EXHIBIT 10.8
PURCHASE AND LICENSE AGREEMENT
This PURCHASE AND LICENSE AGREEMENT is made and entered into on the
14th day of January, 2000, between TRW Inc., an Ohio corporation, acting on
behalf of its Systems and Information Technology Group ("TRW"), and Wireless,
Inc., a California corporation ("WI").
WHEREAS, TRW has designed and developed a point to multipoint wireless
networking technology generally referred to as the Spitfire technology; and
WHEREAS, WI desires to purchase certain assets related to the Spitfire
technology and to obtain certain license rights in the Spitfire technology.
NOW THEREFORE, in consideration of the mutual promises contained herein
and the mutual benefits to be derived therefrom, TRW and WI agree as follows:
ARTICLE 1. DEFINITIONS
The following words and phrases will have the meanings set forth below:
1.1 ACCESS POINT. A common connection point through which multiple wireless
devices may connect to each other, to other Access Points, to other wireless or
wired devices on a network, or to other networks. An Access Point consists of at
least one of each of the following components: (i) antenna, (ii) transceiver,
(iii) switching and/or routing device. These Access Point components need not be
housed together in a single unit (for example, the antenna may be separate from
the electronics).
1.2 AFFILIATE. A corporation, joint venture, partnership or other entity
that, now or hereafter, directly or indirectly controls, is controlled by, or is
under common control with the particular party; but only so long as such control
continues to exist. For purposes of this definition, "control" means beneficial
ownership of at least twenty percent (20%) of the equity or outstanding shares
or securities (representing the right to vote for the election of directors or
other managing authority) of, or at least twenty percent (20%) interest in the
income of, an entity; or the right to vote for or appoint at least twenty
percent (20%) of the directors, general partners or other controlling persons or
governing body of such entity; or other interest representing the right to make
the decisions for such corporation, company or other entity.
1.3 AGREEMENT. This Purchase and License Agreement and the following
Schedules attached hereto:
Schedule 1 Spitfire Technical Information and Software
[*] CERTAIN INFORMATION OF THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Schedule 2 Spitfire Patents
Schedule 3 Xxxx of Sale
Schedule 4 Exceptions to TRW's Representations and Warranties
Schedule 5 Proprietary Information Exchange Agreement
Schedule 6 Exceptions to WI's Representations and Warranties
Schedule 7 Teaming Agreement
Schedule 8 Time and Materials Proposal
Schedule 9 Additional Spitfire Technical Information and Software
1.4 CAPITAL ASSETS. The capital equipment and other tangible assets of TRW
sold to WI pursuant to the Xxxx of Sale attached as Schedule 3 (Xxxx of Sale).
1.5 CAPITALIZATION EVENT. Any of the following: (i) A firm-commitment,
underwritten public offering of WI common stock, at a price per share exceeding
$7.50, pursuant to an effective registration statement under the Securities Act
of 1933, as amended, resulting in at least $25,000,000 in gross proceeds to WI;
or (ii) a private placement of WI preferred shares, closing at least nine (9)
months after the Effective Date.
1.6 CONCURRENT AGREEMENTS. The Series F Preferred Stock Purchase Agreement
and the Sixth Amended and Restated Investors' Rights Agreement between the
parties signed concurrently herewith.
1.7 CONFIDENTIAL INFORMATION. Information maintained by a party as
confidential, including (to the extent so maintained) trade secrets, know-how,
inventions, techniques, processes, algorithms, software programs, schematics,
designs, contracts, customer lists, product plans and specifications, schedules,
product availability information, cost and profit data, other financial
information, sales and marketing plans and other business information.
1.8 CORE TEAM. The TRW employees and contractors that TRW and WI have
agreed will initially be assigned to the Program Office.
1.9 DERIVATIVE WORK. This term is defined in Section 101 of the Copyright
Act of 1976, and includes any translation or abridgment, the inclusion of some
or all of a work as part of a different work, or any other form in which a work
may be recast, transformed, or adapted.
1.10 EMPLOYEE. A person who is then employed by the relevant party, or who
was employed by that party at any time during the preceding one (1) year period.
1.11 EFFECTIVE DATE. The date of the "Closing" of the Series F Preferred
Stock Purchase Agreement (as such term is defined therein).
1.12 EQUIPMENT. The design tools, test equipment, cell libraries and other
items made available by TRW for WI's use in connection with Spitfire product
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development pursuant to Section 3.9 (Use of TRW Design Tools and Equipment).
Notwithstanding the foregoing, "Equipment" excludes the Capital Assets.
1.13 EXCLUDED PRODUCT. A point to multipoint Wireless Communications system
that is designed to provide bi-directional high speed transmission of voice,
video and/or data, and that:
(i) uses at least one Access Point the antenna of which: (a) is not
located inside a building, and (b) is connected directly or
indirectly to the earth (such as to a roof top, mountain peak, light
pole, car, ship or pier); AND
(ii) uses the following techniques in the point to multipoint air
interface:
(a) Code Division Multiple Access; AND
(b) Asynchronous Transfer Mode and/or Packatized Physical Layer; AND
(c) Time Division Duplex and/or Frequency Division Duplex; AND
(iii) contains or was developed using any TRW Spitfire Technical
Information, TRW Spitfire Software, WI Future Improvement, Program
Office Technology or Spitfire Invention; and
(iv) is not a Mobile System.
1.14 FLYSPEC. The document, labeled "WISP System Summary Specification" and
dated 11/17/99, included in the documents listed on Schedule 1 (Spitfire
Technical Information and Software).
1.15 GOVERNMENT. Any department, agency, organization, office or the like
("Agency") of the United States Government or in which the United States is a
member (such as NATO or the United Nations); and any Agency of the government of
another sovereign state or country throughout the world or in which such
government is a member. Notwithstanding the foregoing, "Government" excludes any
Agency, company or organization (or Affiliate thereof) that provides any kind of
telecommunications or data communications product or service other than
exclusively for its own internal use or the use of other Governments.
1.16 GOVERNMENT FIELD. Use of any product in any location, including both
Indoor Access Points, Outdoor Access Points, or any combination thereof, solely
by one or more Governments.
1.17 INDOOR ACCESS POINT. An Access Point each component of which is
located inside the same building on earth.
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1.18 INDOOR FIELD. Wireless Communications using one or more Indoor Access
Points, and no Outdoor Access Points. The term does not encompass the Government
Field.
1.19 INTELLECTUAL PROPERTY. All rights under Patents and copyrights; mask
work rights; rights to exploit know-how, trade secret and other non-public or
confidential information, including the right to use and exploit Confidential
Information: and rights under any other form of intellectual property.
1.20 LICENSED PRODUCT. The Spitfire Products and any other product
developed by or for WI that incorporates any Spitfire IP or any TRW Future
Improvement.
1.21 MOBILE SYSTEM. A system for Wireless Communications that: (i) uses
handoff protocols to maintain a continuous connection, permitting the
transmission and reception of data while an end user device transfers its
wireless connection from at least one Access Point to a different Access Point,
and (ii) does not contain, and was not developed using, any TRW Spitfire
Technical Information, TRW Spitfire Software, WI Future Improvement, Program
Office Technology or invention covered by a Spitfire Patent.
1.22 OUTDOOR ACCESS POINT. An Access Point which: (i) is designed to have a
minimum radiated RF signal range (through free space) of at least 1 kilometer;
(ii) the antenna of which is not located inside a building; and (iii) the
antenna of which is connected directly or indirectly to the earth (such as to a
roof top, mountain peak, light pole, car, ship or pier).
1.23 OUTDOOR FIELD. Wireless Communications using one or more Outdoor
Access Points, and no Indoor Access Points, but excluding the Government Field.
1.24 PATENTS. All United States or foreign patents and pending patent
applications and utility models, including any continuations, continuations in
part, divisions, reissues, extensions or foreign country counterparts thereof.
1.25 PERSON MONTH. A measure of time equal to 176 person hours.
1.26 PROGRAM OFFICE. An engineering organization which TRW will, at WI's
request, establish to continue development of Spitfire products. Further
specifications concerning the Program Office are set forth in Article 3 (Program
Office) herein.
1.27 PROGRAM OFFICE INVENTION. An invention invented, by any Program Office
Person in the course of performing work for the Program Office.
1.28 PROGRAM OFFICE IP. All Intellectual Property covering or relating to
the Program Office Technology.
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1.29 PROGRAM OFFICE PATENT. Any Patent issuing or applied for on a Program
Office Invention.
1.30 PROGRAM OFFICE PERSON. Any one or more of the following: (i) a TRW or
WI employee assigned to the Program Office created pursuant to Article 3
(Program Office); (ii) an employee of a TRW contractor providing services to the
Program Office; or (iii) a TRW employee or contractor providing services under
the Time and Materials Contract.
1.31 PROGRAM OFFICE SOFTWARE. All Software created by any Program Office
Person in the course of performing work for the Program Office, including
Derivative Works of TRW Spitfire Software so created.
1.32 PROGRAM OFFICE TECHNICAL INFORMATION. Technical Information developed
by any Program Office Person. in the course of performing work for the Program
Office.
1.33 PROGRAM OFFICE TECHNOLOGY. The Program Office Technical Information,
the Program Office Software, and the Program Office Inventions.
1.34 RESIDUAL INFORMATION. Information retained in non-tangible form (i.e.,
in a person's memory) by a person who rightfully had access to such information
and who did not make an effort to purposely retain such information in memory in
order to avoid the field of use restrictions otherwise applicable to the Sale of
products developed with the use of such information. "Residual Information" may
include, for example, data, know-how, ideas, concepts, inventions, methods,
processes and techniques.
1.35 RF. Radio Frequency (wireless).
1.36 SALE, SELL, SOLD. The sale, licensing, distribution, rental or other
disposition of a product, directly to end users, or indirectly though any sales
representative, sales agent, reseller or remarketer of a product or service, at
any tier, including to OEMs, VARs, system integrators and distributors and other
third party sales channels employed from time to time.
1.37 SERIES F PREFERRED STOCK PURCHASE AGREEMENT. The agreement bearing
such title, by and between WI and TRW, and signed concurrently with this
Agreement.
1.38 SOFTWARE. Computer programming in any form, including microcode,
firmware, object code, source code and documentation therefor.
1.39 SPITFIRE. The TRW Systems & Information Technology Group's
point-to-multipoint wireless communications system in existence on the Effective
Date that is designed to provide bi-directional transmission of high speed data
and that allows multiple service offerings, including voice, video and data, and
the components that comprise such system; and the future versions of such system
and components developed from time to time by TRW and/or WI or any of their
contractors or licensees.
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1.40 SPITFIRE INVENTION. An invention that: (i) on the Effective Date, is a
subject of a Spitfire Patent; or (ii) is selected by WI pursuant to Section 9.1
(WI May Patent Spitfire Inventions).
1.41 SPITFIRE IP. All Intellectual Property covering or relating to the
Spitfire Technology.
1.42 SPITFIRE PATENT. A Patent (including a pending patent application)
listed on Schedule 2 (Spitfire Patents)).
1.43 SPITFIRE PRODUCT. The most recent version of each product, subsystem
or component, in existence on the Effective Date, that incorporates any TRW
Spitfire Technical Information, any TRW Spitfire Software or any invention
described in a Spitfire Patent.
1.44 SPITFIRE TECHNOLOGY. The TRW Spitfire Technical Information, the TRW
Spitfire Software and all other technology in existence on the Effective Date
that is embodied in any Spitfire Product. Notwithstanding the foregoing,
"Spitfire Technology" excludes the inventions described in the Spitfire Patents.
1.45 STOCK. The shares of common stock of WI issued to TRW in exchange for
the rights granted to WI under this Agreement.
1.46 TEAMING AGREEMENT. The agreement attached as Schedule 7 (Teaming
Agreement).
1.47 TECHNICAL INFORMATION. Proprietary information, data and confidential
know-how, including methods, processes, algorithms, databases, formulae,
devices, specifications and drawings pertaining to the design or manufacture of
a Spitfire product, including any mask works developed in connection therewith.
1.48 TIME AND MATERIALS CONTRACT. Any contract awarded by WI to TRW for
continued development of the Spitfire products, including the Letter Contract
signed concurrently herewith.
1.49 TRW FUTURE IMPROVEMENT. Any Patent issued or issuing to TRW (or to a
TRW Affiliate if TRW is entitled to license such Patent without payment of a
royalty to such Affiliate) on a patent application entitled to an effective
filing date on or after the Effective Date and prior to the fifth anniversary of
the Effective Date, to the extent a claim under any such Patent covers an
invention that improves: (i) any Spitfire Technology; (ii) any invention that is
the subject of a Spitfire Patent; (iii) any WI Future Improvement; or (iv) any
TRW Future Improvement; and all TRW Spitfire Technical Information or TRW
Software that constitutes an improvement to any Spitfire Technology, to any
invention that is the subject of a Spitfire Patent, to any WI Future
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Improvement or to any TRW Future Improvement. Notwithstanding the foregoing,
"TRW Future Improvement" excludes the Program Office Technology.
1.50 TRW SPITFIRE SOFTWARE. All Software that is incorporated into any
Spitfire Product, listed on Schedule 1 (Spitfire Technical Information and
Software) or on Schedule 9 (Additional Spitfire Technical Information and
Software), or provided by TRW to WI in any form, or that constitutes or is
incorporated into any TRW Future Improvement. Notwithstanding the foregoing,
"TRW Software" excludes all Program Office Software and all Software that is
either an off-the-shelf commercial product (such
as Microsoft Word) or is identified by TRW as a third party product at the time
it provides such Software to WI.
1.51 TRW SPITFIRE TECHNICAL INFORMATION. The Technical Information of TRW
(or of a TRW Affiliate if TRW is entitled to license such information without
payment of a royalty to such Affiliate) pertaining to any Spitfire Product; all
information, provided in any form to WI by TRW relating to any Spitfire product;
the information, documents and other items listed in Schedule 1 (Spitfire
Technical Information and Software), and the information, documents and other
items listed in Schedule 9 (Additional Spitfire Technical Information and
Software). Notwithstanding the foregoing, "TRW Technical Information" excludes
the Spitfire Patents, the TRW Spitfire Software, and all Program Office
Technical Information.
1.52 WI FUTURE IMPROVEMENT. Any Patent issued or issuing to WI (or to a WI
Affiliate if WI is entitled to license such Patent without payment of a royalty
to such Affiliate) on a patent application entitled to an effective filing date
on or after the Effective Date and prior to the fifth anniversary of the
Effective Date, to the extent a claim under any such Patent covers an invention
that improves; (i) any Spitfire Technology; (ii) any invention that is the
subject of a Spitfire Patent; (iii) any WI Future Improvement; or (iv) any TRW
Future Improvement; and all WI Technical Information and WI Software that
constitutes an improvement to any Spitfire Technology, to any invention that is
the subject of a Spitfire Patent, to any WI Future Improvement or to any TRW
Future Improvement. Notwithstanding the foregoing, "WI Future Improvement"
excludes the Program Office Technology.
1.53 WI SOFTWARE. All Software that constitutes or is incorporated into any
WI Future Improvement. Notwithstanding the foregoing, "WI Software" excludes all
Program Office Software.
1.54 WIRELESS COMMUNICATIONS. The transmission/reception of radio frequency
(RF) signals propagating through the atmosphere and not by way of wires, cables
or other such physical interconnection means.
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ARTICLE 2. PATENT ASSIGNMENT, LICENSES, NONCOMPETITION
AND COVENANT NOT TO XXX
2.1 ASSIGNMENT OF INTEREST IN SPITFIRE INVENTIONS
2.1.1 ASSIGNMENT. Except for Spitfire Inventions included within the
documentation listed on Schedule 9 (Additional Spitfire Technical Information
and Software), TRW hereby sells and assigns to WI, without further compensation,
*. With respect to inventions included within the documentation listed on
Schedule 9 (Additional Spitfire Technical Information and Software), *. Neither
party will have an obligation of accounting with respect to any such inventions.
2.1.2 LIMITED USE BY WI. WI agrees that unless otherwise agreed by TRW in
writing, Licensed Products may be Sold by WI for use only in the Outdoor Field
and not for use in either the Indoor Field or the Government Field.
Notwithstanding the foregoing, WI may sell such Licensed Products to TRW and its
Affiliates for use in the Indoor Field, and for Sale by TRW and its Affiliates
(with or without modification) for use in the Indoor Field and/or the Government
Field.
2.1.3 LIMITED USE BY TRW. TRW agrees that unless otherwise agreed by WI in
writing, products containing any Spitfire Invention may not be Sold by TRW for
use in the Outdoor Field, except in the Government Field.
2.1.4 LICENSING AND TRANSFER OF SPITFIRE PATENTS. Each party agrees that
except as permitted in Section 19.3 (Assignments), it will not grant a license
under any issued United States Spitfire Patent, or transfer its interest in any
such Patent, without first obtaining the other party's written consent, which
will not be unreasonably withheld or delayed. The preceding undertaking does not
apply, however, to the licensing by TRW of rights to Spitfire Patents to TRW
Affiliates, but only as such rights pertain to the Indoor Field or the
Government Field.
2.2 PROGRAM OFFICE IP AND TECHNOLOGY
2.2.1 *
2.2.2 LIMITED USE BY WI. WI agrees that unless otherwise agreed by TRW in
writing, products containing any Program Office IP or Program Office Technology
may be Sold by WI for use only in the Outdoor Field and not in either the Indoor
Field or the Government Field. Notwithstanding the foregoing, WI may sell such
products to TRW and its Affiliates for use in the Indoor Field, and for Sale by
TRW and its Affiliates (with or without modification) for use in the Indoor
Field and/or the Government Field.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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2.2.3 LIMITED USE BY TRW. TRW agrees that unless otherwise agreed by WI in
writing, products containing any Program Office IP or Program Office Technology
may be Sold by TRW only for use in the Government Field.
2.2.4 LICENSING AND TRANSFER OF PROGRAM OFFICE PATENTS. Each party agrees
that except as permitted in Section 19.3 (Assignments), it will not grant a
license under any issued United States Program Office Patent, or transfer its
interest in any such Patent, without first obtaining the other party's written
consent, which will not be unreasonably withheld or delayed.
2.3 LICENSE TO WI
TRW hereby grants to WI a fully paid up, perpetual, royalty free, worldwide
right and license under the Spitfire IP and each TRW Future Improvement to
reproduce, modify and prepare Derivative Works of TRW Spitfire Software, and to
make, have made, manufacture, import, use and Sell products, and to authorize
others to do some or all of the foregoing (except as set forth in Section 2.8
(Sublicenses)) consistent with the licenses granted to WI herein; provided that
unless otherwise agreed by TRW in writing, such products may be Sold for use
only in the Outdoor Field and not in either the Indoor Field or in the
Government Field. Notwithstanding the foregoing: (i) the license granted herein
to WI is applicable for Spitfire IP included in the documentation listed on
Schedule 9 (Additional Spitfire Technical Information and Software) only if and
to the extent TRW has the right to grant licenses thereto, and (ii)WI may Sell
Licensed Products to TRW and its Affiliates for use in the Indoor Field, and for
Sale by TRW and its Affiliates (with or without modification) for use in the
Government Field. The license granted herein to WI does not extend to, nor does
it grant any rights to, any TRW manufacturing processes relating to, or TRW
products that are compound semiconductors or integrated circuits.
2.4 EXCLUSIVITY, CONVERSION TO NON-EXCLUSIVE LICENSE
The license to WI set forth in Section 2.3 (License to WI) will be
exclusive (even as to TRW) to the extent, but only to the extent, it permits the
manufacture, use, importation or Sale of Excluded Products; provided such
license will become non-exclusive if, within eighteen (18) months of the
Effective Date, WI has not offered for Sale a commercial (non-beta) version of
any Licensed Product or product containing a Spitfire Invention, and such
failure is not due to the fault or negligence of TRW or to any cause that under
Section 12.2 (Excusable Delay) would constitute an excuse for non-performance of
an obligation under this Agreement. This provision does not prohibit TRW from
making, having made, importing, using or Selling Excluded Products for use in
the Government Field, or from reselling * WI Spitfire products purchased under
a Purchase Agreement to be negotiated.
2.5 LICENSE TO TRW
WI hereby grants to TRW a fully paid up, perpetual, royalty free,
non-exclusive, worldwide right and license under each WI Future Improvement to
reproduce, modify and prepare Derivative Works of WI Software, to make, have
made, manufacture,
[*] CERTAIN INFORMATION OF THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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import, use and Sell products for use in the Government Field, and to authorize
others to do some or all of the foregoing (except as set forth in Section 2.8
(Sublicenses)) consistent with the licenses granted to TRW herein, provided such
products may be Sold only for use in the Government Field.
2.6 RESIDUALS LICENSE
Notwithstanding any other provision of this Agreement, except as provided
in this Section 2.6 (Residuals License), Residual Information retained in human
memory by an employee or contractor of a party may be used by that person (e.g.,
on behalf of an employer) for any purpose and without restriction, and products
containing or developed using such Residual Information may be Sold for use in
any field of use. This Section 2.6 (Residuals License) does not grant either
party a license under any issued Patent.
2.7 NONCOMPETITION
During the time that WI's license under Section 2.3 (License to WI) remains
exclusive under Section 2.4 (Exclusivity, Conversion to Non-Exclusive License),
TRW agrees that it will not make, have made, import, use or Sell, nor license
any third party to make, have made, import, use or Sell, any Excluded Product,
other than for use in the Government Field. This provision does not prohibit TRW
from reselling * WI Spitfire products purchased under a Purchase
Agreement to be negotiated.
2.8 SUBLICENSES
2.8.1 SUBLICENSING BY WI. The right and license granted under Section 2.3
(License to WI) do not confer the right, and WI will have no right, to
sublicense any third party: (i) under any United States Patent issued to TRW on
an invention that is a TRW Future Improvement, unless otherwise agreed by TRW in
writing, or (ii) under any of the licenses granted herein unless such sublicense
is consistent with the rights granted herein.
2.8.2 NOTICE BY WI. If WI licenses any third party under any Spitfire IP or
any TRW Future Improvement to manufacture and sell products, WI will, within
sixty (60) days of the execution of the sublicense agreement, inform TRW in
writing of the name and address of the sublicensee.
2.8.3 SUBLICENSING BY TRW. The right and license granted under Section 2.5
(License to TRW) do not confer the right, and TRW will have no right, to
sublicense any third party: (i) under any United States Patent issued to TRW on
an invention that is a WI Future Improvement, unless otherwise agreed by WI in
writing, or (ii) under any of the licenses granted herein unless such sublicense
is consistent with the rights granted herein.
2.8.4 NOTICE BY TRW. If TRW licenses any third party under any WI Future
Improvement or Spitfire Patent to manufacture and sell products, TRW will,
within
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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sixty (60) days of the execution of the sublicense agreement, inform WI
in writing of the name and address of the sublicensee.
2.9 DUTY OF DISCLOSURE
In addition to any other obligation under this Agreement, each party
agrees, during the first five (5) years after the Effective Date and subject to
the provisions of the Mutual Confidentiality Agreement attached as Schedule 5,
to disclose to the other party any WI Future Improvement or TRW Future
Improvement (as applicable); provided that this duty of disclosure will apply
only if and to the extent necessary to answer specific technical questions
submitted by the other party.
2.10 COVENANT NOT TO XXX
TRW covenants and agrees not to bring or assert any claim suit or action:
(i) against WI, its customers, licensees or sublicensees (at any tier), or its
or any of their officers, employees, agents, contractors, successors or assigns,
alleging that the manufacturing of any Licensed Product or product containing a
Spitfire Invention, the use of any such product in the Outdoor Field, or the
Sale of any such product for use in the Outdoor Field, infringes any Patent on
which TRW has the right to file suit; or (ii) against WI or any of its officers,
employees, agents, contractors, successors or assigns, alleging that the Sale of
any such product infringes any Patent on which TRW has the right to file suit,
if such Sale would not constitute a breach of this Agreement under the
provisions of Section 14.2 (Use Outside WI's Appropriate Field: When Not a
Breach). Notwithstanding the foregoing, this covenant not to xxx will not apply
to any Patent, not owned by TRW, if as a result of TRW's failure to file suit
TRW would incur a financial obligation to a third party.
ARTICLE 3. PROGRAM OFFICE
3.1 ESTABLISHMENT AND TERM OF PROGRAM OFFICE
TRW will, at WI's request, establish a Program Office to continue
development of Spitfire products. This office will exist so long as WI deems the
office to be useful, but in no event longer than eighteen months unless
otherwise agreed by the parties.
3.2 STAFFING AND MANAGEMENT OF PROGRAM OFFICE
WI will have sole responsibility for managing the Program Office. TRW will,
at WI's request from time to time, promptly provide staff for the Program Office
with the skill sets reasonably requested by WI. WI will also assign to the
Program Office such WI employees as WI in its sole discretion deems appropriate.
3.3 CORE TEAM, INCENTIVES
TRW will initially assign to the Program Office, on a full-time basis, the
Core Team (consisting of a Program Manager, and adequate staff to complete
development of the Spitfire products). TRW agrees to provide an appropriate
incentive compensation
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package to the Core Team to entice the Core Team to remain with the Program
Office throughout its existence, to complete the development of Spitfire
products, and to meet the development and other specifications, milestones and
budgets reasonably specified by WI.
3.4 FACILITIES, SUPPLIES, SERVICES
The Program Office will be located in mutually agreed facilities. TRW will
provide all supplies (e.g., desks and chairs, computers and software, printers,
copier, fax, test equipment, office supplies), infrastructure (e.g., computer
network and telephone lines with appropriate network access restrictions
consistent with TRW security policies and procedures) and services (e.g.,
maintenance, lighting, heat, security, phone service and internet access) needed
by the Program Office related to Spitfire product development requirements,
including those items needed by WI employees; except that WI will provide
computers for its own employees.
3.5 TERMS APPLICABLE TO PROGRAM OFFICE SERVICES
TRW will offer to provide services to WI under a Time and Materials
Contract to be negotiated and signed by the parties no later than February 15,
2000. The terms of that contract will be consistent with the terms set forth in
this Agreement.
3.6 CHARGES AND PAYMENTS
3.6.1 TRW will invoice WI for services rendered by TRW employees assigned
to the Program Office, and by TRW contractors providing services to the Program
Office, in accordance with the rates set forth in Schedule 8 (Time and Materials
Proposal). These rates will remain in effect for at least 12 months from the
Effective Date, except as set forth in Section 3.7 (Additional Overhead). For
the next six months, there rates may be increased by TRW, provided the increase
will not exceed 4%.
3.6.2 Except as set forth in Section 3.9 (Use of TRW Design Tools and
Equipment), and on Schedule 8 (Time and Materials Proposal), these rates include
all overhead, general and administrative expenses, charges for facilities, and
charges for use of equipment, and WI will have no other responsibility for any
costs, expenses or liabilities incurred by or in connection with the Program
Office.
3.6.3 All payments will be in United States dollars and will be made at the
offices of TRW or such other place as TRW may designate, within forty five (45)
days of WI's receipt of TRW's invoice.
3.7 ADDITIONAL OVERHEAD
If in any calendar quarter the average ratio of: (i) WI employees assigned
to the Program Office (excluding WI's Program Office manager and his or her
assistant) to (ii) non-WI employees assigned to that office exceeds 1:3, and the
parties expect that that ratio will be exceeded in any subsequent calendar
quarter, then the parties will renegotiate the overhead charges used in
calculating the hourly rates set forth in
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Schedule 8 (Time and Materials Proposal), and the new hourly rates will apply
to services rendered in any subsequent quarter in which such ratio is exceeded.
3.8 WARRANTY REGARDING WORK OF TRW EMPLOYEES AND CONTRACTORS
TRW will warrant that the work done by TRW employees and contractors
assigned to the Program Office or performing services in connection with the
Spitfire development will be performed in accordance with the TRW Code of
Conduct and the policies, practices and requirements set forth in TRW's Legal
and Ethical Compliance Program binder provided to WI prior to the Effective
Date.
3.9 USE OF TRW DESIGN TOOLS AND EQUIPMENT
3.9.1 While the Program Office is in operation, at WI's request from time
to time, TRW will make available to WI without charge, at TRW's facilities and
at mutually convenient times, Equipment used by the Program Office and useful to
WI in completing the development of the Spitfire Products (including
modifications to such products that WI deems necessary or appropriate).
3.9.2 TRW will permit WI reasonable access to its facilities such that WI
is able to use the Equipment. WI will use the Equipment only in connection with
the development of Spitfire products.
3.10
*
3.11 PAYMENTS BY TRW FOR SERVICES RENDERED BEFORE THE EFFECTIVE DATE
TRW will pay for all services rendered by or to TRW, and all assets ordered
by TRW, prior to the Effective Date in connection with the development of the
Spitfire Products. WI has no obligation to reimburse TRW for any such costs or
expenses, except to the extent specified in Section 6.2 (Cash).
3.12 PAYMENTS BY TRW * FIELD TRIALS
TRW will pay for all services rendered by or to TRW prior to and after the
Effective Date to meet TRW's obligation to conduct field trials of Spitfire
Products *, and for all products purchased or manufactured for use in
such field trials; provided, however, that if WI elects to participate in such
field trials other than at the request of TRW, TRW has no obligation to pay any
WI costs or expenses associated with participating in the* field trials.
WI has no obligation to reimburse TRW for any such costs or expenses.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
13
3.13 ASSISTANCE WITH DRAFTING IPO DOCUMENTS
Without charge to WI, at WI's request from time to time, TRW will assist WI
in drafting and reviewing the technical portions of the IPO offering documents
related to the Spitfire products. The assistance provided in this subsection
3.13 is limited to one person month, after which such assistance will be
provided at WI's expense.
ARTICLE 4. TERM AND TERMINATION
The Agreement commences as of the Effective Date and will remain in effect
for the life of the last to expire Patent licensed herein, except as provided in
Article 14 (Default and Termination).
ARTICLE 5. CAPITAL ASSETS, DELIVERY, TECHNICAL ASSISTANCE AND
OTHER SERVICES
5.1 CAPITAL ASSETS
5.1.1 On the Effective Date, TRW will deliver to WI the Xxxx of Sale and
title to the Capital Assets.
5.1.2 WI agrees, for nine (9) months from the Effective Date ("TRANSITION
PERIOD"), not to move the Capital Assets from their respective locations on the
Effective Date without TRW's consent. During the Transition Period, TRW will use
reasonable efforts to ensure that WI is given control of and access to such
assets, and at TRW's request from time to time, WI will use reasonable efforts
to make available to TRW without charge, at mutually convenient times, the
Capital Assets for use by TRW.
5.1.3 During the Transition Period: (i) TRW will permit WI reasonable
access to its facilities such that WI is able to use the Capital Assets then in
such facilities as and when needed, (ii) TRW will not charge WI any storage,
facilities or other fees in connection with the Capital Assets, and (iii) TRW
will maintain at its sole cost and expense the Capital Assets in good working
order, subject to normal wear and tear.
5.1.4 WI will have no liability to TRW or any third party for damage to
persons or property (including death of any person or any loss, destruction or
loss of use of any property) to the extent caused by any Capital Asset or any
use thereof during the Transition Period (unless caused by WI's negligence), and
TRW will indemnify and hold WI harmless from and against any and all claims,
costs, expenses (including reasonable attorneys' fees and costs of defense as
such fees and costs are incurred), damages, losses and liabilities arising
during the Transition Period from or in connection with any Capital Asset, or
arising from or in connection with the use of any Capital Asset during the
Transition Period.
14
5.2 DELIVERY
On the Effective Date, TRW will deliver to WI the documents, software and
other items listed in Schedule 1 (Spitfire Technical Information and Software)
and on ). In addition, TRW will furnish to WI, as requested by WI from time to
time, copies of such documents and other materials as are reasonably necessary
or useful for WI to understand the design of the Spitfire Products, to be able
to modify the Spitfire Products as contemplated in the Flyspec, and to be able
to use the Capital Assets.
5.3 TECHNOLOGY TRANSFER
During the first twelve (12) months after the Effective Date, in addition
to the services provided pursuant to Article 3 (Program Office), TRW will
provide to WI, at WI's request from time to time, at mutually convenient times,
and without charge for the first 24 person-months of such services, technology
transfer and engineering advice and support services by TRW employees who are
not assigned to the Program Office but who have expertise needed in connection
with the development of Spitfire products. These services will include answering
questions concerning the Spitfire Technology, the Capital Assets, the Spitfire
Inventions and the documents, Software and other items delivered to WI pursuant
to this Agreement or the Time and Materials Agreement.
5.4 INTELLECTUAL PROPERTY
At WI's request from time to time, TRW will assist WI in analyzing and
responding to actual and potential claims that the manufacture, use, Sale,
importation, or reproduction of any Licensed Product or any portion thereof
infringes or misappropriates any intellectual property of a third party, or that
any Spitfire-related Patent, copyright or trade secret is invalid or
unenforceable, such assistance to be provided as follows: TRW will:
(i) conduct searches of TRW documents to identify prior art or to locate
other helpful information requested by WI, and release relevant documents to the
fullest extent permitted by applicable U.S. government security regulations;
(ii) assist WI in designing around any Patent; and
(iii) provide legal support and analysis related to items (i) and (ii)
above as requested by WI.
Such assistance will be provided without charge for the first 12 person-months
of services rendered under this Section 5.4 (Intellectual Property). Thereafter,
such assistance will be provided for a reasonable charge.
15
ARTICLE 6. CONSIDERATION
6.1 SHARES
In consideration of the sale of the Capital Assets, all rights and licenses
conferred to WI hereunder and the technical assistance to be provided hereunder,
on the Effective Date, WI will issue to TRW 3,429,352 shares of WI's common
stock.
6.2 CASH
In consideration of the rights and licenses conferred to WI hereunder and
the technical assistance to be provided hereunder, within forty-five (45) days
after each Capitalization Event, WI will make a payment to TRW of ten percent
(10%) of the net proceeds to WI as a result of such Capitalization Event, until
a total of $2,500,000 has been paid to TRW. If all or any portion of the
$2,500,000 has not been paid by January 1, 2001, then the remainder of such sum
will be due on that date.
6.3 TAXES
Each party agrees to pay and promptly discharge when due all excise, sales,
use, transfer, stamp, registration or other similar taxes imposed or levied by
reason of or in connection with or attributable to payments made by it to the
other party under this Agreement, except for taxes based on the other party's
net income.
ARTICLE 7. USE AND PROTECTION OF CONFIDENTIAL INFORMATION
The provisions of Schedule 5 (Proprietary Information Exchange Agreement)
are incorporated in this Agreement.
ARTICLE 8.
*
ARTICLE 9. PATENTS
9.1 WI MAY PATENT SPITFIRE INVENTIONS
WI may seek to patent any invention included in the Spitfire Technology in
one or more countries selected by WI. If WI notifies TRW in writing that WI
elects to pursue United States patents on one or more such inventions, it will
specifically identify the particular inventions for which WI will seek such
protection. The inventions so identified will thereupon become "Spitfire
Inventions", without further compensation to
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
16
TRW, and TRW will promptly execute and cause to be executed any documents
required * . Notwithstanding the foregoing, the right to pursue United States
patents for the documentation listed on Schedule 9 (Additional Spitfire
Technical Information and Software) is applicable only if and to the extent that
TRW has the right to grant that right, * in inventions included in such
documentation is applicable only to the extent (if any) that TRW has an interest
in such inventions.
9.2 WI AND TRW MAY PATENT PROGRAM OFFICE INVENTIONS
9.2.1 COOPERATION REGARDING FILING. The Parties agree to cooperate
reasonably concerning decisions as to whether and in which countries patent
applications should be filed to protect Program Office Inventions.
9.2.2 DISAGREEMENT REGARDING WHETHER TO FILE A PATENT APPLICATION IN A
PARTICULAR COUNTRY OR WITH A PARTICULAR ORGANIZATION.
9.2.2.1 In the event that the parties do not agree on a decision
concerning the filing of patent applications to protect a Program Office
Invention, a party desiring to file a U.S. or foreign patent application to
protect such invention will have the right to make such application(s); however,
such party will bear all costs for preparing and prosecuting such application,
issuing any Patents, and maintaining such Patents. The other party will
cooperate reasonably with the preparation, execution, filing or prosecution of
such applications or the enforcement or defense of any such Patents, but will
have no obligation to incur any costs for any such actions. The filing party
grants to the other party a worldwide, non-exclusive, royalty-free, fully paid
up, perpetual right and license, without the right to grant sublicenses, under
any Patent issuing which was filed to protect such Program Office Invention, to
make, have made, manufacture, import, use and Sell products covered by such
Program Office Invention, the license being limited: (i) if to WI, to the
Outdoor Field; or, (ii) if to TRW, to the Government Field.
9.2.2.2 In the case where one party files an application on a Program
Office Invention, Confidential Information of a non-filing party will not be
used in such application without the prior written consent of the non-filing
party whose Confidential Information is to be used. The filing party will permit
the non-filing party to review and edit any application prior to its execution
and filing. If the non-filing party will not consent to use of its Confidential
Information that the filing party deems necessary to provide an adequate
application, an application will not be filed to protect such Program Office
Invention.
9.2.3 AGREEMENT REGARDING WHETHER TO FILE A PATENT APPLICATION IN A
PARTICULAR COUNTRY OR WITH A PARTICULAR ORGANIZATION. In the event that the
parties agree that U.S. and/or foreign patent applications will be filed on a
Program Office Invention, WI will be primarily responsible as further detailed
herein for preparing, filing and prosecuting such applications and for issuing
and maintaining any Patents based upon such applications. The applications will
be filed in the names of both parties or will be filed
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
17
in the names of the actual inventors * Program Office Patent(s), except that
products covered by any such Program Office Patent(s) may be Sold by WI only for
use in the Outdoor Field and not in either the Indoor Field or in the Government
Field, and products covered by any such Program Office Patent(s) may be Sold by
TRW only for use in the Government Field. The provisions of Section 2.2.4
(Licensing and Transfer of Program Office Patents) concerning sublicenses will
be applicable to any such Program Office Patent(s).
9.3 PREPARATION AND PROSECUTION OF PATENT APPLICATIONS
9.3.1 COOPERATION. TRW agrees to communicate to WI or its representatives
any information known to TRW or its employees or contractors respecting the
Spitfire Inventions and Program Office Inventions.
9.3.2 EXECUTION OF DOCUMENTS. TRW and WI, as appropriate, will execute all
assignments, sign all lawful papers, execute all divisional, continuing, and
reissue applications, make all rightful oaths, and request any official whose
duty it is to issue patents to issue any Patent on the Spitfire Inventions or
Program Office Inventions to TRW and WI, all as reasonably requested by WI or
TRW, as the case may be, from time to time. TRW and WI both agree to require
their respective employees and contractors (and to the fullest extent possible,
their former employees and contractors) who are inventors of any Spitfire
Invention or Program Office Invention to perform all of the foregoing
obligations of TRW and WI, as the case may be.
9.3.3 AGREEMENT TO PROSECUTE. For so long as both parties agree to file, or
to continue prosecution of, a patent application in a particular country:
9.3.3.1 DRAFTING. WI will be primarily responsible for drafting the
patent applications for Spitfire Inventions and Program Office Inventions.
9.3.3.2 TRW REVIEW AND ADDITIONAL CLAIMS. WI will provide drafts of
the patent applications to TRW for review at least twenty (20) days prior to the
filing of the applications. TRW may provide claims and/or other information to
be included in such applications that TRW wants to be pursued. WI will insert
such claims and other information into the application, provided the inventors
agree that such claims and other information accurately reflect the invention,
the proposed claims are received at least ten (10) days before the proposed
filing date for the patent application, and WI does not have good reason for
rejecting the proposed claim. At WI's option, TRW will be responsible for
prosecution of claims that TRW provides.
9.3.3.3 CORRESPONDENCE, ARGUMENTS AND AMENDMENTS. WI will promptly,
within seven (7) days of receipt, provide to TRW copies of all correspondence
between the United States Patent and Trademark Office (and international offices
and associates, if any) and WI concerning such applications. Copies of
correspondence by WI will be provided in advance to TRW in a timely manner to
enable TRW to review and comment
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
18
on such correspondence. TRW will supply any arguments or amendments of claims
and/or other information to WI for presentation to the United States Patent and
Trademark Office (and international offices, if any). WI will not be required to
delay any response beyond normal periods for response set forth in any official
action while waiting for TRW's submissions. TRW will be responsible for all fees
for addition of claims, fees for extension of time, and other fees charged by
the United States Patent and Trademark Office (and international offices, if
any) required solely for prosecution of TRW's claims.
9.3.3.4 FEE SHARING. The parties will each bear one-half of the fees,
costs and expenses (including WI's attorneys', agents' and consultants' fees,
translation expenses, costs of filing and examination, costs of searches, and
other statutory or official fees and costs) incurred by WI in connection with
Spitfire Patents and Program Office Patents. TRW will promptly reimburse WI
one-half of all such fees, costs and expenses, and will at WI's request directly
pay one-half of the invoices rendered by attorneys, agents and consultants in
connection with the Spitfire Patents and Program Office Patents.
9.3.3.5 MAINTENANCE. The parties will equally share all maintenance
and similar fees imposed by any authority *. WI may invoice TRW for such fees
quarterly in advance, and TRW will promptly pay such invoices. WI will then
promptly pay any such maintenance and similar fees to the appropriate authority.
9.4 CONTINUED PATENTING EXPENSES
No party is obligated to incur any costs for maintaining any Program Office
Patent. If a party decides that it no longer desires to continue to prosecute,
obtain or maintain a Patent in a particular country, then it will assign its
ownership rights to the Patent in that country to the other party, but will
retain a worldwide, non-exclusive, royalty-free, fully paid up, perpetual right
and license, without the right to grant sublicenses, under any Patent issuing to
make, have made, manufacture, import, use and Sell products covered by such
Spitfire Invention or Program Office Invention, as the case may be, the license
being limited: (i) if to WI, to the Outdoor Field; or, (ii) if to TRW, in the
Government Field Once a party surrenders its ownership interest to a particular
patent application, it will no longer be entitled to review or comment upon
office actions or proposed responses thereto, nor will it be entitled to receive
notice of such office actions received, and the other party shall have complete
authority and control to prosecute the patent application.
9.5 ENFORCEMENT
No party is obligated to incur any costs for policing any Program Office
Patent or Spitfire Patent, or for enforcing any Program Office Patent or
Spitfire Patent against any third party for infringement. Either party may seek
to enforce a Spitfire Patent or Program Office Patent to which it retains an
ownership interest, and the other party will
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
19
fully cooperate with such efforts. All expenses of such enforcement efforts will
be borne by the party seeking such enforcement.
9.6 ACCESS TO EMPLOYEES - BEFORE SUBMISSION OF APPLICATION
Each party agrees to use all reasonable efforts to provide access to its
employees and contractors who are inventors of the Spitfire Inventions and
Program Office Inventions in connection with the drafting and review of
applications for Patents, and to make such employees and contractors available
to the drafting party at mutually agreeable times during normal business hours.
Each party will bear one-half the cost of such services, provided that WI may
elect to pay its portion by reducing the balance of free hours remaining (if
any) under Section 5.3 (Technology Transfer).
9.7 ACCESS TO EMPLOYEES - AFTER SUBMISSION OF APPLICATION
With respect to each application for a Spitfire Patent or Program Office
Patent, and with respect to each such issued Spitfire Patent and Program Office
Patent, each party agree to use all reasonable efforts to make its employees and
contractors who are inventors of the Spitfire Inventions and Program Office
Inventions available, at mutually convenient times, to testify in any legal
proceedings, and generally to aid the other party and its permitted assigns to
obtain and enforce Spitfire Patents and Program Office Patents in all countries
selected. Each party will xxxx the other party for such services at one-half the
normal billing rates for such employees and contractors.
9.8 COPYRIGHT AND MASK WORK RIGHT FILINGS
The parties agree to cooperate reasonably concerning decisions as to
whether and in which countries applications should be filed to protect any
copyrightable works or mask works for Program Office Technical Information or
for any Derivative Works of Spitfire Technology. *
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
10.1 TRW'S WARRANTIES
Subject to the exceptions set forth on Schedule 4 (Exceptions to TRW's
Representations and Warranties), TRW represents and warrants as follows:
(i) The Spitfire Technology listed on Schedule 1 (Spitfire Technical
Information and Software), the Spitfire IP related to the Spitfire Technology
listed on Schedule 1 (Spitfire Technical Information and Software) and the
Spitfire Inventions are the sole property of TRW.
(ii) *
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
20
(iii) *
(iv) None of the representations or warranties made by TRW herein
contains any untrue statement of a material fact, or intentionally omits to
state any material fact necessary in order to make the statements contained
herein or therein not misleading as of the Effective Date.
(v) To the best of TRW's knowledge: (a) no claim by any third party
involving potential infringement of any third party's Intellectual Property has
been made to or against TRW with respect to any Spitfire Technology, Spitfire IP
or Spitfire Invention; (b) no proceedings have been instituted or threatened,
and no notice has been given to TRW, alleging any such infringement or
violation; and (c) TRW has received no offer of a patent license with respect to
any such product, technology or IP.
(vi) Except with respect to any rights that may have been granted to the
United States Government as a result of contractual activities performed by TRW,
TRW has not previously granted any rights or licenses to any third party with
respect to any Spitfire Technology, Spitfire IP or Spitfire Invention.
(vii) TRW is not a party to any agreement pursuant to which the grant or
the exercise of any of the rights and licenses granted herein requires any
payment by TRW, or by WI or any of its customers at any tier, of any royalty or
other payment. There are no existing agreements, options, commitments,
entitlements or rights of or to any person to obtain from TRW, directly or
indirectly, any rights, obligations, grants or licenses inconsistent with the
licenses and rights granted to WI under this Agreement.
(viii) To the best of its knowledge, TRW employees and contractors
performing services in connection with the Spitfire development project prior to
the Effective Date complied with the TRW Code of Conduct and the policies,
practices and requirements set forth in TRW's Legal and Ethical Compliance
Program binder provided to WI prior to the Effective Date.
(ix) The execution, delivery and performance of this Agreement do not and
will not violate, conflict with or result in the breach of any term, condition
or provision of TRW's articles of incorporation or bylaws (or their equivalent)
nor a breach or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under any term, condition or
provision of any contract, agreement, license, document, commitment, undertaking
or understanding between TRW and any other person or entity.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
21
(x) TRW has the requisite corporate and other power, authority and legal
right to execute and deliver this Agreement and to perform each and every of
TRW's obligations hereunder and to consummate the transactions contemplated by
this Agreement. The execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action. This Agreement has been
duly executed and delivered by TRW and constitutes the valid and binding
obligation of TRW.
(xi) TRW acknowledges that it has had an opportunity to discuss the
business, affairs and current prospects of WI with its officers. TRW further
acknowledges having had access to information about WI that it has requested.
TRW acknowledges that it is able to fend for itself in the transactions
contemplated by this Agreement and has the ability to bear the economic risks of
its investment pursuant to this Agreement, and is an "accredited investor" as
defined in Rule 501(a) under the Securities Act. TRW is fully competent to
evaluate the market, management, business and prospects of WI and to evaluate
the value of the Stock and the substantial risks inherent in purchasing and
owning such Stock.
(xii) TRW represents and warrants that the Stock will be acquired for its
own account, not as a nominee or agent, and not with a view to or in connection
with the sale or distribution of any part thereof.
(xiii) TRW understands that the Stock being purchased hereunder will not
be registered under the Act, on the ground that the sale provided for in this
Agreement is exempt from registration under the Act, and that the reliance of WI
on such exemption is predicated in part on TRW's representations set forth in
this Agreement. TRW understands that the Stock being purchased hereunder
constitutes restricted securities within the meaning of Rule 144 under the Act;
that the Stock is not registered and must be held indefinitely unless it is
subsequently registered or an exemption from such registration is available.
(xiv) It is understood that each certificate representing the Stock being
purchased hereunder and any other securities issued in respect of the any of the
foregoing upon any stock split, stock dividend, recapitalization, merger or
similar event will be stamped or otherwise imprinted with a legend substantially
in the following form: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED
22
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
The legend set forth above will be removed by WI from any certificate
evidencing Stock upon delivery to WI of an opinion by counsel, reasonably
satisfactory to WI, that a registration statement under the Act is at that time
in effect with respect to the legended security or that such security can be
freely transferred in a public sale without such a registration statement being
in effect and that such transfer will not jeopardize the exemption or exemptions
from registration pursuant to which the WI issued the Stock.
(xv) The patent applications listed on Schedule 2 (Spitfire Patents) are
the only patent applications filed by TRW that protect inventions made by TRW
employees and/or contractors in the course of working on, and that cover the
Spitfire Product and/or the Spitfire Technology.
(xvi) TRW has good and marketable title to the Purchased Assets, owns the
Purchased Asset free and clear of all claims, liens, security interests,
restrictions or other encumbrances, and has the right to transfer title to the
Purchased Assets to WI. On the Effective Date, TRW will sell and transfer the
Purchased Assets to WI and deliver to WI a Xxxx of Sale, in the form of Exhibit
3 (Xxxx of Sale). Upon receipt by WI of the xxxx of sale therefor, WI will
acquire complete right, title and ownership in and to the Purchased Asset, free
and clear of any liens, encumbrances, claims, restrictions or reversionary
rights.
(xvii) As of the Effective Date, except with respect to any rights that may
have been granted to the United States Government as a result of contractual
activities performed by TRW, TRW has not granted a license, or sold or otherwise
transferred, to any third party, any item listed on Schedule 9 (Additional
Spitfire Technical Information and Software), or rights to any invention,
information or software described therein.
(xviii) The items listed on Schedule 9 (Additional Spitfire Technical
Information and Software) have not, since the receipt thereof by TRW from L3,
been modified by a third party in such a manner that such third party has
obtained any ownership interest in, or license to, any such item or any
invention, information or software described therein.
10.2 WI'S WARRANTIES
Subject to the exceptions set forth on Schedule 6 (Exceptions to WI's
Representations and Warranties), WI represents and warrants as follows:
(i) The execution, delivery and performance of this Agreement do not and
will not violate, conflict with or result in the breach of any term, condition
or provision of WI's articles of incorporation or bylaws (or their equivalent)
nor a breach or default
23
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or to loss
of a material benefit under any term, condition or provision of any contract,
agreement, license, document, commitment, undertaking or understanding between
WI and any other person or entity.
(ii) WI has the requisite corporate and other power, authority and legal
right to execute and deliver this Agreement and to perform each and every of
WI's obligations hereunder and to consummate the transactions contemplated by
this Agreement. The execution, delivery and performance of this Agreement has
been duly authorized by all necessary corporate action. This Agreement has been
duly executed and delivered by WI and constitutes the valid and binding
obligation of WI.
(iii) Except as set forth on a Schedule of Exceptions attached as Schedule
A to the Series F Preferred Stock Purchase Agreement, which exceptions shall be
deemed to be representations and warranties as if made hereunder:
(a) Organization: Good Standing; Qualification. WI is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of California, and has all requisite corporate power and authority to
carry on its business as now conducted. WI is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on its business, results of
operation or financial condition.
(b) Subsidiaries. WI does not presently own or control, directly or
indirectly, any interest in any other corporation, association, or other
business entity. WI is not a participant, directly or indirectly, in any joint
venture, partnership, or similar arrangement.
(c) Shareholders, Warrant Holders, and Option Holders List. Section
2.3 of the Schedule of Exceptions contains a list of each of WI's shareholders,
warrant holders, and option holders, who individually hold at least 5,000 shares
of the Common Stock (either directly or on an as converted basis) and holders of
subscription or other rights (contingent or other) to purchase or otherwise
acquire from WI or any other person or entity any equity securities of WI and
the number of such shares, warrants, options, subscriptions or other rights held
by them.
(d) Authorization. All corporate action on the part of WI, its
officers, directors, and shareholders necessary for the authorization, execution
and delivery of this Agreement, the performance of all obligations of WI
hereunder and the authorization, issuance (or reservation for issuance), sale,
and delivery of the Common Stock issuable hereunder has been taken or will be
taken prior to the Closing, and this Agreement constitutes the valid and legally
binding obligation of WI, enforceable in accordance with its terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting
24
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
(e) Valid Issuance of Common Stock. The Common Stock to be delivered
hereunder, when issued and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, will be free of restrictions on transfer other than restrictions
on transfer under this Agreement and TRW' Rights Agreement and under applicable
state and federal securities laws, and, assuming the accuracy of the
representations of TRW in this Agreement, will be issued in compliance with
applicable state and federal securities laws. All preemptive or similar rights
arising from WI's execution and performance of this Agreement have been waived.
(f) Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration, or
filing with, any local, state, or federal governmental authority is required on
the part of WI in connection with the consummation of the transactions
contemplated by this Agreement.
(g) Capitalization and Voting Rights. The Immediately prior to the
Closing, the authorized capital of WI or will consist of:
(i) Preferred Stock. 25,000,000 authorized shares of Preferred
Stock issuable in series (the "Preferred Stock"), of which (i) 4,300,000 shares
have been designated Series A Preferred Stock, all of which are issued and
outstanding, (ii) 750,000 shares have been designated Series B Preferred Stock,
all of which are outstanding (iii) 2,400,000 shares have been designated Series
C Preferred Stock, of which 2,081,402 are outstanding, (iv) 6,600,000 shares
have been designated Series D Preferred Stock of which 6,541,013 are
outstanding, (v) 4,000,000 shares have been designated Series E Preferred Stock,
of which (A) 3,600,000 are outstanding and (B) 360,000 are issuable upon the
conversion of securities convertible thereinto, (vi) 400,000 shares of Series
E-1 Preferred Stock, of which none are outstanding and (vii) 3,000,000 shares
have been designated Series F Preferred Stock all of which shares may be issued
pursuant to this Agreement. The rights, privileges and preferences of the Series
F Preferred Stock will be on parity with those of the Series A Preferred Stock,
the Series B Preferred Stock and, the Series C Preferred Stock, the Series D
Preferred Stock, the Series E Preferred Stock and the Series E-1 Preferred Stock
as set forth in WI's Amended and Restated Articles of Incorporation, the
Certificate of Determination of Preferences and Rights of Series D Preferred
Stock (the "Series D Certificate of Determination"), the Certificate of
Determination of Preferences and Rights of Series E Preferred Stock (the "Series
E Certificate of Determination") and the Certificate of Determination of
Preferences and Rights of Series F Preferred Stock (the "Certificate of
Determination, collectively, unless the context dictates otherwise, the
"Articles"), respectively.
(ii) Common Stock. 50,000,000 shares of Common Stock ("Common
Stock"), of which 5,712,854 shares are issued and outstanding (including shares
issued upon the exercise of Options described below). WI has reserved up to (i)
4,300,000 shares of Common Stock issuable upon conversion of the Series A
Preferred
25
Stock, (ii) 750,000 shares of Common Stock issuable upon conversion of
the Series B Preferred Stock, (iii) 2,146,867 shares of Common Stock issuable
upon conversion of the Series C Preferred Stock, (iv) 6,600,000 shares of Common
Stock issuable upon conversion of the Series D Preferred Stock, (v) 4,000,000
shares of Common Stock issuable upon conversion of the Series E Preferred Stock
and (vi) 400,000 shares of Common Stock issuable upon conversion of the Series
E-1 Preferred Stock. As of the Closing, WI will have reserved 3,000,000 shares
of Common Stock issuable upon conversion of the Series F Preferred Stock.
(iii) Except as set forth in the Schedule of Exceptions and as
provided in TRW' Rights Agreement, and the Fifth Amended and Restated Investors'
Rights Agreement, dated September 30, 1999 between WI and the shareholders
listed as signatories thereto ("Former Investors' Rights Agreement"), there are
no outstanding options, warrants, rights (including conversion or preemptive
rights and rights of first refusal) or agreements for the purchase or
acquisition from WI of any shares of its capital stock. Other than as provided
in the Articles, WI is not a party or subject to any agreement or understanding,
and, to the best of WI's knowledge, there is no agreement or understanding
between any persons that affects or relates to the voting or giving of written
consents with respect to any security or the voting by a director of WI.
(iv) The execution and performance by WI of this Agreement will
not result in any adjustment in the number of shares of Common Stock into which
the Series A, Series B, Series C, Series D, Series E or Series E-1 Preferred
Stock is convertible.
(h) Litigation. There is no action, suit, proceeding or investigation
pending or currently threatened against WI (i) that questions the validity of
this Agreement or TRW' Rights Agreement, or the right of WI to enter into such
agreements, or to consummate the transactions contemplated hereby or thereby, or
(ii) that might result, either individually or in the aggregate, in any material
adverse change in the assets, prospects, results of operation or financial
condition of WI, or in any material change in the current equity ownership of WI
nor is WI aware that there is any basis for the foregoing. The foregoing
includes, without limitation, actions pending or threatened involving the prior
employment of any of WI's employees, their use in connection with WI's business
of any information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. WI is
not a party to, or to the best of its knowledge, named in any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit or proceeding by WI currently pending
or that WI currently intends to initiate.
(i) Offering. Assuming the accuracy of TRW's representations set forth
in Section 10.1 (TRW's Warranties) of this Agreement, the offer, sale and
issuance of the Common Stock as contemplated by this Agreement are exempt from
the registration requirements of the Securities Act of 1933, as amended (the
"Act"), and the qualification requirements of the California Corporate
Securities Act of 1968, as
26
amended, and neither WI nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such exemption.
(j) Disclosure. WI has fully provided the TRW with all the information
that it has requested for deciding whether accept the Common Stock as
consideration hereunder and all information that WI believes is reasonably
necessary to enable the TRW to make such decision. Neither this Agreement nor
any other statements or certificates made or delivered in connection herewith or
therewith contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements herein or therein not misleading.
(k) Corporate Documents. Except for amendments necessary to satisfy
representations and warranties or conditions contained herein (the form of which
amendments has been approved by TRW), the Articles and Bylaws of WI are in the
form previously provided to TRW. The minute books of WI provided to TRW contain
a complete summary of all meetings of directors and shareholders since the time
of incorporation.
(l) Proprietary Information and Employee Stock Purchase Agreements.
Each employee, officer and consultant of WI has executed a Proprietary
Information and Inventions Agreement in the form provided to special counsel to
TRW. WI, after reasonable investigation, is not aware that any of its employees,
officers or consultants are in violation thereof, and WI will use its best
efforts to prevent any such violation.
(m) Patents and Trademarks. WI has sufficient title and ownership of
all patents, trademarks, service marks, trade names, copyrights, trade secrets,
information, proprietary rights and processes necessary for its business as now
conducted and as proposed to be conducted without any conflict with or
infringement of the rights of others. There are no outstanding options,
licenses, or agreements of any kind relating to the foregoing, nor is WI bound
by or a party to any options, licenses or agreements of any kind with respect to
the patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information, proprietary rights and processes of any other person or
entity. WI has not received any communications alleging that WI has violated or,
by conducting its business as presently conducted or proposed to be conducted,
would violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person or
entity, or that any intellectual property owned by WI is invalid or
unenforceable. WI is not aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of his or her best
efforts to promote the interests of WI or that would conflict with WI's business
as presently conducted or proposed to be conducted. Neither the execution nor
delivery of this Agreement, nor the carrying on of WI's business by the
employees of WI, nor the conduct of WI's business as presently conducted or
proposed to be conducted, will, to the best of WI's knowledge, conflict with or
result in a breach of the
27
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees is now obligated. WI
does not believe it is or will be necessary to utilize any inventions of any of
its employees (or people it currently intends to hire) made prior to their
employment by WI.
(n) Compliance with Other Instruments.
(a) WI is not in violation or default of any provision of its
Articles or Bylaws, or of any instrument, judgment, order, writ, decree or
contract to which it is a party or by which it is bound, or, to the best of its
knowledge, of any provision of any federal or state statute, rule or regulation
applicable to WI. The
execution, delivery and performance of this Agreement and TRW' Rights Agreement,
and the consummation of the transactions contemplated hereby and thereby will
not result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that results in the creation of any lien, charge or encumbrance upon any
assets of WI or the suspension, revocation, impairment, forfeiture, or
nonrenewal of any material permit, license, authorization, or approval
applicable to WI, its business or operations or any of its assets or properties.
(b) To the knowledge of WI, WI has avoided every condition, and
has not performed any act, the occurrence of which would result in WI's loss of
any right granted under any license, distribution or other agreement.
(o) Agreements; Action.
(a) Except for (i) as provided in Section 2.15 of the Schedule of
Exceptions, and (ii) TRW' Rights Agreement, there are no agreements,
understandings or proposed transactions between WI and any of its officers,
directors, affiliates, or any affiliate thereof.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
WI is a party or by which it is bound that may involve (i) obligations
(contingent or otherwise) of, or payments to WI in excess of, $20,000, or (ii)
the license of any patent, copyright, trade secret or other proprietary right to
or from WI, or (iii) provisions restricting or affecting the development,
manufacture or distribution of WI's products or services, or (iv)
indemnification by WI with respect to infringements of proprietary rights, or
(v) the required repurchase or redemption by WI of any capital stock, or (vi)
any voting trust, preemptive rights or right of first refusal involving WI's
capital stock.
(c) WI has not (i) declared or paid any dividends or authorized
or made any distribution upon or with respect to any class or series of its
capital stock, (ii) incurred any indebtedness for money borrowed or any other
liabilities individually in excess of $20,000 or, in the case of indebtedness
and/or liabilities individually less than $20,000, in excess of $75,000 in the
aggregate, (iii) made any loans or advances to or
28
guaranteed any liabilities of any person, other than ordinary advances to
employees or consultants for travel expenses, or (iv) sold, exchanged or
otherwise disposed of any of its assets or rights, other than the sale of its
inventory in the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities WI has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
(e) WI has not engaged in the past three (3) months in any
discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of WI with or into any such corporation or
corporations, (ii) with any corporation, partnership, association or other
business entity or any individual regarding the sale, conveyance or disposition
of all or substantially all of the assets of WI or a transaction or series of
related transactions in which more than fifty percent (50%) of the voting power
of WI is disposed of, or (iii) regarding any other form of acquisition,
liquidation, dissolution or winding up of WI.
(f) WI is not a party to and is not bound by any contract,
agreement or instrument, or subject to any restrictions under its Articles or
Bylaws that presently adversely affects its business as now conducted.
(p) Related-Party Transactions. No employee, officer, director or
stockholder of WI or member of his or her immediate family is indebted to WI,
nor is WI indebted (or comitted to make loans or extend or guarantee credit) to
any of them. To the best of WI's knowledge, none of such persons has any direct
or indirect ownership interest in any firm or corporation with which WI is
affiliated or with which WI has a business relationship, or any firm or
corporation that competes with WI, except that employees, officers, or directors
of WI and members of their immediate families may own stock in publicly traded
companies that compete with WI. No member of the immediate family of any officer
or director of WI is directly or indirectly interested in any material contract
with WI.
(q) Permits. WI has all franchises, permits, licenses, and any similar
authority necessary for the conduct of its business as now being conducted by
it, the lack of which could materially and adversely affect the business,
properties, prospects, results of operations or financial condition of WI, and
WI believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted. WI is not
in default in any material respect under any of such franchises, permits,
licenses, or other similar authority.
(r) Environmental and Safety Laws. To the best of its knowledge, WI is
not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to the best of its knowledge,
no material expenditures are or will be required in order to comply with any
such existing statute, law or regulation.
29
(s) Manufacturing and Marketing Rights. WI has not granted rights to
manufacture, produce, assemble, license, market, or sell its products to any
other person and is not bound by any agreement that affects WI's exclusive right
to develop, manufacture, assemble, distribute, market or sell its products.
(t) Registration Rights. Except as provided in TRW' Rights Agreement,
WI has not granted or agreed to grant any registration rights, including
piggyback rights, to any person or entity.
(u) Title to Property and Assets. WI owns its property and assets free
and clear of all mortgages, liens, loans and encumbrances, except such
encumbrances and liens that arise in the ordinary course of business and do not
materially impair WI's ownership or use of such property or assets. With respect
to the property and assets it leases, WI is in compliance with such leases and,
to the best of its knowledge, holds a valid leasehold interest free of any
liens, claims or encumbrances.
(v) Financial Statements.
(a) WI has delivered to TRW its unaudited financial statements
(balance sheet and profit and loss statement, statement of stockholders' equity
and statement of cash flows, including notes thereto) at December 31, 1998 and
for the fiscal year then ended, and its unaudited financial statements (balance
sheet and profit and loss statement) as at and for the nine month period ended
September 30, 1999 (the "Financial Statements") (i) the pro forma consolidated
balance sheet of WI and its Subsidiaries as at September 30, 1999 and the pro
forma combined historical income statements dated September 30, 1999, each such
balance sheets and income statements taking into account all transactions
contemplated hereby and by the Related Agreements, such balance sheet and income
statements being attached hereto as Schedule 2.22(a)(ii); and (iii) the
projections of the future performance of WI and its Subsidiaries for the
five-year period following the Closing Date, on a consolidated basis, including
income, net profits, and cash flows, as attached hereto as Schedule 2.22(a)(iii)
(the "Projections"). The Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods indicated and with each other, except that unaudited
Financial Statements may not contain all footnotes required by generally
accepted accounting principles applicable to audited annual financial
statements. The Financial Statements fairly present the financial condition and
operating results of WI as of the dates, and for the periods, indicated therein,
subject in the case of unaudited Financial Statements to normal year-end audit
adjustments. Except as set forth in the Financial Statements, WI has no material
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to September 30, 1999 and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected in the Financial Statements, which, in both cases, individually or in
the aggregate, are not material to the financial condition or operating results
of WI. Except as disclosed in the Financial Statements, WI is not a guarantor or
indemnitor of any indebtedness of any other
30
person, firm or corporation. WI maintains and will continue to maintain a
standard system of accounting established and administered in accordance with
generally accepted accounting principles.
(b) The pro forma consolidated balance sheet of WI and its
Subsidiaries and the pro forma consolidated income statements referred to in
Section 2.22(a)(ii) have been prepared by management of WI on a reasonable
basis, taking into consideration the effect of the transactions contemplated
hereby and by the Related Agreements, and WI is not aware of any fact which
casts any doubt on the accuracy or completeness thereof. After giving effect to
the transactions contemplated hereby and by the Related Agreements, WI and its
Subsidiaries will have no material liabilities, contingent or otherwise, which
are not referred to in such balance sheet or in the notes thereto.
(c) The Projections constitute a reasonable basis for the
assessment of the future performance of WI and its Subsidiaries, on a
consolidated basis, during the periods indicated therein, and all material
assumptions used in the preparation of the Projections are set forth in the
notes thereto.
(w) Changes. Since September 30, 1999 there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of WI from that reflected in the Financial Statements, except
changes in the ordinary course of business that have not been, in the aggregate,
materially adverse;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results, prospects or business of WI (as such business is
presently conducted and as it is proposed to be conducted);
(c) any waiver by WI of a material right or of a material debt
owed to it;
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by WI, except in the ordinary course of
business and that is not material to the assets, properties, financial
condition, operating results or business of WI (as such business is presently
conducted and as it is proposed to be conducted);
(e) any material change or amendment to a material contract or
arrangement by which WI or any of its assets or properties is bound or subject;
(f) any change in any material compensation arrangement or
agreement with any employee;
31
(g) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any key
officer of WI; and WI, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
(i) receipt of notice that there has been a loss of, or material
order cancellation by, any customer of WI;
(j) any mortgage, pledge, transfer of a security interest in, or
lien, created by WI, with respect to any of its material properties or assets,
except liens for taxes not yet due or payable;
(k) any loans or guarantees made by WI to or for the benefit of
its employees, officers or directors, or stockholders or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect of any of WI's capital stock, or any direct or indirect
redemption, purchase or other acquisition of any of such stock by WI;
(m) to the best of WI's knowledge, any other event or condition
of any character that might materially and adversely affect the assets,
properties, financial condition, operating results or business of WI (as such
business is presently conducted and as it is proposed to be conducted); or
(n) any agreement or commitment by WI to do any of the things
described in the Section 2.24.
(x) Employee Benefit Plans. WI does not have any Employee Benefit Plan
as defined in the Employee Retirement Income Security Act of 1974.
(y) Tax Returns, Payments and Elections. WI has filed all tax returns
and reports as required by law. These returns and reports are true and correct
in all material respects. WI has timely paid all taxes and other assessments
due, except those contested by it in good faith that are listed in the Schedule
of Exceptions. The provision for taxes of WI as shown in the Financial
Statements is adequate for taxes due or accrued as of the date thereof. WI has
not elected pursuant to the Internal Revenue Code of 1986, as amended (the
"Code"), to be treated as a Subchapter S corporation or a collapsible
corporation pursuant to Section 1362(a) or Section 341(f) of the Code, nor has
it made any other elections pursuant to the Code (other than elections that
relate solely to methods of accounting, depreciation or amortization) that would
have a material effect on WI, its financial condition, its business as presently
conducted or proposed to be conducted or any of its properties or material
assets. WI has never had any tax deficiency proposed or assessed against it and
has not executed any waiver of any
32
statute of limitations on the assessment or collection of any tax or
governmental charge.
None of WI's federal income tax returns and none of its state income or
franchise tax or sales or use tax returns has ever been audited by governmental
authorities. Since the date of the Financial Statements, WI has made adequate
provisions on its books of account for all taxes, assessments and governmental
charges with respect to its business, properties and operations for such period.
WI has withheld or collected from each payment made to each of its employees,
the amount of all taxes (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes)
required to be withheld or collected therefrom, and has timely paid the same to
the proper tax receiving officers or authorized depositaries.
(z) Insurance. WI has in full force and effect fire and casualty
insurance policies, with extended coverage, sufficient in amount (subject to
reasonable deductibles) to allow it to replace any of its properties that might
be damaged or destroyed. WI does not have any term life insurance, payable to
WI, on the lives of any of its officers, directors or employees. WI has in full
force and effect products liability and errors and omissions insurance in
amounts customary for companies similarly situated.
(aa) Minute Books. The minute books of WI provided to TRW contain a
complete summary of all meetings directors and stockholders since the time of
incorporation and reflect all transactions referred to in such minutes
accurately in all material respects.
(bb) Labor Agreements and Actions. WI is not bound by or subject to
(and none of its assets or properties is bound by or subject to) any written or
oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the best of WI's knowledge, has
sought to represent any of the employees, representatives or agents of WI. There
is no strike or other labor dispute involving WI pending, or to the best of WI's
knowledge, threatened, that could have a material adverse effect on the assets,
properties, financial condition, operating results, or business of WI (as such
business is presently conducted and as it is proposed to be conducted), nor is
WI aware of any labor organization activity involving its employees. WI is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with WI, nor does WI have a present
intention to terminate the employment of any of the foregoing. The employment of
each officer and employee of WI is terminable at the will of WI. To the best of
its knowledge, WI has complied in all material respects with all applicable
state and federal equal employment opportunity and other laws related to
employment.
(cc) Section 83(b) Elections. To the best of WI's knowledge, all
individuals who have purchased shares of WI's Common Stock have timely filed
elections under Section 83(b) of the Code and any analogous provisions of
applicable state tax laws.
33
(dd) Real Property Holding Company. WI is not a real property holding
company within the meaning of Section 897 of the Code and Section 1.897-2(b) of
the Treasury Regulations promulgated by the Internal Revenue Service.
(ee) Solvency. Prior to, upon and immediately after consummation of
the transactions contemplated hereby, WI is solvent, has tangible and intangible
assets having a fair value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured, and has
access to adequate capital for the conduct of its business and the ability to
pay its debts from time to time incurred in connection therewith as such debts
mature.
(ff) Defaults. No Default or Event of Default exists on the date
hereof. WI is not in default under any provisions of its Articles or under any
material provisions of any franchise, contract, agreement, lease or other
instrument to which it is a party or by which it or its property is bound or in
material violation of any law, judgment, decree or governmental order, rule or
regulation.
(gg) Year 2000. To WI's knowledge, all hardware and software products
used by WI in the administration and the business operations of WI will be able
to accurately process date data (including, but not limited to calculating,
comparing and sequencing) from, into and between the twentieth century (through
year 1999), the year 2000 and the twenty-first century, including leap year
calculations, when used in accordance with the product documentation
accompanying such hardware and software products. Undefined capitalized terms
used in this Section 10.2 (WI's Warranties) will have the meaning ascribed to
them in the Series F Preferred Stock Purchase Agreement.
10.3 NO COMMITMENT TO DEVELOP LICENSED PRODUCTS
WI represents that as of the Effective Date, it is WI's intention to
continue development of the Spitfire Products, and to manufacture and market
commercial versions of such products. Nothing contained in this Agreement will
be construed to require WI to perform any development using any Spitfire IP or
any Spitfire Invention, to market any product incorporating any such
Intellectual Property or invention, or to have an Initial Public Offering, and
WI has made no representation or warranty to TRW regarding these or any other
subjects, except for the specific representations set forth in Section 10.2
(WI's Warranties) and 10.3 (No Commitment) of this Agreement and in Section 2 of
the Series F Preferred Stock Purchase Agreement.
10.4 *
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
34
10.5 EXCLUSION OF WARRANTIES AND DAMAGES. LIMITS OF LIABILITY.
10.5.1 EXCLUSION OF WARRANTIES AND DAMAGES. THE WARRANTIES PROVIDED IN THIS
Article 10 (REPRESENTATIONS AND WARRANTIES) ARE IN LIEU OF ALL OTHER WARRANTIES,
WHETHER STATUTORY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ALL
OF WHICH ARE EXPRESSLY EXCLUDED. EXCEPT AS PROVIDED IN THIS AGREEMENT, IN NO
CASE WILL TRW OR WIRELESS BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, WHETHER ARISING IN CONTRACT, WARRANTY, TORT, NEGLIGENCE,
STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY. TRW DOES NOT MAKE ANY
WARRANTY AS TO THE VALIDITY OF THE SPITFIRE PATENTS.
10.5.2 EXCEPTION. Section 10.5.1 (Exclusion of Warranties and Damages) does
not preclude WI from recovering the following types of damages (subject to the
liability limit set forth below) for the breach or material falseness of any
representation and warranty of TRW contained in subsections (i), (v), (vi),
(vii), (viii), (ix) and (x) of Section 10.1 (TRW's Warranties) of this
Agreement, or of subsection (iv) to the extent applicable to the aforementioned
subsections: (a) amounts incurred by WI in connection with any third party claim
or suit, (b) judgments and royalties payable to third parties, and (c) amounts
incurred by WI in developing Spitfire products to the extent such amounts are
not recouped by WI from profits from the Sale of Spitfire products.
10.5.3 LIMIT OF LIABILITY. Each party's entire monetary liability to the
other arising out of or connection with this Agreement will not exceed the total
of (i) $17,000,000 plus (ii) any monetary amounts paid by WI to TRW under this
Agreement or under a Time and Materials Contract.
ARTICLE 11. PRODUCT LIABILITY AND INDEMNIFICATION
11.1 PRODUCT DEFECTS
WI will have full responsibility for determining that the designs of the
Licensed Products and that components made by or for WI (other than by TRW or
its Affiliates) are manufactured in accordance with customary commercial
standards.
11.2 INDEMNIFICATION
TRW will indemnify and hold WI harmless from and against any and all costs,
expenses (including reasonable attorneys' fees and costs of defense as such fees
and costs are incurred), damages, losses and liabilities that may arise from or
in connection with any claim made against WI by any TRW employee or contractor
or by any governmental agency with respect to employee compensation or benefits,
withholding taxes, worker's compensation, or the like, or by any TRW employee or
contractor for
35
any compensation in any form from WI for work done, intellectual property
created or services performed while an employee or contractor of TRW.
ARTICLE 12. EXCUSABLE DELAY
12.1 NOTICE
If either party is unable to perform any of its respective obligations as
herein provided then such party will give the other party notice thereof as soon
as reasonably possible under the circumstances and information regarding the
cause or reason therefor.
12.2 EXCUSABLE DELAY
If a party is unable to perform any of its obligations as herein provided,
due to any circumstances beyond its reasonable control (including strikes, war,
an act of God, a public enemy, interference by any civil or military authority,
or inability to secure governmental approval, materials or services despite
reasonable advance contingency planning) but not due to its negligence, and
gives notice to the other party as provided in Section 12.1 (Notice), then the
time of performance of any such obligation will be extended for a period equal
to the number of days during which performance thereof was prevented or delayed,
and during such period such party will not be deemed in default of the
Agreement.
ARTICLE 13. GOVERNMENT APPROVAL
13.1 GOVERNMENTAL APPROVAL
The Agreement will not become effective until any required governmental
authorities have approved performance of, or the action required to perform, the
Agreement.
13.2 COOPERATION
TRW and WI 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 the
Agreement will be deemed to require either party to agree to any revision or
modification of the Agreement that may be required to obtain any governmental
approval.
ARTICLE 14. DEFAULT AND TERMINATION
14.1 DEFAULT
In addition to any other remedy available at law or in equity, either party
may terminate the Agreement in accordance with the provisions of this Article 14
(Default
36
and Termination) in the event the other party fails to perform any
material obligation to be performed by it hereunder within thirty (30) days
after receipt of notice from the other party that time for such performance has
passed or, if no such time is prescribed, within thirty (30) days after notice
from the other party.
14.2 USE OUTSIDE WI'S APPROPRIATE FIELD: WHEN NOT A BREACH
Notwithstanding any other provision of this Agreement, WI will not be
deemed in breach of the restrictions on the field into which a product may be
Sold so long as: (i) the product is designed for use in a permitted field and is
not advertised or promoted by WI for use in an excluded field; and (ii) WI's
senior management does not know that the product is being Sold for use in an
excluded field (provided WI management will be presumed to know about activities
of WI's own sales force).
14.3 USE OUTSIDE TRW'S APPROPRIATE FIELD: WHEN NOT A BREACH
Notwithstanding any other provision of this Agreement, TRW will not be
deemed in breach of the restrictions on the field into which a product may be
Sold so long as: (i) the product is designed for use in a permitted field and is
not advertised or promoted by TRW for use in an excluded field; and (ii) TRW's
senior management of any involved TRW business organization does not know that
the product is being Sold for use in an excluded field (provided TRW management
will be presumed to know about activities of TRW's own sales force).
ARTICLE 15. TRW TECHNOLOGY PARTNER
On the Effective Date, TRW will designate WI a TRW technology partner.
ARTICLE 16. MANUFACTURING AND PURCHASE AGREEMENT
WI agrees to sell to TRW, and TRW agrees to purchase from WI, under terms
and conditions to be negotiated, Licensed Products for sale in the Government
Field, where WI's standard commercial version of such products meets the
requirements of TRW's Government customer. Such requirements include
specifications, packaging, delivery dates, certifications and price.
ARTICLE 17. L3 COMMUNICATIONS
For three (3) years after the Effective Date, at WI's option, TRW will from
time to time purchase from L3 Communications, Inc. ("L3") and resell to WI,
products and components for use in Spitfire products, and services to develop
and/or manufacture such products and components. * TRW will enter into a written
contract with L3, which must approved by WI in writing in advance. WI will be a
third
[*] Certain Information on this page has been omitted and filed separately with
the Commission. Confidential Treatment has been requested with respect to the
omitted portions.
37
party beneficiary of such contract, and TRW will pass through to WI all
representations, warranties and indemnities provided by L3 in such contract or
otherwise. If L3 provides TRW exclusivity in any field for any purchased product
or component, or any licensed intellectual property, TRW will assign or
otherwise pass through to WI such exclusive rights for Spitfire product, in the
Outdoor Field, to the extent TRW has such rights.
ARTICLE 18. SURVIVAL OF OBLIGATIONS
Other provisions of this Agreement notwithstanding, the rights, licenses
and obligations of the parties under Article 2 (Patent Assignment, Licenses,
Noncompetition and Covenant Not to Xxx), Section 3.8 (Warranty Regarding Work of
TRW Employees and Contractors), Section 3.10 *, Section 3.11 (Payments by TRW
for Services Rendered Before the Effective Date) Section 3.12 (Payments by TRW
for * Field Trials), Section 5.1 (Capital Assets), Section 5.4 (Intellectual
Property), Section 6.2 (Cash), Section 6.3 (Taxes), Article 7 (Use and
Protection of Confidential Information), Article 9 (Patents), Article 10
(Representations and Warranties), Article 11 (Product Liability and
Indemnification), Article 14 (Default and Termination), Article 17 (L3
Communications) and Article 19 (Miscellaneous) will survive any termination of
the Agreement for any reason.
ARTICLE 19. MISCELLANEOUS
19.1 EXPORT REGULATIONS
Neither party will export, directly or indirectly, any Software or
Technical Information provided by the other party under this Agreement, or the
direct product of any such Software or Technical Information, to any country for
which the United States Government or any agency thereof, at the time of export,
requires an export license or other government approval, without first obtaining
such license or approval. The parties agree to cooperate, in any reasonable
manner, to effect compliance with all applicable export regulations in able to
enable the export of such Software and Technical Information.
19.2 NOTICES
All notices and communications required or permitted to be given under the
Agreement will be written in English and will be (a) delivered personally, (b)
sent by confirmed telecopy, with confirmation by one of the other methods
specified in this Section 19.2 (Notices), (c) sent by commercial overnight
courier with written verification of receipt, or (d)mailed as registered or
certified airmail, postage prepaid and addressed to the other party at their
respective addresses set forth below (unless by such notice a different person
or address will have been designated):
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
38
WI: Wireless, Inc.
0000 Xxxxx Xxxx Xx.
Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Executive Officer
With copy to:
Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx & Xxxxxxxx
Two Embarcadero Place
0000 Xxxx Xx.
Xxxx Xxxx, XX 00000
TRW: TRW Inc.
Law Department
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx
Each notice will be effective upon receipt.
19.3 ASSIGNMENTS
Either party may assign this Agreement to any person or entity to whom it
transfers a majority of its assets, and WI may assign this agreement to any
person or entity that acquires a majority of the assets related to the Spitfire
Products. Otherwise, neither party will have the right to assign or transfer any
of its rights or to delegate any of its duties under the Agreement without the
prior written consent of the other party.
19.4 HEADINGS
The headings and titles to the Articles and Sections of the Agreement are
inserted for convenience only and will not be deemed a part hereof or affect the
construction or interpretation of any provision hereof.
19.5 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 the Agreement, and exercise of one right or remedy will not be
deemed a waiver of any other right or remedy.
19.6 MODIFICATION - WAIVER
No cancellation, modification, amendment, deletion, addition or other
change in
39
the Agreement or any provision hereof, or any consent to any action or
breach or any wavier 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 consent by either party to, or waiver of any right or
remedy or of a breach by either party, whether express or implied, in respect of
any occurrence or event on one occasion will be deemed a consent to, a waiver or
excuse of any other, different, or subsequent breach by either party.
19.7 ENTIRE AGREEMENT
The Concurrent AgreementS supersede all other agreements, oral or written,
heretofore or contemporaneously made with respect to the subject hereof and
thereof, and the transactions contemplated hereby and thereby, and contain the
entire agreement of the parties with respect to such transactions.
19.8 CONTROLLING LAW, CHOICE OF FORUM
All questions concerning the validity and operation of the Agreement and
performance of the obligations imposed upon the parties hereunder will be
governed by the substantive laws of the State of California, United States of
America. Each party hereto hereby agrees that any action that, in whole or in
part, in any way arises under or in connection with the Agreement will be
brought in the United States District Court for the Northern District of
California San Xxxx Xxxxxx or the Superior or Municipal Courts of the State of
California, Santa Xxxxx County. The parties hereby submit to the jurisdiction
of, and waive any venue objections against such courts in any litigation arising
out of the Agreement.
19.9 SUCCESSORS AND ASSIGNS
The provisions of the Agreement will be binding upon and inure to the
benefit of TRW and WI 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 19.3 Assignments).
19.10 PRODUCT MARKING
WI will make reasonable efforts to xxxx all Licensed Products manufactured,
delivered or sold by WI in conformance with the patent and copyright laws of the
countries of manufacture, use and sale. WI will, upon written request and with
reasonable notice, modify any such markings as TRW reasonably may request,
provided that if TRW requests WI to change markings previously applied to a
Licensed Product or to add Markings to previously manufactured Licensed
Products, then TRW will bear all costs and expenses incurred by WI in complying
with such request.
19.11 DISPUTE RESOLUTION
An informal dispute resolution procedure will be followed in all
disputes that arise under this Agreement, prior to the institution of any court
action or demand for arbitration, except for actions seeking temporary
injunctive relief. Either party may
40
notify the other of a dispute. Such notice will be in writing, specifying the
nature of the dispute in as much detail as possible. One or more senior
representatives of the parties will meet within seven (7) calendar days of the
date of such notice to attempt to resolve the dispute. If the parties are unable
to reach agreement, then the Chief Executive Officer of WI and the Executive
Vice President of the TRW group primarily responsible for the development and
sale of telecommunications products will meet (in person or by telephone) to
attempt to resolve the matter within fourteen (14) days of the date of the
original written notification of the dispute. If the parties cannot resolve the
dispute in writing within seven (7) days after this meeting, or if either party
fails to comply with any such written settlement agreement, the other party may
seek any remedy available under this Agreement.
19.12 PUBLICITY
19.12.1 The parties will jointly announce the signing of this Agreement and
the Concurrent Agreements (excluding the Teaming Agreement) within 10 days of
the Effective Date. Except as the other party gives its prior written consent
neither TRW nor WI will use the name, logo or any trademark of the other party
in any publicity, product announcement, brochure, advertising, product labeling,
promotion or otherwise for any purpose provided, however that WI will disclose
that TRW is the source of the Spitfire Technology and will promote the
relationship in a manner that enhances the views and perceptions of both TRW and
WI.
19.12.2 A party may disclose the terms of this Agreement where required by
law, provided that such party makes reasonable effort to obtain confidential
treatment or similar protection to the fullest extent available to avoid public
disclosure of the terms of this Agreement. A party required by law to make
disclosure of the terms of
this Agreement will promptly notify the other party and permit the other party
to review and participate in the application process seeking confidential
treatment.
19.13 CONSTRUCTION AND INTERPRETATION OF AGREEMENT
This Agreement has been negotiated by the parties and their attorneys and
the language hereof will not be construed for or against any party. The words
"INCLUDE", "INCLUDES" and "INCLUDING" will be deemed in each case to be followed
by the words "without limitation."
19.14 COUNTERPARTS
The Agreement may be executed in two counterparts, each of which will be
deemed to be an original, but both of which together will constitute one and the
same instrument. If this Agreement is executed in counterparts, no signatory
hereto will be bound until both the parties have duly executed a counterpart of
this Agreement.
19.15 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable for any
reason, the remainder of that provision will be amended to achieve as closely as
41
possible the economic effect of the original provision, and all other provisions
of this Agreement will continue in full force and effect.
19.16 RELATIONSHIP OF THE PARTIES
The parties to this Agreement are licensors and licensees. There is no
relationship of agency, partnership, joint venture, employment, or franchise
between the parties. Neither party has the authority to bind the other or to
incur any obligation on its behalf.
ARTICLE 20. CONDITIONS TO CLOSING
The rights and obligations of the parties under this Agreement are subject
to the fulfillment on or before the Closing (as defined in Series F Stock
Purchase Agreement) of each of the following conditions:
(i) WI REPRESENTATIONS AND WARRANTIES. The representations and warranties
of WI contained in Section 10.2 (WI's Warranties) shall be true on and as of the
Effective Date with the same effect as though such representations and
warranties had been made on and as of the Effective Date.
(ii) WI COMPLIANCE CERTIFICATE. The President of WI shall deliver to TRW at
the Closing a certificate certifying that the conditions specified in subsection
(i) of this Article 20 (Conditions to Closing) have been fulfilled.
(iii) TRW REPRESENTATIONS AND WARRANTIES. The representations and
warranties of TRW contained in Section 10.1 (TRW's Warranties) shall be true on
and as of the Effective Date with the same effect as though such representations
and warranties had been made on and as of the Effective Date.
(iv) TRW COMPLIANCE CERTIFICATE. An Executive Vice President of TRW shall
deliver to WI at the Closing a certificate certifying that the conditions
specified in subsection (i) of this Article 20 (Conditions to Closing) have been
fulfilled.
(v) OTHER AGREEMENTS. Each of TRW and WI shall have executed and delivered
the Investors' Rights Agreement of even date herewith and the Series F Stock
Purchase Agreement, and the Closing of the Series F Stock Purchase Agreement
shall have occurred.
/ /
/ /
/ /
42
(vii) XXXX-XXXXX-XXXXXX. Each party hereto shall have completed and filed
all necessary reports and forms, and responded to all requests or further
requests for additional information, if any, and all applicable time periods
shall have lapsed as may be required or authorized under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended.
IN WITNESS WHEREOF, the parties have executed the Agreement as of the
Effective Date.
WIRELESS, INC. TRW INC.
by: /s/ Xxxx X. Xxxxxxx by: /s/ Xxxxxx Xxxxxx
-------------------------------- --------------------------------
Xxxxxxx X. Xxxxxxx Don Winter
Chief Executive Officer Executive Vice President
1/15/00 1/14/00
----------------------------------- -----------------------------------
Date Date
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