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Umbrella Transitional Services Agreement

Transition Agreement

Umbrella Transitional Services Agreement | Document Parties: DSP Group Ltd | DSP Group, Inc | NXP BV You are currently viewing:
This Transition Agreement involves

DSP Group Ltd | DSP Group, Inc | NXP BV

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Title: Umbrella Transitional Services Agreement
Governing Law: Delaware     Date: 11/9/2007
Industry: Communications Equipment     Law Firm: Morrison Foerster     Sector: Technology

Umbrella Transitional Services Agreement, Parties: dsp group ltd , dsp group  inc , nxp bv
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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.

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

MARKED WITH [*] AND FILED SEPARATELY WITH THE SEC.

  

 


Contents

 

    

Clause

   Page
1.    DEFINITIONS    4
2.    MASTER AGREEMENT AND SERVICE LEVEL AGREEMENTS    6
   2.1    Master Agreement    6
   2.2    Service Level Agreements    6
   2.3    Management of Service Level Agreements    8
   2.4    Performance by Affiliates    8
3.    SERVICES, STANDARD OF PERFORMANCE AND THIRD-PARTY   
   SERVICE PROVIDERS    8
   3.1    Cost    8
   3.2    Standard of Performance    8
   3.3    Downtime    9
   3.4    Third-Party Service Providers    9
   3.5    Notice period for outsourcing    10
   3.6    11
4.    INVOICING AND PAYMENT    11
   4.1    11
   4.2    11
   4.3    11
   4.4    11
   4.5    Cash neutral principle    11
   4.6    Taxes    12
   4.7    Parent Guarantee    12
5.    COOPERATION; RECORDS; ACCESS; CONSENTS    12
   5.1    Cooperation    12
   5.2    Records    12
   5.3    Access    12
   5.4    Consents    13
6.    TERM AND TERMINATION OF SERVICES    13
   6.1    Term    13
   6.2    Interdependancy    13
   6.3    Material breach    14
   6.4    Effect of termination    14
7.    INTELLECTUAL PROPERTY RIGHTS    14
8    LIABILITY    14

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

MARKED WITH [*] AND FILED SEPARATELY WITH THE SEC.

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   8.1    No Implied Warranty    14
   8.2    No Liability    15
9.    FORCE MAJEURE    15
   9.1    Force Majeure    15
   9.2    Force Majeure consequences    16
10.    CONFIDENTIALITY    16
   10.1    16
   10.2    16
   10.3    17
   10.4    17
   10.5    17
   10.6    17
11.    DISPUTE RESOLUTION PROCEDURE; APPLICABLE LAW    17
   11.1    Dispute resolution    17
   11.2     Applicable law    17
12.    FURTHER ASSURANCES    17
13.    MISCELLANEOUS    18
   13.1    Notices    18
   13.2    Binding effect; amendments and waivers    20
   13.3    Assignment    21
   13.4    Waiver    21
   13.5    Invalidity    21
   13.6    Third-party rights    21
   13.7    Headings    21
   Schedules   
   Schedule 1         Certain Services   
   Schedule 2         Service Level Agreements   

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

MARKED WITH [*] AND FILED SEPARATELY WITH THE SEC.

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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 ”),

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 ”),

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:

 

1 DEFINITIONS

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 .

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

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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

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

MARKED WITH [*] AND FILED SEPARATELY WITH THE SEC.

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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

 

2.1 Master Agreement

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

 

  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.

 

  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:

 

  (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;

 

  (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

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

MARKED WITH [*] AND FILED SEPARATELY WITH THE SEC.

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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.

 

  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.

 

  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.

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

MARKED WITH [*] AND FILED SEPARATELY WITH THE SEC.

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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

 

3.1 Cost

 

  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:

 

  (a) For any Services that NXP is currently providing to the Operations - [*] ;

 

  (b) For any Services other than those set forth in clause 3.1.1(a) – [*] ; and

 

  (c) With respect to the provision of Services after 2008, [*].

 

  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

 

  

CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS

MARKED WITH [*] AND FILED SEPARATELY WITH THE SEC.

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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.

 

3.3 Downtime

In respect of IT Services provided hereunder, NX


 
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