EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
AGERE SYSTEMS INC.
AS SELLER
AND
PROXIM CORPORATION
AS BUYER
DATED AS OF JUNE 14, 2002
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TABLE OF CONTENTS
Page
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1. Definitions....................................................................2
1.1 Defined Terms...........................................................2
1.2 Additional Defined Terms................................................8
1.3 Other Definitional and Interpretive Matters.............................9
2. Purchase and Sale of the ORiNOCO Business......................................11
2.1 Purchase and Sale of Assets.............................................11
2.2 Excluded Assets.........................................................12
2.3 Purchase Price..........................................................13
2.4 Assumed Liabilities.....................................................13
2.5 Excluded Liabilities....................................................14
2.6 Further Assurances; Further Conveyances and Assumptions; Consent
of Third Parties .......................................................15
2.7 Proprietary Information.................................................17
2.8 Bulk Sales Law..........................................................17
2.9 Taxes...................................................................17
2.10 Buyer Designee..........................................................17
3. Representations and Warranties of Seller.......................................18
3.1 Organization and Qualification..........................................18
3.2 Subsidiaries............................................................18
3.3 Authorization; Binding Effect...........................................18
3.4 Non-Contravention; Consents.............................................19
3.5 Title to Property; Principal Equipment; Sufficiency of Assets...........20
3.6 Permits; Licenses.......................................................21
3.7 Real Estate.............................................................21
3.8 Compliance With Laws; Litigation........................................22
3.9 Business Employees......................................................23
3.10 Contracts...............................................................24
3.11 Environmental Matters...................................................25
3.12 Financial Statements; Absence of Changes................................26
3.13 Intellectual Property...................................................26
3.14 Product Liability and Recalls...........................................27
3.15 Product Warranty........................................................27
3.16 Inventory...............................................................28
3.17 Customer and Suppliers..................................................28
3.18 Restrictions on the Business............................................28
3.19 Brokers.................................................................28
3.20 Taxes...................................................................29
3.21 No Other Representations or Warranties..................................29
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4. Representations and Warranties of Buyer........................................29
4.1 Organization and Qualification..........................................30
4.2 Authorization; Binding Effect...........................................30
4.3 Non-Contravention; Consents.............................................30
4.4 Brokers.................................................................31
4.5 No Inducement or Reliance; Independent Assessment.......................31
4.6 Sufficiency of Funds....................................................32
4.7 No Other Representations or Warranties..................................32
5. Certain Covenants..............................................................32
5.1 Access and Information..................................................32
5.2 Conduct of the ORiNOCO Business.........................................34
5.3 Tax Reporting and Allocation of Consideration...........................35
5.4 Business Employees......................................................36
5.5 Collateral Agreements; Leased Equipment.................................38
5.6 Reasonable Commercial Efforts...........................................38
5.7 Contacts with Suppliers and Customers...................................39
5.8 Use of Agere Systems' Name..............................................40
5.9 Non-Solicitation of Employees...........................................41
5.10 No Negotiation or Solicitation..........................................42
5.11 Non-Competition.........................................................42
5.12 Channel Inventory.......................................................43
6. Confidential Nature of Information.............................................43
6.1 Confidentiality Agreement...............................................43
6.2 Seller's Proprietary Information........................................43
6.3 Buyer's Proprietary Information.........................................44
6.4 Confidential Nature of Agreements.......................................45
7. Closing........................................................................45
7.1 Deliveries by Seller or the Subsidiaries................................46
7.2 Deliveries by Buyer or a Buyer Designee.................................46
7.3 Closing Date............................................................46
8. Conditions Precedent to Closing................................................47
8.1 General Conditions......................................................47
8.2 Conditions Precedent to Buyer's Obligations.............................47
8.3 Conditions Precedent to Seller's Obligations............................48
9. Status of Agreements...........................................................49
9.1 Effect of Breach........................................................49
9.2 Survival of Representations and Warranties..............................49
9.3 General Agreement to Indemnify..........................................49
9.4 General Procedures for Indemnification..................................51
10. Miscellaneous Provisions.......................................................53
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10.1 Notices.................................................................53
10.2 Expenses................................................................54
10.3 Entire Agreement; Modification..........................................54
10.4 Assignment; Binding Effect; Severability................................54
10.5 Governing Law...........................................................54
10.6 Consent to Jurisdiction.................................................54
10.7 Waiver of Jury Trial....................................................55
10.8 Execution in Counterparts...............................................55
10.9 Public Announcement.....................................................55
10.10 No Third-Party Beneficiaries............................................56
11. Termination and Waiver.........................................................56
11.1 Termination.............................................................56
11.2 Effect of Termination...................................................57
11.3 Waiver or Amendment of Agreement........................................57
11.4 Amendment of Agreement..................................................57
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SCHEDULES
Schedule 1.1(a) Assumed Leases
Schedule 1.1(b) Business Employees
Schedule 1.1(c) Leased Equipment
Schedule 2.1(g) Licenses
Schedule 2.1(j) Domain Names
Schedule 2.2(f) Excluded Contracts
Schedule 2.4(a) Vacation, Personal Days and Floating Holidays
Schedule 2.4(b) Executive Retention Payments
Schedule 3.2 Subsidiaries
Schedule 3.4(b) Required Consents
Schedule 3.6 Governmental Permits
Schedule 3.7(a) Real Estate
Schedule 3.7(c) Status of Leases
Schedule 3.8(a) Compliance with Laws
Schedule 3.8(b) Litigation
Schedule 3.9(b) Benefit Plans
Schedule 3.10 Material Contracts
Schedule 3.11 Environmental Matters
Schedule 3.12(a) Financial Statements
Schedule 3.12(d) Interim Financial Statements
Schedule 3.13(b) Intellectual Property
Schedule 3.14(a) Product Issues
Schedule 3.15 Product Warranty
Schedule 3.17 Customers and Suppliers
Schedule 5.2 Exceptions to Seller's Conduct of ORiNOCO Business
Schedule 5.4(b) Relocation and Tuition Assistance; International Assignee Status
Schedule 5.4(c) Severance Benefits
Schedule 8.2(d) Closing Required Consents
EXHIBITS
Exhibit A Form of Assignment and Xxxx of Sale and Assumption Agreement
Exhibit B-1 Form of Intellectual Property Agreement
Exhibit B-2 Form of Patent License Agreement
Exhibit C Form of Lease Assignment
Exhibit D Form of Sublease
Exhibit E Form of Supply Agreement
Exhibit F Form of Transition Services Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of June 14, 2002
by and between AGERE SYSTEMS INC., a Delaware corporation ("Seller" or "Agere"),
with offices at 000 Xxxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000 and PROXIM CORPORATION,
a Delaware corporation ("Buyer"), with offices at 000 Xxxxxxx Xxxxx, Xxxxxxxxx,
XX 00000.
R E C I T A L S
A. WHEREAS, Seller and the Subsidiaries (as hereinafter defined) are,
among other things, engaged through a unit (referred to herein as Agere's
"Wireless Communication and Networking Division" or "WCND") of its Client
Systems Group in the ORiNOCO Business (as hereinafter defined);
B. WHEREAS, the ORiNOCO Business is comprised of certain assets and
liabilities that are currently owned by Seller and the Subsidiaries or in
respect of which Seller or the Subsidiaries are currently obligated, as the case
may be;
C. WHEREAS, Seller and the Subsidiaries desire to sell, transfer and
assign to Buyer or a Buyer Designee (as hereinafter defined), and Buyer or a
Buyer Designee desires to purchase from Seller and the Subsidiaries, the
Purchased Assets (as hereinafter defined), and Buyer or a Buyer Designee is
willing to assume, the Assumed Liabilities (as hereinafter defined), in each
case as more fully described and upon the terms and subject to the conditions
set forth herein; and
D. WHEREAS, Seller and/or one or more of the Subsidiaries and Buyer
and/or one or more of the Buyer Designees desire to enter into each Assignment
and Xxxx of Sale and Assumption Agreement, each Sublease or Lease Assignment,
the Supply Agreement, the Intellectual Property Agreement, the Patent License
Agreement and the Transition Services Agreement (each as hereinafter defined and
collectively, the "Collateral Agreements").
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. DEFINITIONS
1.1 DEFINED TERMS
For the purposes of this Agreement the following words and phrases shall
have the following meanings:
"Affiliate" of any Person means any Person that controls, is controlled
by, or is under common control with such Person. As used herein, the term
"control" (including the terms "controlling", "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities or other interests, by contract
or otherwise. For purposes of this Agreement, Ripplewood Holdings LLC and
related Persons (other than Buyer, any Buyer Designee or their respective
Affiliates) shall not be deemed an Affiliate of Buyer.
"Assignment and Xxxx of Sale and Assumption Agreement" means each
agreement in substantially the form set forth as Exhibit A.
"Assumed Lease" means each of the Leases to be assumed by the Buyer or a
Buyer Designee pursuant to a Lease Assignment or Sublease and identified on
Schedule 1.1(a).
"Benefit Plan" means, in respect of any Business Employee, each Pension
Plan, Welfare Plan and employment, bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock option, stock
purchase, phantom stock, performance, retirement, thrift, savings, stock bonus,
excess benefit, supplemental unemployment, paid time off, perquisite, fringe
benefit, vacation, sick leave, severance, disability, death benefit,
hospitalization, medical, dental, life insurance, welfare benefit or other plan,
program or arrangement, in each case maintained or contributed to, or required
to be maintained or contributed to, by Seller or the Subsidiaries, provided such
plans, programs, or arrangements are in writing.
"Business Day" means a day that is not a Saturday, a Sunday or a
statutory or civic holiday in the State of New York or any other day on which
banking institutions are not required by law to be closed in the State of New
York.
"Business Employees" means the employees of Seller or the Subsidiaries
employed in the ORiNOCO Business and identified on Schedule 1.1(b).
"Business Records" means all books, records, ledgers, tangible data,
disks, tapes, and other media-storing data and files or other similar
information used or held for use primarily in the operation or conduct of the
ORiNOCO Business, including price lists, customer lists, supplier or vendor
lists, mailing lists, warranty information, catalogs, sales promotion
literature, advertising materials, brochures, bids, records of operation,
accounting and financial records, standard forms of documents, manuals of
operations or business
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procedures, designs, research materials and product testing reports, but
excluding any such items to the extent (i) they are included in the Excluded
Assets or Excluded Liabilities or (ii) any applicable Law prohibits their
transfer.
"Buyer Designee" means one or more subsidiaries of Buyer identified by
Buyer to Seller prior to the Closing Date.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq., as amended.
"Channel Inventory" means inventory sold to distributors of the ORiNOCO
Business for which revenue has not been recognized by Seller as of any specified
date in accordance with Seller's revenue recognition policies as set forth in
the Financial Statements.
"Closing" means the closing of the transactions described in Article 7.
"Closing Date" means the date of the Closing as determined pursuant to
Section 7.3.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" means the agreement between Seller and Buyer
dated February 14, 2002.
"Contracts" means all Third-Party contracts, agreements, leases,
subleases, supply contracts, purchase orders, sales orders and instruments used
or held for use primarily in the operation or conduct of the ORiNOCO Business,
that will be in effect on the Closing Date and to which Seller or a Subsidiary
is a party, including, without limitation, any such contracts, agreements,
leases, subleases, supply contracts, sales orders and instruments (i) for the
lease of machinery, equipment, motor vehicles, furniture or office equipment,
(ii) for the provision of goods or services to the ORiNOCO Business, (iii) for
the sale by the ORiNOCO Business of goods or performance by the ORiNOCO Business
of services, (iv) for the sale and distribution of the products of the ORiNOCO
Business, and (v) any such contracts, agreements, instruments and leases
referred to in clauses (i) - (iv), inclusive, entered into between the date
hereof and the Closing Date by Seller or a Subsidiary in the ordinary course of
business consistent with past practice and outstanding as of the Closing Date,
but not the Excluded Contracts.
"Counsel for Buyer" means Xxxxxxx Xxxxxxx & Xxxxxxxx.
"Counsel for Seller" means a corporate counsel of Seller.
"Encumbrance" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
covenant, licenses, adverse claims of ownership or use, or other similar
restriction or Third Party right affecting the Purchased Assets, but shall not
include Permitted Encumbrances.
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"Environmental Law" means any Law that governs the existence of or
provides a remedy for release of Hazardous Substances, the protection of
persons, natural resources or the environment, the management of Hazardous
Substances, or other activities involving Hazardous Substances including,
without limitation, under CERCLA, the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., the Clean Water Act, 33 U.S.C. Section Section 1251
et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Toxic Substance
Control Act, 15 U.S.C. Section 2601 et seq., the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq., and the Occupational Safety and Health Act, 29
U.S.C. Section 651 et seq., or any other similar Law, as any such law has been
amended or supplemented, and the regulations promulgated pursuant thereto, in
each case as in effect on or prior to the Closing Date or, with respect to
representations and warranties made on the date hereof, on or prior to the date
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Contracts" means those Contracts (i) identified in Schedule
2.2(f), (ii) under which performance by Seller or an Affiliate of Seller has
been completed and for which there is no remaining warranty, maintenance, or
support obligation, (iii) that constitute a General Purchase Agreement, or (iv)
under which performance by the counterparty has been completed and for which
there is no remaining payment obligation of such party.
"Excluded Taxes" means any liability, obligation or commitment, whether
or not accrued, assessed or currently due and payable, for any Taxes relating
to, pertaining to, or arising out of the ORiNOCO Business or the Purchased
Assets for any Pre-Closing Tax Period, including, but not limited to, any Taxes
on Seller's income arising in connection with the consummation of the
transactions contemplated hereby.
"Fixtures and Supplies" means all furniture, furnishings and other
tangible personal property owned by Seller or a Subsidiary and used or held for
use primarily in the operation or conduct of the ORiNOCO Business and located in
the Leased Premises, including, without limitation, desks, tables, chairs, file
cabinets and other storage devices and office supplies and any additions,
improvements, replacements and alterations thereto between the date hereof and
the Closing Date and all warranties and guarantees, if any, express or implied
with respect to the foregoing, but excluding any such items that primarily
relate to Excluded Assets or Excluded Liabilities.
"GAAP" means U.S. generally accepted accounting principles.
"General Purchase Agreements" means Third-Party supply contracts or
other agreements between Seller or an Affiliate of Seller and a Third Party
pursuant to which Seller or an Affiliate purchases or sells products or services
from or to such Third-Party primarily for one or more of Seller's or such
Affiliate's businesses other than the ORiNOCO Business.
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"Governmental Body" means any legislative, executive or judicial unit of
any governmental entity (foreign, federal, state or local) or any department,
commission, board, agency, bureau, official or other regulatory, administrative
or judicial authority thereof.
"Governmental Permits" means all governmental permits and licenses,
certificates of inspection, approvals or other authorizations identified on
Schedule 3.6 issued to Seller or a Subsidiary by Governmental Body with respect
to the ORiNOCO Business and necessary for the operation or conduct of the
ORiNOCO Business as currently conducted under applicable Laws.
"Hazardous Substance" means (i) any hazardous, toxic or dangerous waste,
substance or material defined as such pursuant to any Environmental Law, (ii)
asbestos or PCBs and (iii) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any Governmental Body pursuant
to any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Intellectual Property Agreement" means the agreement in substantially
the form set forth as Exhibit B-1.
"Inventory" means all inventory, wherever located, including raw
materials, work in process, recyclable materials, finished products,
inventoriable supplies, and parts and non-capital spare parts owned by Seller or
a Subsidiary and used or held for use in the operation or conduct of the ORiNOCO
Business, and any rights of Seller or a Subsidiary to the warranties received
from suppliers and any related claims, credits, rights of recovery and setoff
with respect to such Inventory, but only to the extent such rights are
assignable.
"IRS" means the U.S. Internal Revenue Service.
"Law" means any national, federal, state, provincial or local law,
statute, ordinance, rule, regulation, code, order, judgment, injunction or
decree of any country.
"Lease" means all leases or other agreements together with any
amendments thereto pursuant to which Seller leases, subleases or otherwise
occupies (whether as tenant, subtenant or other occupancy arrangement) any of
the Leased Premises.
"Lease Assignment" means each assignment agreement with respect to an
Assumed Lease in substantially the form set forth as Exhibit C.
"Leased Equipment" means the vehicles, computers, servers, machinery and
equipment and other similar items identified on Schedule 1.1(c) leased and used
or held for use by Seller or a Subsidiary primarily in the operation or conduct
of the ORiNOCO
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Business but shall not include any such items that are Excluded Assets or
Excluded Liabilities.
"Leased Premises" means the real property that is leased by Seller or a
Subsidiary and used or held for use by Seller or a Subsidiary primarily in the
operation or conduct of the ORiNOCO Business, together with all rights and
interests thereunder (including leasehold improvements).
"Licenses" means all licenses, agreements and other arrangements,
including those identified on Schedule 2.1(g), concerning any Proprietary
Information to which Seller or a Subsidiary is a party to the extent used or
held for use primarily in the operation or conduct of the ORiNOCO Business but
not (i) the Nonassignable Licenses, (ii) generally available shrink-wrap
software licenses, or (iii) any such items primarily related to Excluded Assets
or Excluded Liabilities.
"Nonassignable Licenses" means those Licenses of Proprietary Information
under which Seller or an Affiliate of Seller is the licensee that are (i) not by
their terms assignable to Buyer or (ii) related to other businesses of Seller or
an Affiliate of Seller.
"ORiNOCO Business" means the worldwide design, engineering,
manufacturing, marketing, sale and distribution of IEEE 802.11 standards-based
wireless network system infrastructure solutions, including both ORiNOCO-branded
products and private label systems products, as carried on by Seller and the
Subsidiaries from October 1, 2001 through the Closing, but excluding (i) Agere's
WCND client module business which, among other things, sells radio products for
integration into host devices and sells client card products, (ii) any billing,
order entry, fulfillment, accounting, collections, sales and other centralized
or administrative activities that are currently provided by centralized
functional organizations within, or controlled by, Agere, in the case of clauses
(i) and (ii) that are not being transferred hereunder.
"Patent License Agreement" means the agreement in substantially the form
set forth as Exhibit B-2.
"Pension Plan" means each "employee pension benefit plan" (within the
meaning of Section 3(2) of ERISA).
"Permitted Encumbrances" means any (i) statutory lien for Taxes,
assessments and other governmental charges or liens of carriers, warehouseman,
mechanics and material men incurred in the ordinary course of business, which
are in each case for sums not yet due and payable or being contested in good
faith by appropriate proceedings, for which appropriate reserves (if required)
are being maintained in accordance with GAAP, (ii) liens incurred or deposits
made in the ordinary course of ORiNOCO Business in connection with workers'
compensation, unemployment insurance and other types of social security or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds and similar obligations, (iii) licenses granted by Seller or an Affiliate
of Seller in connection with sales
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of products in the ordinary course of business and (v) any Encumbrance or minor
imperfection in title and minor encroachments, if any, not material in amount
that, individually or in the aggregate, do not materially interfere with the
conduct of the ORiNOCO Business or with the use of the Purchased Assets and do
not materially affect the value of the Purchased Assets or the ORiNOCO Business.
"Person" means any individual, corporation, partnership, firm,
association, joint venture, joint stock company, trust, unincorporated
organization or other entity, or any government or regulatory, administrative or
political subdivision or agency, department or instrumentality thereof.
"Pre-Closing Tax Period" means, with respect to the ORiNOCO Business or
the Purchased Assets, any Tax period (or portion thereof) ending on or before
the Closing Date.
"Principal Equipment" means all computers, servers, machinery, equipment
(including any related spare parts, dies, molds, tools, and tooling) and other
items used or held for use by Seller or a Subsidiary primarily in the operation
or conduct of the ORiNOCO Business but not the Leased Equipment or any Excluded
Assets or Excluded Liabilities. Principal Equipment includes rights to the
warranties received from the manufacturers and distributors of such items and to
any related claims, credits, rights of recovery and setoff with respect to such
items, but only to the extent such rights are assignable.
"Proprietary Information" means all intellectual property and other
information (whether or not protectable by patent, copyright, mask works or
trade secret rights) not generally known to the public (except for patents), (i)
including, but not limited to, works of authorship in any and all media,
inventions, discoveries, improvements, patentable subject matter, patents,
patent applications, industrial models, industrial designs, trade secrets, trade
secret rights, software, works, copyrightable subject matters, copyright rights
and registrations, mask works, know-how and show-how, trademarks, trade names,
service marks, emblems, logos, insignia and related marks, the goodwill of any
business symbolized thereby and all common law rights related thereto,
registrations and applications, specifications, technical manuals and data,
databases, libraries, blueprints, drawings, designs, techniques, proprietary
processes, product information, business plans and development work-in-process;
and (ii) all rights to obtain renewals, extensions continuations,
continuations-in-part, re-issues, divisions or similar legal protections related
thereto.
"Return" means any return, declaration, report, statement, and any other
document required to be filed in respect of any Tax, including any amendment
thereto.
"Seller Material Adverse Effect" means any condition or event that has
or could reasonably be expected to have a material and adverse effect upon (i)
the assets, business, the financial condition or results of operations of the
ORiNOCO Business taken as a whole, or (ii) the ability of Seller and its
Affiliates to consummate the transactions contemplated by this Agreement, other
than any condition or event (a) resulting from conditions in the United
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States or foreign economies or securities markets in general, (b) resulting from
conditions in the industry in which the ORiNOCO Business operates in general,
except to the extent that the ORiNOCO Business is disproportionately affected
thereby, (c) resulting from the public announcement of the transactions
contemplated by this Agreement, or (d) arising out of or resulting from actions
of Buyer or a Buyer Designee in connection with this Agreement.
"Sublease" means each sublease agreement with respect to an Assumed
Lease in substantially the form set forth as Exhibit D.
"Subsidiary" means each subsidiary of Seller that that has title to any
Purchased Asset or an obligation that is an Assumed Liability.
"Supply Agreement" means the agreement in substantially the form set
forth as Exhibit E.
"Taxes" means, all taxes of any kind, and all charges, fees, customs,
levies, duties, imposts, required deposits or other assessments, including,
without limitation, all net income, capital gains, gross income, gross receipt,
property, franchise, sales, use, excise, withholding, payroll, employment,
social security, worker's compensation, unemployment, occupation, capital stock,
ad valorem, value added, transfer, gains, profits, net worth, asset,
transaction, and other taxes, and any interest, penalties or additions to tax
with respect thereto, imposed upon any Person by any taxing authority or other
Governmental Body under applicable Law.
"Third Party" means any Person not an Affiliate of the other referenced
Person or Persons.
"Transition Services Agreement" means the agreement in substantially the
form set forth as Exhibit F.
"Welfare Plan" means each "employee welfare benefit plan" (within the
meaning of Section 3(1) of ERISA).
1.2 ADDITIONAL DEFINED TERMS
For purposes of this Agreement, the following terms shall have the
meanings specified in the Sections indicated below:
Term Section
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"Agere" Preamble
"Agreement" Preamble
"Asset Acquisition Statement" Section 5.3(b)
"Assumed Liabilities" Section 2.4
"Antitrust Division" Section 5.6(b)
"Buyer" Preamble
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"Buyer Savings Plan" Section 5.4(e)
"Collateral Agreements" Recital D
"Continuation Coverage Requirements" Section 5.4(f)
"Excluded Assets" Section 2.2
"Excluded Leased Equipment" Section 5.5(b)
"Excluded Liabilities" Section 2.5
"Financial Statements" Section 3.12(a)
"FTC" Section 5.6(b)
"Indemnified Party" Section 9.3(a)
"Indemnifying Party" Section 9.4(a)
"Interim Financial Statements" Section 3.12(d)
"Losses" Section 9.3(a)
"Material Contracts" Section 3.10
"NL Transferred Employees" Section 3.9(a)
"Nonassignable Assets" Section 2.6(c)
"ORiNOCO Intellectual Property" Section 3.13(a)
"Purchase Price" Section 2.3
"Purchased Assets" Section 2.1
"Purchased Leased Equipment" Section 5.5(b)
"Required Consents" Section 3.4(b)
"Seller" Preamble
"Seller Name" 5.8(a)
"Third-Party Claim" Section 9.4(a)
"Transferred Employees" Section 5.4(a)
"Transfer Taxes" Section 2.9(a)
"WCND" Recital A
1.3 OTHER DEFINITIONAL AND INTERPRETIVE MATTERS
Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:
Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the starting reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.
Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.
Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this
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Agreement. All references in this Agreement to any "Section" are to the
corresponding Section of this Agreement unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
Including. The word "including" or any variation thereof means
"including, without limitation" and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.
Reasonable Commercial Efforts. Reasonable commercial efforts means that
the obligated party is required to make a diligent, reasonable and good faith
effort to accomplish the applicable objective. Such obligation, however, does
not require expenditure of material funds or the incurrence of a material
liability on the part of the obligated party, nor does it require that the
obligated party act in a manner that would be contrary to normal commercial
practices in order to accomplish the objective.
Schedules and Exhibits. The Schedules and Exhibits attached to this
Agreement shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein. Any matter
disclosed by either party on any one Schedule with respect to any
representation, warranty or covenant of such party shall be deemed disclosed for
purposes of all other representations, warranties or covenants of such party to
the extent that it is reasonably apparent from such disclosure that is also
relates to such other representations, warranties or covenants, and to the
extent any matter disclosed on any Schedule conflicts with any representation,
warranty or covenant of such party contained in this Agreement, and to the
extent such conflict is reasonably apparent thereto, such party shall not have
any liability with respect such representation, warranty or covenant.
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2. PURCHASE AND SALE OF THE ORiNOCO BUSINESS
2.1 PURCHASE AND SALE OF ASSETS
Upon the terms and subject to the conditions of this Agreement and in
reliance on the representations and warranties contained herein, on the Closing
Date, Seller shall, or shall cause one or more of the Subsidiaries to, grant,
bargain, sell, transfer, assign, convey and deliver to Buyer or one or more
Buyer Designees, and Buyer or one or more Buyer Designees shall purchase,
acquire and accept from Seller or the applicable Subsidiary all of the right,
title and interest in, to and under the Purchased Assets that Seller or the
applicable Subsidiary owns, leases, licenses, possesses, uses and has the right
to transfer as the same shall exist on the Closing Date, free and clear of
Encumbrances. For purposes of this Agreement, the term "Purchased Assets" means
all the assets, properties and rights used or held for use by Seller or the
applicable Subsidiary primarily in the operation or conduct of the ORiNOCO
Business, whether tangible or intangible, real, personal or mixed, set forth or
described in paragraphs (a) through (l) below (except in each case for the
Excluded Assets), whether or not any of such assets, properties or rights have
any value for accounting purposes or are carried or reflected on or specifically
referred to in Seller's or the applicable Subsidiary's financial statements:
(a) the Assumed Leases;
(b) the Principal Equipment and the Purchased Leased Equipment;
(c) the Fixtures and Supplies;
(d) the Inventory;
(e) the Intellectual Property;
(f) the Contracts;
(g) the Licenses;
(h) the Business Records (including any Tax records);
(i) the Governmental Permits but only to the extent that such
Governmental Permits are assignable or transferable to Buyer or a Buyer
Designee;
(j) the domain names set forth on Schedule 2.1(j);
(k) all rights, choses and claims of any kind relating to the ORiNOCO
Business, known or unknown, accrued or contingent, against Third Parties arising
out of transactions occurring after the Closing Date; and
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(l) the goodwill of the ORiNOCO Business.
Notwithstanding the foregoing, the Purchased Assets shall not include
the Netherlands Purchased Assets (as defined in the Assignment and Xxxx of Sale
and Assumption Agreement for the Netherlands attached hereto as Exhibit A)
unless and until Agere Systems Nederland B.V. has complied with its obligations
under the Act on Works Councils (Wet op de Ondernemingsraden).
2.2 EXCLUDED ASSETS
Notwithstanding anything in Section 2.1 to the contrary, it is hereby
expressly acknowledged and agreed that the Purchased Assets shall not include,
and neither Seller nor any Subsidiary is granting, bargaining, selling,
transferring, assigning, conveying or delivering to Buyer or a Buyer Designee,
and neither Buyer nor any Buyer Designee is purchasing, acquiring or accepting
from Seller or any Subsidiary, any of the rights, properties or assets set forth
or described in paragraphs (a) through (i) below (the rights, properties and
assets expressly excluded by this Section 2.2 or otherwise excluded by the terms
of Section 2.1 from the Purchased Assets being referred to herein as the
"Excluded Assets"):
(a) any of Seller's or any Affiliate of Seller's receivables, cash, cash
equivalents, bank deposits or similar cash items or employee receivables;
(b) any (i) confidential personnel records pertaining to any Business
Employee; (ii) other books and records that Seller or any Affiliate of Seller is
required by Law to retain or that Seller determines are necessary or advisable
to retain; provided, however, that Buyer shall have the right to make copies of
any portions of such retained books and records that relate to the ORiNOCO
Business or any of the Purchased Assets; and (iii) any information management
system of Seller or any Affiliate of Seller other than those used or held for
use primarily in the operation or conduct of the ORiNOCO Business and contained
within computer hardware included as a Purchased Asset pursuant to Section
2.1(b);
(c) any claim, right or interest of Seller or any Affiliate of Seller in
or to any refund, rebate, abatement or other recovery for Taxes, together with
any interest due thereon or penalty rebate arising therefrom, for any periods
ending on or prior to the Closing Date;
(d) subject to Section 5.8, all "Agere," or "Agere Systems," marked
sales and marketing or packaging materials, samples, prototypes, other similar
Agere Systems- identified sales and marketing or packaging materials;
(e) the Excluded Contracts, the Nonassignable Licenses and the Excluded
Leased Equipment;
(f) any insurance policies or rights of proceeds thereof;
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(g) except as specifically provided in Section 5.4, any of the assets of
the Benefits Plans; and
(h) any rights, claims or causes of action of Seller or any Affiliate of
Seller against Third Parties relating to the assets, properties, ORiNOCO
Business or operations of Seller or any Affiliate of Seller arising out of
transactions occurring on or prior to the Closing Date;
(i) all other assets, properties, interests and rights of Seller or any
Affiliate of Seller related to the operations of the ORiNOCO Business in India;
(j) Seller's leasehold interest in the Netherlands ORiNOCO facility; and
(k) the NL Transferred Employees to be employed or terminated by Seller
pursuant to the Transition Services Agreement.
2.3 PURCHASE PRICE
In consideration of the grant, bargain, sale, transfer, assignment,
conveyance and delivery by Seller and the Subsidiaries of the Purchased Assets
to Buyer or a Buyer Designee, and in addition to assuming the Assumed
Liabilities, Buyer and/or a Buyer Designee shall pay to Seller at the Closing,
an aggregate amount equal to Sixty-Five Million Dollars ($65,000,000) (the
"Purchase Price") in cash by wire transfer of immediately available funds to an
account designated by Seller's written instructions to Buyer at least two (2)
Business Days prior to Closing.
2.4 ASSUMED LIABILITIES
On the Closing Date, Buyer or one or more Buyer Designees shall execute
and deliver to Seller the Assignment and Xxxx of Sale and Assumption Agreements
and the Lease Assignments or Subleases pursuant to which Buyer or the applicable
Buyer Designee shall accept, assume and agree to pay, perform or otherwise
discharge, in accordance with the respective terms and subject to the respective
conditions thereof, the Assumed Liabilities. For purposes of this Agreement, the
term "Assumed Liabilities" means the liabilities and obligations set forth or
described in paragraphs (a) through (e) below, whether or not any such liability
or obligation has a value for accounting purposes or is carried or reflected on
or specifically referred to in Seller's or the applicable Subsidiary's financial
statements:
(a) to the extent identified on Schedule 2.4(a), the accrued unpaid
vacation, personal days and floating holidays accrued by Transferred Employees;
(b) the executive retention payments set forth on Schedule 2.4(b);
(c) the liabilities and obligations arising on or after the Closing Date
under the Assumed Leases and the transferred Contracts, Licenses and Government
Permits;
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(d) with respect to the ORiNOCO Business, any product warranty
liabilities arising from sales of products in the ordinary course of business;
(e) the Permitted Encumbrances and all other Encumbrances identified in
the Schedules to this Agreement; and
(f) the employment-related obligations and liabilities arising as a
result of the Transferred Employees' employment with Buyer or a Buyer Subsidiary
and the obligations and liabilities with respect to the ORiNOCO Business or the
Purchased Assets arising from, or in connection with, the conduct of the ORiNOCO
Business by the Buyer or the ownership of the Purchased Assets after the Closing
Date.
Notwithstanding the foregoing, the Assumed Liabilities shall not include
the Netherlands Assumed Liabilities (as defined in the Assignment and Xxxx of
Sale and Assumption Agreement for the Netherlands attached hereto as Exhibit A)
unless and until Agere Systems Nederland B.V. has complied with its obligations
under the Act on Works Councils (Wet op de Ondernemingsraden).
2.5 EXCLUDED LIABILITIES
Neither the Buyer nor any Buyer Designee shall assume or be obligated to
pay, perform or otherwise assume or discharge any liabilities or obligations of
Seller or any Subsidiary, whether direct or indirect, known or unknown, absolute
or contingent, except for the Assumed Liabilities (all of such liabilities and
obligations not so assumed being referred to herein as the "Excluded
Liabilities") and Seller shall pay, perform and discharge all such Excluded
Liabilities. For the avoidance of doubt, the parties agree that the Excluded
Liabilities include, but are not limited to, any and all liabilities or
obligations set forth or described in paragraphs (a) and (e) below, whether or
not any such liability or obligation has a value for accounting purposes or is
carried or reflected on or specifically referred to in Seller's or any
applicable Subsidiary's financial statements:
(a) any Excluded Taxes;
(b) arising out of or related to any Excluded Asset
(c) except as set forth in Section 2.4(d) above, arising out products
shipped or services rendered or for which a receivable was booked prior to
Closing;
(d) except as identified on Schedule 2.4(a) and the executive retention
payments identified on Schedule 2.4(b), any and all liabilities relating to or
in connection with the employment or termination of employment of each
Transferred Employee by Seller on or prior to the effective date of his or her
employment with Buyer;
(e) any liabilities in connection with, or relating to, any actions,
suits, claims or
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proceedings against Seller or any Subsidiary which arise or accrue on or before
the Closing Date;
(f) any obligations or liabilities in connection with, or relating to,
AirPort Base Stations, capacitors and/or rework costs with respect to products
sold or delivered to Apple Computer, Inc.; and
(g) any and all other obligations or liabilities, other than the Assumed
Liabilities.
2.6 FURTHER ASSURANCES; FURTHER CONVEYANCES AND ASSUMPTIONS; CONSENT OF
THIRD PARTIES
(a) From time to time following the Closing, Seller shall, or shall
cause its Affiliates to, make available to Buyer or Buyer Designees such
non-confidential data and information in personnel records of Transferred
Employees and NL Transferred Employees as is reasonably necessary for Buyer or
Buyer Designees to integrate such employees into Buyer's or Buyer Designees'
workforce.
(b) From time to time following the Closing, Seller and Buyer shall, and
shall cause their respective Affiliates to, execute, acknowledge and deliver all
such further conveyances, notices, assumptions, releases and acquittances and
such other instruments, and shall take such further actions, as may be necessary
or appropriate to assure fully to Buyer and its Affiliates and each of their
respective successors or assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges intended to be conveyed to
Buyer and the Buyer Designees under this Agreement and the Collateral Agreements
and to assure fully to Seller and its Affiliates and each of their respective
successors and assigns, the assumption of the liabilities and obligations
intended to be assumed by Buyer and the Buyer Designees under this Agreement and
the Collateral Agreements, and to otherwise make effective the transactions
contemplated hereby and thereby (including (i) transferring back to Seller or a
Subsidiary any asset or liability not contemplated by this Agreement to be a
Purchased Asset or an Assumed Liability, respectively, which asset or liability
was transferred to Buyer or a Buyer Designee at the Closing and (ii)
transferring to Buyer or a Buyer Designee any asset or liability contemplated by
this Agreement to be a Purchased Asset or an Assumed Liability, respectively,
which was not transferred to Buyer or a Buyer Designee at the Closing).
(c) Nothing in this Agreement nor the consummation of the transactions
contemplated hereby shall be construed as an attempt or agreement to assign any
Purchased Asset, including any Contract, Lease, License (which shall include,
for the purpose of this Section 2.6, all Non-Assignable Licenses), Governmental
Permit, certificate, approval, authorization or other right, which by its terms
or by Law is nonassignable without the consent of a Third Party or a
Governmental Body ("Nonassignable Assets") unless and until such consent shall
have been obtained. Seller shall, and shall cause its Affiliates to cooperate
with Buyer or a Buyer Designee in endeavoring to obtain such consents promptly.
To the extent permitted by applicable Law, in the event consents to the
assignment thereof cannot
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be obtained, such Nonassignable Assets shall be held, as of and from the Closing
Date, by Seller or the applicable Affiliate of Seller in trust for Buyer and the
covenants and obligations thereunder shall be performed by Buyer in Seller's or
such Affiliate's name and all benefits and obligations existing thereunder shall
be for Buyer's account. Seller shall take or cause to be taken at Buyer's
expense such actions in its name or otherwise as Buyer may reasonably request so
as to provide Buyer with the benefits of the Nonassignable Assets and to effect
collection of money or other consideration that becomes due and payable under
the Nonassignable Assets, and Seller or the applicable Affiliate of Seller shall
promptly pay over to Buyer all money or other consideration received by it in
respect to all Nonassignable Assets.
(d) Buyer and Seller shall use their respective reasonable commercial
efforts to obtain, or to cause to be obtained, any consent, substitution,
approval, or amendment required to transfer all obligations under any and all
Contracts or other obligations or liabilities that constitute Assumed
Liabilities or to obtain in writing the unconditional release of Seller and its
Affiliates so that, in any such case, Buyer and its Affiliates shall be solely
responsible for such liabilities and obligations.
(e) As of and from the Closing Date, Seller on behalf of itself and its
Affiliates authorizes Buyer, to the extent permitted by applicable Law and the
terms of the Nonassignable Assets, at Buyer's expense, to perform all the
obligations and receive all the benefits of Seller or its Affiliates under the
Nonassignable Assets and appoints Buyer its attorney-in-fact to act in its name
on its behalf or in the name of the applicable Affiliate of Seller and on such
Affiliate's behalf with respect thereto.
(f) Notwithstanding anything in this Agreement to the contrary, unless
and until any consent or approval with respect to any Nonassignable Asset is
obtained, such Nonassignable Asset shall not constitute a Purchased Asset and
any associated liability shall not constitute an Assumed Liability for any
purpose under this Agreement.
(g) Promptly after the receipt thereof by Seller, Seller shall transfer
to the Buyer any consideration that it receives which relates to an Assumed
Liability to the extent that such consideration relates to the ORiNOCO Business
or Purchased Assets and to the extent that such Assumed Liability remains
unperformed or unfulfilled on the Closing Date, or by its terms continues in
effect after the Closing Date, in each case only to the extent that Buyer has
performed its obligations under such Assumed Liability as of the date of
Seller's receipt of such consideration.
(h) Seller shall attempt to secure for Buyer from the counter party
thereto, for the entire unexpired term of any such agreement, the benefit of any
General Purchase Agreement marked with an asterisk (*) on Schedule 3.10 to the
extent such agreement benefited the ORiNOCO Business as of immediately prior to
the Closing Date.
(i) From time to time following the Closing, Seller shall cooperate with
Buyer and make available to Buyer (i) such data and information as Buyer may
reasonably request
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for the purpose of preparing financial statements in conformity with applicable
federal and state securities laws with respect to the ORiNOCO Business as
conducted through the Closing Date, and (ii) such personnel and information as
Buyer may reasonably request for the purpose of responding to any inquiry,
investigation or comment letter of any Governmental Entity concerning any
financial statement including or reflecting the assets, results of operations,
cash flows or other results of (whether as a segment or otherwise) the ORiNOCO
Business as conducted through the Closing Date.
2.7 PROPRIETARY INFORMATION
Unless expressly set forth in this Agreement, the Intellectual Property
Agreement or in any Collateral Agreement, no title, right or license of any kind
is granted to Buyer pursuant to this Agreement with respect to Proprietary
Information of Seller or any Affiliate of Seller, either directly or indirectly,
by implication, by estoppel or otherwise.
2.8 BULK SALES LAW
Buyer hereby waives compliance by Seller with the requirements and
provisions of any "bulk-transfer" Laws of any jurisdiction, including Article 6
of the Pennsylvania Uniform Commercial Code, that may otherwise be applicable
with respect to the sale of any or all of the Purchased Assets to Buyer or a
Buyer Designee.
2.9 TAXES
(a) All applicable Taxes and all recording and filing fees that may be
imposed, assessed or payable by reason of the operation or as a result of this
Agreement including the sales, transfers, leases, rentals, licenses, and
assignments contemplated hereby, except for Seller's or any Subsidiary's net
income and capital gains taxes or franchise or other taxes based on Seller's or
any Subsidiary's net income ("Transfer Taxes") shall be paid by the party
prescribed by applicable law as primarily liable for such Transfer Taxes.
(b) Seller shall be responsible for all Taxes attributable to, levied
upon or incurred in connection with the Purchased Assets pertaining to the tax
periods (or that portion of the period) ending prior to or on the Closing Date.
Buyer shall be responsible for all Taxes attributable to, levied upon or
incurred in connection with the Purchased Assets pertaining to the tax periods
(or that portion of the period) beginning the day after the Closing Date.
2.10 BUYER DESIGNEE
The parties agree that Buyer may assign the right to purchase certain of
the Purchased Assets to one or more Buyer Designees or that one or more Buyer
Designees may enter into a Collateral Agreement. Notwithstanding any such
assignment or execution of a Collateral Agreement by a Buyer Designee, Buyer
shall remain liable for, and any such assignment or execution shall not relieve
Buyer of, its obligations hereunder or thereunder.
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Any reference to Buyer in this Agreement shall to the extent applicable also be
deemed a reference to the applicable Buyer Designee, except where in context of
this Agreement such use would not be appropriate.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in Schedules attached hereto and delivered by Seller
to Buyer prior to the execution of this Agreement, Seller represents and
warrants to Buyer that:
3.1 ORGANIZATION AND QUALIFICATION
Seller is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware and has all requisite corporate
power and authority to carry on the ORiNOCO Business as currently conducted by
it and to own or lease and operate the Purchased Assets. Seller is duly
qualified to do business and is in good standing as a foreign corporation (in
any jurisdiction that recognizes such concept) in each jurisdiction where the
ownership or operation of the Purchased Assets or the operation or conduct of
the ORiNOCO Business requires such qualification, except where the failure to be
so qualified or in good standing, individually or in the aggregate, has not had
and could not reasonably be expected to have a Seller Material Adverse Effect.
3.2 SUBSIDIARIES
Schedule 3.2 contains a complete and accurate list of each Subsidiary,
together with its jurisdiction of organization. Each Subsidiary is duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation or organization and has all requisite corporate
power and authority to carry on its portion of the ORiNOCO Business as currently
conducted and to own or lease and operate its portion of the Purchased Assets.
Each Subsidiary is duly qualified to do business and is in good standing as a
foreign corporation or other entity (in any jurisdiction that recognizes such
concept) in each jurisdiction where the ownership or operation of its portion of
the Purchased Assets or the operation or conduct of its portion of the ORiNOCO
Business requires such qualification, except where the failure to be so
qualified or in good standing, individually or in the aggregate, has not had and
could not reasonably be expected to have a Seller Material Adverse Effect. The
Subsidiaries listed on Schedule 3.2 are the only Affiliates of Seller that have
title to any Purchased Asset or any obligation that is an Assumed Liability.
3.3 AUTHORIZATION; BINDING EFFECT
(a) (i) Seller has all requisite corporate power and authority to
execute and deliver this Agreement and the Collateral Agreements to which it
will be a party and to effect the transactions contemplated hereby and thereby,
and the execution, delivery and performance of this Agreement and the Collateral
Agreements to which it will be a party has been duly authorized by all requisite
corporate action.
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(ii) Each Subsidiary has all requisite corporate power and
authority to execute and deliver the Collateral Agreements to which it will be a
party and to effect the transactions contemplated thereby and the execution,
delivery and performance of the Collateral Agreements to which it will be a
party has been duly authorized by all requisite corporate action.
(b) This Agreement has been duly executed and delivered by Seller and
this Agreement is, and the Collateral Agreements to which Seller and each
Subsidiary will be a party when duly executed and delivered by Seller or such
Subsidiary will be, valid and legally binding obligations of Seller or such
Subsidiary, as applicable, enforceable against Seller or such Subsidiary, as
applicable, in accordance with their respective terms, except to the extent that
enforcement of the rights and remedies created hereby and thereby may be
affected by bankruptcy, reorganization, moratorium, insolvency and similar Laws
of general application affecting the rights and remedies of creditors and by
general equity principles.
3.4 NON-CONTRAVENTION; CONSENTS
(a) Assuming that all Required Consents have been obtained, the
execution, delivery and performance of this Agreement and the Collateral
Agreements by Seller or any Subsidiary and the consummation of the transactions
contemplated hereby and thereby do not and will not: (i) result in a breach or
violation of any provision of Seller's or any Subsidiary's charter, by-laws or
similar organizational document, (ii) violate or result in a breach of or
constitute an occurrence of default under any provision of, result in the
acceleration or cancellation of any obligation under, or give rise to a right by
any party to terminate or amend its obligations under, any mortgage, deed of
trust, conveyance to secure debt, note, loan, indenture, lien, lease, agreement,
instrument, order, judgment, decree or other arrangement or commitment to which
Seller or a Subsidiary is a party or by which it is bound which relates to the
ORiNOCO Business or the Purchased Assets, or (iii) violate any order, judgment,
decree, rule or regulation of any court or any Governmental Body having
jurisdiction over Seller, a Subsidiary, the ORiNOCO Business or the Purchased
Assets, other than in the case of clauses (ii) and (iii), any such violations,
breaches, defaults, accelerations or cancellations of obligations or rights
that, individually or in the aggregate, have not had and could not reasonably be
expected to have a Seller Material Adverse Effect.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by Seller or a
Subsidiary in connection with the execution, delivery and performance of this
Agreement or the Collateral Agreements or for the consummation of the
transactions contemplated hereby or thereby by Seller or such Subsidiary, except
for (i) any filings required to be made under the HSR Act and any applicable
filings required under foreign antitrust Laws, (ii) consents or approvals of
Third Parties that are required to transfer or assign to Buyer any Purchased
Assets or assign the benefits of or delegate performance with regard thereto,
(iii) those set forth in Schedule 3.4(b) (items (i), (ii) and (iii) being
referred to herein as the "Required Consents") and (iv) such consents,
approvals, orders, authorizations, registrations, declarations or filings the
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failure of which to be obtained or made, individually or in the aggregate, have
not had and could not reasonably be expected to have a Seller Material Adverse
Effect.
3.5 TITLE TO PROPERTY; PRINCIPAL EQUIPMENT; SUFFICIENCY OF ASSETS
(a) Seller or a Subsidiary has and at the Closing will have good and
valid title to, or a valid and binding leasehold interest or license in, all
real and personal tangible Purchased Assets free and clear of any Encumbrance.
(b) Each material, tangible Purchased Asset is in reasonable operating
condition, in light of its age, for the purposes for which it is currently being
used, but is otherwise being transferred on a "where is" and, as to condition,
"as is" basis.
(c) Except for (i) the assets that will be used in connection with
providing services under the Transition Services Agreement and (ii) the Excluded
Assets, the Purchased Assets (including, without limitation, the ORiNOCO
Intellectual Property) and the Business Employees and the rights to be acquired
under this Agreement and the Collateral Agreements (including the services to be
provided pursuant to the Transition Services Agreement) include all assets,
personnel and rights that are used or held for use by Seller or a Subsidiary
primarily in the operation or conduct the ORiNOCO Business, and are sufficient
for the conduct of the ORiNOCO Business immediately following the Closing in
substantially the same manner as currently conducted. In the event this Section
3.5(c) is breached because Seller or a Subsidiary has in good faith failed to
identify and transfer any assets or properties or provide any services used in
the ORiNOCO Business, such breach shall be deemed cured if Seller or the
applicable Subsidiary promptly transfers such properties or assets or provides
such services to Buyer or a Buyer Designee at no additional cost to Buyer or
such Buyer Designee.
(d) All Principal Equipment and Fixtures are located on the Leased
Premises except for certain test systems, consisting of injection molding tools,
personal computers with special test fixtures and connectors and software that
are used to manufacture and test the products of the ORiNOCO Business, that are
located at the contract manufacturing facility used by Seller in Taiwan or at
the facilities of subcontractors.
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3.6 PERMITS; LICENSES
Except as set forth on Schedule 3.6, there are no material Governmental
Permits necessary for or used by Seller or a Subsidiary to operate or conduct
the ORiNOCO Business as currently conducted. Seller or one of the Subsidiaries
owns, holds or possesses in its own name, all Governmental Permits necessary to
own or lease, operate and use the Purchased Assets and to carry on and conduct
the ORiNOCO Business and its operations as presently conducted, except for such
Governmental Permits, the absence of which could not reasonably be expected to
have a Seller Material Adverse Effect. The Governmental Permits held, owned or
possessed by Seller or one of the Subsidiaries are valid and in full force and
effect and no proceeding is recorded, pending or, to Seller's knowledge,
threatened seeking the suspension, modification, limitation or revocation of any
such Governmental Permit. Neither Seller nor any Subsidiary is in violation of
or default under any such Governmental Permits, which could, individually or in
the aggregate, reasonably be expected to have a Seller Material Adverse Effect.
3.7 REAL ESTATE
(a) Schedule 3.7(a) contains a complete and accurate list of the Leased
Premises and the Assumed Leases. Buyer has been provided with a complete and
correct copy of each Assumed Lease. Each Assumed Lease is in full force and
effect and constitutes a valid and binding obligation, legally enforceable
agreement against Seller, and, to Seller's knowledge, the other party thereto.
To Seller's knowledge, neither Seller nor any Subsidiary has violated, and, to
Seller's knowledge, the landlord has not waived, any of the material terms or
conditions of any Assumed Lease and, to Seller's knowledge, all the material
covenants to be performed by Seller or any Subsidiary and the landlord under
each Assumed Lease have been performed in all material respects, and neither
Seller nor any Subsidiary has received any notice from the other party to such
Assumed Lease of the termination thereof, and there is no default or event
which, with the giving of notice or lapse of time or both, would constitute a
default on the part of the Seller or Subsidiary party thereto (nor to the
knowledge of Seller, on the part of any other party to such Assumed Lease).
Seller or its Subsidiary has good and valid title to the leasehold estate in the
Leased Premises, free and clear of any Encumbrances other than Permitted
Encumbrance or arising as a result of the ownership of the Purchased Assets by
Buyer.
(b) The use of the Leased Premises by Seller or a Subsidiary does not
violate and has not violated any local zoning or similar land use Laws or
governmental regulations except for any violations that individually or in the
aggregate (i) will not materially and adversely affect the ability of the Buyer
to use the affected Leased Premises in the manner and scope in which it is now
being used or operated, or (ii) have not had and could not reasonably be
expected to have a Seller Material Adverse Effect. Neither Seller nor any
Subsidiary is in violation of or in noncompliance with any covenant, condition,
restriction, order or easement affecting any Leased Premises except for any
violation or noncompliance that, individually or in the aggregate, (i) will not
materially and adversely affect the ability of the Buyer to use the affected
Leased Premises in the manner and scope in which it is now
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being used or operated, or (ii) has not had and could not reasonably be expected
to have a Seller Material Adverse Effect. There is no pending or existing
condemnation or, to the best knowledge of Seller, threatened condemnation or
special assessment affecting any Leased Premise.
(c) Except as set forth in Schedule 3.7(c), each Assumed Lease can be
assigned or sublet by the applicable Seller without any material change in terms
or conditions and the consummation of the transactions contemplated by this
Agreement will not constitute a breach or default under any such Assumed Lease
or give the landlord a right to terminate any such Assumed Lease. Seller agrees
that to the extent that the landlord's consent to assignment or sublet is
required to assign any Assumed Lease and such consent is not received prior to
closing, Seller will use its reasonable commercial efforts to obtain such
consent promptly after the Closing (including remaining as guarantor or any such
Assumed Lease).
3.8 COMPLIANCE WITH LAWS; LITIGATION
(a) Except as set forth on Schedule 3.8(a), with respect to the ORiNOCO
Business conducted by Seller and each Subsidiary, Seller and each Subsidiary is
in compliance with all applicable Laws and all decrees, orders, judgments,
permits and licenses of or from Governmental Bodies by which the ORiNOCO
Business or the Purchased Assets are bound or affected except for instances of
noncompliance or possible noncompliance that, individually or in the aggregate,
have not had and could not reasonably be expected to have a Seller Material
Adverse Effect.
(b) Except as set forth on Schedule 3.8(b), there is no action, suit,
proceeding, arbitration or governmental investigation pending or, to Seller's
knowledge, threatened against Seller, any Subsidiary, the ORiNOCO Business or
the Purchased Assets, (i) which seeks to restrain or enjoin the consummation of
the transactions contemplated hereby or (ii) with respect to the ORiNOCO
Business that, individually or in the aggregate, has had or could be reasonably
expected to have a Seller Material Adverse Effect.
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3.9 BUSINESS EMPLOYEES
(a) Schedule 1.1(b) contains a complete and accurate list of all the
Business Employees as of the date specified in such list (which in any event
shall be no more than 10 business days prior to the date hereof), showing for
each Business Employee, (i) the name, position held, service date, salary or
wages and aggregate annual compensation for Seller's or the applicable
Subsidiary's last fiscal year, and (ii) such employee's status to show whether
he or she is on vacation, holiday, illness, leave of absence or short-term
disability or long-term disability. None of the Business Employees is covered by
any union, collective bargaining agreement or other similar labor agreement,
formal or informal, nor, to the knowledge of Seller, has there been any labor
union organizing activities relating to the Business Employees within the past 5
years, except for the Business Employees located in the Netherlands whose
employment is covered under a Collectieve Arbeidsovereenkomst (collective labor
agreement). Other than the employment of the Business Employees indicated on
Schedule 1.1(b) as governed by Dutch law, no employees of Seller or any
Subsidiary will transfer to Buyer or any Affiliate thereof by operation of art.
7:662 et seq. of the Dutch Civil Code (Burgerlijk Wetboek) in connection with
the transactions contemplated by this Agreement and the NL Redundant Employees
other than the NL Redundant Transferred Employees (as such terms are defined in
the Transition Services Agreement) cannot claim existence of an employment
agreement with Buyer or a Buyer Designee. All salaries and other emoluments
(including any and all fringe benefits (secundaire arbeidsvoorwaarden), wage
taxes (including with respect to stock options or similar instruments), social
security and employee insurance contributions that accrue for the benefit of the
NL Transferred Employees up to and including the Closing Date, as well as any
other obligations of Seller, or the applicable Subsidiary, arising out of an
employment agreement with an NL Transferred Employee will have been settled at
the Closing Date.
(b) Except as set forth in Schedule 3.9(b), with respect to the Business
Employees, neither Seller nor any Subsidiary currently maintains, contributes to
or has any liability under any Benefit Plan. Each Benefit Plan listed on
Schedule 3.9(b) has been operated in material compliance with all applicable
Laws, including ERISA. Any amount that could be received (whether in cash,
property, or vesting of property) as a result of the transaction contemplated by
this Agreement by any officer, director, employee or independent contractor of
Seller or any Subsidiary, who is a "disqualified individual" (as defined in
proposed Treasury Regulation Section 1.280G-1), under any Contract that will be
assumed by the Buyer, would not be characterized as an "excess parachute
payment" (as defined in Section 280G of the Code).
(c) With respect to the ORiNOCO Business, there is not presently pending
or existing, and to Seller's knowledge there is not threatened, (i) any strike,
slowdown, picketing, or work stoppage, (ii) any application for certification of
a collective bargaining agent, or (iii) any controversies pending, or to
Seller's knowledge, threatened between Seller or any Subsidiary and any of their
respective employees that could reasonably be expected to have a Seller Material
Adverse Effect.
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3.10 CONTRACTS
(a) Schedule 3.10 contains a complete and accurate list of all existing
Contracts of Seller or a Subsidiary that:
(i) involve payments by or to either Seller or a Subsidiary of
more than $50,000 per year or more than $100,000 in the aggregate over the full
term thereof;
(ii) are with Transferred Employees or NL Transferred Employees;
(iii) contain any provision or covenant prohibiting or limiting
the ability of Seller to engage in any activity relating to or involving the
ORiNOCO Business (including geographical restrictions) or to compete, directly
or indirectly, with any person as to the ORiNOCO Business;
(iv) create or obligate Seller to participate in any joint
venture or similar arrangement with respect to or affecting the ORiNOCO Business
or the Purchased Assets;
(v) relate to any material license relating to the ORiNOCO
Business or the Purchased Assets; and
(vi) relate to the ORiNOCO Business or pursuant to which the
Purchased Assets may be bound or affected that is not in the ordinary course of
business or which is material to the ORiNOCO Business taken as a whole (the
"Material Contracts").
(b) The Material Contracts include all existing Contracts of Seller or a
Subsidiary that are (i) primarily related to the ORiNOCO Business, or (ii) by
which the Purchased Assets may be bound or affected, in each case whether
written or oral. Each such Material Contract is valid, binding and enforceable
against Seller or the applicable Subsidiary and, to Seller's knowledge, the
other parties thereto in accordance with its terms and is in full force and
effect. Except as set forth on Schedule 3.10, neither Seller nor any Subsidiary
has received any notice that it is in default under or in breach of or is
otherwise delinquent in performance under any Material Contract, and, to
Seller's knowledge, each of the other parties thereto has performed all
obligations required to be performed by it under, and is not in default under,
any Material Contract and no event has occurred that, with notice or lapse of
time, or both, would constitute such a default, except for breaches, failures of
performance or defaults that, individually or in the aggregate, have not had and
could not reasonably be expected to have a Seller Material Adverse Effect.
Seller has made available to Buyer true and complete copies of all Material
Contracts (including all amendments thereto).
(c) The Material Contracts marked with an asterisk (*) on Schedule 3.10
are General Purchase Agreements related to the manufacturing or sale of products
of the ORiNOCO business which are material to the ORiNOCO business, but do not
include contracts generally related to centralized business operations or
activities of Agere.
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3.11 ENVIRONMENTAL MATTERS
Except as set forth in Schedule 3.11, with respect to the ORiNOCO
Business:
(a) Seller and each Subsidiary has obtained all Governmental Permits
relating to environmental, health and safety matters necessary for the operation
or conduct of the ORiNOCO Business, and all such Governmental Permits are in
good standing and Seller and each Subsidiary is in compliance with all terms and
conditions of such permits, except where failures to obtain, maintain in good
standing or be in compliance with, such permits, individually or in the
aggregate, has not had and could not reasonably be expected to have a Seller
Material Adverse Effect;
(b) except for those matters that, individually or in the aggregate,
have not had and could not reasonably be expected to have a Seller Material
Adverse Effect, none of the Leased Premises is subject to any on-going, or, to
Seller's knowledge, threatened, investigation by, order from or agreement with
any Person relating to (i) any Environmental Law or (ii) any remedial action
arising from or related to the release or threatened release of a Hazardous
Substance into the environment;
(c) none of Seller, any Subsidiary, the ORiNOCO Business or the
Purchased Assets is subject to any judicial or administrative proceeding, order,
judgment, decree or settlement nor, to Seller's knowledge, any threatened
judicial or administrative proceeding order or decree, alleging or addressing a
violation of, or liability under, any Environmental Law;
(d) Seller and each Subsidiary has filed all notices required to be
filed under any Environmental Law indicating past or present treatment, storage
or disposal of a Hazardous Substance or reporting a spill or release of a
Hazardous Substance into the environment, except where failures to file any such
notices, individually or in the aggregate, have not had and could not reasonably
be expected to have a Seller Material Adverse Effect; and
(e) neither Seller nor any Subsidiary has received any written notice to
the effect that it is or may be liable to any Person as a result of the release
or threatened release of a Hazardous Substance, except for any such notices
relating to matters that, individually or in the aggregate, have not had and
could not reasonably be expected to have a Seller Material Adverse Effect.
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3.12 FINANCIAL STATEMENTS; ABSENCE OF CHANGES
(a) Schedule 3.12(a) contains true and complete copies of the following
audited financial statements of the ORiNOCO Business (the "Financial
Statements"):
(i) Statement of Net Assets as of September 30, 2001; and
(ii) Statement of Net Sales, Cost of Sales and Direct Operating
Expenses for the Year Ended September 30, 2001.
(b) The Financial Statements were prepared in accordance with GAAP and
on the basis of the books and records of the ORiNOCO Business (in each case, as
of the date of such Financial Statements) applied consistently with prior
periods, and present fairly, in all material respects, the net assets, net
sales, cost of sales and direct operating expenses of the ORiNOCO Business as of
the dates thereof and for each of the periods then ended in conformity with
GAAP.
(c) Since September 30, 2001, Seller and the Subsidiaries have conducted
and operated the ORiNOCO Business in the ordinary course consistent with past
practice and the ORiNOCO Business has not suffered any change or incurred any
liability that has had or could reasonably be expected to have a Seller Material
Adverse Effect.
(d) Schedule 3.12(d) contains true and correct copies of the unaudited
interim financial statements of the ORiNOCO Business (the "Interim Financial
Statements"). Except as stated in Schedule 3.12(d), the Interim Financial
Statements were prepared using the same methodology as the Financial Statements,
and present fairly, in all material respects, the information stated therein for
each of the periods then ended in conformity with GAAP, subject to normal
year-end adjustments and the absence of notes.
3.13 INTELLECTUAL PROPERTY
(a) Seller or one of its Affiliates owns or has a valid right to
transfer or grant the licenses in and to all of the Proprietary Information to
be assigned or licensed pursuant to the Intellectual Property Agreement
(collectively, the "ORiNOCO Intellectual Property").
(b) Except as set forth in Schedule 3.13 (b), there are no pending, or,
to Seller's knowledge, threatened, claims or demands of any Third Party
pertaining to the ORiNOCO Intellectual Property, with respect to use, practice
or license of the ORiNOCO Intellectual Property or the operation of the ORiNOCO
Business by Seller or a Subsidiary as of the date hereof or with respect to the
Purchased Assets, other than any such claims or demands that, individually or in
the aggregate, have not had and could not reasonably be expected to have a
Seller Material Adverse Effect. No proceedings have been instituted, or are
pending, or, to Seller's knowledge, threatened which challenge the rights of
Seller or a Subsidiary in respect of the ORiNOCO Intellectual Property, other
than any such proceedings that, individually or
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in the aggregate, have not had and could not reasonably be expected to have a
Seller Material Adverse Effect.
(c) At the Closing, Seller or one of its Affiliates will provide, either
by assignment or license, to Buyer in accordance with the Intellectual Property
Agreement, all of the ORiNOCO Intellectual Property owned by Seller or the
applicable Affiliate or as to which Seller or such Affiliate has a right to
license without paying a royalty or fee, which Buyer requires to conduct the
ORiNOCO Business after the Closing and to make, have made, use, lease, import,
offer to sell or sell the products, as such products and services existed as of
the Closing Date, of the ORiNOCO Business. Buyer's sole remedy for breach of
this Section 3.13(c) shall be the assignment or license by Seller or one of its
Affiliates at no additional cost to Buyer or a Buyer Designee, in accordance
with the transfers and licenses provided in the Intellectual Property Agreement,
of those components of such technology which are required by Buyer or a Buyer
Designee to conduct the ORiNOCO Business after the Closing and to make, have
made, use, lease, import, offer to sell or sell any products of the ORiNOCO
Business as to which ownership or license rights were not adequately conveyed.
3.14 PRODUCT LIABILITY AND RECALLS
(a) Since January 1, 1999, there has been no action, suit, claim,
inquiry, proceeding or investigation in any case by or before any court or
Governmental Body pending or, to the best knowledge of Seller, threatened
against or involving the ORiNOCO Business relating to any product alleged to
have been designed, manufactured or sold by the ORiNOCO Business and alleged to
have been defective or improperly designed or manufactured.
(b) Except as set forth in Schedule 3.14(b), since January 1, 1999,
there has been no pending, or to the best knowledge of Seller, threatened recall
or investigation of any product sold by Seller or a Subsidiary in connection
with the ORiNOCO Business.
3.15 PRODUCT WARRANTY
Schedule 3.15 includes copies of the standard terms and conditions of
sale for the ORiNOCO Business (containing applicable guaranty, warranty and
indemnity provisions). Except as set forth in Schedule 3.15, the products
manufactured by the ORiNOCO Business have been sold by the ORiNOCO Business in
accordance with the standard terms and conditions of sale. All product warranty
claims included in the Assumed Liabilities shall be governed by the terms of
such warranty provisions.
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3.16 INVENTORY
(a) The Inventory (i) as reflected in the Financial Statements is stated
at the lower of cost (determined principally on a first-in, first-out basis) or
market, and (ii) is, and as of the Closing Date, will be, of quality and
quantity usable or saleable in the ordinary course of the ORiNOCO Business,
except in each case for obsolete items and items of below-standard quality that
have been written down in the Financial Statements to estimated net realizable
values. As of the Closing Date, the Channel Inventory will not have a value in
excess of $5,000,000 in terms of potential revenues to Agere.
(b) The Channel Inventory was sold by Seller or a Subsidiary in
transactions arising in the ordinary course of business consistent with past
practice, and has been accounted for in accordance with GAAP, consistently
applied.
3.17 CUSTOMER AND SUPPLIERS
(a) Schedule 3.17 contains a list setting forth the 10 largest customers
of the ORiNOCO Business, by dollar amount, over the 12 months ended March 31,
2002, and the 10 largest suppliers of the ORiNOCO Business, by dollar amount,
over the 12 months ended March 31, 2002. All purchase and sale orders and other
commitments for purchases and sales made by Seller or a Subsidiary in connection
with the ORiNOCO Business have been made in the ordinary course of business in
accordance with past practices, and no payments have been made to any supplier
or their representatives other than payments to such suppliers or their
representatives for the payment of the invoiced price of supplies purchased or
goods sold in the ordinary course of business.
(b) Seller reasonably believes that its relationships with the customers
and suppliers of the ORiNOCO Business are satisfactory and has not been notified
by any customer or supplier in any writing or email of any intention to
terminate its relationship with the ORiNOCO Business as a result of the
transactions contemplated by this Agreement or otherwise.
3.18 RESTRICTIONS ON THE BUSINESS
Except for this Agreement, to the best knowledge of Seller, there is no
agreement, judgment, injunction, order or decree affecting Seller's or the
Subsidiary's conduct of the ORiNOCO Business as currently conducted other than
any such matters that, individually or in the aggregate, have not had and could
not reasonably be expected to have a Seller Material Adverse Effect.
3.19 BROKERS
Other than X.X. Xxxxxx Securities Inc. , as to which Seller shall have
full responsibility and for which neither Buyer nor any Buyer Designee shall
have any liability,
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no broker, investment banker, financial advisor or other Person is entitled to
any broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Seller or any Affiliate of Seller.
3.20 TAXES
There are no material liens for Taxes upon any of the Purchased Assets
that arose in connection with any failure (or alleged failure) to pay any Tax,
except for liens for Taxes not yet due and payable. Seller or a Subsidiary has
duly and timely filed all material Tax Returns that it was required to file; all
such Tax Returns were correct and complete in all material respects; and all
Taxes owed with respect to the Purchased Assets and the ORiNOCO Business, and
shown as due on any Tax Return, have been paid, except to the extent that any
non-payment could not reasonably be expected to have a Seller Material Adverse
Effect. None of the Purchased Assets is an asset or property that is or will be
required to be treated as described in Section 168(f)(8) of the U.S. Internal
Revenue Code of 1954 and in effect immediately before the enactment of the Tax
Reform Act of 1986, or tax-exempt use property within the meaning of Section
168(h)(1) of the Code.
3.21 NO OTHER REPRESENTATIONS OR WARRANTIES
(a) Except for the representations and warranties contained in this
Xxxxxxx 0, xxxx of Seller, any Subsidiary, any Affiliate of Seller or any other
Person makes any representations or warranties, and Seller hereby disclaims any
other representations or warranties, whether made by Seller, any Subsidiary, or
any Affiliate of Seller, or any of their respective officers, directors,
employees, agents or representatives, with respect to the execution and delivery
of this Agreement or any Collateral Agreement, the transactions contemplated
hereby or the ORiNOCO Business, notwithstanding the delivery or disclosure to
Buyer or its representatives of any documentation or other information with
respect to any one or more of the foregoing. Notwithstanding anything to the
contrary herein, no representation or warranty contained in this Section 3 is
intended to, or does, cover or otherwise pertain to any assets that are not
included in the Purchased Assets or any liabilities that are not included in the
Assumed Liabilities.
(b) The representations and warranties contained in this Article 3
(including the Schedules referred to in such representations and warranties) do
not contain any untrue statement of a material fact and, when taken together, do
not omit to state any material fact necessary in order to make such
representations, warranties or statements not misleading in light of the
circumstances under which they were made.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth in Schedules attached hereto and delivered by Buyer
to Seller prior to the execution of this Agreement, Buyer represents and
warrants to Seller that:
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4.1 ORGANIZATION AND QUALIFICATION
Each of Buyer and any Buyer Designee is a corporation duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
incorporation or organization, and each of Buyer and any Buyer Designee has all
requisite corporate power and authority to carry on its business as currently
conducted by it and to own or lease and operate its properties. Each of Buyer
and any Buyer Designee is duly qualified to do business and is in good standing
as a foreign corporation (in any jurisdiction that recognizes such concept) in
each jurisdiction where the ownership or operation of its assets or the conduct
of its business requires such qualification, except where the failure to be so
qualified or in good standing, individually or in the aggregate, has not had and
could not reasonably be expected to have a material adverse effect on Buyer's
business taken as a whole or on its or any Buyer Designee's ability to
consummate the transactions under this Agreement and the Collateral Agreements.
4.2 AUTHORIZATION; BINDING EFFECT
(a) Each of Buyer and any Buyer Designee has all requisite corporate
power and authority to execute and deliver this Agreement and the Collateral
Agreements to which it will be a party, as the case may be, and to effect the
transactions contemplated hereby and thereby and the execution, delivery and
performance of this Agreement and the Collateral Agreements by Buyer and any
Buyer Designee, as the case may be, has been duly authorized by all requisite
corporate action.
(b) This Agreement has been duly executed and delivered by Buyer and
this Agreement is, and the Collateral Agreements to which Buyer and each Buyer
Designee will be a party when duly executed and delivered by Buyer or such Buyer
Designee will be, valid and legally binding obligations of Buyer or such Buyer
Designee, as applicable, enforceable against Buyer or such Buyer Designee, as
applicable, in accordance with their respective terms, except to the extent that
enforcement of the rights and remedies created hereby and thereby may be
affected by bankruptcy, reorganization, moratorium, insolvency and similar Laws
of general application affecting the rights and remedies of creditors and by
general equity principles.
4.3 NON-CONTRAVENTION; CONSENTS
(a) Assuming that the consents specified in Section 4.3(b) below have
been obtained, the execution, delivery and performance of this Agreement and the
Collateral Agreements by Buyer or any Buyer Designee and the consummation of the
transactions contemplated hereby and thereby do not and will not: (i) result in
a breach or violation of any provision of Buyer's or any Buyer Designee's
charter, by-laws or similar organizational document, (ii) violate or result in a
breach of or constitute an occurrence of default under any provision of, result
in the acceleration or cancellation of any obligation under, or give rise to a
right by any party to terminate or amend its obligations under, any mortgage,
deed of trust, conveyance to secure debt, note, loan, indenture, lien, lease,
agreement, instrument, order,
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judgment, decree or other arrangement or commitment to which Buyer or a Buyer
Designee is a party or by which it or its assets or properties are bound, or
(iii) violate any order, judgment, decree, rule or regulation of any court or
any Governmental Body having jurisdiction over Buyer or a Buyer Designee or any
of their respective properties, other than in the case of clauses (ii) and
(iii), any such violations, breaches, defaults, accelerations or cancellations
of obligations or rights that, individually or in the aggregate, have not had
and could not be reasonably expected to have a material adverse effect on
Buyer's business taken as a whole or on its or any Buyer Designee's ability to
consummate the transactions under this Agreement and the Collateral Agreements.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by Buyer or a
Buyer Designee in connection with the execution, delivery and performance of
this Agreement or the Collateral Agreements or for the consummation of the
transactions contemplated hereby or thereby, except for (i) any filings required
to be made under the HSR Act and any applicable filings required under foreign
antitrust Laws and (ii) such consents, approvals, orders, authorizations,
registrations, declarations or filings the failure of which to be obtained or
made, individually or in the aggregate, have not had and could not reasonably be
expected to have a material adverse effect on Buyer's business taken as a whole
or on its or any Buyer Designee's ability to consummate the transactions under
this Agreement and the Collateral Agreements.
4.4 BROKERS
Other than Broadview International LLC and Credit Suisse First Boston,
as to which Buyer shall have full responsibility and for which neither Seller
nor any Subsidiary shall have any liability, no broker, investment banker,
financial advisor or other Person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based on arrangements made by or on
behalf of Buyer or an Affiliate of Buyer.
4.5 NO INDUCEMENT OR RELIANCE; INDEPENDENT ASSESSMENT
(a) With respect to the Purchased Assets, the ORiNOCO Business and any
other rights or obligations to be transferred hereunder or under the Collateral
Agreements or pursuant hereto or thereto, Buyer has not been induced by and has
not relied upon any representations, warranties or statements, whether express
or implied, made by Seller, any Affiliate of Seller, or any agent, employee,
attorney or other representative of Seller or by any other Person representing
or purporting to represent Seller that are not expressly set forth in this
Agreement or in the Collateral Agreements (including the Schedules and Exhibits
hereto and thereto), whether or not any such representations, warranties or
statements were made in writing or orally, and none of Seller, any Affiliate of
Seller, or any agent, employee, attorney, other representative of Seller or
other Person shall have or be subject to any liability to Buyer or any other
Person resulting from the distribution to Buyer, or Buyer's use of, any such
information, including any information, documents or material made available
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in any "data rooms" or management presentations or in any other form in
expectation of the transactions contemplated hereby.
(b) Buyer acknowledges that it has made its own assessment of the
present condition and the future prospects of the ORiNOCO Business and is
sufficiently experienced to make an informed judgment with respect thereto.
Buyer further acknowledges that neither Seller nor any Affiliate of Seller has
made any warranty, express or implied, as to the future prospects of the ORiNOCO
Business or its profitability for Buyer, or with respect to any forecasts,
projections or ORiNOCO Business plans prepared by or on behalf of Seller and
delivered to Buyer in connection with the ORiNOCO Business and the negotiation
and the execution of this Agreement.
4.6 SUFFICIENCY OF FUNDS
Each of Buyer and any Buyer Designee (i) by Closing will have sufficient
funds available to pay the Purchase Price and any expenses incurred by Buyer or
any Buyer Designee in connection with the transactions contemplated by this
Agreement; (ii) by Closing will have the resources and capabilities (financial
or otherwise) to perform its obligations hereunder and under the Collateral
Agreements; and (iii) has not incurred any obligation, commitment, restriction
or liability of any kind, absolute or contingent, present or future, which would
impair or adversely affect such resources and capabilities.
4.7 NO OTHER REPRESENTATIONS OR WARRANTIES
Except for the representations and warranties contained in this Xxxxxxx
0, xxxx of Buyer, any Buyer Designee, any Affiliate of Buyer or any other Person
makes any representations or warranties, and Buyer hereby disclaims any other
representations or warranties, whether made by Buyer, any Buyer Designee or any
Affiliate of Buyer, or any of their officers, directors, employees, agents or
representatives, with respect to the execution and delivery of this Agreement or
any Collateral Agreement or the transactions contemplated hereby and thereby,
notwithstanding the delivery or disclosure to Seller or its representatives of
any documentation or other information with respect to any one or more of the
foregoing.
5. CERTAIN COVENANTS
5.1 ACCESS AND INFORMATION
(a) Seller shall give, or cause its Affiliates to give, to Buyer and its
Affiliates, and their respective officers, employees, accountants, counsel and
other representatives (including financing sources) reasonable access during
Seller's or the applicable Affiliate's normal business hours throughout the
period prior to the Closing to all of Seller's or the applicable Affiliate's
properties, books, contracts, commitments, reports of examination and records
relating to the ORiNOCO Business, the Purchased Assets and the Assumed
Liabilities (but excluding those related primarily to the Excluded Assets and
Excluded Liabilities and subject to any limitations that are reasonably required
to preserve any
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applicable attorney-client privilege or legal or contractual Third-Party
confidentiality obligation). Seller shall assist, and cause its Affiliates to
assist, Buyer and its Affiliates and financing sources in making such
investigation and shall cause its counsel, accountants, engineers, consultants
and other non-employee representatives to be reasonably available to any of them
for such purposes; it being understood that Buyer shall reimburse Seller or the
applicable Affiliate promptly for reasonable and necessary out-of-pocket costs
and expenses, if any, incurred by Seller or any Affiliate in complying with any
such request by or on behalf of Buyer.
(b) After the Closing Date, Seller and Buyer shall provide, and shall
cause their respective Affiliates to provide, to each other and to their
respective officers, employees, accountants, counsel and other representatives,
upon request (subject to any limitations that are reasonably required to
preserve any applicable attorney-client privilege or Third-Party confidentiality
obligation), reasonable access for inspection and copying of all ORiNOCO
Business Records, Governmental Permits, Licenses, Contracts and any other
information existing as of the Closing Date and relating to the ORiNOCO Business
or the Purchased Assets, and shall make their respective personnel reasonably
available for interviews, depositions and testimony in any legal matter
concerning transactions contemplated by this Agreement, the operations or
activities relating to the ORiNOCO Business or the Purchased Assets, and as
otherwise may be necessary or desirable to enable the party requesting such
assistance to: (i) comply with any reporting, filing or other requirements
imposed by any Governmental Body; (ii) assert or defend any claims or
allegations in any litigation or arbitration or in any administrative or legal
proceeding other than claims or allegations that one party to this Agreement has
asserted against the other; or (iii) subject to clause (ii) above, perform its
obligations under this Agreement. The party requesting such information or
assistance shall reimburse the other party for all reasonable and necessary
out-of-pocket costs and expenses, if any, incurred by such party in providing
such information and in rendering such assistance. The access to files, books
and records contemplated by this Section 5.1(b) shall be during normal business
hours and upon reasonable prior notice and shall be subject to such reasonable
limitations as the party having custody or control thereof may impose to
preserve the confidentiality of information contained therein.
(c) Buyer shall preserve all Business Records, Licenses and Governmental
Permits for at least seven (7) years after the Closing Date. After this
seven-year period and at least ninety (90) days prior to the planned destruction
of any Business Records, Licenses or Governmental Permits, Buyer shall notify
Seller in writing and shall make available to Seller, upon its request, such
Business Records, Licenses and Governmental Permits. Buyer further agrees that,
to the extent Business Records, Licenses or Governmental Permits are placed in
storage, they will be indexed in such a manner as to make individual document
retrieval possible in an expeditious manner.
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5.2 CONDUCT OF THE ORiNOCO BUSINESS
From and after the date of this Agreement and through the Closing Date,
except as otherwise contemplated by this Agreement or in Schedule 5.2 or as
Buyer shall otherwise consent to in writing, Seller, with respect to the ORiNOCO
Business:
(a) will carry on the ORiNOCO Business in the ordinary course consistent
with past practice and, to the extent consistent therewith, use reasonable
commercial efforts to keep intact the ORiNOCO Business, keep available the
services of the Business Employees and preserve the relationships of the ORiNOCO
Business with customers, suppliers licensors, licensees, distributors and others
that have a business relationship with the ORiNOCO Business;
(b) will not permit, other than as may be required by Law or a
Governmental Body, all or any of the Purchased Assets (real or personal,
tangible or intangible) presently and actively used or held for use primarily in
the operation or conduct of the ORiNOCO Business to be sold, licensed or
subjected to any Encumbrance, other than sales of Inventory in accordance with
Section 5.2(d);
(c) will not sell, lease, license, transfer or dispose of any asset that
would otherwise be a Purchased Asset, other than sales of Inventory in the
ordinary course of business consistent with past practice and Section 5.2(d);
(d) will not sell Inventory outside of the ordinary course of business
consistent with past practice, including (i) acceleration of any sales to
increase, or that have the effect of increasing, Channel Inventory, or (ii)
offering discounts, rebates or special promotions that have the effect of
accelerating sales to customers;
(e) will not acquire any asset that will be a Purchased Asset except in
the ordinary course of business consistent with past practice;
(f) will not move any Principal Equipment or Fixtures from their present
locations at the Leased Premises or at the contract manufacturing facilities
used by Seller in Taiwan;
(g) will not enter into, terminate or materially extend or materially
modify any Material Contract except in the ordinary course of business
consistent with past practice and following consultation with Buyer;
(h) will not incur or assume any liabilities, obligations or
indebtedness for borrowed money, other than in the ordinary course of business
consistent with past practice that are not, individually or in the aggregate,
material in scope or amount, or that will constitute Excluded Liabilities;
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(i) will not increase the salaries, wage rates, fringe benefits
severance arrangements or vacation or personal time off policies of any
Transferred Employees or NL Transferred Employees;
(j) will not do any other act which would cause any representation or
warranty of Seller in this Agreement to be or become untrue in any material
respect or intentionally omit to take any action necessary to prevent any such
representation or warranty from being untrue in any material respect; and
(k) will not enter into any agreement or commitment with respect to any
of the foregoing.
5.3 TAX REPORTING AND ALLOCATION OF CONSIDERATION
(a) Seller and Buyer acknowledge and agree that (i) Seller or the
applicable Subsidiary will be responsible for and will perform all Tax
withholding, payment and reporting duties with respect to any wages and other
compensation paid by Seller or a Subsidiary to any Business Employee in
connection with the operation or conduct of the ORiNOCO Business for any tax
period ending prior to or on the Closing Date, and (ii) Buyer will be
responsible for and will perform all Tax withholding, payment and reporting
duties with respect to any wages and other compensation paid by Buyer to any
Transferred Employee or NL Transferred Employee in connection with the operation
or conduct the ORiNOCO Business with respect to tax periods beginning the day
after the Closing Date.
(b) Seller and Buyer recognize their mutual obligations pursuant to
Section 1060 of the Code to timely file IRS Form 8594 (the "Asset Acquisition
Statement") with their respective federal income tax returns. Accordingly,
Seller and Buyer shall, no later than thirty (30) days after the Closing Date,
attempt in good faith and use reasonable commercial efforts to (i) enter into a
Purchase Price allocation agreement providing for the allocation of the Purchase
Price among the Purchased Assets consistent with the provisions of Section 1060
of the Code and the Treasury Regulations thereunder and (ii) cooperate in the
preparation of the Asset Acquisition Statement in accordance with clause (i) for
timely filing with their respective federal income tax returns. If Seller and
Buyer shall have agreed on a Purchase Price allocation and an Asset Acquisition
Statement, then Seller and Buyer shall file the Asset Acquisition Statement in
the form so agreed and neither Seller nor Buyer shall take a Tax position which
is inconsistent with such Purchase Price allocation.
(c) Seller agrees to transfer to Buyer any records relating to
withholding and payments of income and unemployment taxes (federal, state and
local) and FICA taxes with respect to wages paid to Transferred Employees prior
to the Closing (including, if available, Forms W-4, Employee Withholding
Allowance Certificate). Buyer and Seller hereby agree that, pursuant to Revenue
Procedure 96-60, Buyer agrees to provide the Transferred Employees with Forms
W-2, Wage and Tax Statement, setting forth the wages paid and taxes withheld
with respect to the Transferred Employees, for the calendar year in which the
Closing occurs. Seller and Buyer agree to fully cooperate with respect to any
filings and
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information necessary to effect the transactions contemplated by this section,
including the transfer of employment records.
5.4 BUSINESS EMPLOYEES
(a) As of the Closing Date, Buyer shall make offers of employment to all
Business Employees listed on Schedule 1.1(b) (including those absent due to
vacation, holiday, illness, leave of absence or short-term disability, but
excluding any Business Employees on long-term disability) other than the NL
Transferred Employees, whose employment with Seller or a Subsidiary shall
transfer to Buyer or a Buyer Designee by operation of Dutch law, and who will be
treated (subject to the receipt of any necessary consents or approvals required
by Dutch law) in accordance with the relevant provisions of the Transition
Services Agreement. Seller shall cooperate in facilitating the performance of
Buyer's obligation to make such offers. Business Employees (other than the NL
Transferred Employees) who accept Buyer's offer of employment, as of the
effective date of their employment with Buyer, are referred to as "Transferred
Employees". Employment with Buyer of Transferred Employees shall be effective as
of the day following the close of business on the Closing Date, except that the
employment of individuals receiving short-term disability benefits or on
approved leave of absence on the Closing Date will become effective as of the
date they present themselves for work with the Buyer.
(b) Buyer shall provide, or shall cause to be provided, to Transferred
Employees, until at least December 31, 2002, the same salary offered by Seller
immediately prior to the Closing Date. Buyer shall provide or shall cause to be
provided, to Transferred Employees, for so long as such Transferred Employees
remain employed by Buyer, employee benefits pursuant to employee benefit plans,
programs, policies or arrangements maintained by Buyer or any subsidiary of
Buyer providing coverage and benefits that, in the aggregate, are no less
favorable than those provided to employees of Buyer or its subsidiaries in
positions reasonably comparable to the positions held by Transferred Employees.
Except as expressly set forth in this Section 5.4, no assets of any Benefit Plan
shall be transferred to Buyer or any Affiliate of Buyer. Each employee benefit
plan, program, policy and arrangement of Buyer or an Affiliate of Buyer,
including Pension Plans, Welfare Plans, vacation plans and severance plans,
shall recognize (i) for purposes of satisfying any deductibles, co-pays and
out-of-pocket maximums during the coverage period that includes the Closing
Date, any payment made by any Transferred Employee towards deductibles, co-pays
and out-of-pocket maximums in any health or other insurance plan of Seller and
(ii) for purposes of determining eligibility to participate, vesting and for any
schedule of benefits based on service, all service with Seller, including
service with predecessor employers that was recognized by Seller and any prior
unbridged service with Seller, provided that such service shall not be
recognized to the extent such recognition would result in a duplication of
benefits. Buyer will continue to provide (A) relocation assistance to those
Transferred Employees receiving it as of the Closing Date and (B) tuition
assistance to those Transferred Employees who are receiving such benefits as of
the Closing Date for the current academic session, in each case as set forth on
Schedule 5.4(b). Buyer will honor the terms and conditions of Seller's
international assignee program as set forth on Schedule 5.4(b),
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including repatriation upon completion of assignment, completion bonuses, Tax
equalization and Tax return preparation, with respect to Transferred Employees
who are on international assignment as of the Closing Date, except that these
costs shall be allocated between Buyer and Seller based on the portion of the
international assignment occurring before or on the Closing Date (which shall be
Seller's obligation) and after the Closing Date (which shall be Buyer's
obligation).
(c) Seller and Buyer intend that the transactions contemplated by this
Agreement shall not constitute a severance of employment of any Business
Employee prior to or upon the consummation of the transactions contemplated
hereby and that such employees will have continuous and uninterrupted employment
immediately before and immediately after the Closing Date. Notwithstanding
anything to the contrary in this Agreement, until at least December 31, 2002,
Buyer shall provide severance benefits to Transferred Employees substantially
equivalent to the benefits listed on Schedule 5.4(c).
(d) Buyer agrees that its and its Affiliate's health and welfare plans
shall waive any pre-existing condition exclusion (to the extent such exclusion
was waived under applicable health and welfare plans offered to the Transferred
Employees by Seller or any Subsidiary) and any proof of insurability. Seller
agrees to transfer the cafeteria plan assets in the accounts and experience of
Transferred Employees to substantially equivalent plans that exist or will be
established by Buyer to the extent permitted by applicable plan terms and
applicable law. Seller shall remain responsible for any benefits payable under a
Benefit Plan to Business Employees due to events occurring through the Closing
Date. The medical and dental plans maintained by Buyer and Affiliates of Buyer
shall recognize as dependents of the Transferred Employees any Class 2
dependents recognized by Seller's medical and dental plans to the extent such
dependents are recognized as eligible dependents under Buyer's plans.
(e) As soon as practicable following the Closing Date, Buyer shall cause
one or more defined contribution savings plans intended to qualify under
sections 401(a) and 401(k) of the Code (the "Buyer Savings Plan") to provide for
the receipt of Transferred Employees' lump sum cash distributions, in the form
of an eligible rollover distribution, which includes outstanding participant
loans, from the Agere Systems Inc. Management 401(k) Plan, provided such
rollovers are made at the election of the Transferred Employees and in
accordance with the terms of the Buyer Savings Plan. Seller shall cause the
Agere Systems Inc. Management 401(k) Plan to permit the Transferred Employees to
elect a lump sum cash distribution of benefits accrued through the Closing Date
in accordance with the Code.
(f) With respect to all group health plans, Seller shall retain full
responsibility and liability for compliance with Seller's continuation health
care coverage requirements of Code Section 4980B and ERISA Sections 601 through
608 (the "Continuation Coverage Requirements") for all Qualifying Events within
the meaning of Section 4980B(f)(3) of the Code and Section 603 of ERISA. On or
after the Closing Date, Seller shall continue to comply with the Continuation
Coverage Requirements with respect to all Qualifying Events
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affecting any current or former employees or former employee of the Seller and
any qualifying beneficiary of such employee or former employee which Qualifying
Events occurred prior to the Closing Date. Seller shall hold Buyer and any
entity required to be combined with Buyer (within the meaning of Sections
414(b), (c), (m) or (i) of the Code) harmless from and fully indemnify them
against any costs, expenses, losses, damages and liabilities incurred or
suffered by them directly or indirectly, including, but not limited to,
reasonable attorneys' fees and expenses, which relate to continuation coverage
and arise as a result of any action or omission by Seller or because Buyer is
deemed to be a successor employer to Seller. Buyer shall offer no inducement to
any employee to elect continuation coverage with respect to any group health
plan of Seller.
(g) Seller shall make and be responsible for incentive compensation
payments, if any, to Transferred Employees for the period from October 1, 2001
to and including the Closing Date in accordance with its short-term incentive
plan in effect for any such period.
(h) Throughout the period commencing with the date of this Agreement and
ending on the Closing Date, Seller shall provide Buyer reasonable access to the
Business Employees for the purpose of enabling Buyer to meet with and make
offers of employment to one or more of such employees.
5.5 COLLATERAL AGREEMENTS; LEASED EQUIPMENT
(a) Prior to the Closing Date, Seller and Buyer shall negotiate in good
faith the schedules for the services to the attached to the Transition Services
Agreement. On or prior to the Closing Date, Buyer or a Buyer Designee shall
execute and deliver to Seller or a Subsidiary, and Seller or a Subsidiary shall
execute and deliver to Buyer or a Buyer Designee the Collateral Agreements.
(b) Prior to the Closing Date, Seller shall provide Buyer with the costs
and other terms applicable to the Leased Equipment and Buyer shall decide
whether such Leased Equipment will (i) transfer to Buyer or a Buyer Designee as
of the Closing Date by Buyer assuming the leases for such equipment in which
case such lease agreement shall be deemed a Contract hereunder, (ii) be acquired
by Buyer or a Buyer Designee as of the Closing Date by Buyer or a Buyer Designee
paying for the costs of purchasing such equipment to the applicable Third Party
pursuant to the equipment rentals or leases (the "Purchased Leased Equipment"),
or (iii) remain the property of Seller or a Subsidiary as of the Closing Date
(the "Excluded Leased Equipment").
5.6 REASONABLE COMMERCIAL EFFORTS
(a) Subject to Section 5.6(b), upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use its
reasonable commercial efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including using reasonable commercial efforts
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to accomplish the following: (i) the taking of all acts necessary to cause the
conditions to Closing to be satisfied as promptly as practicable, (ii) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Bodies and the making of all necessary registrations
and filings (including filings with Governmental Bodies, if any) and the taking
of all steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by any Governmental Body, (iii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iv) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the Collateral Agreements or the
consummation of the transactions contemplated hereby or thereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Body vacated or reversed, and (v) the execution and delivery
of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement and the
Collateral Agreements.
(b) Seller and Buyer shall timely and promptly make all filings which
may be required by each of them in connection with the consummation of the
transactions contemplated hereby under the HSR Act and any state, foreign or
multinational antitrust legislation or by any foreign or multinational
governmental authority, and the parties shall respectively use all reasonable
commercial efforts to cause the prompt termination or expiration of the
applicable waiting period under such laws. Seller and Buyer agree that their
respective initial filings under the HSR Act and in respect of any foreign
antitrust approval shall be made no later than the fifth business day following
the date of this Agreement. Each party shall furnish to the other such necessary
information and assistance as the other party may reasonably request in
connection with the preparation of any necessary filings or submissions by it to
any U.S. federal or state or foreign or multinational governmental agency,
including, without limitation, any filings necessary under the provisions of the
HSR Act. Each party shall provide the other party the opportunity to make copies
of all correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or its representatives, on the one hand,
and the Federal Trade Commission (the "FTC"), the Antitrust Division of the
United States Department of Justice (the "Antitrust Division") or any state,
foreign or multinational governmental agency or members of their respective
staffs, on the other hand, with respect to this Agreement or the transactions
contemplated hereby. Each party agrees to inform promptly the other party of any
communication made by or on behalf of such party to, or received by or on behalf
of such party from, the FTC, the Antitrust Division or any other state, foreign
or multinational governmental authority regarding any of the transactions
contemplated hereby.
5.7 CONTACTS WITH SUPPLIERS AND CUSTOMERS
Prior to the Closing, without the prior written consent of Seller, Buyer
shall not contact any suppliers to, or customers of, the ORiNOCO Business in
connection with or pertaining to any subject matter of this Agreement or the
Collateral Agreements. Concurrent with the Closing, Seller and Buyer agree to
cooperate in contacting any suppliers to, or customers of, the Business in
connection with or pertaining to any subject matter of this Agreement or the
Collateral Agreements.
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5.8 USE OF AGERE SYSTEMS' NAME
(a) Buyer and Seller agree as follows:
(i) Immediately after the Closing Date, Buyer and the Buyer
Designees shall cease using "Agere," "Agere Systems" or other similar xxxx (the
"Seller Name") and any other trademark, design or logo previously or currently
used by Seller or any of its Affiliates (other than those that are transferred
pursuant to the Intellectual Property Agreement) in all invoices, letterhead,
advertising and promotional materials, office forms or business cards;
(ii) Within three (3) months after the Closing Date, Buyer and
the Buyer Designees shall (A) remove and any other trademark, design or logo
previously or currently used by Seller or any of its Affiliates from all
buildings, signs and vehicles of the ORiNOCO Business; and (B) cease using the
Seller Name and any other trademark, design or logo previously or currently used
by Seller or any of its Affiliates (other than those that are transferred
pursuant to the Intellectual Property Agreement) in electronic databases, web
sites, product instructions, packaging (except as provided below) and other
materials, printed or otherwise. Notwithstanding the foregoing, Buyer and the
Buyer Designees shall not be restricted in using any packaging materials that
are in inventory as of the Closing Date;
(iii) Buyer and the Buyer Designees shall not be required at any
time to remove the Seller Name and any other trademark, design or logo
previously or currently used by Seller or any of its Affiliates from inventory
of the ORiNOCO Business that is in existence subject to a purchase order
delivered by Seller to a Third Party prior to or as of the Closing Date, nor
shall Buyer or the Buyer Designees be required at any time to remove such Seller
Name and any such other trademark, design or logo from schematics, plans,
manuals, drawings, machinery, tooling including hand tools, and the like of the
ORiNOCO Business in existence as of the Closing Date to the extent that such
instrumentalities are used in the ordinary internal conduct of the ORiNOCO
Business and are neither generally observed by the public nor intended for use
as means to effectuate or enhance sales;
(iv) Buyer and the Buyer Designees shall use Reasonable Efforts
(as defined below) to remove the Seller Name and any other trademark, design or
logo previously or currently used by Seller or any of its Affiliates (other than
those that are transferred pursuant to the Intellectual Property Agreement) from
those assets of the ORiNOCO Business (such as, but not limited to, tools, molds,
and machines) used in association with the manufacture of the products of the
ORiNOCO Business or otherwise reasonably used in the conduct of the ORiNOCO
Business after the Closing. For the purposes of this Section 5.8(a)(iv),
"Reasonable Efforts" means Buyer and the Buyer Designees shall remove the Seller
Name from such assets but only at such time when such asset is not operated or
otherwise is taken out of service in the normal course of business due to
regular maintenance or repair (but only for such repairs or maintenance where
such removal could normally be undertaken, for example, repair or maintenance of
a mold cavity) whichever occurs first; provided that, in no event shall Buyer or
the Buyer Designees use the
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Seller Name after the date which is one (1) year from the Closing Date. Neither
Buyer nor the Buyer Designees shall be required to perform such removal on such
assets that are not or no longer used to manufacture the products of the ORiNOCO
Business or other parts, or if discontinuance of use of such assets is
reasonably anticipated during such time period.
(v) Seller hereby grants to Buyer and the Buyer Designees a
limited right to use Seller's Name and associated trademarks, designs and logos
as specified in, and during the periods, if any, specified in clauses (i) --
(iv) above.
(b) In no event shall Buyer or any Affiliate of Buyer advertise or hold
itself out as Agere or an Affiliate of Agere after the Closing Date.
5.9 NON-SOLICITATION OF EMPLOYEES
None of Seller, any of its representatives or any of its Affiliates will
at any time prior to one (1) year from the date hereof, directly or indirectly,
solicit the employment of any Transferred Employee, NL Transferred Employee
(other than in accordance with the Transition Services Agreement) or any
employee of Buyer or its Affiliates with whom Seller came into contact in
connection with the negotiation of this Agreement without Buyer's prior written
consent. None of Buyer, any of its representatives or any of its Affiliates will
at any time prior to one (1) year from the date hereof, directly or indirectly,
solicit the employment of any employee of Seller's Wireless Communication and
Networking Division (other than the Business Employees) without Seller's prior
written consent. The term "solicit the employment" shall not be deemed to
include generalized searches for employees through media advertisements,
employment firms or otherwise that are not focused on Buyer's or Seller's
employees, as the case may be. This restriction shall not apply to any employee
whose employment is involuntarily terminated by Buyer or Seller, or their
respective successors, after the Closing. Solicitation of employment shall be
deemed to occur if the Persons who perform such solicitation have knowledge of
the existence of this Agreement or if such Persons have no knowledge of the
existence of this Agreement but Buyer's or Seller's employees, as the case may
be, with knowledge of the existence of this Agreement have advance knowledge of
any such solicitation.
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5.10 NO NEGOTIATION OR SOLICITATION
Prior to the Closing Date, Seller and its Affiliates will not (and
Seller will cause each of its employees, officers and agents not to) directly or
indirectly (a) solicit, initiate, entertain or encourage the submission of any
proposal, offer or any discussions that might reasonably be expected to lead to
or result in any proposal or offer from any Person relating to the direct or
indirect acquisition of the ORiNOCO Business or any portion of the Purchased
Assets (other than purchases of goods or services from the ORiNOCO Business in
the ordinary course of business consistent with past practice), or (b)
participate in any discussions or negotiations regarding the ORiNOCO Business,
furnish any information with respect thereto, or assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing. Seller will notify Buyer if any Person makes any proposal,
offer, inquiry or contact with respect to any of the foregoing within two
Business Days after receipt of any such offer or proposal.
5.11 NON-COMPETITION
(a) Seller agrees that, as part of the consideration for the payment of
the Purchase Price, for a period of three (3) years immediately following the
Closing Date, neither Seller nor any of its Affiliates will, directly or
indirectly, operate, perform or have any ownership interest in any business that
develops, manufactures, sells, installs or distributes products in competition
with the ORiNOCO Business, except that Seller or its subsidiaries may (i)
purchase or otherwise acquire by merger, purchase of assets, stock, controlling
interest or otherwise any Person or business or engage in any similar merger and
acquisition activity with any Person the business of which is not in competition
with the ORiNOCO Business, (ii) invest as a minority shareholder with less than
19.9% ownership in any non-public entity provided that neither Seller nor any of
its Affiliates has the legal right (by contract or the terms of the securities
it owns) to approve any action within the scope of this section), or (iii)
continue to operate the WCND client module business which, among other things,
incorporates software products into reference designs, provides radio products
for integration into host devices and sells client card products. For the
purposes of this Section 5.11(a), ownership of securities of a company whose
securities are publicly traded under a recognized securities exchange not in
excess of 5% of any class of such securities shall not be considered to be
competition with the ORiNOCO Business, and a Person shall not be considered to
be in the "business" of competing with the ORiNOCO Business if such Person
derives less than twenty percent (20%) of its revenues from products that
compete with the ORiNOCO Business.
(b) Seller acknowledges that the restrictions set forth in Section
5.11(a) constitute a material inducement to Buyer's entering into and performing
this Agreement. Seller further acknowledges, stipulates and agrees that a breach
of such obligation could result in irreparable harm and continuing damage to
Buyer for which there may be no adequate remedy at law and further agrees that
in the event of any breach of said obligation, Buyer may be entitled to
injunctive relief and to such other relief as is proper under the circumstances.
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5.12 CHANNEL INVENTORY
For the purposes of determining that the Channel Inventory will not have
a value in excess of $5,000,000 in terms of potential revenues to Agere as of
the Closing Date, prior to the Closing, Seller will provide Buyer with reports
from its distributors dated not more than 7 days prior to the Closing setting
forth the total inventory level with such distributors as of such date. Such
reports will include data that accounts for at least 75% of the Channel
Inventory.
6. CONFIDENTIAL NATURE OF INFORMATION
6.1 CONFIDENTIALITY AGREEMENT
Buyer agrees that the Confidentiality Agreement shall apply to (a) all
documents, materials and other information that it shall have obtained regarding
Seller or its Affiliates during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before or
after the date of this Agreement), any investigations made in connection
therewith and the preparation of this Agreement and related documents and (b)
all analyses, reports, compilations, evaluations and other materials prepared by
Buyer or its counsel, accountants or financial advisors that contain or
otherwise reflect or are based upon, in whole or in part, any of the provided
information; provided, however, that subject to Sections 6.2(a), the
Confidentiality Agreement shall terminate as of the Closing and shall be of no
further force and effect thereafter with respect to information of Seller or a
Subsidiary the ownership of which is transferred to Buyer or a Buyer Designee.
6.2 SELLER'S PROPRIETARY INFORMATION
(a) Except as provided in Section 6.2(b), after the Closing and for a
period of five (5) years following the Closing Date, Buyer agrees that it will
keep confidential all of Seller's and its Affiliates' Proprietary Information
that is received from, or made available by, Seller in the course of the
transactions contemplated hereby, including, for purposes of this Section 6.2,
information about the ORiNOCO Business's business plans and strategies,
marketing ideas and concepts, especially with respect to unannounced products
and services, present and future product plans, pricing, volume estimates,
financial data, product enhancement information, business plans, marketing
plans, sales strategies, customer information (including customers' applications
and environments), market testing information, development plans,
specifications, customer requirements, configurations, designs, plans, drawings,
apparatus, sketches, software, hardware, data, prototypes, connecting
requirements or other technical and business information, except for such
Proprietary Information the ownership of which is transferred to Buyer or a
Buyer Designee as part of the Purchased Assets.
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(b) Notwithstanding the foregoing, such Proprietary Information shall
not be deemed confidential and Buyer shall have no obligation with respect to
any such Proprietary Information that:
(i) at the time of disclosure was already known to Buyer other
than as a result of this transaction, free of restriction as evidenced by
documentation in Buyer's possession;
(ii) is or becomes publicly known through publication, inspection
of a product, or otherwise, and through no negligence or other wrongful act of
Buyer;
(iii) is received by Buyer from a Third Party without similar
restriction and without breach of any agreement;
(iv) to the extent it is independently developed by Buyer; or
(v) is, subject to Section 6.2(c), required to be disclosed under
applicable Law or judicial process.
(c) If Buyer (or any of its Affiliates) is requested or required (by
oral question, interrogatory, request for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Proprietary
Information, Buyer will promptly notify Seller of such request or requirement
and will cooperate with Seller such that Seller may seek an appropriate
protective order or other appropriate remedy. If, in the absence of a protective
order or the receipt of a waiver hereunder, Buyer (or any of its Affiliates) is
in the opinion of Buyer's counsel compelled to disclose the Proprietary
Information or else stand liable for contempt or suffer other censure or
penalty, Buyer (or its Affiliate) may disclose only so much of the Proprietary
Information to the party compelling disclosure as is required by Law. Buyer will
exercise its (and will cause its Affiliates to exercise their) reasonable
commercial efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded to such Proprietary Information.
6.3 BUYER'S PROPRIETARY INFORMATION
(a) Except as provided in Section 6.3(b), after the Closing Date and for
a period of five (5) years thereafter, Seller agrees that it will keep
confidential all of Seller's and its Affiliates' Proprietary Information the
ownership of which is transferred to Buyer or a Buyer Designee as part of the
Purchased Assets, including, for purposes of this Section 6.3, information about
the ORiNOCO Business's business plans and strategies, marketing ideas and
concepts, especially with respect to unannounced products and services, present
and future product plans, pricing, volume estimates, financial data, product
enhancement information, business plans, marketing plans, sales strategies,
customer information (including customers' applications and environments),
market testing information, development plans, specifications, customer
requirements, configurations, designs, plans,
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drawings, apparatus, sketches, software, hardware, data, prototypes, connecting
requirements or other technical and business information.
(b) Notwithstanding the foregoing, such Proprietary Information
regarding the ORiNOCO Business shall not be deemed confidential and Seller shall
have no obligation with respect to any such Proprietary Information that:
(i) is or becomes publicly known through publication, inspection
of a product, or otherwise, and through no negligence or other wrongful act of
Seller;
(ii) is received by Seller from a Third Party without similar
restriction and without breach of any agreement; or
(iii) is, subject to Section 6.3(c), required to be disclosed
under applicable Law or judicial process.
(c) If Seller (or any of its Affiliates) is requested or required (by
oral question, interrogatory, request for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Proprietary
Information regarding the ORiNOCO Business, Seller will promptly notify Buyer of
such request or requirement and will cooperate with Buyer such that Buyer may
seek an appropriate protective order or other appropriate remedy. If, in the
absence of a protective order or the receipt of a waiver hereunder, Seller (or
any of its Affiliates) is in the opinion of Seller's counsel compelled to
disclose the Proprietary Information or else stand liable for contempt or suffer
other censure or penalty, Seller (or its Affiliate) may disclose only so much of
the Proprietary Information to the party compelling disclosure as is required by
Law. Seller will exercise its (and will cause its Affiliates to exercise their)
reasonable commercial efforts to obtain a protective order or other reliable
assurance that confidential treatment will be accorded to such Proprietary
Information.
6.4 CONFIDENTIAL NATURE OF AGREEMENTS
Except to the extent that disclosure thereof is required under
accounting, stock exchange or federal securities or labor relations Laws
disclosure obligations, both parties agree that the terms and conditions of this
Agreement, the Collateral Agreements and all attachments and amendments hereto
and thereto shall be considered Proprietary Information protected under this
Article 6. Notwithstanding anything in this Article 6 to the contrary, in the
event that any such Proprietary Information is also subject to a limitation on
disclosure or use contained in another written agreement between Buyer and
Seller or either of their respective Affiliates that is more restrictive than
the limitation contained in this Article 6, then the limitation in such
agreement shall supersede this Article 6.
7. CLOSING
At the Closing, the following transactions shall take place:
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7.1 DELIVERIES BY SELLER OR THE SUBSIDIARIES
On the Closing Date, Seller or the applicable Subsidiary shall execute
and deliver, or cause to be executed and delivered, to Buyer or a Buyer Designee
the following:
(a) the Collateral Agreements;
(b) all consents, waivers or approvals theretofore obtained by Seller
with respect to the sale of the Purchased Assets or the consummation of the
transactions contemplated by this Agreement or the Collateral Agreements;
(c) a certificate of an appropriate officer of Seller, dated the Closing
Date, certifying to the best of his or her knowledge the fulfillment of the
conditions set forth in Sections 8.2(a) and (b) and a certificate of an
Assistant Secretary of Seller, dated the Closing Date, in customary form; and
(d) all such other bills of sale, assignments and other instruments of
assignment, transfer or conveyance as Buyer or a Buyer Designee may reasonably
request or as may be otherwise necessary to evidence and effect the sale,
transfer, assignment, conveyance and delivery of the Purchased Assets to Buyer
or a Buyer Designee and to put Buyer or a Buyer Designee in actual possession or
control of the Purchased Assets.
7.2 DELIVERIES BY BUYER OR A BUYER DESIGNEE
On the Closing Date, Buyer or a Buyer Designee shall execute and
deliver, or cause to be executed and delivered, to Seller or a Subsidiary the
following:
(a) the Purchase Price;
(b) the Collateral Agreements;
(c) a certificate of an appropriate officer of Buyer, dated the Closing
Date, certifying to the best of his or her knowledge the fulfillment of the
conditions set forth in Sections 8.3(a) and (b), and a certificate of an
Assistant Secretary of Buyer, dated the Closing Date, in customary form; and
(d) all such other documents and instruments as Seller may reasonably
request or as may be otherwise necessary or desirable to evidence and effect the
assumption by Buyer or a Buyer Designee of the Assumed Liabilities.
7.3 CLOSING DATE
The Closing shall take place at the offices of Agere, 000 Xxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx, at 10:00 a.m. local time within three (3)
Business Days following the date on which the last of the conditions specified
in Article 8 to be satisfied or waived
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has been satisfied or waived, or at such other place or time or on such other
date as Seller and Buyer may agree upon in writing (such date and time being
referred to herein as the "Closing Date"). Notwithstanding the previous
sentence, in the event that the conditions specified in Article 8 to be
satisfied or waived have been satisfied or waived except for the accuracy of
Buyer's representations and warranties in Section 4.6 as of such date, then the
Closing Date may be postponed by Buyer until the date on which all conditions,
including the condition specified in Section 8.3(a) with respect to Section 4.6,
are satisfied by Buyer and Seller, but in any event not later than fifteen (15)
business days following the date on which the Closing Date would otherwise have
occurred.
7.4 CONTEMPORANEOUS EFFECTIVENESS
All acts and deliveries prescribed by this Article 7, regardless of
chronological sequence, will be deemed to occur contemporaneously and
simultaneously on the occurrence of the last act or delivery, and none of such
acts or deliveries will be effective until the last of the same has occurred.
8. CONDITIONS PRECEDENT TO CLOSING
8.1 GENERAL CONDITIONS
The respective obligations of Buyer and Seller to effect the Closing of
the transactions contemplated hereby are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions:
(a) Legal Proceedings. No Governmental Body shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, non-appealable
judgment, decree, injunction or other order which is in effect on the Closing
Date and which prohibits, restricts or delays consummation of the transactions
contemplated by this Agreement or the Collateral Agreements and there shall be
no pending lawsuit, claim or legal action relating to the transactions
contemplated by this Agreement or any of the Collateral Agreements which could
reasonably be expected to have a Seller Material Adverse Effect.
(b) Antitrust Laws. Any applicable waiting period under the HSR Act or
applicable foreign antitrust law relating to the transactions contemplated by
this Agreement or the Collateral Agreements shall have expired or been
terminated.
8.2 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of Buyer to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any of which may be waived in writing by
Buyer:
(a) Representations and Warranties of Seller True and Correct at
Closing. The representations and warranties of Seller contained in this
Agreement or in any schedule,
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certificate or document delivered pursuant to the provisions hereof or in
connection with the transactions contemplated hereby shall be true and correct
at and as of the Closing Date, as though such representations and warranties
were made at and as of the Closing Date, except (i) as affected by the
transactions contemplated hereby and (ii) to the extent that such
representations and warranties are made as of a specified date, in which case
such representations and warranties shall be true and correct as of the
specified date; provided, that this condition shall be deemed satisfied unless
the failure of any such representations and warranties to be true and correct,
individually or in the aggregate, at and as of the Closing Date has not had and
could not reasonably be expected to have a Seller Material Adverse Effect.
(b) Performance by Seller. Seller or the applicable Subsidiary shall
have delivered all of the documents required under Section 7.1 and shall have
otherwise performed in all material respects all obligations and agreements and
complied in all material respects with all covenants required by this Agreement
to be performed or complied with by it prior to or at the Closing, including
executing the Collateral Agreements.
(c) Seller Material Adverse Effect. There shall not have occurred a
Seller Material Adverse Effect from the date hereof to the Closing Date.
(d) Required Consents. Seller shall have obtained all Required Consents
for Closing designated by Buyer and set forth in Schedule 8.2(d).
8.3 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligations of Seller to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any of which may be waived in writing by
Seller:
(a) Representations and Warranties of Buyer True and Correct at Closing.
The representations and warranties of Buyer contained in this Agreement or in
any schedule, certificate or document delivered pursuant to the provisions
hereof or in connection with the transactions contemplated hereby shall be true
and correct at and as of the Closing Date as though such representations and
warranties were made at and as of the Closing Date, except to the extent that
such representations and warranties are made as of a specified date, in which
case such representations and warranties shall be true and correct as of the
specified date; provided, that this condition shall be deemed satisfied unless
the failure of any such representations and warranties to be true and correct,
individually or in the aggregate, at and as of the Closing Date has not had and
could not reasonably be expected to have a material adverse effect on Buyer's
business taken as a whole or on its or any Buyer Designee's ability to
consummate the transactions under this Agreement and the Collateral Agreements.
(b) Performance by Buyer. Buyer or the applicable Buyer Designee shall
have delivered all of the documents required under Section 7.2 and shall have
otherwise performed in all material respects all obligations and agreements and
complied in all
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material respects with all covenants required by this Agreement to be performed
or complied with by it prior to or at the Closing, including executing the
Collateral Agreements.
9. STATUS OF AGREEMENTS
The rights and obligations of Buyer and Seller under this Agreement
shall be subject to the following terms and conditions:
9.1 EFFECT OF BREACH
In the event of a material breach of any representation, certification
or warranty, or agreement or covenant of Seller under this Agreement that is
discovered by the Buyer prior to Closing and that cannot be or is not cured by
Seller upon prior notice and the passage of a reasonable period of time, the
Buyer may elect not to proceed with the Closing hereunder, which, except with
respect to the breach of any representation or warranty included in the ultimate
sentence of Section 3.16(a) (the "Channel Warranty"), shall be the Buyer's sole
remedy for such breach.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of Buyer and Seller contained in this
Agreement shall survive the Closing solely for purposes of this Article 9 and
such representations and warranties shall terminate at the close of business on
the date that is twelve (12) months after the Closing Date; provided, however,
that representations and warranties relating to Tax and ERISA matters shall
survive the Closing and shall terminate at the close of business on the 120th
day following the expiration of the applicable statute of limitations with
respect to the Tax or ERISA liabilities in question (giving effect to any
waiver, mitigation or extension thereof) and the representation and warranty in
Section 3.3 and Section 3.5(a) with respect to title matters shall survive
indefinitely. Neither Seller nor Buyer shall have any liability whatsoever with
respect to any such representations or warranties after the applicable
expiration date.
9.3 GENERAL AGREEMENT TO INDEMNIFY
(a) Seller and Buyer shall indemnify, defend and hold harmless the other
party hereto, and Affiliates thereof, and any director, officer or employee of
such other party or Affiliates thereof (each an "Indemnified Party") from and
against any and all claims, actions, suits, proceedings, liabilities,
obligations, Taxes, losses, and damages, amounts paid in settlement, interest,
costs and expenses (including reasonable attorney's fees, court costs and other
out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing) (collectively, "Losses") incurred or suffered by any Indemnified
Party to the extent that the Losses arise by reason of, or result from (i)
subject to Section 9.2 and other than with respect to any breach by Seller of
the Channel Warranty, any breach of any representation or warranty of such party
contained in this Agreement to have been true when made and as of the Closing
Date, or (ii) (A) any breach by Seller of the Channel Warranty or (B) the breach
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by such party of any covenant or agreement of such party contained in this
Agreement to the extent not waived by the other party.
(b) Seller further agrees to indemnify and hold harmless Buyer and any
Buyer Indemnified Party from and against any Losses incurred by Buyer or any
Buyer Indemnified Party arising out of, resulting from, or relating to: (i) the
Excluded Liabilities; (ii) Buyer's waiver of any applicable Bulk Sales Laws;
(iii) any claim, demand or liability for Taxes accruing in connection with the
ORiNOCO Business or the Purchased Assets prior to and including the Closing Date
and (iii) any liability of any class action, product liability or other action,
suit, proceeding or claim, whether direct or indirect, known or unknown,
absolute or contingent, relating to the ORiNOCO Business or the Purchased Assets
arising out of actions or omissions by Seller prior to or on the Closing Date.
(c) Buyer further agrees to indemnify and hold harmless Seller and any
Seller Indemnified Party from and against any Losses incurred by Seller or any
Seller Indemnified Party arising out of, resulting from, or relating to: (i) any
failure of Buyer to discharge any of the Assumed Liabilities; and (ii) any
medical, health or disability claims of any Transferred Employee or such
Transferred Employee's employment with Buyer or a Buyer Designee accruing after
the Closing Date; and (iii) any claim, demand or liability for Taxes accruing in
connection with the ORiNOCO Business or the Purchased Assets following the
Closing Date.
(d) Amounts payable in respect of the parties' indemnification
obligations shall be treated as an adjustment to the Purchase Price. Buyer and
Seller agree to cooperate in the preparation of a supplemental Asset Acquisition
Statement as required by Section 5.3(b) and Treasury Reg. Section 1.1060-1T(e)
as a result of any adjustment to the Purchase Price pursuant to the preceding
sentence. Whether or not the Indemnifying Party (as defined below) chooses to
defend or prosecute any Third-Party Claim (as defined in Section 9.4(a)), both
parties hereto shall cooperate in the defense or prosecution thereof and shall
furnish such records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials and appeals, as may be reasonably
requested in connection therewith or as provided in Section 5.1.
(e) The amount of the Indemnifying Party's liability under this
Agreement shall be net of any applicable insurance proceeds actually received
by, and other savings, including Tax savings, that actually reduce the overall
impact of the Losses upon, the Indemnified Party. In computing the amount of any
such Tax savings, the Indemnified Party shall be deemed to recognize all other
items of income, gain, loss, deduction or credit before recognizing any item
arising from the receipt of any indemnity payment hereunder or the incurrence of
any payment of any indemnified Loss. The indemnification obligations of each
party hereto under this Article 9 shall inure to the benefit of the directors,
officers and Affiliates of the other party hereto on the same terms as are
applicable to such other party.
(f) The Indemnifying Party's liability for all claims made under Section
9.3(a)(i) shall be subject to the following limitations: (i) the Indemnifying
Party shall have no
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liability for such claims until the aggregate amount of the Losses incurred
shall exceed $1,500,000, in which case the Indemnifying Party shall be liable
for the Losses from the first dollar, and (ii) the Indemnifying Party's
aggregate liability for all such claims shall not exceed $32,500,000.
(g) The indemnification provided in this Article 9 shall be the sole and
exclusive remedy after the Closing Date for damages available to the parties to
this Agreement for breach of any of the terms, conditions, representations or
warranties contained herein or any right, claim or action arising from the
transactions contemplated by this Agreement; provided, however, this exclusive
remedy for damages does not preclude a party from bringing an action for (i)
specific performance or other equitable remedy to require a party to perform its
obligations under this Agreement or any Collateral Agreement or (ii) seeking any
remedy available at Law or in equity for fraud or intentional misrepresentation.
(h) Notwithstanding anything contained in this Agreement to the
contrary, no party shall be liable to the other party for any indirect, special,
punitive, exemplary or consequential loss or damage (including any loss of
revenue or profit) arising out of this Agreement, provided, however, that the
foregoing shall not be construed to preclude recovery by the Indemnified Party
in respect of Losses directly incurred from Third Party Claims. Both parties
shall use reasonable commercial efforts to mitigate their damages.
(i) The rights to indemnification under this Section 9.3 shall not be
subject to set-off for any claim by the Indemnifying Party against any
Indemnified Party, whether or not arising from the same event giving rise to
such Indemnified Party's claim for indemnification.
(j) In furtherance and not in limitation of Section 9.3(g), from and
after the Closing through the survival thereof, in the event Buyer concludes
that Seller shall have breached the Channel Warranty, Buyer and Seller shall,
following Buyer's notice thereof pursuant to Section 9.4(c), meet in good faith
and use reasonable commercial efforts to reach agreement as to the amount of
Loss suffered by Buyer as a result of any such breach.
9.4 GENERAL PROCEDURES FOR INDEMNIFICATION
(a) The Indemnified Party seeking indemnification under this Agreement
shall promptly notify the party against whom indemnification is sought (the
"Indemnifying Party") of the assertion of any claim, or the commencement of any
action, suit or proceeding by any Third Party, in respect of which indemnity may
be sought hereunder and shall give the Indemnifying Party such information with
respect thereto as the Indemnifying Party may reasonably request, but failure to
give such notice shall not relieve the Indemnifying Party of any liability
hereunder (unless and to the extent that the Indemnifying Party has suffered
material prejudice by such failure). If the Indemnifying party acknowledges in
writing its obligation to indemnify the Indemnified Party, then the Indemnifying
Party shall have the right, but not the obligation, exercisable by written
notice to the Indemnified Party within twenty (20) days of receipt of notice
from the Indemnified Party of the commencement of or
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assertion of any claim, action, suit or proceeding by a Third Party in respect
of which indemnity may be sought hereunder (a "Third-Party Claim"), to assume
the defense and control the settlement of such Third-Party Claim that (i)
involves (and continues to involve) solely money damages, or (ii) involves (and
continues to involve) claims for both money damages and equitable relief against
the Indemnified Party that cannot be severed, where the claims for money damages
are the primary claims asserted by the Third Party and the claims for equitable
relief are incidental to the claims for money damages. If the Indemnifying Party
has not acknowledged in writing its obligation to indemnify the Indemnified
Party, then the Indemnified Party shall have the right to assume and control the
defense or the settlement of such Third-Party Claim. In the event that any party
exercises its right to undertake any such defense against any Third Party Claim
as provided above, then the other parties shall cooperate in such defense and
make available at such cooperating party expense all witnesses, pertinent
records, materials and information in such party's possession and control
relating thereto as is reasonably required to by the party conducting the
defense.
(b) The Indemnifying Party or the Indemnified Party, as the case may be,
shall have the right to participate in (but not control), at its own expense,
the defense of any Third-Party Claim that the other is defending, as provided in
this Agreement.
(c) The Indemnifying Party, if it has assumed the defense of any
Third-Party Claim as provided in this Agreement, shall not consent to a
settlement of, or the entry of any judgment arising from, any such Third-Party
Claim without the Indemnified Party's prior written consent (which consent shall
not be unreasonably withheld, conditioned or delayed) unless such settlement or
judgment relates solely to monetary damages. The Indemnifying Party shall not,
without the Indemnified Party's prior written consent, enter into any compromise
or settlement that (i) commits the Indemnified Party to take, or to forbear to
take, any action, or (ii) does not provide for a complete release by such Third
Party of the Indemnified Party. The Indemnified Party shall have the sole and
exclusive right to settle any Third-Party Claim, on such terms and conditions as
it deems reasonably appropriate, to the extent such Third-Party Claim involves
equitable or other non-monetary relief against the Indemnified Party, and shall
have the right to settle any Third-Party Claim involving money damages for which
the Indemnifying Party has not assumed the defense pursuant to this Section 9.4
with the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
(d) In the event an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written notice of
such claim to the Indemnifying Party; but failure to give such notice shall not
relieve the Indemnifying Party of any liability hereunder (unless and to the
extent that the Indemnifying Party has suffered prejudice by such failure). Such
notice shall specify the basis for such claim, the amount thereof, if known, and
the method of computation thereof, all with reasonable particularity and shall
contain a reference to the provisions of this Agreement in respect of which such
a claim shall have been incurred. Such notice shall be given promptly after the
Indemnified Party becomes aware of the basis for each such a claim. The
Indemnifying Party shall, within thirty (30) days after receipt of such notice
of an indemnified Loss, and subject to the
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limitations set forth in Section 9.3, (i) pay or cause to be paid to the
Indemnified Party the amount of such Loss specified in such notice which the
Indemnifying Party does not contest (which payment shall not adversely affect
any remaining amount of such Loss to which the Indemnified Party may otherwise
be entitled to receive pursuant to Section 9.3), or (ii) notify the Indemnified
Party if it wishes to contest the existence or amount of part or all of such a
Loss by stating with particularity the basis upon which it contests the
existence or amount thereof.
10. MISCELLANEOUS PROVISIONS
10.1 NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given upon receipt if (i) mailed by certified
or registered mail, return receipt requested, (ii) sent by Federal Express or
other express carrier, fee prepaid, (iii) sent via facsimile with receipt
confirmed, or (iv) delivered personally, addressed as follows or to such other
address or addresses of which the respective party shall have notified the
other.
(a) If to Seller, to: Agere Systems Inc.
Attn: Executive Vice President, Client Systems
000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
With a copy to: Agere Systems Inc.
Attn: Vice President - Law
000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
(b) If to Buyer, to: Proxim Corporation
Attn: Chief Financial Officer
000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
With a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
Attn: Xxxxxx Xxxxxxx
00 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Los Angeles, CA 91608
United States of America
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Facsimile: (000) 000-0000
10.2 EXPENSES
Except as otherwise provided in this Agreement, each party to this
Agreement will bear all the fees, costs and expenses that are incurred by it in
connection with the transactions contemplated hereby, whether or not such
transactions are consummated.
10.3 ENTIRE AGREEMENT; MODIFICATION
The agreement of the parties, which consists of this Agreement, the
Schedules and Exhibits hereto and the documents referred to herein, sets forth
the entire agreement and understanding between the parties and supersedes any
prior agreement or understanding, written or oral, relating to the subject
matter of this Agreement. No amendment, supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby, and in accordance with Sections 11.3 and 11.4.
10.4 ASSIGNMENT; BINDING EFFECT; SEVERABILITY
This Agreement may not be assigned by any party hereto without the other
party's written consent; provided that, Buyer may transfer or assign in whole or
in part to one or more Buyer Designee its the right to purchase all or a portion
of the Purchased Assets, but no such transfer or assignment will relieve Buyer
of its obligations hereunder. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the successors, legal representatives and
permitted assigns of each party hereto. The provisions of this Agreement are
severable, and in the event that any one or more provisions are deemed illegal
or unenforceable the remaining provisions shall remain in full force and effect
unless the deletion of such provision shall cause this Agreement to become
materially adverse to either party, in which event the parties shall use
reasonable commercial efforts to arrive at an accommodation that best preserves
for the parties the benefits and obligations of the offending provision.
10.5 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS BE
PERFORMED ENTIRELY WITHIN THAT STATE, IRRESPECTIVE OF THE CHOICE OF LAWS
PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING MATTERS OF
VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND REMEDIES.
10.6 CONSENT TO JURISDICTION
Buyer irrevocably submits, and Seller irrevocably submits, and agrees to
cause the Subsidiaries to irrevocably submit to, the exclusive jurisdiction of
(i) the Supreme Court of
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the State of New York, New York County, and (ii) the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby (and each agrees that no such action, suit or proceeding
relating to this Agreement or any transaction contemplated hereby shall be
brought by it or any of its Affiliates except in such courts). Buyer further
agrees, and Seller further agrees, that service of any process, summons, notice
or document by U.S. registered mail to such person's respective address set
forth above shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding sentence. Buyer
irrevocably and unconditionally waives (and agrees not to plead or claim), and
Seller irrevocably and unconditionally waives (and agrees not to plead or
claim), and agrees to cause the Subsidiaries to irrevocably and unconditionally
waive (and not to plead or claim), any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of
New York or that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
10.7 WAIVER OF JURY TRIAL
Each party hereby waives, and agrees to cause each of its Affiliates to
waive, to the fullest extent permitted by applicable Law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement. Each party (i) certifies
that no representative of any other party has represented, expressly or
otherwise, that such other party would not, in the event of litigation, seek to
enforce the foregoing waiver and (ii) acknowledges that it and the other parties
hereto have been induced to enter into this Agreement by, among other things,
the mutual waivers and certifications in this Section 10.7.
10.8 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10.9 PUBLIC ANNOUNCEMENT
Prior to the signing of this Agreement, Seller and Buyer shall prepare a
mutually agreeable release announcing the transaction contemplated hereby.
Except for such press release, neither Seller nor Buyer shall, without the
approval of the other, make any press release or other announcement concerning
the existence of this Agreement or the terms of the transactions contemplated by
this Agreement, except as and to the extent that any such party shall be so
obligated by Law, in which case the other party shall be advised and the parties
shall use their reasonable commercial efforts to cause a mutually agreeable
release or announcement to be issued; provided, however, that the foregoing
shall not preclude
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communications or disclosures necessary to comply with accounting, stock
exchange or federal securities or labor relations Law disclosure obligations.
10.10 NO THIRD-PARTY BENEFICIARIES
Nothing in this Agreement, express or implied, is intended to or shall
(a) confer on any Person other than the parties hereto and their respective
successors or assigns any rights (including Third-Party beneficiary rights),
remedies, obligations or liabilities under or by reason of this Agreement or (b)
constitute the parties hereto as partners or as participants in a joint venture.
This Agreement shall not provide Third Parties with any remedy, claim,
liability, reimbursement, cause of action or other right in excess of those
existing without reference to the terms of this Agreement. Nothing in this
Agreement shall be construed as giving to any Business Employee, or any other
individual, any right or entitlement under any Benefit Plan, policy or procedure
maintained by Seller, except as expressly provided in such Benefit Plan, policy
or procedure. No Third Party shall have any rights under Section 502, 503 or 504
of ERISA or any regulations thereunder because of this Agreement that would not
otherwise exist without reference to this Agreement. No Third Party shall have
any right, independent of any right that exist irrespective of this Agreement,
under or granted by this Agreement, to bring any suit at law or equity for any
matter governed by or subject to the provisions of this Agreement.
11. TERMINATION AND WAIVER
11.1 TERMINATION
This Agreement may be terminated at any time prior to the Closing Date
by:
(a) Mutual Consent. The mutual written consent of Buyer and Seller;
(b) Failure of Buyer Condition. Buyer upon written notice to Seller if
any of the conditions to the Closing set forth in Section 8.2 shall have become
incapable of fulfillment and shall not have been waived in writing by Buyer;
(c) Failure of Seller Condition. Seller upon written notice to Buyer if
any of the conditions to the Closing set forth in Section 8.3 shall have become
incapable of fulfillment and shall not have been waived in writing by Seller;
(d) Court or Administrative Order. Buyer or Seller if there shall be in
effect a final, non-appealable order of a court or government administrative
agency of competent jurisdiction prohibiting the consummation of the
transactions contemplated hereby;
(e) Delay. Buyer or Seller if the Closing shall not have occurred by
December 31, 2002;
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provided, however, that the party seeking termination pursuant to clause (b),
(c) or (e) is not then in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
11.2 EFFECT OF TERMINATION
In the event of the termination of this Agreement in accordance with
Section 11.1, this Agreement shall become void and have no effect, without any
liability on the part of any party or its directors, officers or stockholders,
except for the obligations of the parties hereto as provided in Article 6
relating to the obligations of Buyer and Seller to keep confidential certain
information, Section 10.2 relating to certain expenses, Section 10.9 relating to
publicity and this Section 11.2. Nothing in this Section 11.2 shall be deemed to
release either party from any liability for any willful and material breach of
any obligation hereunder.
11.3 WAIVER OR AMENDMENT OF AGREEMENT
Any term or condition hereof may be waived and at any time prior to the
Closing Date by the party hereto which is entitled to the benefits thereof by
action taken by its Board of Directors or its duly authorized officer or
employee, whether before or after the action of such party; provided, however,
that such action shall be evidenced by a written instrument duly executed on
behalf of such party by its duly authorized officer or employee. The failure of
either party to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision nor shall it in any way affect the
validity of this Agreement or the right of such party thereafter to enforce each
and every such provision. No waiver of any breach of this Agreement shall be
held to constitute a waiver of any other or subsequent breach.
11.4 AMENDMENT OF AGREEMENT
This Agreement may be amended with respect to any provision contained
herein at any time prior to the Closing Date by action of the parties hereto
taken by their Boards of Directors or by their duly authorized officers or
employees, whether before or after such party's action; provided, however, that
such amendment shall be evidenced by a written instrument duly executed on
behalf of each party by its duly authorized officer or employee.
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IN WITNESS WHEREOF, each party has caused this Agreement to be duly
executed on its behalf by its duly authorized officer as of the date first
written above.
AGERE SYSTEMS INC.
By: /s/ XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: EVP, CSG, Agent
PROXIM CORPORATION
By: /s/ XXXXXXXXX XXXXX
------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: CEO
EXHIBIT B-1
================================================================================
INTELLECTUAL PROPERTY AGREEMENT
BY AND BETWEEN
AGERE SYSTEMS INC.
AND
PROXIM CORPORATION
================================================================================
TABLE OF CONTENTS
Article I Definitions
Article II Assignment Of Software
Article III Software Licenses
Article IV Assignment Of Information
Article V Licenses To Information
Article VI Assignment Of Trademarks
Article VII Export Control
Article VIII Term And Termination
Article IX Assignability
Article X Licenses To Related Companies And Improvements
Article XI Rights and Obligations
Article XII Warranties And Covenants
Article XIII General Provisions
Article XIV Notices
Appendix A Definitions Appendix
Appendix B Assigned Software
Appendix C Licensed Software
Appendix D Assigned Technical Information
Appendix E Licensed Technical Information
Appendix F Trademark Assignment
Schedule A -- U.S. Registrations
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INTELLECTUAL PROPERTY AGREEMENT
THIS INTELLECTUAL PROPERTY AGREEMENT (this "Agreement") is made by and
between AGERE SYSTEMS INC., a Delaware corporation ("Agere"or "Seller") and
PROXIM CORPORATION, a Delaware corporation ("Buyer"). Seller and Buyer are
sometimes referred to herein individually as a "Party" and collectively as the
"Parties".
RECITALS
A. WHEREAS, this Agreement is provided as Exhibit B-1 to a certain Asset
Purchase Agreement dated as of ______, 2002 (the "Purchase Agreement") entered
into by and between Agere and Buyer pursuant to which Agere is selling and Buyer
is acquiring certain Purchased Assets, as that term is defined in the Purchase
Agreement. This Agreement is executed upon the signing by all Parties and shall
become effective concurrent with and on the Closing Date of the Purchase
Agreement (the "Effective Date");
B. WHEREAS, this Agreement is intended by the parties to address, among
other things, the Intellectual Property rights and Information either included
in the Purchased Assets or licensed to Buyer; and
C. WHEREAS, in connection with the sale and purchase of the ORiNOCO
Business, Seller agrees to assign certain intellectual property rights to Buyer
and to license certain intellectual property rights to Buyer, in each case in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound thereby, the Parties agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Unless otherwise defined in Appendix A attached hereto, as used in
this Agreement any term in initial capital letters shall have the meaning
ascribed thereto in the Purchase Agreement.
ARTICLE II
ASSIGNMENT OF SOFTWARE
2.01 Seller hereby transfers and assigns, subject to Section 2.02, to
Buyer all of its worldwide right, title and interest in the Assigned Software,
including all copyrights and
other intellectual property rights therein, as well as the right to bring
actions, at law or in equity for the infringement or other impairment thereof
prior to the Closing Date, including the right to receive all proceeds or
damages therefrom. Such transfer does not include a transfer of, or license
under, any patents; any such license under any such patent being specifically
set forth in Exhibit B-2 to the Asset Purchase Agreement. The transfer of the
Assigned Software shall be subject to all prior written agreements (or
replacement agreements thereof) between Seller, its predecessors (including AT&T
Corp. and its Subsidiaries and Lucent Technologies Inc. and its Subsidiaries) or
its Related Companies, and one or more third parties that have an effective date
prior to the Effective Date of this Agreement, none of which will have a
material adverse affect on Buyer's use of the Assigned Software in operation of
the ORiNOCO Business as it existed as of the Closing Date.
2.02 Buyer grants to Seller, in consideration for the transfer and
assignment of the Assigned Software by Seller to Buyer pursuant to Section 2.01,
a personal, nonexclusive, non-transferable (except as provided in Article IX),
irrevocable (subject to Article VIII), worldwide, royalty-free license to use,
copy and distribute the Assigned Software, and create, use, copy and distribute
Derivative Works from the Assigned Software with respect to any products or
services of the businesses in which Seller or any of its Related Companies is
now or hereafter engaged for any Permitted Use.
2.03 Seller agrees to deliver to Buyer copies of all Code of whatever
kind in whatever medium that embody the Assigned Software within 30 days of
Closing. To Seller's knowledge, all of the Assigned Software will, at closing,
be included in the Principal Equipment transferred to the Buyer or otherwise in
the possession of the Transferred Employees. However, Seller agrees to take all
steps reasonably requested by Buyer in connection with delivering to Buyer any
missing parts of the Assigned Software to the extent such Assigned Software
exists within Seller. Buyer agrees that the previous sentence provides Buyer's
sole remedy for Seller's failure to deliver the Assigned Software.
ARTICLE III
SOFTWARE LICENSES
3.01 Seller hereby grants to Buyer a fully paid-up, royalty-free
worldwide, irrevocable (subject to Article VIII), non-transferable (except as
provided in Article IX) and nonexclusive license to use, copy, sublicense and
distribute the Licensed Software, and create, use, copy, sublicense and
distribute Derivative Works from the Licensed Software in connection with the
conduct or operation of the Wireless Networking Business, under any and all
copyright, trade secret and other intellectual property rights (other than
patent rights which are specifically granted in Exhibit B-2 to the Asset
Purchase Agreement) in the Licensed Software owned by Seller or its Related
Companies or in which Seller or its Related Companies have a right to license as
of the Effective Date including, without limitation, the right (i) to reproduce
the Code of and Documentation for such Licensed
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Software; (ii) to sell, lease, sublicense (but only to the extent that Seller
has a right to authorize Buyer to grant such a sublicense and provided that
Seller shall not be obligated to pay any consideration for such sublicense
authorization) or otherwise transfer copies of the Licensed Software and
Derivative Works therefrom, in whole or in part for use within the scope of the
Wireless Networking Business; and (iii) to combine the Licensed Software and
Derivative Works therefrom with other software or hardware within the scope of
the Wireless Networking Business.
3.02 Seller agrees to deliver to Buyer, within 30 days of Closing,
complete and useable copies of the Licensed Software and any related
documentation. To Seller's knowledge, all of the Licensed Software will, at
Closing, be included in the Principal Equipment transferred to Buyer or
otherwise in the possession of the Transferred Employees. Notwithstanding the
foregoing, Seller agrees to take all steps reasonably requested by Buyer in
connection with promptly delivering to Buyer any copies of any components of the
Licensed Software or documentation not delivered to Buyer at Closing. Buyer
agrees that the previous sentence provides Buyer's sole remedy for Seller's
failure to deliver the Licensed Software.
3.03 The Parties recognize that the best or only available copy of
certain Assigned Software and Licensed Software may reside, after the Closing
Date, within the ORiNOCO Business or in the possession of the ORiNOCO Business,
and that Seller may require certain access to or copies of the Assigned Software
and Licensed Software for purposes consistent with this Agreement, which,
because of inadvertence or oversight, a copy was not retained by or made
available to Seller prior to the Closing Date. To that end, Buyer agrees, upon
receiving a written request from Seller, to provide, within a commercially
reasonable amount of time after receipt of Seller's written request, copies of
any portion of the Assigned Software and Licensed Software necessary for Seller
or one of its Related Companies to exercise its rights in accordance with this
Agreement. Any reasonable costs associated with the assembling, copying and
delivering of such requested Assigned Software and Licensed Software shall be
borne by Seller.
ARTICLE IV
ASSIGNMENT OF INFORMATION
4.01 Seller hereby transfers and assigns, subject to Section 4.02, to
Buyer all of its worldwide right, title and interest in and to the Assigned
Technical Information including all copyright, trade secret and intellectual
property rights therein, as well as the right to bring actions at law or in
equity for the infringement or other impairment thereof prior to the Closing,
including the right to receive all proceeds or damages therefrom. Such transfer
does not include a transfer of, or license under, any patents; any such license
under any such patent being specifically set forth in Exhibit B-2 to the Asset
Purchase Agreement. The transfer of such Assigned Technical Information shall be
subject to all prior written agreements (or replacement agreements thereof)
between Seller, its predecessors (including AT&T Corp. and its Subsidiaries and
Lucent Technologies Inc.
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and its Subsidiaries) or its Related Companies, and one or more third parties
that have an effective date prior to the Effective Date of this Agreement, none
of which will have a material adverse affect on Buyer's use of the Assigned
Technical Information in operation of the ORiNOCO Business as it existed as of
the Closing Date.
4.02 In consideration for the transfer and assignment of the Assigned
Technical Information by Seller to Buyer pursuant to Section 4.01, Buyer grants
to Seller a personal, nonexclusive, non-transferable (except as provided in
Article IX), irrevocable (subject to Article VIII), worldwide, royalty-free
license to use, copy and distribute the Assigned Technical Information, and
create, use, copy and distribute Derivative Works from the Assigned Technical
Information with respect to any products or services of the businesses in which
Seller or any of its Related Companies is now or hereafter engaged for any
Permitted Use.
4.03 Seller agrees to deliver to Buyer, within 30 days of Closing,
copies of all documents of whatever kind in whatever medium that embody the
Assigned Technical Information. To Seller's knowledge, all of the Assigned
Technical Information will, at Closing, be included in the Business Records
transferred to Buyer or otherwise in possession of the Transferred Employees.
Notwithstanding the foregoing, Seller agrees to take all steps reasonably
requested by Buyer in connection with delivering to Buyer any documents that
embody the Assigned Technical Information not delivered to Buyer at Closing.
Buyer agrees that the previous sentence provides Buyer's sole remedy for
Seller's failure to deliver the Assigned Technical Information.
4.04 The Parties recognize that the best or only available copy of
certain Assigned Technical Information may reside, after the Closing Date,
within the ORiNOCO Business or in the possession of the ORiNOCO Business, and
that Seller may require certain access to or copies of the Assigned Technical
Information for purposes consistent with this Agreement, which, because of
inadvertence or oversight, a copy was not retained by or made available to
Seller prior to the Closing Date. To that end, Buyer agrees, upon receiving a
written request from Seller, to provide, within a commercially reasonable amount
of time after receipt of Seller's written request, copies of any portion of the
Assigned Technical Information necessary for Seller or one of its Related
Companies to exercise its rights in accordance with this Agreement. Any
reasonable costs associated with the assembling, copying and delivering of such
requested Assigned Technical Information shall be borne by Seller.
-4-
ARTICLE V
LICENSES TO INFORMATION
5.01 Seller grants to Buyer a fully paid-up, royalty-free worldwide,
irrevocable (subject to Article VIII), non-transferable (except as provided in
Article IX) and nonexclusive license to use, copy, sublicense and distribute
Licensed Technical Information, and create, use, copy, sublicense and distribute
Derivative Works from the Licensed Technical Information, in connection with the
conduct and operation of the Wireless Networking Business under any and all
copyright, trade secret and other intellectual property rights in such Licensed
Technical Information (other than patent rights which are specifically granted
in Exhibit B-2 to the Asset Purchase Agreement) owned by Seller as of the
Effective Date.
5.02 Seller grants to Buyer a personal, non-transferable (except as
provided in Article IX) and nonexclusive right, as an attribute of the right to
use the Licensed Technical Information in Section 5.01, to communicate (subject
to confidentiality provisions as least as restrictive as those in Section 12.03)
portions of and grant nonexclusive sublicenses (of the same scope as the
licenses granted to Buyer under Section 5.01) to such Licensed Technical
Information to third party suppliers or manufacturers for the procurement by
Buyer of materials, manufacturing facilities, parts and/or components reasonably
necessary for use by Buyer in the manufacture and assembly of products of the
ORiNOCO Business in accordance with this Agreement.
5.03 Seller agrees to deliver to Buyer, within 30 days of Closing,
copies of all documents of whatever kind in whatever medium that embody the
Licensed Technical Information. To Seller's knowledge, all of the Licensed
Technical Information will, at Closing, be included in the Business Records
transferred to Buyer or otherwise in possession of the Transferred Employees.
Notwithstanding the foregoing, Seller agrees to take all steps reasonably
requested by Buyer in connection with delivering to Buyer any documents that
embody the Licensed Technical Information not delivered to Buyer at Closing.
Buyer agrees that the previous sentence provides Buyer's sole remedy for
Seller's failure to deliver the Licensed Technical Information.
5.04 The Parties recognize that the best or only available copy of
certain Licensed Technical Information may reside, after the Closing Date,
within the ORiNOCO Business or in the possession of the ORiNOCO Business, and
Seller may require certain access to or copies of the Licensed Technical
Information for purposes consistent with this Agreement, which because of
inadvertence or oversight, a copy was not retained by or made available to
Seller prior to the Closing Date. To that end, Buyer agrees, upon receiving a
written request from Seller, to provide, within a commercially reasonable amount
of time after receipt of Seller's written request, copies of any portion of the
Licensed Technical Information necessary for Seller or one of its Related
Companies to exercise its rights in accordance with this Agreement. Any
reasonable costs associated with
-5-
the assembling, copying and delivering of such requested Licensed Technical
Information shall be borne by Seller.
ARTICLE VI
ASSIGNMENT OF TRADEMARKS
6.01 Seller agrees to transfer and assign, pursuant to the Trademark
Assignment attached as Appendix F hereto, to Buyer all of its worldwide right,
title and interest in and to the Assigned Marks and good will associated
therewith as well as all rights, privileges and priorities of Seller, together
with all income, royalties or payments due or payable as of the Closing, as well
as the right to xxx at law or in equity in respect of past, present and future
infringement of any of such Assigned Marks, including the right to receive all
proceeds or damages therefrom. Such assignment shall be subject to all
agreements entered into between Seller, its predecessors (including AT&T Corp.
and its Subsidiaries, and Lucent Technologies and its Subsidiaries) or its
Related Companies, and one or more third parties prior to the Effective Date of
this Agreement, none of which will have a material adverse affect on Buyer's use
of the Assigned Marks in operation of the ORiNOCO Business as it existed as of
the Closing Date.
6.02 Buyer shall bear any and all administrative and similar costs
external to Seller related to the recordation or transfer of title of Assigned
Marks from Seller to Buyer pursuant to Section 6.01 above. Seller shall execute
all documents and perform all acts as required to give effect to the assignment
and recording of the transfer of Assigned Marks to Buyer under this Agreement.
ARTICLE VII
EXPORT CONTROL
7.01 (a) The Parties acknowledge that any information and software
(including, but not limited to, services and training) provided under this
Agreement are subject to U.S. export laws and regulations and any use or
transfer of such information and software must be authorized under those
regulations. Each party hereby assures the other party that it will comply with
all applicable export laws of the U.S. as may be in effect at the time any
export of such information or software is made.
ARTICLE VIII
TERM AND TERMINATION
8.01 This Agreement shall be effective during the term commencing on the
Effective Date hereof and shall continue unless terminated by mutual agreement
between the Parties.
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8.02 The rights and obligations of Buyer and Seller which by their
nature would continue beyond termination of this Agreement shall survive and
continue after any termination of this Agreement.
ARTICLE IX
ASSIGNABILITY
9.01 The Parties hereto have entered into this Agreement in
contemplation of personal performance, each by the other, and intend that the
licenses and rights granted hereunder to a Party not be extended to entities
other than such Party's Related Companies without the other Party's express
written consent.
9.02 Notwithstanding the foregoing, all of a Party's rights, title and
interest in this Agreement and any licenses and rights granted to it hereunder
may be assigned to any of its Related Companies or any direct or indirect
successor to all or a portion of the business of the Party, which successor
shall thereafter be deemed substituted as the Party hereto, effective upon such
assignment subject to written acceptance of such assignment by such successor.
Notwithstanding any such assignment to a successor, any licenses assigned herein
to the successor do not include any past or future licenses to products which
are sold or otherwise distributed, directly or indirectly, by such successor
prior to any assignment.
ARTICLE X
LICENSES TO RELATED COMPANIES AND IMPROVEMENTS
10.01 The grant of each license hereunder includes the right to grant
sublicenses within the scope of such license to a Party's Related Companies for
so long as they remain its Related Companies. Any and all licenses or
sublicenses granted to Related Companies pursuant to this Agreement may be made
effective retroactively, but not prior to the Effective Date hereof, nor, unless
otherwise authorized pursuant to another provision of this Agreement, prior to
the sublicensee's becoming a Related Company of such Party.
10.02 Unless otherwise specifically expressed in this Agreement, the
Asset Purchase Agreement or the Collateral Agreements, no license to, or right
of a Party, under any patent, copyright, trademark, trade secret, or any other
intellectual property right, is either granted or implied by conveying any
information to such Party.
10.03 Except as otherwise expressly provided for herein or the Purchase
Agreement or the Collateral Agreements, no rights are granted to a Party under
any improvements or derivative works of the Software or the Technical
Information to the extent made by the other Party after the Effective Date.
10.04 The grant of each license hereunder also includes the right of a
Party to sublicense (within the scope of its own license) any business which is
divested by that Party or any of its Related Companies provided that the
sublicense is granted within 60
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(60) days of divestiture, provided that any such sublicense shall not include
any past or future licenses to products which are sold or otherwise distributed,
directly or indirectly, by an acquiror of such business prior to the date of
acquisition even if they are of the same kind or similar to those of the
divested business.
ARTICLE XI
RIGHTS AND OBLIGATIONS
11.01 For any license provided from one party to the other, the licensee
shall, at its sole expense, comply at all times with all applicable laws and
regulations in connection with the use of the rights licensed to it hereunder,
and obtain all appropriate permits and approvals, as applicable.
11.02 The licenses granted herein by Seller or Buyer, as the case may
be, shall be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code, to the fullest extent permitted by law, licenses to rights in
"intellectual property" as defined in Section 101 of the Bankruptcy Code. The
parties agree that the licensee to any such licenses, as the case may be, shall
retain and may fully exercise all of its rights and elections under the
Bankruptcy Code. In the event that a bankruptcy proceeding under the Bankruptcy
Code is commenced by or against the licensor of any such licenses, the licensee
shall be entitled to retain all of its rights under this Agreement (including
without limitation all rights and licenses granted herein) pursuant to Section
365(n) of the U.S. Bankruptcy Code.
ARTICLE XII
WARRANTIES AND COVENANTS
12.01 Except as expressly provided herein, all warranties and
representations are exclusively set forth in the Purchase Agreement.
12.02 (a) EXCEPT AS EXPRESSLY PROVIDED HEREIN OR IN THE PURCHASE
AGREEMENT, THE TECHNICAL INFORMATION, SOFTWARE OR OTHER INFORMATION ASSIGNED OR
LICENSED UNDER THIS AGREEMENT IS ASSIGNED OR LICENSED "AS IS" WITH ALL FAULTS,
LATENT AND PATENT AND WITHOUT ANY WARRANTY OF ANY TYPE. SELLER AND ITS RELATED
COMPANIES MAKE NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED. BY WAY OF
EXAMPLE, BUT NOT OF LIMITATION, SELLER AND ITS RELATED COMPANIES MAKE NO
REPRESENTATIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR THAT
THE USE OF THE TECHNICAL INFORMATION, SOFTWARE OR OTHER INFORMATION WILL NOT
INFRINGE ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY AND
IT SHALL BE THE SOLE RESPONSIBILITY OF BUYER TO MAKE SUCH DETERMINATION AS IS
NECESSARY WITH RESPECT TO THE ACQUISITION OF LICENSES UNDER PATENTS OR
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OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
(b) EXCEPT AS EXPRESSLY PROVIDED HEREIN OR IN THE PURCHASE
AGREEMENT, SELLER AND ITS RELATED COMPANIES SHALL NOT BE HELD TO ANY LIABILITY
WITH RESPECT TO ANY PATENT INFRINGEMENT OR ANY OTHER CLAIM MADE BY BUYER OR ANY
THIRD PARTY ON ACCOUNT OF, OR ARISING FROM THE USE OF, THE TECHNICAL
INFORMATION, SOFTWARE OR OTHER INFORMATION ASSIGNED OR LICENSED HEREUNDER.
12.03 Each party agrees:
(a) that it will not, without the other party's express written
permission or as provided herein or in the Purchase Agreement, or as otherwise
agreed to in writing, (i) use in advertising, publicity, or otherwise any trade
name, trademark, trade device, service xxxx, symbol or any other identification
or any abbreviation, contraction or simulation thereof owned or used by the
other party or any of its Related Companies, or (ii) represent, directly or
indirectly, that any product or service produced in whole or in part with the
use of any of the Software or Technical Information is a product or service of
the other party or any of its Related Companies; and
(b) that except as otherwise expressly provided for in this
Agreement, it will hold in confidence for the other party all private or
confidential information of the other party, including any Software or Technical
Information licensed hereunder that such party's personnel may unavoidably
receive or have access to during the performance of this Agreement. Such party
further agrees that all such information shall remain the property of the other
party and that such party shall not make any disclosure of such information to
anyone, except to employees of such party to whom such disclosure is necessary
to the use for which rights are granted hereunder. Such party shall
appropriately notify all employees to whom any such disclosure is made that such
disclosure is made in confidence and shall be kept in confidence by them.
(c) The restrictions under this Section 12.03 on the use or
disclosure of such information shall not apply to such information:
(i) which is independently developed by such party or is
lawfully received free of restriction from another source having the right to so
furnish such information; or
(ii) after it has become generally available to the public by
acts not attributable to such party or its employees, agents or contractors; or
-9-
(iii) which at the time of disclosure to such party was known
to such party free of restriction and evidenced by documentation in such party's
possession; or
(iv) which the other party agrees in writing is free of such
restrictions; or
(v) which is requested pursuant to a judicial or governmental
request, requirement or order under law, provided that such party provides the
other party with sufficient prior notice in order to contest such request,
requirement or order or seek protective measures.
12.04 In the event of any conflict between the representations and
warranties in this Agreement and the representations and warranties in the
Purchase Agreement, the representations and warranties in the Purchase Agreement
shall prevail.
ARTICLE XIII
GENERAL PROVISIONS
13.01 Consideration. The consideration for the transfers, assignments
and grant of rights and licenses under this Agreement by Seller to Buyer is
provided in the Purchase Agreement and no further payment of royalties will be
due under this Agreement.
13.02 Agreement Prevails. This Agreement shall prevail in the event of
any conflicting terms or legends, which may appear on documents, the Software,
the Documentation or the Technical Information transferred or licensed
hereunder.
13.03 Relationship Between Parties. Neither Party to this Agreement
shall have the power to bind the other by any guarantee or representation that
it may give, or to incur any debts or liabilities in the name of or on behalf of
the other Party. The Parties acknowledge and agree that nothing contained in
this Agreement shall be deemed or construed to constitute or create between the
Parties hereto a partnership, association, joint venture or other agency.
13.04 Entire Agreement. This Agreement, the Purchase Agreement and
Collateral Agreements set forth the entire agreement and understanding between
the Parties as to the subject matter hereof and merge all prior discussions
between them, and none of the Parties shall be bound by any conditions,
definitions, warranties, modifications, understandings or representations with
respect to such subject matter other than as expressly provided herein or
therein set forth on or subsequent to the Effective Date hereof in writing and
signed by a proper and duly authorized representative of the Party to be bound
thereby.
13.05 Headings. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this
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Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
13.06 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
13.07 Governing Law. The Parties agree that this Agreement shall be
governed by and construed and interpreted in accordance with the laws of the
State of New York, excluding the choice of law rules thereof.
13.08 Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, acts of terrorism, fire, explosion, flood, strike, lockout,
embargo, act of God, or other cause beyond the reasonable control of the
defaulting Party, provided that the Party claiming force majeure has exerted
commercially reasonable efforts to avoid or remedy such force majeure.
13.09 Waiver. Except as specifically provided for herein, the waiver
from time to time by either of the Parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of the same or of any other of such Party's rights or remedies provided
in this Agreement.
13.10 Severability. If any term, covenant or condition of this Agreement
or the application thereof to any Party or circumstances shall, to any extent,
be held to be invalid or unenforceable, then the remainder of this Agreement, or
the application of such term, covenant or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law.
13.11 Except as otherwise agreed in this Agreement, in the Purchase
Agreement, or in a Collateral Agreement, Seller and Buyer shall have no right or
interest whatsoever in any product of the other Party whether such product is
conceived or developed by the other Party, during or after the course of
performance of this Agreement, the Purchase Agreement or any Collateral
Agreement. Nothing in this Agreement shall be construed to obligate Buyer or
Seller to a specified level of effort in its promotion and marketing of any
product.
13.12 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
-11-
ARTICLE XIV
NOTICES
14.01 Until further notice in writing, any notice or other communication
hereunder shall be deemed to be sufficiently given to the addressee and any
delivery hereunder deemed made when sent by certified mail to the addresses set
out below.
For Agere: Agere Systems
Intellectual Property
Attn: Contract Administrator
0000 Xxxxx Xxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Xxxxxx Xxxxxx of America
With a copy to: Agere Systems Inc.
Attn: Vice President - Law
000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
For Buyer: Proxim Corporation
Attn: Chief Financial Officer
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
With a copy to: Simpson, Thacher & Xxxxxxxx
Attn: Xxxxxx Xxxxxxx, Esq.
00 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Los Angeles, California 91608
United States of America
Facsimile: (000) 000-0000
-12-
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed by its duly authorized representative on the respective dates entered
below.
AGERE SYSTEMS INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Date:
------------------------------
PROXIM CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Date:
------------------------------
THIS AGREEMENT DOES NOT BIND OR OBLIGATE ANY PARTY
IN ANY MANNER UNLESS DULY EXECUTED BY AUTHORIZED
REPRESENTATIVES OF ALL PARTIES
-13-
APPENDIX A
DEFINITIONS APPENDIX
"Assigned Marks" means the trademarks, service marks, trade names, logos, trade
dress and all elements thereof specifically set forth in Schedule A in Appendix
F together with any registrations or applications therefore, all common law
rights thereto and the goodwill appurtenant thereto and/or symbolized thereby.
"Assigned Software" means the Code and associated Documentation owned by Seller
and currently used primarily for the purpose of operating the ORiNOCO Business
as of the Effective Date, as identified in Appendix B to this Agreement.
"Assigned Technical Information" means Information owned by Seller and used
primarily for the purpose of operating the ORiNOCO Business, as of the Closing
Date, as identified in Appendix D hereto.
"Code" shall mean Object Code and Source Code, collectively.
"Derivative Work(s)" shall mean any work of authorship that is based, in whole
or in part, upon one or more pre-existing works, such as a revision,
modification, translation, abridgment, condensation, expansion or any other form
in which such pre-existing works may be recast, transformed or adopted and
which, if prepared without authorization of the owner of the copyright in such
pre-existing work, would constitute a copyright infringement. For purposes of
this Agreement, a Derivative Work shall also include any compilation that
incorporates such a pre-existing work.
"Documentation" shall mean all information in human and/or machine-readable
form, relating to Code, including but not limited to user manuals and materials
useful for design (for example, logic manuals, flow charts, and principles of
operation).
"Effective Date" has the meaning assigned in Recital A hereof.
"Information" shall mean any and all documented and undocumented information
(excluding patents and patent applications), including without limitation Code,
Documentation, technical information, trade secrets and other confidential
information, data and drawings of whatever kind in whatever medium,
specifications, techniques, know-how, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples, non-patented
inventions, discoveries, developments and ideas, past and current manufacturing
and distribution methods and processes, current and anticipated customer
requirements, price lists, part lists, customer lists, market studies, business
plans, database technologies, systems, structures, architectures, improvements,
devices, concepts, methods and information, however documented, and any and all
notes, analysis, compilations, studies, summaries, and other material containing
or based, in whole or in part, on any
-14-
information included in the foregoing. Information does not include any
intellectual property embodied in an integrated circuit chip or chipset, or any
method of manufacturing an integrated circuit.
"Licensed Software" means Code and associated Documentation owned by Seller as
of the Effective Date, other than the Assigned Software that, aside from
currently being used in the operation of the ORiNOCO Business or in products of
the ORiNOCO Business, has application in other business units or areas within
Seller or its Related Companies, and/or applications external to Seller prior to
the Effective Date as identified herein in Appendix C.
"Licensed Technical Information" means Information owned by Seller as of the
Effective Date other than the Assigned Technical Information that, aside from
currently being used in the operation of the ORiNOCO Business or in products of
the ORiNOCO Business, has application in other business units or areas within
Seller or its Related Companies, and/or applications external to Seller prior to
the Effective Date as identified herein in Appendix E.
"Object Code" shall mean code in machine-readable form generated by compilation,
assembly or other translation of Source Code and contained in a medium which
permits it to be loaded into and operated on by a computer.
"Permitted Use" means i) for any Assigned Software or Assigned Technical
Information below layer 3 (i.e., layer 1, layer 2, etc.), for any use, and ii)
for any Assigned Software or Assigned Technical Information at layer 3 and
above, for any use other than sale or license to third parties for incorporation
into wireless networking infrastructure products.
"Purchase Agreement" has the meaning assigned in Recital A hereof.
"Related Companies" means with respect to Buyer and Agere, its Subsidiaries.
"Software" means Assigned Software and Licensed Software, collectively.
"Source Code" shall mean code in any programming language contained in any
format, including human and machine-readable formats, such code including all
comments and procedural code plus all related development documents such as, but
not limited to, flow charts, schematics, statements of principles of operations
or any other specifications.
"Subsidiary" of a company means a corporation or other legal entity (i) more
than fifty percent (50%) of whose shares or other securities entitled to vote
for election of directors (or other managing authority) is now or hereafter
controlled by such company either directly or indirectly; or (ii) which does not
have outstanding shares or securities but more than fifty percent (50%) of whose
ownership interest representing the right to manage such corporation or other
legal entity is now or hereafter owned and controlled by such company
-15-
either directly or indirectly; but any such corporation or other legal entity
shall be deemed to be an Subsidiary of such company only as long as such control
or ownership and control exists.
"Technical Information" means Assigned Technical Information and Licensed
Technical Information, collectively.
"Trademarks" means the Assigned Marks.
"Wireless Networking Business" means any business, including without limitation
the ORiNOCO Business, related to the design, engineering, manufacturing,
marketing, sale and distribution of wireless networking products.
-16-
EXHIBIT B-2
PATENT LICENSE AGREEMENT
BETWEEN
AGERE SYSTEMS GUARDIAN CORPORATION,
AGERE SYSTEMS INC.
AND
PROXIM CORPORATION
EFFECTIVE ______________
PATENT LICENSE AGREEMENT
TABLE OF CONTENTS
ARTICLE I - GRANTS OF LICENSES
1.01 Grant
1.02 Licensing Provisions
1.03 Joint Inventions
ARTICLE II - CONSIDERATION
2.01 Consideration
ARTICLE III -- TERMINATION
3.01 Termination
3.02 Survival
ARTICLE IV -- PUBLICITY AND CONFIDENTIALITY
4.01 Publicity
4.02 Confidentiality
ARTICLE V - MISCELLANEOUS PROVISIONS
5.01 Disclaimer
5.02 Limited Assignability
5.03 Addresses
5.04 Taxes
5.05 Choice of Law
5.06 Integration
5.07 Outside the United States
5.08 Releases
5.09 Bankruptcy
ARTICLE VI -- EFFECT ON PENDING LITIGATION
6.01 Consent Order
APPENDIX A
APPENDIX B
i
PATENT LICENSE AGREEMENT
Effective ______________, Agere Systems Guardian Corporation ("AGERE GUARDIAN"),
a Delaware corporation having an office at 0000 X. Xxxx Xxxxx Xxxxxxx, Xxxxxxx,
Xxxxxxx 00000-0000, Agere Systems Inc. ("AGERE SYSTEMS"), a Delaware corporation
having an office at 000 Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000, (AGERE
GUARDIAN and AGERE SYSTEMS being collectively or individually referred to as
"AGERE", as the context requires) and PROXIM CORPORATION ("PROXIM"), a Delaware
corporation having an office at 000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
agree as follows*:
ARTICLE I
GRANTS OF LICENSES
1.01 GRANT
(a) AGERE grants to PROXIM under AGERE'S PATENTS a personal,
nonexclusive and non-transferable license to make, have made, use, lease, sell,
offer to sell and import WIRELESS NETWORKING PRODUCTS. The have made rights do
not apply to 802.11-based integrated circuit products, unless developed
according to a custom design of PROXIM. Notwithstanding the foregoing, any
injunctive relief obtained against a supplier will not apply to products sold to
PROXIM, unless PROXIM is acting as a reseller. This license shall be in effect
from the effective date of this Agreement until the earlier of the end of the
LIMITED PERIOD or the expiration of each patent, unless terminated sooner
pursuant to Article III.
(b) AGERE grants to PROXIM under AGERE'S WIRELESS LAN PATENTS a
personal, nonexclusive and non-transferable license to make, have made, use,
lease, sell, offer to sell and import PRODUCTS OF THE ORINOCO BUSINESS. The have
made rights do not apply to 802.11-based integrated circuit products, unless
developed according to a custom design of PROXIM. Notwithstanding the foregoing,
any injunctive relief obtained against a supplier will not apply to products
sold to PROXIM, unless PROXIM is acting as a reseller. This license shall be in
effect until the expiration date of each patent, unless terminated sooner
pursuant to Article III.
(c) PROXIM grants to AGERE under PROXIM'S PATENTS a personal,
nonexclusive, and non-transferable license to make, have made, use, lease, sell,
offer to sell and import all products and services of any kind. The have made
rights do not apply to 802.11-based integrated circuit products, unless
developed according to a custom design of AGERE. Notwithstanding the foregoing,
any
--------
*ANY TERM IN CAPITAL LETTERS WHICH IS DEFINED IN APPENDIX A SHALL HAVE THE
MEANING SPECIFIED THEREIN, OTHERWISE IT WILL HAVE THE MEANING AS USED OR DEFINED
IN THIS AGREEMENT.
injunctive relief obtained against a supplier will not apply to products sold to
AGERE, unless AGERE is acting as a reseller. This license shall be in effect
from the effective date of this Agreement until the earlier of the end of the
LIMITED PERIOD or the expiration of each patent, unless terminated sooner
pursuant to Article III.
1.02 LICENSING PROVISIONS
(a) The licenses granted herein also include licenses to convey to any
customer of the grantee, with respect to any LICENSED PRODUCT(S) which is sold
or leased by such grantee to such customer, rights to use and resell such
LICENSED PRODUCT(S) as sold or leased by such grantee (whether or not as part of
a larger combination); provided, however, that no rights may be conveyed to
customers with respect to any invention which is directed to (1) a combination
of such LICENSED PRODUCT (as sold or leased) with any other product unless such
LICENSED PRODUCT has no substantial use except in such combination, (2) a method
or process which is other than the inherent use of such LICENSED PRODUCT itself
(as sold or leased), or (3) a method or process involving the use of a LICENSED
PRODUCT to manufacture (including associated testing) any other product.
(b) Licenses granted herein are not to be construed either (i) as
consent by the grantor to any act which may be performed by the grantee, except
to the extent impacted by a patent licensed herein to the grantee, or (ii) to
include licenses to contributorily infringe or induce infringement under U.S.
law or a foreign equivalent thereof, except that no party shall xxx another
party for contributory infringement or inducement of infringement by virtue of
the sale by a party of a LICENSED PRODUCT until all remedies have been exhausted
against a direct infringer.
(c) The grant of each license hereunder includes the right to grant
sublicenses within the scope of such license to a SUBSIDIARY of a party for so
long as it remains its SUBSIDIARY and only to the extent that such SUBSIDIARY
grants to the other party licenses of similar scope and duration as provided in
this Agreement. Any such sublicense granted hereunder may be made effective
retroactively, but not prior to the Effective Date hereof, nor prior to the
sublicensee's becoming a SUBSIDIARY of such party. The parties agree that if
either party forms a holding company for patents licensed herein, that party
shall cause such holding company to grant licenses under such patents, of the
scope and duration granted herein, to the other party.
(d) The grant of each license hereunder also includes the right of a
party to sublicense (commensurate with its own licenses) any business which is
divested by that party or any licensed SUBSIDIARY of that party provided that
the sublicense is granted within sixty (60) days of divestiture and the divested
business is itself a legal entity at the time of divestiture or within sixty
(60) days thereafter. Such sublicense may continue for so long as the divested
business
2
remains a legal entity and shall extend only to the LICENSED PRODUCTS sold or
furnished by the divested business prior to the divestiture and only for the
patents of the non-divesting party licensed to the divesting party in this
Agreement that are issued as of the date of divestiture. Furthermore, any
sublicense shall not extend to the products sold or services furnished by a
third party which acquires the divested business, even if they are of the same
kind or similar to those of the divested business and even if made, sold or
provided by the divested business.
1.03 JOINT INVENTIONS
(a) There are countries (not including the United States) which require
the express consent of all inventors or their assignees to the grant of licenses
or rights under patents issued in such countries for joint inventions.
(b) Each party shall give such consent, or shall obtain such consent from
each SUBSIDIARY, its employees or employees of any SUBSIDIARY, as required to
make full and effective any such licenses and rights respecting any joint
invention granted to the grantee hereunder by such party and by another licensor
of such grantee.
(c) Each party shall take steps which are reasonable under the
circumstances to obtain from third parties whatever other consents are necessary
to make full and effective such licenses and rights respecting any joint
invention purported to be granted by it hereunder. If, in spite of such
reasonable steps, such party is unable to obtain the requisite consents from
such third parties, the resulting inability of such party to make full and
effective its purported grant of such licenses and rights shall not be
considered to be a breach of this Agreement.
ARTICLE II
CONSIDERATION
2.01 CONSIDERATION
In consideration of the purchase by PROXIM and the sale by AGERE of the ORiNOCO
business according to the ASSET PURCHASE AGREEMENT, the licenses granted herein
will be deemed paid up.
ARTICLE III
TERMINATION
3.01 TERMINATION
This Agreement shall be effective during the term commencing on the effective
date hereof and shall continue unless terminated by mutual agreement of the
parties.
3
3.02 SURVIVAL
(a) If a company ceases to be a SUBSIDIARY of a party, licenses and rights
granted hereunder with respect to patents of such company on inventions made
prior to the date of such cessation, shall not be affected by such cessation.
(b) Any termination of licenses and rights of a party under the provisions
of this Article III shall not affect such party's licenses, rights and
obligations with respect to any LICENSED PRODUCTS made or furnished prior to
such termination, and shall not affect the other party's licenses and rights
(and obligations related thereto) hereunder.
ARTICLE IV
PUBLICITY AND CONFIDENTIALITY
4.01 PUBLICITY
Nothing in this Agreement shall be construed as conferring upon either party or
any SUBSIDIARY any right to include in advertising, packaging or other
commercial activities related to a LICENSED PRODUCT, any reference to the other
party (or any SUBSIDIARY), its trade names, trademarks or service marks in a
manner which would be likely to cause confusion or to indicate that such
LICENSED PRODUCT is in any way certified by the other party hereto or a
SUBSIDIARY.
4.02 CONFIDENTIALITY
(a) The terms, but not the existence, of this Agreement shall be treated
as confidential information by the parties, and neither party shall disclose the
terms or conditions of this Agreement to any third party (other than a
SUBSIDIARY and divested businesses licensed pursuant to this Agreement) without
the prior written permission of the other party. Each party, however, shall have
(i) the right to represent to third parties that such party is licensed for the
products and patents as provided by this Agreement, and (ii) the right to make
disclosures to the extent required by an order of court, or otherwise by law,
provided that the party shall promptly provide written notice to the
non-disclosing party of the intended disclosure and of the court order or
regulation prior to such disclosure and that the party takes all reasonable
steps to minimize such disclosure by, for example, obtaining a protective order
and/or appropriate confidentiality provisions requiring that such information to
be disclosed be used only for the purpose for which such law, or order was
issued. Additionally, each party may disclose this Agreement or its contents to
the extent reasonably necessary, under a suitable confidentiality agreement, to
its accountants, attorneys, financial advisors and in connection with due
diligence activities relating to the sale of the stock or a portion of the
business of a party or a SUBSIDIARY.
4
(b) Notwithstanding the foregoing, the parties agree that they will
jointly issue any press release as provided for in the ASSET PURCHASE AGREEMENT.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.01 DISCLAIMER
OTHER THAT THE PROVISIONS OF SECTION 1.03, NEITHER PARTY NOR ANY SUBSIDIARY
MAKES ANY REPRESENTATIONS, EXTENDS ANY WARRANTIES OF ANY KIND, ASSUMES ANY
RESPONSIBILITY OR OBLIGATIONS WHATEVER, OR CONFERS ANY RIGHT BY IMPLICATION,
ESTOPPEL OR OTHERWISE, OTHER THAN THE LICENSES, RIGHTS AND WARRANTIES HEREIN
EXPRESSLY GRANTED.
5.02 LIMITED ASSIGNABILITY
The parties hereto have entered into this Agreement in contemplation of personal
performance, each by the other, and intend that the licenses and rights granted
hereunder to a party not be extended to entities other than a SUBSIDIARY thereof
without the other party's express written consent. All of AGERE's rights, title
and interest in this Agreement and any licenses and rights granted to it
hereunder may be assigned to any direct or indirect successor to the business of
AGERE that is relevant to the business or subject matter of this Agreement as
the result of any internal reorganization or acquisition of substantially all
the business of AGERE, which successor shall thereafter be deemed substituted
for AGERE as the party hereto, effective upon such assignment, provided that
upon an acquisition the licenses granted herein to AGERE shall be limited in
scope to products of AGERE that were sold at least thirty (30) days prior to the
announcement of the acquisition, and natural extensions of said products after
the acquisition, but not to products of the acquiring party that existed prior
to the acquisition. All of PROXIM'S rights, title and interest in this Agreement
and any licenses and rights granted to it hereunder may be assigned to any
direct or indirect successor to the business of PROXIM that is relevant to the
business or subject matter of this Agreement as the result of any internal
reorganization or acquisition of substantially all the business of PROXIM,
provided that upon an acquisition the licenses granted herein to PROXIM shall be
limited in scope to products of PROXIM that were sold at least thirty (30) days
prior to the announcement of the acquisition, and natural extensions of said
products after the acquisition, but not to products of the acquiring party that
existed prior to the acquisition.
5.03 ADDRESSES
Any notice or other communication hereunder shall be sufficiently given to
PROXIM when sent by overnight or certified mail to the address set out above or
to AGERE when sent by overnight or certified mail addressed to Contract
Administrator, Agere Systems Guardian Corporation, 0000 Xxxxx Xxxx Xxxxx
0
Xxxxxxx, Xxxxxxx, Xxxxxxx 00000-0000 Xxxxxx Xxxxxx of America, Telephone # (407)
000-0000. Changes in such addresses may be specified by written notice.
5.04 TAXES
Each party and SUBSIDIARY shall bear its own taxes, duties, levies and similar
charges (and any related interest and penalties), however designated or imposed
as a result of the existence or operation of this Agreement.
5.05 CHOICE OF LAW
The parties are familiar with the principles of New York commercial law, and
desire and agree that the law of New York, exclusive of its conflict of law
provisions, shall apply in any dispute arising with respect to this Agreement.
5.06 INTEGRATION
This Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges all prior discussions between
them. Neither of the parties shall be bound by any modifications, warranties,
understandings or representations with respect to such subject matter other than
as expressly provided herein or in a writing signed with or subsequent to
execution hereof by an authorized representative of the party to be bound
thereby.
5.07 OUTSIDE THE UNITED STATES
(a) There are countries in which the owner of an invention is entitled to
compensation, damages or other monetary award for another's unlicensed
manufacture, sale, lease, use or importation involving such invention prior to
the date of issuance of a patent for such invention but on or after a certain
earlier date, hereinafter referred to as the invention's "protection
commencement date" (e.g., the date of publication of allowed claims or the date
of publication or "laying open" of the filed patent application). In some
instances, other conditions precedent must also be fulfilled (e.g., knowledge or
actual notification of the filed patent application). The parties agree that (i)
an invention which has a protection commencement date in any such country may be
used in such country pursuant to the terms of this Agreement on and after any
such date, and (ii) all such conditions precedent are deemed satisfied by this
Agreement.
(b) There may be countries in which a party hereto may have, as a
consequence of this Agreement, rights against infringers of the other party's
patents licensed hereunder. Each party hereby waives any such right it may have
by reason of any third party's infringement or alleged infringement of any such
patents.
6
(c) Each party hereby agrees to register or cause to be registered, to the
extent required by applicable law, and without expense to the other party or any
SUBSIDIARY thereof, any agreements wherein sublicenses are granted by it. Each
party hereby waives any and all claims or defenses, arising by virtue of the
absence of such registration, that might otherwise limit or affect its
obligations to the other party or SUBSIDIARY.
5.08 RELEASES
(a) In consideration of the covenants and conditions set forth herein and
other good and valuable consideration, each party, for itself and any SUBSIDIARY
hereby releases, to the full extent of its right to do so, the other party and
any SUBSIDIARY for any patent infringement arising prior to the effective date
of this Agreement for which the rights and licenses expressly granted under this
Agreement to the other party and any SUBSIDIARY would be a complete defense had
this Agreement been in effect at the time such patent infringement arose.
(b) The releases granted in Section 5.08(a) shall extend to customers of
a party with respect to products purchased by those customers from such party
provided that the releases shall not extend to any patent which is directed to
(1) a combination of such LICENSED PRODUCT (as sold or leased) with any other
product regardless of whether such product is hardware or software unless such
LICENSED PRODUCT has no substantial use except in such combination, (2) a method
or process which is other than the inherent use of such LICENSED PRODUCT itself
(as sold or leased), or (3) a method or process involving the use of a LICENSED
PRODUCT to manufacture (including associated testing) any other product.
(c) The releases in this Section 5.08 shall not operate with respect to
acquisitions of any sort. That is, if a party or any SUBSIDIARY, individually or
collectively, acquire one or more companies, or the business or assets or any
portion thereof of one or more companies or other entities, then engaged in
whole or in part in the business of making, importing, selling, using or leasing
products and/or services of the kinds which are furnished or used by a party or
any SUBSIDIARY in the operation of the business in which they are engaged as of
that party's signing of this Agreement, but such companies or entities were not
part of either party or any SUBSIDIARY as of such party's signing of this
Agreement, then such companies or entities shall not be covered by the releases
granted in Section 5.08.
5.09 BANKRUPTCY
The licenses granted herein to each party, as the case may be, shall be
deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, to the
fullest extent permitted by law, licenses to rights in "intellectual property"
as defined in Section 101 of the Bankruptcy Code. The parties agree that the
7
licensee to any such licenses, as the case may be, shall retain and may fully
exercise all of its rights and election under the Bankruptcy Code. In the event
that a bankruptcy proceeding under the Bankruptcy Code is commenced by or
against the licensor of any such licenses, the licensee shall be entitled to
retain all of its rights under this Agreement (including without limitation all
rights and licenses granted herein) pursuant to Section 365(n) of the U.S.
Bankruptcy Code.
ARTICLE VI
EFFECT ON PENDING LITIGATION
6.01 CONSENT ORDER
The parties agree to enter a consent order or consent judgment
substantially in the form as attached as Appendix B, and to perform any other
acts necessary to result in (i) the dismissal of the pending litigation between
AGERE and PROXIM in the U.S. District Court for the District of Delaware, (ii)
the dismissal of AGERE SYSTEMS (as an intervener) and any customers of AGERE or
any SUBSIDIARY of AGERE as parties to the International Trade Commission action
initiated by PROXIM with respect to those products that AGERE'S customers buy
from AGERE or any SUBSIDIARY of AGERE, and (iii) the dismissal of any pending
litigation by PROXIM against any of AGERE'S customers, with respect to those
products that AGERE'S customers buy from AGERE or any SUBSIDIARY of AGERE.
8
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in duplicate originals by its duly authorized representatives on the respective
dates entered below.
AGERE SYSTEMS GUARDIAN CORPORATION
By:
---------------------------------------------
Xxxxxx X. xxXxxxx
Vice President
Date:
-------------------------------------------
AGERE SYSTEMS INC.
By:
---------------------------------------------
Xxxxxx X. xxXxxxx
Vice President
Date:
-------------------------------------------
PROXIM CORPORATION
By:
---------------------------------------------
Xxxxx X. Xxxx
President and Chief Operating Officer
Date:
-------------------------------------------
9
APPENDIX A
DEFINITIONS
AGERE'S PATENTS means all patents having enforceable rights in any country of
the world issuing from an application filed as of the effective date of this
Agreement and from any continuation or division of such application, which AGERE
(or any company while a SUBSIDIARY of AGERE), at any time during the LIMITED
PERIOD, has the right to grant any licenses of the type herein granted, but only
to the extent of such right.
AGERE'S WIRELESS LAN PATENTS means all of AGERE'S PATENTS that claim an
invention used in any PRODUCTS OF THE ORINOCO BUSINESS.
ASSET PURCHASE AGREEMENT means the agreement to which this Agreement is attached
as Exhibit B-2, and by which PROXIM is acquiring the ORiNOCO Business from AGERE
SYSTEMS.
LICENSED PRODUCTS means WIRELESS NETWORKING PRODUCTS, PRODUCTS OF THE ORINOCO
BUSINESS, or all products and services of any kind, as the case may be,
according to Section 1.01.
LIMITED PERIOD means the period commencing on the effective date of this
Agreement and continuing for seven and one half (7.5) years thereafter.
PRODUCTS OF THE ORINOCO BUSINESS means any IEEE 802.11 based product, including
each ORiNOCO-branded product and each private label systems product, of the
ORiNOCO business of AGERE SYSTEMS existing and under development prior to and as
of the effective date of this Agreement, and subsequent extensions thereof, as
well as all services related to such products.
PROXIM'S PATENTS means all patents having enforceable rights in any country of
the world issuing from an application filed as of the effective date of this
Agreement and from any continuation or division of such application, which
PROXIM (or any company while a SUBSIDIARY of PROXIM), at any time during the
LIMITED PERIOD has the right to grant any licenses of the type herein granted,
but only to the extent of such right.
SUBSIDIARY of a company means a corporation or other legal entity (i) the
majority of whose shares or other securities entitled to vote for election of
directors (or other managing authority) is now or hereafter controlled by such
company either directly or indirectly; or (ii) which does not have outstanding
shares or securities but the majority of whose ownership interest representing
the right to manage such corporation or other legal entity is now or hereafter
owned and controlled by such company either directly or indirectly; but any such
corporation or other legal entity shall be deemed to be a SUBSIDIARY of such
company only as long as such control or ownership and control exists.
10
WIRELESS NETWORKING PRODUCTS means any product involved in connecting together
electronic devices using a wireless network, as well as all services related to
such products.
00
XXXXXXXX X
CONSENT ORDER
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
--------------------------------
AGERE SYSTEMS GUARDIAN CORP.,
Plaintiffs, Civil Action No. 01-339-RRM
v.
PROXIM CORPORATION,
Defendant.
--------------------------------
STIPULATION AND ORDER OF DISMISSAL
Pursuant to Federal Rule of Civil Procedure 41, the claims of Agere
Systems Guardian Corp. ("Agere") against Proxim Corporation ("Proxim"), and the
claims of Proxim against Agere, are hereby dismissed without prejudice.
Each party to bear its own costs and attorney fees.
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Counsel for Agere Counsel for Proxim
SO ORDERED this ___ day of __ 2002
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UNITED STATES DISTRICT COURT JUDGE
12
13
Exhibit E
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SUPPLY AGREEMENT
BY AND BETWEEN
AGERE SYSTEMS INC.
AND
PROXIM CORPORATION
DATED AS OF , 2002
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TABLE OF CONTENTS
Page
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1. DEFINITIONS.................................................................1
2. TERM OF THE AGREEMENT.......................................................4
3. SCOPE OF THE AGREEMENT......................................................4
4. SCHEDULES...................................................................7
5. SUPPLIER'S RESPONSIBILITIES.................................................8
6. EXPORT CONTROL..............................................................8
7. ELECTRONIC DATA INTERCHANGE.................................................9
8. ORDERS......................................................................9
9. BLANKET PURCHASE ORDERS.....................................................9
10. FLEXIBLE DELIVERY ARRANGEMENTS.............................................10
11. SHIPPING...................................................................10
12. FORECASTS..................................................................10
13. PRICES.....................................................................10
14. BENCHMARKING...............................................................10
15. PRICE REVISION.............................................................11
16. DUTIES AND TAXES...........................................................11
17. PAYMENT TERMS..............................................................11
18. DELIVERY, TITLE AND RISK OF LOSS...........................................12
19. PRODUCT MAKEUP AND CHANGES; DISCONTINUATION................................12
20. LICENSE TO LICENSED MATERIALS..............................................13
21. RESCHEDULING OR TERMINATION OF ORDERS......................................15
22. DELIVERY INTERVAL..........................................................16
23. WARRANTIES AND WARRANTY EXCLUSIONS.........................................16
24. REPAIRS NOT COVERED UNDER WARRANTY.........................................19
25. INDEMNITY..................................................................20
26. INTELLECTUAL PROPERTY INDEMNITY............................................20
27. TRADEMARKS AND OTHER INDICIA...............................................21
28. CONFIDENTIALITY............................................................22
29. TERMINATION; EXPIRATION OF AGREEMENT.......................................23
30. EXCLUSIVE REMEDIES; LIMITATION OF LIABILITY................................24
31. MEDIATION; DISPUTE RESOLUTION..............................................25
32. INSURANCE AND INDEMNIFICATION BY SUPPLIER..................................25
33. RESELLER CUSTOMERS.........................................................26
34. CUSTOMS DUTY DRAWBACK......................................................26
35. FOB........................................................................27
36. ADDITIONAL PROVISIONS......................................................27
37. COMPLIANCE WITH LAWS.......................................................27
38. MISCELLANEOUS..............................................................27
SCHEDULE 3 - PRODUCTS AND PRICE SCHEDULE.........................................33
SCHEDULE 4 - INTERNATIONAL TERMS.................................................34
SCHEDULE 20 - LIMITED USE SOFTWARE LICENSE AGREEMENT.............................40
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SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement"), dated as of , 2002 (the
"Effective Date"), is by and between Agere Systems Inc., a Delaware corporation
("Agere" or "Supplier"), and Proxim Corporation, a Delaware corporation
("Buyer").
R E C I T A L S
A. WHEREAS, the Parties have entered into an Asset Purchase Agreement,
dated as of June 14, 2002 (the "Purchase Agreement"), pursuant to which Agere is
selling, and Buyer is acquiring, Agere's ORiNOCO Business (as defined in the
Purchase Agreement);
B. WHEREAS, in connection with the purchase and sale of the ORiNOCO
Business, Buyer seeks to appoint Agere, and Agere desires to be so appointed, as
Buyer's supplier of the products specified herein on the terms and conditions
set forth herein; and
C. WHEREAS, in furtherance of the foregoing transaction, Agere and
Buyer desire to enter into this Agreement to provide for certain commercial
transactions between the Parties as described herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valid consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS
For the purposes of this Agreement, in addition to the words and phrases
that are defined throughout the body of this Agreement, the following words and
phrases shall have the following meanings:
"Affiliate" of any Person means any Person that controls, is controlled
by, or is under common control with such Person. As used herein, the term
"control" (including the terms "controlling", "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities or other interests, by contract
or otherwise.
"Authorized Provider" shall mean (1) any of Supplier's authorized
distributors, dealers and similar entities, which may include Supplier's
Affiliates to which Supplier may assign or subcontract all or part of an Order
for Products, Licensed Materials or services; or (2) any Person who executes an
LOA and who, by doing so, agrees to be bound by the terms and conditions of this
Agreement, except as modified or exempted by the relevant LOA.
"Buyer's Products" shall mean products designed, produced, marketed, and
distributed by Buyer that contain or incorporate the Products provided under
this Agreement.
"End User" means (i) with respect to Software and Licensed Material, any
third party to whom Buyer or a Sublicensee of Buyer has granted rights to use,
but not to sublicense, Licensed Materials, and (ii) with respect to Products, a
third party who purchases Products primarily for use by such third party or
inclusion by such third party in networks or systems produced and sold by such
third party, and not for resale.
"Firmware" means Software embedded with Product hardware that is not
directly accessible by and cannot be loaded onto, removed from or altered by End
Users of such hardware.
"Governmental Authority" means any federal, state, local, foreign or
international court, government, department, commission, board, bureau, agency,
official or other regulatory, administrative or governmental authority.
"Information" means information, whether or not patentable or
copyrightable, in written, electronic or other tangible or intangible forms,
stored in any medium, including studies, reports, records, books, contracts,
instruments, surveys, discoveries, ideas, concepts, know-how, techniques,
designs, specifications, drawings, blueprints, diagrams, models, prototypes,
samples, flow charts, data, computer data, disks, diskettes, tapes, computer
programs or other software, marketing plans, customer names, communications by
or to attorneys (including attorney-client privileged communications), memos and
other materials prepared by attorneys or under their direction (including
attorney work product), and other technical, financial, employee or business
information or data.
"Licensed Materials" means any Software and Related Documentation
offered under this Agreement for which a license to use, sublicense, modify, or
distribute is granted under the terms and conditions of this Agreement. The term
Licensed Materials includes any third-party provided Software and Related
Documentation to which Supplier has sub-licensing rights and that are
incorporated into Supplier's Licensed Material.
"LOA" shall mean a Letter of Acceptance substantially in the form
attached hereto as Exhibit 1 to Schedule 4 to be used by a Non-U.S. Ordering
Company for the purpose of placing Orders outside of the United States.
"Non-U.S. Ordering Company" shall mean any Affiliate of Buyer located
outside the United States who has entered into a LOA with the appropriate
Supplier Entity in the same geographic area and is therefore authorized to order
Products, Licensed Materials or Services under this Agreement.
"Object Code" shall mean any compiled, assembled, or machine-executable
version of the Software, or any part thereof.
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"Order" shall refer to a written order for the provision of Products,
Licensed Materials or services pursuant to this Agreement, including Blanket
Purchase Orders as specified in Section 9.
"Ordering Company" shall refer to Buyer, any Affiliate of Buyer, or a
Non-U.S. Ordering Company that places an Order under this Agreement or an
applicable LOA.
"Party" shall refer to either Agere or Buyer; "Parties" shall refer to
Agere and Buyer collectively.
"Products" means systems, equipment, chip sets, assemblies and parts
thereof, offered under this Agreement and described in Schedules 3, but does not
include Software.
"Person" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.
"Price Schedule" shall mean the prices for the Products and Licensed
Materials listed in Schedule 3.
"Related Documentation" means materials in any form useful in connection
with Products of Software and/or its use including, but not limited to any
description, specification, listing, flow chart or mode of operation of such
Products or Software (including methods and concepts used therein).
"Reseller Customer" means a customer of Buyer who has an agreement with
Buyer to distribute or resell any of the Products, Licensed Materials or
services to End User customers.
"Software" means the programs, routines and symbolic languages that
control the functioning of Product hardware, including all Firmware, regardless
of the form, whether such Software is provided separately or bundled with or
embedded within such hardware. "Software" may be contained in any medium
whatsoever but shall not be read to mean or include such medium.
"Source Code" means any version of Software incorporating high-level or
assembly language that generally is not directly executable by a processor.
"Sublicensee" means any third party to whom Buyer or another sublicensee
grants rights to use and sublicense Licensed Materials.
"Supplier Entity" shall mean Supplier or an Affiliate or Authorized
Provider in a given geographical area that has executed a LOA with Buyer or a
Non-U.S. Ordering Company. Unless a LOA is executed by a Supplier Entity in a
particular geographical area outside the United States, this Agreement does not
cover that Supplier Entity; provided,
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however, that absence of a LOA does not preclude export in compliance with the
applicable United States export control laws and the laws of Buyer's or
Supplier's geographic location. Unless the context indicates otherwise, any
reference to Supplier in this Agreement shall constitute a reference to the
applicable Supplier Entity.
"United States" means the fifty (50) states comprising the United States
of America and the District of Columbia.
2. TERM OF THE AGREEMENT
The term of this Agreement shall commence on the Effective Date and
shall expire on the third (3rd) anniversary of the Effective Date, unless
earlier terminated in accordance with the provisions hereof (the "Term"). The
Term may be extended for additional one (1) year periods upon the mutual written
agreement of the Parties. The rights and obligations of the Parties which by
their nature would continue beyond the termination, cancellation, or expiration
of this Agreement, shall survive such termination, cancellation or expiration.
3. SCOPE OF THE AGREEMENT
(a) This Agreement contemplates that Buyer will buy on an as ordered
basis from Agere certain Products and Licensed Materials as set forth in
Schedule 3. Subject to Buyer's existing commitments, each of Buyer and Supplier
agree that, through the Term, to the extent Buyer is able to purchase Products
from Supplier consistent with Buyer's future designs at levels of price,
quality, quantity and service that are competitive with the levels obtainable by
Buyer in an arm's length transaction with third Parties, Supplier shall be a
preferred supplier of such Products and related Licensed Materials to Buyer and
Buyer shall use commercially reasonable efforts to purchase such Products from
Supplier to the exclusion of other vendors and suppliers.
(b) Under the terms and conditions of this Agreement, Agere shall
sell to Buyer, for (i) the purpose of incorporation of Product(s) or Licensed
Material(s) into Buyer's finished products for sale or resale to End User
customers or to Reseller Customers or for use as spares or replacement parts for
such finished products ("OEM Sale"); (ii) sales in which the Product(s) or
Licensed Material(s) is resold or sublicensed as part of Bundled Offers by Buyer
to End User customers and/or to Reseller Customers or for use as spares or
replacement parts for such offers ("Value Added Resale" or "VAR"); or (iii) such
other uses or projects to which the Parties may agree in writing. For purposes
of (ii) above, a "Bundled Offer" is a product offering made by Buyer to its End
User customers and/or Reseller Customers consisting of the Products or Licensed
Materials combined with other products or services provided by Buyer, the
combination of which will add additional value to End Users of the Products or
Licensed Materials. Stand alone resale of the Products or Licensed Materials
which does not constitute an OEM Sale or a Value Added Resale is prohibited,
except as expressly permitted herein including but not limited to provision of
spares or
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replacement parts in connection with a sale permitted hereunder, or as the
Parties may otherwise agree in writing.
(c) The only Products and Licensed Materials covered by this Agreement
are those (i) listed on Schedule 3 and/or explicitly stated herein and all
improvements, updates, or upgrades to such Products and Licensed Materials that
are released to the market by Supplier during the Term, or (ii) offered by
Supplier to Buyer under this Agreement by other written notice. Agere may add to
Schedule 3 at any time, provided that Buyer agrees in writing to the addition of
new Products or Licensed Materials.
(d) Buyer and any of its Affiliates in the United States may place or
enter into Orders under this Agreement for the procurement of Products or
Licensed Materials in the United States.
(e) In the event that Buyer, or Buyer's designated contract
manufacturer, wants to procure Products and/or Licensed Materials outside the
United States, the following procedures shall apply:
(1) Prior to submitting or entering into an Order under this
Agreement, the Non-U.S. Ordering Company and the relevant Supplier Entity shall
sign a LOA committing them to utilize the terms and conditions of this Agreement
in any forthcoming procurement of Products or Licensed Materials in their
location, subject to any modified, additional, or deleted terms as set forth in
the LOA. Each LOA shall state the Supplier Entity, the Non-U.S. Ordering
Company, the applicable Products and Licensed Materials, and the geographical
area to which it applies. Each LOA will incorporate by reference the master
terms and conditions of this Agreement, the additional international terms set
forth in Schedule 4 (International Terms), and will specify any agreed upon
changes required by local law, local operational practice, the availability or
variation of services for the geographical area, or any other in-country needs
or concerns. Such additional terms may include, but shall not be limited to:
currency in which payment is to be made, taxes, delivery terms, passage of
title, importer of record, in-country installation and maintenance requirements,
or choice of law, and handling of disputes as well as operational changes (e.g,
lead times, response times, service support plans and offerings, etc.).
Notwithstanding the foregoing, the Parties intend that the terms and conditions
of the Agreement, as supplemented and/or modified by Schedule 4, shall apply
except with respect to those mutually agreed upon provisions which are required
to address (1) local laws/regulations or (2) operational issues resulting from
transacting in the particular country identified in the relevant LOA. Each LOA
shall be deemed a separate contract between the Parties who sign it, and each
Party identified in such LOA shall look only to the other for performance of
their respective obligations under such LOA and any Order placed pursuant to it.
Once a LOA has been executed by the relevant Parties, multiple Orders may be
placed under such LOA.
(2) For deliveries outside of the United States only: (i)
should there be a conflict between the terms and conditions of a LOA and this
Agreement (including the
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applicable International Terms set forth in Schedule 4), the terms of the LOA
shall prevail; and (ii) should there be a conflict between the terms and
conditions of this Agreement and the International Terms, the International
Terms shall prevail. Once a LOA for a specific geographic area is executed
between a Non-U.S. Ordering Company and a Supplier Entity Parties, Orders may be
placed under the LOA following the procedures set forth herein (unless modified
or amended by the relevant LOA). In the event of a conflict between the terms of
a LOA or this Agreement and an Order, the terms of the Order shall prevail,
provided the terms of the Order have been approved in writing by authorized
representatives of the Parties.
(f) It is expressly understood and agreed that this Agreement neither
grants to Supplier an exclusive right or privilege to sell to Buyer any or all
Products, Licensed Materials or services of the type described in this Agreement
which Buyer may require, nor requires the purchase of any Products, Licensed
Materials or services from Supplier by Buyer. It is, therefore, understood that
Buyer may contract with other manufacturers and suppliers for the procurement of
comparable Products, Licensed Materials or services. In addition, Buyer shall at
its sole discretion, decide the extent to which Buyer will market, advertise,
promote, support, or otherwise assist in further offerings of the Products,
Licensed Materials or services.
(g) The relationship of the Parties under this Agreement shall be,
and at all times remain, one of independent contractors and not that of
franchiser and franchisee, joint ventures, or principal and agent. Neither Party
shall have any authority to assume or create obligations on the other's behalf
with respect to such Products or Licensed Materials, and neither Party shall
take any action which has the effect of creating the appearance of its having
such authority. Nothing in this Agreement shall be deemed or construed by the
Parties or any third party as creating the relationship of principal and agent,
partnership or joint venture between the Parties, it being understood and agreed
that no provision contained herein, and no act of the Parties, shall be deemed
to create any relationship between the Parties other than the relationship of
independent contractor.
(h) Neither Party is, or shall hold itself out to be, the
representative of the other. Buyer shall market the Products and Licensed
Materials to customers on such terms and conditions as Buyer chooses, provided
Buyer does not violate this Agreement.
(i) In the event Buyer wishes to sell or license certain of
Supplier's Products or Licensed Materials under Buyer's brands and marks, the
following additional terms and conditions apply:
(1) Supplier will affix Buyer's brands or marks to the
Products, Licensed Materials, documentation, and packaging materials produced
for Buyer pursuant to this Agreement ("Buyer Branded Materials"). It is
expressly acknowledged that this Agreement shall not give Supplier any right,
title or interest in or to Buyer's brands or marks and that any goodwill arising
from any use or distribution of the Buyer Branded Materials shall inure
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solely to the benefit of Buyer. Buyer hereby grants Supplier a royalty free,
non-exclusive , non-transferable worldwide license:
(a) to duplicate and use Buyer's brands and marks for the
limited purpose of marking Buyer Branded Materials (or having Buyer Branded
Materials made by Supplier's suppliers); and
(b) to market, sell, and distribute such Buyer Branded
Materials exclusively to Buyer or to such Persons as directed to or authorized
by Buyer.
(2) To the extent applicable, Supplier will label Products or
Licensed Materials as required by Part 68 of United States Federal
Communications Commission rules, 47 C.F.R. Section 68.300. At the sole
discretion of Supplier, certain Products, Licensed Materials, components,
documentation, or packaging delivered to Buyer may also bear trade names,
trademarks, trade devices, logos, codes, serial numbers, or other symbols of
Supplier or of third Parties, or of any combination thereof (collectively "Other
Marks"). Neither this Agreement nor the purchase and resale of Products or
licensing of Licensed Materials containing such Other Marks shall give Buyer any
right, title, interest, or privilege with respect to any of the Other Marks.
Buyer shall not conduct business or market Products or Licensed Materials under
any of the Other Marks or derivatives or variations thereof. Buyer may disclose
that the Products are manufactured or produced by Supplier, but Buyer shall not
directly or indirectly hold itself out as having any other relation to Supplier
or to any of its affiliates. Buyer shall take all commercially reasonable steps
to ensure that its dealers, distributors, and agents comply with all provisions
of this Section. Notwithstanding the preceding, the presence of Other Marks
shall not affect Buyer's rights to resell Products or sub-license Licensed
Materials in accordance herewith.
(3) With respect to Buyer's Branded Materials, except as
expressly set forth in this Agreement, Buyer shall not, without Supplier's
express written permission, use in advertising, publicity or otherwise any
Supplier name, trademark, service xxxx or symbol, trade dress or any other
indicia of origin. Buyer shall not represent that it is a dealer, distributor,
supplier or agent of Supplier or that it is affiliated with, endorsed by,
sponsored by or in any way connected with Supplier. Buyer shall not imply or
state that it has any authority to bind Supplier or to modify Supplier's
warranty.
4. SCHEDULES
The following Schedules are incorporated by reference hereunto and form
a part of this Agreement:
Schedule 3 Agere Products and Price Schedule
Schedule 4 International Terms
Schedule 20 Supplier License Agreement
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5. SUPPLIER'S RESPONSIBILITIES
Supplier agrees at all times:
(a) to keep abreast and to keep Buyer abreast of any major developments
in Supplier's industry and to promptly advise Buyer of any developments that
might affect the production of any Product or Licensed Material under this
Agreement or any Order placed hereunder.
(b) to permit Buyer to review, inspect, and evaluate on a periodic
basis (but not unreasonably frequently) Supplier's parts and supplies and
Supplier's facilities.
(c) to immediately notify Buyer's representative thereof and include
all relevant information concerning the delay or potential delay if Supplier has
knowledge that anything prevents or threatens to prevent the timely delivery of
Products or Licensed Materials under this Agreement or an Order placed pursuant
to this Agreement.
(d) to provide timely notice to Buyer of improvements, updates, or
upgrades to Products.
(e) to manufacture the products in compliance with the requirements of
ISO 9002.
(f) to have an established system to allow traceability from production
lots to material lots used in the production lot. This will allow traceability
of specific defective material.
(g) in the event of delinquent Product deliveries, Product shortages or
shortfalls or periods of Product allocations, Supplier shall allocate available
Product to Buyer in a fair and reasonable manner (e.g., on a pro rata basis
based on historical purchases) relative to any and all of Supplier's similarly
situated customers.
6. EXPORT CONTROL
The Parties acknowledge that any Products, Licensed Materials and
services and all other Software and technical information (including, but not
limited to, services and training) provided under this Agreement are subject to
U.S. export laws and regulations and any use or transfer of such Products,
Licensed Materials, services, and technical information must be authorized under
those laws and regulations. The Parties agree that they will not use,
distribute, transfer, or transmit the Products, Licensed Materials, services, or
technical information (even if incorporated into other products) except in
compliance with U.S. export laws and regulations. The Parties each agree to sign
written assurances and other export-related documents as may be required by the
other to comply with U.S. laws and export regulations.
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7. ELECTRONIC DATA INTERCHANGE
Supplier agrees, if requested by Buyer, to use commercially reasonable
efforts to implement "Electronic Data Interchange" or "EDI" as an electronic
means of trading business documents with Buyer. The electronic business
documents may include Orders, acknowledgments, Order changes, ship notices,
invoices, remittance advice, electronic funds transfer (EFT) or such purchasing
communications as may be reasonably requested by Buyer for transactions under
this Agreement.
8. ORDERS
Orders submitted by Buyer for the Products or Licensed Materials shall
be deemed subject to this Agreement unless the Parties otherwise expressly agree
in writing. All Orders shall be subject to acceptance by Supplier. Unless prior
written notice of rejection is received by Buyer from Supplier, Orders issued
under this Agreement shall be deemed to have been accepted by Supplier upon the
occurrence of the earliest of: (1) expiration of five (5) business days from the
date of issuance of the Order; (2) Supplier's written acceptance of the Order;
(3) shipment of the Products or Licensed Materials; or (4) submission of
Supplier's first invoice. Orders shall indicate the Products and Licensed
Materials to be furnished, applicable pricing, product code and Buyer's
warehouse address, requested delivery dates, and any other information
reasonably requested by Supplier. Orders may be submitted in writing or by such
electronic means as mutually agreed.
Changes by Buyer to an Order that has been previously accepted by
Supplier (a "Change Order") are subject to acceptance by Supplier. Change Orders
shall be treated as a separate order. In the event Buyer submits a Change Order
and such change affects Supplier's ability to meet its obligations under the
original Order, any price (or discount, if applicable), shipment date or
services completion date quoted by Supplier with respect to such original Order
is subject to change. Supplier will provide to Buyer written quotations and
expected completion dates for any requested Change Orders. If the Parties agree
on such revised terms, the Change Order shall be deemed accepted.
9. BLANKET PURCHASE ORDERS
Buyer may submit Blanket Purchase Orders under this Agreement. Blanket
Purchase Orders cover a specific period of time as identified on the order. The
quantity of Products or Licensed Material specified in such Blanket Purchase
Orders is Buyer's forecasted usage for the specified period. The forecast is not
a commitment. Buyer's only commitment is for the number of units ordered by
Buyer by specific written requests for product to be released (the "Release"),
except as otherwise stated in this Agreement. A Release shall be treated as an
Order in accordance with this Agreement. Each Release shall specify the number
of units to be shipped by Supplier and the shipment schedule (the "Release
Schedule").
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10. FLEXIBLE DELIVERY ARRANGEMENTS
During the term of this Agreement, and for OEM Sales only, if Buyer
requests and Supplier agrees, such agreement not to be unreasonably withheld,
Supplier will implement certain forms of "Flexible Delivery Arrangements",
including, but not limited to, consignment, demand pull, and pull replenishment,
for designated Product or Licensed Material.
11. SHIPPING
Supplier shall: (1) ship the Product or Licensed Material covered by
this Agreement or Order and shall ship the Order complete if Buyer specifically
states in its Order that the Order shall be shipped complete; (2) ship to the
destination designated in the Agreement or Order; (3) ship according to routing
instructions given by Buyer; (4) place the Agreement and Order number on all
subordinate documents; (5) enclose a packing memorandum with each shipment and,
when more than one package is shipped, identify the package containing the
memorandum; and (6) xxxx the Agreement and Order number on all packages and
shipping papers; provided, however, that Supplier shall not be required to "drop
ship" to locations other than those of Buyer or Buyer's Affiliates or its
contract manufacturers pursuant to Section 13, PRICES except if Buyer agrees to
pay the incremental costs, if any, associated with any such shipment. Adequate
protective packing shall be furnished at no additional charge. Shipping and
routing instructions may be furnished or altered by Buyer without a writing.
12. FORECASTS
Buyer will make a commercially reasonable effort to provide Supplier
with a rolling twelve (12) month non-binding forecast of Product requirements,
including configurations. Buyer will provide the initial forecast within sixty
(60) days of the Effective Date of this Agreement, and thereafter will make a
commercially reasonable effort to update the forecast at least monthly.
13. PRICES
Supplier will invoice Buyer for Products and Licensed Materials in
accordance with the Price Schedule. At Buyer's written request, Supplier agrees
to sell Products and Licensed Materials to Buyer's designated contract
manufacturer or systems integrator as per the Price Schedule shown in this
Agreement when such sales are for use or benefit of Buyer.
14. BENCHMARKING
After the first six (6) months of this Agreement, and on a semi-annual
basis, Supplier and Buyer shall undertake to benchmark prices, quality and
service performance of the Products and Licensed Materials purchased by Buyer.
The purpose of this benchmarking is
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to keep contract and industry prices, service and quality levels appropriately
aligned. The Products and Licensed Materials benchmarked shall be the codes that
comprise eighty percent (80%) of the monetary volume purchased by Buyer.
Supplier and Buyer shall review such benchmark information and Supplier shall
develop a plan of action for improving Product and Licensed Materials price,
quality and service performance as a result of the benchmarking exercise.
15. PRICE REVISION
Supplier and Buyer agree that the prices set forth on the Price Schedule
shall be the prices for the first eighteen (18) months of this Agreement, after
which Supplier and Buyer will review prices on a quarterly basis. Such revision
shall be determined by mutual agreement of the Parties. In the event Supplier
increases the then applicable price of a Product or Licensed Material after the
eighteen-month period, Supplier shall provide written notice to Buyer at least
ninety (90) days prior to the proposed effective date thereof. With respect to
any price changes initiated after , if the Parties fail to agree upon revised
prices by the proposed effective date of such price change, Buyer shall have the
right to submit a "last buy" order for the relevant Products or Licensed
Materials and to have such Products or Licensed Materials deleted from Schedule
3, as applicable, if it so chooses within ninety (90) days after receipt of the
notice; provided that Buyer may defer delivery, in whole or in part, for up to
twelve (12) months after receipt of such notice.
Notwithstanding anything to the contrary herein, Supplier may reduce
prices under this Agreement unilaterally at any time at its discretion and
without being subject to the procedures set forth in this Section.
16. DUTIES AND TAXES
Buyer shall bear all taxes, duties and other similar charges (and any
related interest and penalties), however designated, imposed upon or based upon
the provision, sale, license or use of Products, Licensed Materials or services,
excluding taxes on Supplier's net income, unless Buyer provides Supplier with a
valid tax exemption certificate.
17. PAYMENT TERMS
Buyer shall pay any undisputed invoiced amount within thirty (30) days
from the date of the invoice. If Buyer fails to pay any undisputed invoiced
amount when due, any unpaid amount will be subject to a late payment charge at
the rate of one and one-half percent (1-1/2%) per month (but not to exceed the
then-maximum lawful rate).
Invoices for Products and Licensed Materials will be sent upon shipment
or as soon thereafter as practicable. Partial shipments shall be separately
invoiced and shall be paid by Buyer net thirty (30) days from the date of the
undisputed invoice and not from when the
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remaining shipments occur. If Buyer delays shipment, then Supplier may invoice
when Supplier is prepared to ship the Products and Licensed Materials.
Orders placed under this Agreement are subject to a maximum outstanding
credit limit as reasonably determined by Supplier. Supplier may refuse to accept
orders which may cause Buyer to exceed such credit limit. Each shipment of
Products and Licensed Materials shall constitute an independent transaction, and
Buyer shall pay for same without deduction or set-off.
Payment shall be made only for the Products and Licensed Materials in
the quantities specified in the Order. Buyer may deduct from the amount
indicated on the invoice all items delivered which were not specified. The Buyer
shall notify Supplier in writing and following acknowledgment by Supplier, these
Products shall be returned by the Buyer to Supplier at Supplier's expense. The
expenses borne by the Supplier for such returns shall include without
limitation, customs duties, taxes, levies, insurance and freight.
18. DELIVERY, TITLE AND RISK OF LOSS
Except for those transactions subject to any agreed upon Flexible
Delivery Arrangements, title to Products only and risk of loss to Products and
Licensed Materials shall pass to Buyer upon delivery to Buyer's carrier in
accordance with the terms of this Agreement. Title to all Licensed Materials
(whether or not part of Firmware) furnished by Supplier shall remain with
Supplier. Buyer shall notify Supplier promptly of any claim with respect to loss
which occurs while Supplier has the risk of loss and shall cooperate in every
reasonable way to facilitate the settlement of any claim. For purposes of this
Section, "delivery" shall mean the point at which Supplier or Supplier's
supplier or agent turns over possession of the Product or Licensed Materials to
Buyer, Buyer's employee, Buyer's designated carrier, Buyer's warehouse, or other
Buyer's agent and not necessarily the final destination shown on the Order.
19. PRODUCT MAKEUP AND CHANGES; DISCONTINUATION
Parts incorporated in Products sold hereunder in this Agreement shall be
new.
Supplier shall have the right, in the Supplier's sole discretion, to
change the design or to discontinue the manufacture or availability to Buyer of
a Product or Licensed Material subject to the following terms:
(a) In the event that any such design change affects the form, fit, or
function of the Product or Licensed Material, then the Supplier shall notify
Buyer of such change when the Supplier becomes aware of such change and no later
than 180 days before the change becomes effective. If however Supplier and Buyer
are unable to reach mutual acceptance of the change within 180 days from
notification to the Buyer, then at the expiration of the 180
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days, Supplier may implement such change at the Supplier's sole discretion and
the Buyer may as its exclusive remedies have the following options:
(1) cancel any outstanding purchase orders for undelivered
Products or Licensed Materials without incurring any cancellation charges for
the Product or Licensed Material affected by the design change provided that the
design change is the reason for the cancellation, and, have the option of a last
buy quantity (not to exceed the total amount purchased within the prior twelve
(12) month period) of Product or Licensed Materials without the change. In the
event of a last buy, Buyer shall place and schedule for delivery any such order
within 120 days of the expiration of the 180 day period, or;
(2) continue to purchase changed Product and Licensed Material
at terms defined in this Agreement.
(b) For discontinuance of manufacturing or availability of any Product
or Licensed Material to the Buyer, Supplier will notify Buyer of such intent no
later than 180 days before implementation. Supplier shall accept Buyer's Orders
for such Products and Licensed Materials during the period following Supplier's
notice and prior to the effective date of notice. Buyer may as its exclusive
remedies have the following options:
(1) cancel any outstanding Orders for undelivered Products or
Licensed Materials that have been discontinued without incurring any
cancellation charges for the Product or Licensed Material; or
(2) have the option to submit during the period following
Supplier's notice and prior to the effective date of notice a last buy (not to
exceed the total amount purchased within the prior twelve (12) month period) of
Product or Licensed Materials without the change. In the event of a last buy,
Buyer shall place and schedule for delivery any such order within 120 days of
the expiration of the 90 day period.
20. LICENSE TO LICENSED MATERIALS
Supplier grants Buyer a personal, non-exclusive license to use Licensed
Materials only in connection with the Product for which such Licensed Materials
are furnished. All Licensed Materials (whether or not part of Firmware)
furnished by Supplier, shall remain the property of Supplier.
If the particular Product for which such Licensed Materials are
furnished becomes temporarily inoperative, Buyer shall have the right to use the
Licensed Materials on a backup Product until operable status is restored.
Unless otherwise set forth in a separate written agreement or as
provided herein, as may be required in connection with a specific Product, no
Source Code version of Software shall be licensed or provided to Buyer under
this Agreement.
-13-
Notwithstanding the provisions of this Section, Buyer may sublicense its
right to use Licensed Materials to an End User customer, but only in connection
with the sale or lease to such customer of the Products for which such Licensed
Materials were furnished. Such sublicense shall be in writing, shall be executed
by Buyer's customer, and shall incorporate the terms and conditions set forth in
this Section except that (i) such sublicense shall not permit the customer to
sublicense the Licensed Materials or assign such sublicense and (ii) warranties
by Supplier under this Agreement shall not extend to the customer. To the extent
the use of a "tear-open" license is permitted by applicable law, then such
license is acceptable for the purpose of this Agreement. Such sublicense shall
substantially conform to the provisions of the License attached hereto as
Schedule 20. If such sublicense is issued in the name of the Buyer, Supplier
shall have a right as a third party beneficiary to enforce any of the provisions
thereof. Any third party transferee must agree to require any successive
transferee to correspondingly assume these same obligations. Upon request by
Supplier, Buyer agrees to provide Supplier's independent auditor with copies of
all such sublicenses. The terms of such sublicenses shall survive any
termination of rights under this Agreement.
Failure by Buyer to comply with the material terms and conditions of
such License shall be a material breach of this Agreement. Supplier may cause
Buyer to cancel any sublicense to a customer of Buyer who fails to comply
therewith. If a license or sublicense is canceled, or if Licensed Materials are
no longer needed, all copies of Licensed Materials shall be returned to
Supplier, or Supplier shall be assured that all copies of such Licensed
Materials have been destroyed and Software has been erased from all media. This
paragraph shall not affect (1) the proper sublicense of Licensed Materials made
before Buyer's license is canceled, or (2) Buyer's license hereunder if a
customer of Buyer fails to comply with a sublicense, provided, in either event,
that such sublicenses fully comply and comport with this article.
Subject to the terms stated below, the Licensed Materials shall include
and Supplier hereby grants to Buyer a personal, non-exclusive, non-transferable,
non-sublicensable license to the Firmware Source Code and drivers and utility
programs Source Code, including associated documentation, listed on Schedule
20B, as may be updated from time to time. Such license shall be subject to the
following additional terms:
(a) Buyer shall have the right to reproduce, compile, and make
modifications to or derivatives of ("Derivative Works") the Firmware Source Code
solely for the purpose of creating Object Code to be used as firmware on the
Products that are incorporated into Buyer's products.
(b) Buyer shall have the right to reproduce, compile, and make
modifications to or derivatives of the driver and other utility program Source
Code solely for the purpose of creating Object Code to be distributed and used
with Buyer's products that incorporate the Products.
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(c) Supplier agrees that, as between Buyer and Supplier, Buyer shall
have and retain ownership of and title to all Derivative Works made by Buyer,
except that (i) any Derivative Works conceived or implemented by Buyer and
Supplier in a collaborative engineering effort shall be owned jointly by both
Parties with no right of accounting ("Jointly Owned Derivative Works"); and (ii)
any correction ("Fix") to a Product Flaw, discovered, conceived or implemented
by either Party, will be owned wholly and solely by Supplier and shall be
furnished to Supplier by Buyer. "Product Flaw" shall mean any deviation in
Product performance from the intended function. Buyer hereby grants to Supplier
a non-exclusive, transferable, sublicensable, royalty-free, worldwide, perpetual
license to use, execute, perform, copy, reproduce, modify and make derivative
works of and distribute the Jointly Owned Derivative Works.
(d) Buyer shall be solely responsible for the performance and its use
of such Derivative Works.
(e) In the event that Supplier releases an upgrade or revision to the
Source Code, Buyer shall be solely responsible for incorporating such upgrade or
revision into the Derivative Works. Supplier is not obligated to make such
releases or upgrades or revisions; provided, however, that Supplier agrees to
provide to Buyer in accordance with the terms of this Agreement any upgrades or
revisions that are released.
(f) Buyer may sublicense the Source Code, including Derivative Works and
Jointly Owned Derivative Works, of drivers and utility programs, but not the
Firmware, to a Buyer OEM partner who is not a competitor of Supplier (as
identified in Buyer's then current Forms 10-K or 10-Q from time to time), to use
to incorporate the Products into their products, provided such third-party OEM
partner agrees to substantially the same terms and conditions including
restrictions on disclosure and use of the Source Code and Licensed Materials at
least as restrictive as are contained in this Agreement, and further agrees to
return to Buyer (and not distribute) all copies of such Source Code, Derivative
Works and Jointly Owned Derivative Works. In the case of an OEM partner that has
been identified as a competitor of Supplier, Supplier and Buyer will negotiate
in good faith an agreement whereby Buyer can sublicense the Source Code,
Derivative Works and Jointly Owned Derivative Works to such OEM partner for a
restricted field of use. Supplier shall have the sole discretion to deny such
permission.
(h) All rights not expressly granted herein are reserved to Supplier.
21. RESCHEDULING OR TERMINATION OF ORDERS
(a) Orders may only be rescheduled as follows:
DAYS CANCEL RESCHEDULE
---- ------ ----------
Within 15 days No rescheduling and no termination of Orders.
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DAYS CANCEL RESCHEDULE
---- ------ ----------
16 to 30 days 50% 50% (one-time*)
31 days to lead-time 100% 100% (one time*)
One time reschedule by up to 90 days beyond factory promised date is permitted
with no further reschedule. Reschedule percentage is based on a percentage of
monthly original demand.
(b) No termination of any Order is permitted following a rescheduling
previously negotiated at Buyer's request. If Buyer terminates any Order, either
in whole or in part, Buyer shall compensate Supplier for loss or damage
resulting from such termination by paying Supplier as follows:
DAYS PERCENT OF LIABILITY
---- --------------------
0 to 15 days 100
Greater than 15 days 0 (only for amounts set forth above)
(c) As used in this Section, "Days" means the number of days between
the date of reschedule request or termination notice and current factory promise
date and "Liability" means the percentage of aggregate purchase price of the
terminated portion of the Order.
22. DELIVERY INTERVAL
The delivery interval applicable to each Order will be agreed upon by
Supplier and Buyer and set forth in the Order.
If Supplier exceeds the agreed to delivery by more than a five (5) day
interval then Buyer's exclusive remedy shall be to either: (a) cancel such
Order, or (b) extend such delivery interval to a later date, subject, however,
to the right to cancel as in (a) preceding if delivery is not made or
performance is not completed on or before such extended delivery date. Supplier
shall be responsible for payment of any express delivery charges required to
deliver the product as quickly as practicable.
Supplier shall immediately notify Buyer as soon as it becomes apparent,
if Supplier is unable to meet the delivery interval for an Order. However,
nothing contained in this paragraph shall waive Buyer's rights as set forth
above in this Section.
23. WARRANTIES AND WARRANTY EXCLUSIONS
a. WARRANTIES TO END USERS:
The Products or Licensed Materials are provided to End Users and
Buyer's Reseller Customers "as is." Supplier makes no warranty to End Users and
Buyer's Reseller Customers of any kind.
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b. HARDWARE WARRANTY TO BUYER:
(i) Supplier warrants only to Buyer that it will repair or
replace Products which, at the time of shipment and under proper and normal use
(as unmodified), contain defects in material or workmanship or fail to conform
to Supplier's applicable Product descriptions or specifications if any such
failure appears in any Product within eighteen (18) months of the date title to
Product is transferred to Buyer. Supplier will, at its option, either repair or
replace the defective Product without charge at Supplier's manufacturing or
repair facility or at Buyer's facility, or if such repair or replacement is not
commercially and reasonably feasible, will refund the purchase price of the
defective Products, provided: (1) that Buyer notifies Supplier of the purported
failure to conform to this warranty within the warranty period, and (2) that
Supplier's examination of the Product discloses that the purported failure to
conform to this warranty is present. Buyer shall follow Supplier's instructions
regarding return of Products to the place designated by Supplier, and no
Products will be accepted for repair, replacement or refund absent Buyer's
following such instructions. Supplier shall be responsible for any custom
duties, local taxes and expenses related to the importation of repair or
replacement Products and any requested premium transportation. Replaced parts
and Products shall become Supplier's property. Supplier shall not be responsible
under this warranty for deinstallation or reinstallation or for related expenses
arising out of the alteration of Buyer's or a third party's premises or
building, or removal, replacement or relocation of other items not purchased
hereunder. If Supplier determines that the Products do not fail to conform to
this warranty, Buyer shall pay Supplier all costs of handling, inspection,
repairs and transportation at Supplier's then prevailing reasonable rates.
(ii) Supplier shall be solely responsible for repair or
replacement of Product which is installed by Buyer in finished product being
purchased by Supplier from Buyer, unless the Buyer performs improper
installation of Product into finished product or the Product has been damaged or
modified by Buyer, in which case Buyer shall be responsible for repair or
replacement.
(iii) Repair and replacement parts and Products provided under
the above warranty are warranted as set forth above, but only for sixty (60)
days from the date of repair or replacement, or, for the remainder of the
warranty period, whichever is greater, and such parts and Products may be new,
remanufactured or refurbished, at the discretion of Supplier, provided such
Products perform as new.
(iv) All rights exercised under this warranty shall be exercised
only by Buyer or Buyer's designated contract manufacturer.
(v) Supplier shall repair or replace defective units within a
commercially reasonable time (not to exceed 30 days) after receipt of such
units.
The foregoing warranty does not extend to the use of Supplier's Products
beyond the specifications; to expendable items; to experimental or developmental
products; to other
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products, procured from other sources, which were integrated or assembled by
Buyer with Supplier's Products; or to Products which have been subject to
misuse, neglect, accident or abuse; have been improperly wired, repaired or
altered by anyone other than Supplier; have been improperly installed, stored or
maintained by anyone other than Supplier; have been used in material violation
of Supplier's instructions; or have had their serial numbers or month and year
of manufacture or shipment removed, defaced or altered. Supplier makes no
warranty, express or implied, to any customer of Buyer regarding Buyer's total
system, and Buyer shall make no representation to the contrary to a customer.
c. LICENSED MATERIAL WARRANTY TO BUYER
(i) Supplier warrants to Buyer that, upon shipment, Licensed
Materials licensed under this article will be free from defects which result in
a material failure of the applicable Product to operate in accordance with
specifications for such Licensed Materials.
(ii) If under normal and proper licensed use, the Licensed
Materials prove to have such a defect (1) within ninety (90) days from the date
of Buyer's acceptance thereof, Supplier, at its option, will either correct or
replace the same without charge at its facility or, if such repair or
replacement is not commercially and reasonably feasible, provide a refund or
credit. No Licensed Material will be accepted for correction or replacement
except upon the written authorization and in accordance with instructions of
Supplier. Any transportation expenses associated with returning such Licensed
Materials to Supplier shall be borne by Supplier. At Supplier's option,
correction may be incorporated into a new release of the Licensed Materials
which will be made available to Buyer.
(iii) In the event that Supplier determines after investigation
that more than 10% of the Licensed Materials alleged by Buyer to have been
defective were not defective, Buyer shall pay all costs of handling, inspection,
testing and transportation, including travel and subsistence costs incurred by
Supplier's personnel arising in connection with such non-defective Licensed
Materials.
(iv) All rights exercised under this warranty shall be
exercised only by Buyer, whether or not beneficial use of the media containing
Licensed Materials belongs to Buyer or Buyer's customers.
(v) Supplier makes no warranty as to the following: defects
other than those which result in a material failure of the applicable Product to
execute instructions; defects related to Buyer's or a third party's misuse,
neglect, accident or abuse; defects related to Buyer's or a third party's
alteration of Software; the correction of defects appearing in Software used in
violation of the license granted hereby; that Licensed Materials will meet
specifications or requirements of Buyer or its customers; or that the operation
of the Product using the Licensed Materials will be uninterrupted or error-free.
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(vi) The foregoing warranty is exclusive and is in lieu of all
other express and implied warranties in connection with the Licensed Materials
covered by this paragraph, including but not limited to, warranties of
merchantability and fitness for a particular purpose. Buyer's sole and exclusive
remedy for breach of this warranty, whether in contract, tort, strict liability
or otherwise, shall be Supplier's obligation to correct, replace, credit or
refund, as set forth above.
THE FOREGOING WARRANTIES ARE IN LIEU OF AND EXCLUDE ALL OTHER EXPRESS
AND IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. BUYER'S
SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THIS WARRANTY, WHETHER IN CONTRACT,
TORT, STRICT LIABILITY OR OTHERWISE, SHALL BE SUPPLIER'S OBLIGATION TO REPAIR,
REPLACE OR REFUND AS SET FORTH ABOVE.
24. REPAIRS NOT COVERED UNDER WARRANTY
In addition to repairs provided for in the Section entitled WARRANTIES
AND WARRANTY EXCLUSIONS, Supplier agrees to provide repair service to Buyer on
all Products and Licensed Materials ordered under this Agreement during the term
of this Agreement for five (5) years following the last shipment of such Product
or Licensed Material to Buyer. Buyer and Supplier agree to negotiate in good
faith repair intervals and repair charges should the need arise.
Products and Licensed Materials to be repaired under this Section must
be returned to a location designated by Supplier. Unless otherwise mutually
agreed upon, Supplier shall ship the repaired Products and Licensed Materials
which meets the specifications set forth in this Agreement to the appropriate
Buyer or customer location as shown on the repair order. If at any time Supplier
is unable to meet the agreed to repair interval, Supplier shall immediately
notify Buyer or customer and establish a mutually agreed upon shipment date for
the repaired Products and Licensed Materials.
If Products or Licensed Materials are returned to Supplier for repair as
provided for in this Section, and are determined to be beyond repair, Supplier
shall so notify Buyer or the customer. When Buyer is involved and if requested
by Buyer, Supplier will sell to Buyer a replacement at the then agreed upon
price in this Agreement, or, if this Agreement has expired or there is no agreed
upon price in the Agreement, at Supplier's then current list price for the
Products and Licensed Materials.
Replacement and repaired Products and Licensed Materials shall be
warranted as set forth in Section 23.
It is expressly understood and agreed that this Agreement does not grant
Supplier an exclusive privilege to repair any or all of the Products and
Licensed Materials purchased
-19-
under this Agreement for which Buyer may require repair, and Buyer may perform
the repairs or contract with Supplier's Authorized Providers for these services.
In addition, Supplier authorizes Buyer and any Supplier Authorized Provider with
whom Buyer may contract to perform repairs on all Products and Licensed
Materials purchased under this Agreement.
All transportation costs and in-transit risk of loss and damage to
Products and Licensed Materials returned to Supplier for repair under this
Section will be borne by Buyer and all transportation costs and risk of
in-transit loss and damage associated with the return of such repaired material
will be borne by Buyer.
Invoices to Buyer for repair services hereunder will be paid in
accordance with Section 17, PAYMENT TERMS.
25. INDEMNITY
Supplier will indemnify and save harmless Buyer from any loss or damages
(including reasonable attorneys' fees) awarded against Buyer by final judgment
(or by settlement approved by Supplier) because of claims, suits, or demands of
third Parties for personal injury or tangible property damage (as limited below)
to the extent such loss or damage is caused by or results solely from the
negligent or willful acts of Supplier or its employees or agents provided 1)
Buyer promptly notifies Supplier in writing of any suits, claims or demands
against Buyer for which Supplier is responsible under this indemnity, 2) Buyer
gives Supplier full opportunity and authority to assume the sole defense of and
settle such suits and 3) Buyer furnishes to Supplier upon request all
information and assistance available to Buyer for defense against any such suit,
claim or demand. Supplier's liability under this indemnity, however, shall in no
event exceed $1,000,000 for any one occurrence (except for indemnity pursuant to
the article entitled "INTELLECTUAL PROPERTY INDEMNITY"). This indemnity is in
lieu of all other obligations of Supplier, express or implied, in law or
inequity, to indemnify Buyer (except pursuant to the article entitled
"INTELLECTUAL PROPERTY INDEMNITY").
26. INTELLECTUAL PROPERTY INDEMNITY
(a) In the event of any claim, action, proceeding or suit by a third
party against Buyer alleging an infringement of any patent, copyright, or
trademark, or a violation of any trade secret or proprietary rights by reason of
the use, in accordance with Supplier's technical specifications, of any Product
or Licensed Materials furnished by Supplier to Buyer under this Agreement,
Supplier, at its expense, will defend Buyer, subject to the conditions and
exceptions stated below. Supplier will reimburse Buyer for any cost, expense or
attorneys' fees, incurred at Supplier's written request or authorization, and
will indemnify Buyer against any liability assessed against Buyer by final
judgment or settlement approved by Supplier on account of such infringement or
violation arising out of such use.
-20-
(b) If Buyer's use shall be enjoined or in Supplier's reasonable opinion
is likely to be enjoined, Supplier will, at its expense and at its option,
either (1) promptly replace the enjoined Product or Licensed Materials furnished
pursuant to this Agreement with a suitable substitute free of any infringement;
(2) promptly modify it so that it will be free of the infringement; or (3)
procure for Buyer a license or other right to use it. If none of the foregoing
options are practical despite Supplier's commercially reasonable efforts,
Supplier will remove the enjoined Product or Licensed Materials and refund to
Buyer any amounts paid to Supplier therefor less a reasonable charge for any
actual period of use by Buyer.
(c) Buyer shall give Supplier prompt written notice of all such claims,
actions, proceedings or suits alleging infringement or violation and Supplier
shall have full and complete authority to assume the sole defense thereof,
including appeals, and to settle same. Buyer shall, upon Supplier's request and
at Supplier's expense, furnish all information and assistance reasonably
available to Buyer and cooperate in every reasonable way to facilitate the
defense and/or settlement of any such claim, action, proceeding or suit.
(d) No undertaking of Supplier under this Section shall extend to any
such alleged infringement or violation to the extent that it: (1) arises from
adherence to design modifications, specifications, drawings, or written
instructions which Supplier is directed by Buyer to follow; or (2) arises from
adherence to instructions to apply Buyer's trademark, trade name or other
identification; or (3) resides in a Product or Licensed Materials which are not
of Supplier's origin and which are furnished by Buyer to Supplier for use under
this Agreement; or (4) relates to uses of Product or Licensed Materials provided
by Supplier in combinations with other Product or Licensed Materials, furnished
either by Supplier or others where such infringement or violation would not
otherwise have occurred. In the foregoing cases numbered (1) through (4), Buyer
will defend and save Supplier harmless, subject to the same terms and conditions
and exceptions stated above, with respect to the Supplier's rights and
obligations under this Section.
(e) The liability of Supplier and Buyer with respect to any and all
claims, actions, proceedings or suits by third Parties alleging infringement of
patents, trademarks or copyrights or violation of trade secrets or proprietary
rights because of, or in connection with, any Products or Licensed Materials
furnished pursuant to this Agreement shall be limited to the specific
undertakings contained in this Section.
27. TRADEMARKS AND OTHER INDICIA
Products and Licensed Materials delivered hereunder will be marketed by
Buyer under trade names and trade dress of Buyer or Buyer's distributors unless
Buyer and Supplier execute a separate trademark license agreement. Products and
Licensed Materials delivered hereunder may also bear certain trade names,
trademarks, trade devices, logos, codes or other symbols of Supplier
(hereinafter "Marks"). Supplier hereby grants Buyer permission to market
Products bearing such Marks in accordance with the terms of this Agreement. If
Supplier grants Buyer permission to use its Marks in Buyer's marketing and
advertising of,
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and in Buyer's publicity relating to, Products and Licensed Materials, such use
shall conform to Supplier's written standards and guidelines relating thereto,
which may be revised by Supplier from time to time. Such use shall inure to the
benefit of Supplier and shall not invest in Buyer any rights in or to the Marks.
All uses of Marks by Buyer shall be subject to pre-publication or pre-use review
and approval by Supplier. If, in Supplier's judgment, any use of Marks by Buyer
is deemed detrimental to the Marks or Supplier's reputation, or is deemed
otherwise undesirable, Supplier may withdraw such permission without liability
as a result thereof upon written notice to Buyer.
Buyer shall not conduct business under any of the Marks or derivatives
or variations thereof, and Buyer shall not directly or indirectly hold itself
out as having any relation to Supplier or its Affiliates other than as set forth
herein. Marks may not be used to identify the Buyer.
Advertising by Buyer which shows and identifies product brands, software
(including related documentation), services or other items not covered by this
Agreement may not use Marks without Supplier's prior written consent. Buyer will
not alter or remove any Marks applied to Products or Licensed Materials without
the written approval of Supplier.
All references to Buyer in this Section shall also be intended to
include Reseller Customers. In its agreements with its Reseller Customers, Buyer
shall use commercially reasonable efforts to require said customers to comply
with the provisions of this article.
Supplier shall remove or obliterate any Identification prior to any use
or disposition of any Product or Licensed Material rejected or not purchased by
Buyer. "Identification" means any semblance of any trade name, trademark,
service xxxx, insignia, symbol, logo, or any other designation or drawing of
Buyer or its Affiliates.
28. CONFIDENTIALITY
(a) Subject to subsection (d) of this Section, each of Agere and Buyer
agrees to hold, and to cause its respective directors, officers, employees,
agents, accountants, counsel and other advisors and representatives to hold, in
strict confidence, with at least the same degree of care that applies to such
Party's confidential and proprietary information, all Information concerning
each other that is either in its possession or furnished by one Party to the
other or its respective directors, officers, employees, agents, accountants,
counsel and other advisors and representatives at any time pursuant to this
Agreement or otherwise, and shall not use any such Information other than for
the purposes of performing its obligations under this Agreement, except, in each
case, to the extent that such Information has been (i) in the public domain
through no fault of such Party or any of their respective directors, officers,
employees, agents, accountants, counsel and other advisors and representatives,
(ii) later lawfully acquired from other sources by such Party which sources are
not themselves bound by a confidentiality obligation, or (iii) independently
generated without reference to any proprietary or confidential Information of
the other Party. Information shall be subject to this
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Agreement, if it is in tangible form, only if clearly marked as proprietary or
confidential when disclosed to the receiving Party or, if not in tangible form,
its proprietary nature must first be announced, and it must be reduced to
writing and furnished to the receiving Party within thirty (30) days of the
initial disclosure.
(b) Each Party agrees not to release or disclose, or permit to be
released or disclosed, any such Information to any other Person, except its
directors, officers, employees, agents, accountants, counsel and other advisors
and representatives who need to know such Information for purposes of performing
such Party's obligations under this Agreement (who shall be advised of their
obligations hereunder with respect to such Information), except in compliance
with paragraph (d) of this Section or with the prior written consent of the
other Party.
(c) Without limiting the foregoing, when any Information that is
required to be kept confidential is no longer needed for the purposes
contemplated by this Agreement, each Party will promptly after request of the
other Party either return to the other Party all of such Information in a
tangible form (including all copies thereof and all notes, extracts or summaries
based thereon) or certify to the other Party that it has destroyed such
Information (and such copies thereof and such notes, extracts or summaries based
thereon).
(d) In the event that any Party either determines on the advice of its
counsel that it is required to disclose any Information pursuant to applicable
law or receives any demand under lawful process or from any Governmental
Authority to disclose or provide Information of any other Party that is subject
to the confidentiality provisions hereof, such Party shall notify the other
Party prior to disclosing or providing such Information and shall cooperate at
the expense of the requesting Party in seeking any reasonable protective
arrangements requested by such other Party. Subject to the foregoing, the Person
that received such request may thereafter disclose or provide Information to the
extent required by such law (as so advised by counsel) or by lawful process or
such Governmental Authority.
29. TERMINATION; EXPIRATION OF AGREEMENT
Either Party may terminate this Agreement effective immediately by
written notice if or when it is discovered that the other Party has (a)
intentionally or in a willful, wanton or reckless manner, made any material,
false representation, report or claim relative hereto or (b) engaged in fraud or
criminal conduct relative hereto. In the event that a Party has (x) marketed the
Products or Licensed Materials to customers for purposes of export or resale
contrary to this agreement or (y) violated another Person's copyright, the
non-breaching Party shall have the right to terminate this Agreement if the
breaching Party fails to cure such breach within sixty (60) days after receipt
of written notice of such breach. In the event that a Party (1) becomes
insolvent, (2) invokes as a debtor any laws relating to the relief of debtors'
or creditors' rights, or has had such laws invoked against it, (3) becomes
involved in any liquidation or termination of business, (4) is adjudicated
bankrupt or (5) is involved in any assignment for the benefit of its creditors,
the other Party shall have the right to suspend
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business under this Agreement and, if such condition is not cured within ninety
(90) days, to terminate this Agreement.
Either Party may terminate this Agreement on notice if the other Party
has defaulted in the performance of its obligations under this Agreement or a
subordinate agreement. Such termination shall be effective sixty (60) days after
notice by the terminating Party, unless such default or breach has been cured.
30. EXCLUSIVE REMEDIES; LIMITATION OF LIABILITY
(a) For purposes of the exclusive remedies and limitations of liability
set forth in this Section, each Party shall be deemed to include its respective
subsidiaries and Affiliates and the directors, officers, employees, agents,
representatives, subcontractors and suppliers of each of them; and "damages"
shall be deemed to refer collectively to all injury, damage, loss or expense
incurred.
(b) Supplier's entire liability to Buyer and Buyer's exclusive remedy
against Supplier for any damages caused by any Product, Licensed Material or
service defect or failure, or arising from the performance or non-performance of
any work, regardless of the form of action, whether in contract, tort including
negligence, strict liability or otherwise shall be as follows:
(i) for infringement, the remedies set forth in Section 26,
INTELLECTUAL PROPERTY INDEMNITY;
(ii) for the non-performance of Product. Licensed Material or
service or work performed during the warranty period, the remedies stated in
Section 23, WARRANTIES AND WARRANTY EXCLUSIONS;
(iii) for tangible property damage or bodily injury or death to
any person proximately caused by Supplier's negligence, the amount of proven
direct damages; and
(iv) for any claims not set forth above, Supplier's liability
shall be limited to direct damages that are proven, in an amount not to exceed
the greater of $1,000,000 or the value of the specific Product, License Material
and/or service giving rise to the claim.
(c) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY
SHALL BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR CONSEQUENTIAL
DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, SAVINGS OR REVENUES OF ANY
KIND, WHETHER OR NOT ANY SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THIS PROVISION SHALL SURVIVE FAILURE OF AN EXCLUSIVE REMEDY.
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31. DISPUTE RESOLUTION.
The provisions set forth in this Section shall apply to all disputes,
controversies or claims (whether arising in contract, tort or otherwise) that
may arise out of or relate to, or arise under or in connection with this
Agreement, or the transactions contemplated hereby (including all actions taken
in furtherance of the transactions contemplated hereby), or the commercial or
economic relationship of the Parties relating hereto.
It is the intent of the Parties to use their respective reasonable best
efforts to resolve expeditiously and on a mutually acceptable negotiated basis
any dispute, controversy or claim between them with respect to the matters
covered hereby that may arise from time to time. In furtherance of the
foregoing, any Party involved in a dispute, controversy or claim may deliver a
notice (an "Escalation Notice") demanding an in-person meeting involving
representatives of the Parties at a senior level of management of the Parties
(or if the Parties agree, of the appropriate strategic business unit or division
within such entity). A copy of any such Escalation Notice shall be given to the
General Counsel, or like officer or official, of each Party involved in the
dispute, controversy or claim (which copy shall state that it is an Escalation
Notice pursuant to this Agreement). Any agenda, location or procedures for such
discussions or negotiations between the Parties may be established by the
Parties from time to time; provided, however, that the Parties shall use their
reasonable best efforts to meet within thirty (30) days of the Escalation
Notice.
In the event the Parties are unable to resolve a dispute, the Parties
shall submit such dispute to binding arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules, and judgment on
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
Unless otherwise agreed in writing, the Parties will continue to provide
service and honor all other commitments under this Agreement during the course
of dispute resolution pursuant to the provisions of this Section with respect to
all matters not subject to such dispute, controversy or claim.
32. INSURANCE AND INDEMNIFICATION BY SUPPLIER
Supplier shall maintain and cause its agents to maintain during the term
of this Agreement:
(a) Workers' Compensation insurance as prescribed by the law of the
states or other jurisdiction in which Supplier's obligations under this
Agreement are performed,
(b) employer's liability insurance with limits of at least $100,000 each
occurrence, and
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(c) comprehensive general liability (CGL) insurance and comprehensive
automobile liability insurance if the use of motor vehicles is required, each
with limits of at least $250,000 for bodily injury, including death, to any one
person and $1,000,000 for any one occurrence, and $100,000 for each occurrence
of property (as limited below) damage. Supplier agrees that Supplier, Supplier's
insurer and anyone claiming by, through, under or in Supplier's behalf shall
have no claim, right of action or right of insured against under the foregoing
insurance. Upon request of Buyer, Supplier and Supplier's agents shall include a
clause in the applicable insurance policy stating that Buyer is to be notified
in writing at least ten (10) days prior to cancellation of or any material
change in this policy, and Supplier shall provide Buyer with suitable evidence
of having done so.
Buyer agrees to notify Supplier within a reasonable time of any written
claims or demands against Buyer for which Supplier is responsible under this
Section.
Supplier may self-insure.
33. RESELLER CUSTOMERS
(a) Unless otherwise expressly authorized by Supplier in writing, Buyer
shall not actively sell or distribute Products or provide Licensed Materials to
a customer that Buyer has reason to believe will further distribute or resell
the Products or Licensed Materials, unless such customer is a Reseller Customer
or an End User in the business of building wireless networks. In their
agreements with Buyer, Buyer shall have Reseller Customers agree to distribute
and resell the Products and Licensed Materials only in connection with finished
products and only to End User customers.
(b) Buyer shall instruct its Reseller Customers that they may not use
Supplier Marks to identify and promote the Products and Licensed Materials. No
Reseller Customer shall be authorized to conduct business under Supplier's name,
Xxxx, or variant thereof.
(c) No agency or franchise relationship is created hereby or by any
transaction contemplated in this Agreement, and no exclusive rights of any kind
are granted by this Agreement or any approval hereunder. Buyer shall defend,
indemnify and hold Supplier harmless from and against any claims, damages, costs
and liabilities incurred by Supplier associated with any assertion by any person
that Supplier is responsible for the acts, failures to act, misrepresentations,
or defaults of performance of Buyer or any Reseller Customer of Buyer. Buyer
shall require its Reseller Customer to do the same.
34. CUSTOMS DUTY DRAWBACK
Buyer reserves the right to claim duty drawback on all purchases from
Supplier and Supplier shall cooperate by providing the necessary certificates of
manufacture and delivery or, in instances where the imported merchandise
received further processing, shall furnish certificates of manufacture and
delivery on all articles and merchandise which may be subject to drawback.
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35. FOB
Subject to any agreed upon Flexible Delivery Arrangements, FLEXIBLE
DELIVERY ARRANGEMENTS, FOB shall be Supplier's factory of manufacture, freight
charges to be paid at the same time as the invoice for Products is paid, unless
otherwise mutually agreed upon in writing by the Parties.
36. ADDITIONAL PROVISIONS
The 1980 United Nations Convention on contracts for the international
sale of goods shall not apply to this Agreement or to any Order issued under
this Agreement.
37. COMPLIANCE WITH LAWS
Each Party shall comply with all applicable laws and regulations of the
country/ies in which it operates, and all laws and regulations of the United
States, including (among others) those particularly pertaining to the proper use
and designation of trademarks; the U.S. Foreign Corrupt Practices Act; the U.S.
Export Administration Regulations; anti-boycott laws; and laws pertaining to
data protection. Neither Party shall do anything which would cause the other
Party, or any of its Affiliates, to be in violation of any laws or regulations,
including (among others) the U.S. Foreign Corrupt Practices Act. If at any time
after the Effective Date, this Agreement or the performance of its obligations
by either Party is no longer in compliance with any national, federal, state or
local law or regulation, the Agreement shall either be appropriately amended by
the Parties so as to come into compliance, or may be terminated by either Party.
Each Party shall exercise reasonable efforts to keep the other Party informed of
any applicable laws or regulations of its territory, and any political
subdivisions or agencies; as well as any amendments to such laws or regulations,
whether proposed or adopted, which may affect the rights and obligations of the
Parties, or the promotion, sales, service or maintenance of the Products.
38. MISCELLANEOUS
38.1. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER
(a) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement.
(b) This Agreement and any exhibits, schedules and appendices hereto
contain the entire agreement between the Parties with respect to the subject
matter hereof, supersede all previous agreements, negotiations, discussions,
writings, understandings, commitments and conversations with respect to such
subject matter and there are no agreements or understandings between the Parties
other than those set forth or referred to herein.
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(c) Each Party represents as follows:
(i) each has the requisite corporate or other power and authority
and has taken all corporate or other action necessary in order to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by it
and constitutes a valid and binding agreement of it enforceable in accordance
with the terms thereof.
38.2. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS TO BE
PERFORMED SOLELY WITHIN THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING
MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND
REMEDIES.
38.3. ASSIGNABILITY; SUCCESSORS, SUBCONTRACTING
(a) This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns and the successor(s)
of either party to the business and assets of such Party that relate to this
Agreement; provided, however, that neither Party may assign this Agreement, in
whole or in part, or its respective rights or obligations without the prior
written consent of the other Party, such consent not to be unreasonably
withheld, except as provided in subsections (b) and (c) below.
(b) By the provision of notice thereof in accordance with this
Agreement, either Party may assign this Agreement and its rights and obligations
hereunder, either in whole or in part, to any entity that is, or that was
immediately preceding such assignment, a current subsidiary, business unit,
division or other Affiliate of such Party, in each case that is the successor to
the business and assets of any such Party that relates to this Agreement.
(c) In the event of the attempted assignment by either Party of this
Agreement and its rights and obligations hereunder pursuant to subsection (b),
or in the event either Party hereto shall attempt to sell or transfer any
portion of its business or any assets that relate to this Agreement, such
assigning or transferring Party shall make all necessary effort to confirm that
the successor to the acquiror of such business and/or assets of such Party shall
perform and honor all of such Party's obligations hereunder so that such
performance shall continue uninterrupted through the Term.
(d) Buyer agrees to allow Supplier to subcontract manufacturing services
to designated contract manufacturer(s). This consent to subcontract does not
relieve Supplier of Supplier's responsibilities for performing this Agreement,
and Supplier shall remain liable
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for compliance by the Supplier's contract manufacturer(s) with all provisions of
this Agreement.
38.4. THIRD PARTY BENEFICIARIES
The provisions of this Agreement are solely for the benefit of
the Parties and are not intended to confer upon any Person except the Parties
any rights or remedies hereunder, and there are no third party beneficiaries of
this Agreement, and this Agreement shall not provide any third Person with any
remedy, claim, liability, reimbursement, claim of action or other right in
addition to those existing without reference to this Agreement.
38.5. NOTICES
All notices or other communications under this Agreement shall be in
writing and shall be deemed to be duly given when (a) delivered in person or (b)
deposited in the United States mail or private express mail, postage prepaid,
addressed as follows:
If to Agere, to: Agere Systems Inc.
Attn: Executive Vice President, Client Systems
0000 Xxxxxxxx Xxxxxxx XX
Xxxxxxxxx, XX 00000
with a copy to: Agere Systems Inc.
Attn: Vice President - Law
0000 Xxxxxxxx Xxxxxxx XX
Xxxxxxxxx, XX 00000
If to Buyer to: Proxim Corporation
Attn: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
Attn: Xxxxxx Xxxxxxx
00 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx Xxxx, XX 00000
Any Party may, by notice to the other Party, change the address to which
such notices are to be given.
38.6. SEVERABILITY
If any provision of this Agreement or the application thereof to any
Person or circumstance is determined by a court of competent jurisdiction to be
invalid, void or
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unenforceable, the remaining provisions hereof, or the application of such
provision to Persons or circumstances or in jurisdictions other than those as to
which it has been held invalid or unenforceable, shall remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby, so long
as the economic or legal substance of the transactions contemplated hereby or
thereby, as the case may be, is not affected in any manner adverse to any Party.
Upon such determination, the Parties shall negotiate in good faith in an effort
to agree upon such a suitable and equitable provision to effect the original
intent of the Parties.
38.7. FORCE MAJEURE
Except with respect to payment obligations hereunder, no Party shall be
deemed in default of this Agreement to the extent that any delay or failure in
the performance of its obligations under this Agreement results from any cause
beyond its reasonable control and without its fault or negligence, such as acts
of God, acts of civil or military authority, embargoes, epidemics, war, riots,
insurrections, fires, explosions, earthquakes, floods, unusually severe weather
conditions, labor problems or unavailability of parts or raw materials, or, in
the case of computer systems, any failure in electrical or air conditioning
equipment. In the event of any such excused delay, the time for performance
shall be extended for a period equal to the time lost by reason of the delay.
38.8. PUBLICITY
Each of Agere and Buyer shall consult with each other prior to issuing
any press releases or otherwise making public statements with respect to this
Agreement or the transactions contemplated hereby. In addition, neither Party
shall issue or release for publication any articles, advertising, or publicity
materials relating to Products, Licensed Materials or services under this
Agreement or mentioning or implying the name, trademarks, logos, trade name,
service xxxx or other Buyer identification of the other Party or any of its
Affiliates or any of its personnel without the prior written consent of the
other Party.
38.9. HEADINGS
The article, section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
38.10. WAIVERS OF DEFAULT
Waiver by any Party of any default by the other Party of any provision
of this Agreement shall not be deemed a waiver by the waiving Party of any
subsequent or other default, nor shall it prejudice the rights of the other
Party.
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38.11. AMENDMENTS
No provision of this Agreement shall be deemed waived, amended,
supplemented or modified by any Party, unless such waiver, amendment, supplement
or modification is in writing and signed by the authorized representative of the
Party against whom it is sought to enforce such waiver, amendment, supplement or
modification.
38.12. INTERPRETATION
Words in the singular shall be held to include the plural and vice versa
and words of one gender shall be held to include the other genders as the
context requires. The terms "hereof," "herein," and "herewith" and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole (including all of the schedules, exhibits and appendices
hereto) and not to any particular provision of this Agreement. Article, section,
exhibit, and schedule references are to the articles, sections, exhibits, and
schedules to this Agreement unless otherwise specified. The word "including" and
words of similar import when used in this Agreement shall mean "including,
without limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive. Unless expressly stated to the
contrary in this Agreement, all references to "the date hereof," "the date of
this Agreement," "hereby" and "hereupon" and words of similar import shall all
be references to the Effective Date, regardless of any amendment or restatement
hereof.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.
AGERE SYSTEMS INC.
By: __________________________________
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
PROXIM CORPORATION
By: __________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President & CFO
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