EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of December
14, 1994 (the "Execution Date"), by and between PHONEPRINT, INC., a Delaware
corporation ("Buyer"), ESL INCORPORATED, a California corporation ("Seller") and
TRW INC., an Ohio corporation ("TRW"), with reference to the following facts:
WHEREAS, Seller has established a business unit known as "PhonePrint" (the
"Business Unit") that has engaged in research, development and other activities
relating to wireless communications fraud detection ("Business").
WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell
to Buyer, on the terms and subject to the conditions of this Agreement, all of
such rights, interests and property relating to the Business.
WHEREAS, in connection with the sale of the Business, Seller desires to
license to Buyer certain technology within a defined field described in the
License and Technical Assistance Agreement attached hereto as Exhibit B.
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WHEREAS, TRW is the parent company of Seller, and is interested in and
benefits from the transactions described in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements contained below, the
parties agree as follows:
ARTICLE 1
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PURCHASE AND SALE OF ASSETS
PURCHASE AND SALE. On the Closing Date (as defined in Article 7
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below), Seller agrees to sell, transfer, assign and deliver to Buyer and Buyer
agrees to purchase, accept and acquire from Seller, all of Seller's right, title
and interest in and to the assets (the "Assets") of Seller described in Exhibit
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A attached hereto and incorporated herein by this reference. On the Closing
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Date, in addition to any other documents required hereunder, Seller shall
execute and deliver to Buyer: (i) the License and Technical Assistance
Agreement in the form attached hereto as Exhibit B ("License Agreement"); (ii)
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the Assignment and Assumption Agreement in the form attached hereto as Exhibit C
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("Assignment of Lease"); (iii) the Assignment of Development and License
Agreement in
the form attached hereto as Exhibit D ("AirTouch Assignment"); (iv) the Patent
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Application Assignment in the form attached hereto as Exhibit E ("Patent
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Assignment") (which shall also be properly notarized); (v) the Assignment of
U.S. Intent-To-Use Trademark Application in the form attached hereto as Exhibit
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F ("Trademark Assignment") (which shall also be properly notarized); (vi) the
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Purchase Order and Supply Contract Assignment in the form attached as Exhibit G
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("Order and Contract Assignment"); (vii) the General Conveyance, Xxxx Of Sale
And Assignment in the form attached hereto as Exhibit H ("General Conveyance");
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(vii) the Non-Competition Agreement in the form attached hereto as Exhibit I
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("Non-Competition Agreement"); (viii) the Pledge Agreement in the form attached
hereto as Exhibit J ("Pledge Agreement"); and (ix) the Cooperation Agreement in
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the form attached hereto as Exhibit K ("Cooperation Agreement"). In addition,
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on the Closing Date, Seller shall simultaneously take all additional steps and
execute all additional documents and instruments as may be reasonably necessary
to put Buyer in possession and complete operating control of the Assets and to
transfer all of Seller's right, title and interest in and to the Assets to
Buyer. Seller agrees that for a period of thirty (30) days following the Closing
Date Buyer shall also have the right (but no obligation) to contact and hire any
employees of Seller who work in or whose duties relate to the Business Unit. The
documents and instruments that Seller is required to deliver to Buyer under this
Section 1.1 shall be the "Conveyance Documents."
1.1 PURCHASE PRICE. The purchase price to be paid by Buyer to Seller for
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the sale, transfer, assignment and delivery of the Assets shall be Nine Million
Two Hundred Forty Thousand Dollars ($9,240,000), payable as follows:
(a) $6,240,000 at the Closing (the "Cash Payment") by certified or
cashier's check or by wire transfer; and
(b) $3,000,000 in the form of a promissory note ("Buyer Note") in the
form attached hereto as Exhibit L.
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1.2 ALLOCATION OF PURCHASE PRICE AMONG CERTAIN ASSETS. Buyer, Seller and
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TRW agree: (i) the value of the inventory being sold to Buyer is $6,391,848;
(ii) the value of the equipment being sold to Buyer, as set forth in Schedule 8
of the disclosure schedule attached hereto as Exhibit M (the "Disclosure
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Schedule"), is $712,465; (iii) the value of the trade secrets, licenses,
patents, copyrights, trademarks and other agreements being sold to Buyer is
$2,135,000; and (iv) the value of all paper and storage media (including, but
not limited to computer storage and computer disks) being sold to Buyer is two
hundred percent (200%) of the fair market value of the paper and storage media.
1.3 NO LIABILITIES ASSUMED. Except for the "Assumed Obligations" (defined
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below), Buyer shall not assume and shall under no circumstances be responsible
for, and Seller and TRW shall retain and be responsible for, any liabilities or
obligations of Seller
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related to the Assets or the employees of Seller or TRW whatsoever, regardless
of amount, character or description, or whether accrued, contingent, determined,
undetermined or otherwise, including (without limitation) any obligation or
liability whatsoever arising from the conduct of Seller's or TRW's business at
any time. The "Assumed Obligations" shall consist solely of the obligations
expressly assumed by Buyer pursuant to the AirTouch Assignment, the Lease
Assignment and the Order and Contract Assignment.
ARTICLE 2
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REPRESENTATIONS AND WARRANTIES
OF SELLER AND TRW
For purposes of this Article 2, "Knowledge," "Known" or similar terms mean
the knowledge of the officers and directors of TRW and ESL, and any employees of
TRW or ESL who have knowledge of or responsibility for the subject matter of the
applicable representation and warranty. Except as set forth in the Disclosure
Schedule referencing the specific section of this Article 2 (the "Disclosure
Schedule"), the Seller and TRW hereby represent and warrant to Buyer as follows:
2.1 CORPORATE ORGANIZATION AND CAPITALIZATION. Seller is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of California.
2.2 AUTHORIZATION. The execution, delivery and performance by Seller and
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TRW of this Agreement, and all documents and instruments contemplated hereby,
referenced herein or executed in connection herewith (collectively, the "Related
Documents"), and the consummation by Seller of the transactions contemplated
hereby and therein, have been duly authorized and approved by all necessary
corporate proceedings of Seller and TRW. This Agreement and each of the Related
Documents have been duly executed and delivered by Seller (and TRW, where
applicable), and each constitutes a legal, valid and binding agreement of Seller
(and TRW, where applicable), enforceable against Seller (and TRW, where
applicable) in accordance with their respective terms, except as limited by
bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights.
2.3 TITLE; CONDITION OF ASSETS. Except as otherwise provided for in
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Paragraph 2.12, Seller has good and marketable title to all of the Assets, free
and clear of all mortgages, liens (tax or otherwise), pledges, charges, leases,
encumbrances, claims or restrictions of any kind or character. The Assets
conform and comply with all applicable laws, regulations and ordinances and
other than those Assets constituting inventory, and to Seller's and TRW's
knowledge without having conducted an independent review, the Assets are in good
condition with no material defects, excepting normal wear and tear.
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With respect to the inventory, at the time of the Closing the components parts
of such inventory are in good condition with no material defects, excepting
normal wear and tear.
2.4 NO VIOLATION. The execution, delivery and performance of this
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Agreement and the Related Documents by Seller (and TRW, where applicable) will
not (with notice and/or the lapse of time) result in a breach or violation of,
or constitute a material default under, Seller's or TRW's Articles of
Incorporation, Bylaws or any material agreement to which Seller or TRW is a
party or by which Seller or TRW is bound, and will not, to the best of Seller's
and TRW's Knowledge, be in violation of any statute, judgment, order, rule or
regulation in effect at the Closing Date of any court or federal, state or other
regulatory authority or governmental body having jurisdiction over Seller, TRW
or the Assets. Neither Seller nor TRW is a party to, subject to or bound by any
agreement or judgment, order, writ, injunction or decree of any court or
federal, state or other regulatory or governmental body that prevents or impairs
the consummation of the transactions contemplated by this Agreement or the
Related Documents or the rights of the Buyer hereunder and thereunder.
2.5 GOVERNMENTAL AUTHORITIES. Neither Seller nor TRW is required to
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submit any notice, report or other filing to any governmental or regulatory
authority, nor is any consent, approval or authorization of any governmental or
regulatory authority required to be obtained in connection with the consummation
of the transactions contemplated hereby or in the Related Documents.
2.6 LIABILITIES. The Assets are not subject to any liability or
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obligation of whatever nature (other than the Assumed Obligations as defined in
Section 1.4), whether absolute, accrued, contingent or otherwise. Seller, TRW
and their respective officers, employees or agents have not employed any broker
or finder or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated hereby or the
Related Documents, except for a fee owing to Xxxxxxx & Company pursuant to a
separate agreement between TRW and Xxxxxxx & Company.
2.7 ASSETS; ACCOUNTS RECEIVABLE; PURCHASE ORDERS. The Assets include all
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intellectual property, inventory and all other property in which Seller or TRW
has any right, title or interest with respect to the Business Unit except for
the shared pool equipment described in Paragraph 2.7 of the Disclosure Schedule
and the software subject to an ESL site license that is not transferrable as
described in Schedule 2 of the Disclosure Schedule. The Assets include all the
assets necessary to operate the Business Unit in the same manner as the Business
Unit was operated by Seller or TRW prior to the Closing. There are no notes or
accounts receivable relating to the Business Unit as of the Closing. All
purchase orders relating to orders received by the Seller and all supply
contracts relating to purchase obligations created by the Business Unit are
listed in Paragraph 2.7 of the Disclosure Schedule, and have arisen only from
bona fide
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transactions in the ordinary course of Seller's business, are valid contracts,
and are being assigned to Buyer pursuant to the Order and Contract Assignment.
All inventory and equipment, relating to the Business Unit as of the Execution
Date are Seller's property and have been acquired or arisen in the ordinary
course of business, have not been pledged as collateral, are not held by Seller
on consignment from others and are being conveyed to Buyer pursuant to the
General Assignment. All inventory and equipment relating to the Business Unit
are listed in Schedule 2.7 of the Disclosure Schedule. Except as set forth in
the Disclosure Schedule, Seller has provided no warranties or guarantees
relating to any of the products of the Business Unit, and Buyer is not assuming
and will not have any liabilities pursuant to such warranties.
2.8 LITIGATION. To the Knowledge of Seller and TRW, there are no claims,
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actions, litigation, suits, proceedings or investigations pending or threatened
against or affecting any of the Assets, the business and activities conducted by
the Business Unit or the consummation of the transactions contemplated hereby or
the Related Documents, at law or in equity or before or by any governmental or
regulatory authority, agency or instrumentality or before any arbitrator of any
kind, and there is no valid basis for any such claim, action, litigation, suit,
proceeding or investigation. To the Knowledge of Seller and TRW, no
governmental or regulatory authority, agency or instrumentality has at any time
challenged or questioned the legal right of Seller or TRW to sell any products
and services of the Business Unit or relating to the Assets. The Disclosure
Schedule contains a list and brief description of all claims, actions,
litigation, suits, proceedings or investigations relating to the Assets or the
Business Unit which resulted in a judgment, settlement, compromise, release,
payment or award of any nature. No governmental or regulatory authority, agency
or instrumentality has at any time challenged or questioned the legal right of
Seller or TRW to sell any products or services of the Business Unit or relating
to the Assets.
2.9 CONTRACTS. A true copy of each agreement, instrument, commitment,
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contract or other obligation of any type to which Seller or TRW is a party or is
bound relating in any way to the Assets or the Business or activities conducted
by the Business Unit, or to which the Assets are subject (collectively, the
"Relevant Contracts") has been provided to Buyer's counsel prior to Closing and
an accurate listing of same has been set forth in the Disclosure Schedule. All
Relevant Contracts are in full force and effect and are valid, binding and
enforceable in accordance with their respective terms; all parties to such
Relevant Contracts have complied with the provisions thereof; no such party is
in default under any of the terms thereof and no event has occurred that (with
the passage of time and/or the giving of notice) would constitute a default by
any party under any provision thereof. The Assets are not subject to any
agreement, contract, commitment or instrument maintained by Seller or TRW, or
other obligation, whether written or oral and of whatever nature that will be
enforceable against the Assets. From and after the Closing, other than the
Assumed Obligations, no agreement, contract, commitment, instrument or other
obligation made by Seller or TRW prior to the Closing, whether
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written or oral and of whatever nature, will be enforceable against Buyer. No
consent, approval or authorization of any third party on the part of Seller or
TRW is required in connection with the consummation of the transactions
contemplated hereunder. Buyer will be entitled to the full benefits after the
Closing under the agreement ("AirTouch Agreement") being assigned under the
Airtouch Assignment without the consent of or notice to any third party and the
transactions contemplated hereby and in the Related Documents will not create
any termination rights in favor of any party to the AirTouch Agreement or
otherwise change the material rights and obligations of the parties thereunder.
2.10 COMPLIANCE WITH LAW. Seller and TRW are, in connection with the
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Business and activities conducted by the Business Unit and the ownership and use
of the Assets, in compliance with all applicable foreign, federal, state or
local laws, statutes, rules, regulations, ordinances, codes, orders, licenses,
franchises, permits, authorizations and concessions (collectively,
"Regulations").
2.11 LICENSES, PERMITS AND AUTHORIZATIONS. The Disclosure Schedule
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contains a list of all approvals, authorizations, consents, licenses,
franchises, orders and other permits of, and filings with, any governmental
authority, whether foreign, federal, state or local ("Permits"), which are
required in connection with the ownership, handling, use , sale or possession of
the Assets, the noncompliance with which would have a material adverse effect on
Buyer or the Assets.
2.12 INTANGIBLE PROPERTY RIGHTS. Seller owns and possesses all the
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patents, patent applications, inventions, Trade Secrets (as defined in the
License Agreement), licenses, trade names, trademarks, service marks,
brandmarks, copyrights or registrations or applications therefor, franchises and
other assets of like kind (such assets and rights herein called "Rights"),
necessary for the ownership and development of the Assets that consist of Rights
and the conduct of the Business Unit as presently conducted, and such Rights
will not be adversely affected by the transactions contemplated hereby and in
the Related Documents; and, to the Knowledge of Seller and TRW, such Rights are
not being infringed or violated by any other person or entity. All Assets that
consist of Rights, are, and upon the consummation of the transactions
contemplated by this Agreement and the Related Documents will be, vested in
Buyer, pursuant to the terms of this Agreement and the License Agreement, free
of any equities, claims, liens, encumbrances or restrictions of whatever nature
and Seller and TRW have not granted any license or right thereto to others.
Neither the Assets that consist of Rights employed by Seller or TRW in
connection with the Business Unit infringes upon: (i) other than patents, any
Rights, proprietary rights or intellectual property of any other person, firm,
corporation or other entity; or (ii) any patent of any other person, firm,
corporation or other entity issued on or prior to July 11, 1994. The documents
reflecting the Assets that consist of Rights are current and accurate and
sufficient in detail and content to identify the Rights and permit the full and
proper use by Buyer, and have been provided to
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Buyer. Any employee or other person who, either alone or in concert with others,
developed, invented, discovered, derived, programmed or designed any of the
Assets that consist of Rights, or who has Knowledge of or access to information
relating to it, has been put on notice that such Rights are proprietary to
Seller and are not to be divulged or misused and has executed a form of
proprietary information and inventions agreement provided to and approved by
Buyer. The Assets that consist of Rights are presently valid and protectable,
and not part of the public Knowledge or literature, nor have they been used,
divulged, or appropriated for the benefit of any past or present employees or
other persons.
2.13 TAX MATTERS. All taxes, including without limitation income,
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property, sales, use, franchise, added value, imposed by the United States or by
any foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country, or by any other
taxing authority, which are due or payable by Seller or TRW in connection with
the Assets, and all interest and penalties thereon, whether disputed or not,
have been or will be paid in full; all tax returns required to be filed in
connection therewith have been or will be accurately prepared and duly and
timely filed or will be so filed after the Closing Date if due thereafter; and
all deposits required by law to be made by Seller or TRW have been or will be
duly made. Nothing in this Section 2.13 shall be construed as limiting Seller's
or TRW's right to dispute taxes levied upon it.
2.14 ENVIRONMENTAL AND SAFETY MATTERS. Seller's and TRW's operation of the
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Business Unit have been in material compliance with, and Seller and TRW have
complied in all material respect with all, and are not in violation of any,
applicable United States federal, state and local laws, ordinances, regulations
and orders relating to environmental matters (collectively, "Environmental
Laws"), including, but not limited to, matters related to air pollution, water
pollution, on-site or off-site hazardous substance handling, discharge, disposal
or recovery, toxic or hazardous substances or materials, asbestos, PCBs,
employee safety, and transportation or shipping safety, and, no notice of
violation of any such statutes, laws, ordinances, regulations and orders with
respect thereto have been received by Seller or TRW, nor, to the Knowledge of
Seller or TRW, is any such notice threatened. Seller and TRW have obtained all
material environmental permits, temporary and otherwise, required for the lawful
operation of the Business Unit, and all such permits are in full force and
effect and Seller and TRW have not received notice that any such permits will be
revoked, lapsed or otherwise subject to modification, nor to the Knowledge of
Seller or TRW is any such notice of violation, lapse or modification threatened.
2.15 CUSTOMERS AND SUPPLIERS. There are no current customers or clients of
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Seller and TRW in connection with the Business Unit. Section 2.15 of the
Disclosure Schedule sets forth a list of all suppliers of Seller with respect to
the Business conducted by the Business Unit.
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2.16 DISCLOSURE; NO MISSTATEMENTS. Neither this Agreement nor the Related
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Documents, nor any other document, certificate or written statement referenced
in this Agreement or the Related Agreements or prepared or furnished by Seller
or TRW or their respective representatives and furnished to Buyer or Buyer's
representatives on or after November 1, 1994, in connection herewith or
therewith, contain any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading as of the date hereof or thereof. Seller and TRW, have
disclosed to Buyer all Known material facts relating to the Assets or the
Business or activities conducted by the Business Unit using the trade Secrets
licensed under the License Agreement. There is no fact Known to Seller or TRW
that materially and adversely affects the value of the Assets or the Business
Unit which has not been set forth in this Agreement.
2.17 BUSINESS UNIT. Within Seller, the Business Unit is the exclusive unit
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that conducts activities relating to the Business, and no material activities
within Seller are conducted with respect to the Business outside of the Business
Unit except for continued research and development activities provided that such
research and development activities do not violate the terms of this Agreement
or the Related Documents. Within TRW or any direct or indirect wholly-owned
subsidiary of TRW, no material activities are conducted with respect to radio
fingerprinting using the Trade Secrets licensed under the License Agreement.
2.18 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Subject to the terms of
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Article 6.4, all of Seller's and TRW's warranties and representations herein
shall survive the Closing.
ARTICLE 3
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REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Seller as follows:
3.1 ORGANIZATION; AUTHORITY. Buyer is a corporation duly organized,
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validly existing and in good standing under the laws of the State of Delaware,
and has all requisite power and authority to enter into this Agreement and
perform its obligations hereunder.
3.2 AUTHORITY RELATIVE TO AGREEMENT. The execution, delivery and
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performance of this Agreement and the Related Agreements by Buyer and the
consummation of the transactions contemplated hereby and therein, have been duly
and validly authorized by all necessary corporate action of Buyer. This
Agreement and the Related Agreements have been duly executed and delivered and
constitute the legal, valid and binding
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obligations of Buyer, each enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditor's rights.
3.3 NO CONFLICT WITH OTHER INSTRUMENTS OR AGREEMENTS. The execution,
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delivery and performance of this Agreement or the Related Agreements by Buyer
will not result in a material breach or violation of, or constitute a material
default under, Buyer's Articles of Incorporation, Bylaws or any agreement to
which Buyer is a party or by which Buyer is bound or to which any of Buyer's
property is subject and, to the best of Buyer's Knowledge, will not be in
violation of any statute, judgment, order, rule or regulation in effect at the
date hereof of any court or federal, state or other regulatory authority or
governmental body having jurisdiction over Buyer.
3.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Subject to Article 6.4,
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all Buyer's warranties and representations herein shall survive the Closing.
3.5 BUYER'S DUE DILIGENCE. Buyer has conducted a due diligence review of
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the Business Unit. On the basis thereof and to the best of Buyer's Knowledge,
no condition exists that would make Seller's representations materially untrue.
ARTICLE 4
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CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
Each and every obligation of Buyer under this Agreement to be performed on
or before the Closing Date shall be subject to the satisfaction, on or before
the Closing Date, of the following conditions precedent, except to the extent
that Buyer shall have waived such satisfaction in writing:
4.1 PERFORMANCE. Seller shall have performed and complied with all
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agreements, covenants and conditions required by this Agreement to be performed
and complied with by Seller on or before the Closing Date.
4.2 CONVEYANCE DOCUMENTS. Seller (and TRW, where appropriate) shall have
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executed and delivered to Buyer all of the Conveyance Documents, in the form
attached hereto (or, if there is no attached form, then in form and substance
acceptable to Buyer).
4.3 INVESTOR SERIES A PREFERRED STOCK PURCHASE AGREEMENT. Buyer and
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certain investors shall have entered into and closed either prior to or
contemporaneously with the Closing hereunder, the Series A Preferred Stock
Purchase Agreement in form and substance acceptable to Buyer.
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4.4 SELLER SERIES A PREFERRED STOCK PURCHASE AGREEMENT. Buyer and Seller
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shall have entered into a Series A Preferred Stock Purchase Agreement in form
and substance acceptable to Buyer, pursuant to which Seller is obligated to
purchase 2,019,850 shares of Buyer's Series A Preferred Stock for a purchase
price of $4,039,700.
4.5 AMENDMENT TO LEASE AGREEMENT. Seller and the landlord ("Landlord") of
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the facility currently occupied by the Business Unit shall have entered into
Amendment 3 of the existing lease ("Lease") that establishes a February 15, 1995
expiration date for the lease agreement.
4.6 CONSENT AND ESTOPPEL CERTIFICATES. Buyer shall have received consent
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and estoppel certificates, in form and substance acceptable to Buyer, from
AirTouch Communications (with respect to the agreement being assigned to Buyer
pursuant to the AirTouch Assignment) and from the Landlord (with respect to the
Lease).
4.7 OPINION OF SELLER'S COUNSEL. Buyer shall receive an opinion of the
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Seller's counsel, dated the Closing Date, in form and substance satisfactory to
Buyer and its counsel.
4.8 GOVERNMENTAL APPROVALS. As of the Closing, all authorizations,
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approvals or permits of or filings with any governmental authority that are
required by law prior to and in connection with the transfer of the Assets or
the transactions contemplated by this Agreement or the Related Documents shall
have been duly obtained or made and shall be effective as of the Closing.
4.9 CLOSING CERTIFICATE. Buyer shall have received a certificate of the
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President or the Secretary of the Seller dated as of the Closing Date and
certifying to the fulfillment of the foregoing conditions and the absence of any
material adverse change, in form and substance acceptable to Buyer and its
counsel ("Closing Certificate").
ARTICLE 5
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CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER
Each and every obligation of Seller under this Agreement to be performed on
or before the Closing Date shall be subject to the satisfaction, on or before
the Closing Date, of each of the following conditions precedent, except to the
extent that the Seller shall have waived in writing such satisfaction.
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5.1 PERFORMANCE. Buyer shall have performed and complied with all
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agreements, covenants and conditions required by this Agreement to be performed
and complied with by Buyer on or before the Closing Date.
5.2 CASH PAYMENT AND BUYER NOTE. Buyer shall at the Closing pay to Seller
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the Cash Payment and deliver to Seller the Buyer Note.
5.4 PLEDGE AGREEMENT. Seller and Buyer shall have entered into the Pledge
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Agreement in the form attached hereto as Exhibit J.
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5.5 CONVEYANCE DOCUMENTS. Buyer shall have executed and delivered to
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Seller all Conveyance Documents required by their terms to be executed by Buyer,
in the form attached hereto.
ARTICLE 6
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INDEMNIFICATION
6.1 GRANT OF INDEMNITY.
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(a) INDEMNIFICATION BY SELLER. As an inducement to Buyer to enter
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into this Agreement and the Related Documents, and acknowledging that Buyer is
relying on the indemnification provided in this Section 6 in entering into this
Agreement and the Related Documents, Seller and TRW agree to indemnify, defend
and hold harmless Buyer and its employees, officers, directors, representatives,
agents, successors and assigns (collectively, "Buyer Affiliates"), from and
against any claims, losses, liability, obligations, lawsuits, judgments,
settlements, governmental investigations, deficiencies, damages, costs or
expenses of whatever nature, whether Known or unknown, accrued, absolute,
contingent or otherwise including, without limitation, interest, penalties,
attorneys' fees, costs of investigation and all amounts paid in defense or
settlement of the foregoing, (collectively "Claims and Losses"), suffered or
incurred by Buyer or Buyer Affiliates as a result of or in connection with the
following: (i) any and all debts, liabilities and obligations of Seller or TRW
or related to the Assets, whether Known or unknown, accrued, absolute,
contingent or otherwise, arising out of or relating to the business and
operations of the Business Unit or related to the Assets prior to or on the
Closing Date or which arise after the Closing Date, to the extent such debts,
liabilities and obligations are based upon or arise out of any act, transaction,
circumstance, state of facts or other condition which occurred or existed on or
before the Closing Date, whether or not then Known, accrued, due or payable;
(ii) a breach of any obligation, representation, warranty, covenant or agreement
of Seller or TRW in this Agreement or any Related Document, or because any
representation or warranty by Seller or TRW contained in this Agreement or any
Related Document, in any document furnished or
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required to be furnished pursuant to this Agreement by Seller to Buyer or any of
its representatives, or any documents furnished to Buyer in connection with the
Closing hereunder, shall be false; (iii) except for matters covered under
Buyer's indemnification in Section 6.1(b), any litigation, to the extent such
litigation arises out of or is based upon events or operative facts occurring
prior to or on the Closing Date, in connection with the Seller, TRW or the
Assets, whether or not disclosed on the Disclosure Schedule, including, but not
limited to, claims made by employees or former employees of Seller or TRW; (iv)
any and all claims, including legal, administrative or creditor claims or
actions, in connection with the Seller, TRW or the Assets or the transfer of
Assets hereunder, to the extent any fact material to any such claim or cause of
action pleaded or stated there occurred prior to or on the Closing Date; (v) any
fee or payment due from Seller or TRW to Xxxxxxx & Company, Inc. or any of its
affiliates; (vi) as required by Section 8.3(a) of the License Agreement; and
(vii) costs and expenses (including reasonable attorneys' fees) incurred by
Buyer in connection with any demand, action, suit, proceeding, demand,
assessment or judgment incident to any of the foregoing (collectively, "Buyer's
Damages").
(b) INDEMNIFICATION BY BUYER. As an inducement to Seller and TRW to
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enter into this Agreement and the Related Documents, and acknowledging that
Seller and TRW are relying on the indemnification provided in this Section 6 in
entering into this Agreement and the Related Documents, Buyer agrees to
indemnify, defend and hold harmless Seller, and its respective affiliates,
agents, successors and assigns (collectively, "Seller Affiliates"), from and
against any Claims and Losses suffered or incurred by Seller or TRW as a result
of or in connection with the following: (i) a breach of any obligation,
representation, warranty, covenant or agreement of Buyer in this Agreement or
any Related Document, or because any representation or warranty by Buyer
contained in this Agreement or any Related Document, in any document furnished
or required to be furnished pursuant to this Agreement by Buyer to Seller, or
any of their representatives, or any documents furnished to Seller in connection
with the Closing hereunder, shall be false; (ii) any and all liabilities of the
Seller, to the extent such liabilities arise out of the conduct of business by
Buyer after the Closing, including, but not limited to, liabilities arising from
the sale of any product by Seller following the Closing Date, except for matters
which are the subject of indemnification pursuant to Section 6.1(a); (iii) as
required by Section 8.3(b) of the License Agreement; and (iv) costs and expenses
(including reasonable attorneys' fees) incurred by Seller in connection with any
action, suit, proceeding, demand, assessment or judgment incident to any of the
foregoing (collectively, "Seller's Damages").
6.2 REPRESENTATION, COOPERATION AND SETTLEMENT.
------------------------------------------
(a) Each party agrees to give prompt notice to the other of any claim
against the other which might give rise to a claim based on the indemnity
contained in Sections 6.1 and 6.2, stating the nature and basis of the claim and
the amount thereof.
-12-
(b) In the event any claims, action, suit or proceeding is brought
against a party (the "Indemnified Party") with respect to which the other party
(the "Indemnifying Party") may have liability under the indemnity contained in
Sections 6.1 and 6.2 hereof, the Indemnified Party shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting from
such claim, provided that Buyer shall not be required to permit Seller to assume
the defense of any third party claim which if not first paid, discharged, or
otherwise complied with would result in a material interruption or cessation of
the conduct of Buyer's business or any material part thereof or materially
impair the value of the Assets. Failure by the Indemnifying Party to notify the
Indemnified Party of its election to defend any such claim or action by a third
party within thirty (30) days after notice thereof shall have been given by the
Indemnified Party, shall be deemed a waiver of any such election. If the
Indemnifying Party assumes the defense of such claim or litigation resulting
therefrom, the obligations of the Indemnifying Party hereunder as to such claim
shall include taking all steps reasonably necessary in the defense or settlement
of such claim or litigation resulting therefrom, including the retention of
competent counsel satisfactory to the Indemnified Party, and holding the
Indemnified Party harmless from and against any and all damage resulting from,
arising out of, or incurred with respect to any settlement approved by the
Indemnifying Party or any judgment in connection with such claim or litigation
resulting therefrom. The Indemnifying Party shall not, in the defense of such
claim or litigation, consent to the entry of any judgment (other than a judgment
of dismissal on the merits without costs) except with the written consent of the
Indemnified Party nor enter into any settlement (except with the written consent
of the Indemnified Party) which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party a
release from all liability in respect to such claim or litigation in form and
substance acceptable to the Indemnified Party.
(c) If the Indemnifying Party shall not assume the defense of any such
claim by a third party or litigation resulting therefrom, the Indemnified Party
may defend against such claim or litigation in such manner as it deems
appropriate. The Indemnifying Party shall, in accordance with the provisions
hereof, promptly reimburse the Indemnified Party for the amount of any
settlement reasonably entered into by the Indemnified Party and for all damage
incurred by the Indemnified Party in connection with the defense against or
settlement of such claim or litigation.
6.3 INTEREST. In the case of payments to third parties (including
--------
federal, state, local or other tax authorities) which are indemnifiable
hereunder, the amount of the indemnifying party's liability under this Article 6
with respect thereto shall include interest on the amount of such payment from
the effective date of the indemnified party's notice of such payment to the
indemnifying party or the date on which such payment is made (whichever is
later) through the date on which the indemnified party shall have been
indemnified therefor, at a simple rate of interest equal to eight percent
-13-
(8%) per annum; provided, in no event shall such rate exceed the maximum rate
permitted by law.
6.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; LIMITATION OF LIABILITY.
-------------------------------------------------------------------
(a) The representations and warranties of Seller and TRW contained in
Article 2 above (excluding the representations and warranties contained in
Section 2.12 and 2.16 which shall survive for the respective periods described
below), and the covenants of Seller and TRW contained in Article 6 (excluding
the indemnification obligation referenced in subitem (vi) of Section 6.1(a) and
Sections 6.2 and 6.3 as they relate to subitem (vi) of Section 6.1(a)) of this
Agreement, shall survive the Closing hereunder and shall continue in full force
and effect for a period of 18 months after the Closing. The representation and
warranty contained in Section 2.12 and the indemnification obligation referenced
in subitem (vi) of Section 6.1(a) shall survive the Closing indefinitely. The
representation and warranty contained in Section 2.16 shall survive the Closing
for a period of two (2) years. A claim shall be deemed made under this Section
6.4(a) and shall not be deemed to be invalid by the terms of this Section 6.4(a)
if Buyer sends written notice of such claim to TRW prior to the applicable
expiration date of the survival period.
(b) The representations and warranties of Buyer contained in Article
3 above and the covenants of Buyer contained in Article 6 (excluding the
indemnification obligation referenced in subitem (iii) of Section 6.1(b) and
Sections 6.2 and 6.3 as they relates to subitem (iii) of Section 6.1(b)) of this
Agreement, shall survive the Closing hereunder and shall continue in full force
and effect for a period of eighteen (18) months after the Closing. The
indemnification obligation referenced in subitem (iii) of Section 6.1(b) shall
survive the Closing indefinitely. A claim shall be deemed made under this
Section 6.4(b) and shall not be deemed to be invalid by the terms of this
Section 6.4(b) if TRW sends written notice of such claim to Buyer prior to the
expiration of the applicable expiration date of the survival period.
(c) Except for any liability arising in connection with the
representations and warranties contained in Section 6.12 of this Agreement and
the indemnification obligation referenced in subitem (vi) of Sections 6.1(a) and
2.12 of this Agreement, the liability of Seller and TRW under this Agreement
shall not exceed the sum of (i) Six Million Two Hundred Thousand Dollars
($6,200,00); plus (ii) any principal payments made to Seller or TRW pursuant to
the Buyer Note. Seller and TRW shall not have liability for the first Fifty
Thousand Dollars ($50,000.00) of claims, in the aggregate, made by Buyer. Seller
and TRW shall be liable, subject to the limits imposed by the first sentence of
this Section 6.4(c), for the entire amount of claims above such $50,000
aggregate threshold.
-14-
(d) Except for any liability arising in connection with the
indemnification obligation referenced in subitem (iii) of Section 6.1(b),
Buyer's liability under this Agreement shall not exceed Nine Million Two Hundred
Thousand Dollars ($9,200,000). Buyer shall not have liability for the first
Fifty Thousand Dollars ($50,000.00) of claims, in the aggregate, made by Seller
and TRW. Buyer shall be liable, subject to the limits imposed by the first
sentence of this Section 6.4(d), for the entire amount of Claims above such
$50,000 aggregate threshold.
(e) The limitations on survival and liability in this Section 6.4
shall not apply with respect to the License Agreement, the Non-Competition
Agreement, the Cooperation Agreement, the Patent Assignment and the Trademark
Assignment.
ARTICLE 7
---------
CLOSING
7.1 CLOSING. The closing (the "Closing") shall be consummated at the
-------
offices of Xxxxxxx, Phleger & Xxxxxxxx, 2200 Geng Road, Palo Alto California, at
10:00 a.m. (Pacific Standard Time) on December __, 1994. The date of such
Closing is herein referred to as the "Closing Date." At the Closing, the
parties to this Agreement will exchange funds, documents, agreements,
certificates, opinions and other instruments and documents so as to cause the
terms and conditions of this Agreement to be satisfied. All documents and
instruments delivered at Closing pursuant to this Article 7 shall be dated and
shall be effective for all purposes as of the Closing Date.
7.2 DELIVERIES BY SELLER. At the Closing, Seller (and TRW, where
--------------------
required by the document) shall execute and deliver to Buyer: (i) the License
Agreement; (ii) the Assignment of Lease; (iii) the AirTouch Assignment; (iv) the
Patent Assignment; (v) the Trademark Assignment; (vi) the Purchase Order
Assignment; (vii) the Non-Competition Agreement; (viii) the General Conveyance;
and (ix) the Closing Certificate.
7.3 DELIVERIES BY BUYER. At the Closing Buyer shall pay the Cash Payment
-------------------
to Seller, and shall execute and deliver to Seller: (i) the License Agreement;
(ii) the Assignment of Lease; (iii) the AirTouch Assignment; (iv) the Non-
Competition Agreement; (v) the Buyer Note; and (vi) the Pledge Agreement.
7.4 FILING OF PATENT ASSIGNMENT AND TRADEMARK ASSIGNMENT. At the closing,
----------------------------------------------------
the Patent Assignment and Trademark Assignment shall be filed with the United
States Patent Office, in a manner necessary to complete and perfect the
assignments to Buyer, as determined by Buyer.
-15-
ARTICLE 8
---------
TRANSACTIONS SUBSEQUENT TO THE CLOSING DATE
8.1 FURTHER ASSURANCES. From time to time after the Closing Date, the
------------------
parties shall execute, deliver and acknowledge all such further instruments of
transfer and conveyance and shall perform all such other acts as any other party
may reasonably request to more effectively transfer the Assets and to otherwise
carry out the transactions contemplated by this Agreement and the Related
Documents.
8.2 SALES AND USE TAXES. Any sales, use or other transfer tax which is
-------------------
payable as the result of the transactions contemplated by this Agreement shall
be paid by Buyer in full compliance with applicable law. Buyer will provide
Seller with an appropriate resale certificate relating to the purchase of
Seller's inventory.
8.3 TRW TRADEMARK. Licensee may use printed material bearing the name
-------------
and xxxx"TRW PhonePrint" for a period from the Effective Date through February
2, 1995 specifically in support of the CTIA trade show; provided it disclaims
its affiliation with TRW, Inc. when and as appropriate. Thereafter, Licensee
will cease use of the TRW name, xxxx or logo either by itself or in connection
with the PhonePrint name and xxxx. Notwithstanding anything in this Agreement
to the contrary, TRW reserves all right, title and interest to the TRW name,
xxxx and logo and Licensee may not use the TRW name, xxxx or logo in any way
except as provided in this Section 8.3. Licensor shall abandon and shall not
use the "TRW PhonePrint" name and xxxx, and will execute all documents and take
all action reasonably required by Licensee to permit Licensee to use the
"PhonePrint" name and xxxx.
ARTICLE 9
---------
MISCELLANEOUS PROVISIONS
9.1 INVESTIGATIONS AND SURVIVAL. The respective representations,
---------------------------
warranties, covenants and agreements of Seller and Buyer herein and in the
Related Documents, or in any certificates or other documents delivered prior to
or at the Closing, shall not be deemed modified, waived or otherwise affected by
any investigation made by any party or its representatives hereto nor shall the
same be affected by the Closing.
9.2 SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by a
----------------------
party without the prior written consent of the parties hereto which consent
shall not be unreasonably withheld or delayed; provided, however, this Agreement
may be assigned and the obligations hereunder delegated by the Buyer to a
purchaser or acquiror of all or substantially all of the business, stock or
assets of Buyer in whatever form of
-16-
corporate transaction or to any other corporation or entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by or
under common control with Buyer without the consent of the Seller. Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors, assigns,
heirs, legatees, executors and administrators of the parties.
9.3 GOVERNING LAW; JURISDICTION AND VENUE; SEVERABILITY. This Agreement
---------------------------------------------------
shall be governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law. If any term,
covenant or condition of this Agreement is held to be to any extent invalid,
void, or otherwise unenforceable by any court or arbitrator, the remainder of
this Agreement shall not be affected thereby and each term, covenant and
condition of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
9.4 ENTIRE AGREEMENT; MODIFICATION AND WAIVER. This Agreement, together
-----------------------------------------
the agreements and documents referred to herein, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements and understandings. All
Exhibits and Schedules attached hereto are incorporated herein by this
reference. This Agreement may be modified, amended or supplemented only by a
written instrument duly executed by all parties hereto. No covenant, term or
condition or the breach thereof shall be deemed waived, unless it is waived in
writing and signed by the party against whom the waiver is claimed. Any waiver
of breach of any covenant, term or condition shall not be deemed to be a waiver
of any preceding or succeeding breach of the same or any other covenant, term or
condition. The failure of any party to insist upon strict performance of any
covenant, term or condition hereunder shall not constitute a waiver of such
party's right to demand strict compliance therewith in the future. Time is of
the essence for purposes of each and every provision of this agreement.
9.5 NOTICES. All payments, notices, requests, demands and other
-------
communications required or permitted hereunder shall be in writing and shall be
delivered personally (which shall include delivery by courier or overnight
delivery service) or sent by certified or registered mail postage prepaid,
certified or return receipt requested, or sent by telecopier or similar
facsimile transmission, to the parties at their respective address set forth
below or at such other address as shall be given in writing by a party to the
other party. Items delivered personally or by telecopier or facsimile shall be
deemed delivered on the date of actual delivery; items sent by certified or
regular mail shall be deemed delivered three (3) days after mailing.
-17-
If to Seller: ESL Incorporated
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: TRW Legal Department
If to TRW: TRW, Inc.
Xxx Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: TRW Legal Department
If to Buyer: PhonePrint, Inc.
000 X. Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
9.6 PAYMENT OF FEES AND EXPENSES. Each party to this Agreement shall be
----------------------------
responsible for, and shall pay, all of its own legal, accounting and other
transactional fees and expenses incurred in the negotiation and preparation of
this Agreement and the Related Documents and the transactions contemplated
herein and therein.
9.7 DRAFTING PARTY. The provisions of this Agreement, and the documents
--------------
and instruments referred to herein, have been examined, negotiated, drafted and
revised by counsel for each party hereto.
9.8 COUNTERPARTS. This Agreement may be executed in multiple copies,
------------
each of which shall be deemed an original and all of which shall constitute a
single agreement binding on all parties.
[Remainder of This Page Intentionally Left Blank]
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"BUYER" "SELLER"
PHONEPRINT, INC., a Delaware ESL INCORPORATED, a California
corporation corporation
By:/s/ Xxxxx Xxxxxxx By:/s/ Xxxxx Xxxxxxxxx
------------------------- ----------------------------------
Title: Chairman Title: Senior Vice President
---------------------- -------------------------------
TRW INC, an Ohio corporation
By: /s/ illegible
----------------------------------
Title: Vice President Finance
-------------------------------
[COUNTERPART SIGNATURE PAGE TO AGREEMENT TO PURCHASE
SELECTED ASSETS]
-19-
EXHIBIT A
---------
Assets
------
1. All property that is the subject of the General Conveyance,
including, without limitation, the items set forth on Schedule 1 to
----------
the General Conveyance.
2. The Trade Secrets, Copyrights, Licensed Products, Licensed Services
and Patent Right (as defined in the License Agreement), including
without limitation, the items set forth on Schedules 1, 2, 3 and 4 to
-----------------------
the License Agreement.
3. The interest in real property that is the subject of the Assignment
of Lease.
4. The contract and other rights that are the subject of the AirTouch
Assignment and the Order and Contract Assignment.
5. The rights and property that are the subject of the Patent Assignment
and the Trademark Assignment.
6. All other assets and property used by the Business Unit in connection
with the Business, except for the pooled and excluded assets
described in Paragraph 2.7 of the Disclosure Schedule.
7. All goodwill of Seller and TRW associated with the foregoing.
A-1
EXHIBIT B
---------
License Agreement
-----------------
B-1
LICENSE AND TECHNICAL ASSISTANCE AGREEMENT
This LICENSE AND TECHNICAL ASSISTANCE AGREEMENT, ("Agreement") is made
and entered into as of the 14th day of December, 1994, ("Effective Date")
between TRW INC., an Ohio corporation ("TRW"), ESL INCORPORATED, a California
corporation and wholly owned subsidiary of TRW INC. ("ESL") (TRW and ESL are
together referred to as "Licensor"), and PHONEPRINT, INC., a Delaware
corporation ("Licensee").
WHEREAS, Licensor has * * * a * * * that * * *
and * * * a * * * based on * * * or * * *
and is able to * * * activities in the "Wireless
Communications Field," as defined below; and
WHEREAS, Licensee desires to avail itself of this * * * ,
and Licensor desires to license the technology to Licensee;
NOW THEREFORE, in consideration of the mutual promises contained
herein and the mutual benefits to be derived therefrom, Licensor and Licensee
agree as follows:
ARTICLE 1
DEFINITIONS
-----------
The following words and phrases will have the meanings set forth
below:
1.1 AGREEMENT. This Agreement and the following Schedules attached
---------
hereto:
Schedule 1 Trade Secrets
----------
Schedule 2 Licensed Products
----------
Schedule 3 Licensed Services
----------
Schedule 4 Patent Rights
----------
1.2 *** . Those particular Trade Secrets identified as ***
----------
in Schedule 1 and which consist of mechanical, technological or
----------
computational procedures for solving a problem or achieving a particular result.
1.3 ASSET PURCHASE AGREEMENT. The Asset Purchase Agreement of even
------------------------
date herewith between the parties.
1.4 BUSINESS SUCCESSOR. For purposes of Section 1 of this
------------------
Agreement, "Business Successor" is defined as the Tactical and National Lines of
Business of TRW's Avionics and Surveillance Group and any successor unit or
subunit (whether or not
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
separately incorporated), of TRW conducting some or all of those businesses
currently carried on by ESL.
1.5 * * * . Any * * * technology
-------------------------------
* * * Business Successor that consists of * * *
intended for or that have application with respect to * * *
and that * * * major system * * *. * * * shall
not include any * * * ; the parties intend that * * *
will consist only of * * * described in Schedule 1.
----------
1.6 COOPERATION AGREEMENT. The Cooperation Agreement of even date
---------------------
herewith between Licensee and TRW.
1.7 COPYRIGHTS. All existing copyrights that have been used in or
----------
for manufacture of the Licensed Products, the provision of Licensed Services or
in connection with Trade Secrets (and all * * *
related thereto) in connection with which Licensor owns and has the right to
grant licenses to Licensee, and future copyrights used or created by Business
Successor that have use in, for or with respect to products, services or trade
secrets (including, without limitation, the Licensed Products, Licensed
Services, Trade Secrets, and * * * ) relating to fraud
detection or mitigation in the Wireless Communications Field.
1.8 GOVERNMENTAL ENTITY. Any department, agency, organization,
-------------------
activity, office or the like ("agency") of the United States Government or in
which the United States is a participant; and any agency of the government of
another sovereign state or country throughout the world or in which such
government participates; any contractor or vendor to any such agency or
government proposing to purchase with funds derived from or reimbursable by any
such agency or state, or any other customer under circumstances such that
Licensee knows or has reason to know or believe that the customer intends to use
the product or service in any activity funded by any such agency or state.
1.9 INVESTORS. Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxx VII, KPCB VII
---------
Founders Fund, Xxxxx-Xxxxx IV, Xxxxx-Xxxxx-Xxxxxxx Management Company, Norwest
Equity Partners IV, Xxxxxxx Capital SBIC, L.P., and Xxxxxxx Emerging Growth
Partners.
1.10 LICENSED PRODUCT(S). Each of * * * products that
-------------------
recognizes and identifies a transmitter based on * * * or * * *
for the purpose of detecting fraudulent activities, listed on Schedule 2 or
----------
* * * by Business Successor, whether or not Licensee hereafter
makes any changes, including, without limitation, * * * or other
modifications thereto.
1.11 LICENSED SERVICES. Each of * * * that relates to
-----------------
the * * * of a transmitter based on * * * or
* * * for the purpose of detecting fraudulent activities, listed on
Schedule 3 or * * * by Business Successor, whether or not
----------
Licensee hereafter makes any changes or
2
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
modifications thereof. * * * (a) will include, by way of example
but not of limitation, services for * * * , such as * * *
for * * * and * * * and the development of * * * for
* * * or * * * and (b) will not include
work in the * * * that involves a Licensed Product in the
* * * .
1.12 LICENSEE IMPROVEMENTS. Any new technology used or developed by
---------------------
Licensee that consists of improvements to the * * * intended for or that
have application with respect to * * *
and that do not require major system redesign. Licensee Improvements shall not
include any * * * ; the parties intend that Licensee Improvements will
consist only of modification to the * * * described in Schedule 1.
----------
1.13 LICENSEE NOTE. The certain promissory note of even date
-------------
herewith made by Licensee in favor of TRW, in the principal amount of $ * * * .
1.14 LICENSOR. TRW and ESL.
--------
1.15 MILITARY/INTELLIGENCE FIELD. Uses or applications of Trade
---------------------------
Secrets and Copyrights under contract or in collaboration with a Governmental
Entity for the purpose of * * * and other similar applications.
1.16 NEW INVENTIONS. Any technology, trade secrets, copyrights,
--------------
patents, patent applications, products or services in the * * *
developed by * * * other than * * * .
1.17 PATENT RIGHTS. All rights, benefits and privileges under: (i)
-------------
United States Letters Patent and pending United States patent applications owned
by Licensor that are identified in Schedule 4, Part A; (ii) any future United
--------
States patent applications or patents that relate to the inventions listed on
Schedule 4, Part B; and (iii) all patents now or subsequently issuing throughout
----------
the world based on the subject matter described in such patents and
applications, including, without limitation, any continuation, division, reissue
or foreign country counterpart thereof.
1.18 TRADE SECRETS. All of Licensor's existing technical expertise,
-------------
and all proprietary information, data or confidential know-how pertaining to the
design, manufacture, installation, use, repair, maintenance, and operation of
Licensed Products or Licensed Services (and all * * *
) which were developed or acquired by Licensor and are owned by Licensor and
which have been applied to or used or tested for the purpose of fraud detection
or mitigation in the * * * , including, but not limited
to, the methods, processes, * * * , computer programs, databases, formulae,
devices, specifications, drawings and items listed in Schedule 1, and all of the
----------
foregoing that may in the future be developed or created by Business Successor
that which have use in, for, or with respect to products, services or trade
secrets (including, without limitation, the Licensed Products, Licensed Services
and * * * ) relating to fraud detection or mitigation
in the * * * .
3
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
1.19 * * * . The conduct of business pertaining to
--------------------
products or services for use in connection with * * * .
1.20 * * * . The business of * * *
-------------------------
based on combining or * * * products or services (including without
limitation, the Licensed Products and Licensed Services) * * * other products
and services.
1.21 * * * . The process of transmitting and
-----------------------
receiving signals used for communications purposes that can be accomplished
without * * * .
1.22 * * * . The conduct of business
-----------------------------
pertaining to * * * .
ARTICLE 2
LICENSE, PATENT ASSIGNMENT AND GRANT-BACK
-----------------------------------------
2.1 LICENSE. Subject to the provisions of Section 2.2, Licensor
-------
hereby grants to Licensee:
(a) an * * *
right and license under the Trade Secrets and the Copyrights (i) to
* * * products, including without limitation, the Licensed
Products and components of the Licensed Products, in the * * *
; and (ii) to * * * , including without limitation,
the Licensed Services to customers, in the * * * ; and
(b) a * * *
right and license under the Trade Secrets and the Copyrights to * * *
products (including, without limitation, the Licensed Products), or * * *
* * * services (including, without limitation, the Licensed Services) in the
* * * .
2.2 RESERVATION OF RIGHT. * * * reserves * * * to * * *
--------------------
the Trade Secrets or the Copyrights for * * * or * * *
and in the * * * , and * * * is granted to * * * to
practice or use the Trade Secrets or the Copyrights in the * * *
.
2.3 PATENT ASSIGNMENT AND GRANT BACK. Pursuant to the Assignment of
--------------------------------
Patents by TRW Inc. dated as of even date herewith, Licensor will assign to
Licensee its Patent Rights in those inventions (including without limitation all
foreign counterpart applications) identified in Schedule 4, Part A. Licensor
----------
will execute such additional documents provided by Licensee as are necessary to
record the Assignment of Patents and for the assignment of the foreign
counterpart applications and to assign and record the assignment to Licensee of
the Patent Rights to any inventions from Schedule 4, Part B that are filed as
----------
patent applications. In consideration thereof, Licensee shall and
4
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
hereby does grant back to Licensor an * * *
right and license to the Patent Rights * * * in the * *
* , and for * * * , except that the foregoing
license shall be * * * in the * * * .
ARTICLE 3
TERM
----
3.1 TERM. This Agreement commences as of the Effective Date and
----
will * * *
of the parties or in accordance with Section 11.3.
3.2 * * * TERMINATION. Except as otherwise expressly provided in
-------------------
Sections 3.1 and 11.3, this Agreement * * * to * * * during
its term.
ARTICLE 4
DELIVERY AND TECHNICAL ASSISTANCE
---------------------------------
4.1 DELIVERY.
--------
4.1(a)Delivery Upon Closing. Licensor has furnished Licensee copies
---------------------
of such documents, information and other materials in possession of Licensor,
including without limitation, materials relating to the Trade Secrets and the
Copyrights, as Licensor believes are reasonably necessary for Licensee to
understand, implement and use the Trade Secrets, Copyrights, Patent Rights,
Licensed Products and Licensed Services and to be able to manufacture Licensed
Products and provide Licensed Services.
4.1(b)Future Deliveries. Upon Licensee's reasonable written request
-----------------
from time to time and without charge (other than photocopy expense), Licensor
will furnish to Licensee copies of such additional documents, information and
other materials, in possession of Licensor, which have not previously been
provided to Licensee, including without limitation all materials relating to the
* * * , the Trade Secrets and the Copyrights as are reasonably
necessary for Licensee to understand, implement and use the Trade Secrets,
Copyrights, Patent Rights, Licensed Products and Licensed Services and to be
able to manufacture Licensed Products and provide Licensed Services.
4.2 TECHNICAL ASSISTANCE. Upon Licensee's reasonable written
--------------------
request * * * , Licensor shall, * * * and subject to
mutual agreement in good faith between the parties as to scheduling, scope of
work and the * * * , provide technical
assistance to Licensee in connection with the Trade Secrets, Copyrights and
Patent Rights, and in connection with the manufacture, use, delivery or sale of
Licensed Products and the provision, delivery or sale of Licensed Services. At
Licensee's request, such technical assistance shall include, without limitation:
5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
(a) Advice and assistance by qualified engineers and other
personnel who have knowledge of the Copyrights or the Trade Secrets, or
experience in the manufacture and use of Licensed Products or the delivery of
Licensed Services; and
(b) Such other technical services and technical information that
Licensee may reasonably request in connection with this Agreement.
4.3 COMPENSATION. For any services rendered upon Licensee's request
------------
pursuant to Section 4.2, * * * customarily
charged to third parties consisting of * * * (including,
without limitation, * * *
, and will reimburse * * * for * * * incurred in connection
with the performance of such services (including but not limited to
* * * ).
ARTICLE 5
PROTECTION OF TRADE SECRETS
---------------------------
5.1 USE AND NON-DISCLOSURE. Licensee and Licensor will not use or
----------------------
permit the use of any Trade Secrets for any purpose not authorized by this
Agreement. Subject to the provisions of Section 5.2 and 5.3, Licensee and
Licensor will hold in confidence, and will not disclose or communicate to any
third person, any * * * . Licensee and Licensor will take or cause to be
taken all reasonably necessary precautions to prevent the disclosure or
communications of such * * * to third persons.
5.2 EXCEPTIONS. Licensee and Licensor may disclose * * * to
----------
its employees or to any person or entity in connection with bona fide business
or financing transactions to the extent that each such disclosure is reasonably
necessary for the purpose of manufacturing, selling, delivering, providing,
installing, repairing or servicing any product (including, without limitation
Licensed Products) or providing any services (including, without limitation
Licensed Services) or procuring goods and services required in connection
therewith or discussing or conducting such business or financing transaction;
provided that: (a) Licensee or Licensor clearly marks any document or other
material containing any * * * so disclosed to indicate that such documents
or materials contain the * * * , (b) Licensee or Licensor requires each
entity to whom such documents or materials are disclosed to sign a written
agreement limiting use thereof to the purpose stated in such agreement,
prohibiting the reproduction thereof and the disclosure thereof to any other
person and requiring the prompt return thereof when no longer needed or such
agreement is terminated, and (c) any reproduction, note or summary of such
documents or materials immediately upon the making thereof will become the
property of * * * . The foregoing restrictions on the use and disclosure of
the * * * shall not apply with respect to any * * * (i) that is in or
(through no improper action or inaction by the disclosing party or any agent or
employee) enters the public domain (and is readily available without substantial
effort), or (ii) in the case of Licensee only, that was rightfully in its
possession or known by Licensee prior to receipt from Licensor, or (iii) in the
case of Licensee only, that was rightfully disclosed to
6
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Confidential Treatment and filed separately with the commission.
Licensee by another person without restriction, or (iv) * * * after the
Effective Date.
5.3 ACCESSIONS. Each modification, improvement and revision of any
----------
of the Trade Secrets (except for direct reproductions thereof) that is made by
or for Licensee will become the property of Licensee.
ARTICLE 6
IMPROVEMENTS; FIRST RIGHT OF OFFER
----------------------------------
6.1 * * * . * * * shall promptly
---------------------------------
disclose to Licensee in writing all * * * .
6.2 FIRST RIGHT OF OFFER FOR NEW INVENTIONS. Licensee will have a
---------------------------------------
right of first offer to license New Inventions in the * * *
. Licensor shall not license or sell any New Inventions to any third party,
* * * , without first offering such New
Inventions to Licensee. Upon receipt of written notification from Licensor as
to the details of the New Invention and the specific terms of an offer ("Offer")
by Licensor to sell or license such New Inventions to Licensee, Licensee shall
have * * * to accept the Offer. In the event that Licensee
* * * , and no other
terms shall apply. If Licensee does * * * , then for a period of
* * * thereafter, Licensor may license such New Inventions to a third
party, but * * * .
6.3 LICENSEE IMPROVEMENT(S). Licensee shall * * *
-----------------------
all Licensee Improvements.
6.4 * * * RIGHT OF FIRST OFFER AND OBLIGATION TO DISCLOSE
-----------------------------------------------------------------
* * * AND LICENSEE IMPROVEMENTS. Notwithstanding anything to
-------------------------------------------------
the contrary in this Agreement, the * * * shall
* * * after the Effective Date, and any * * * or
Licensee Improvements developed or created at any time after * * *
after the Effective Date * * * be included as part of the licenses granted
hereunder.
ARTICLE 7
TRADEMARKS
----------
7.1 PHONEPRINT TRADEMARK. Pursuant to the terms of an Assignment of
--------------------
U.S. Intent-To-Use Trademark Application executed by TRW as of even date
herewith, TRW will assign to Licensee its entire right, title and interest in
and to the application for the trademark "PhonePrint" and any and all trademarks
and service marks related thereto throughout the world. As of the Effective
Date, TRW and ESL will abandon and cease all use of the PhonePrint name and
xxxx.
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Confidential Treatment and filed separately with the commission.
7.2 TRW TRADEMARK. Licensee may use printed material bearing the
-------------
name and xxxx "TRW PhonePrint" for a period from the Effective Date through *
* * specifically in support of the * * * ; provided it
disclaims its affiliation with TRW Inc. when and as appropriate. Thereafter,
Licensee will cease use of the TRW name, xxxx or logo either by itself or in
connection with the PhonePrint name and xxxx. Notwithstanding anything in this
Agreement to the contrary, TRW reserves all right, title and interest to the TRW
name, xxxx and logo and Licensee may not use the TRW name, xxxx or logo in any
way except as provided in this Section 7.2. Licensor shall abandon and shall
not use the "TRW PhonePrint" name and xxxx, and will execute all documents and
take all action reasonably requested by Licensee to permit Licensee to use the
"PhonePrint" name and xxxx.
ARTICLE 8
PRODUCT LIABILITY * * *
---------------------------------
8.1 PRODUCT DEFECTS. With respect to Licensed Products sold, leased
---------------
or manufactured after the Effective Date, * * * will have * * *
for determining that the designs of the Licensed Products and components
* * * are manufactured in accordance with customary commercial
standards.
8.2 GENERAL * * * . Except as provided in Section 8.3,
-----------------------
* * * in respect of any and all * * *
resulting from a claim that * * * use of any Patent Rights, the Trade
Secrets, the Copyright, PhonePrint trademark and/or * * * manufacture, use
and/or sale of Licensed Products, components of such Licensed Products, or
Licensed Services causes injury or damage to persons or property; provided that
(i) * * * reasonably promptly notifies * * * in writing of any claims in
this regard, (ii) * * * provides * * * information, assistance and
authority to enable * * * to defend such claim, and (iii) * * * assumes
control of the defense and settlement of the claim.
8.3 INTELLECTUAL PROPERTY * * * .
-------------------------------------
a. * * * and its officers, directors,
agents, employees, consignees and customers * * * from any and
* * * resulting from: (i) the * * *
of any Trade Secrets, or (ii) * * * of any United States or
foreign copyright or United States patent issued on or before * * * ,
by the Patent Rights listed in Schedule 4 (Part A), Trade Secrets, Copyrights,
or PhonePrint trademark in connection with Licensee's manufacture, use and/or
sale of products (including, without limitation, the Licensed Products),
components of any such products, or * * * provision of services (including,
without limitation, the Licensed Services); * * *
The foregoing obligation of Licensor * * * with respect to
* * * (i) * * * of the Patent Rights,
Trade Secrets, Copyright, or PhonePrint trademark, (ii) not relating to the
Patent Rights, Trade Secrets, Copyright, or PhonePrint
8
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Confidential Treatment and filed separately with the commission.
trademark or portions or components thereof, or * * * the * * *
relates to * * * of the license granted under this
Agreement, (iii) to the extent the Licensed Products * * *
Trade Secrets and Copyrights licensed to Licensee hereunder and
* * * (and * * *
), (iv) where * * * activity after being
* * * thereof or after being
* * * that would have avoided the * * * , (v) to the
extent * * * to * * * ,
except to the extent that the * * *
working in connection with * * * (and who had knowledge of the
* * * ) * * * of such * * * at the time * * * was
required to notify * * * of such * * * pursuant to
* * * , or (vi) of a * * * to the extent that the * *
relates to * * * to a Licensed Product or Licensed Service,
* * * (and the * * *
would not have occurred but for * * * ).
b. * * *
from any and all * * *
from * * * of any * * * issued on or after * * *
(including, without limitation, of the rights of * * * and/or
* * * in * * *
), in connection with Licensee's manufacture, use and/or sale of products
(including, without limitation, the Licensed Products or components of such
Licensed Products or Licensed Services).
ARTICLE 9
GOVERNMENT APPROVAL
-------------------
9.1 COOPERATION. Licensor and Licensee promptly will seek all
-----------
necessary governmental approvals and licenses that may be required in connection
herewith and will cooperate with each other in every reasonable way to obtain
such approval. Nothing in this Agreement will be deemed to require either party
to agree to any revision or modification of this Agreement that may be required
to obtain any governmental approval.
ARTICLE 10
DEFAULT; REMEDY; TERMINATION
----------------------------
10.1 DEFAULT. A "default" shall exist under this Agreement if either
-------
party fails to perform any written obligation to be performed by it hereunder
within * * * after written notice from the other party that time for
such performance has passed or, if no such time is prescribed, within * *
* after written notice from the other party.
9
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Confidential Treatment and filed separately with the commission.
10.2 REMEDY. If a party is in default hereunder, the party not in
------
default may pursue any remedy available to it at law or in equity if the noticed
default is not cured within the notice period. * * *
; this Agreement may be * * * only pursuant to * * * .
10.3 TERMINATION BY * * * . * * * may terminate this Agreement
-----------------------
only in the event that (i) * * * has not * * * under the
* * * ; and (ii) * * * has provided * * * to the * * * and
* * * of such * * * ; and (iii) * * * has * * * ,
within * * * after the receipt by * * * and the * * * of the *
* * described in (ii) above, of the * * * under the * * *
; and (iv) * * * to * * * and the * * * a * * *
following such * * * period and before * * * by * *
*.
10.4 PERFORMANCE AFTER TERMINATION. Upon termination of this
-----------------------------
Agreement pursuant to Section 11.3, * * *
, and (b) * * * , that
(i) is not contained in * * * , or (ii) has not become
available to the public or generally known in the trade
other than as a result of the improper action of * * *
, or its * * * , who have knowledge thereof.
10.5 LIMITATION OF LIABILITY. Subject to the exceptions noted below,
-----------------------
no party shall have liability exceeding $ * * * in the aggregate under this
Agreement, that certain Cooperation Agreement of even date herewith and that
certain Non-Competition Agreement of even date herewith ("Non-Competition
Agreement"). The foregoing limitation of liability shall not apply with respect
to: (i) a willful or intentional breach of this Agreement or the Non-
Competition Agreement; or (ii) matters relating to or arising in connection with
* * * of this Agreement. In the event any party to this
Agreement becomes aware of a breach hereunder by any other party to this
Agreement, the non-breaching party shall provide the breaching party with
written notice of the breach and a * * * period in which to cure such
breach.
ARTICLE 11
MISCELLANEOUS
-------------
11.1 NOTICES. All notices and communications required or permitted
-------
to be given under this Agreement shall be sufficient only if written in English
and personally delivered, delivered by a major commercial rapid delivery
courier service with tracking capabilities or mailed by certified or registered
mail, return receipt requested, with postage or delivery charges prepaid and
addressed to a party at its address set forth below (unless by such notice a
different person or address will have been designated by notice pursuant to this
Section). If not received sooner, notice by mail will be deemed received five
(5) days after deposit in the U.S. mails.
10
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Licensee: PhonePrint Inc.
000 X. Xxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Licensor: TRW Avionics & Surveillance Group
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: TRW Law Department
11.2 ASSIGNMENTS. TRW and ESL will have no right to assign or
-----------
transfer any of their respective rights or to delegate any of their duties under
this Agreement without the prior written consent of Licensee,
* * *
. Licensee can assign or sublicense any of its rights or licenses
under this Agreement at its sole option.
11.3 HEADINGS. The headings and titles to the Articles and Sections
--------
of this Agreement are inserted for convenience only and will not be deemed a
part hereof or affect the construction or interpretation of any provision
hereof.
11.4 REMEDIES. Unless otherwise expressly provided herein, the
--------
rights and remedies hereunder are in addition to, and not in limitation of,
other rights and remedies under this Agreement, and exercise of one right or
remedy will not be deemed a waiver of any other right or remedy.
11.5 MODIFICATION - WAIVER. No cancellation, modification,
---------------------
amendment, deletion, addition or other change in this Agreement or any provision
hereof, or waiver of any right or remedy herein provided, will be effective for
any purpose unless specifically set forth in a writing signed by the party to be
bound thereby. No waiver of any right or remedy in respect of any occurrence or
event on one occasion will be deemed a waiver of such right or remedy in respect
of such occurrence or event on any other occasion.
11.6 ENTIRE AGREEMENT. This Agreement supersedes all other
----------------
agreements, oral or written, heretofore made with respect to the subject hereof
and the transactions contemplated hereby and, with the Schedules hereto and in
conjunction with the Cooperation Agreement and Asset Purchase Agreement,
contains the entire agreement of the parties.
11.7 CONTROLLING LAW. All questions concerning the validity and
---------------
operation of this Agreement and performance of the obligations imposed upon the
parties hereunder will be governed by the substantive laws of the State of
California.
11
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Confidential Treatment and filed separately with the commission.
11.8 SUCCESSORS AND ASSIGNS. The provisions of this Agreement will
----------------------
be binding upon and inure to the benefit of Licensor and Licensee and their
respective successors and authorized assigns. This provision will not be deemed
to expand or otherwise affect the limitations on assignment and delegation set
forth in Section 12.2.
11.9 PRODUCT MARKING. Licensed Products and/or Licensed Services
---------------
manufactured, delivered or sold by Licensee will be marked by Licensee in
conformance with the patent and copyright laws of the countries of manufacture,
use and sale.
11.10 PUBLICITY. Except as the other party gives its prior written
---------
consent, neither Licensor nor Licensee will use the name of the other party in
any publicity, product announcement, brochure, advertising, product labeling,
promotion or otherwise for any purpose.
11.11 COUNTERPARTS. This Agreement has been executed in several
------------
counterparts, each of which will be deemed to be an original copy hereof.
11.12 ATTORNEY'S FEES. In the event of any dispute or litigation
---------------
relating to this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and court costs from the other party(ies).
[Remainder of This Page Intentionally Left Blank]
12.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
PHONEPRINT INC.
--------------------
Name
--------------------
Title
--------------------
Date
TRW INC.
--------------------
Name
--------------------
Title
--------------------
Date
ESL INCORPORATED
--------------------
Name
--------------------
Title
--------------------
Date
13.
ESL PROPRIETARY INFORMATION
SCHEDULE 1
TRADE SECRETS
-------------
1. Proprietary * * * processing * * * that perform the
following functions on the * * * :
. Reduces the effects of * * * with * * * .
. * * * the call information in the * * *
including the * * * .
. * * * various * * * that are useful in * * *
* * *.
. Calculate * * * of each * * * and the * * *
as a whole. Use these * * * the use of each * * *
based on * * *.
2. Proprietary * * * that perform the following
functions:
. * * * the * * * into a * * * of the phone
emitter.
. * * * from the * * * from * * *
, * * * and * * * .
. * * * from new * * * with * * * to determine if
the * * * comes from the original phone or a different
(fraud) phone.
. Use * * * techniques to determine if the * * * is
similar or dissimilar to the existing * * *.
. Compares new * * * against * * * that were * * *
by phones that were * * * to be either * * *.
. Determine if the * * * or * * * are on * * * the
call to be * * * if fraud is * * * .
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
ESL PROPRIETARY INFORMATION SCHEDULE 1 TRADE SECRETS (cont.)
. Compare new * * * against * * * that were produced by
the * * * that the * * * claims to be.
. Compare new * * * against * * * that were produced by
the * * * (from * * *) the * * * claims to be.
. Use of * * * to * * * which were recently used by
* * * or * * * by PhonePrint.
. Issue a * * * to * * * the call when Fraud is
detected.
. * * * the Good/Fraud * * * on * * * matching based on
the * * * , * * * , * * * and * * * with
that * * * and other * * * information.
. Use of * * * and * * *.
. * * * that will * * * calls for
a period of time that are from the same * * * that has
* * * * * * .
3. Proprietary * * * that perform the following
functions:
. * * * retrieve information, via * * * or network, on call
* * * from the real time PhonePrint systems. This information
includes the * * * , measured *
* *
* * * .
. Combine * * * information from * * *
to * * * of all phones observed by all systems.
. Combine new * * * information with * * * to
* * * * * * .
. Transmit the * * * information to the * *
* PhonePrint Systems.
. Generate reports on various system functions from the * * *
information.
2
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
ESL PROPRIETARY INFORMATION SCHEDULE 1 TRADE SECRETS (cont.)
4. * * * and technologies involving methods of * * *
* * * . Use this information
to * * * the * * * that was * * *
. The * * * can come from a variety of means
including:
. Call was * * * that is known only to * * *
of the * *.
. Call was * * * on the * * * for the * * *
that * * * the call was * * * user.
. * * * with the * * * that he did ( * * * ) or did not ( * * * )
* * *.
. Combination of information from * * * that * * *
in good user's * * *.
. Calls flagged by * * * as from * * * or * * *
users.
5. * * * technology that perform the following functions to
* * * calls:
. Receive * * * and information from real time processes
indicating that a call is * * * .
. * * * to * * * containing information on the
call's * * * .
. * * * the * * * information in the * * *.
. * * * a * * * on the * * *.
. * * * both * * * and * * * .
6. Only the following portions of * * *
software:
. All libraries and included modules necessary to link and compile
the * * * program, which only includes the * * *
directory and * * * .
3
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
ESL PROPRIETARY INFORMATION SCHEDULE 1 TRADE SECRETS (cont.)
. The executables and help files in the * * * directory.
. One * * * of how to interface to the * * * program, the * *
* program to be * * * .
7. All * * * and software developed on the * * * not
listed above including:
. * * * software to process * * * to evaluate
* * * with * * * .
. * * * and software to evaluate performance
of each * * * and * * * .
8. Other * * * techniques including:
. * * * . * * * the call via * * * the *
* * .
. * * * . Interface with the * * * to * * *
by the same * * * occurring at the * * * .
. * * * . * * * to * * * the * * * (as in
the * * * in item 5 above) and to the * * * the
signal.
. * * * . * * * network to * * *
the call * * * the carrier's * * *.
4
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Confidential Treatment and filed separately with the commission.
SCHEDULE 2
LICENSED PRODUCTS
-----------------
.
. * * *
.
.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
SCHEDULE 3
LICENSED SERVICES
-----------------
.
.
. * * *
.
.
.
.
.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
SCHEDULE 4
PATENT RIGHTS
-------------
PART A
------
1. Patent Applications.
--------------------
* * * Patent Application, * * * Serial No. * * * , by
* * * . Corresponding * * *
are listed below.
Country Serial No. Filing Date
------- ---------- -----------
* * *
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
TRADE SECRETS
SCHEDULE 4
PATENT RIGHTS
-------------
PART B
------
* * * INVENTIONS
---------------------
This is a list of the inventions that apply to * * * of
* * * calls, and are believed to have been * * *
and * * * . Where noted, * * * may
be the sole or joint inventor. These * * * subject to the usual
considerations of determining * * * and * * * sale, offer sale and
delivery dates. * * * may or * * * for
the inventions. If * * * are not * * *, these items remain *
* * .
1. * * * that perform the following functions on
the * * * of the phone signal:
. * * * the * * * of * * * with * * * .
. * * *
. * * *
. * * *
2. Proprietary * * * that perform the following
functions:
. * * *
. * * * from the signal * * * from * * * .
. use * * * to determine if the * * * is
. * * * or * * * to the * * *.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
TRADE SECRETS
SCHEDULE 4 PART B INVENTIONS (cont.)
. Determine if the * * * or * * * are on * * * the
call to be * * * if fraud is suspected.
. Compare * * * against * * * that were produced by the
* * * * and * * * the * * * to be.
. Use of * * * to * * * which were recently used
by * * * or * * * by * * * . This is for
the * * * , where a * * *
switches to a * * * after * * * gets * * * . (
* * * may be a * * * or * * *.)
. Vary the * * * on * * * based on the * *
* * * * and
* * * with that *
* * and other * * * .
. Use of * * * and * * * . ( *
* * may be a * * * or * * *.)
. * * * that will * * * for a
* * * that are from the * * * that has
been * * * over a * * *
.
3. Proprietary * * * that perform the following functions:
. Combine * * * from * * * to
* * * of * * * observed by * * * using
* * * and * * * .
4. * * * and technologies involving methods of * * *
.
. * * * a signature as the * * * or a * * * by
identifying at least * * * or * * *
. Use this information to * * * that was
* * * by that * * *. ( * * * may be a * * *
or * * *.)
. Call was made to * * * that is known only to * * *
of the * * *.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
TRADE SECRETS
SCHEDULE 4 PART B INVENTIONS (cont.)
. Call was to * * * on the * * * list for the
* * * that indicates the call was by the * * *.
. Conversation with the * * * that he * * * or
* * * make a * * *.
. Calls * * * by * * * as from * * * or
* * * .
5. * * * technology that perform the following functions to *
* * calls (* * * may be a joint inventor or owner.):
. * * * to * * *
on the * * * .
. * * * the * * * in the * * *.
. * * * on the * * *.
. * * * both * * * and * * *.
6. Other * * * techniques that have been studied but have not been
implemented such as:
. * * * . * * * the call * * *
the * * * * * *.
. * * * . * * * with the * * * to
block * * * by the * * * occurring at the * * *.
. * * * . * * * to both the * * *
and to the * * * .
. * * * . * * * into the * * *
to * * * within the * * *.
7. The * * * initially drafted but not filed by * * *
for an * * *
including without limitation any and all inventions described in the * * *
.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
EXHIBIT C
---------
Assignment of Lease
-------------------
C-1
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Agreement") is entered into as
of December 14, 1994, by and among PHONEPRINT, INC., a Delaware corporation
("PhonePrint") and ESL, INCORPORATED, a California corporation ("ESL"), with
reference to the following facts:
A. Concurrently herewith, ESL and PhonePrint have entered into an Asset
Purchase Agreement of even date herewith (the "Purchase Agreement") pursuant to
which PhonePrint is purchasing certain Assets (as defined in the Purchase
Agreement).
B. As a material inducement for the purchase of the Assets by PhonePrint
and pursuant to the terms of the Purchase Agreement, ESL desires to assign ESL's
rights to PhonePrint and to have ESL's obligations assumed by PhonePrint as
arising under a certain Lease and attached exhibits for the business premises of
ESL at 000 Xxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx, dated June 30, 1992, as
amended April 15, 1993, June 30, 1993 and November 23, 1994 (the "Lease"), a
copy of which is attached hereto as Exhibit "A", by and between ESL and
Westminster Management Corporation, a Canadian corporation ("Lessor"), on the
terms and conditions set forth below.
NOW, THEREFORE, the parties hereby agree as follows:
1. Assignment of Rights by ESL. ESL hereby assigns, transfers and sets
---------------------------
over to PhonePrint, all of ESL's right, title and interest in and to and under
the Lease effective as of the Closing Date (as defined in the Purchase
Agreement). ESL hereby represents to PhonePrint that ESL has performed all
material obligations required to be performed by it under the Lease through the
Closing Date, and neither ESL nor Lessor is in material default thereunder; and
no event has occurred that, with the lapse of time or giving of notice, or both,
(i) would constitute a material breach or material default thereunder by ESL or
Lessor or would cause or permit acceleration of any obligation of ESL or Lessor
or (ii) would materially and adversely affect any of the Assets or the business
to be conducted therewith.
2. Assumption of Obligations by PhonePrint. In reliance on the
---------------------------------------
foregoing representations and warranties, PhonePrint hereby accepts the
foregoing assignment and assumes, as of the Closing Date, all of ESL's
obligations under the Lease. ESL agrees that PhonePrint shall be responsible
only for liabilities, claims or obligations under the Lease that accrue on or
after the Closing Date. ESL further agrees to hold PhonePrint and its
successors and assigns harmless from any liability, claim or obligation under
the Lease that has arisen or may arise in connection with events or actions
occurring on or prior to the Closing Date. Except for the liabilities expressly
assumed in this Agreement, PhonePrint shall not assume or be responsible for any
liabilities or obligations of ESL whatsoever, regardless of amount, character or
description, whether accrued, contingent or otherwise, including, without
limitation, any liability for federal, state, or local income, sales, use,
property or other taxes or assessments arising out of or in connection with
operative events occurring on or prior to the Closing Date.
3. Successors and Assigns. The rights under this Agreement may not be
----------------------
assigned, nor the obligations hereunder delegated, by ESL without the prior
written consent of PhonePrint in its sole discretion. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors, assigns, heirs,
legatees, executors and administrators of the parties. ESL acknowledges and
agrees that PhonePrint may assign its rights and delegate its duties hereunder,
subject to any restrictions found in the Lease, without the consent of ESL.
4. Governing Law; Jurisdiction and Venue; Severability. This Agreement
---------------------------------------------------
shall be governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law. The parties agree
that any dispute regarding the interpretation or validity of this Agreement
shall be subject to the exclusive jurisdiction of the state and federal courts
in and for the County of San Diego, California, and each party hereby agrees to
submit to the personal and exclusive jurisdiction and venue of such courts.
5. Severability. If any term, covenant or condition of this Agreement
------------
is held to be to any extent invalid, void, or otherwise unenforceable by any
court or arbitrator, the remainder of this Agreement shall not be affected
thereby and each term, covenant and condition of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
6. Entire Agreement; Modification and Waiver. This Agreement, together
-----------------------------------------
with the agreements and documents referred to herein, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements and understandings. This
Agreement may be modified, amended or supplemented only by a written instrument
duly executed by all parties hereto. No covenant, term or condition or the
breach thereof shall be deemed waived, unless it is waived in writing and signed
by the party against whom the waiver is claimed. Any waiver of breach of any
covenant, term or condition shall not be deemed to be a waiver of any preceding
or succeeding breach of the same or any other covenant, term or condition. The
failure of any party to insist upon strict performance of any covenant, term or
condition hereunder shall not constitute a waiver of such party's right to
demand strict compliance therewith in the future. Time is of the essence for
purposes of each and every provision of this agreement.
7. Drafting Party. The provisions of this Agreement, and the documents
--------------
and instruments referred to herein, have been examined, negotiated, drafted and
revised by counsel for each party hereto and no implication shall be drawn nor
made against any party hereto by virtue of the drafting of this Agreement.
8. Counterparts. This Agreement may be executed in multiple copies,
------------
each of which shall be deemed an original and all of which shall constitute a
single agreement binding on all parties.
-2-
9. Further Acts. ESL agrees to perform any further acts and execute any
------------
further documents that may be necessary to give effect to the agreements and the
intent of the parties hereunder, including, but not limited to, causing Lessor
to enter into a Consent to Assignment and Assumption Agreement substantially in
the same form as Exhibit "B" attached hereto.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PHONEPRINT, INC., ESL, INCORPORATED,
a Delaware corporation a California corporation
By:______________________ By:__________________________________
Title:___________________ Title:_______________________________
[COUNTERPART SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION AGREEMENT]
EXHIBIT "A"
L E A S E
- - - - -
1. PARTIES
-------
THIS LEASE is made as of this 30th day of June, 1992 by and between
WESTMINSTER MANAGEMENT CORPORATION, a Canadian corporation having its principal
place of business at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000, hereinafter referred to as "Landlord", and ESL INCORPORATED, a California
corporation having a principal place of business at 000 Xxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000-0000, hereinafter referred to as "Tenant".
2. PREMISES
--------
A. Premises. Landlord does demise and lease unto Tenant and Tenant
--------
does hereby take and hire upon subject to the terms, covenants and conditions
herein contained, the Premises, situated in the City of Sunnyvale, County of
Santa Xxxxx, State of California, known as 000 Xxxx Xxxx Xxxxx, located within
the Property as defined in Paragraph 2.B, which are more particularly shown and
-------------
as set forth in Exhibit "A" attached hereto and by reference made a part hereof,
-----------
together with the right to the reasonable and proportionate use of the Common
Area as defined in Paragraph 2.C.
-------------
B. Property: Building. The term "Property" shall mean that certain
------------------
real property, described as Parcel B as shown upon that certain Parcel Map
recorded in Book 383, Page 35 of Maps, which map was filed for record in the
office of the Recorder of the County of Santa Xxxxx, State of California, on
March 28, 1977, in Book 391 of Maps, Page 47, together with the improvements
thereon and appurtenances thereto, subject to all easements thereof, consisting
of one (1) building (the "Building") containing a total building area of
approximately 34,440 square feet, in the City of Sunnyvale, County of Santa
Xxxxx, State of California, all as more particularly shown on Exhibit "B".
-----------
C. Common Area. The term "Common Area" shall mean all areas and
-----------
facilities within the Property provided and designated by Landlord for the
general use, benefit and convenience of Tenant and other tenants and occupants
of any part of the Property, including without limitation, those portions of the
Building for the general use, benefit and convenience of all tenants of the
Building, such as common pipes, wires and appurtenant equipment serving the
Building, including the fire sprinkler system, the roof surface, parking areas,
sidewalks, landscaped and planted areas, driveways, truckways, retaining walls,
common neighbor walls, all exterior surface areas of the Building and all other
areas, facilities and improvements provided by Landlord for the common use of
Landlord and tenants of the Building, subject to the reasonable rules and
regulations
and reasonable changes therein from time to time promulgated by Landlord
governing the use of the Common Areas.
D. Tenant's Percentage. The term "Tenant's Percentage" shall mean
-------------------
the percentage of the area of the Premises to the total area of the Building.
Tenant's Percentage is agreed to be forty-six and four-tenths percent (46.4%)
for the purpose of this Lease.
3. USE OF PREMISES
---------------
Tenant may use and occupy the Premises for office, light
manufacturing, warehouse and research and development uses and other lawful
purposes subject to the zoning ordinances of the City of Sunnyvale, California.
4. TERM
----
The term of this LEASE shall be for a period of six (6) months
commencing on July 15, 1992 ("Commencement Date").
5. RENT
----
Tenant shall pay to Landlord, in advance without deduction or offset,
on the first day of each month of the term hereof, rental for the Premises in
installments of Eight Thousand Dollars ($8,000) per month.
Rental shall be payable without notice or demand at the address stated
herein or to such persons or at such places as Landlord may designate in
writing. Tenant shall pay to Landlord one month's rent in the amount of Eight
Thousand Dollars ($8,000) upon the execution of the Lease which sum shall be
applied to the first full calendar month of the Lease. In the event the
Commencement Date does not fall on the first day of a calendar month, Tenant
shall pay to Landlord on the Commencement Date the pro rata portion of the
monthly rent applicable to the first partial month of the term. All rent shall
be paid to Landlord at:
c/o Strutt Xxxxxx California
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
6. COMMON AREA EXPENSES
--------------------
A. Landlord to Maintain. Landlord shall operate, replace, maintain
--------------------
and repair the Common Area. The manner in which such area shall be maintained
and the expenditures therefor shall be at the sole discretion of Landlord.
Landlord shall at all times have exclusive control of the Common Area and may at
any time temporarily close any part thereof and exclude anyone from any part
thereof. Landlord may change the configuration or
2
location of the Common Area. In exercising any such rights, Landlord shall make
a reasonable effort to minimize any disruption of Tenant's business and shall
not interfere with access to the Premises by the bona fide customers, employees
and invitees of Tenant.
B. Tenant to Pay. During the term of this Lease, Tenant agrees to
-------------
pay, on a monthly basis as set forth in Section 7, as additional rent, Tenant's
---------
Percentage of all costs and expenses as may be paid or incurred by Landlord in
maintaining, operating, replacing and repairing the Common Area (hereinafter
referred to as the "Common Area Expenses") during the term of this Lease. The
Common Area Expenses may include, without limitation, the following: (i)
Assessments and dues, if any, payable under any covenants, conditions and
restrictions covering the Property; (ii) the cost of supplies, materials and
tools used in operation and maintenance of the Common Area; (iii) the cost of
gas, water, sewer usage and lighting used in the Common Area and the Building,
if not separately rendered to the Premises; (iv) the cost of landscaping
maintenance and reasonably required replacement; (v) the cost of maintenance and
repair of the concrete walkways, paved parking areas, roof surface and all other
portions of the Common Area; (vi) the cost of parking area sweeping service and
exterminator service.
7. ADDITIONAL RENT
---------------
From and after the Commencement Date, Tenant shall pay Landlord on the
first day of each calendar month of the term of this Lease, together with the
rent, as set forth in Section 5, Four Hundred Thirty-Eight Dollars ($438) as
---------
additional rent in payment of the estimated amount of Tenant's Percentage of the
Common Area Expenses. The foregoing estimated monthly charge may be adjusted by
Landlord at the end of any calendar year on the basis of Landlord's experience
and reasonably anticipated costs. Any such adjustment shall be effective as of
the first month of the calendar year for which Landlord has estimated costs.
Within sixty (60) days after the end of each calendar year or after
the expiration date of the Lease, Landlord shall furnish Tenant a statement
covering the calendar year, or portion thereof during which this Lease has been
in effect, and the payments made by Tenant with respect to such period as set
forth in Section 7. If Tenant's payments for Tenant's Percentage of the Common
---------
Area Expenses exceed the amount of the Tenant's Percentage of the actual Common
Area Expenses, Landlord shall refund the amount of the overpayments to Tenant.
If Tenant's payments for Tenant's Percentage of the Common Area Expenses are
less than the amount of the Tenant's Percentage of the actual Common Area
Expenses, Tenant shall pay to Landlord the amount of any deficiency within
thirty (30) days after written notice of the amount of such deficiency from
Landlord. The payments by Tenant of Tenant's Percentage of the Common Area
Expenses shall
3
be prorated as of the Commencement Date and the expiration of the term of this
Lease.
Failure by Tenant to pay any of the amounts required to be paid under
this Section 7 shall constitute a default under the terms hereof in like manner
---------
as failure to pay rental when due.
8. NET LEASE
---------
This Lease is what is commonly called a "Net Lease", it being
understood that Landlord shall receive the rent set forth above free and clear
of any and all taxes, assessments, liens, charges or expenses in connection with
the ownership and operation of the Premises except as specifically set forth
herein. In addition to the rent reserved above Tenant shall pay to the parties
respectively entitled thereto all taxes, assessments, insurance premiums,
operating charges, maintenance charges, Common Area Expenses, and any other
charges, costs and expenses against the Premises which arise or may be
contemplated under any provisions of the Lease commencing upon the execution of
this Lease and thereafter during the term hereof. All of such charges, costs
and expenses shall constitute additional charges and upon the failure of Tenant
to pay any of such costs, charges or expenses, Landlord shall have the same
rights and remedies as otherwise provided in this Lease for the failure of
Tenant to pay rent.
9. LATE CHARGES
------------
It is agreed that Tenant shall be responsible for and shall pay
Landlord interest on all sums not paid within fifteen (15) days from the due
date thereof at ten percent (10%) per annum or the maximum rate allowed by law,
whichever is greater, from the due date to and including the date of payment.
In addition, Tenant shall pay Landlord a late charge equal to five percent (5%)
of the amount due as a fair and reasonable estimate of administrative,
processing and accounting costs incurred by Landlord as a result of Tenant's
failure to deliver any payment due hereunder within fifteen (15) days from the
due date thereof.
10. ACCEPTANCE OF PREMISES
----------------------
By execution of this Lease, Tenant accepts the Premises as being in
good and sanitary order, condition, and repair and accepts the building and
improvements on the demised Premises in the condition existing as of the
Commencement Date of the Lease. Landlord makes no representation, or warranty
with respect to the condition of the Premises or its fitness or availability for
any particular use, and Landlord shall not be liable for any latent or patent
defect therein.
4
11. NO RIGHT TO HOLD OVER
---------------------
Tenant has no right to retain possession of the Premises or any part
thereof beyond the expiration or earlier termination of this Lease.
12. USES PROHIBITED AND WASTE
-------------------------
Tenant shall not commit, or suffer to be committed, any waste upon the
Premises, or any nuisance, or allow any sale by auction upon the Premises, or
allow the Premises to be used for any improper, unlawful or illegal purpose, or
place any loads upon the floor, walls, or ceiling in excess of the maximum
designed loads or which endanger the structure of the Premises. No waste
materials or refuse shall be dumped upon or permitted to remain upon any part of
the Premises outside of the building proper, nor shall articles of any nature be
stored upon or permitted to remain on any part of the Premises outside of the
building proper or other areas specifically designated therefor.
13. HAZARDOUS MATERIALS
-------------------
LANDLORD'S OBLIGATIONS:
----------------------
A. Upon the execution of this Lease and Tenant's entry onto the
Premises under this Lease, Landlord represents to Tenant that it shall have
delivered to Tenant the soil sample analysis for Hazardous Materials on the
Premises and Tenant represents to Landlord that it has received said soils
sample analysis.
B. If Hazardous Material is present on the Premises at the time of
Tenant's entry thereupon under this Lease, subject to subparagraph C of this
Section 13, Landlord shall be responsible for remediation, mitigation or removal
----------
of such Hazardous Materials as required by law and shall indemnify Tenant
against any suits, losses or damages because of pollution, seepage or
contamination caused by the Hazardous Materials.
C. Notwithstanding anything to the contrary in subparagraph B of
this Section 13, Tenant shall be responsible for any remediation, mitigation or
----------
removal required by law for any Hazardous Materials which were present prior to
Tenant's entry upon the Premises if the remediation, mitigation or removal is
required by law because of the negligent actions or omissions of Tenant which
affected or exposed such materials and such remediation, mitigation or removal
would not have been required but for the negligent act, error or omission of
Tenant.
D. Landlord agrees to indemnify, defend (using counsel reasonably
acceptable to Tenant) and hold harmless Tenant, its officers, employees and
agents from and against any claims, suits, damages, loss or costs (including
attorneys' fees
5
and removal, clean-up or restoration costs) arising from Landlord's ownership,
possession or use of the Premises prior to the Commencement Date which results
in the presence of Hazardous Material on the Premises unless the Hazardous
Material is present as a result of the acts or omissions of Tenant, its agents,
or employees or as a result of Tenant's failure or neglect to perform in
accordance with the provisions of the Lease. This indemnification of Tenant by
Landlord includes without limitation costs incurred in connection with any
investigation of site conditions or any clean-up, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Premises.
TENANT'S OBLIGATIONS:
--------------------
A. Tenant shall not cause or permit any Hazardous Materials to be
brought upon, kept or used in or about the Premises by Tenant, its agents,
employees, contractors or invitees, without prior written notice to Landlord.
Tenant shall not cause or permit any Hazardous Materials to be discharged into
the plumbing or sewage system of the Premises or onto the property underlying or
adjacent to the Premises. Tenant shall neutralize by filtering or taking other
action all Hazardous Materials generated by Tenant's activities on the Premises.
Tenant shall, at its sole cost and expense, comply with any and all rules,
regulations, codes, ordinances, statutes and other requirements of any federal,
state or local governmental authority respecting Hazardous Materials,
pollutions, harmful chemicals and other materials in connection with Tenant's
activities on or about the Premises. Tenant specifically agrees to comply with
any and all such requirements relating to the handling, use, storage and
disposal of Hazardous Materials and other materials which are considered by any
such governmental authority to be harmful, dangerous, toxic, flammable or
otherwise deserving of special care. Without limiting the foregoing, if the
presence of any Hazardous Material on the Premises, caused or permitted by
Tenant, results in any contamination of the Premises or the property under or
about the Premises, Tenant shall, at its sole cost and expense, promptly take
all actions as are necessary to return the Premises to the condition existing
prior to the introduction of any such Hazardous Material to the Premises;
provided that Landlord's approval of such actions shall first be obtained which
approval shall not be unreasonably withheld so long as such actions would not
potentially have any material adverse long-term or short-term effect on the
Premises. Tenant covenants that if it suspects pollution, seepage or
contamination of a Hazardous Material upon the Premises, it will promptly inform
Landlord of the condition.
B. If Tenant breaches the obligations stated above or if the
presence of Hazardous Material on the Premises caused or permitted by Tenant
results in contamination of the Premises, or
6
if contamination of the Premises by Hazardous Materials otherwise occur for
which Tenant is liable under this Lease to Landlord for damage resulting
therefrom, then Tenant shall indemnify, defend (using counsel reasonably
acceptable to Landlord) and hold Landlord, its officers, employees and agents
harmless from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses which arise during or after the Lease term as a result of
such contamination. This indemnification of Landlord by Tenant includes without
limitation costs incurred in connection with any investigation of site
conditions or any clean-up, remedial, removal or restoration work required by
any federal, state or local governmental agency or political subdivision because
of Hazardous Material present in the soil or ground water on or under the
Premises.
The obligations of Landlord and Tenant under this Section 13 shall
----------
survive the expiration of the Lease term.
14. TENANT IMPROVEMENTS
-------------------
A. Consent of Landlord. Tenant shall not be entitled to make any
-------------------
alterations, additions or improvements (collectively "Tenant Improvements") to
the Premises without Landlord's prior written consent.
Notwithstanding anything to the contrary herein, Tenant shall have no
obligation to repair damage to the Tenant Improvements caused by normal wear and
tear. Any Tenant Improvements including heating, lighting, electrical, air
conditioning, partitioning, drapery and carpeting installation made by Tenant,
which property by its installation has become an integral part of the building
shall be and become the property of Landlord.
B. Notice of Commencement and Completion. Tenant shall give
-------------------------------------
Landlord at least twenty (20) business days' prior written notice of the date of
commencement of construction of any Tenant Improvements to enable Landlord to
post and record a notice of non-responsibility on the Premises prior to the
commencement of such work. Within thirty (30) days after completion of
construction, Tenant shall furnish to Landlord copies of as-built drawings, or
other final plans and specifications and certificates of occupancy or finalized
building permits from the City of Sunnyvale for all Tenant Improvements. Tenant
covenants and agrees to assign to Landlord any and all guarantees or warranties
given for the work performed or materials used and/or installed as part of the
Tenant Improvements.
C. Inspection. Landlord or any of its agents may inspect the
----------
construction of the Tenant Improvements at any time.
7
D. Liens. Tenant shall not permit to be enforced against the
-----
Premises any mechanics', materialmen's, contractors' or other liens arising
from, or any claims for damages growing out of, any work herein authorized or
otherwise arising (except from the actions of Landlord), and Tenant shall pay or
cause to be paid all of said liens and claims before any action is brought to
enforce the same against Tenant, Landlord or the Premises. Tenant agrees to
indemnify and hold Landlord and the Premises free and harmless from all
liability for any and all such liens and claims and all costs and expenses in
connection therewith. Landlord may require that Tenant provide to Landlord, at
Tenant's sole cost and expense, a lien and completion bond in an amount
acceptable to Landlord insuring completion of the Tenant Improvements. If any
claim of lien is recorded, Tenant shall pay such lien or record or deliver a
surety bond sufficient to release any such lien imposed within ten (10) days
after the earlier of the imposition of the lien or written request by Landlord.
If Tenant fails to remove such lien within the prescribed 10-day period, then
Landlord may do so at Tenant's expense, and Tenant shall reimburse Landlord for
all such expenses within five (5) days after written demand by Landlord. Such
reimbursement shall include all sums disbursed, incurred or deposited by
Landlord, including Landlord's costs, expenses and reasonable attorneys' fees
with interest thereon at the maximum interest rate permitted by law.
E. Removal. Tenant shall be under no obligation to remove, at the
-------
expiration or earlier termination of the Lease, any Tenant Improvements unless
Landlord notifies Tenant in writing at the time of the installation of said
Tenant Improvement that removal will be required.
15. CONDEMNATION
------------
If the whole or any part of the Premises shall be taken or condemned
by any competent authority for any public or quasipublic use or purpose, which
taking or condemnation shall render the Premises unfit for the use which Tenant
was utilizing the Premises immediately prior to the taking or condemnation, then
this Lease shall terminate on the date when the possession of the part so taken
shall be acquired for such use or purpose, and the rental payments made or
required to be made under this Lease by Tenant shall be abated and prorated as
of the date of possession by the condemnor arising from such taking.
16. DEFAULT
-------
If: (a) Tenant shall fail to pay any rent or other sum payable
hereunder when due and thereafter fail to pay for a period of ten (10) days
following receipt of notice of such failure; (b) Tenant shall fail to observe,
keep or perform any of the other terms, covenants, agreements or conditions
contained herein and on the part of Tenant to be observed or performed and
8
such default continues for a period of thirty (30) days after written notice by
Landlord or beyond the time reasonably necessary for cure if such default is of
a nature to require more than thirty (30) days to remedy; (c) Tenant shall
become bankrupt or insolvent or make a transfer in fraud of creditors, or make
an assignment for the benefit of creditors, or take or have taken against Tenant
any proceedings of any kind under any provision of the Federal Bankruptcy Act or
under any other insolvency, bankruptcy or reorganization act and in the event
any such proceedings are involuntary, Tenant is not discharged from the same
within sixty (60) days thereafter; (d) a receiver is appointed for a substantial
part of the assets of Tenant; (e) Tenant shall abandon the Premises; or (f) this
Lease or any estate of Tenant hereunder shall be levied upon any attachment or
execution; then any such event shall constitute an event of default by Tenant.
Upon occurrence of any event of default by Tenant hereunder, Landlord may, at
its option and without any further notice or demand, in addition to any other
rights and remedies given hereunder or by law, do any of the following:
(i) Landlord shall have the right, so long as such default
continues, to terminate this Lease by giving to Tenant written notice of
such termination.
(ii) In the event of any such termination of this Lease,
Landlord may then or at any time thereafter, re-enter the Premises by any
lawful method available to Landlord and remove therefrom all persons and
property and again repossess and enjoy the Premises without prejudice to
any other remedies that Landlord may have by reason of Tenant's default or
of such termination.
(iii) In the event of any such termination of this Lease, and in
addition to any other rights and remedies Landlord may have, Landlord shall
have all the rights and remedies of a landlord provided by Section 1951.2
of the California Civil Code. The amount of damages which Landlord may
recover in event of such termination shall include, without limitation; (a)
the worth at the time of award (computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus one percent (1%)) of the amount by which the unpaid rent for
balance of the term after the time of award exceeds the amount of rental
loss that Tenant proves could be reasonably avoided; (b) any reasonable
legal expenses and other costs incurred by Landlord in effecting re-entry
or repossession of the Premises: (c) all reasonable costs incurred by
Landlord in restoring the Premises to good order and condition or in
remodeling, renovating or otherwise preparing the Premises for reletting;
and (d) all reasonable costs including, without limitation, any brokerage
commissions, incurred by Landlord in reletting the Premises.
9
(iv) In the event Tenant breaches this Lease or abandons the
Premises and Landlord does not elect to terminate this Lease by reason of
such breach of abandonment, this Lease shall continue in full force and
effect, and in addition to any other rights and remedies Landlord may have,
Landlord shall have all of the rights and remedies of a landlord provided
by Section 1951.4 of the California Civil Code, including the right to
recover rent as it falls due. Without any obligation to do so, Landlord
may also relet the Premises as the agent of Tenant and for Tenant's account
for such term, which may extend beyond the term of this Lease, and upon
such other items and conditions as Landlord may deem appropriate. Landlord
may do all things reasonably necessary for such reletting, including
repair, remodeling and renovating of the Premises and Tenant shall
reimburse Landlord on demand for all reasonable costs incurred by Landlord
in connection therewith. In the event Landlord relets the Premises,
Landlord shall apply any sums received upon such reletting in the following
order of priority: (a) to the payment of any indebtedness other than rent
due hereunder from Tenant to Landlord, (b) to the payment of all reasonable
costs incurred by Landlord in restoring the Premises to good order and
repair, or in remodeling, renovating or otherwise preparing the Premises
for reletting, (c) to the payment of all reasonable costs (including,
without limitation, any brokerage commissions) incurred by Landlord in
reletting the Premises; (d) to the payment of rent due and unpaid
hereunder; (e) the balance, if any, to the payment of future rent as the
same may become due hereunder. Notwithstanding any determination by
Landlord not to elect to terminate this Lease, Landlord may at any time
elect to terminate this Lease for any previous breach or default hereunder
by Tenant which remains uncured or for any subsequent breach or default.
(v) After terminating this Lease, Landlord may remove any and
all personal property located in the Premises and place such personal
property in a public or private warehouse or elsewhere at the sole cost and
expense of Tenant. In the event that Tenant shall not immediately pay the
cost of storage of such personal property after the same has been stored
for a period of thirty (30) days or more, Landlord may sell to the extent
permitted by law, any or all thereof at a public or private sale in a
commercially reasonable manner and at such commercially reasonable times
and places as Landlord may deem proper, without notice to or demand upon
Tenant. To the extent that such sale is not permitted if such property is
owned by the U.S. government, Landlord shall dispose of the property in a
manner permitted by applicable law. Tenant waives all claims for damages
that may be caused by Landlord's removing or storing or selling the
personal property as herein provided, except where such damage is caused by
Landlord's negligence or
10
willful misconduct, and Tenant shall indemnify and hold Landlord free and
harmless from and against any and all losses, costs and damages, including
without limitation all reasonable attorneys' fees and costs of Landlord
occasioned thereby.
17. WAIVER
------
No waiver of any breach or breaches of any provision, covenant, or
condition of this Lease shall be construed to be a waiver of any preceding or
succeeding breach of such provision, covenant or condition, or any other
provision, covenant or condition.
18. TIME
----
This section has been deleted by agreement of the parties.
19. MAINTENANCE AND REPAIR
----------------------
In addition to Landlord's obligation to maintain the Common Area as
provided in Section 6.A, Landlord at its cost shall maintain, in good condition,
-----------
the structural parts of the building that are a part of the Premises, which
structural parts include only the foundations, bearing and exterior walls
(excluding glass and doors) and structural members of the roof.
Tenant shall, during the term of this Lease, keep in good order,
condition and repair, the Premises and every part thereof, structural (except as
set forth above) or nonstructural. Tenant shall maintain a heating, ventilating
and air conditioning systems preventive maintenance contract with not less than
quarterly service, which shall be subject to the reasonable approval of Landlord
and paid for by Tenant and which shall provide for and include without
limitation replacement of filters, oiling and lubricating of machinery, parts
replacement, adjustment of drive belts, oil changes and other preventive
maintenance. If Tenant fails to perform Tenant's obligations under this
Section, Landlord may at Landlord's option after thirty (30) days' prior written
notice to Tenant (or sooner, at Landlord's discretion, in the event Landlord
determines that such repair is required on an emergency basis): (a) enter upon
the Premises subject to Tenant's applicable security requirements, and put the
same in good order, condition and repair, and the cost thereof together with
interest thereon at the greater of (i) ten (10) percent pier annum or (ii) the
lesser of (A) the maximum rate allowed by law or (B) five percent (5%) in excess
of the federal discount rate (which is the rate on advances to member banks
under Section 13 and 13(a) of the Federal Reserve Act) at the Federal Reserve
Bank of San Francisco on the 25th day of the month preceding the date the
repayment obligation arises (hereafter "Federal Discount Rate"), shall be due
and payable as
11
additional rent to Landlord together with Tenant's next rental installment (or
within ten (10) days from receipt of notice if payments of monthly rental have
not yet commenced); (b) assume responsibility for maintenance and repair of the
Premises, or any part thereof, and require Tenant to reimburse Landlord on a
monthly basis for all expenses incurred thereby; and/or (c) exercise any and all
remedies available to Landlord pursuant to Section 16 herein.
----------
20. INSURANCE
---------
A. Insurance Coverage.
------------------
1. Landlord shall maintain: (i) insurance with respect to the
Premises against loss or damage by fire, lightning, windstorm, hail,
explosion, riot, riot attending a strike, civil commotion, aircraft,
vehicles, smoke and other risks from time to time included under "all risk"
policies, in an amount equal to at least one hundred percent (100%) of the
full replacement value of the Premises and in any event in an amount
sufficient to prevent Landlord or Tenant from becoming a co-insurer of any
partial loss under the applicable policies, which shall be written on a
replacement cost basis; (ii) explosion insurance in respect to any steam
and pressure boilers and machinery, including but not limited to air
conditioning units, power and lighting panels, and similar apparatus
located on the Premises in amounts subject to approval by Landlord.
Landlord may, at its option and at its cost, maintain insurance against
loss or damage to the Premises by earthquake and/or flood. Tenant will
reimburse Landlord for Landlord's annual cost of "all risk" insurance,
excluding Tenant's proportionate share of any cost attributable to coverage
for loss or damage due to earthquake or flood, within thirty (30) days of
receipt of an invoice for such costs from Landlord.
2. Tenant, at its expense, shall maintain with insurers approved by
Landlord, which approval shall not be unreasonably withheld: (i) insurance
with respect to Tenant's equipment, inventory, fixtures and personal
property located in, on or about the Premises against loss or damage by
fire, lightning, windstorm, hail, explosion, riot, riot attending a strike,
civil commotion, aircraft, vehicles, smoke and other risks from time to
time included under "all risk" policies, in an amount equal to at least one
hundred percent (100%) of the full replacement value thereof; (ii) public
liability and property damage insurance applicable to the Premises in an
amount of not less than Two Million Dollars ($2,000,000) combined single
limit which amount may be increased, if requested by Landlord, to the
amount customarily carried by owners and operators of similar properties
which insurance shall be primary not
12
contributory to any other insurance available to Landlord; and (iii)
appropriate worker's compensation or other insurance against liability
arising from claims of workmen in respect of and during the period of any
work on the Premises. Tenant will comply with such other requirements as
Landlord or any mortgagee of Landlord may from time to time reasonably
request for the protection by insurance of their respective interests.
B. Policy Requirements. Any such insurance may, at Tenant's option,
-------------------
be provided through a blanket policy or policies provided the coverage and
limits of coverage applicable to the Premises are set forth on a certificate of
the insurer satisfactory to Landlord in form and substance.
C. Delivery of Policies. Upon the execution of this Lease and
--------------------
thereafter not less than thirty (30) days prior to the expiration date of any
policy delivered pursuant to this section, Tenant will deliver to the Landlord
the original of any policy or renewal policy, as the case may be, required by
this Lease, bearing notations evidencing the payment of premiums, except that,
in lieu of any such policy, Tenant may deliver a certificate of the insurer,
satisfactory to Landlord in substance and in form, as to the issuance and
effectiveness of such policy, and naming Landlord as Certificate Holder and Loss
Payee, as its interests may appear and the amount of coverage afforded thereby.
21. HOLD HARMLESS
-------------
Tenant agrees to indemnify and hold harmless Landlord against and from
any and all claims of damage or injury arising from Tenant's use of the Premises
or the conduct of its business on the Premises, or Tenant's failure to comply
with any of the terms or conditions of this Lease, except and only to the extent
that such claim or damage is caused by Landlord's negligence or willful
misconduct. Tenant as a material part of the consideration to Landlord, hereby
assumes all risk of damage to property or injury to persons in, upon, or about
the Premises from any cause other than Landlord's negligence or willful
misconduct, and Tenant hereby waives all such claims against Landlord.
Landlord agrees to indemnify and hold harmless Tenant against and from
any and all claims of damage or injury to the extent arising from Landlord's
active negligence or willful misconduct or Landlord's failure to comply with any
of its obligations under the terms of this Lease.
22. RIGHT OF ENTRY
--------------
Landlord, or its agents, may at any reasonable time upon reasonable
advance notice enter in and upon the Premises to
13
make repairs, post notices, inspect said Premises, or show the Premises to
prospective tenants or purchasers.
23. QUIET ENJOYMENT
---------------
Landlord covenants and agrees that Tenant, upon performing the
covenants, agreements and conditions of this Lease to be kept and performed by
Tenant, shall lawfully and quietly hold, occupy and enjoy said demised Premises
during the term of this Lease, without hindrance or molestation by Landlord, or
any person or persons claiming under Landlord.
24. SUBORDINATION
-------------
Tenant agrees that this Lease may, at the option of Landlord, be
subject and subordinate to any mortgage, deed of trust or other instrument of
security which has been or shall be placed on the land and/or building of which
the Premises form a part, and this subordination is hereby made effective
without any further act of Tenant. Tenant shall, at any time hereinafter, on
demand execute any instruments, releases, or other documents that may be
reasonably required by Landlord or any mortgagee, or trustor or beneficiary
under any deed of trust for the purpose of subjecting and subordinating this
Lease to the lien of any such mortgage, deed of trust or other instrument of
security, and the failure of Tenant to execute any such instruments, releases,
or documents shall constitute a default hereunder. Notwithstanding such
subordination, Tenant's right to quiet possession of the Premises shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay the rent
and observe and perform all of the provisions of this Lease, unless this Lease
is otherwise terminated pursuant to its terms. Landlord agrees to request any
lender whose loan is currently secured by the Premises to agree to execute a
non-disturbance agreement in favor of Tenant.
25. SIGNS
-----
Tenant shall not place, nor permit to be placed, upon the exterior
walls, roof or any portion of the Premises, any signs, advertisements or notices
whatsoever without the prior written consent of Landlord, which consent shall
not be unreasonably withheld.
26. UTILITIES AND SERVICES
----------------------
Tenant shall pay the cost of all utilities, water, sewer rent,
garbage, telephone and other communication services rendered to and exclusively
metered at the Premises. Domestic water is not metered to the Premises but to
the Building and shall be paid by Tenant as a Common Area Expense. Landlord
shall determine the reasonable proportion of the domestic water costs
attributable to Tenant based on Landlord's knowledge of water costs to the
Building at those times when the Premises have been
14
unoccupied and no domestic water costs were attributable to the Premises but
only to that part of the Building occupied by other tenants. Tenant shall also
be responsible for any janitorial and other services obtained by Tenant to be
supplied to or consumed on the Premises.
27. TAXES AND ASSESSMENTS
---------------------
Tenant shall pay all real and personal property taxes applicable to
the Premises during the term of this Lease. Tenant shall be responsible for any
increase in the real property taxes resulting from a reassessment of the value
of the Premises by the County of Santa Xxxxx due to a change of ownership unless
such change of ownership is a transfer of the Premises to a "related entity" of
Landlord. "Related entity" means any entity which is controlled by Landlord or
any entity which controls Landlord. On or before April 1 and December 1 of each
calendar year during the term of this Lease, except as set forth herein, Tenant
shall pay to Landlord, as additional rent, Tenant's Percentage Share of the real
property taxes as set forth on the county's tax statement for the Premises.
Landlord shall give Tenant at least thirty (30) days' prior written notice of
the amount so due. If any such taxes shall cover any period of time prior to or
after the expiration of the term hereof, Tenant's share of such taxes shall be
equitably prorated as determined by Landlord to cover only the period of time
within the tax fiscal year during which this Lease shall be in effect. Tenant
shall pay to Landlord such prorated amount within thirty (30) days after written
notice from Landlord of the amount so due, and Landlord shall pay such taxes
directly to the county tax assessor. If Tenant shall fail to pay any such
taxes, Landlord shall have the right to (a) pay the same, in which case Tenant
shall immediately repay such amount to Landlord plus interest at the greater of
(i) ten percent (10%) or (ii) the lesser of (A) the maximum allowed by law or
(B) the Federal Discount Rate as defined in Section 19 from the due date to and
----------
including the date of payment; and/or (b) exercise any and all remedies
available to Landlord pursuant to Section 16 herein.
----------
As used herein, the term "real property tax" shall include any form of
assessment, license fee, rent tax, levy, penalty, taxes based on vehicles
utilizing parking areas in the Premises, or taxes (other than income, franchise,
transfer, inheritance or estate taxes) imposed by any authority having the
direct or indirect power to tax, including any city, county, state or Federal
Government, or any school, agricultural, lighting, drainage or other improvement
district thereof, as against any legal or equitable interest of Landlord in the
Premises or in the real property of which the Premises are a part, as against
Landlord's right to rent or other income therefrom. If any assessment is
payable in installments, Landlord agrees that Tenant shall be responsible only
for those installments coming due during the term of the Lease.
15
Nothing herein shall prevent Tenant from contesting and Tenant may
contest, and institute all proceedings reasonably necessary to contest, the
validity and amount of any property tax provided Tenant protects the Premises
and the interest of Landlord and the beneficiary of a deed of trust upon the
Premises against any lien upon the Premises by a surety bond in an amount equal
to one and one-half (1 1/2) times the amount contested, issued by an insurance
company acceptable to Landlord and which indemnifies and saves Landlord harmless
from all loss and expense, including attorneys' fees, arising from any such
contest.
28. ASSIGNMENT AND SUBLETTING
-------------------------
Tenant shall not assign this Lease or sublet the Premises, either in
whole or in part, nor mortgage or otherwise hypothecate the leasehold interest
of Tenant, or any part or parts thereof without first obtaining in each and
every instance, Landlord's written consent, which consent Landlord may withhold
in its sole and absolute discretion. Tenant may, without obtaining Landlord's
consent (a) assign or transfer this Lease to any successor corporation, provided
all or a majority of the assets of Tenant are transferred to the successor
corporation, or to a parent corporation which wholly-owns Tenant, a subsidiary
wholly-owned by such parent, or a subsidiary wholly-owned by Tenant, provided
that any such successor corporation or assignee assumes Tenant's obligations
hereunder, or (b) sublet the Premises to any of the entities referenced in
Section 28(a).
-------------
No sublease by Tenant shall relieve Tenant of any of its obligations
under this Lease or reduce, diminish or impair such obligations. No assignment
by Tenant shall relieve Tenant of any of its obligations under this Lease or
reduce, diminish or impair such obligations.
29. DAMAGE TO OR DESTRUCTION OF PREMISES
------------------------------------
A. Partial or Total Damage - Defined. The term "Total Damage" when
---------------------------------
used herein shall mean damage or destruction to the Premises to the extent that
the cost of repair is fifty percent (50%) or more of the replacement cost of the
entire Premises at the time of such damage or destruction.
The term "Partial Damage" when used herein shall mean damage to the
Premises to the extent that the cost of repair is less than fifty percent (50%)
of the replacement cost of the entire Premises at the time of such damage.
B. Partial or Total Damage - Insured. In the event of Total or
---------------------------------
Partial Damage to the Premises from a casualty covered under an insurance policy
required to be maintained pursuant to Section 20 hereof, Landlord shall
----------
immediately commence such repair or restoration if such repair or restoration
16
can be completed within thirty (30) days following the date of such damage or
destruction.
To the extent that the insurance proceeds are inadequate to pay in
full the cost of repair or restoration of the Premises, or if insurance proceeds
are not available due to Tenant's default hereunder, Tenant shall be responsible
for all such costs in excess of any applicable insurance proceeds received by
Landlord and all such sums shall be paid by Tenant to Landlord upon demand prior
to Landlord's use of any applicable insurance proceeds.
C. Partial or Total Damage - Uninsured. In the event of Total or
-----------------------------------
Partial Damage to the Premises from a casualty not covered under an insurance
policy required to be maintained pursuant to Section 20 hereof, Landlord may
----------
elect to repair such damage and restore the Premises if such reparation or
restoration can be completed within thirty (30) days at Landlord's sole cost,
and this Lease shall continue in full force and effect or Landlord may give
notice to Tenant within thirty (30) days after the date of occurrence of such
damage, that it elects not to repair or restore the Premises in which event
Tenant may elect to repair such damage and restore the Premises at its sole
cost. If Tenant does not repair the Premises at its sole cost, this Lease will
be deemed terminated as of the date of occurrence of the Partial or Total
Damage.
D. Abatement and Adjustment of Rent. If Partial or Total Damage
--------------------------------
occurs and Landlord or Tenant repairs or restores the Premises pursuant to the
provisions of this Section 29, the Rent, Common Area Expenses and other charges
----------
payable by Tenant hereunder for the period during which such damage, repair or
restoration continues shall be paid as due.
Upon termination of this Lease pursuant to this Section, a pro rata
adjustment of rent, taxes, insurance and other charges payable hereunder (based
upon a thirty (30) day month) shall be made.
30. ESTOPPEL CERTIFICATE
--------------------
Tenant shall, at any time and from time to time upon request by
Landlord, execute, acknowledge and deliver to Landlord a statement in writing
certifying that (a) this Lease is unmodified and in full force and effect (or if
there have been modifications that the same is in full force and effect as
modified and identifying the modifications); (b) the dates to which the rent and
other charges have been paid; (c) the term of the Lease and any option to extend
the term; (d) the amount of any security deposit; (e) so far as the person
making the certificate knows, Landlord is not in default under any provisions of
this Lease; and (f) any other matters as may be reasonably requested by
Landlord. It is intended that any such
17
statement may be relied upon by any person proposing to acquire Landlord's
interest in this Lease or any prospective mortgage of, or assignee of any
mortgage upon, such interest. Notwithstanding the time periods set forth in
Section 16 of this Lease, Tenant shall be in default under the terms of this
----------
Lease if Tenant fails to deliver to Landlord the statement required by this
section within ten (10) days of receipt by Tenant of written request for such
statement.
31. REGULATORY COMPLIANCE
---------------------
Tenant agrees to comply with all Legal Requirements including, but not
limited to those dealing with Hazardous Materials and Insurance Requirements
related to Tenant's use, occupancy or possession of the Premises including the
making of all necessary alterations or repairs to the Premises in order for said
Premises to comply thereunder.
32. OPTION TO EXTEND
----------------
Provided that Tenant is not in default under any of the terms of this
Lease at the date on which the options granted herein are exercised or at the
expiration of the original term or extended term, as appropriate, Tenant shall
have the option to extend this Lease for three (3) successive periods of one
month each, subject to Landlord's rights as set forth in subsection 33.A. Each
---------------
such period of one month is referred to herein as the "Option Term". The
options to extend shall be exercised by giving Landlord written notice of
Tenant's irrevocable exercise of the Option Term not less than thirty (30) days
prior to the expiration of the original term or extended term as applicable
("Tenant's Notice"). All terms and conditions of this Lease shall apply to the
option Terms.
33. LEASING RIGHTS
--------------
A. Landlord's Right of Refusal. Landlord shall have the right to
---------------------------
refuse Tenant's exercise of any Option Term if Landlord has identified another
tenant (the "Long-Term Tenant") to lease the Building for a term of three (3)
years or more and has negotiated with such Long-Term Tenant to such extent as to
reasonably anticipate entering into a lease with the Long-Term Tenant.
B. Tenant's Right to Lease. If Tenant is not in default under any
-----------------------
of the terms of this Lease at the time Landlord identifies the Long-Term Tenant,
Landlord shall offer to Tenant a first right to lease the Premises on
substantially the same terms upon which Landlord is prepared to lease the
Premises to the Long-Term Tenant, other than those terms which would normally
apply only to a new rather than an existing tenant.
18
Tenant shall have five (5) business days after receipt of written
notice of the terms upon which Landlord is prepared to lease the Premises to the
Long-Term Tenant to accept such terms in writing. Tenant's failure to respond
to Landlord's notice within said five (5) business days shall be deemed
rejection of the terms by Tenant, and Landlord may elect to proceed to lease the
available space to the Long-Term Tenant, for a term to commence following the
expiration of Tenant's then existing original term of Option Term.
34. BROKER'S COMMISSION
-------------------
Landlord and Tenant warrant and represent to each other that they have
had no dealings with any real estate brokers or agents in connection with the
negotiation of this Lease, except for CPS Realty Group, represented by Xxxxx
Xxxxx and Xxxx Xxxxxx.
Tenant agrees to indemnify and hold Landlord harmless from any cost,
expense or liability (including reasonable attorneys' fees in connection
therewith) for any compensation, commissions or charges claimed by any real
estate broker or agent, other than those specifically named herein, employed or
claiming to represent or to have been employed by Tenant in connection with the
negotiation of this Lease or any extension thereof.
Landlord agrees to indemnify and hold Tenant harmless from any cost,
expense or liability (including reasonable attorneys' fees in connection
therewith) for any compensation, commissions or charges claimed by any real
estate broker or agent, other than those specifically named herein, employed or
claiming to represent or to have been employed by Landlord in connection with
the negotiation of this Lease or any extension thereof.
The foregoing shall survive the termination of this Lease.
35. SURRENDER OF PREMISES
---------------------
Tenant, at the expiration of this Lease, shall deliver up the Premises
in good condition and repair (damage by acts of God, fire, and normal wear and
tear excepted), with all interior walls cleaned and painted, the air
conditioning and heating equipment serviced by Tenant and, if necessary, a
reputable serviceman and with all floors cleaned or waxed, together with
alterations, additions, and improvements which may have been made in, to, or on
the Premises. If the Premises are not surrendered at the end of the term or
sooner termination of this Lease, Tenant shall indemnify Landlord against loss
or liability resulting from delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding Tenant founded
on such delay.
19
36. INTERPRETATION
--------------
This Lease shall be construed according to the laws of the State of
California, but the language in all parts of this Lease shall in all cases be
construed simply according to its fair meaning and not strictly for or against
Landlord or Tenant. Wherever the context so requires, words used herein in the
masculine gender will be deemed to include the feminine and neuter, and the
words used herein in the singular shall be deemed to include the plural.
37. DEFINITIONS
-----------
The term "Insurance Requirements" when used herein shall mean all
terms of an insurance policy required to be carried by Tenant pursuant to
Section 20 covering or applicable to the Premises or any part thereof, all
----------
requirements of the issuer of any such policy, and all orders, rules,
regulations and other requirements of the National Board of Fire Underwriters
(or any other body exercising similar functions) applicable to or affecting the
Premises or any part thereof or any use or condition of the Premises or any part
thereof.
The term "Legal Requirements," when used herein shall mean acts,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations, directions and requirements of all
governments, departments, commissions, boards, courts, authorities, agencies,
officials and officers, foreseen or unforeseen, ordinary or extraordinary, which
now or at any time hereafter may be applicable to the Premises or any part
thereof or any of the adjoining sidewalks, curbs, streets or ways, or any use or
condition of the Premises or any part thereof.
The term "Hazardous Material" when used herein shall mean any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material" includes, without limitation, any
material or substance which is (i) defined as a "hazardous waste," "extremely
hazardous waste" or "restricted hazardous waste" under Sections 25115, 25117 or
25122.7, or listed pursuant to Section 25140, of the California Health and
Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii)
defined as a "hazardous substance" under Section 25316 of the California Health
and Safety Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous
Substance Account Act), (iii) defined as a "hazardous material," "hazardous
substance," or "hazardous waste" under Section 25501 of the California Health
and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response
Plans and Inventory), (iv) defined as a "hazardous substance" under Section
25281 of the California Health and Safety Code, Division 20, Chapter 6.7
(Underground
20
Storage of Hazardous Substance), (v) petroleum, (vi) asbestos, (vii) listed
under Article 9 or defined as hazardous or extremely hazardous pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (viii) designated as a "hazardous substance" pursuant to Section 311
of the Federal Water Pollution Control Act (33 U.S.C. (S) 1317), (ix) defined as
a "hazardous waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. (S) 6901 et seq. (42 U.S.C. (S) 6903),
or (x) defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
(S) 9601 et seq. (42 U.S.C. (S) 9601).
38. BINDING EFFECT
--------------
This Lease shall bind and inure to the benefit of the parties hereto
and their respective heirs, representatives, successors or assigns (provided
that this Lease shall not inure to the benefit of any assignee pursuant to an
assignment which is not in compliance with the terms of this Lease relating to
assignment and subletting).
39. COVENANTS, CONDITIONS AND RESTRICTIONS
--------------------------------------
Tenant acknowledges that it has read and understood the Covenants,
Conditions and Restrictions recorded in Book 9640, Page 443, and as assigned by
instrument recorded in Book C583, Page 685, of the Official Records of Santa
Xxxxx County, California and will abide by the provisions thereof as they apply
to the use and occupancy of the Premises. Landlord has obtained a consent from
the Declarant under said Declarations to the use contemplated under this Lease.
40. NOTICES
-------
All notices to be given or served hereunder, whether pursuant to the
terms of this Lease or any provisions of law, shall be given or served in
writing at the address stated herein or to such persons or at such places as
Landlord or Tenant may designate in writing. Any such notice sent by United
States registered mail, postage prepaid shall be deemed delivered and received
seventy-two (72) hours following deposit in the U.S. Mail; any such notice sent
in any other manner shall be deemed received upon actual receipt.
TO LANDLORD AT: c/o Strutt & Xxxxxx California
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
TO TENANT AT: 000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Services Manager
21
WITH A COPY TO: Xxxxxx X. Xxxxxx
Senior Counsel
Avionics and Surveillance Group
Xxx Xxxxxx Xxxxxx
XX0/0000
Xxx Xxxxx, Xxxxxxxxxx 00000
41. ENTIRE AGREEMENT
----------------
This Lease is the entire agreement between the parties and there are
no agreements or representations between the parties except as expressed herein.
42. ATTORNEYS' FEES
---------------
In the event any action shall be brought by either party hereto
against the other regarding terms and conditions of this Lease, the prevailing
party shall recover a reasonable sum as attorneys' fees and costs.
43. COUNTERPARTS
------------
This Lease may be signed in counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
LANDLORD TENANT
WESTMINSTER MANAGEMENT ESL INCORPORATED,
CORPORATION, a Canadian a California corporation
corporation
By: illegible By: illegible
-------------------- -----------------
Its: President & CEO Its: President
--------------- ----------------
By:___________________
Its:______________
00
XXXXXXXX XXXXXX
[DIAGRAM]
EXHIBIT A
BORREGAS AVENUE
[DIAGRAM]
EXHIBIT B
FIRST AMENDMENT TO LEASE
BETWEEN
WESTMINSTER MANAGEMENT CORPORATION
AND
ESL, INC.
This First Amendment to Lease (the "First Amendment") is made and
entered into as of this 15 day of April, 1993 by and between WESTMINSTER
MANAGEMENT CORPORATION, a Canadian corporation ("Landlord") and ESL, INC., a
California corporation ("Tenant").
RECITALS
A. On or about June 30, 1992, Landlord and Tenant entered into a
Lease (the "Lease") of those certain premises commonly known as 000 X. Xxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxx ("the Premises"') as more particularly described
therein.
B. The Lease was for a term of six (6) months commencing July 15,
1992. The Tenant was provided an option to extend the Lease for three (3)
successive periods of one month each.
C. In lieu of Tenant exercising its option to extend the term a
month at a time for a total of three (3) months, Landlord and Tenant agreed in a
letter agreement dated January 11, 1993 and signed by both parties to extend the
Lease term from January 15, 1993 through April 30, 1993 on all the same terms
and conditions as the original term of the Lease.
D. Tenant now wishes to extend the Lease term for an additional two
months ending June 30, 1993. Landlord and Tenant have agreed the rent payable
under the Lease should be increased for said two additional months.
E. Landlord and Tenant agree to amend the Lease in order to evidence
the agreement of Landlord and Tenant as to the extension of the term of the
Lease through April 30, 1993, to further extend the term through June 30, 1993
and to establish the rent to be paid by the Tenant for the Premises during the
extended term.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, the parties hereto
agree to amend the Lease as follows:
1. Expiration Date. Section 4 of the Lease is hereby deleted and
----------------
the following substituted therefore:
The term of this Lease shall commence July 15, 1992 ("Commencement Date")
and end June 30, 1993 ("Expiration Date").
2. Rent. The first paragraph of Section 5 of the Lease is hereby
-----
deleted and the following substituted therefore:
Tenant shall pay to Landlord, in advance without deduction or offset, on
the first day of each month of the extended term of the Lease, rental for
the Premises in monthly installments as follows:
July 15, 1992 through April 30, 1993 $8,000.00
May 1, 1993 through June 30, 1993 $9,500.00
3. Confirmation of Lease. As amended hereby, the, Lease shall
----------------------
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment To Lease as of the day and year first above written.
"LANDLORD" "TENANT"
Westminster Management Corporation, ESL Corporation,
a Canadian corporation a California corporation
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxx X. Money
------------------- --------------------
Xxxxx Xxxxxxxxx Xxxxxx X. Money
Its: President Its: President
SECOND AMENDMENT TO LEASE
BETWEEN
WESTMINSTER MANAGEMENT CORPORATION
AND
ESL, INCORPORATED
This Second Amendment to Lease (the "Second Amendment") is made and
entered into as of this 30th day of June, 1993 by and between WESTMINSTER
MANAGEMENT CORPORATION, a Canadian corporation ("Landlord") and ESL, INC., a
California corporation ("Tenant").
RECITALS
A. On or about June 30, 1993, Landlord and Tenant entered into a
Lease of those certain premises commonly known as 000 X. Xxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx (the "Premises"), as more particularly described therein (the
"Initial Lease").
B. The Premises are part of a larger building of approximately
34,440 square feet known as 1308 Borregas Drive/207 E. Java Drive, Sunnyvale,
California (the "Building"). Cermetek Microelectronics, Inc. ("Cermetek")
occupies that part of the Building known as 0000 Xxxxxxxx Xxxxx (the "Borregas
Premises") under a Lease which expires February 15, 1995 (the "Cermetek Lease").
C. The Initial Lease was originally for a term of six (6) months
commencing July 15, 1992. The Term was extended through June 30, 1993 by that
certain First Amendment To Lease between Landlord and Tenant, dated April 15,
1993 (the "First Amendment"). The Initial Lease dated June 30, 1992 and the
First Amendment together are hereinafter referred to as the "Lease."
D. Landlord and Tenant now wish to extend the term of the Lease for
an additional twenty (20) months commencing July 1, 1993 and ending February 15,
1995.
E. Tenant wishes to make certain alterations to the Premises and to
install certain improvements as described in Exhibit A hereto (the
"Improvements"), and Landlord and Tenant agree each shall pay a portion of the
cost of such Improvements.
F. Tenant wishes to be granted, and Landlord wishes to grant to
Tenant, the right to lease the Borregas Premises if the Cermetek Lease is
terminated prior to February 15, 1995.
G. Tenant also wishes to be granted, and Landlord wishes to grant to
Tenant, the option to lease the entire Building upon the expiration of the
Cermetek Lease on February 15, 1995.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing, the parties hereto
agree to amend the Lease as follows:
1. Expiration Date. Section 4 of the Lease is hereby deleted and
---------------
the following substituted therefore:
The term of this Lease shall commence July 15, 1992 ("Commencement Date")
and end June 30, 1996 ("Expiration Date")
2. Improvements. The Tenant shall be entitled to make the
------------
Improvements described in Exhibit A hereto pursuant and subject to the terms and
conditions set forth in Section 14 of the Lease.
Prior to obtaining Landlord's consent to the Improvements, Tenant
shall provide Landlord with detailed drawings and specifications of such
Improvements for Landlord's approval. Following such approval, material
revisions to the approved plans and specifications shall be made by Tenant
unless first submitted to and approved by Landlord. Construction of the
Improvements shall be in compliance with all recorded covenants affecting the
Building and all federal, state and municipal laws, codes, ordinances, rules and
regulations pertaining to the Property. The construction shall be performed in
compliance with federal and state health and safety laws and regulations.
Upon presentation by Tenant to Landlord of: a) a certificate of
occupancy, or finalized building permit record, from the City of Sunnyvale for
the Improvements; b) certification from Tenant's contractor, or other person
selected by Landlord, that construction of the Improvements has been completed
in compliance with the plans and specifications approved by Landlord; and c)
evidence that thirty (30) days have passed since the filing by Tenant of a
notice of completion has been filed with the office of the Recorder of the
County of Santa Xxxxx, Landlord shall pay to Tenant Ten Thousand and 00/100
Dollars ($10,000) as its share of the cost of the Improvements. All other costs
of the Improvements shall be at the expense of Tenant.
3. Right to Lease. Should the Cermetek Lease be terminated and the
--------------
Borregas Premises be vacated by Cermetek prior to February 15, 1995, Tenant
shall have the right to lease the Borregas Premises for the term remaining under
the Cermetek Lease. Landlord shall provide the Borregas Premises to Tenant in
clean and sanitary condition with all plumbing, electrical and HVAC systems in
operating condition after Landlord has had a reasonable period of time following
vacation of the Borregas Premises by Cermetek to assure the Borregas Premises
are in such condition. Landlord shall make no representation or warranty with
respect to the condition of the Borregas Premises or its fitness or availability
for any
particular use, and Landlord shall not be liable for any latent or patent defect
therein.
From the date the Borregas Premises are made available to Tenant,
Tenant shall assume the obligations of Tenant under the Cermetek Lease for
payment to Landlord for the Cermetek Premises of monthly rent in the amount of
Twelve Thousand Three Hundred Sixty-One and 50/100 Dollars ($12,361.50) and
53.6% of Common Area Expenses as additional rent in a monthly amount of Five
Hundred Seven Dollars and 00/100 ($507), subject to annual adjustment as set
forth in Section 7 of the Lease. All other obligations of Landlord and Tenant
with regard to the Borregas Premises shall be as set forth in this Lease.
If Tenant desires occupancy of the Borregas Premises prior to February
15, 1995 and the Cermetek Lease has not been terminated, Tenant shall give
written notice of its desire to lease the Borregas Premises to Landlord and
Landlord shall use reasonable effort to terminate the Cermetek Lease and remove
Cermetek from the Borregas Premises. If Cermetek terminates the Cermetek Lease
after Tenant's request, Tenant shall be obligated to lease the Borregas Premises
on the terms set forth in this Section 3.
4. Option to Extend. Whether Tenant has or has not leased the
----------------
Borregas Premises as of February 15, 1995, and provided that Tenant is not in
default of any terms of this Lease, Tenant (but not a sublessee or assignee of
Tenant unless a successor corporation as described in Section 28 of the Lease)
shall have the option to lease the Building and Property for a term of six and
one half (6 1/2) years (the "Option Term"). The Option Term shall commence as
soon as the Borregas Premises are vacated by Cermetek and are prepared for
occupancy by Tenant. The option shall be exercised by giving Landlord written
notice of Tenant's irrevocable exercise of the Option Term not later than May
15, 1994 nor sooner than February 15, 1994 ("Tenant's Notice").
All terms and conditions of this Lease shall apply to the Option Term
except that the initial monthly rent payable pursuant to Section 5 hereof shall
be the Fair Market Rent as hereinafter defined or Twenty-One Thousand Eight
Hundred Sixty-Two Dollars and 00/100 ($21,862) whichever is greater. For all
purposes under the Lease during the Option Term, the Premises shall consist of
the entire "Property," as defined in the Lease,and only those portions of the
"Common Area," as defined in the Lease, which are outside the Building shall be
deemed to be Common Area during the Option Term. All areas of the Building
defined as part of the Common Area in the Lease shall be part of the Premises
and Tenant shall be obligated to maintain such Premises in the manner set forth
in Section 19 of the Lease.
Fair Market Rent is to be determined in accordance with this paragraph
4. Fair Market Rent shall be the fair rental value of the Building as compared
to the fair rental
value being obtained under new leases at the time Landlord receives Tenant's
Notice on comparable buildings for leases with a term of six years or more and
shall include periodic increases in rent based either on an established
schedule, increases in the consumer price index or periodic reviews to market,
whichever measure is then the custom between Landlords and Tenants in the Santa
Xxxxx Valley. The Fair Market Rent and method of determining the periodic
increases shall be determined by agreement of Landlord and Tenant within thirty
(30) days of receipt by Landlord of Tenant's Notice, or in the absence of such
agreement, by a real estate appraiser with at least five years full time
appraisal experience in the area where the Building is located who shall be
selected by Landlord with reasonable approval of Tenant within forty-five (45)
days after receipt by Landlord of Tenant's notice. Said appraiser shall make a
determination which shall be binding on each party as soon as reasonably
possible after such appraiser's selection.
Brokers Commission. Section 34 of the Lease is hereby amended to
-------------------
provide that no brokerage commission is due to any real estate brokers or agents
in connection with the negotiation of this Second Amendment.
6. Confirmation of Lease. As amended hereby, the Lease shall
---------------------
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment To Lease as of the day and year first above written.
"LANDLORD" "TENANT"
Westminster Management Corporation, ESL Corporation,
a Canadian corporation a California corporation
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxx X. Money
-------------------- --------------------
Xxxxx Xxxxxxxxx Xxxxxx X. Money
Its: President Its: President
IMPROVEMENTS
1. Completion of T-Bar ceiling and installation of fluorescent lights in
the workstation area (rear two thirds of facility). . . .rework of
HVAC ducting would be required to facilitate air flow to workstation
areas.
2. Carpeting throughout workstation area (rear two thirds of facility).
3. Installation of 10 new offices.
4. Repair/upgrade of HVAC units.
5. Repair cabinetry and upgrade condition of cafeteria.
EXHIBIT A
THIRD AMENDMENT TO LEASE
BETWEEN
WESTMINSTER MANAGEMENT CORPORATION
AND
ESL, INCORPORATION
This Third Amendment to Lease (the "Third Amendment") is made and
entered into as of this 23rd day of November, 1994 by and between WESTMINSTER
MANAGEMENT CORPORATION, a Canadian corporation ("Landlord") and ESL, INC., a
California corporation ("Tenant").
RECITALS
A. On or about June 30, 1992, Landlord and Tenant entered into a
Lease of those certain premises commonly known as 000 X. Xxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx (the "Premises"), as more particularly described therein (the
"Initial Lease").
B. The Premises are part of a larger building of approximately
34,440 square feet known as 1308 Borregas Drive/207 E. Java Drive, Sunnyvale,
California (the "Building").
C. The Initial Lease was originally for a term of six (6) months
commencing July 15, 1992. The term of the Lease was extended through June 30,
1993 by that certain First Amendment to Lease between Westminster Management
Corporation and ESL Incorporated, dated as of April 15, 1993 (the "First
Amendment") and was further extended through Febraury 15, 1995 by that certain
Amentment to Lease between Westminster Management Corporation and ESL
Incorporated, dated as of June 30, 1994 (the Second Amendment).
D. Landlord and Tenant now wish to clarify certain changes made to
correct typing errors in the Second Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
1. For the purpose of clarifying the date of the Second Amendment,
the Second Amendment is hereby stated to be dated as of June 30, 1994.
2. For the purpose of clarifying paragraph A. of the Second
Amendment, the date of the Lease is June 30, 1992.
3. For the purpose of clarifying paragraph 1. Expiration Date of the
Second Amendmment, the Expiration Date of the Lease if February 15, 1995.
4. As clarified and amended hereby, the Lease shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the day and year first above written.
"LANDLORD" "TENANT"
Westminster Management Corporation, ESL Corporation,
a Canadian corporation a California corporation
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxx X. Money
-------------------- --------------------
Xxxxx Xxxxxxxxx Xxxxxx X. Money
Its: President Its: President
EXHIBIT "B"
Consent to Assignment and Assumption Agreement
----------------------------------------------
Westminster Management Corporation, a Canadian corporation ("Lessor"),
hereby fully and without restriction: (a) consents to and approves the
assignment of rights and assumption of obligations under the Lease as set forth
in the foregoing Assignment and Assumption Agreement ("Agreement") and (b)
acknowledges that Lessor has received the notice required by Section 28 of the
Lease with respect to the transfer of the premises covered by the Lease and that
this consent shall constitute the prior written consent of Lessor as required by
and contemplated in Section 28 of the Lease. Lessor hereby represents and
warrants to PhonePrint, Inc., a Delaware corporation ("PhonePrint"), that the
Lease remains in full force and effect, that neither ESL nor Lessor is in any
material default thereunder and no event has occurred, that with the lapse of
time or giving of notice or both: (i) will constitute a material breach or
material default thereunder by ESL or Lessor or cause or permit acceleration of
any obligation of ESL or Lessor or (ii) would materially and adversely effect
any of the rights or obligations of ESL (or any successor thereto including
PhonePrint) under the Lease. Further, Lessor hereby represents and warrants to
PhonePrint that as of the Closing Date, no rents or other amounts are owed to
Lessor under the Lease by ESL nor are there any other financial obligations owed
by ESL to Lessor thereunder as of the Closing Date referred to under the
Purchase Agreement.
"LESSOR"
WESTMINISTER MANAGEMENT CORPORATION
By: /s/ illegible
--------------------------------
Title: President
-----------------------------
B-1
EXHIBIT D
---------
AirTouch Assignment
-------------------
D-1
EXHIBIT 10.5
AIRTOUCH ASSIGNMENT AGREEMENT
-----------------------------
This Assignment Agreement (the "Agreement") is entered into as of December
14, 1994, by and between ESL Incorporated, a California corporation ("ESL"), and
PhonePrint, Inc., a Delaware corporation ("PhonePrint"), with reference to the
following facts:
WHEREAS, ESL is a party to that certain Development and License Agreement
by and between AirTouch Communications Incorporated, formerly known as PacTel
Corporation ("AirTouch") and ESL dated as of October 4, 1993, as amended by
First Amendment to the Development and License Agreement dated October 23, 1993
(collectively, the "AirTouch Agreement"), a copy of which is attached hereto as
Exhibit A.
---------
WHEREAS, ESL is willing to grant to PhonePrint and PhonePrint desires to
acquire from ESL, all of ESL's rights and obligations under the AirTouch
Agreement.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions set forth below, the parties hereto agree as follows:
1. ASSIGNMENT OF RIGHTS AND OBLIGATIONS. ESL hereby assigns to
------------------------------------
PhonePrint, and PhonePrint hereby accepts, all of ESL's rights and obligations
under the AirTouch Agreement. The parties agree that this instrument
constitutes a present assignment of the AirTouch Agreement, but is subject to
the continuing indemnification and other obligations contained in that certain
Asset Purchase Agreement between the parties of even date herewith.
2. OWNERSHIP. ESL represents and warrants that ESL is the sole and
---------
exclusive owner of all of such rights.
3. COVENANTS. ESL covenants that ESL has full right to convey the rights
---------
herein assigned, and that ESL has not executed and will not execute any
agreement in conflict herewith.
4. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one in the same instrument.
5. GOVERNING LAW. This Agreement shall be governed by and construed under
-------------
the internal laws of the State of California, without regard to any rules of
conflicts of law applicable to agreements made and to be performed in such state
by and among residents of such state.
6. FURTHER ASSURANCES. Each of the parties hereto shall execute and
------------------
deliver all additional documents and shall do any and all acts and things
reasonably required in connection with the performance of the obligations
undertaken in the Agreement and to effectuate in good faith the intent of the
parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-2-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PHONEPRINT, INC., ESL INCORPORATED,
a Delaware corporation a California corporation
By: /s/ illegible By: /s/ illegible
------------- -------------------------
Title: Chairman Title: Senior Vice President
---------- --------------------
[COUNTERPART SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION AGREEMENT]
EXHIBIT A
AGREEMENT WITH AIRTOUCH
-----------------------
A-1
DEVELOPMENT AND LICENSE AGREEMENT
This Development and License Agreement (the "Agreement") is made and
effective as of the later date signed below (the "Effective Date") by and
between ESL Incorporated, a California corporation and a TRW Company with
offices located at 000 Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000-0000 ("ESL"), and
PacTel Corporation, a California corporation with offices located at 0000 Xxx
Xxxx, Xxxxxx Xxxxx, Xxxxxxxxxx 00000 ("PacTel")
WITNESSETH:
WHEREAS, ESL wishes to develop, and PacTel wishes to have developed, the
"Licensed Products," as that term is defined below; and
WHEREAS, PacTel has expertise in cellular telephony, including ***
*** , alpha and beta testing, field test facilities, and
FCC and regulatory requirements, such as experimental licenses; and
WHEREAS, ESL has expertise in emitter recognition and identification
technology including, but not limited to, *** , developing
and maintaining a database of authorized and unauthorized emitter security
patterns, emitter recognition, and enabling cellular systems to determine
whether to deliver services depending on certain ***
levels; and
WHEREAS, ESL intends to manufacture, have manufactured, use, market, sell
and distribute the Licensed Products in accordance with the terms hereof; and
WHEREAS, PacTel intends to provide business and technical development
support to ESL in accordance with the terms hereof including, but not limited
to, *** ***
; and
WHEREAS, each party intends to bear the costs associated with it own
efforts in the development of the Licensed Products;
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the parties hereby agree as follows:
ARTICLE 1
Definitions and Priority
----------- --- --------
1.1 Definitions. The following words and phrases will have the meanings
------------
set forth below:
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
1.1.1 Agreement. The term the "Agreement" means this Development and
----------
License Agreement between ESL and PacTel, including the following Exhibits
attached hereto, and any amendments thereto:
Exhibit A: The ***
*** . As of the Effective Date, this exhibit is in *** and
the parties *** .
Exhibit B: Statement of Work, Milestones and Functional and Interface
Specifications. As of the Effective Date, this
*** .
Exhibit C: Nondisclosure Agreement, dated *** .
1.1.2 Develop or Development. The term "develop" or "development,"
------- -- ------------
as used herein, means engineering, design, layout, hardware and Licensed
Software generation, prototyping, characterization, qualification, fabrication,
testing, and preparation of data sheets and application notes.
1.1.3 Licensed Products. The term "Licensed Products" means the
-------- ---------
*** , and any *** , developed in accordance
with the functional and interface specifications set forth in Exhibit B hereto,
and made under the *** and the ***
therein or by the use of *** .
1.1.4 *** . The term " *** " means the
------------------
*** and *** and their *** and
*** relating to the Licensed Products, together with any
*** *** .
1.1.5 *** . The term " ***
-----------------------------
" means PacTel's *** containing ***
, as described in Exhibit A, that is used in the Licensed Products for the
*** telephone usage, together with any ***
and other intellectual property rights thereto. The term " ***
" does not include any subscriber information.
1.1.6 *** . The term " *** " means the
-----------------
*** *** and *** for the
scheduling and *** operations within the Licensed Products, as
described in Exhibit A, together with any *** and other
intellectual property rights thereto.
1.1.7 *** . The term " ***
------------------------------
" means the information, as described in Exhibit A, that is directly related to
the *** *** and the production, manufacture, use,
operation, repair, maintenance, modification or reconstruction thereof, together
with any *** and other
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
intellectual property rights thereto. This includes, but is not limited to,
information in the form of blueprints, drawings, plans, photographs,
instructions, masks, Licensed Software and documentation.
1.1.8 Gross Sales Price. The term "Gross Sales Price" means the
----- ----- ------
amount that is the price at which each Licensed Product is sold or delivered to
the customer or user. In the event that the Gross Sales Price is less than the
*** , as a result of *** or *** under arrangements
with the customer or user, or in the event Licensed Products are *** or
otherwise *** , then for purposes of this Agreement, the Gross Sales
Price shall be the sales price ***
*** .
1.1.9 Net Sales Price. The term "Net Sales Price" means the Gross
--- ----- ------
Sales Price, net of expenses for transportation, shipping, insurance, boxing,
handling or similar charges, taxes and duties, if any, and other costs
incidental to shipment.
1.1.10 Affiliate. The term "Affiliate" means any corporation,
----------
partnership or other business entity in which either party hereto owns or
controls more than fifty percent (50%) of the voting stock or otherwise has more
than fifty percent (50%) of the right to control the entity.
1.1.11 Equity Partner. The term "Equity Partner" means any
------ --------
corporation, partnership or other business entity in which either party hereto
owns or controls between five percent (5%) and fifty percent (50%) of the voting
stock or otherwise has between five percent (5%) and fifty percent (50%) of the
right to control the entity.
1.2 Priority. In the event of any inconsistency between the text of the
---------
Agreement and the provisions of any of the Exhibits, the text of the Agreement
shall prevail.
ARTICLE 2
Scope of Work, Cost Sharing and Payment
----- -- ----- ---- ------- --- -------
2.1 Development by PacTel. PacTel will enhance its ***
----------- -- -------
and *** and will perform such other tasks as are set forth
in Exhibit B. PacTel agrees to provide ESL with access to its spectrum and
network to facilitate ESL's work on the Licensed Products. PacTel will be
responsible for *** including, but not limited to,
*** and *** , in *** , for *** of
the Licensed Products, and in *** localities only, for ***
release of the Licensed Products. PacTel will provide functional system
specifications including operating and support requirements.
2.2 Development by ESL. ESL will develop an *** for
----------- -- ----
wireless subscriber systems and perform such other tasks to develop the Licensed
Products as are set forth in Exhibit B.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
2.3 Commercialization by ESL. ESL will commercialize the Licensed
----------------- -- ----
Products to meet the functional and interface specifications in Exhibit B, i.e.,
ESL will *** *** so that the Licensed
Products will be in manufacturable form for worldwide marketing, sales,
distribution and support by ESL to end user customers.
2.4 Cost Sharing. Each party will bear its own costs associated with its
---- --------
respective development efforts described above.
2.5 *** Developments. ESL will have the ***
------- -------------
*** including, without limitation, any upgrades,
modifications, improvements, enhancements, derivatives or other changes to the
Licensed Products. If ESL exercises such rights, it shall have a license in
accordance with *** and ***
, as that term is defined herein. In each instance, ESL will have a reasonable
amount of time to ***
*** its rights under this Section.
ARTICLE 3
Term
----
The term of the Agreement will be *** years from the Effective Date,
unless sooner terminated in accordance with Article 9 hereof. Unless a
termination notice is given by either party hereto six (6) months prior to
expiration of such ***-year period, the Agreement shall be renewed
automatically for *** year from the date of expiration of the said period
under the same terms and conditions. Neither party will make any claims or
demands against the other party for any damages, losses, expenses or costs, if
any, incurred as a result of the expiration, termination without cause, or non-
renewal of the Agreement.
ARTICLE 4
Licenses Granted and Royalties
-------- ------- --- ---------
4.1 License to ESL. Subject to the terms and conditions of this Agreement,
PacTel hereby grants to ESL a worldwide, *** , ***, *** *** right
and license under PacTel's *** *** :
(a) to make, have made, copy and/or use the Licensed Products, including
the *** ;
(b) to sell the Licensed Products, including the ***
; and
(c) to provide support for the Licensed Products, including the
*** *** .
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
4.2 License to PacTel. Subject to the terms and conditions of this
------- -- -------
Agreement, ESL hereby grants to PacTel a *** , non-exclusive, non-
transferable, *** right and license under ESL's *** to
copy and use the *** for PacTel's internal business purposes in
the United States only during the term of this Agreement.
4.3 Royalties. In consideration of the rights, licenses and benefits
----------
conferred upon ESL hereunder, during the term of this Agreement, *** will pay
to *** a *** in the amount of *** of
the *** of all ***
*** . *** will have no obligation
to pay *** . In
no event will more than *** .
Notwithstanding the foregoing, *** will be payable on any
*** , by a customer. In order to maintain the
*** shall pay to *** ***
*** during the *** and
*** *** thereafter,
*** . The first of such
*** later than *** , and every ***
thereafter during the term hereof. Should *** fail to make such
*** , the ***
*** shall retain only a ***
. The amounts of the *** and *** and
*** at the end of the *** of this
Agreement.
4.4 Accounting and Payment. Within *** after every
---------- --- --------
anniversary date of the Agreement during the term hereof, from and after the
date both parties agree that Licensed Products may be released for production,
*** will render to *** a certified check (or other form of payment
acceptable to ***) in the amount of all *** *** on account of
activities of *** under the Agreement during the calendar year preceding the
year in which such *** is required to be made. Further, *** will
transmit to *** , accompanying each such payment, an accurate, itemized
statement (certified upon request) setting forth in sufficient detail for
verification, the basis upon which such *** is determined and made. All
*** will be made to the order of *** in *** and will be
payable at *** address as set forth in Article 13.
4.5 Records and Audit. *** will keep complete and accurate books and
------- --- ------
records, containing adequate details for the calculation of the amounts of all
*** from the *** to *** hereunder. All such books and records will be
available for reasonable time periods during regular business hours, for a
period of three (3) years following the end of the calendar year to which they
pertain, for inspection and audit by *** accountants or independent
auditors for the purpose of verifying all *** submitted by ***. The
obligations of *** under this Article 4 will survive any termination or
expiration of the Agreement.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
4.6 Product Marketing.
------- ----------
(a) ESL will at all times have the sole discretion to set and determine
all terms and conditions of sale of all Licensed Products, including price,
position, distribution channels and name (including ESL trademarks, trade names
or logos). ESL will be responsible for distribution of the Licensed Products in
its sole discretion.
(b) ESL will at all times have the sole discretion to develop and approve
marketing materials and activities for, the Licensed Products. Further, ESL
will at all times during the term of the Agreement be responsible for
manufacturing, assembling and distributing the components that comprise the
Licensed Products.
(c) PacTel has adopted and owns certain trademarks and service marks used
in identifying and marketing PacTel technology, products and services, logos,
trade names and related acronyms and the like, whether or not registered (the
"PacTel Trademarks"). ESL recognizes and consents for all purposes that the
PacTel Trademarks constitute the exclusive property of PacTel and cannot be used
by ESL pursuant to this license, except as specified in the Agreement, nor will
ESL use any confusing similar trademark, logo, trade name or the like. PacTel
hereby grants to ESL the non-exclusive right to use the following statement in
the marketing of the Licensed Products: " ***
*** ." Nothing contained in the Agreement will be construed as
conferring any additional rights upon ESL to use in advertising, publicity or
other promotional activities any PacTel Trademark, other than specifically set
forth in the preceding sentence, unless PacTel grants to ESL its prior express
written consent. ESL will use the PacTel trade name with such words qualifying
or identifying the relationship of PacTel and ESL as PacTel, from time to time,
may reasonably prescribe. PacTel will have the sole right, but not the
obligation, to register and enforce the PacTel Trademarks and other marks it
adopts, acquires or uses in the United States or in any foreign country and all
rights generated by use of same by ESL will inure directly to the benefit of
PacTel.
(d) The parties will mutually plan and agree upon the contents, form and
manner of publicity with respect to the Licensed Products and will not respond
to inquiries from members of the public media, if such inquiries concern the
contents of the Agreement and details of the transactions contemplated by the
Agreement. In no event will the parties act unilaterally with regard to such
disclosures, unless otherwise required to by law.
(e) PacTel will provide to ESL *** , *** , and such
additional information that ESL may require in order to promote the Licensed
Products. In addition, PacTel will *** for Licensed Product ***
on *** .
(f) ESL reserves the right to ESL-developed trademarks, trade names, logos
and related acronyms and the like, whether or not registered, to identify the
Licensed Products or other ESL developed technology, products and services, so
long as such trademarks, etc., are not confusingly similar to the PacTel
Trademarks.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
ARTICLE 5
Ownership of Inventions and Technical Information
--------- -- ---------- --- --------- -----------
5.1 Patent Applications. Each party agrees to notify the other party
------ -------------
within ninety (90) days following the filing of a patent application with
respect to any invention relating to the Licensed Products first reduced to
practice during the term of the Agreement.
5.2 PacTel Inventions. All inventions developed conceived or first
------ -----------
reduced to practice, as those terms are used before the U.S. Patent
and.Trademark Office, by statute and under common law, solely by PacTel
personnel, will be the sole and exclusive property of PacTel. PacTel will
retain any and all rights to file any patent applications thereon and such
inventions shall be subsumed under ***
*** above.
5.3 ESL Inventions. All inventions developed, conceived or first reduced
--- -----------
to practice, as those terms are used before the U.S. Patent and Trademark
Office, by statute and under common law, solely by ESL personnel, will be the
sole and exclusive property of ESL. ESL will retain any and all rights to file
any patent applications thereon ***
in ***
with the ***
for the term of this Agreement.
5.4 Joint Inventions.
----- -----------
(a) Inventions developed, conceived or first reduced to practice, as those
terms are used before the U.S. Patent and Trademark Office, by statute and under
common law, jointly by the parties (the "Joint Inventions"), will be jointly
owned by the parties, each party having an equal and undivided interest therein,
without the duty to account to the other for any use made of such Joint
Inventions. Notwithstanding the foregoing, neither party may use the Joint
Inventions in any way which would harm the other's ownership interest therein.
The parties agree to mutually determine whether a patent application or
applications will be filed on such Joint Inventions, the party which will
prepare and file such application or applications, and the country or countries
in which the same are to be filed. The patent expenses incurred will be divided
equally between the parties.
(b) If the parties are not able to mutually agree to file an application
or applications on a Joint Invention, either one of the parties may elect to
assume such expenses (the "Electing Party"). The Electing Party will control the
preparation and prosecution of any such application and all rights in any
patents granted thereon will belong exclusively to the Electing Party. The party
declining to bear its share of the expenses of prosecuting or maintaining
patents covering a Joint Invention (the "Declining Party") agrees to execute any
and all forms, assignments or other documents to effect the foregoing; provided,
however, that the Declining Party will ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
***
*** ; provided further, however, that such
Declining Party will ***
*** or the U.S. Government. Neither party may, without the prior
written consent of the other party (which consent may be withheld for any
reason, in its sole and absolute discretion), assign or otherwise transfer its
interest in any Joint Invention, except as expressly provided herein.
5.5 Protection and Use of *** .
---------- --- --- -- ------------------------
(a) Each party agrees it will not disclose (unless compelled to disclose
by judicial or administrative process, or in the opinion of such party's
counsel, by other requirement of law), use, or permit the use by others of such
other party's *** *** , at any time during the Agreement, or at any time
thereafter, for a period of *** after the disclosure thereof. Without
limiting the foregoing, each party agrees to do the following with respect of
any such *** : (i) instruct and require all of its employees and agents to
maintain the confidentiality of such information; (ii) exercise either at least
the same degree of care to safeguard the confidentiality of such information as
that party exercises to safeguard the confidentiality of its own information of
a similar type, or a reasonable degree of care, whichever is greater; and (iii)
restrict disclosure of such information to those of its employees who have a
need to know consistent with the purposes for which such information was
disclosed. Each party further agrees not to remove or destroy any proprietary or
confidential legends or markings placed upon documentation or other materials
which contain or set forth the *** of the other party.
(b) The party receiving *** will obtain the
written agreement of any permitted transferee or licenses to hold in confidence
the information transferred to such transferee or licensee in accordance with
terms no less restrictive than those set forth above.
(c) The receiving party may disclose the other party's ***
to its employees, agents, suppliers and subcontractors to the extent that each
such disclosure is reasonably necessary for manufacturing, using, selling,
installing and/or servicing Licensed Products, or procuring goods and services
required in connection therewith; provided, however, that the receiving party
will take all desirable and necessary actions to preserve the confidentiality of
such information including, but not limited to: (i) marking any documents or
other material containing any ***
*** so disclosed to indicate that same contains proprietary data and
***
*** ; (ii) requiring each party to whom same is disclosed to sign a
written agreement limiting the use thereof to authorized purposes, prohibiting
the further reproduction or disclosure thereof and requiring the prompt return
thereof when no longer needed; and (iii) providing that any reproduction, notes
or summaries thereof, immediately upon the making thereof, will become the
property of the disclosing party and will be delivered to the disclosing party
with, and upon the return of, the *** *** .
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
(d) Each reproduction of any *** , together with
each modification and revision thereof, made by or for the receiving party, will
automatically become the property of the disclosing party, will be deemed the
disclosing party's *** *** for all purposes hereunder and will be
clearly marked accordingly.
(e) Upon *** , the receiving party
will immediately discontinue the use of, and will promptly return to the
disclosing party or its designee, all *** , together
with copies thereof, in the possession or control of the receiving party,
together with all written documentation and/or other materials containing
information relating to the *** . The receiving
party further agrees that it will not, for a period of *** after the
date of any termination or expiration of this Agreement, use or disclose to any
third party any of disclosing party's *** , except
such information an the disclosing party has previously made generally available
to the public.
ARTICLE 6
*** *** Support Services, Minimum Order
--------- --------- ------- --------- ------- -----
6.1 *** . ESL will sell the Licensed Products to
------------------
PacTel ***
*** . *** that the ***
to *** and
*** as ***
to its
*** of *** , for *** delivered
within ***
*** calendar days before or *** after *** the
*** to *** . Such ***
shall be *** by an additional *** for ***
by *** , taking into account the fact that
*** on *** by *** and *** . In *** of
the *** of *** to the ***
agrees to *** a *** on ***
by *** who were introduced to *** . No *** will be
*** on any *** , but
*** by an *** . Further, *** shall give *** to
*** by *** and/or its *** , and to the extent that
*** after
*** and its *** have *** , *** may make a ***
to *** for *** to *** to *** . *** will have no
obligation to *** with *** and/or *** , if
*** to *** written request within five (5) business days after the
date of such written request. In addition to the foregoing,
*** shall have the *** to conduct all *** for
all new versions of the *** and/or the *** .
6.2 Minimum Order. PacTel shall place a minimum order for ***
------- ------
Licensed Products by December 31, 1993, at a *** of
***
*** , *** in accordance with the terms of Section
6.1. It is understood that such Licensed Products will initially be installed by
December 31, 1993, for *** PacTel, and that upon ***
of the finished Licensed Products, ESL shall *** such ***
, *** versions no later than March 31, 1994. ***
of the price is payable upon installation
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
and the balance of *** is due when such ***
pass all acceptance criteria set forth in Exhibit B. Provided that such initial
*** Licensed Products pass all acceptance criteria no later than March 31,
1994, PacTel shall place a follow-on order of *** Licensed
Products by March 31, 1994, at a *** *** of
*** , *** in accordance with the terms of Section 6.1
above. Finished, *** of the Licensed Products shall be
installed *** no later than August 30, 1994
6.3 Maintenance and Support. ESL agrees to provide maintenance and
----------- --- --------
support, including all software upgrades and support, to PacTel and its
Affiliates ***
*** .
ARTICLE 7
Indemnification
---------------
7.1 PacTel Indemnity. PacTel shall, at its own expense, defend, or at its
------ ----------
option, settle any suit, claim or proceeding brought against ESL insofar as such
suit or proceeding is based on a claim that PacTel does not have sufficient
right, title and interest in PacTel's ***
and/or ***
*** (collectively " *** ") delivered to ESL under
this Agreement for the design, manufacture, use and sale of the Licensed
Products or that such information constitutes a direct infringement of any
United States trade secret, patent, trademark, copyright or any other
proprietary right of any third party, and PacTel shall indemnify and hold ESL
harmless against all costs, expenses and damages arising from such claim
including, without limitation, reasonable attorneys' fees and shall pay all
settlements and costs finally awarded therein against ESL, provided that PacTel
is promptly informed and furnished a copy of each communication, notice or other
action relating to the alleged infringement and is given all authority,
information and assistance necessary to defend or settle such suit or
proceeding.
7.2 ESL Indemnity. ESL shall, at its own expense, defend, or at its
--- ----------
option, settle any suit, claim or proceeding brought against PacTel insofar as
such suit or proceeding is based on a claim that
***
*** (collectively "ESL Licensed Materials")
licensed to PacTel hereunder or that such information constitutes a
*** ***
of any third party, and ESL shall ***
***
*** PacTel, provided that *** and *** a
copy of each communication, *** relating to the ***
and is *** all *** , information and *** to
*** .
7.3 PacTel Limitations on Indemnity. PacTel shall not be obligated to
------ ----------- -- ----------
defend or be liable for costs and damages to the extent that infringement arises
out of a
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
modification of the PacTel *** after delivery by PacTel, out of
combination of the PacTel *** with other goods or devices not
supplied by PacTel, or from other fault or action of ESL.
7.4 ESL Limitations on Indemnity. ESL shall not be obligated to defend or
--- ----------- -- ----------
be liable for costs and damages to the extent that infringement arises out of
compliance with PacTel's specifications, from a modification of the ESL Licensed
Materials after delivery by ESL, out of combination of the ESL Licensed
Materials with other goods or devices not supplied by ESL, or from other fault
or action of PacTel.
ARTICLE 8
Default and Termination
------- --- -----------
8.1 Default. An event of default on the part of either party will exist
--------
under the Agreement if:
(a) Such party fails to perform any material obligation required to be
performed by it under any provision of the Agreement within the time specified
in such provision, or if no time is specified, within *** after written
notice from the other party that such performance has become due.
(b) Such party becomes insolvent, is unable to pay its debts as they
become due, makes an assignment for the benefit of creditors, files a petition
in any state insolvency proceeding or ceases to carry on its business; or
(c) A receiver or liquidator is appointed for any of such party's
properties or assets, or a petition is filed against such party in any state
insolvency proceeding and such petition is not withdrawn within 30 days after
such appointment or filing.
8.2 *** . Subject to any other provisions hereof
-----------------
***
the *** hereunder, if *** , as *** in this
*** , exists on the part of either party, then the *** may
***
*** and may *** any other ***
to *** .
8.3 Mutual Termination. The parties may mutually agree to terminate the
------ ------------
Agreement at any time.
ARTICLE 9
Arbitration and Dispute Resolution
----------- --- ------- ----------
If a dispute arises between the parties relating to the interpretation or
performance of the Agreement or the grounds for the termination thereof, the
parties agree to meet to try to resolve the dispute. Such meeting will be
attended by individuals with decision-making authority to attempt, in good
faith, to negotiate a resolution of the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
dispute prior to pursuing other available remedies. If, within thirty days
after such a meeting, the parties have not succeeded in negotiating a resolution
of the dispute, either party may request that such dispute be resolved through
final and binding arbitration. Such arbitration will be conducted by three (3)
arbitrators familiar with the wireless telecommunications industry and will be
held in San Francisco, California, in accordance with the then-current Rules of
Conciliation and Arbitration of the American Arbitration Association. Such
arbitrators will be selected by mutual agreement of the parties, or failing such
agreement, each party will select one arbitrator and the two selected
arbitrators will usually agree upon the selection of a third arbitrator. The
arbitrators will be bound to apply California law, and where applicable, federal
statutory law. The parties will be afforded a reasonable period of time to
conduct discovery prior to the arbitration. A court reporter will be present at
all arbitration proceedings in order to transcribe them and such transcription
will be the official record of such proceedings for purposes of any judicial
enforcement or review proceeding. The arbitrators' decision will be binding on
the parties and will specify the basis for any award and the types of damages
awarded. The parties will bear the cost of such arbitration equally and the
prevailing party in any such arbitration will be entitled to reasonable
attorneys fees, in addition to any other award ordered by the arbitrators. The
prevailing party in any judicial enforcement or review proceeding shall also be
entitled to reasonable attorneys' fees and costs, in addition to any other award
ordered by the court. If judicial enforcement is sought by either party,
judgment may be entered in any court of competent jurisdiction. This Article
shall survive any expiration or termination of the Agreement and shall continue
to be enforceable in the event of the bankruptcy of a party.
ARTICLE 10
Limitation of Liability
---------- -- ---------
Notwithstanding anything in the Agreement to the contrary, in no event will
either party be liable to the other for loss of profits, or for any indirect,
incidental, special or consequential damages arising from this Agreement,
however caused, whether as a consequence of the negligence of the one party or
otherwise; and the sole and exclusive liability and maximum liability of one
party to the other hereunder, whether arising in warranty, contract, tort or
otherwise, shall not exceed $ *** .
ARTICLE 11
Licenses and Permits
-------- --- -------
PacTel, at its own expense, will obtain from the appropriate agencies or
departments of the government all experimental licenses during product
development and ***
*** the Licensed Products under this Agreement. This obligation of PacTel
is limited to ***
as more specifically set forth in Section 2.1 above.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
ARTICLE 12
Miscellaneous Provisions
------------- ----------
12.1 Any notice, demand, request, statement or other writing required or
permitted by the Agreement, will be deemed to have been sufficiently given when
personally delivered or mailed by certified or registered mail, postage prepaid,
addressed as follows:
If to PacTel: PacTel Corporation
000 Xx. Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: *** , Director
Technology Transfer
With a copy to: PacTel Corporation
0000 Xxx Xxxx, XX 000
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
If to ESL: ESL Incorporated, MS __/__
000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: *** , New Venture Manager
12.2 The Agreement constitutes the entire agreement between the parties and
supersedes all previous agreements and understandings relating to the subject
hereof. The Agreement may not be altered, amended or modified, except by a
written instrument signed by the duly authorized representatives of both
parties.
12.3 The Agreement may not be assigned to any third party, in whole or in
part, by either party without the prior written consent of the other party. An
assignment to Affiliate of either party will not be deemed a third party and
will not require prior written consent from the other party.
12.4 Failure or successive failures on the part of either party, its
successors and assigns, to enforce any covenant or agreement herein, or any
waiver or successive waivers on its or their part of any covenant or condition
of the Agreement will not operate as a discharge of such covenant, agreement or
condition, render the same invalid or impair the right of either party, its
successors or assigns, to enforce the same.
12.5 Headings included in the Agreement are for convenience only and are
not to be used to interpret the Agreement between the parties.
12.6 Any news release, including photographs, films, advertisements,
publicity, public announcements or confirmation of same, to be released by
either party concerning
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
the activities of the other party or on any part of the subject matter of the
Agreement will be subject to the prior written approval of the other party. The
parties further agree that news releases made by either party will recognize the
participation and contributions of the other party. The nature of this
relationship will remain confidential to both parties.
12.7 No failure or omission on the part of either party to carry out or
observe any of the terms or provisions of the Agreement will be deemed a breach
of the Agreement, if same will arise or result from force majeure or from any
cause reasonably beyond the control of PacTel or ESL. Should such delay occur,
the date or dates of performance by the affected party will be extended for a
period equal to the number of days during which performance is so delayed. The
affected party will give the other party written notice of such delay within
fifteen (15) working days after identification of the delay.
12.8 Notwithstanding anything in the Agreement to the contrary, PacTel has
no obligation under the Agreement to perform any act whatsoever which would
violate the terms of the Modification of Final Judgment in U.S. v. Western
---------------
Electric Co., 552 P. Supp. 131 (D.D.C. 1982) (the "MFJ"). Following written
------------
notice to ESL, PacTel may discontinue performance of any activity required
herein or terminate the Agreement immediately, if in PacTel's sole opinion, such
discontinuation or termination is necessary in order to comply with the MFJ. In
the event that PacTel has determined that only certain activities, but not the
entire Agreement, must be discontinued, ESL will have the option to continue or
terminate the Agreement. In the event that ESL elects to continue the
Agreement, the parties will mutually agree upon royalty or payment terms which
will reasonably compensate ESL for PacTel's inability to perform certain of
PacTel's obligations hereunder.
12.9 Nothing in the Agreement will be construed to constitute ESL as the
partner or agent of PacTel, nor will either party have any authority to bind the
other. Each party will remain an independent contractor responsible only for
its own actions.
12.10 This Agreement has been entered into, will be governed by and
construed in accordance with the substantive laws of the State of California
applicable to agreements made and to be performed wholly within such
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed by their duly authorized
representatives as of the Effective Date.
ESL INCORPORATED PACTEL CORPORATION
A TRW COMPANY
By:/s/ Xxxxxx X. Money By:/s/ C. Xxx Xxx
-------------------- ---------------
Name:Xxxxxx X. Money Name:C. Xxx Xxx
------------------ -------------
Title:President Title:President
----------------- ------------
Date:01 October 1993 Date:10/4/93
------------------ -------------
DRAFT
EXHIBIT A ***
PACTEL
***
***
***
***
Application No:
***
*** to provide input.
***
N/A
***
*** to be provided includes:
. ***
. ***
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
EXHIBIT A
ESL
***
*** has *** under the ***:
***
***
*** software is the *** software which will maintain database
information, apply *** of *** , and
*** .
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
EXHIBIT B DRAFT
STATEMENT OF WORK
PacTel
Regulatory
PacTel will apply for the *** , tariff modifications and
approvals necessary to *** the ***
product within *** Markets.
Product Specifications
PacTel will translate its market requirements into a complete generic
description of functionality, features, performance and compatibility
characteristics. This will include installation, platform and market location
considerations.
Procurement Requirements
PacTel will provide a description of the procurement procedures, methods and
requirements within its organization.
Field Testing
PacTel will support technology, prototype and product evaluations by providing
ESL access to *** and ***. Evaluations shall
include, but not be limited to, the following: ***
***
*** used for evaluation and deployment shall be selected by PacTel based on
technical and business considerations. The *** will allow *** to test its
product under various conditions including extreme *** and ***.
PacTel will assist with the definition of test requirements and conditions.
*** of the product will be based on the *** as
included herein.
Work In Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
EXHIBIT B DRAFT
Operations Training and Support
PacTel will provide documentation specifications including a statement of
requirements and objectives covering installation, maintenance,
repair/replacement and operational procedures. PacTel will assist with
development and implementation of a detailed plan addressing system integration,
FOT training and ongoing vendor support.
***
PacTel will provide *** as described in Exhibit A.
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
EXHIBIT B
STATEMENT OF WORK
ESL
Product Development
ESL will design, develop, and test new technology developments, taking into
account PacTel's requirements, for the advancement of the ***
Product.
Field Testing & Evaluation
***
*** will be performed at designated PacTel cell sites. With PacTel
assistance, ESL will generate the definition of the test requirements and
conditions for each test and ***
*** of the product. *** of the product will be based upon
the ***
*** as included herein.
Upon *** of the *** units, ESL will manufacture the quantity of
units being procured by PacTel to the agreed upon production configuration and
functionality performance.
Operations Training & Support
ESL will generate product installation and FOT training documentation taking
into consideration PacTel requirements for installation, maintenance,
replacement/repair, and operational procedures.
***
ESL will *** with PacTel in *** of the
***
*** . This will include engineering and manufacturing consideration through
test and evaluation of the *** and *** units.
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
EXHIBIT B
Milestones
.
.
.
.
.
. *** ***
.
.
.
.
.
.
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
PAC(TM) TEL
Corporation
A Pacific TelesisCompany
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
GENERAL EQUIPMENT SPECIFICATIONS
This section describes the physical and electrical specifications that are
important to operation in a ***. Most *** are air conditioned and shielded. To
work in most *** the following specifications are required. If more stringent,
FCC Type Acceptance requirements shall apply.
------------------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
------------------------------------------------------------------------------------------
*** *** ***
*** ***
------------------------------------------------------------------------------------------
*** *** ***
***
------------------------------------------------------------------------------------------
*** ***
------------------------------------------------------------------------------------------
*** *** ***
------------------------------------------------------------------------------------------
*** *** No performance
degradation
------------------------------------------------------------------------------------------
*** *** Normal cell site power
------------------------------------------------------------------------------------------
*** *** ***
------------------------------------------------------------------------------------------
*** ***
------------------------------------------------------------------------------------------
*** *** Check FCC specifications
------------------------------------------------------------------------------------------
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
PAC(TM) TEL
Corporation
A Pacific Telesis Company
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
*** (USING JAMMING)
Additional equipment is required to implement the *** function. This includes a
*** can be used to terminate in process calls as required. This equipment is
controlled by the *** system.
--------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
--------------------------------------------------------------------------------
*** *** Only mobile receive is needed
--------------------------------------------------------------------------------
*** *** Monitor cell site transmit
--------------------------------------------------------------------------------
*** *** ***
***
--------------------------------------------------------------------------------
*** *** ***
*** ***
***
--------------------------------------------------------------------------------
*** *** Need to control SAT
frequency and
presence of 10 kHz
--------------------------------------------------------------------------------
*** *** ***
*** ***
***
--------------------------------------------------------------------------------
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
PAC(TM) TEL
Corporation
A Pacific TelesisCompany
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
SYSTEM INTEGRATION
The *** system must integrate into the existing *** and *** functions.
-------------------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
-------------------------------------------------------------------------------------------
*** *** Security features must be in place
-------------------------------------------------------------------------------------------
*** *** Database must be remotely modified
-------------------------------------------------------------------------------------------
*** *** Activity must be available for further
analysis at the host site
-------------------------------------------------------------------------------------------
*** ***
-------------------------------------------------------------------------------------------
*** ***
-------------------------------------------------------------------------------------------
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
*** ACCEPTANCE CRITERIA
TECHNICAL DRAFT
--------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
------------------- ----------------- --------------- -------------------
--------------------------------------------------------------------------------------------
*** *** *** Must capture information on
*** all registrations and attempts
within test sites
--------------------------------------------------------------------------------------------
***
--------------------------------------------------------------------------------------------
***
--------------------------------------------------------------------------------------------
***
--------------------------------------------------------------------------------------------
*** ***
***
--------------------------------------------------------------------------------------------
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
*** ACCEPTANCE CRITERIA
*** DRAFT
-----------------------------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
------------------- ----------------- --------------- -------------------
-----------------------------------------------------------------------------------------------------------------
Hardware Installation Operations review prior Commercial equipment ***
to final commercial ***
roll-out
***
-
- ***
-
-
-----------------------------------------------------------------------------------------------------------------
Software Installation Operations review prior Commercial equipment ***
to final commercial
roll-out
-----------------------------------------------------------------------------------------------------------------
Installation Documentation Operations review prior Published documentation Must include:
to final commercial roll-out -
- ***
-
-
-----------------------------------------------------------------------------------------------------------------
Trouble-Shooting Operations review prior Commercial equipment Must include:
Capabilities to final commercial - ***
roll-out
-----------------------------------------------------------------------------------------------------------------
Alarming Operations review prior Commercial equipment ***
to final commercial
roll-out
-----------------------------------------------------------------------------------------------------------------
Monitoring Operations review prior Commercial equipment ***
to final commercial
roll-out
-----------------------------------------------------------------------------------------------------------------
Reporting Operations review prior Commercial equipment ***
to final commercial
roll-out
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
*** ACCEPTANCE CRITERIA
DRAFT
*** SATISFACTION
----------------------------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
------------------- ----------------- --------------- -------------------
---------------------------------------------------------------------------------------------------------------
Transparency Subjective evaluation *** and commercial roll- ***
through live drive test out ***
---------------------------------------------------------------------------------------------------------------
Billing Records Evaluation of affected Commercial roll-out of ***
customer bills through *** *** configuration
***
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
*** ACCEPTANCE CRITERIA
DRAFT
*** MITIGATION
--------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
------------------- ----------------- --------------- -------------------
--------------------------------------------------------------------------------------------
*** Identification *** *** ***
***
Review of *** ***
performance
reports ***
--------------------------------------------------------------------------------------------
Terminations Review of *** ***
performance
reports ***
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
EXHIBIT C
NONDISCLOSURE AGREEMENT
-----------------------
THIS NONDISCLOSURE AGREEMENT is made as of this 22 day of April, 1993
("Effective Date"), by and between PACTEL CORPORATION, a California corporation
(hereinafter referred to as "PacTel"), with offices located at 0000 Xxx Xxxx,
Xxxxxx Xxxxx, Xxxxxxxxxx 00000, and ESL INCORPORATED, a California corporation
(hereinafter referred to as "Vendor"), with offices located at 000 Xxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000-0000 (collectively "the Parties") which agree as
follows:
WHEREAS each Party wishes to evaluate and understand its potential
involvement in a project of mutual interest; and
WHEREAS PacTel may find it necessary to disclose to Vendor certain
confidential and proprietary information and intellectual property of PacTel,
relating to PacTel and its operations, which will be used by Vendor only for its
work on PacTel projects; and
WHEREAS Vendor may find it necessary to disclose to PacTel certain
confidential and proprietary information relating to Vendor and its operations
which will be used by PacTel only to evaluate its potential use of Vendor's
services; and
WHEREAS each Party is willing to release such Information to the other
on a confidential basis, and is willing to enter into this Agreement;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained, PacTel and Vendor agree as follows:
1. All Information as defined below, provided by one Party (the
"Originator") to the other will be treated as confidential.
"Information" shall include all information in written, oral or other
tangible or intangible forms which may include, but is not limited to,
discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, tracings, diagrams, models,
samples, flow charts, data, computer programs, disks, diskettes,
tapes, marketing plans, customer names and other technical, financial
or business information.
2. For a period of ten (10) years following the effective date of this
Agreement, each Party shall:
-1-
a. restrict disclosure of the Information solely to those of its
employees with a need to know, and not to disclose it to other
parties; and,
b. advise its employees of the obligation of confidentiality
hereunder; and,
c. require its employees to use the same degree of care as is used
with that Party's own proprietary information.
3. Notwithstanding anything to the contrary herein, neither Party shall
have any obligation to preserve the confidentiality of any Information
that:
a. was previously known by it free of any obligation to keep it
confidential; or,
b. is distributed to third parties by the Originator without
restriction; or,
c. is or becomes publicly available, by other than unauthorized
disclosure by the Party receiving the Information; or,
d. is wholly and independently developed by the Party receiving the
Information.
4. All Information shall be deemed the property of the Originator, and,
upon request, the other Party will return all Information received in
tangible form to the Originator or destroy all such Information.
5. Nothing contained in this Agreement shall be construed as granting or
conferring any rights by license or otherwise in any Information
disclosed by the Originator.
6. This Agreement shall be governed and construed in accordance with the
laws of the State of California and shall benefit and be binding upon
the Parties hereto and their respective successors and assigns.
7. Since either Party may choose not to do business with the other in the
future, each acknowledges that the other is not responsible or liable
for any business decisions made by either in reliance upon disclosures
made during any meetings between the Parties or in reliance on any
results of the discussions.
-2-
8. This Agreement shall continue until terminated in writing by either
Party. The obligation to protect the confidentiality of Information
received prior to such termination shall survive the termination of
this Agreement.
9. Each Party agrees that it will make no copies or otherwise reproduce
the data provided by the other, and further agrees to remove all such
data from its files and return all data to the other if requested to
do so.
PACTEL CORPORATION ESL INCORPORATED
("PacTel") ("Vendor")
By: _____________________ By: ______________________
Xxx X. Xxxxxxx Name:______________________
Chief Financial Officer Title:_____________________
and Treasurer
-3-
FIRST AMENDMENT TO
THE DEVELOPMENT AND LICENSE AGREEMENT
DATED OCTOBER 4, 1993
BETWEEN
ESL INCORPORATED AND PACTEL CORPORATION
This First Amendment is made this 4th day of October, 1993, by and between
ESL Incorporated ("ESL") and PacTel Corporation ("PacTel").
WHEREAS, the parties entered into a Development and License Agreement,
dated October 4, 1993; and
WHEREAS, the parties now wish to amend that Agreement to correct certain
terms thereof;
NOW THEREFORE, the parties agree as follows:
1. In Section 2.5 of the Agreement the following clause shall be added at
the end of the second sentence:
", and shall be subject to the terms and conditions of this Agreement, with
the exception of Sections 6.2 and 6.3."
2. Section 5.5 of the Agreement is hereby deleted and the following is
substituted therefor:
5.5 Protection and Use of *** .
---------- --- --- -- --------------------
(a) Each party agrees it will not disclose (unless compelled to disclose by
judicial or administrative process, or in the opinion of such party's counsel,
by other requirement of law), use, or permit the use by others of such other
party's *** , *** and/or *** ,
at any time during the Agreement, or at any time thereafter, for a period of ***
years after the disclosure thereof. Without limiting the foregoing, each party
agrees to do the following with respect of any such *** , ***
and/or *** : (i) instruct and require all of its employees and agents to
maintain the confidentiality of such information; (ii)
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
exercise either at least the same degree of care to safeguard the
confidentiality of such information as that party exercises to safeguard the
confidentiality of its own information of a similar type, or a reasonable degree
of care, whichever is greater; and (iii) restrict disclosure of such information
to those of its employees who have a need to know consistent with the purposes
for which such information was disclosed. Each party further agrees not to
remove or destroy any proprietary or confidential legends or markings placed
upon documentation or other materials which contain or set forth the ***
*** of the other party.
(b) The party receiving *** , ***
and/or *** will obtain the written agreement of any
permitted transferee or licensee to hold in confidence the information
transferred to such transferee or licensee in accordance with terms no less
restrictive than those set forth above.
(c) The receiving party may disclose the other party's ***
*** and/or *** to its
employees, agents, suppliers and subcontractors to the extent that each such
disclosure is reasonably necessary for manufacturing, using, selling, installing
and/or servicing Licensed Products, or procuring goods and services required in
connection therewith; provided, however, that the receiving party will take all
desirable and necessary actions to preserve the confidentiality of such
information including, but not limited to: (i) marking any documents or other
material containing any ***
*** so disclosed to indicate that same contains proprietary data
and *** and/or *** ; (ii)
requiring each party to whom same is disclosed to sign a written agreement
limiting the use thereof to authorized purposes, prohibiting the further
reproduction or disclosure thereof and requiring the prompt return thereof when
no longer needed; and (iii) providing that any reproduction, notes or summaries
thereof, immediately upon the making thereof, will become the property of the
disclosing party and will be delivered to the disclosing party with, and upon
the return of, the ***
and/or *** .
(d) Each reproduction of any ***
and/or *** , together with each modification and
revision thereof, made by or for the receiving party, will automatically become
the property of the disclosing party, will be deemed the disclosing party's
*** and/or *** for all purposes
hereunder and will be clearly marked accordingly.
(e) Upon *** , the receiving party
will immediately discontinue the use of, and will promptly return to the
disclosing party or its designee, all ***
and/or *** , together with copies thereof, in the
possession or control of the receiving party, together with all written
documentation and/or other materials containing information relating to the
*** *** and/or *** .
The receiving party further agrees that it will not for a period of ***
after the date of any termination or expiration of this Agreement, use or
disclose to any third party any of disclosing party's
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
*** and/or ***
, except such information as the disclosing party has previously made generally
available to the public.
3. In Article 9, the following sentence shall be added at the end:
"Any judicial review under this Article shall be limited to arbitrator
misconduct or the arbitrators' non-compliance with or failure to observe
the terms and conditions of this Agreement."
4. Except as amended herein, the Agreement between the parties, dated
October 4, 1993, shall remain in full force and effect.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date first written above.
ESL INCORPORATED PACTEL CORPORATION
By:______________________ By:_________________________
Name:____________________ Name:_______________________
Title:___________________ Title:______________________
EXHIBIT E
---------
Patent Assignment
-----------------
PATENT APPLICATION ASSIGNMENT
WHEREAS, TRW Inc., an Ohio corporation, having its principal place of
business at 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000 (hereinafter referred to
as the "Assignor") holds all right, title and interest in and to the
_____________ Patent Application, "____________________________________," Serial
No. _________, by _____________, dated ______, Docket No. _______, including all
continuations, revisions, patents, reissues, re-examinations, foreign
counterpart applications and extensions thereof (hereinafter referred to as the
"Patent Application"); and
WHEREAS, Assignor desires to assign its entire right, title and
interest in and to the Patent Application to PhonePrint, Inc., a California
corporation (hereinafter referred to as the "Assignee"), pursuant to the terms
of that certain License and Technical Assistance Agreement, dated as of
______________.
NOW, THEREFORE, for good and valuable consideration to the Assignor,
the receipt of which is hereby acknowledged, the Assignor has agreed to and does
hereby assign and transfer unto the Assignee its entire right, title and
interest in and to any and all inventions disclosed in the Patent Application,
the Patent Application, and in any and all patents obtained for said inventions
by the Patent Application or any continuations, revisions, renewals or
substitutions thereon, and any reissues or re-examinations thereof.
Assignor further agrees that it will, at Assignee's reasonable
expense, (a) cooperate with Assignee in the prosecution of U.S. patent
applications and foreign counterparts on the inventions and any improvements,
(b) execute, verify and acknowledge and deliver all such further papers,
including patent applications and instruments of transfer, and (c) perform such
other acts as Assignee lawfully may request to obtain or maintain Letters Patent
and Registrations for the inventions and improvements in any and all countries,
and to vest title thereto in Assignee or Assignee's successors and assigns.
IN TESTIMONY WHEREOF, I hereby set my hand this ____ day of _________,
19___.
TRW Inc.
By: _________________________________
Assistant Secretary
State of California )
County of )
On ____________________, before me, __________________________, the undersigned
officer, personally appeared _________________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
________________________________
Notary Public
My Commission Expires: _________________________
EXHIBIT F
---------
Trademark Assignment
--------------------
F-1
ASSIGNMENT OF U.S. INTENT-TO-USE TRADEMARK APPLICATION
WHEREAS, TRW Inc., an Ohio corporation, having its principal place of
business at 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000 (hereinafter referred to
as the "Assignor") owns a certain Intent-To-Use-Trademark Application in the
United States Patent and Trademark Office for "PHONEPRINT," Serial No.
74/531385, filed May 31, 1994, in Class 9. The goods are electronic cellular
network access control system comprised of signed analysis hardware and software
which receives, authenticates and blocks unauthorized cellular transmission
(hereinafter referred to as the "Trademark Application").
WHEREAS, PhonePrint, a California corporation (hereinafter referred to
as the "Assignee") has acquired Assignor's interest in and to the Trademark
Application and any and all trademarks and service marks related thereto
throughout the world.
NOW, THEREFORE, for good and valuable consideration to the Assignor,
the receipt of which is hereby acknowledged, (i) the Assignor has agreed to and
does hereby assign unto the Assignee its entire right, title and interest in and
to the Trademark Application and any and all trademarks and service marks
related thereto throughout the world, together with the goodwill of the business
related thereto and concurrent with the transfer of certain tangible assets as
indicia of said goodwill; and (ii) the Assignor authorizes the Commissioner of
Patents and Trademarks of the United States to assign the Trademark Registration
to the Assignee in accordance with the terms of this instrument.
IN TESTIMONY WHEREOF, I hereby set my hand this ____ day of
___________, 19__.
TRW, Inc.
By: _________________________________
Assistant Secretary
State of California )
County of )
On ____________________, before me, __________________________, the undersigned
officer, personally appeared _________________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
________________________________
Notary Public
My Commission Expires: _________________________
EXHIBIT G
---------
Order and Contract Assignment
-----------------------------
G-1
PURCHASE ORDER AND SUPPLY CONTRACT
----------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
This Assignment and Assumption Agreement is made as of this 14th day of
December, 1994 by and between ESL Incorporated, a California corporation having
a place of business at 000 Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx (the "Transferor"),
and PhonePrint, Inc., a Delaware corporation having a place of business at 000
X. Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx (the "Transferee").
WHEREAS, the Transferor is a party to those certain purchase orders and
supply contracts (and all amendments and modifications thereof) (collectively,
the "Agreements") listed on Exhibit A attached hereto (and such Agreements were
---------
contemplated by the parties to be included within the definition of Assumed
Obligation as set forth in Paragraph 1.4 of that certain Asset Purchase
Agreement of even date herewith), with certain of the vendees and suppliers set
forth therein; and
WHEREAS, the Transferor desires to assign to the Transferee, and the
Transferee desires to take by assignment, all of the Transferor's right, title
and interest under the Agreements, and the Transferee desires to assume all of
the Transferor's duties and obligations with respect thereto.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. The Transferor does hereby transfer, assign and set over to the
Transferee the Transferor's entire right, title and interest in and to the
Agreements.
2. The Transferee does hereby assume and agree to pay, perform and
discharge any and all obligations and liabilities of the Transferor existing as
of November 30, 1994 under or arising out of the Agreements and any other
documents relating thereto, subject to the indemnification obligations of the
Transferor and Transferee in that certain Asset Purchase Agreement of even date
herewith.
3. This Assignment and Assumption Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto.
4. This Assignment and Assumption Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one in the same instrument.
5. This Assignment and Assumption Agreement shall be governed by and
construed under the internal laws of the State of California, without regard to
any rules of conflicts of law applicable to agreements made and to be performed
in such state by and among residents of such state.
6. Each of the parties hereto shall execute and deliver all additional
documents and shall do any and all acts and things reasonably required in
connection with the performance of the obligations undertaken in the Assignment
and Assumption Agreement and to effectuate in good faith the intent of the
parties.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-2-
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption Agreement as of the date hereof.
TRANSFEROR:
ESL INCORPORATED, a California corporation
By:________________________________________
Its:_______________________________________
TRANSFEREE:
PHONEPRINT, INC., a Delaware corporation
By:________________________________________
Its:_______________________________________
[SIGNATURE PAGE TO PURCHASE ORDER AND SUPPLY CONTRACT
ASSIGNMENT AND ASSUMPTION AGREEMENT]
EXHIBIT A
---------------------------------------------------------------------------------
PHONEPRINT INC.
---------------------------------------------------------------------------------
OUTSTANDING COMMITMENTS
---------------------------------------------------------------------------------
AS OF NOVEMBER 30, 1994
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
PART TOTAL PURCHASE PURCHASE
---------------------------------------------------------------------------------
P.O. # VENDOR NUMBER QTY PRICE EXTENSION
---------------------------------------------------------------------------------
401254 Amco Engineering 000-0000-000 41 475.60 19,500
---------------------------------------------------------------------------------
400012 Ariel Corp 000-0000-000 750 969.92 727,440
---------------------------------------------------------------------------------
401623 Arow Components 000-0000-000 7000 0.01 84
---------------------------------------------------------------------------------
401623 Arow Components 000-0000-000 2000 0.13 260
---------------------------------------------------------------------------------
400686 Custom Computer Service 000-0000-000 120 260.00 31,200
---------------------------------------------------------------------------------
000000 X Xxxxxxx 000-0000-000 70 700.00 49,000
---------------------------------------------------------------------------------
401724 Isis Surface Mounting 000-0000-000 59 36 2,124
---------------------------------------------------------------------------------
401639 Kent Electronics 000-0000-000 375 3.97 1,489
---------------------------------------------------------------------------------
401389 Lambda Electronics 000-0000-000 100 23.50 2,350
---------------------------------------------------------------------------------
401226 Maxpeed Corp 000-0000-000 50 347.00 17,350
---------------------------------------------------------------------------------
400053 Rugged Computer Systems 000-0000-000 631 3,518.00 2,219,858
---------------------------------------------------------------------------------
401719 Rugged Computer Systems, Inc. 000-0000-000 10 505 5,050
---------------------------------------------------------------------------------
401262 Vanderbend 000-0000-000 100 30.93 3,093
---------------------------------------------------------------------------------
401272 Vanderbend 000-0000-000 200 7.22 1,444
---------------------------------------------------------------------------------
401275 Vanderbend 000-0000-000 250 8.19 2,048
---------------------------------------------------------------------------------
401277 Vanderbend 000-0000-000 100 2.25 225
---------------------------------------------------------------------------------
401278 Vanderbend 000-0000-000 200 10.51 2,102
---------------------------------------------------------------------------------
401279 Vanderbend 000-0000-000 200 10.12 2,024
---------------------------------------------------------------------------------
401279 Vanderbend 000-0000-000 200 1.40 280
---------------------------------------------------------------------------------
401282 Vanderbend 000-0000-000 100 11.57 1,157
---------------------------------------------------------------------------------
401283 Vanderbend 000-0000-000 200 16.95 3,390
---------------------------------------------------------------------------------
401284 Vanderbend 000-0000-000 200 32.47 6,494
---------------------------------------------------------------------------------
401285 Vanderbend 000-0000-000 300 7.63 2,289
---------------------------------------------------------------------------------
401287 Vanderbend 000-0000-000 100 9.46 946
---------------------------------------------------------------------------------
401288 Vanderbend 000-0000-000 40 109.11 4,364
---------------------------------------------------------------------------------
401296 Vanderbend 000-0000-000 150 3.23 485
---------------------------------------------------------------------------------
400067 Voctron Labs 000-0000-000 180 335.00 60,300
---------------------------------------------------------------------------------
401306 Xxxx Xxxxx 000-0000-000 385 5.15 1,983
---------------------------------------------------------------------------------
401307 Xxxx Xxxxx 000-0000-000 385 4.00 1,540
---------------------------------------------------------------------------------
401308 Xxxx Xxxxx 000-0000-000 380 14.00 5,320
---------------------------------------------------------------------------------
401309 Xxxx Xxxxx 000-0000-000 120 42.40 5,088
---------------------------------------------------------------------------------
401310 Xxxx Xxxxx 000-0000-000 300 16.35 4,905
---------------------------------------------------------------------------------
401311 Xxxx Xxxxx 000-0000-000 200 1.45 290
---------------------------------------------------------------------------------
401584 DC Electronics 000-0000-000 100 19.14 1,914
---------------------------------------------------------------------------------
401559 DC Electronics 000-0000-000 140 26.89 3,765
---------------------------------------------------------------------------------
401589 DC Electronics 000-0000-000 325 15.11 4,911
---------------------------------------------------------------------------------
401512 DC Electronics 000-0000-000 200 6.49 1,298
---------------------------------------------------------------------------------
401735 DC Electronics 000-0000-000 25 3.50 88
---------------------------------------------------------------------------------
401699 Arow Components 000-0000-000 1500 0.213 320
---------------------------------------------------------------------------------
401699 Arow Components 000-0000-000 1000 0.15 150
---------------------------------------------------------------------------------
400799 DC Electronics 1 2,000.00 2,000
---------------------------------------------------------------------------------
401631 Applied Specialties 1 211.2 211
---------------------------------------------------------------------------------
401312 Xxxx Xxxxx 90 23.25 2,093
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 262,350
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
PHONEPRINT INC.
---------------------------------------------------------------------------------
OUTSTANDING COMMITMENTS
---------------------------------------------------------------------------------
AS OF NOVEMBER 30, 1994
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
PART TOTAL PURCHASE PURCHASE
---------------------------------------------------------------------------------
P.O. # VENDOR NUMBER QTY PRICE EXTENSION
---------------------------------------------------------------------------------
401076 Ask Group 4 2,756.00 11,024
---------------------------------------------------------------------------------
401077 Ask Group 48 310.00 14,880
---------------------------------------------------------------------------------
401077 Ask Group 1 1,450.00 1,450
---------------------------------------------------------------------------------
401075 Hewlett Packard 1 2,193.00 2,193
---------------------------------------------------------------------------------
401075 Hewlett Packard 1 355.30 355
---------------------------------------------------------------------------------
401075 Hewlett Packard 1 224.40 224
---------------------------------------------------------------------------------
401075 Hewlett Packard 1 635.80 636
---------------------------------------------------------------------------------
401075 Hewlett Packard 1 469.20 469
---------------------------------------------------------------------------------
401067 Mobilecomm* 1 1,200.00 1,200
---------------------------------------------------------------------------------
401696 Sealed Air Corp. 1 2650 2,650
---------------------------------------------------------------------------------
401696 Sealed Air Corp. 1 950 950
---------------------------------------------------------------------------------
401736 Sun Microsystems 5 2640 13,200
---------------------------------------------------------------------------------
401722 Vanstar 2 120.88 242
---------------------------------------------------------------------------------
401729 Vanstar 1 2362 2,362
---------------------------------------------------------------------------------
401729 Vanstar 1 369 369
---------------------------------------------------------------------------------
401729 Vanstar 1 120 120
---------------------------------------------------------------------------------
401804 Vanstar 1 5 5
---------------------------------------------------------------------------------
401801 Xxxx Xxxxx 285 2.95 841
---------------------------------------------------------------------------------
401801 Xxxx Xxxxx 1 186.12 186
---------------------------------------------------------------------------------
401504 AT&T Capital* 1 2,078.00 2,078
---------------------------------------------------------------------------------
401558 AT&T Capital* 1 2,332.00 2,332
---------------------------------------------------------------------------------
401541 AT&T Capital* 1 1,515.00 1,515
---------------------------------------------------------------------------------
401647 AT&T Capital* 1 596.00 596
---------------------------------------------------------------------------------
401709 AT&T Capital* 1 466.00 466
---------------------------------------------------------------------------------
401726 AT&T Capital* 1 892.00 892
---------------------------------------------------------------------------------
401734 AT&T Capital* 1 2,332.00 2,332
---------------------------------------------------------------------------------
401253 California Furniture* 1 312.00 312
---------------------------------------------------------------------------------
401253 California Furniture* 1 336.00 336
---------------------------------------------------------------------------------
401253 California Furniture* 1 160.00 160
---------------------------------------------------------------------------------
401805 Frame Technology Corp 2 550.00 1,100
---------------------------------------------------------------------------------
401805 Frame Technology Corp 1 49.00 49
---------------------------------------------------------------------------------
401805 Frame Technology Corp 1 260.00 260
---------------------------------------------------------------------------------
401733 JMW Consultants Inc. 1 14650 14,650
---------------------------------------------------------------------------------
401733 JMW Consultants Inc. 1 6208.65 6,209
---------------------------------------------------------------------------------
401237 Rent A Computer* 1 985.00 985
---------------------------------------------------------------------------------
401261 Rent A Computer* 1 1,405.00 1,405
---------------------------------------------------------------------------------
401576 Rent A Computer* 1 340.00 340
---------------------------------------------------------------------------------
401667 Vanstar 2 3520.28 7,041
---------------------------------------------------------------------------------
401700 Tel-Lan Communications 12 12 144
---------------------------------------------------------------------------------
Consultant Xxx Xxxxxx-December Retainer & Expenses 30,500
---------------------------------------------------------------------------------
Consultant Xxxx Xxxxxxx-December Retainer & Expenses 5,500
---------------------------------------------------------------------------------
Consultant Xxxx Xxx-December Retainer & Expenses 9,000
---------------------------------------------------------------------------------
Consultant Xxxxxx Xxx-Billed at straight hourly rate as used
---------------------------------------------------------------------------------
Consultant Hill & Xxxxxxxx 28,824
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
TOTAL COMMITMENTS 3,634,950
===========
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
* Indicates month-to-month rental
---------------------------------------------------------------------------------
EXHIBIT H
---------
General Conveyance
------------------
H-1
GENERAL CONVEYANCE, XXXX OF SALE AND ASSIGNMENT
-----------------------------------------------
ESL INCORPORATED, a California corporation (the "Seller"), hereby grants,
conveys, transfers, assigns, sets over and delivers, as of December 14, 1994
(the "Effective Date"), unto PHONEPRINT, INC., a Delaware corporation ("Buyer"),
pursuant to that certain Asset Purchase Agreement between the Seller and Buyer
dated December 14, 1994 (the "Purchase Agreement"), all of the Seller's right,
title and interest in and to all the assets and properties (whether tangible or
intangible and whether real, personal or mixed and whether owned or leased by
Seller), of every kind, character and description and wherever situated which
are either (i) identified in Exhibit A to the Purchase Agreement; or (ii) listed
---------
on Schedule 1 attached hereto (the assets and properties in (i) and (ii) above
----------
shall collectively be the "Assets").
TO HAVE AND TO HOLD the Assets unto Buyer, its successors and assigns
forever.
The Seller and TRW Inc., an Ohio corporation ("TRW") and their successors
hereby agree to take all actions reasonably necessary to obtain any necessary
consent for the transfer of the Assets to Buyer and, upon the receipt of such
consent, to provide to the Buyer the benefits of title to such Assets. All the
Assets shall automatically be deemed to have been transferred and assigned to
Buyer as of the Closing Date (as defined in the Purchase Agreement). Pending
such formal transfer and assignment, Buyer shall be entitled to the full
economic benefit of ownership of the Assets and shall not be liable for any
loss, damage or charge arising out of acts or omissions occurring prior to the
Closing Date with respect to the Assets or the conduct of Seller's business.
The obligation of the Seller, TRW and their successor shall be to take all
reasonable action necessary to obtain the consents and to provide to the Buyer
the benefits of title to all of the Assets referred to above.
THE SELLER AND TRW HEREBY CONSTITUTE and appoint Buyer and Buyer's
successors and assigns, the true and lawful attorneys of the Seller and TRW with
full power of substitution, in the name of the Seller or otherwise, and on
behalf and for the benefit of Buyer, its successors and assigns, to demand and
receive from time to time any and all Assets transferred or intended so to be;
to give receipts, releases and acquittances for or in respect of the same of any
part thereof; and to take any action necessary to effect the transfer to Buyer
of full legal title in and beneficial ownership of any Asset hereby transferred
and assigned or intended so to be. The Seller and TRW declare that the
foregoing powers are coupled with an interest and shall not be revocable by it
in any manner or for any reason.
THE SELLER AND TRW FOR THEMSELVES AND THEIR SUCCESSORS, AGREE THAT they or
such successors will hereafter cause the execution and delivery of any further
assignments, instruments of transfer, bills of sale, powers of attorney or
conveyances and perform other acts, as may be necessary or desirable fully to
vest in Buyer title to and enjoyment of the Assets assigned and transferred or
intended so to be pursuant to the Agreement.
-2-
IN WITNESS WHEREOF, the Seller and TRW have caused this General Conveyance,
Xxxx of Sale and Assignment to be executed as of the date first written above.
"SELLER":
ESL INCORPORATED, a California corporation
By:_________________________________________
Title:_____________________________
"TRW":
TRW INC., an Ohio Corporation
By:_________________________________________
Title:_____________________________
[SIGNATURE PAGE TO GENERAL CONVEYANCE,
XXXX OF SALE AND ASSIGNMENT]
SCHEDULE 1
----------
List of Specific Assets
-----------------------
Schedule 1-1
-------------------------------------------------------------------
PHONEPRINT INVENTORY MODEL M MODEL A MODEL E TOTAL
-------------------------------------------------------------------
1) Consigned Units 56 1 5 20 9 1
-------------------------------------------------------------------
2) Finished Goods 61 31 84 176
-------------------------------------------------------------------
3) Work In Progress N/A N/A N/A N/A
-------------------------------------------------------------------
4) Material Unit Equivalents 0 0 61 61
-------------------------------------------------------------------
5) Engineering Test Units 6 0 1 7
-------------------------------------------------------------------
6) Raw Materials N/A N/A N/A $979,124
-------------------------------------------------------------------
1) Units shipped to customers on consignment at 11/30/94.
2) Finished Goods Inventory as of 11/30/94. Does not include the cost of
installation kits noted below in (b) below.
3) Work In Process (WIP) value is included in Material Unit Equivalents
calculation.
4) Material Unit Equivalents is calculated by adding material stock and WIP on
hand plus additional future purchases of $153,000 (see note (a) below). The
model E unit has the highest material content of the three Phone Print
models. Using this material in different product mixes would result in
different equivalent unit combinations.
5) Units that are in the field and in-house for purposes of Engineering test.
6) Remaining stock balance of $979,124 at 1995 standards. Included in this
number is material at vendors valued at $167,009 (see note (c) below) and
spares valued at $260,699 described in note (c) and (d).
NOTES:
(a) ESL's current estimate is approximately $153,000 to make up material
shortages required to build the 61 equivalent units shown above as item 4,
excluding labor and testing.
(b) Installation kit material nominally valued at $34,000 Is required to
complete 176 units of Finished Goods.
(c) The $167,009 of material under evaluation at vendors could potentially be
written-off based on final evaluation and recommended disposition
(d) Inventory has been re-valued based on latest material cost experience and
time standards.
PhonePrint Inc.
Fixed Assets
MAKE MODEL DESCRIPTION ASSET#
HP 7550A CMPTR,PLOTTER,GRPH C0012235
APPLE MACPLUS COMPUTER,PERSONAL C0014120
APPLE MACPLUS COMPUTER,PERSONAL C0014342
APPLE MACPLUS COMPUTER,PERSONAL C0014542
APPLE MACPLUS COMPUTER,PERSONAL C0016103
AST PREMIUM 286 COMPUTER,PERSONAL C0017172
APPLE MAC II COMPUTER,PERSONAL C0017215
APPLE MAC II COMPUTER,PERSONAL C0019273
APPLE M0402 CMPTR,MONITOR,MONO C0019285
APPLE X0000 XXXXX,XXXXXXX,XXXX C0019290
APPLE MAC II COMPUTER,PERSONAL C0019291
APPLE MAC II COMPUTER,PERSONAL C0019589
RADIUS 218 CMPTR,MONITOR C0019590
APPLE MACII Mac IIC1 w/Ext Kybd C0019941
RADIUS TPD/19 CMPTR,MONITOR C0020185
APPLE MAC II COMPUTER,PERSONAL C0020195
RADIUS TPD/19 CMPTR,MONITOR C0021173
APPLE CENTRIS COMPUTER,PERSONAL C0021600
DELL COMPUTERS466/ M COMPUTER,PERSONAL C0021988
DELL COMPUTERS466/ M COMPUTER,PERSONAL C0021989
APPLE CENTRIS COMPUTER,PERSONAL C0021990
APPLE CENTRIS COMPUTER,PERSONAL C0021991
RADIUS 350 CMPTR,MONITOR,COLOR C0021992
RADIUS 350 CMTR,MONITOR,COLOR C0021993
T1 2559821 CMPTR,PRINTER,LASER C0021994
APPLE QUADRA CENTRIS 650 C0022026
APPLE CENTRIS COMPUTER,PERSONAL C0022035
APPLE CENTRIS COMPUTER,PERSONAL C0022037
APPLE CENTRIS COMPUTER,PERSONAL C0022137
APPLE CENTRIS COMPUTER,PERSONAL C0022138
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022139
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022140
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022141
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022142
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022143
APPLE CENTRIS COMPUTER,PERSONAL C0022144
RADIUS 348 CMPTR,MONITOR,COLOR C0022145
RADIUS 348 21" Color Monitor C0022146
APPLE PRO 630 CMPTR,PRINTER,LASER C0022147
NCA 4542NT CMPTR,DRIVE,DISK C0022151
NCA MXT1240S CMPTR,DRIVE,DISK C0022196
APPLE QUADRA (610) COMPUTER,PERSONAL C0022479
APPLE QUADRA (610) COMPUTER,PERSONAL C0022480
APPLE QUADRA (610) COMPUTER,PERSONAL C0022481
APPLE QUADRA (610) COMPUTER,PERSONAL C0022482
APPLE QUADRA (610) COMPUTER,PERSONAL/21" Clr Monitor C0022483
APPLE QUADRA (610) COMPUTER,PERSONAL/21" CLr Monitor C0022484
RADIUS 381 CMPTR,MONITOR,COLOR C0022485
PhonePrint Inc.
Fixed Assets
MAKE MODEL DESCRIPTION ASSET #
RADIUS 381 CMPTR,MONITOR,COLOR C0022486
DELL COMPUTERS466/M-66 COMPUTER,PERSONAL C0022528
DELL COMPUTERS466/M-66 COMPUTER,PERSONAL C0022529
CHAPLET SYS NBD486T COMPUTER,PERSONAL,LPTP C0022619
SUN S10GXN-40 WORKSTATION C0023073
SUN S10GXN-40 WORKSTATION C0023074
SUN 4/15EC-32 WORKSTATION C0023075
SUN 4/15EC-32 WORKSTATION C0023076
SUN 4/10EC-8 WORKSTATION C0023077
SUN X547A-ST CMPTR,DRIVE,DISK C0023078
SUN X547A-ST CMPTR,DRIVE,DISK C0023079
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023101
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023102
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023103
APPLE QUADRA COMPUTER,PERSONAL C0023104
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023105
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023106
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023107
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023108
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023109
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023110
APPLE QUADRA (610) COMPUTER,PERSONAL C0023111
MICRONET SS-Dl6OOO COMPUTER,DRIVE,TAPE,DAT C0023115
486 COMPUTER C0023197
HP 7550A CMPTR,PLOTTER,GRPH C0023308
DELL COMPUTERS486DX2-66 COMPUTER,PERSONAL C0023309
DELL COMPUTERS486DX2-66 COMPUTER,PERSONAL C0023310
DELL COMPUTERS486DX2-66 COMPUTER,PERSONAL C0023311
IFR SYSTEMS COM-120A CMPTR,MONITOR C0023404
IBM 425SX/SI COMPUTER,PERSONAL C0023529
IBM 425SX/SI COMPUTER,PERSONAL C0023530
APPLE QUADRA COMPUTER,PERSONAL C0023531
APPLE QUADRA COMPUTER,PERSONAL C0023532
APPLE QUADRA COMPUTER,PERSONAL C0023533
APPLE QUADRA COMPUTER,PERSONAL C0023534
APPLE QUADRA COMPUTER,PERSONAL C0023535
APPLE QUADRA COMPUTER,PERSONAL C0023536
APPLE POWER MAC COMPUTER,PERSONAL C0023537
APPLE POWER MAC COMPUTER,PERSONAL C0023538
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023605
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023606
APPLE POWERMAC COMPUTER,PERSONAL C0023621
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023634
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023635
APPLE QUADRA COMPUTER,PERSONAL C0023647
APPLE QUADRA COMPUTER,PERSONAL C0023648
APPLE QUADRA COMPUTER,PERSONAL C0023649
APPLE QUADRA610 COMPUTER,PERSON C0023782
PERSONAL COMPUTER C0023783
PhonePrint Inc.
Fixed Assets
MAKE MODEL DESCRIPTION ASSET#
APPLE PB DUO 280/280C Power Book Duo 280c w/17" Disp C0023903
Power Book Duo 280c w/17" Disp C0023904
APPLE M3077 (POWERMAC) CMPTR,PERSONAL C0023906
17 COLOR MONITOR C0023907
APPLE M2017 CMPTR,PERSONAL C0023908
APPLE M2612 CMPTR,MONITOR,COLOR 20" C0023909
Powerbook 180 C0023924
Powerbook 180 C0023925
APPLE 6100 (POWERMAC) CMPTER,PERSONAL C0023926
APPLE 6100 (POWERMAC) CMPTER,PERSONAL C0023927
APPLE M2464 (POWER PC) MONITOR,CMPTR C0023935
APPLE C-0890 MONITOR,COLOR (20") C0023936
APPLE M2464 (POWER PC 7100) MONITOR,CMPTR C0023937
APPLE C-0890 MONITOR,COLOR C0023938
APPLE 8100 CMPTR,PERSONAL C0023939
SPARC STAT C0023964
5 GB TAPE C0023965
SUN 4/10FC2- WORKSTATION C0023969
SUN 4/15FC2- WORKSTATION,CLASSIC C0023970
RADIUS C0507 MONITOR,COLOR 17" C0023971
APPLE QUADRA 605 CMPTR,PERSONAL C0023972
APPLE QUADRA 605 COMPUTER,PERSONAL C0023973
SPORTSTER N/A CMPTR,PERSONAL C0023974
APPLE M2332 POWERBOOK C0023991
APPLE M2332 POWERBOOK C0023992
INTEL 486 DXL 486 COMPUTER C0023995
APPLE 7100 PERSONALCOMPUTER C0023996
APPLE 7100 PERSONALCOMPUTER C0023997
COMPAQ PROLINEA FOR PAYROLL C0024046
APPLE POWERBOOK 520 FOR FINANCE C0024047
APPLE POWERBOOK 520 FOR FINANCE C0024048
APPLE 7100 PERSONALCOMPUTER C0024049
APPLE 7100 PERSONALCOMPUTER C0024050
Pentium 90 MHZ for Xxxxxxxx C0024111
Pentium 90 MHZ for Xxxxxxxx C0024112
XXXXXXXXX 0Xx0X SCOPE,PN,DUAL C0004026
XXXXXXXXX 0Xx0X SCOPE,PN,DUAL,CH C0004028
TEKTRONIX 7704 SCOPE,GP,MF C0004208
HP 0000X XXX XXXX, XX X0000000
TEKTRONIX 475DM43 SCOPE,PORTABLE C0004280
POWER DESIGN TP325 POWER SUPPLY, TRIPLE C0004357
TEKTRONIX 7A26 SCOPE,PN,DUAL CH C0004400
TEKTRONIX 7B80 SCOPE,PN,TIME BASE C0004649
XXXXXXXXX 0X00X XXXXX,XX,XXXX C0004879
HP 0000X XXX XXXX, XX X0000000
XXXXXXXXX 0X00X XXXX,XX,XXXX BASE C0005319
XXXXX-XXXX 3202R FILTER,TUNABLE C0005370
HP 3964A RCRDR,INSTRUMENT C0005438
TEKTRONIX 7A26 SCOPE,PN,DUAL CH C0005452
PhonePrint Inc.
Fixed Assets
MAKE MODEL DESCRIPTION ASSET #
TEKTRONIX 7B85 SCOPE,PN,TIME BASE C0005598
SD TIMECODE READER 8132 C0005825
HP 436A METER,POWER,MW C0006519
HP 8656A GEN,SIGNAL C0007157
HP 197B CAMERA,SCOPE C0007573
HP 8970A METER,NOISE C0007647
TEKTRONIX 485 SCOPE,PORTABLE C0007725
HP 5335A COUNTER,ELEC C0007925
ESL PROJ 5110 MODULE, AMPL, BIAS C0011605
TEKTRONIX 2445 SCOPE,PORTABLE C0011887
TEKTRONIX 2465CTS O'SCOPE SNBO52750 C0012315
HP 16OG LOGIC ANALYZER C0012426
HP 6024A POWER SUPPLY C0012969
IBM 6180-002 CMPTR,PLOTTER,CLR C0013809
HP 3335A GEN,SYNTHESIZER C0014059
HP 5385A COUNTER,ELEC C0017628
HP HP 6632A PWR,SUPP,DC C0019030
FLUKE MFG 6080A GEN,SIGNAL C0019122
HP 6632A PWR,SUPP,DC C0019126
HP 6632A PWR,SUPP,DC C0019128
HP 5087A AMPL,DISTR C0021441
IFR SYSTEMS COM120A MONITOR, COMMUNICATION C0021580
IFR SYSTEMS 120A RECEIVER,COMM C0021984
NCA PERIPHERAL CMPTR,DRIVE,DISK C0021985
MXT1240S
NCA PERIPHERAL CMPTR,DRIVE,DISK C0021986
MXT1240S
II INC XXX00X-000 XXX,XXX C0022048
XXXX-XXXXX ZPBI007001 CONVERTER, A/D C0022049
NCA 0000XX XXXXX,XXXXX,XXXX C0022150
DIGITAL EQ 4000/90 SYSTEM,VAC C0022191
MAXTOR KOOCHOHE 1.2 GBYTE DISK DRIVES C0022197
MAXTOR KOOCHOHE 1.2 GBYTE DISK DRIVES C0022198
STANFORD RES SR620 COUNTER,UNIVERSAL C0023118
STANFORD RES FS700 FREQ STD,XXXXX C0023119
LOW PHASE NOISE OSCIL C0023196
PANASONIC KX-B520 PRINTBOARD,ELECTRONIC C0023375
COMBINET CB-400 BRIDGE,ETHERNET C0023433
NOISE COM UFX7109 GEN,NOISE,PROGRAMMABLE C0023434
4MM TAPE DRIVE C0023551
HP 8560E ANAL, SPECTRUM C0023814
AUTOCAD SYSTEM C0023823
17 MONITOR C0023824
LASER PRINTER C0023825
2 GB HD, SCSI-II, Cable C0023963
4.2 GB MUL C0023966
4.2 GB MUL C0023967
4.2 GB MUL C0023968
CSC 1924EXT DRIVE,DISK,SCSI C0023975
CSC 1924EXT DRIVE,DISK,SCSI C0023976
RADIUS C0507 DRIVE,DISK,SCSI C0023977
PhonePrint Inc.
Fixed Assets
MAKE MODEL DESCRIPTION ASSET#
2 GB SCSI C0023978
2 GB SCSI C0023979
2 GB SCSI C0023980
2 GB SCSI C0023981
2 GB SCSI C0023982
2 GB SCSI C0023983
CSC 1924EXT DRIVE,DISK,SCSI C0023985
2 GB SCSI C0023986
00-0 XX XX & 00 XXXXXXXXXXX X0000000
0 XX SCSI C0023988
Xyplex Server C0023999
Sun Workstation C0024096
Self-Const Equip PHONEMAID, SIG GENERATORS(2) Self-Const
POWER 36100RF PWR SUPPLY, DC C0001464
DESIGN
TEKTRONIX 2335 SCOPE,PORTABLE C0007583
TEKTRONIX 496P ANAL,SPECT C0007792
HP 6653A POWER SUPPLY C0022979
HP 6653A POWER SUPPLY C0022980
HP 6653A POWER SUPPLY C0022981
HP 6673A POWER SUPPLY C0022982
HP 6543A POWER SUPPLY C0022983
HP 6543A POWER SUPPLY C0022984
HP 6543A POWER SUPPLY C0022985
HP 6543A POWER SUPPLY C0022986
TEKTRONIX TAS475 SCOPE,PORTABLE C0023312
TEKTRONIX 2232 SCOPE,PORTABLE C0023314
HP 8568B ANAL,SPECT C0023405
HP 8482B SENSOR,POWER C0023406
HP 8657B GEN,SIGNAL C0023407
HP 437B METER,POWER,MW C0023408
HP 5385A COUNTER,ELEC C0023473
POWER SUPPLY C0023574
HP 5385A COUNTER,ELEC C0023704
DRIVE CONTROL C0023784
DSP32C Board C0023874
CSC 1924EXT DRIVE,DISK,SCSI C0023984
Marconi Signal Generator C0024035
Rugged Computers C0024109
Rugged Computers C0024110
IBM SEL III TYPEWRITER C0006472
APPLE PRO 630 Laserwriter Pro 630 C0022148
HP FAX 950 FAX-EXPENSED C0023902
HP 451MX LASERJET PRINTER C0024045
HP 8591E ANAL,SPECT,PORTABLE C0023831
SUN X822A STORAGE PACK,5GB C0023954
SUN X569A DRIVE,DISK 4.2GB C0023955
SUN X569A DRIVE,DISK 4.2GB C0023956
SUN X569A DRIVE,DISK 4.2GB C0023957
Xyplex Server C0023998
PhonePrint Inc.
Fixed Assets
MAKE MODEL DESCRIPTION ASSET #
Xyplex Server C0024127
Xyplex Server C0024128
XXX ENG XB024-10 PLATFORM LIFTER C0023120
XXX ENG XB024-10 PLATFORM LIFTER C0023121
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023160
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023161
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023162
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023163
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023164
WORK BENCHES C0023539
WIRE SHELF CARTS C0023540
Floor Scale C0024036
Instapak Model 750 Packaging C0024129
Stockroom Security Enclosure C0022850
HP HP3100 C0023841
EXHIBIT I
---------
Non-Competition Agreement
-------------------------
I-1
NON-COMPETITION AGREEMENT
-------------------------
THIS NON-COMPETITION AGREEMENT ("Agreement") is entered into as of December
14, 1994 ("Effective Date"), by and among PHONEPRINT, INC., a Delaware
corporation ("Buyer"), ESL INCORPORATED, a California corporation and a TRW
Company ("Seller") and TRW INC., an Ohio corporation, with reference to the
following facts:
A. Buyer is purchasing certain of the assets of Seller (the "Assets"),
pursuant to that certain Asset Purchase Agreement dated as of the Effective Date
(the "Purchase Agreement"). Seller has previously established a business unit
known as "PhonePrint" (the "Business Unit") that has been engaged in the
research, development and sale of products ("PhonePrint Products") used for
fraud mitigation in the wireless communications field.
B. Seller intends to license certain of its technology relating to the
PhonePrint Products to Buyer pursuant to that certain License and Technical
Assistance Agreement ("License Agreement").
C. Buyer intends to maintain and operate a business based, in substantial
part, on the Assets.
D. The execution of this Agreement by the Seller is a material inducement
for Buyer's execution of the Purchase Agreement.
E. The parties hereto desire to provide for the protection of the value
of the Assets being acquired by Buyer pursuant to the Purchase Agreement, and to
provide protection to the business and confidential information of Buyer.
E. TRW is the parent company of Seller, and is interested in and benefits
from the transactions described in the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
terms, covenants and conditions contained in the Purchase Agreement and this
Agreement, the parties hereby agree as follows:
1. NON-COMPETITION. During the term of the Agreement, without the prior
---------------
written consent of Buyer, neither Seller nor any Business Successor (as that
term is defined in Section 3 of this Agreement), shall, directly or indirectly,
(a) use the Trade Secrets as defined in the License Agreement except as provided
therein or (b) except to the extent that the License Agreement specifically
permits the use of Trade Secrets by Seller, engage in any business involving the
sale of products designed primarily for fraud mitigation in the Wireless
Communications Field (as that term is defined in the License Agreement), in any
county of the State of California, in the remainder of the United States or in
the world.
2. PERMITTED ACTIONS. The provisions of Section 1 apply to Seller and
-----------------
the Business Successors only, and subject to the terms of Section 1, shall not
be deemed to restrict Seller from (a) continuing in those lines of businesses
that do not involve a violation of this Agreement; (b) continuing the research,
development, manufacture, and sale of wireless communications systems and
subsystems sold by Seller; or (c) continuing new technology developments in the
wireless communications area.
3. BUSINESS SUCCESSOR. For purposes of Section 1 of this Agreement,
------------------
"Business Successor" is defined as the Tactical and National Lines of Business
of TRW's Avionics and Surveillance Group and any successor unit or subunit
(whether or not separately incorporated), of TRW conducting some or all of those
businesses currently carried on by Seller. Under no circumstances are the
covenants contained in Section 1 of this Agreement binding on any part of TRW
other than Seller or Business Successor to Seller.
4. TERM. This Agreement shall extend for a period of four (4) years
----
after the Effective Date, or until such earlier time as Buyer (or its successors
or assigns) ceases to conduct a business involving the research, development or
sale of products designed primarily for fraud mitigation in the wireless
communications field.
5. REMEDIES. Seller and TRW acknowledge and agree that their compliance
--------
with the covenants contained in Section 1 hereof are reasonable and necessary to
protect the goodwill and value of the Assets and other proprietary interests of
the Seller being acquired by Buyer pursuant to the Purchase Agreement and of the
Buyer. Seller and TRW further acknowledge and agree that a breach of the
covenants in Section 1 hereof will result in immediate, irreparable and
continuing damage to Buyer for which there will be no adequate remedy at law;
and agrees that in the event of any such breach or violation or any threatened
or intended breach or violation of the aforesaid covenants, the Buyer and its
respective successors and assigns shall be entitled to temporary, preliminary
and permanent injunctive relief and/or restraining orders enjoining and
restraining such breach or violation or such threatened or intended breach or
violation and/or other equitable relief (without needing to post any bond or
other security) in addition to such other and further relief as may be proper.
Seller and TRW hereby represent (i) that they have thoroughly reviewed the terms
of this Agreement, including the geographic areas and time periods stated
herein, (ii) that their experience and/or abilities are such that observance of
this Agreement will not cause them undue hardship or unreasonably interfere with
their ability to conduct business, and (iii) that they have reviewed the
limitations imposed by this Agreement with independent counsel.
6. SEVERABILITY. In the event any portion of this Agreement shall for
------------
any reason be held to be illegal or unenforceable to any extent, such portion
shall be deemed to read in such a way so as to render it legal and enforceable
to the maximum extent
-2-
possible in every respect, so as to effectuate the parties' expressed intent to
the maximum extent possible, and the remaining portions of this Agreement shall
remain in full force and effect. Without limitation, the parties agree and
intend that the covenants and agreements contained in this Agreement shall be
deemed to be a series of separate covenants and agreements, one for each and
every political subdivision of the Covered Area. If, in any judicial
proceeding, a court shall refuse to enforce in such action separate covenants
and agreements deemed included herein then, at the option of Buyer, wholly
unenforceable covenants and agreements shall be deemed eliminated from the
provisions hereof for the purpose of such proceeding to the extent necessary to
permit the remaining separate covenants and agreements to be enforced in such
proceeding. This Agreement is separate and severable from the Purchase
Agreement and the various agreements executed pursuant thereto. The Purchase
Agreement and the various agreements executed pursuant thereto shall remain in
full force and effect notwithstanding any holding that this Agreement is illegal
or unenforceable to any extent.
7. NOTICES. All payments, notices, requests, demands and other
-------
communications required or permitted hereunder shall be in writing and shall be
delivered personally (which shall include delivery by courier or overnight
delivery service) or sent by certified or registered mail, postage prepaid,
certified or return receipt requested or sent by telecopier or other similar
facsimile transmission to the parties at their respective address set forth
below or at such other address as shall be given in writing by a party to the
other parties. Items delivered personally or by telecopier or facsimile shall
be deemed delivered on the date of actual delivery; items sent by certified or
registered mail shall be deemed delivered three (3) days after mailing.
Seller: ESL Incorporated
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: TRW Legal Department
TRW: TRW Inc.
Xxx Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: TRW Legal Department
Buyer: PhonePrint, Inc.
000 X. Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
-3
8. AMENDMENTS AND WAIVERS. This Agreement may be modified, amended or
----------------------
supplemented only by a written instrument duly executed by all parties hereto.
No covenant, term or condition or the breach thereof shall be deemed waived,
unless it is waived in writing and signed by the party against whom the waiver
is claimed. Any waiver of breach of any covenant, term or condition shall not
be deemed to be a waiver of any preceding or succeeding breach of the same or
any other covenant, term or condition. The failure of any party to insist upon
strict performance of any covenant, term or condition hereunder shall not
constitute a waiver of such party's right to demand strict compliance therewith
in the future.
9. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by a party
----------------------
without the prior written consent of the parties hereto; provided, however, the
Buyer may assign its rights and delegate its obligations under this Agreement to
a purchaser of all or substantially all of the business, stock or assets of the
Buyer in whatever form or to any of Buyer's Affiliates without the consent of
the Seller. Except as otherwise provided herein, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
10. GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be
-------------------------------------
governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law.
11. ATTORNEYS' FEES. In the event that any legal action becomes necessary
---------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled, in addition to its court costs, to such reasonable attorneys' fees,
expert witness fees and legal expenses as may be fixed by a court of competent
jurisdiction.
12. COUNTERPARTS. This Agreement may be executed in multiple copies, each
------------
of which shall be deemed an original and all of which shall constitute a single
agreement binding on all parties.
13. ENTIRE AGREEMENT. This Agreement (together with documents and
----------------
agreements entered into herewith) constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements have been made by any party, or any one acting on behalf of any
party, that are not embodied in this Agreement with respect to the subject
matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day of the year first above written.
"BUYER" "SELLER"
PHONEPRINT, INC., ESL INCORPORATED,
a Delaware corporation a California corporation
BY: ________________________ BY: ________________________
TITLE: ______________________ TITLE:_______________________
"TRW"
TRW INC.,
an Ohio corporation
BY: _________________________
TITLE: ______________________
[SIGNATURE PAGE TO NON-COMPETITION AGREEMENT]
EXHIBIT J
---------
Pledge Agreement
----------------
J-1
PLEDGE AGREEMENT
----------------
THIS PLEDGE AGREEMENT (this "Agreement"), dated as of December 14,
1994, is made between PhonePrint, Inc., a Delaware corporation ("Pledgor"), and
ESL Incorporated, a California corporation ("Secured Party").
Pledgor and Secured Party hereby agree as follows:
SECTION 1 Definitions; Interpretation.
---------------------------
(a) All capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings assigned to them in the Note.
(b) As used in this Agreement, the following terms shall have the
following meanings:
"Event of Default" has the meaning set forth in Section 6.
----------------
"Lien" means any mortgage, deed of trust, pledge, security interest,
----
assignment, deposit arrangement, charge or encumbrance, lien, or other type of
preferential arrangement.
"Note" means that certain Promissory Note of even date herewith made
----
by Pledgor in favor of Secured Party, as amended, modified, renewed, extended or
replaced from time to time.
"Pledged Collateral" has the meaning set forth in Section 2(a).
------------------
"Pledged Notes" means the Promissory Notes described in Schedule 1.
------------- ----------
"Obligations" means the indebtedness, liabilities and other
-----------
obligations of Pledgor to Secured Party under or in connection with this
Agreement and the Note, including, without limitation, all unpaid principal of
the Note, all interest accrued thereon and all other amounts payable by Pledgor
to Secured Party thereunder or in connection therewith, whether now existing or
hereafter arising, and whether due or to become due, absolute or contingent,
liquidated or unliquidated, determined or undetermined.
"Person" means an individual, corporation, partnership, joint venture,
------
trust, unincorporated organization, governmental agency or authority, or any
other entity of whatever nature.
"UCC" means the Uniform Commercial Code as the same may, from time to
---
time, be in effect in the State of California; provided, however, in the event
-------- -------
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the security interest in any Pledged Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of California, the term "UCC" shall mean
1.
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
(c) Where applicable and except as otherwise defined herein, terms
used in this Agreement shall have the meanings assigned to them in the UCC.
(d) In this Agreement, (i) the meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms defined;
and (ii) the captions and headings are for convenience of reference only and
shall not affect the construction of this Agreement.
SECTION 2 Security Interest.
-----------------
(a) As security for the payment and performance of the Obligations,
Pledgor hereby pledges, assigns, transfers, hypothecates and sets over to
Secured Party, and hereby grants to Secured Party a security interest in, all of
Pledgor's right, title and interest in, to and under (i) the Pledged Notes, (ii)
all rights, interests and claims with respect to the Pledged Notes, (iii) any
securities, property, interest and other payments and distributions issued as an
addition to, in redemption of, in renewal or exchange for, in substitution or
upon conversion of, or otherwise on account of, the Pledged Notes, and (iv) all
cash and non-cash proceeds of the Pledged Notes and any of the foregoing, in
each case from time to time received or receivable by, or otherwise paid or
distributed to, the Pledgor, and whether presently existing or owned or
hereafter arising or acquired and wherever located (collectively, the "Pledged
Collateral").
(b) Pledgor hereby agrees to deliver to or for the account of Secured
Party, at the address and to the Person or Persons to be designated by Secured
Party, the Pledged Notes, which shall be accompanied by duly executed
assignments in blank, in form and substance satisfactory to Secured Party.
(c) If Pledgor shall become entitled to receive or shall receive any
securities or other instruments or obligations as an addition to, in redemption
of, in renewal or exchange for, in substitution or upon conversion of, or
otherwise on account of, the Pledged Notes, Pledgor shall accept the foregoing
as Secured Party's agent, shall hold the foregoing in trust for Secured Party,
shall segregate the foregoing from other property or funds of Pledgor, and shall
deliver the foregoing forthwith to or for the account of Secured Party, at the
address and to the Person to be designated by Secured Party, accompanied by a
duly executed assignment in blank, in form and substance satisfactory to Secured
Party. Upon accepting any of the foregoing, Secured Party shall promptly send a
notification to Pledgor with a description thereof, which notification shall be
deemed to be a Schedule to this Agreement and may be attached hereto.
(d) Pledgor shall execute and deliver to Secured Party concurrently
with the execution of this Agreement, and at any time and from time to time
thereafter, all financing statements, assignments, continuation financing
statements, termination statements, indorsements, and other documents and
instruments, in form reasonably satisfactory to
2.
Secured Party, and take all other action, as Secured Party may reasonably
request, to effect a transfer of a perfected first priority security interest in
and pledge of the Pledged Collateral to Secured Party pursuant to the UCC and to
continue perfected, maintain the priority of or provide notice of the security
interest of Secured Party in the Pledged Collat eral and to accomplish the
purposes of this Agreement.
(e) Pledgor agrees that this Agreement shall create a continuing
security interest in and pledge of the Pledged Collateral which shall remain in
effect until terminated in accordance with Section 16.
(f) Pledgor hereby consents to any assignment of the Pledged
Collateral and the security interests related thereto to TRW Inc. or any direct
or indirect wholly-owned subsidiary of TRW Inc. After any such assignment such
assignee shall be the Secured Party hereunder and shall possess all the rights
of Secured Party hereunder.
SECTION 3 Representations and Warranties. Pledgor represents and
------------------------------
warrants to Secured Party that:
(a) Pledgor is a corporation duly organized, validly existing and in
good standing under the law of the jurisdiction of its incorporation and has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) The execution, delivery and performance by Pledgor of this
Agreement have been duly authorized by all necessary corporate action of
Pledgor, and this Agreement constitutes the legal, valid and binding obligation
of Pledgor, enforceable against Pledgor in accordance with its terms.
(c) No authorization, consent, approval, license, exemption of, or
filing or registration with, any governmental authority or agency, or approval
or consent of any other Person, is required for the due execution, delivery or
performance by Pledgor of this Agreement.
(d) Pledgor is the legal and beneficial owner of the Pledged Notes
subject to no Lien except for the pledge and security interest created by this
Agreement.
(e) Pledgor's chief executive office and principal place of business
are located at its address set forth on the signature pages hereof.
SECTION 4 Covenants. So long as any of the Obligations remain
---------
unsatisfied, Pledgor agrees that:
(a) Pledgor will, at its own expense, appear in and defend any action,
suit or proceeding which purports to affect its title to, or right or interest
in, the Pledged Collat eral or the security interest of Secured Party therein
and the pledge to Secured Party thereof.
3.
(b) Pledgor will not surrender or lose possession of (other than to
Secured Party), exchange, sell, convey, transfer, assign or otherwise dispose of
or transfer the Pledged Collateral or any right, title or interest therein.
(c) Pledgor will not create, incur or permit to exist any Liens upon
or with respect to the Pledged Collateral, other than the security interest of
and pledge to Secured Party created by this Agreement.
(d) Pledgor shall maintain and preserve its corporate existence, its
rights to transact business and all other rights, franchises and privileges
necessary or desirable in the normal course of its business and operations and
the ownership of the Pledged Collateral.
SECTION 5 Payments on the Pledged Collateral.
----------------------------------
(a) Unless an Event of Default shall have occurred, Pledgor shall be
entitled to receive and retain for its own account any interest and other
payments in respect of the Pledged Collateral; provided that Secured Party shall
--------
receive, and Pledgor shall not be entitled to receive, any cash paid, payable or
otherwise distributed, and any other property, instruments, securities or
obligations, in redemption of, or in exchange for or in substitution of, any
Pledged Collateral. Upon and after the occurrence and during the continuance of
any Event of Default, Secured Party shall be entitled to receive all distri
butions and payments of any nature with respect to the Pledged Collateral, to be
held by Secured Party as part of the Pledged Collateral.
(b) Distributions and other payments and property which are received
by Pledgor but which it is not entitled to retain as a result of the operation
of subsection (a) shall be held in trust for the benefit of Secured Party, be
segregated from the other property or funds of Pledgor, and be forthwith paid
over or delivered to Secured Party in the same form as so received.
SECTION 6 Events of Default. Any of the following events which shall
-----------------
occur and be continuing shall constitute an "Event of Default":
(a) Pledgor shall fail to pay when due any amount payable hereunder or
under the Note and such failure shall continue for 5 days.
(b) Any representation or warranty by Pledgor under or in connection
with this Agreement or the Note shall prove to have been incorrect in any
material respect when made or deemed made.
(c) Pledgor shall fail to perform or observe in any material respect
any other term, covenant or agreement contained in this Agreement or the Note on
its part to be performed or observed and any such failure shall remain
unremedied for a period of 15 days from the occurrence thereof; or any "Event of
Default" as defined in the Note shall have occurred.
4.
(d) Any impairment in the priority of Secured Party's Lien hereunder.
(e) Any levy upon, seizure or attachment of any of the Pledged
Collateral.
SECTION 7 Remedies.
--------
(a) Upon the occurrence and during the continuance of any Event of
Default, Secured Party may declare any of the Obligations to be immediately due
and payable and shall have, in addition to all other rights and remedies granted
to it in this Agreement or the Note, all rights and remedies of a secured party
under the UCC and other applicable laws. Without limiting the generality of the
foregoing, Pledgor agrees that any item of the Pledged Collateral may be sold
for cash or on credit or for future delivery without assumption of any credit
risk, in any number of lots at the same or different times, at any exchange,
brokers' board or elsewhere, by public or private sale, and at such times and on
such terms, as Secured Party shall determine; provided, however, that Pledgor
-------- -------
shall be credited with the net proceeds of sale only when such proceeds are
finally collected by Secured Party in cash. Pledgor hereby agrees that the
sending of notice by ordinary mail, postage prepaid, to the address of Pledgor
set forth herein, of the place and time of any public sale or of the time after
which any private sale or other intended disposition is to be made, shall be
deemed reasonable notice thereof if such notice is sent ten days prior to the
date of such sale or other disposition or the date on or after which such sale
or other disposition may occur, provided that Secured Party may provide Pledgor
--------
shorter notice or no notice, to the extent permitted by the UCC or other
applicable law. The Pledgor and the Secured Party agree that such notice
constitutes "reasonable notification" within the meaning of Section 9504(3) of
the UCC. Pledgor recognizes that Secured Party may be unable to make a public
sale of any or all of the Pledged Collateral, by reason of prohibitions
contained in applicable securities laws or otherwise, and expressly agrees that
a private sale to a restricted group of purchasers for investment and not with a
view to any distribution thereof shall be considered a commercially reasonable
sale. Secured Party shall have the right upon any such public sale, and, to the
extent permitted by law, upon any such private sale, to purchase the whole or
any part of the Pledged Collateral so sold, free of any right or equity of
redemption, which right or equity of redemption Pledgor hereby releases to the
extent permitted by law.
(b) For the purpose of enabling Secured Party to exercise its rights
under this Section 7 or otherwise in connection with this Agreement, Pledgor
hereby constitutes and appoints Secured Party its true and lawful attorney, with
full power of substitution, in the name of the Pledgor, the Secured Party or
otherwise, for the sole use and benefit of the Secured Party, but at the expense
of the Pledgor, to the extent permitted by law to exercise, at any time and from
time to time while an Event of Default has occurred and is continuing, all or
any of the following powers with respect to all or any of the Pledged
Collateral: (i) to demand, xxx for, collect, receive and give acquittance for
any and all monies due or to become due upon or by virtue thereof, (ii) to
settle, compromise, compound, prosecute or defend any action or proceeding with
respect thereto, (iii) to sell, transfer, assign or otherwise deal in or with
the same or the proceeds or avails thereof, as fully and effectually as if the
Secured Party were the absolute owner thereof, and (iv) to extend the time of
5.
payment of any or all thereof and to make any allowance and other adjustments
with reference thereto.
(c) The cash proceeds actually received from the sale or other
disposition or collection of Pledged Collateral, and any other amounts received
in respect of the Pledged Collateral the application of which is not otherwise
provided for herein, shall be applied first, to the payment of the reasonable
-----
costs and expenses of Secured Party in exercising or enforcing its rights
hereunder and in collecting or attempting to collect any of the Pledged
Collateral, and to the payment of all other amounts payable to Secured Party
pursuant to Section 10; and second, to the payment of the Obligations. Any
------
surplus thereof which exists after payment and performance in full of the
Obligations shall be promptly paid over to Pledgor or otherwise disposed of in
accordance with the UCC or other applicable law. Pledgor shall remain liable to
Secured Party for any deficiency which exists after any sale or other
disposition or collection of Pledged Collateral.
SECTION 8 Notices. All notices or other communications hereunder
-------
shall be in writing (including by facsimile transmission) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses
or facsimile numbers set forth below their names on the signature pages hereof,
or at or to such other address or facsimile number as shall be designated by any
party in a written notice to the other parties hereto. All such notices and
other communications shall be effective (i) if delivered by hand, when
delivered; (ii) if sent by mail, upon the earlier of the date of receipt or five
business days after deposit in the mail, first class; and (iii) if sent by
facsimile transmission, when sent.
SECTION 9 No Waiver; Cumulative Remedies. No failure on the part of
------------------------------
Secured Party to exercise, and no delay in exercising, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to Secured Party.
SECTION 10 Costs and Expenses. Pledgor agrees to pay on demand all
------------------
costs and expenses of Secured Party, including reasonable attorneys' fees, in
connection with the enforcement of this agreement, and the sale or collection
of, or other realization upon, any of the Pledged Collateral.
SECTION 11 Binding Effect. Subject to the restrictions on assignment
--------------
contained in the Note, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by Pledgor, Secured Party and their respective
successors and assigns.
SECTION 12 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of California, except as
required by mandatory provisions of law and to the extent the validity or
perfection of the security interests hereunder, or the remedies hereunder, in
respect of any Pledged Collateral are governed by the law of a jurisdiction
other than California.
6.
SECTION 13 Entire Agreement; Amendment. This Agreement contains the
---------------------------
entire agreement of the parties with respect to the subject matter hereof and
shall not be amended except by the written agreement of the parties.
SECTION 14 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction.
SECTION 15 Counterparts. This Agreement may be executed in any
------------
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement.
SECTION 16 Termination. Upon payment and performance in full of all
-----------
Obligations, this Agreement shall terminate and Secured Party shall promptly
redeliver to Pledgor any of the Pledged Collateral in Secured Party's possession
and shall execute and deliver to Pledgor such documents and instruments
reasonably requested by Pledgor as shall be necessary to evidence termination of
all security interests given by Pledgor to Secured Party hereunder; provided,
--------
however, that the obligations of Pledgor under Section 10 shall survive such
-------
termination.
SECTION 17 Conflicts. In the event of any conflict or inconsistency
---------
between this Agreement and the Note, the terms of this Agreement shall control.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
7.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
as of the date first above written.
PHONEPRINT, INC.
By ______________________________
Title:
000 X. Xxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
ESL INCORPORATED
By ______________________________
Title:
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: TRW Legal Department
8.
SCHEDULE 1
to the Pledge Agreement
Pledged Notes
Promissory Date of
Name and Address Note Issuance
----------------------------- ---------- ----------
Xxxxxxx Xxxxxxx Xxxxxxxx & $885,224 12/10/94
Xxxxx VII
0000 Xxxx Xxxx Xxxx
Xxxxx, XX 00000
KPCB VII Founders Fund $ 98,358 12/10/94
0000 Xxxx Xxxx Xxxx
Xxxxx, XX 00000
Xxxxx-Xxxxx IV $983,582 12/10/94
Two Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, XX 00000
Norwest Equity Partners IV $786,940 12/10/94
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Needham Capital SBIC, L.P. $122,948 12/10/94
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Needham Emerging Growth $122,948 12/10/94
Partners
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
S-1.
EXHIBIT K
---------
Cooperation Agreement
---------------------
K-1
COOPERATION AGREEMENT
This COOPERATION AGREEMENT is made and entered into as of this 14th day of
December, 1994 by and among PhonePrint Inc., a corporation organized and
existing under the laws of the Delaware ("PhonePrint"), TRW Inc., an Ohio
corporation, by and through its Avionics and Surveillance Group ("TRW"), and ESL
Incorporated, a California corporation and a wholly-owned subsidiary of TRW Inc.
("ESL"). (The forgoing parties are hereinafter sometimes collectively referred
to as the "Parties" and individually referred to as a "Party".)
PRELIMINARY STATEMENT:
A. The Parties are parties to that certain Asset Purchase Agreement
("Purchase Agreement") and License and Technical Assistance Agreement ("License
Agreement") of even date herewith, pursuant to which TRW and ESL sold and
licensed certain assets and technology to PhonePrint.
B. The parties desire to create a technical advisory council to
facilitate on-going communication and education between them concerning certain
technology.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the Parties herein contained, it is hereby agreed as follows:
ARTICLE 1
COOPERATION
-----------
In connection with the obligations of TRW and ESL, the TRW Representatives
(as defined below), TRW and ESL agree to use their respective commercially
reasonable efforts to assist PhonePrint, as needed, if and to the extent
necessary to receive, subject to appropriate Government approval, either: (1)
U.S. Government classified information; or (2) any otherwise restricted
information the receipt, disclosure, use or invention of which causes a
violation under any provision of the United Sates Code.
ARTICLE 2
TECHNICAL ADVISORY COUNCIL
--------------------------
2.1 ESTABLISHMENT. Upon the execution of this Agreement, a "Technical
Advisory Council," or the "Council," shall be formed and remain in existence for
the duration of this Agreement. The Council shall be composed of six (6)
members, in accordance with the following structure:
(a) Three (3) representatives of TRW, who shall initially be Xxx
Xxxxx, Xxxx Xxxxxxx and Xxx Xxxxxx (the "TRW Representatives").
(b) Three (3) representatives of PhonePrint (the "PhonePrint
Representatives") appropriately representing senior technical staff of
PhonePrint.
In the event that any TRW Representative ceases to be an employee of or a
consultant to TRW or any of its affiliated or sister companies, then TRW shall
appoint a successor of reasonably equivalent stature, experience, knowledge and
capability. PhonePrint shall be entitled to remove and replace its own members
when and as it deems appropriate.
2.2 MEMBERSHIP. The Chair of the Technical Advisory Council shall be
alternated between the Parties on a quarterly basis. The first chairman shall
be a TRW Representative. Meetings of the Technical Advisory Council shall be
held at least quarterly, or more frequently by mutual agreement of TRW and
PhonePrint. The time and location of each meeting shall be reasonably
determined by the Chair.
2.4 RESPONSIBILITIES OF TECHNICAL ADVISORY COUNCIL. In connection with
their membership on the Council, TRW and PhonePrint shall have the following
specific responsibilities, obligations and objectives pursuant to this
Agreement:
(a) Openly exchange information, ideas and insights regarding "Existing
Technologies," "TRW Improvements," "TRW Inventions" and "PhonePrint
Improvements," each as defined in Section 2.7 hereof, which
information shall be exchanged in the form reasonably requested by the
requesting party;
(b) Discuss openly, candidly and thoroughly questions and issues regarding
the background, development or application of the Existing
Technologies and TRW Improvements, TRW Inventions and PhonePrint
Improvements; and
(c) Assist the other Party in problem solving related to Existing
Technologies, TRW Improvements, and PhonePrint Improvements.
2
2.5 RESPONSIBILITIES OF TRW REPRESENTATIVES. TRW shall cause each TRW
Representative to:
(a) Personally attend all meetings of the Council and;
(b) Outside of meetings of the Council, be available to PhonePrint in
person or by phone, as elected by PhonePrint, for the exchange of
information and discussion of issues described in subsection 2.4(a),
(b) and (c) hereof, for up to (i) 16 hours per quarter per person
during the first eighteen (18) months of this Agreement; and (ii)
eight (8) hours per quarter per person for the final forty-two (42)
months of this Agreement; provided, however, that actual meeting time
of the Technical Advisory Council shall be credited towards the
requirements of this subsection Section 2.5(b). Unused hours in any
quarter are credited to future quarters, provided, however, any unused
hours at the end of this Agreement are forfeited.
TRW agrees to be responsible for securing the full cooperation of the TRW
Representatives in fulfilling their responsibilities hereunder. TRW further
agrees that PhonePrint shall have no obligation to compensate TRW or the TRW
Representatives for the discharge of the TRW Representatives' responsibilities
and obligations pursuant to Sections 2.4 and 2.5 hereof.
2.6 RESPONSIBILITIES OF PHONEPRINT REPRESENTATIVES. PhonePrint shall
cause each PhonePrint Representative to personally attend all meetings of the
Technical Advisory Council. PhonePrint agrees to be responsible for securing
the full cooperation of the PhonePrint Representatives in fulfilling their
responsibilities hereunder. PhonePrint further agrees that TRW shall have no
obligation to compensate PhonePrint or the PhonePrint Representatives for the
discharge of the PhonePrint Representatives' responsibilities and obligations
pursuant to Sections 2.4 and 2.6 hereof.
2.7 DEFINITIONS. For the purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Existing Technology" shall mean the Trade Secrets, Copyrights,
Licensed Products and Licensed Services licensed to PhonePrint
pursuant to the License Agreement, as well as the patents and patent
applications assigned to PhonePrint pursuant to that certain Patent
Application Assignment of even date herewith.
(b) "TRW Improvements" shall mean the "Business Successor Improvements,"
as defined in the License Agreement.
(c) "TRW Inventions" shall mean the "New Inventions," as defined in the
License Agreement.
3
(d) "PhonePrint Improvements," shall mean the "Licensee Improvements," as
defined in the License Agreement.
ARTICLE 3
EXPENSES
--------
Each Party shall bear the expenses incurred by it with respect to this
Agreement, including without limitation, travel to and from meetings of the
Technical Advisory Council.
ARTICLE 4
TERM AND TERMINATION
--------------------
This Agreement shall become effective upon execution by the Parties as of
the day and year first stated above (the "Effective Date") and shall terminate
five (5) years after the Effective Date, unless sooner terminated in a writing
signed by all of the Parties hereto.
ARTICLE 5
DISCLOSURE AND PROTECTION OF INFORMATION
----------------------------------------
5.1 PROPRIETARY INFORMATION. For the purpose of this Agreement.
(a) "Proprietary Information" shall mean all drawings, documents,
ideas, computer software, know-how and other information supplied
by one Party to another (whether disclosed written or verbally by
demonstration or otherwise) for the purposes of achieving the
objectives of this Agreement. Notwithstanding the foregoing,
"Proprietary Information" shall not include any of the foregoing
items that are licensed to either Party pursuant to the License
Agreement or sold or assigned to PhonePrint pursuant to the
Purchase Agreement.
(b) "Proper Use" shall mean any use of the Proprietary Information
solely by the recipient for the objectives of this Agreement.
5.2 NONDISCLOSURE. All Proprietary Information furnished shall remain the
property of the disclosing party and shall be treated by the recipient in strict
confidence, shall not be used except for Proper Use, shall be disclosed by the
recipient only to persons within the recipient's company (including companies
directly or indirectly more than fifty percent (50%) owned or controlled by the
recipient) that are directly concerned with the Proper Use, and shall not be
disclosed to consultants or by the recipient to any
4
other party without the disclosing party's prior written consent, except for
Proprietary Information that was:
(a) In the public domain at the time it was disclosed; or
(b) Known to the recipient without restriction at the time of receipt
as evidenced by written records; or
(c) Published or becomes available to others without restriction
through no act or failure to act on the part of the recipient; or
(d) Known to the recipient from a source other than the disclosing
party without breach of this Agreement by the recipient; or
(e) Subsequently designated by the disclosing party in writing as no
longer proprietary; or
(f) Independently developed by the recipient; or
(g) Disclosed after four (4) years from the date of delivery by the
disclosing party to the recipient, which four (4) year period
shall survive the termination of this Agreement.
If any portion of Proprietary Information falls within any one of these
exceptions, the remainder shall continue to be subject to the foregoing
prohibitions and restrictions. The recipient of Proprietary Information shall
inform its employees of the confidential nature of the Proprietary Information
and shall prohibit them from making copies of any of it except where such copies
are necessary for the purposes of Proper Use, unless agreed upon by the
disclosing party.
5.3 MARKING. Proprietary Information made available in written form by
one Party to another Party shall be marked with the legend:
"PHONEPRINT PROPRIETARY INFORMATION"
"TRW PROPRIETARY INFORMATION,"
as the case may be, or an equivalent conspicuous legend. A recipient of
Proprietary Information hereunder shall have no obligation with respect to any
portion of any written material which is not so labeled or any information
received orally unless it is identified as proprietary and a written summary of
such oral communication, specifically identifying the items of Proprietary
Information, is furnished to the recipient within thirty (30) days of such
disclosure.
5.4 COMPENSATION. Except as provided for by the License Agreement, the
Parties agree that: (a) the parties shall not be obligated to compensate each
other for the transfer of any Proprietary Information under this Agreement; (b)
no warranties of any
5
kind are given with respect to such Proprietary Information or any use thereof;
and (c) no license is hereby granted under any patent, trademark or copyrights
with respect to any Proprietary Information or other technical data at any time
owned by any other Party hereto.
5.5 SURVIVAL. Other provisions of this Agreement notwithstanding, the
obligations of the Parties concerning confidentiality set forth in this Article
5 shall survive termination or completion of this Agreement, subject to the
limits set forth in Section 5.2(g).
ARTICLE 6
MISCELLANEOUS
-------------
6.1 RELATIONSHIP. Nothing in this Agreement shall be deemed to
constitute, create, give effect to or otherwise recognize a joint venture,
partnership, or formal business entity or any kind, and the rights and
obligations of the Parties hereto shall be limited to those expressly set forth
herein.
6.2 GOVERNING LAW; JURISDICTION AND VENUE; SEVERABILITY. This Agreement
shall be governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law. If any term,
covenant or condition of this Agreement is held to be to any extent invalid,
void, or otherwise unenforceable by any court or arbitrator, the remainder of
this Agreement shall not be affected thereby and each term, covenant and
condition of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
6.3 ENTIRE AGREEMENT; MODIFICATION AND WAIVER. This Agreement, together
with the agreements and documents referred to herein, constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements and understandings. This
Agreement may be modified, amended or supplemented only by a written instrument
duly executed by all parties hereto. No covenant, term or condition or the
breach thereof shall be deemed waived, unless it is waived in writing and signed
by the party against whom the waiver is claimed. Any waiver of breach of any
covenant, term or condition shall not be deemed to be a waiver of any preceding
or succeeding breach of the same or any other covenant, term or condition. The
failure of any party to insist upon strict performance of any covenant, term or
condition hereunder shall not constitute a waiver of such party's right to
demand strict compliance therewith in the future. Time is of the essence for
purposes of each and every provision of this agreement.
6.4 NOTICES. All payments, notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
delivered personally (which shall include delivery by courier or overnight
delivery service) or sent by certified or registered mail postage prepaid,
certified or return receipt requested, or sent by telecopier or similar
facsimile transmission, to the parties at their respective address set forth
below or at such other address as shall be given in writing by a party
6
to the other party. Items delivered personally or by telecopier or facsimile
shall be deemed delivered on the date of actual delivery; items sent by
certified or regular mail shall be deemed delivered three (3) days after
mailing.
If to ESL: ESL Incorporated
000 Xxxx Xx.
Xxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxx
If to TRW: TRW Inc.
000 Xxxx Xx.
Xxxxxxxxx, XX 00000-0000
Attn: Xxx Xxxxxxx or TRW Law Department
If to PhonePrint PhonePrint, Inc.
000 X. Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
6.5 ASSIGNMENTS. TRW and ESL will have no right to assign or transfer any
of their respective rights or to delegate any of their duties under this
Agreement without the prior written consent of Licensee, except for assignment
or transfer to TRW or a subsidiary or affiliate of TRW or in connection with the
sale or transfer of all of the assets of the Successor Business. Licensee can
assign or sublicense any of its rights or licenses under this Agreement at its
sole option.
6.6 PUBLICITY. No Party shall make any announcement or communicate any
information to any third party concerning the purpose of this Agreement without
the prior written approval of the other Party.
6.7 PAYMENT OF FEES AND EXPENSES. Each party to this Agreement shall be
responsible for, and shall pay, all of its own legal, accounting and other
transactional fees and expenses incurred in the negotiation and preparation of
this Agreement and the other agreements and documents referred to herein and the
transactions contemplated herein and therein.
6.8 DRAFTING PARTY. The provisions of this Agreement, and the documents
and instruments referred to herein, have been examined, negotiated, drafted and
revised by counsel for each party hereto and no implication shall be drawn nor
made against any party hereto by virtue of the drafting of this Agreement.
6.9 ATTORNEYS FEES. If any action at law or equity is necessary to
enforce or interpret the terms of this Agreement or to protect the rights
obtained hereunder, the prevailing party shall be entitled to its reasonable
attorneys' fees, costs, and disbursements in addition to any other relief to
which it be entitled.
7
6.10 COUNTERPARTS. This Agreement may be executed in multiple copies, each
of which shall be deemed an original and all of which shall constitute a single
agreement binding on all parties.
8
IN WITNESS WHEREOF, the Parties' duly authorized representatives hereto
have executed this Cooperation Agreement as of the date first written above.
TRW INC. PHONEPRINT
_________________________ _________________________
Name Name
_________________________ _________________________
Print Name: Print Name:
Print Title: Print Title:
ESL INCORPORATED
_________________________
Name
_________________________
Print Name:
Print Title:
9
EXHIBIT L
---------
Buyer Note
----------
L-1
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO
DISTRIBUTION OR RESALE, AND THEREFORE THEY MAY NOT BE
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR ASSIGNED
UNLESS REGISTERED UNDER THE APPLICABLE PROVISIONS OF
THE SECURITIES ACT OF 1933, OR UNLESS PURSUANT TO
RULE 144 UNDER SUCH ACT OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION FROM LEGAL COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT
NON-NEGOTIABLE PROMISSORY NOTE
------------------------------
$3,000,000 December 14, 1994
Palo Alto, California
PhonePrint, Inc., a Delaware corporation ("Obligor"), for value received,
hereby promises to pay to the order of ESL Incorporated, a California
corporation ("Payee"), in lawful money of the United States at 000 Xxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000-0000 the principal sum of THREE MILLION DOLLARS
($3,000,000), on December 14, 1997.
Unpaid principal of this Note shall bear interest, from the date hereof
(the "Closing Date") until such principal is due and payable, at a rate per
annum equal at all times to 6.66% per annum, compounded annually. In the event
that any amount of principal or interest, or any other amount payable hereunder,
is not paid in full when due (whether at stated maturity, by acceleration or
otherwise), Obligor shall pay interest on such unpaid principal amount, from the
date such amount becomes due until the date such amount is paid in full, payable
on demand, at a rate per annum equal at all times to 7.66% per annum. All
computations of interest shall be made on the basis of a year of 365 or 366
days, as the case may be, for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest is
payable. All payments with respect to this Note shall be credited first to the
payment of accrued but unpaid interest and then to the repayment of principal.
Any payment shall be deemed made upon receipt by Payee.
Anything herein to the contrary notwithstanding, if during any period for
which interest is computed hereunder, the amount of interest computed on the
basis provided for in this Note, together with all fees, charges and other
payments which are treated as interest under applicable law, as provided for
herein or in any other document executed in connection herewith, would exceed
the amount of such interest computed on the basis of the Highest Lawful Rate,
Obligor shall not be obligated to pay, and Payee shall not be entitled to
charge, collect, receive, reserve or take, interest in excess of the Highest
Lawful Rate, and during any such period the interest payable hereunder shall be
computed on the basis of the Highest Lawful Rate. As used herein, "Highest
Lawful Rate" means the maximum non-usurious rate of interest, as in effect from
time to time, which may be charged, contracted
for, reserved, received or collected by Payee in connection with this Note under
applicable law.
Obligor may, at any time, prepay the outstanding amount hereof in whole or
in part, without premium or penalty. In addition, Obligor shall be required to
prepay, without premium or penalty, the principal amount of this Note at the
following times:
i. Promptly after the end of each fiscal quarter of Obligor,
commencing with calendar quarter ending March 31, 1996, Obligor shall determine
the Inventory Sales for such fiscal quarter (and, with respect to the first
payment, the fiscal quarter shall be defined as the period from the date of this
Note to March 31, 1996) and shall, not later than 30 days after the end of such
quarter, prepay to Payee a percentage of the original principal amount of this
Note equal to (a) Inventory Sales for such quarter divided by (b) 200; provided,
--------
however, that any such prepayment shall not be required if such amount is less
-------
than $50,000. As used herein, "Inventory Sales" means the number of units of
inventory sold or leased by Obligor to third parties. Notwithstanding any other
provision of this paragraph 1, Obligor shall not be required to pay to Payee
principal in excess of the original principal amount of this Note. If at any
time following the date of this Note but prior to December 15, 1995, Obligor has
received actual cash payments totaling $10,000,000 or more (not including credit
advanced by Obligor to third parties) with respect to Obligor's sale or lease to
third parties of inventory, then the March 31, 1996 date described above shall
automatically be changed to the last day of the calendar quarter during which
the total of such cash payments has exceeded $10,000,000.
ii. If on December 31, 1996, any portion of the principal of this
Note shall remain outstanding and such outstanding amount shall be less than
$1,000,000, Obligor shall prepay such outstanding principal amount in full.
Together with any prepayment under paragraphs 1 and 2 above, Obligor shall
pay all accrued interest to the date of such prepayment.
This Note may be not be modified, amended or terminated except by a writing
signed by Obligor and Payee.
The execution, delivery and performance by Obligor of this Note have been
duly authorized by all necessary corporate or partnership action of Obligor, no
consent or approval of any person or entity is required in connection herewith,
and this Note is the legal, valid and binding obligation of Obligor, enforceable
against Obligor in accordance with its terms.
So long as any amount hereof remains unpaid, Obligor shall use commercially
reasonable efforts to sell and lease its inventory and Obligor will not merge
with or into any entity or sell, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets, unless the entity that survives any merger or acquires such
assets assumes in writing the obligations of Obligor hereunder and under the
Pledge Agreement (defined below).
-2-
Any of the following events which shall occur shall constitute an "Event of
Default":
1. Obligor shall fail to pay when due any amount hereunder and such
failure shall continue for 5 business days.
2. Any representation or warranty by Obligor under or in connection
with this Note shall prove to have been incorrect in any material respect when
made or deemed made.
3. Obligor shall fail to perform or observe any term, covenant or
agreement contained in the immediately preceding paragraph above and such
failure shall continue for 15 business days.
4. Obligor shall admit in writing its inability to, or shall fail
generally or be generally unable to, pay its debts (including its payrolls) as
such debts become due, or shall make a general assignment for the benefit of
creditors; or Obligor shall file a voluntary petition in bankruptcy or a
petition or answer seeking reorganization, to effect a plan or other arrangement
with creditors or any other relief under the Bankruptcy Reform Act of 1978, as
amended or recodified from time to time (the "Bankruptcy Code") or under any
other state or federal law relating to bankruptcy or reorganization granting
relief to debtors, whether now or hereafter in effect, or shall file an answer
admitting the jurisdiction of the court and the material allegations of any
involuntary petition filed against Obligor pursuant to the Bankruptcy Code or
any such other state or federal law; or Obligor shall be adjudicated a
bankrupt, or shall make an assignment for the benefit of creditors, or shall
apply for or consent to the appointment of any custodian, receiver or trustee
for all or any substantial part of Obligor's property, or shall take any action
to authorize any of the actions or events set forth above in this paragraph; or
an involuntary petition seeking any of the relief specified in this paragraph
shall be filed against Obligor and shall not be dismissed within 30 days; or any
order for relief shall be entered against Obligor in any involuntary proceeding
under the Bankruptcy Code or any such other state or federal law referred to in
this paragraph 4.
5. Obligor shall liquidate, wind up or dissolve (or suffer any
liquidation, wind-up or dissolution), except in connection with a transaction
expressly permitted by this Note.
If any Event of Default shall occur and be continuing, Payee may (i), by
notice to Obligor, declare the entire unpaid principal amount of this Note, all
interest accrued and unpaid hereon and all other amounts payable hereunder to be
forthwith due and payable, whereupon all unpaid principal under this Note, all
such accrued interest and all such other amounts shall become and be forthwith
due and payable, without presentment, demand, pro test or further notice of any
kind, all of which are hereby expressly waived by Obligor; and (ii) whether or
not the actions referred to in clause (i) have been taken, exercise any or all
of Payee's rights and remedies under the Pledge Agreement and proceed to enforce
all other rights and remedies available to Payee under applicable law.
-3-
Upon payment in full of all principal and interest payable hereunder, this
Note shall be surrendered to Obligor for cancellation.
This Note shall be binding upon, inure to the benefit of and be enforceable
by Obligor, Payee and their respective successors and assigns; provided that
without the written consent of Obligor, this Note may not be transferred or
assigned by Payee to any party other than TRW, Inc. or any direct or indirect
wholly-owned subsidiary of TRW, Inc. (after which assignment or transfer, such
transferee or assignee shall be deemed the Payee under this Note and shall have
all of the rights and responsibilities of the Payee hereunder).
No delay on the part of Payee in exercising any right hereunder shall
operate as a waiver of such right under this Note.
This Note is being delivered in and shall be construed in accordance with
the laws of the State of California.
All notices and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including by facsimile) and mailed, sent
or delivered to the respective parties hereto at or to the following addresses
or facsimile numbers (or at or to such other address or facsimile number as
shall be designated by any party in a written notice to the other party hereto):
If to Payee: ESL Incorporated
000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxx
If to Obligor: Phoneprint, Inc.
000 X. Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
All such notices and communications shall be effective (i) if delivered by hand,
upon delivery; (ii) if sent by mail, upon the earlier of the date of receipt or
five business days after deposit in the mail, first class, postage prepaid; and
(iii) if sent by facsimile, when sent.
Obligor agrees to pay on demand all costs and expenses of Payee in
connection with the enforcement and collection of this Note, including
reasonable attorneys' fees.
This Note is secured by certain collateral described in that certain Pledge
Agreement of even date herewith between Obligor and Payee.
[Remainder of This Page Intentionally Left Blank]
-4-
IN WITNESS WHEREOF, Obligor has duly executed this Note, as of the date
first above written.
PHONEPRINT, INC.
By:__________________________________________
-5-
EXHIBIT M
---------
Disclosure Schedule
-------------------
M-1
EXHIBIT M
---------
DISCLOSURE SCHEDULE
The information set forth herein is, disclosed pursuant to Article 2 of the
Asset Purchase Agreement dated December 14, 1994 (the "Agreement") by and
--
between PhonePrint, Inc. ("PhonePrint"), ESL Incorporated ("Seller") and TRW
Inc. ("TRW").
Paragraph numbers contained herein correspond to section numbers in the
Agreement. Terms used in initial capital letters and not defined herein shall
have the same meaning asset forth in the Agreement.
PARAGRAPH 2.3
-------------
TITLE, CONDITION OF ASSETS
A. TITLE
-----
1. Cross reference to "Equipment Rentals and Leases" and "Software
Licenses," Schedules 1 and 2, respectively. To the extent that these rentals,
leases and licenses are transferable, Buyer will have a right and not title
thereto. Cross reference to Paragraph 2.9 for a list of documents that require
assignment.
2. Cross reference to Items A.1 (human capital) and A.3 (co-inventorship)
of Paragraph 2.7 and Items 1 (Xxxxxxx), 2 (other patents) and 4 (Other AirTouch
issues) to Paragraph 2.12. These issues may potentially affect title.
B. COMPLIANCE WITH LAWS. See Item A.2 above.
--------------------
C. CONDITION OF INVENTORY
----------------------
1. No Inspection/Acceptance Tests. Seller does not perform incoming
------------------------------
inspection and acceptance tests on its Raw Materials Inventory. Thus, the
condition of Raw Material Inventory is not known until Seller performs
PhonePrint product subsystem tests of which the Raw Materials Inventory is a
part. If problems arise, Inventory is isolated as "rejected" and submitted to
Seller's Material Review Board for consideration. See Item C.2 below.
2. Returned/Rejected Items. Certain items, components, or subassemblies
-----------------------
of the Raw Materials Inventory have been rejected during the manufacturing and
assembly process or constitute field returns. These items may be valued at a
range anywhere from full standard cost to scrap value. PhonePrint can return
defective material unless we have modified it or if it is obsolete and the
warranty period has not expired. As of the Closing, the warranty will not have
expired on any of the Raw Materials.
3. Product Development. The PhonePrint product is a developmental
-------------------
product, and is continually being developed as customers and the Seller work
together to define performance specifications, desired robustness and the like.
4. No Product Representation. No representation is made that the
-------------------------
PhonePrint product that comprises part of the Inventory is salable in the
ordinary course of business, reliable, or acceptable to customers pursuant to
test plans that have yet to be determined.
5. Other Product Issues. There exist certain software and hardware
--------------------
issues that are being resolved as product development continues. See Schedule
3, "Product Issues."
PARAGRAPH 2.4
-------------
NO VIOLATION
A. CONSENTS TO ASSIGNMENT. Cross reference Schedules to Paragraph 2.9 of
-----------------------
this Exhibit M.
PARAGRAPH 2.5
-------------
GOVERNMENTAL AUTHORITIES
A. Buyer will need to acquire its own FCC license. Concurrent with the
Closing, Seller will release to Buyer test data required for that process.
B. Buyer may need to acquire export licenses and the international
equivalent(s) of an FCC license if and when it sells internationally. These
requirements vary country by country.
C. Seller requires a number of ordinary course licenses to conduct
Business such as fire permits and building permits and other similar permits.
None of these permits or licenses or their like will be transferred with the
sale of the product.
PARAGRAPH 2.6
-------------
LIABILITIES
A. Maintenance and support obligation for AirTouch Purchase Order, cross
reference to Item A.1(b) on Paragraph 2.9 expires December 31, 1994.
B. Product support obligations under the AirTouch Agreement, as amended
of the date herewith.
2
PARAGRAPH 2.7
-------------
ASSETS, ACCOUNTS RECEIVABLE, PURCHASE ORDERS
A. THE ASSETS ARE ALL NECESSARY; SELLER HAS RIGHT, TITLE AND INTEREST
------------------------------------------------------------------
1. Human Capital. Certain of the Seller's assets reside in "human
-------------
capital," i.e., the know-how and experience of the engineers, managers, customer
service representatives and others who participated in developing the PhonePrint
Business, its product, and Seller's technology. Seller and TRW make no
representation that Buyer will acquire all of the employees and contract labor
that it may need -- this involves human resources issues over which Seller has
no control. See Item 5 below regarding product improvements.
2. Brochures. The following marketing material contains TRW copyright
---------
notices:
. Two print advertisements ("Click" and "Sparky"),
. Product brochure ("TRW PhonePrint: Network Access Control"),
. Product videotape ("TRW PhonePrint").
Seller understands that Buyer intends (and is granted a temporary license
under the License Agreement) to use this material only until the "CTIA" trade
show in February.
3. Co-Inventorship. The patent applications referenced in the License
---------------
Agreement, Exhibit B to the Asset Purchase Agreement, may require amendment to
grant co-inventorship credit to one ESL engineer, namely, Xxx Xxxxxx. If Xxx
Xxxxxx is determined to be a co-inventor of the patent applications referenced
in the License Agreement, his name may need to be included on the patent
applications. Seller will assist Buyer in determining inventorship of the
Patent Rights and execute all necessary documents at Seller's full expense not
to exceed $500 to reflect the determination.
4. Transition List. Certain items used by the Business are necessary for
---------------
the ordinary course of its Business (or substitutes therefor). These include
telephones, electricity, storage, forklifts, purchasing, accounting and payroll
systems and the like.
5. Product Issues. Cross reference to discussion of product issues in
--------------
Schedule 3 of this Exhibit M.
6. Product Improvements. No representation is made that the total range
--------------------
of conceivable product improvements can be made by the PhonePrint team as
presently constituted. For example, the PhonePrint team has limited capability
to add emitter tracking and location (i.e., direction finding) capabilities.
7. Use of Marketing Information. PhonePrint may continue to use the
----------------------------
text, images and design used in its marketing brochures in Item 2 above, videos
and other
3
marketing materials provided, however, after the CTIA show, PhonePrint will
remove the TRW name and logo from these materials prior to use.
8. Purchase Orders. See Paragraph D below.
---------------
9. Non-transferable Equipment. Pooled capital equipment not being
--------------------------
transferred is listed in Schedule 4 of this Exhibit M.
B. NOTES OR ACCOUNTS RECEIVABLE
----------------------------
1. AirTouch Receivable. Certain moneys were owed to Seller under the
-------------------
AirTouch Agreement, however, this receivable will be eliminated as part of the
Second Amendment to this agreement being executed concurrently herewith.
2. Other Notes or Accounts Receivable. Except for the AirTouch
----------------------------------
receivable (Item 1 above), there are no other notes or accounts receivable.
C. WARRANTY
--------
PhonePrint has no formal warranty policy. It has, however, proposed
limited software and hardware warranties in draft agreements with NYNEX and LA
Cellular. Copies of these drafts have been provided to Buyer. Seller has a
one-year maintenance and support obligation under the original AirTouch purchase
order (Paragraph 2.9, Item X.xx (ten units, one year, shipped December 1993),
and Buyer will have a two-year maintenance and support obligation under the
second amendment to this agreement.
D. PURCHASE ORDERS. Cross reference to Paragraph 2.9.
---------------
E. SUPPLY CONTRACTS. See Schedule 6 to this Exhibit M, "Assumed
----------------
Obligations."
F. INVENTORY SCHEDULE. See Schedule 7 to this Exhibit M, "PhonePrint
------------------
Inventory."
G. CAPITAL EQUIPMENT SCHEDULE. See Schedule 8 to this Exhibit M,
--------------------------
"Capital Equipment."
PARAGRAPH 2.8
-------------
LITIGATION
X. Xxxxxxx or AirTouch matters referenced in response to patent and
contract issues, respectively, may ripen into claims. See Paragraphs 2.9 and
2.12 of this Exhibit M.
4
PARAGRAPH 2.9
-------------
CONTRACTS
A. LIST OF CONTRACTS
-----------------
l.a AirTouch Agreement. Consent to Assignment obtained on even date
herewith.
b. AirTouch Purchase Order (AirTouch, formerly PacTel, as Buyer) dated
December 12, 1993 for ten PhonePrint products. Cross reference to Paragraph 2.7,
Warranty paragraph C.
2.a Memorandum of Understanding (for beta testing) between NYNEX Mobile
Communications Company ("NYNEX") and TRW Wireless Communications executed on
July 21, 1994.
b. NYNEX test exhibit for beta testing of PhonePrint dated August 26,
1994.
3.a NYNEX Purchase Order (NYNEX as buyer) for five PhonePrint products
dated June 27, 1993; contingent on agreement on performance specifications.
b. NYNEX Purchase Order (no-cost consignment only) dated December 14,
1993.
4. Letter of intent (for negotiations towards purchase order for 160
units) dated January 11, 1994 between ESL Incorporated and NYNEX Mobile
Communications.
5. Letter of intent (for negotiation towards purchase order for 150
units) dated December 21, 1993 between Seller and Cellular One (New York).
6. Non-Disclosure Agreements. See Schedule 5.
7. Licenses. See Exhibit B ("License Agreement") to the Asset Purchase
Agreement and Schedule 2, "Software Licenses," to this Exhibit M.
8. Purchase Orders (Seller as buyer). Cross reference to Schedule 6.
9. Equipment Rentals and Leases. See Schedule 1 of this Exhibit M.
10. Seller may have a beta test agreement (written or oral) with Cellular
One New York. A test plan is in place and units are in the field.
B. VALID AND BINDING/NO VIOLATION
------------------------------
1. AirTouch "breach" issue. Seller did not meet the delivery dates
-----------------------
specified in the AirTouch Agreement. However, the parties failed to agree upon
performance specifications that were a prerequisite for product delivery.
Accordingly, ESL does not believe it is in breach of the AirTouch Agreement.
Seller believes these issues are
5
subsumed in the Second Amendment to the AirTouch Agreement being executed
concurrently herewith.
2. Other Delivery Date Problems. Seller has failed to meet delivery
----------------------------
dates on all of its existing memorandums of understanding and letters of intent.
Seller believes none of these delivery dates are binding contractual commitments
because no purchase orders were placed.
3. Postponement of Purchase Commitments. Seller is in the process of
------------------------------------
postponing delivery commitments of suppliers listed on Schedule 6 to this
Exhibit M.
PARAGRAPH 2.10
--------------
COMPLIANCE WITH LAW
Cross reference to Paragraph 2.9 (regarding potential breaches of contract)
and 2.12 (regarding potential patent infringement.)
PARAGRAPH 2.11
--------------
LIENS, PERMITS AND AUTHORIZATIONS
A. Non-transferable FCC license.
B. The Business Unit is not a separate business of Seller. No ordinary
course business permits will go with the Business.
C. Cross reference to Software Licenses, Schedule 2 to this Exhibit M.
D. California Public Utilities License. AirTouch obtained this on behalf
of Seller. Equivalent licenses may be required in any state where PhonePrint
products are tested or sold. State laws may vary.
E. Cross reference to responses to Paragraph 2.5.
PARAGRAPH 2.12
--------------
INTANGIBLE PROPERTY RIGHTS
X. XXXXXXX PATENT. Documents and facts regarding this potential patent
--------------
infringement have been disclosed to Buyer's counsel.
B. OTHER PATENTS. Seller and TRW are unaware of the content of the
-------------
AirTouch patent, any patents pending, and any patents issued since July 11,
1994. There can be no
6
assurance that the conduct of the Business, including the matters covered by
Seller's patent applications, does not violate any such patents issued since
July 11, 1994 or patents pending.
C. TRANSFERABILITY OF LICENSED SOFTWARE. Whenever a PhonePrint product
------------------------------------
is sold, it contains embedded software. Cross reference to Paragraph 2.9
regarding transferability.
D. OTHER AIRTOUCH ISSUES. There exist certain unresolved issues
---------------------
concerning whether, for purposes of determining intellectual property ownership
versus license rights, certain inventions peripheral to the core RF
fingerprinting technology were developed by ESL, AirTouch or jointly by both
parties. These issues are specifically identified in the License Agreement,
Exhibit B to the Asset Purchase Agreement, at Part B to Paragraph 4. These
inventions include: 1) use of dialed digits to identify fraud users, 2) always
allowed digits (e.g., 911), 3) use of single event to validate clusters, and 4)
spoofer terminator.
E. CHECKPRINT. The name and xxxx "CheckPrint" is being licensed to Xxx
----------
Xxx. Arguably, the name is similar to that of "PhonePrint." While both involve
fraud detection, different customers are involved and no technologies being
licensed to PhonePrint under the License Agreement are involved.
X. XXXXX BACK. Grant-back to TRW in License Agreement of improvements to
----------
Licensed Products and Licensed Services.
G. TRADE SECRETS. Trade Secrets licensed to Buyer pursuant to the
-------------
License Agreement will not be owned by Buyer unless Buyer elects to file a
patent application incorporating the Trade Secrets.
H. USE OF RIGHTS. Full and proper use of the Rights require employment
-------------
of persons skilled in the art relating to the activities of the Business Unit.
I. PATENTABILITY OF INVENTIONS. No representation of the validity or
---------------------------
protectability is made for any invention which may be submitted as a patent
application by Buyer.
PARAGRAPH 2.13
--------------
TAX MATTERS
A. The balance of 1994 Property taxes due in December has been filed and
paid and will be pro-rated as the Seller is responsible only for that share due
through November 30, 1994.
7
PARAGRAPH 2.14
--------------
ENVIRONMENTAL AND SAFETY MATTERS
A. Seller rents the building that houses the product team, and has made
no formal environmental inspection of the premises. Therefore, Seller makes no
representation as to the condition of the building with respect to the above
matters, except to note that the roof leaks.
B. Certain of the materials used by Seller, including solder, solder flux
and genesolve 2004, constitute hazardous materials. Currently, Seller does not
use these materials in such amounts as would necessitate any environmental
permits.
PARAGRAPH 2.15
--------------
CUSTOMERS AND SUPPLIERS
No exceptions.
PARAGRAPH 2.16
--------------
DISCLOSURE; NO MISSTATEMENTS
A. PRODUCT DEVELOPMENT. The PhonePrint product is a developmental
-------------------
product, and is continually being refined and improved as customers and the
Business Unit work together to define performance specifications, desired
robustness and the like. No representation is made as to the salability of the
PhonePrint products currently in inventory.
B. OTHER PRODUCT ISSUES. There exist certain software and hardware
--------------------
issues that are being resolved as product development continues. See Schedule
3, "Product Issues."
C. OBSOLESCENCE. Certain material has ceased being manufactured by
------------
Seller's suppliers, namely, the Radio Shack scanner and the OKI phone receiver.
There can be no assurance that reasonable alternatives will be available or that
significant product re-design effort will not be necessary.
PARAGRAPH 2.17
--------------
BUSINESS UNIT
No exceptions.
8
SCHEDULES TO DISCLOSURE SCHEDULE
--------------------------------
Schedule 1 Equipment Rentals and Leases
Schedule 2 Software Licenses
Schedule 3 Product Issues
Schedule 4 Pooled Capital Equipment
Schedule 5 Non-Disclosure Agreements
Schedule 6 Assumed Obligations
Schedule 7 PhonePrint Inventory
Schedule 8 Capital Equipment
9
SCHEDULE 1. EQUIPMENTAL RENTALS AND LEASES
-------------------------------------------
----------------------------------------------------------------------------------------------------------
PHONEPRINT INC.
----------------------------------------------------------------------------------------------------------
EQUIPMENT RENTALS AND LEASES
----------------------------------------------------------------------------------------------------------
AS OF NOVEMBER 30,1994
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
OPEN PURCH.
----------------------------------------------------------------------------------------------------------
P.O. # VENDOR DESCRIPTION TOTAL
----------------------------------------------------------------------------------------------------------
401067 Mobilecomm 16-pagers (and services) $ 1,200.00
----------------------------------------------------------------------------------------------------------
401504 AT&T Capital 1-HP8560E, & 1-HP8642B Spectrum Analyzer $ 2,078.00
----------------------------------------------------------------------------------------------------------
401541 AT&T Capital 1-Sparc 20 Model 50, 1-20" monitor, extra menory $ 1,515.00
----------------------------------------------------------------------------------------------------------
401558 AT&T Capital 2-Sparc 20 Model 50, 2-20" monitor, extra memory $ 2,332.00
----------------------------------------------------------------------------------------------------------
401647 AT&T Capital 2-com/DX100P/528 $ 596.00
----------------------------------------------------------------------------------------------------------
401709 AT&T Capital 2-486/66 12mb/120, 2-14" monitors $ 466.00
----------------------------------------------------------------------------------------------------------
401726 AT&T Capital 4-486/66 12mb/120, 2-14" monitors $ 892.00
----------------------------------------------------------------------------------------------------------
401734 AT&T Capital 2-Sparc 20 Model 50, 2-20" monitor, extra memory $ 2,332.00
----------------------------------------------------------------------------------------------------------
401237 Rent A Power Mac 7100 & Monitor, Quarda 650 $ 985.00
Computer
----------------------------------------------------------------------------------------------------------
401261 Rent A 1 - Mac 8100 32meg., 1-486/66 $ 1,405.00
Computer
----------------------------------------------------------------------------------------------------------
3-VGA Monitors, 1-16" monitor
----------------------------------------------------------------------------------------------------------
1 adaptec SCSI controller card
----------------------------------------------------------------------------------------------------------
401576 Rent A Quadra 650,14" monitor $ 340.00
Computer
----------------------------------------------------------------------------------------------------------
401253 Cal. Furniture 13 Work Tables, 8-chairs, 4-drafting chairs $ 808.00
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Total $14,949.00
=============
----------------------------------------------------------------------------------------------------------
NOTE: ABOVE ITEMS ARE ON MONTH-TO-MONTH LEASE.
----------------------------------------------------------------------------------------------------------
10
SCHEDULE 2. SOFTWARE LICENSES
-----------------------------
PHONEPRINT PRODUCT DEVELOPMENT SOFTWARE LICENSES:
1) Pharlap DOS Extender SW
2) IXI Premier Motif 1.2 - for the Sun Sparcstations (GUI)
3) Borland no-Nonsense
4) Digital License Pak Fortran for Open VMS, VAX C ***
5) Data Desk 4.2 analysis
6) 10 Watcom SW
7) X-Designer 3.0 (GUI) ***
8) SunPro Proof (GUI) ***
9) Xxxx Xxxxx Spectrum DSP intelligent instrumentation
10) Adaptec SW SCSI for POS ***
11) Versaterm PRO (Analysis SW) ***
12) MatLab - DOS - MAC-SUN (Analysis SW) ***
13) TMS 32OC3x Emulator SW (Analysis)
14) Texas Instruments Microprocessor Development Systems ***
15) Sybase *
16) MS Visual Basic (for Windows)
17) MS Visual C++ (for Windows)
STANDARD SYSTEM/APPLICATION SOFTWARE:
1) FileMaker Pro, MacDraw Pro, Claris Draw, MacProject Pro (Claris)
2) Mac Schedule (Mainstay)
3) MS Office
4) DOS Mounter Plus (Mac, IBM)
5) Mac System Software 7.1, 7.5, System 7 Pro
6) DOS 6.2
7) Norton Anywhere, Symantec
8) Windows 3.1
9) Norton Utilities
10) TimbukTu (data network monitoring)
* The Sybase software license was given to us free from TRW Inc. and the issue
of transferring is being assessed. PhonePrint needs the latest version of this
software.
** The ESL site licenses for Word, Excel, PowerPoint, System 7 Pro, and Mac
System Software 7.1 and 7.5 will not be transferred to PhonePrint, Inc.
PhonePrint will have to purchase this software if it is deemed necessary.
*** Software license may require consent for assignment.
11
SCHEDULE 3. PHONEPRINT PRODUCT ISSUES
-------------------------------------
SYSTEM:
. COMMUNICATIONS NETWORK. The connection from SCC to RFU is unreliable making
routine upload and download of data problematic for customer satisfaction.
. DSP REBOOT. Some of the DSP processors in PhonePrint systems in the field
have problems that cause the processor to reboot. The system can not detect
any calls during this reboot process. The DSP reboots can occur every
couple of hours where the system will be down for around 10 seconds.
. INTEL MODEM. Some of the PhonePrint systems in the field occasionally have
communications problems due to the interaction of the Intel modems and PC-
Anywhere software package causing the communications system to hang up. The
system must be rebooted to recover from this problem.
. SIGNAL DETECTION. This is a system performance limitation. The Motorola
model ("Model M") units detect about 90% of the signals due to the lower
system sensitivity from the antenna combiner we use. The Ericsson model
("Model E") detects >98% of the signals because of the three receivers and
DSP boards.
. "BRAZIL STREET ALIEN." One of PhonePrint's systems in the field has a
problem with bit errors. This is caused by a piece of the cell site
equipment having signals couple into the PhonePrint system. These phone
companies do not experience these problems in their equipment. This problem
can cause problems in 40% of PhonePrint's call intercepts for 2 - 6 days at
a time. The problem can be gone for 2 - 20 days at a time.
HARDWARE:
. ARIEL DSP BOARD. Some of the Ariel DSP boards have a problem with memory
access. This is a manufacturing defect of a Cypress chip on some of the
boards. This problem has been corrected for all future boards.
. XXXXXXX XXXXXXX RECEIVER. There are a number of system deficiencies caused
by poor receiver specifications. To meet cost and schedule goals, the
vendor was allowed to ignore certain specifications. The specific issues
are:
. no Noise Figure specification
. no specification on spurs or Spur Free Dynamic Range
. no soft limiter on signal amplitude
. no Group Delay specification
. no specifications on receiver to receiver consistency
. inadequate bandwidth specification; PhonePrint engineers are working on a
software fix.
. OBSOLETE COMPONENTS. The specific Radio Shack receiver and OKI cell phone
models used in PhonePrint's "spoofer" terminator have been discontinued by
these suppliers.
SOFTWARE:
PhonePrint engineers are currently working on the 0.8.5.x and 0.8.6.x software
releases that will address all of these problems.
. NEC PHONES. PhonePrint's current system, 0.8.4.4, does not always perform
properly with high level signals from NEC phones.
. AT&T PHONES. PhonePrint's current system does not always perform properly
with some AT&T phones.
12
. WILD SHOTS. Some phones and some signal environments cause some of the
parameters to have erroneous values. This problem has been labeled "wild
shots". While the current software release (0.8.4.4) is orders of magnitude
better than the previous release (0.8.2.4), it still has wild shots from
time to time.
. CLUSTERING PROBLEMS. PhonePrint's algorithm for combining signal intercepts
from the same phone from the same and different cells is not as robust as it
should be. We experience situations where this lack of robustness can
desensitize our ability to see fraud against some MINs.
13
SCHEDULE 4. POOLED CAPITAL EQUIPMENT
------------------------------------
-----------------------------------------------------------
PHONEPRINT INC.
-----------------------------------------------------------
NON-TRANSFERABLE EQUIPMENT
-----------------------------------------------------------
AS OF NOVEMBER 30, 1994
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
MAKE MODEL DESCRIPTION ASSET#
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
HP 8568B ANAL, SPECT C0014760
-----------------------------------------------------------
HP 8901A Mod Analyzer 2134AOl C0015075
-----------------------------------------------------------
HP 8903A ANAL, AUDIO C0015096
-----------------------------------------------------------
HP 8642A GEN, SYNTHESIZER C0016036
-----------------------------------------------------------
HP 4195A ANAL, NETWORK, SPECT C0016310
-----------------------------------------------------------
HP 8753C ANAL, NETWORK C0017153
-----------------------------------------------------------
HP 5371A ANAL, FREQ C0018150
-----------------------------------------------------------
HP 346B SOURCE, NOISE C00l9046
-----------------------------------------------------------
TEXASINSTR 32OC30 EMULATOR, BOARD C0019440
-----------------------------------------------------------
XX 00000X ANAL, LOGIC C0020397
-----------------------------------------------------------
XX 00000X TEST SET,S-PARAMTR C0020732
-----------------------------------------------------------
HP 85032B KIT, CALIB, N C0020733
-----------------------------------------------------------
PROTOCOL ANALYZER C0018314
-----------------------------------------------------------
SPECTRUM ANALYZER C0019081
-----------------------------------------------------------
NOTE: THE POOLED CAPITAL EQUIPMENT THAT IS NOT PART OF THE TRANSFERRED ASSETS
WILL BE REMOVED FROM J7, THE PHONEPRINT FACILITY LOCATED AT 000 XXXX XXXXX XX
XXXXXXXXX, XX, XX DECEMBER 31, 1994 OR SOONER IF PHONEPRINT, INC. REPLACES THIS
EQUIPMENT IN THE INTERIM.
14
SCHEDULE 5. NON-DISCLOSURE AGREEMENTS
-------------------------------------
AGRMN'T EXPIRATION
COMPANY DATE DATE
----------------------------------------------------------------------------------------------------------------------------
AGRMN'T EXPIRATION
COMPANY DATE DATE
----------------------------------------------------------------------------------------------------------------------------
ASPEN TECHNOLOGIES 9/15/94 9/15/95
Exploring potential investment opportunities with respect to the TRW PhonePrint network
access control system.
ASSOCIATED RT, INCORPORATED 4/28/94 4/28/95
TRWs wireless technology and business plans and Associated's radio location patent and
business plans in order to evaluate the viability of a potential business relationship.
XXXX ATLANTIC MOBILE SYSTEMS, INC. 5/12/94 5/12/96
Contemplate discussions and analyses conserning TRW PhonePrint technology.
XXXXXXX XXXXX ADVERTISING - XXXXXXX PRINCIPAL 9/30/93
XXXXXXX, PHLEGER & XXXXXXXX 11/17/94 11/17/95
Law firm representing investors of PhonePrint
CBIS 9/15/94 9/15/95
Exploring potential investment opportunities with respect to the TRW PhonePrint network
access control system.
CELLTEST 6/19/94 6/9/95
Terminator Design
COMSAT MOBILE COMMUNICATIONS* 5/24/94 5/24/96
COMSAT has developed or is developing or owns certain operational, technical and
telecommunications services business information relating to its business of providing mobile
ESL has certain technical, operational market research and business information relating to its
business of Mobile Communications Network Access Control.
CORAL SYSTEM 10/23/94 10/23/95
Exploring potential investment opportunities with respect to the TRW PhonePrint network
access control system.
CORAL SYSTEM INCORPORATED 10/20/93 10/20/94
Information relating to telecommunications systems and services.
CUBIC COMMUNICATIONS INCORPORATED 6/21/93 1/1/94
Specifications for low cost receiver front end; Quantity and program schedules and market
potential Any system configuration of these receivers.
DIABLO RESEARCH 6/9/94 6/9/95
Terminator Design
E. XXXXX XXXXXXX 9/19/94 9/19/95
Employment
E2 INCORPORATED 7/22/93 7/22/94
Xxx Xxxxxx
EDS 3/2/93 5/1/93
Discussing methods to detect and control fraudulent use of cellular communications through the
use of RF signatures.
PAGE 15
SCHEDULE 5. NON-DISCLOSURE AGREEMENTS
-------------------------------------
AGRMN'T EXPIRATION
COMPANY DATE DATE
----------------------------------------------------------------------------------------------------------------------------
EDS 5/19/94 5/19/95
Exploring potential investment opportunities with respect to the TRW PhonePrint network
access control system.
ERICSSON RADIO SYSTEMS INC. 8/17/94 8/17/95
Regarding information relating to ESL's wireless technology and business plans and Ericsson
products in order to evaluate the viability of a potential business relationship in wireless office
products.
FAILURE ANALYSIS ASSOCIATE 10/19/94 10/19/95
(PhonePrint) evaluating its MTBF and field performance.
FALCON COMMUNICATIONS 12/21/93 12/21/94
Evaluation of system
GLOBALLINK 5/3/93 7/8/93
Application: Direction Finding techniques for detecting mobile cellular emitters and wireless
technologies used with PBX telephone systems.
GLOBALLINK 4/12/93 8/12/93
Application "fingerprinting" techniques for detecting and controlling fraudulent use of cellular
telephony.
XXXXXXXX, XXXXXXX 4/27/94 4/27/95
Employment purposes
XXXXXX XXXXXXX 8/16/94 8/16/95
Employment (was hired)
GTE MOBILNET 2/1/94 2/1/95
Joint review of technical aspects of TRW
PhonePrint
GTE TSI 4/26/94 Indefinite
Discussions re: CloneDetector System, TransAction Manager System, TRW PhonePrint
Network Access Control System.
HALL SOFTWARE TECHNOLOGIES 4/27/94 4/27/95
Work on PhonePrint
XXXXXXX, XXXX 12/29/93 12/29/94
Company business operations assessment
HARTSTIELD COMPANY 5/30/94 5/30/95
Evaluation of company operations, specifically Customer Service and Sales
HILL & XXXXXXXX 9/20/93
Clone Terminator and related products.
IFR SYSTEMS INCORPORATED 6/21/93 1/1/94
Specifications for low cost receiver front end; Quantity and program schedules and market
potential. Any system configuration of these receivers.
INFO PLUS INTERNATIONAL 5/2/94 5/1/95
ESL's wireless technology and business plans for the purpose of determining the suitability of
engaging Info Plus as a consultant
X. XXXXXXX 7/23/93 10/23/93
ARUBA business plan and details of ESL's telecommunications business venture(s).
PAGE 16
SCHEDULE 5. NON-DISCLOSURE AGREEMENTS
-------------------------------------
AGRMN'T EXPIRATION
COMPANY DATE DATE
----------------------------------------------------------------------------------------------------------------------------
XXXXX XXXXX 9/20/94 9/20/95
Employment
XXXXX XXXXXXX DESIGN, INC. 11/7/94 11/7/95
Information for the purpose of developing a corporate identity.
K.M.T.C. 6/1/94 6/1/95
Technical information regarding TRW PhonePrint
LOS ANGELES CELLULAR 4/8/93 7/8/93
Data on RF "fingerprint" techniques for detecting and controlling fraudulent use of cellular
telephony and signal enhancement for cellular telephony.
LOS ANGELES CELLULAR TELEPHONE COMPANY 10/10/94 10/10/95
(PhonePrint) TRWs wireless technoloy and business plans, and L.A. Cellular's business
strategies, plans, policies and procedures regarding cellular or wireless fraud management in
order to evaluate the viability of a potential business relationship
XXXXX 11/2/93 8/2/94
Joint review of the technical aspects of ARUBA project (TRW PhonePrint)
XXXXX CELLULAR COMMUNICATIONS 7/13/94 7/13/95
Determining the viability of a potential business relationship.
MOTOROLA 7/22/94 7/22/95
MOTOROLA, INC. 5/9/94 5/9/97
TRW PhonePrint network access control sustem as it relates to the problem of clone phones.
X. XXXXXXXX & ASSOCIATES INCORPORATED 1/4/93 11/4/94
NARROWBAND 6/9/94 6/9/95
Terminator Design/possible design work for TRW
NARROWBAND TELECOM. RESEARCH INC. 9/8/93 12/31/93
ARUBA product specific details.
XXXXXXX & COMPANY 5/12/94 5/12/95
Exploring potential investment opportunities with respect to the TRW PhonePrint network
access control system.
NYNEX MOBILE COMMUNICATION COMPANY 12/16/93 7/1/94
Exchange proprietary information relating to TRW "PhonePrint".
MOBILE COMMUNICATION COMPANY 7/20/94 7/1/95
Mutually conduct tests on the TRW PhonePrint network access control system.
OMNI CELLULAR 1/1/94
ESL: Information regarding business opportunity (ARUBA) in the cellular phone industry.
Omni: Technical informtion relating to cellular phone technologies/software.
PACTEL 4/22/93 10 yrs
Evaluate and understand potential involvement in a project of mutual interest.
PACTEL 3/26/93 Indefinite
Evaluate and understand potential involvement in a project of mutual interest
PAGE 17
SCHEDULE 5. NON-DISCLOSURE AGREEMENTS
-------------------------------------
AGRMN'T EXPIRATION
COMPANY DATE DATE
----------------------------------------------------------------------------------------------------------------------------
PHILIPINO TELEPHONE CORPORATION 9/26/94 9/26/95
For the purpose of determining the viability of a potential business relationship.
RIACS (RESEARCH INSTITUTE FOR ADVANCED COMPUTER SCIENCE) 3/27/94 3/27/95
Product evaluation
SF TELECOM 6/9/94 6/9/95
Terminator Design
SNET CELLULAR INC. 3/17/94 3/17/95
SPRINT CELLULAR 11/11/93 11/11/94
Product evaluation
XXXXXXXXXXXX CORPORATION 6/22/93 1/1/94
Specifications for low cost receiver front end; Quantity and program schedules and market
potential. Any system configuration of these receivers.
SUN MICROSYSTEMS 10/7/93 12/31/94
ARUBA Product
SUBSCRIBER COMPUTING, INC. 7/11/94 7/11/95
For the purpose of determining the viability of a potential business relationship.
SYSTEMS LINK 12/2/94 12/2/95
Product evaluation and interface
TANDEM COMPUTERS INCORPORATED 10/18/94 10/18/95
For the purpose of determing the viability of a potential business relationship.
TELME XXXX 8/24/93 8/24/94
Cellular Fraud Detection.
XXXXXXX-XXXXXXX COMPANY 6/21/93 1/1/94
Specifications for low cost receiver front end; Quantity and program schedules and market
potential. Any system configuration of these receivers.
WIDEBAND COMPUTER, INC. 3/17/94 3/17/95
RF FingerPrint algorithms
US WEST* 6/21/94 6/21/97
Mutual evaluation of cellular PBX and wireless communications capabilities and marketing plan
VENTURE FIRST 11/18/94 11/18/95
Exploring potential investment opportunities with respect to the TRW PhonePrint network
access control system.
Note: These non-disclosure agreements require consent to assignment.
PAGE 18
SCHEDULE 6. ASSUMED OBLIGATIONS
--------------------------------
-------------------------------------------------------------------------------------
PHONEPRINT INC.
-------------------------------------------------------------------------------------
OUTSTANDING COMMITMENTS
-------------------------------------------------------------------------------------
AS OF NOVEMBER 30, 1994
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
PART TOTAL PURCHASE PURCHASE
-------------------------------------------------------------------------------------
P.O. # VENDOR NUMBER QTY PRICE EXTENSION
-------------------------------------------------------------------------------------
401254 Amco Engineering 000-0000-000 41 475.60 19,500
-------------------------------------------------------------------------------------
400012 Ariel Corp 000-0000-000 750 969.92 727,440
-------------------------------------------------------------------------------------
401623 Arow Components 000-0000-000 7000 0.01 84
-------------------------------------------------------------------------------------
401623 Arow Components 000-0000-000 2000 0.13 260
-------------------------------------------------------------------------------------
400686 Custom Computer Service 000-0000-000 120 260.00 31,200
-------------------------------------------------------------------------------------
000000 X Xxxxxxx 000-0000-000 70 700.00 49,000
-------------------------------------------------------------------------------------
401724 Isis Surface Mounting 000-0000-000 59 36 2,124
-------------------------------------------------------------------------------------
401639 Kent Electronics 000-0000-000 375 3.97 1,489
-------------------------------------------------------------------------------------
401389 Lambda Electronics 000-0000-000 100 23.50 2,350
-------------------------------------------------------------------------------------
401226 Maxpeed Corp 000-0000-000 50 347.00 17,350
-------------------------------------------------------------------------------------
400053 Rugged Computer Systems 000-0000-000 631 3,518.00 2,219,858
-------------------------------------------------------------------------------------
401719 Rugged Computer Systems, In 000-0000-000 10 505 5,050
-------------------------------------------------------------------------------------
401262 Vanderbend 000-0000-000 100 30.93 3,093
-------------------------------------------------------------------------------------
401272 Vanderbend 000-0000-000 200 7.22 1,444
-------------------------------------------------------------------------------------
401275 Vanderbend 000-0000-000 250 8.19 2,048
-------------------------------------------------------------------------------------
401277 Vanderbend 000-0000-000 100 2.25 225
-------------------------------------------------------------------------------------
401278 Vanderbend 000-0000-000 200 10.51 2,102
-------------------------------------------------------------------------------------
401279 Vanderbend 000-0000-000 200 10.12 2,024
-------------------------------------------------------------------------------------
401279 Vanderbend 000-0000-000 200 1.40 280
-------------------------------------------------------------------------------------
401282 Vanderbend 000-0000-000 100 11.57 1,157
-------------------------------------------------------------------------------------
401283 Vanderbend 000-0000-000 200 16.95 3,390
-------------------------------------------------------------------------------------
401284 Vanderbend 000-0000-000 200 32.47 6,494
-------------------------------------------------------------------------------------
401285 Vanderbend 000-0000-000 300 7.63 2,289
-------------------------------------------------------------------------------------
401287 Vanderbend 000-0000-000 100 9.46 946
-------------------------------------------------------------------------------------
401288 Vanderbend 000-0000-000 40 109.11 4,364
-------------------------------------------------------------------------------------
401296 Vanderbend 000-0000-000 150 3.23 485
-------------------------------------------------------------------------------------
400067 Voctron Labs 000-0000-000 180 335.00 60,300
-------------------------------------------------------------------------------------
401306 Xxxx Xxxxx 000-0000-000 385 5.15 1,983
-------------------------------------------------------------------------------------
401307 Xxxx Xxxxx 000-0000-000 385 4.00 1,540
-------------------------------------------------------------------------------------
401308 Xxxx Xxxxx 000-0000-000 380 14.00 5,320
-------------------------------------------------------------------------------------
401309 Xxxx Xxxxx 000-0000-000 120 42.40 5,088
-------------------------------------------------------------------------------------
401310 Xxxx Xxxxx 000-0000-000 300 16.35 4,905
-------------------------------------------------------------------------------------
401311 Xxxx Xxxxx 000-0000-000 200 1.45 290
-------------------------------------------------------------------------------------
401584 DC Electronics 000-0000-000 100 19.14 1,914
-------------------------------------------------------------------------------------
401559 DC Electronics 000-0000-000 140 26.89 3,765
-------------------------------------------------------------------------------------
401589 DC Electronics 000-0000-000 325 15.11 4,911
-------------------------------------------------------------------------------------
401512 DC Electronics 000-0000-000 200 6.49 1,298
-------------------------------------------------------------------------------------
401735 DC Electronics 000-0000-000 25 3.50 88
-------------------------------------------------------------------------------------
401699 Arow Components 000-0000-000 1500 0.213 320
-------------------------------------------------------------------------------------
401699 Arow Components 000-0000-000 1000 0.15 150
-------------------------------------------------------------------------------------
400799 DC Electronics 1 2,000.00 2,000
-------------------------------------------------------------------------------------
401631 Applied Specialties 1 211.2 211
-------------------------------------------------------------------------------------
401312 Xxxx Xxxxx 90 23.25 2,093
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 262,350
-------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
PAGE 19
SCHEDULE 6. ASSUMED OBLIGATIONS
--------------------------------
----------------------------------------------------------------------------------------------------------------------
PHONEPRINT INC.
----------------------------------------------------------------------------------------------------------------------
OUTSTANDING COMMITMENTS
----------------------------------------------------------------------------------------------------------------------
AS OF NOVEMBER 30, 1994
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
PART TOTAL PURCHASE PURCHASE
----------------------------------------------------------------------------------------------------------------------
P.O. # VENDOR NUMBER QTY PRICE EXTENSION
----------------------------------------------------------------------------------------------------------------------
401076 Ask Group 4 2,756.00 11,024
----------------------------------------------------------------------------------------------------------------------
401077 Ask Group 48 310.00 14,880
----------------------------------------------------------------------------------------------------------------------
401077 Ask Group 1 1,450.00 1,450
----------------------------------------------------------------------------------------------------------------------
401075 Hewlett Packard 1 2,193.00 2,193
----------------------------------------------------------------------------------------------------------------------
401075 Hewlett Packard 1 355.30 355
----------------------------------------------------------------------------------------------------------------------
401075 Hewlett Packard 1 224.40 224
----------------------------------------------------------------------------------------------------------------------
401075 Hewlett Packard 1 635.80 636
----------------------------------------------------------------------------------------------------------------------
401075 Hewlett Packard 1 469.20 469
----------------------------------------------------------------------------------------------------------------------
401067 Mobilecomm* 1 1,200.00 1,200
----------------------------------------------------------------------------------------------------------------------
401696 Sealed Air Corp. 1 2650 2,650
----------------------------------------------------------------------------------------------------------------------
401696 Sealed Air Corp. 1 950 950
----------------------------------------------------------------------------------------------------------------------
401736 Sun Microsystems 5 2640 13,200
----------------------------------------------------------------------------------------------------------------------
401722 Vanstar 2 120.88 242
----------------------------------------------------------------------------------------------------------------------
401729 Vanstar 1 2362 2,362
----------------------------------------------------------------------------------------------------------------------
401729 Vanstar 1 369 369
----------------------------------------------------------------------------------------------------------------------
401729 Vanstar 1 120 120
----------------------------------------------------------------------------------------------------------------------
401804 Vanstar 1 5 5
----------------------------------------------------------------------------------------------------------------------
401801 Xxxx Xxxxx 285 2.95 841
----------------------------------------------------------------------------------------------------------------------
401801 Xxxx Xxxxx 1 186.12 186
----------------------------------------------------------------------------------------------------------------------
401504 AT&T Capital* 1 2,078.00 2,078
----------------------------------------------------------------------------------------------------------------------
401558 AT&T Capital* 1 2,332.00 2,332
----------------------------------------------------------------------------------------------------------------------
401541 AT&T Capital* 1 1,515.00 1,515
----------------------------------------------------------------------------------------------------------------------
401647 AT&T Capital* 1 596.00 596
----------------------------------------------------------------------------------------------------------------------
401709 AT&T Capital* 1 466.00 466
----------------------------------------------------------------------------------------------------------------------
401726 AT&T Capital* 1 892.00 892
----------------------------------------------------------------------------------------------------------------------
401734 AT&T Capital* 1 2,332.00 2,332
----------------------------------------------------------------------------------------------------------------------
401253 California Furniture* 1 312.00 312
----------------------------------------------------------------------------------------------------------------------
401253 California Furniture* 1 336.00 336
----------------------------------------------------------------------------------------------------------------------
401253 California Furniture* 1 160.00 160
----------------------------------------------------------------------------------------------------------------------
401805 Frame Technology Corp 2 550.00 1,100
----------------------------------------------------------------------------------------------------------------------
401805 Frame Technology Corp 1 49.00 49
----------------------------------------------------------------------------------------------------------------------
401805 Frame Technology Corp 1 260.00 260
----------------------------------------------------------------------------------------------------------------------
401733 JMW Consultants Inc. 1 14650 14,650
----------------------------------------------------------------------------------------------------------------------
401733 JMW Consultants Inc. 1 6208.65 6,209
----------------------------------------------------------------------------------------------------------------------
401237 Rent A Computer* 1 985.00 985
----------------------------------------------------------------------------------------------------------------------
401261 Rent A Computer* 1 1,405.00 1,405
----------------------------------------------------------------------------------------------------------------------
401576 Rent A Computer* 1 340.00 340
----------------------------------------------------------------------------------------------------------------------
401667 Vanstar 2 3520.28 7,041
----------------------------------------------------------------------------------------------------------------------
401700 Tel-Lan Communications 12 12 144
----------------------------------------------------------------------------------------------------------------------
Consultant Xxx Xxxxxx-December Retainer & Expenses 30,500
----------------------------------------------------------------------------------------------------------------------
Consultant Xxxx Xxxxxxx-December Retainer & Expenses 5,500
----------------------------------------------------------------------------------------------------------------------
Consultant Xxxx Xxx-December Retainer & Expenses 9,000
----------------------------------------------------------------------------------------------------------------------
Consultant Xxxxxx Xxx-Billed at straight hourly rate as used
----------------------------------------------------------------------------------------------------------------------
Consultant Hill & Xxxxxxxx 28,824
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
TOTAL COMMITMENTS 3,634,950
============
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
* Indicates month-to-month rental
----------------------------------------------------------------------------------------------------------------------
PAGE 20
SCHEDULE 7. PHONEPRINT INVENTORY
-----------------------------------
INVENTORY AS OF 11/30/94
----------------------------------------------------------------------------
PHONEPRINT Inventory MODEL M MODEL A MODEL E TOTAL
----------------------------------------------------------------------------
1) Consigned Units 56 15 20 91
----------------------------------------------------------------------------
2) Finished Goods 61 31 84 176
----------------------------------------------------------------------------
3) Work In Progress N/A N/A N/A N/A
----------------------------------------------------------------------------
4) Material Unit Equivalents 0 0 61 61
----------------------------------------------------------------------------
5) Engineering Test Units 6 0 1 7
----------------------------------------------------------------------------
6) Raw Materials N/A N/A N/A $ 979,124
----------------------------------------------------------------------------
1) Units shipped to customers on consignment at 11/30/94.
2) Finished Goods Inventory as of 11/30/94. Does not include the cost of
installation kits noted below in (b) below.
3) Work In Process (WIP) value is included in Material Unit Equivalents
calculation.
4) Material Unit Equivalents is calculated by adding material stock and WIP on
hand plus additional future purchases of $153,000 (see note (a) below). The
model E unit has the highest material content of the three Phone Print
models. Using this material in different product mixes would result in
different equivalent unit combinations.
5) Units that are in the field and in-house for purposes of Engineering test.
6) Remaining stock balance of $979,124 at 1995 standards. Included in this
number is material at vendors valued at $167,009 (see note (c) below) and
spares valued at $260,699 described in note (c) and (d).
NOTES:
(a) ESL's current estimate is approximately $153,000 to make up material
shortages required to build the 61 equivalent units shown above as item 4,
excluding labor and testing.
(b) Installation kit material nominally valued at $34,000 Is required to
complete 176 units of Finished Goods.
(c) The $167,009 of material under evaluation at vendors could potentially be
written-off based on final evaluation and recommended disposition
(d) Inventory has been re-valued based on latest material cost experience and
time standards.
Page 21
SCHEDULE 8. CAPITAL EQUIPMENT
-----------------------------
PhonePrint Inc.
Fixed Assets
As of November 30, 1994
MAKE MODEL DESCRIPTION ASSET#
HP 7550A CMPTR,PLOTTER,GRPH C0012235
APPLE MACPLUS COMPUTER,PERSONAL C0014120
APPLE MACPLUS COMPUTER,PERSONAL C0014342
APPLE MACPLUS COMPUTER,PERSONAL C0014542
APPLE MACPLUS COMPUTER,PERSONAL C0016103
AST PREMIUM 286 COMPUTER,PERSONAL C0017172
APPLE MAC II COMPUTER,PERSONAL C0017215
APPLE MAC II COMPUTER,PERSONAL C0019273
APPLE M0402 CMPTR,MONITOR,MONO C0019285
APPLE X0000 XXXXX,XXXXXXX,XXXX C0019290
APPLE MAC II COMPUTER,PERSONAL C0019291
APPLE MAC II COMPUTER,PERSONAL C0019589
RADIUS 218 CMPTR,MONITOR C0019590
APPLE MACII Mac IIC1 w/Ext Kybd C0019941
RADIUS TPD/19 CMPTR,MONITOR C0020185
APPLE MAC II COMPUTER,PERSONAL C0020195
RADIUS TPD/19 CMPTR,MONITOR C0021173
APPLE CENTRIS COMPUTER,PERSONAL C0021600
DELL COMPUTERS466/ M COMPUTER,PERSONAL C0021988
DELL COMPUTERS466/ M COMPUTER,PERSONAL C0021989
APPLE CENTRIS COMPUTER,PERSONAL C0021990
APPLE CENTRIS COMPUTER,PERSONAL C0021991
RADIUS 350 CMPTR,MONITOR,COLOR C0021992
RADIUS 350 CMTR,MONITOR,COLOR C0021993
T1 2559821 CMPTR,PRINTER,LASER C0021994
APPLE QUADRA CENTRIS 650 C0022026
APPLE CENTRIS COMPUTER,PERSONAL C0022035
APPLE CENTRIS COMPUTER,PERSONAL C0022037
APPLE CENTRIS COMPUTER,PERSONAL C0022137
APPLE CENTRIS COMPUTER,PERSONAL C0022138
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022139
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022140
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022141
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022142
APPLE CENTRIS (610) COMPUTER,PERSONAL C0022143
APPLE CENTRIS COMPUTER,PERSONAL C0022144
RADIUS 348 CMPTR,MONITOR,COLOR C0022145
RADIUS 348 21" Color Monitor C0022146
APPLE PRO 630 CMPTR,PRINTER,LASER C0022147
NCA 4542NT CMPTR,DRIVE,DISK C0022151
NCA MXT1240S CMPTR,DRIVE,DISK C0022196
APPLE QUADRA (610) COMPUTER,PERSONAL C0022479
APPLE QUADRA (610) COMPUTER,PERSONAL C0022480
APPLE QUADRA (610) COMPUTER,PERSONAL C0022481
APPLE QUADRA (610) COMPUTER,PERSONAL C0022482
APPLE QUADRA (610) COMPUTER,PERSONAL/21" Clr Monitor C0022483
APPLE QUADRA (610) COMPUTER,PERSONAL/21" CLr Monitor C0022484
RADIUS 381 CMPTR,MONITOR,COLOR C0022485
Page 22
SCHEDULE 8. CAPITAL EQUIPMENT
-----------------------------
PhonePrint Inc.
Fixed Assets
As of November 30, 1994
MAKE MODEL DESCRIPTION ASSET #
RADIUS 381 CMPTR,MONITOR,COLOR C0022486
DELL COMPUTERS466/M-66 COMPUTER,PERSONAL C0022528
DELL COMPUTERS466/M-66 COMPUTER,PERSONAL C0022529
CHAPLET SYS NBD486T COMPUTER,PERSONAL,LPTP C0022619
SUN S10GXN-40 WORKSTATION C0023073
SUN S10GXN-40 WORKSTATION C0023074
SUN 4/15EC-32 WORKSTATION C0023075
SUN 4/15EC-32 WORKSTATION C0023076
SUN 4/10EC-8 WORKSTATION C0023077
SUN X547A-ST CMPTR,DRIVE,DISK C0023078
SUN X547A-ST CMPTR,DRIVE,DISK C0023079
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023101
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023102
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023103
APPLE QUADRA COMPUTER,PERSONAL C0023104
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023105
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023106
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023107
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023108
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023109
APPLE POWERBOOK(QUADRA 61 COMPUTER,PERSONAL C0023110
APPLE QUADRA (610) COMPUTER,PERSONAL C0023111
MICRONET SS-Dl6OOO COMPUTER,DRIVE,TAPE,DAT C0023115
486 COMPUTER C0023197
HP 7550A CMPTR,PLOTTER,GRPH C0023308
DELL COMPUTERS486DX2-66 COMPUTER,PERSONAL C0023309
DELL COMPUTERS486DX2-66 COMPUTER,PERSONAL C0023310
DELL COMPUTERS486DX2-66 COMPUTER,PERSONAL C0023311
IFR SYSTEMS COM-120A CMPTR,MONITOR C0023404
IBM 425SX/SI COMPUTER,PERSONAL C0023529
IBM 425SX/SI COMPUTER,PERSONAL C0023530
APPLE QUADRA COMPUTER,PERSONAL C0023531
APPLE QUADRA COMPUTER,PERSONAL C0023532
APPLE QUADRA COMPUTER,PERSONAL C0023533
APPLE QUADRA COMPUTER,PERSONAL C0023534
APPLE QUADRA COMPUTER,PERSONAL C0023535
APPLE QUADRA COMPUTER,PERSONAL C0023536
APPLE POWER MAC COMPUTER,PERSONAL C0023537
APPLE POWER MAC COMPUTER,PERSONAL C0023538
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023605
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023606
APPLE POWERMAC COMPUTER,PERSONAL C0023621
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023634
APPLE POWERBOOK COMPUTER,PERSONAL,LPTP C0023635
APPLE QUADRA COMPUTER,PERSONAL C0023647
APPLE QUADRA COMPUTER,PERSONAL C0023648
APPLE QUADRA COMPUTER,PERSONAL C0023649
APPLE QUADRA610 COMPUTER,PERSON C0023782
PERSONAL COMPUTER C0023783
Page 23
SCHEDULE 8. CAPITAL EQUIPMENT
-----------------------------
PhonePrint Inc.
Fixed Assets
As of November 30, 1994
MAKE MODEL DESCRIPTION ASSET#
APPLE PB DUO 280/280C Power Book Duo 280c w/17" Disp C0023903
Power Book Duo 280c w/17" Disp C0023904
APPLE M3077 (POWERMAC) CMPTR,PERSONAL C0023906
17 COLOR MONITOR C0023907
APPLE M2017 CMPTR,PERSONAL C0023908
APPLE M2612 CMPTR,MONITOR,COLOR 20" C0023909
Powerbook 180 C0023924
Powerbook 180 C0023925
APPLE 6100 (POWERMAC) CMPTER,PERSONAL C0023926
APPLE 6100 (POWERMAC) CMPTER,PERSONAL C0023927
APPLE M2464 (POWER PC) MONITOR,CMPTR C0023935
APPLE C-0890 MONITOR,COLOR (20") C0023936
APPLE M2464 (POWER PC 7100) MONITOR,CMPTR C0023937
APPLE C-0890 MONITOR,COLOR C0023938
APPLE 8100 CMPTR,PERSONAL C0023939
SPARC STAT C0023964
5 GB TAPE C0023965
SUN 4/10FC2- WORKSTATION C0023969
SUN 4/15FC2- WORKSTATION,CLASSIC C0023970
RADIUS C0507 MONITOR,COLOR 17" C0023971
APPLE QUADRA 605 CMPTR,PERSONAL C0023972
APPLE QUADRA 605 COMPUTER,PERSONAL C0023973
SPORTSTER N/A CMPTR,PERSONAL C0023974
APPLE M2332 POWERBOOK C0023991
APPLE M2332 POWERBOOK C0023992
INTEL 486 DXL 486 COMPUTER C0023995
APPLE 7100 PERSONALCOMPUTER C0023996
APPLE 7100 PERSONALCOMPUTER C0023997
COMPAQ PROLINEA FOR PAYROLL C0024046
APPLE POWERBOOK 520 FOR FINANCE C0024047
APPLE POWERBOOK 520 FOR FINANCE C0024048
APPLE 7100 PERSONALCOMPUTER C0024049
APPLE 7100 PERSONALCOMPUTER C0024050
Pentium 90 MHZ for Xxxxxxxx C0024111
Pentium 90 MHZ for Xxxxxxxx C0024112
XXXXXXXXX 0Xx0X SCOPE,PN,DUAL C0004026
XXXXXXXXX 0Xx0X SCOPE,PN,DUAL,CH C0004028
TEKTRONIX 7704 SCOPE,GP,MF C0004208
HP 0000X XXX XXXX, XX X0000000
TEKTRONIX 475DM43 SCOPE,PORTABLE C0004280
POWER DESIGN TP325 POWER SUPPLY, TRIPLE C0004357
TEKTRONIX 7A26 SCOPE,PN,DUAL CH C0004400
TEKTRONIX 7B80 SCOPE,PN,TIME BASE C0004649
XXXXXXXXX 0X00X XXXXX,XX,XXXX C0004879
HP 0000X XXX XXXX, XX X0000000
XXXXXXXXX 0X00X XXXX,XX,XXXX BASE C0005319
XXXXX-XXXX 3202R FILTER,TUNABLE C0005370
HP 3964A RCRDR,INSTRUMENT C0005438
TEKTRONIX 7A26 SCOPE,PN,DUAL CH C0005452
Page 24
SCHEDULE 8. CAPITAL EQUIPMENT
-----------------------------
PhonePrint Inc.
Fixed Assets
As of November 30, 1994
MAKE MODEL DESCRIPTION XXXXX #
XXXXXXXXX 0X00 SCOPE,PN,TIME BASE C0005598
SD TIMECODE READER 8132 C0005825
HP 436A METER,POWER,MW C0006519
HP 8656A GEN,SIGNAL C0007157
HP 197B CAMERA,SCOPE C0007573
HP 8970A METER,NOISE C0007647
TEKTRONIX 485 SCOPE,PORTABLE C0007725
HP 5335A COUNTER,ELEC C0007925
ESL PROJ 5110 MODULE, AMPL, BIAS C0011605
TEKTRONIX 2445 SCOPE,PORTABLE C0011887
TEKTRONIX 2465CTS O'SCOPE SNBO52750 C0012315
HP 16OG LOGIC ANALYZER C0012426
HP 6024A POWER SUPPLY C0012969
IBM 6180-002 CMPTR,PLOTTER,CLR C0013809
HP 3335A GEN,SYNTHESIZER C0014059
HP 5385A COUNTER,ELEC C0017628
HP HP 6632A PWR,SUPP,DC C0019030
FLUKE MFG 6080A GEN,SIGNAL C0019122
HP 6632A PWR,SUPP,DC C0019126
HP 6632A PWR,SUPP,DC C0019128
HP 5087A AMPL,DISTR C0021441
IFR SYSTEMS COM120A MONITOR, COMMUNICATION C0021580
IFR SYSTEMS 120A RECEIVER,COMM C0021984
NCA PERIPHERAL CMPTR,DRIVE,DISK C0021985
MXT1240S
NCA PERIPHERAL CMPTR,DRIVE,DISK C0021986
MXT1240S
II INC XXX00X-000 XXX,XXX C0022048
XXXX-XXXXX ZPBI007001 CONVERTER, A/D C0022049
NCA 0000XX XXXXX,XXXXX,XXXX C0022150
DIGITAL EQ 4000/90 SYSTEM,VAC C0022191
MAXTOR KOOCHOHE 1.2 GBYTE DISK DRIVES C0022197
MAXTOR KOOCHOHE 1.2 GBYTE DISK DRIVES C0022198
STANFORD RES SR620 COUNTER,UNIVERSAL C0023118
STANFORD RES FS700 FREQ STD,XXXXX C0023119
LOW PHASE NOISE OSCIL C0023196
PANASONIC KX-B520 PRINTBOARD,ELECTRONIC C0023375
COMBINET CB-400 BRIDGE,ETHERNET C0023433
NOISE COM UFX7109 GEN,NOISE,PROGRAMMABLE C0023434
4MM TAPE DRIVE C0023551
HP 8560E ANAL, SPECTRUM C0023814
AUTOCAD SYSTEM C0023823
17 MONITOR C0023824
LASER PRINTER C0023825
2 GB HD, SCSI-II, Cable C0023963
4.2 GB MUL C0023966
4.2 GB MUL C0023967
4.2 GB MUL C0023968
CSC 1924EXT DRIVE,DISK,SCSI C0023975
CSC 1924EXT DRIVE,DISK,SCSI C0023976
RADIUS C0507 DRIVE,DISK,SCSI C0023977
Page 25
SCHEDULE 8. CAPITAL EQUIPMENT
------------------------------
PhonePrint Inc.
Fixed Assets
As of November 30, 1994
MAKE MODEL DESCRIPTION ASSET#
2 GB SCSI C0023978
2 GB SCSI C0023979
2 GB SCSI C0023980
2 GB SCSI C0023981
2 GB SCSI C0023982
2 GB SCSI C0023983
CSC 1924EXT DRIVE,DISK,SCSI C0023985
2 GB SCSI C0023986
00-0 XX XX & 00 XXXXXXXXXXX X0000000
0 XX SCSI C0023988
Xyplex Server C0023999
Sun Workstation C0024096
Self-Const Equip PHONEMAID, SIG GENERATORS(2) Self-Const
POWER 36100RF PWR SUPPLY, DC C0001464
DESIGN
TEKTRONIX 2335 SCOPE,PORTABLE C0007583
TEKTRONIX 496P ANAL,SPECT C0007792
HP 6653A POWER SUPPLY C0022979
HP 6653A POWER SUPPLY C0022980
HP 6653A POWER SUPPLY C0022981
HP 6673A POWER SUPPLY C0022982
HP 6543A POWER SUPPLY C0022983
HP 6543A POWER SUPPLY C0022984
HP 6543A POWER SUPPLY C0022985
HP 6543A POWER SUPPLY C0022986
TEKTRONIX TAS475 SCOPE,PORTABLE C0023312
TEKTRONIX 2232 SCOPE,PORTABLE C0023314
HP 8568B ANAL,SPECT C0023405
HP 8482B SENSOR,POWER C0023406
HP 8657B GEN,SIGNAL C0023407
HP 437B METER,POWER,MW C0023408
HP 5385A COUNTER,ELEC C0023473
POWER SUPPLY C0023574
HP 5385A COUNTER,ELEC C0023704
DRIVE CONTROL C0023784
DSP32C Board C0023874
CSC 1924EXT DRIVE,DISK,SCSI C0023984
Marconi Signal Generator C0024035
Rugged Computers C0024109
Rugged Computers C0024110
IBM SEL III TYPEWRITER C0006472
APPLE PRO 630 Laserwriter Pro 630 C0022148
HP FAX 950 FAX-EXPENSED C0023902
HP 451MX LASERJET PRINTER C0024045
HP 8591E ANAL,SPECT,PORTABLE C0023831
SUN X822A STORAGE PACK,5GB C0023954
SUN X569A DRIVE,DISK 4.2GB C0023955
SUN X569A DRIVE,DISK 4.2GB C0023956
SUN X569A DRIVE,DISK 4.2GB C0023957
Xyplex Server C0023998
Page 26
SCHEDULE 8. CAPITAL EQUIPMENT
-----------------------------
PhonePrint Inc.
Fixed Assets
As of November 30, 1994
MAKE MODEL DESCRIPTION ASSET #
Xyplex Server C0024127
Xyplex Server C0024128
XXX ENG XB024-10 PLATFORM LIFTER C0023120
XXX ENG XB024-10 PLATFORM LIFTER C0023121
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023160
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023161
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023162
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023163
XXX ENG XB024-10 PLATFORM TRUCK/LIFT C0023164
WORK BENCHES C0023539
WIRE SHELF CARTS C0023540
Floor Scale C0024036
Instapak Model 750 Packaging C0024129
Stockroom Security Enclosure C0022850
HP HP3100 C0023841
Page 27
