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Exhibit
10.41
EXECUTION COPY
Umbrella Transitional
Services Agreement
between
NXP B.V.
and
DSP Group
Ltd.
and
DSP Group,
Inc.
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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Contents
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Clause
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Page |
| 1. |
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DEFINITIONS |
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4 |
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| 2. |
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MASTER
AGREEMENT AND SERVICE LEVEL AGREEMENTS |
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6 |
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2.1 Master Agreement |
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6 |
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2.2 Service Level Agreements |
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6 |
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2.3 Management of Service Level
Agreements |
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8 |
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2.4 Performance by
Affiliates |
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8 |
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| 3. |
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SERVICES,
STANDARD OF PERFORMANCE AND THIRD-PARTY |
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SERVICE
PROVIDERS |
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8 |
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3.1 Cost |
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8 |
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3.2 Standard of Performance |
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8 |
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3.3 Downtime |
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9 |
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3.4 Third-Party Service
Providers |
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9 |
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3.5 Notice period for
outsourcing |
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10 |
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3.6 |
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11 |
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| 4. |
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INVOICING
AND PAYMENT |
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11 |
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4.1 |
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11 |
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4.2 |
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11 |
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4.3 |
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11 |
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4.4 |
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11 |
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4.5 Cash neutral principle |
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11 |
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4.6 Taxes |
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12 |
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4.7 Parent Guarantee |
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12 |
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| 5. |
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COOPERATION; RECORDS; ACCESS; CONSENTS |
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12 |
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5.1 Cooperation |
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12 |
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5.2 Records |
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12 |
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5.3 Access |
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12 |
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5.4 Consents |
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13 |
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| 6. |
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TERM AND
TERMINATION OF SERVICES |
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13 |
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6.1 Term |
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13 |
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6.2 Interdependancy |
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13 |
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6.3 Material breach |
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14 |
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6.4 Effect of termination |
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14 |
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| 7. |
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INTELLECTUAL PROPERTY RIGHTS |
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14 |
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| 8 |
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LIABILITY |
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14 |
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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2 / 24 |
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8.1 No Implied Warranty |
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14 |
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8.2 No Liability |
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15 |
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| 9. |
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FORCE
MAJEURE |
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15 |
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9.1 Force Majeure |
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15 |
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9.2 Force Majeure
consequences |
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16 |
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| 10. |
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CONFIDENTIALITY |
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16 |
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10.1 |
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16 |
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10.2 |
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16 |
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10.3 |
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17 |
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10.4 |
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17 |
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10.5 |
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17 |
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10.6 |
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17 |
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| 11. |
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DISPUTE
RESOLUTION PROCEDURE; APPLICABLE LAW |
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11.1 Dispute resolution |
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17 |
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11.2
Applicable law |
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| 12. |
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FURTHER
ASSURANCES |
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| 13. |
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MISCELLANEOUS |
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13.1 Notices |
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18 |
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13.2 Binding effect; amendments and
waivers |
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20 |
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13.3 Assignment |
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21 |
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13.4 Waiver |
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21 |
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13.5 Invalidity |
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21 |
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13.6 Third-party rights |
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21 |
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13.7 Headings |
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Schedules |
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Schedule
1 Certain
Services |
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Schedule
2 Service Level
Agreements |
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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3 / 24 |
THE UNDERSIGNED:
| (1) |
NXP B.V. , a private company with limited liability
incorporated under the laws of the Netherlands, with corporate seat
in Eindhoven, the Netherlands, and having its address at High Tech
Campus 60, 5656 AG Eindhoven, the Netherlands (“ NXP
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and
| (2) |
DSP Group Ltd. , a private company with limited
liability incorporated under the laws of Israel, with corporate
seat in Herzeliya, Israel, and having its address at 5 Shenkar
Street, Herzeliya, 46120, Israel, entering into this Agreement on
behalf of itself and its wholly-owned Affiliates (collectively, the
“ Purchaser ”), |
and
| (3) |
DSP GROUP, Inc. , a company incorporated under the laws
of the State of Delaware, United States of America, having its
address at 2580 North First Street, Suite 460, San Jose, CA 95131,
United States of America (“ Purchaser Parent
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WHEREAS:
| (A) |
NXP, the Purchaser Parent and the Purchaser have entered into a
Share and Business Sale Agreement dated 3 September 2007 (the
“ SBSA ”) relating to the Operations (as defined
in the SBSA); |
| (B) |
NXP is willing to provide or to have its Affiliates or
Third-Party Service Providers provide certain services to the
Purchaser or its Affiliates in accordance with the terms of this
Agreement; |
IT IS AGREED AS
FOLLOWS:
Specific
definitions
For the purposes of this
Agreement, the following terms shall have the meanings set forth
below:
“ Additional
Services ” shall have the meaning as set forth in clause
2.2.
“ Affiliate
” shall have the same meaning as set forth in the
SBSA.
“ Agreement
” means this agreement between NXP, the Purchaser Parent and
the Purchaser, including all Schedules thereto and any and all
service level agreements related to the Services to be entered into
pursuant to this Agreement, if any, but are not otherwise set forth
as annexes to Schedule 2 .
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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4 / 24 |
“ Allocation Key
” shall have the meaning as set forth in clause
3.1.
“ Business Day
” means a calendar day, other than a Saturday or a Sunday, on
which commercial banks in Amsterdam, the Netherlands and New York
City, New York, United States of America, are generally open for
business.
“ Closing Date
” shall have the same meaning as set forth in the
SBSA.
“ Confidential
Information ” shall have the meaning as set forth in
clause 10.1.
“ Continued
Operations ” shall have the same meaning as set forth in
the SBSA.
“ Force Majeure
” shall have the meaning as set forth in
clause 9.1.
“ Governmental
Authority ” means any government or any agency, bureau,
board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government,
whether federal, state or local, domestic or foreign.
“ IPTLA ”
shall mean the Intellectual Property Transfer and License Agreement
between NXP, Purchaser Parent and Purchaser.
“ MSCA ”
shall mean the Manufacturing Services Collaboration Agreement
between NXP, Purchaser Parent and Purchaser.
“ NXP ”
shall have the meaning as set forth in the preamble of to this
Agreement.
“ Operations
” shall have the meaning as set forth in Whereas
(A).
“ Parties
” means the parties to this Agreement and “
Party ” means any one of them as the case may
be.
“ Person ”
means an individual, a company or corporation, a partnership, a
limited liability company, a trust or other entity, organisation or
unincorporated association, including a Governmental
Authority.
“ Project
Manager ” shall have the meaning set forth in clause
2.3.
“ Purchaser
” shall have the meaning as set forth in the preamble to this
Agreement.
“ Purchaser
Parent ” shall have the meaning set forth in the preamble
to this Agreement.
“ SBSA ”
shall have the meaning as set forth in Whereas (A).
“ Service Level
Agreements ” means (i) the service level agreements
in effect as of the Closing Date and attached as annexes to
Schedule 2 and (ii) any and all other service level
agreements related to the Services to be entered into pursuant to
this Agreement, if any.
“ Services
” means (i) the services listed in Schedule 1 ,
(ii) the services provided by NXP or its Affiliates or
Third-Party Service Providers to the Purchaser or its Affiliates
under the Service Level Agreements, (iii) any services not
specifically described in Schedule 1 or under Service Level
Agreements but that are inherent to or a necessary part of the
services described therein, or are reasonably required for proper
performance or provision of such services and (iv) such other
services relating to the Operations that the Purchaser may
reasonably request from NXP which services NXP currently provides
to its Affiliates or other
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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5 / 24 |
business lines of NXP, unless
(with respect to item (iv)) such services cannot be, or cannot be
reasonably provided. For the avoidance of doubt : except as
otherwise agreed between the Parties as otherwise provided for in
Schedule 1 or as otherwise provided for in the Service Level
Agreements, the Services shall not include any services which are
already provided to the Operations by a third party immediately
prior to and/or on the Closing Date and the Parties acknowledge and
agree that (i) with respect to any Contract (as defined in the
SBSA) with respect to such services, [*] shall apply
and (ii) with respect to any Umbrella Contract (as defined in
the SBSA) [*] shall apply.
“ Taxation
” or “ Tax ” means all forms of taxation,
whether direct or indirect, including, without limitation, income,
gross receipts, windfall profits, value added, service, severance,
property, production, sales, use, duty, license, excise, franchise,
employment, withholding or similar taxes, (including, without
limitation, social security contributions and any other payroll
taxes), together with any interest, additions or penalties with
respect thereto imposed by any governmental, taxing or other
authority responsible for the imposition, administration or
collection of any Tax and any interest in respect of such additions
or penalties.
“ Tax Authority
” means any taxing or other authority competent to impose any
liability in respect of Taxation or responsible for the
administration and/or collection of Taxation or enforcement of any
law in relation to Taxation.
“ Third-Party
Service Provider ” means any person or entity other than
NXP or its respective Affiliates (including their respective
employees) providing Services to the Purchaser or its respective
Affiliates in connection with this Agreement.
| 2 |
MASTER AGREEMENT AND SERVICE LEVEL
AGREEMENTS |
This Agreement is a master
agreement which sets out the general terms and conditions relating
to the provision of the Services from NXP (or its relevant
Affiliates or Third-Party Service Providers) to the Purchaser (or
its relevant Affiliates).
| 2.2 |
Service Level Agreements |
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2.2.1 |
Certain Services are set out in Schedule 1 . For each
other Service, NXP (or its relevant Affiliate) and the Purchaser
(or its relevant Affiliate) have concluded or will enter into a
Service Level Agreement, the form of which is attached hereto as
Schedule 2 of this Agreement. |
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2.2.2 |
If the Purchaser desires to extend the term of any Service (or
any part thereof) or to add any additional service (collectively,
the “ Additional Services ”) arising out of or
relating to the Services, the following shall apply: |
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(a) |
the Purchaser shall give NXP at least thirty (30) days
(and in any event sufficient) prior written notice, which shall
include reasonable details relating thereto; |
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(b) |
the Purchaser and NXP shall negotiate in good faith whether and
on what terms NXP shall provide (if at all) any such extended term
or any such Additional Service; and |
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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6 / 24 |
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(c) |
the Parties acknowledge and agree that NXP at its sole
discretion can reject or consent to any extended term or Additional
Service - but only after NXP has fully complied with its obligation
to negotiate in good faith as stated above - and provided that NXP
shall not unreasonably withhold its consent to the extension of any
such term or provision of any such Additional Service if such
extension or Additional Service were inadvertently or
unintentionally omitted from Schedule 1 or a Service Level
Agreement as of the Closing Date or is essential to effectuate an
orderly transition of the Operations in accordance with the SBSA.
Notwithstanding the foregoing - but subject to the absence of any
contractual restrictions prohibiting the extension of any term or
provision of an Additional Service - NXP shall comply with the
Purchaser’s request for the extension of the term of such
Service (or any part thereof) or the provision of any Additional
Service, if such request is as a result of a material breach by NXP
or any of its Affiliates or any Third-Party Service Provider
engaged pursuant to Section 3.4.2 in the provision of such
Services, or the provision of such Service in accordance with the
service levels, pursuant to this Agreement or a Service Level
Agreement under this Agreement. |
The applicable Service Level
Agreement shall thereafter be amended to include the extended term
or a separate Service Level Agreement shall be entered into to add
the Additional Service. Upon execution of such amendment or new
Service Level Agreement, any Additional Service shall be deemed to
be a “Service” for all purposes hereunder.
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2.2.3 |
The Parties acknowledge and agree that the Services include any
ancillary services, functions or responsibilities not specifically
described in this Agreement (including in Schedule 1 ), but
which are required for the proper performance and delivery by NXP
(or its Affiliates or any Third-Party Service Provider arranged by
NXP in accordance with clause 3.4.2) of - and form an essential
part of - the Services listed in Schedule 1 or set forth in
a Service Level Agreement attached in Schedule 2 ,
including those that are an inherent part or subpart thereof. Such
ancillary services which are an essential part of the Services
referred to in Schedule 1 or set forth in a Service Level
Agreement attached in Schedule 2 , will not be deemed
to be an Additional Service, and there will be no separate charge
for such ancillary services; rather the price for such ancillary
services shall be included in the charge for the particular Service
referred to in Schedule 1 or set forth in a Service Level
Agreement attached in Schedule 2 ,of which such
ancillary service is a part. |
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2.2.4 |
In the event that the terms of this Agreement conflict with the
terms of an individual Service Level Agreement, the terms of the
Service Level Agreement shall prevail. |
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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7 / 24 |
| 2.3 |
Management of Service Level Agreements |
Each Party shall designate a
project manager (a “ Project Manager ”) to
report and discuss issues with respect to the provision of the
Services. The Project Managers shall meet to discuss the
performance of the Services as often as the Parties deem necessary
to ensure the orderly provision of the Services, and in any event
at least bi-annually, and shall have authority to address and
remedy problems related to the provision of the Services. Each
Party shall designate successor Project Managers in the event that
a designated individual is not available to perform such role
hereunder.
| 2.4 |
Performance by Affiliates |
NXP and the Purchaser shall
procure that their relevant Affiliates and any Third-Party Service
Provider arranged by NXP in accordance with clause 3.4.2 shall
perform their relevant obligations in accordance with this
Agreement.
| 3 |
SERVICES, STANDARD OF PERFORMANCE AND THIRD-PARTY SERVICE
PROVIDERS |
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3.1.1 |
NXP (or its relevant Affiliates) shall provide the Services to
the Purchaser (or its relevant Affiliates) and the Purchaser (or
its relevant Affiliates) shall obtain the Services from NXP (or its
relevant Affiliates) at the costs determined pursuant to the
Allocation Keys (as defined below) - unless the nature of a Service
changes materially due to the separation of the Operations and the
different cost structure reflecting the material change in the
nature of the Service is agreed upon in the relevant Service Level
Agreement - and at the conditions set forth in the Service Level
Agreements, whereby the following cost principles shall
apply: |
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(a) |
For any Services that NXP is currently providing to the
Operations - [*] ; |
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(b) |
For any Services other than those set forth in clause 3.1.1(a)
– [*] ; and |
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(c) |
With respect to the provision of Services after 2008,
[*]. |
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3.1.2 |
The Purchaser and NXP have mutually agreed upon allocation keys
applicable for each Service in each relevant jurisdiction as set
forth in the relevant Service Level Agreements attached in
Schedule 2 (the “ Allocation Keys
”). |
| 3.2 |
Standard of Performance |
Unless (i) a different
performance standard is set forth in the applicable Service Level
Agreement, or (ii) the nature of a Service changes materially
due to the separation of the Operations and the different
performance standard reflecting the material change in the nature
of the Service is agreed upon in the relevant Service Level
Agreement, NXP agrees to provide the Services in substantially the
same manner and at the same level as such Services were performed
by NXP (and/or its Affiliates or Third Party Service Providers
arranged by NXP in accordance with clause 3.4.2) for the Operations
prior to the date hereof, including (to the extent applicable) with
respect to level of service, priority of service, timeliness and
quality and in any event in a professional and workmanlike manner,
using
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CONFIDENTIAL TREATMENT REQUESTED.
OMITTED PORTIONS
MARKED WITH [*] AND FILED SEPARATELY
WITH THE SEC.
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8 / 24 |
personnel with sufficient
training and expertise. Subject to clause 9 (Force Majeure), NXP
shall give the Services substantially the same priority as it
accords its own operations. In the event the Purchaser brings to
the attention of NXP any alleged failure by NXP, its Affiliates or
a Third-Party Service Provider arranged by NXP in accordance with
clause 3.4.2 to meet, in whole or in part, a service level, the
Project Manager appointed by NXP shall (i) promptly
investigate and notify the Purchaser of the cause of the alleged
problem, (ii) use commercially reasonable efforts to correct
the problem, if any, at no additional cost to the Purchaser, and to
resume meeting the service levels as promptly as practical and
(iii) reasonably advise the Purchaser of the status of the
remedial efforts being undertaken with respect to the
problem.
In respect of IT Services
provided hereunder, NX
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