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Exhibit 10.5.1
FIRST AMENDMENT TO LICENSE, RIGHTS AND SUPPLY AGREEMENT
This First Amendment to License, Rights and Supply Agreement (this
"Amendment") is made March 30, 1999, by and between Telxon Corporation
("Telxon") and Aironet Wireless Communications, Inc. ("Aironet").
BACKGROUND
A. Telxon and Aironet are parties to a License, Rights and Supply
Agreement dated as of March 31, 1998 (together with all exhibits and schedules
thereto, the "Agreement"), pursuant to which Aironet has granted to Telxon
certain rights and licenses, and has agreed to supply Telxon with certain
products.
B. Aironet and Telxon each desires to amend the Agreement to modify
certain royalties payable by Telxon to Aironet under the Agreement, as set forth
in this Amendment.
AGREEMENT
Now, therefore, in consideration of the foregoing, the agreements made
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1 EFFECTIVE DATE. This Amendment is effective for royalties due for the
period beginning March 1, 1999 (the "Effective Date"), and each party shall take
all actions necessary to give this Amendment such effect.
2 INTEGRATION. This Amendment and the Agreement collectively set forth the
entire understanding and agreement between the parties with respect to the
subject matter hereof and thereof, and shall be read together as a single
integrated document. To the extent that the terms of the Agreement conflict with
the terms of this Amendment, the terms of this Amendment shall control.
3 DEFINITIONS. Any initially capitalized term which is not defined herein
shall have the meaning set forth in the Agreement.
4 ROYALTIES.
4.1 Notwithstanding any provision of the Agreement to the contrary and
subject to Section 6 of this Amendment, commencing on the Effective Date of this
Amendment Telxon shall pay to Aironet with respect to each month during the
periods set forth below, the following amounts as a fixed royalty for such month
under Article 5 of the Agreement, SCHEDULE 5 of the Agreement, Section 8.11.3.2
of the Agreement and Section 4 of SCHEDULE 8 of the Agreement (collectively the
"Per Unit Sections"):
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Royalty Period Monthly Royalty
March 1, 1999 - March 31, 2000 $541,667
April 1, 2000 - March 31, 2001 $416,667
Beginning April 1, 2001 and every month thereafter $333,333
The foregoing fixed monthly royalties are payable for the same purposes and
in lieu of the per unit of hardware and per copy of software royalties payable
by Telxon under the Per Unit Sections in respect of any period commencing on or
after the Effective Date of this Amendment, and the payment thereof is due
within ten business days after the last day of the month with respect to which
it is payable.
4.2 Telxon shall have the right to elect, with respect to the royalties
accruing at any time on or after the earlier of (i) April 1, 2001, or (ii) a
Change in Control as provided for in Section 7.1 of Schedule 5 of the Agreement,
to terminate the fixed royalties payable under Section 4.1 of this Amendment
and, in lieu thereof, to pay to Aironet the per unit of hardware and per copy of
software royalties under the Per Unit Sections, as modified by Section 5 of this
Amendment and, subject to the provisions of Section 4.3 of this Amendment,
otherwise on the terms and under the conditions set forth in the Agreement. Any
such termination election shall be made by written notice given to Aironet and
shall be effective, in the case of notice given pursuant to clause (i) of the
preceding sentence, as of the first day of the calendar month commencing on or
after the date ninety (90) days after the date such notice is given, and in the
case of notice given pursuant to clause (ii) of the preceding sentence, as of
the later of the date such notice is given or the date on which the subject
Change in Control occurs. In the case of a termination of the fixed royalties in
connection with the Change in Control, the amount of the fixed royalty due with
respect to the month in which the Change in Control occurs shall be prorated on
a per diem basis (assuming a thirty (30) day month) based on the number of days
elapsed during such month prior to the date of such Change in Control.
4.3 Section 7.6 of Schedule 5 of the Agreement is hereby deleted and shall
be of no further force or effect.
5 ROYALTY REDUCTION. In consideration of the agreements made in
Section 4.1 of this Amendment and elsewhere, in the event that at or after
April 1, 2001 or a Change in Control (as provided in Section 7.1 of SCHEDULE 5
of the Agreement), Telxon elects to terminate the fixed royalty payable under
Section 4.2 of this Amendment and return to a per unit and per copy royalty,
then Sections 3 and 4 of SCHEDULE 5 of the Agreement shall be deleted in their
entirety and replaced with the following:
3. RADIOS. Telxon shall pay Aironet no royalty for any Radio
sold, or otherwise transferred or invoiced, by Telxon in or for use in
any access point, and 15% for each Radio sold, or otherwise transferred
or invoiced, by Telxon in or for use in
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any handheld client or other non-access point device. If a royalty is
due under Section 2 or 4 of this SCHEDULE 5, no royalty is due under
this Section 3.
4. PC CARDS. Telxon shall pay Aironet no royalty for any PC Card
sold, or otherwise transferred or invoiced, by Telxon in or for use in
any access point, and 15% for each PC Card sold by, or otherwise
transferred or invoiced by Telxon in or for use in any handheld client
or other non-access device. If a royalty is due under Section 3 of this
SCHEDULE 5, no royalty is due under this Section 4.
6 NEW SOFTWARE. Royalties for New Software shall remain on a per copy
basis in accordance with the terms of the Agreement.
7 GENERAL.
7.1 REPORTING. In addition to, but not in duplication of, any reporting
requirements in the Agreement, no later than the fifth business day of each
month, Telxon shall report to Aironet in writing, by model and unit volume, each
sale by Telxon for the previous month of any product purchased by Telxon under
the Agreement or upon which a royalty is payable by Telxon to Aironet under the
Agreement or this Amendment.
7.2 AMENDMENTS; WAIVER. The provisions of this Amendment may not be
amended or waived except pursuant to a written agreement executed by both
parties hereto. Section 17 of the Agreement provides that neither party shall
have the right to terminate the Agreement for any reason. Such provision applies
equally to this Amendment.
7.3 GOVERNING LAW; JURISDICTION. This Amendment shall be construed under
and governed by the laws of the State of Ohio, without regards to conflict or
choice of laws, statutes, regulations, rules or principles. Any action relating
to the execution or performance of this Amendment shall be brought in the
courts, state or federal, sitting in Cuyahoga or Summit County, Ohio, and each
party hereto consents to the jurisdiction and venue of such courts, and agrees
not to contest venue on the grounds of forum non conveniens or otherwise.
7.4 NOTICES. Any notice, request, demand or other communication required
or permitted hereunder shall be in writing and shall be deemed to have been
given upon receipt, or if delivered or sent by facsimile transmission, upon
confirmation of transmission, or if sent by overnight courier, the second day
after deposit, to the addresses set forth in the Agreement.
7.5 ASSIGNABILITY. This Amendment may not be assigned, and no right or
obligation herein may be assigned or delegated, separate or apart from the
Agreement, subject to all restrictions on assignment and delegation applicable
thereto, and any purported assignment or
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delegation in violation thereof shall be void and of no effect. Subject to the
foregoing, this Amendment shall be binding upon and enforceable by, and shall
inure to the benefit of, the parties hereto and their respective permitted
successors and assigns.
7.6 CAPTIONS AND GENDER. The captions in this Amendment are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Amendment of the masculine, feminine
or neuter pronoun, shall include the others as the context may require.
7.7 EXECUTION IN COUNTERPARTS. This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same document. An executed faxed
counterpart of this Amendment shall be binding on the parties, and for
evidentiary purposes shall be deemed to be an original.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first set forth above.
AIRONET WIRELESS COMMUNICATIONS, INC. TELXON CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxx, President Xxxxxx X. Xxxxxxx
Its: Senior Vice President,
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Financial Operations
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