent to perform the
Services.
1.8
Verigy acknowledges and agrees that during the term of this
Agreement, Agilent may engage in upgrades, testing and related
activities with respect to Agilent’s systems and IT
infrastructure. To the extent the Services received by Verigy
during any Extension Periods continue to rely on Agilent’s
systems and IT infrastructure, Verigy will reasonably cooperate
with Agilent with respect to such upgrades, testing and
activities.
2.
No Warranty and Limitations.
2.1
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, AGILENT
MAKES NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
WITH RESPECT TO ANY SERVICES PROVIDED HEREUNDER.
2.2
Limitations.
2.2.1
Verigy hereby acknowledges that Agilent utilizes outsourcing
relationships with, and uses software of, third parties (“
Service Providers ”) who may, through Agilent’s
obligations under
2
this Agreement, be delivering
Services to Verigy or whose software may be used by Agilent to
provide Services to Verigy. Verigy further acknowledges that
Agilent’s provision of such Services or use of such software
may be subject to the terms and conditions of agreements between
Agilent and such Service Providers. To the extent required under
any such Service Provider agreements governing such Services or
software, Verigy agrees to cooperate with Agilent and will assist
Agilent in obtaining third party consents, licenses, sublicenses,
or approvals necessary to permit Agilent or the applicable Service
Provider to perform, or otherwise make available to Verigy, the
Services set forth in this Agreement (including any TA) or to
permit Agilent to use the applicable software to provide the
Services set forth in this Agreement (including any TA). Neither
Verigy nor Agilent shall have any obligation to expend funds or
incur obligations in order to obtain any such third party consents,
licenses, sublicenses, or approvals.
2.2.2
Except as may be set forth in an TA or elsewhere in this Agreement,
Agilent shall not be required to provide Verigy with extraordinary
levels of Services, special studies, training, or the like or the
benefit of systems, equipment, facilities, training, or
improvements procured, obtained or made after the Separation Date
by Agilent. Nothing in this Agreement will require Agilent to favor
the businesses of Verigy over its own businesses or those of any of
its Subsidiaries or divisions.
3.
Fees.
3.1
The amount to be charged on a monthly basis for the Services will
be set forth in Annex A or each individual TA (for any Service, the
“ Monthly Charge ”). The Monthly Charge will
begin to be payable starting on the Separation Date, provided that
if for any reason the Separation Date does not occur at the
beginning of a calendar month, the initial Monthly Charge will be
pro-rated. The fees payable with respect to the month in which
services are concluded may be pro-rated to the extent provided for
in the applicable TA.
3.2
Any Additional Services shall be billed by Agilent on a time and
materials basis (provided that the labor rates will be the rate
paid by Agilent to third party contractors where the Additional
Services are provided by third party contractors, and, for
Additional Services provided by Agilent employees, the hourly rate
derived from the fully burdened cost of such employee), and shall
include reimbursement of any pre-approved out-of-pocket expenses
incurred in connection with providing such Additional
Services.
3.3
Agilent shall invoice Verigy for the Services (including any
Additional Services) provided hereunder in arrears on a monthly
basis within twenty (20) days after the end of the month in
which the charges accrued. Verigy shall pay any invoice for
Services promptly but in no event later than fifteen (15) days
after the date of invoice. Late payments shall bear interest at the
prime rate then in effect, plus 5% per annum or the maximum amount
allowed by law, whichever is less. Verigy shall notify Agilent
immediately, and in no event later than thirty (30) days
following receipt of Agilent’s invoice, of any disputed
charges. After such thirty (30) day time period, Verigy will
be deemed to have accepted Agilent’s invoice. Agilent shall
provide supporting information and documentation as reasonably
requested by Verigy to validate any amounts payable by Verigy
pursuant to this Section 3.
4.
Security
4.1
Each Party will and shall cause its Subsidiaries to, and Agilent
will use commercially reasonable efforts to cause the Service
Providers to, handle and protect from disclosure all proprietary
and confidential information and systems (including Verigy Data, as
defined below, in the case of Verigy proprietary and confidential
information) disclosed to it by the other party, or accessible
within Agilent’s information technology infrastructure,
consistent with each party’s respective obligations under the
MSA with respect to confidentiality, and Article VII (Access
to Information) of the MSA is incorporated herein by
reference.
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4.2
During the term of this Agreement (and including any TAs),
Verigy’s access to Agilent’s information technology
infrastructure for applications and other data processing
activities shall be through secured controlled processes determined
by Agilent in its sole discretion, and shall be in accordance with
Agilent’s (including its Subsidiaries) business control and
information protection policies, standards and guidelines as may be
modified from time to time. Except as set forth above and except to
the extent otherwise provided for in the MSA or the Intellectual
Property Matters Agreement between Agilent and Verigy dated as of
the date of this Agreement (“ IPMA ”), or in
connection with third party agreements assigned or novated to
Verigy pursuant to the MSA: (i) Agilent shall not transfer to
Verigy, and Verigy shall have no rights in or access to,
application software/systems source code associated with shared
systems through which Agilent is providing Services to Verigy
hereunder; (ii) Verigy shall not, through reverse engineering
or any other technique or means, attempt to access source code for
any application software/systems that it is allowed to access and
shall use
