1
Exhibit 10.2
================================================================================
INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT
BY AND BETWEEN
LUCENT TECHNOLOGIES INC.
AND
AVAYA INC.
DATED AS OF OCTOBER 1, 2000
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS 2
ARTICLE II. SERVICES 3
2.1 Services 3
2.2 Term 4
2.3 Charges and Payment 4
2.4 General Obligations; Standard of Care 6
2.5 Certain Limitations 8
2.6 Confidentiality 9
2.7 Termination 10
2.8 Disclaimer of Warranties, Limitation of Liability and Indemnification 10
ARTICLE III MISCELLANEOUS 11
3.1 Taxes 11
3.2 Law and Governmental Regulations 12
3.3 Relationship of Parties 12
3.4 Incorporation of Provisions of the Contribution and Distribution Agreement 12
3.5 Expenses 13
3.6 References 13
3.7 Modification and Amendment 13
3.8 Inconsistency 00
-x-
0
XXXXXXX SERVICES AND SYSTEMS REPLICATION AGREEMENT
THIS INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT (this
"Agreement"), dated as of October 1, 2000 (the "Effective Date"), is by and
between LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent"), and Avaya
Inc., a Delaware corporation ("Avaya").
R E C I T A L S
A. WHEREAS, the Board of Directors of Lucent has determined that it is
in the best interests of Lucent and its stockholders to separate Lucent's
existing businesses into two independent businesses;
B. WHEREAS, in order to effectuate the foregoing, Lucent and Avaya have
entered into a Contribution and Distribution Agreement, dated as of September
30, 2000 (the "Contribution and Distribution Agreement"), which provides, among
other things, subject to the terms and conditions thereof, for the Contribution,
the Distribution and the execution and delivery of certain other agreements in
order to facilitate and provide for the foregoing;
C. WHEREAS, in order to ensure an orderly transition under the
Contribution and Distribution Agreement it will be necessary for each of the
parties to provide to the other the Services described herein for a transitional
period; and
D. WHEREAS, capitalized terms used herein and not otherwise defined
shall have the respective meanings assigned to them in Article I hereof or in
the Contribution and Distribution Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valid consideration, the receipt and adequacy of which are hereby acknowledged,
the parties, intending to be legally bound, agree as follows:
4
ARTICLE I.
DEFINITIONS
For the purposes of this Agreement, in addition to the words and
phrases that are defined throughout the body of this Agreement, the following
words and phrases shall have the following meanings:
1.1 ADDITIONAL SERVICES shall have the meaning set forth in Section
2.1(b).
1.2 CORPORATE SUPPORT SERVICES shall mean the Services described in
the Exhibits set forth in Section 2.1(a)(iii).
1.3 DATA PROCESSING SERVICES shall mean the Services described in the
Exhibits set forth in Section 2.1(a)(i).
1.4 EXPIRATION DATE shall have the meaning set forth in Section 2.2.
1.5 IMPRACTICABLE (and words of similar import) shall have the meaning
set forth in Section 2.5(b).
1.6 INITIAL SERVICES shall have the meaning set forth in Section
2.1(a).
1.7 PROVIDING COMPANY shall mean, with respect to any particular
Service, the entity or entities identified on the applicable Exhibit as the
party to provide such Service.
1.8 RECEIVING COMPANY shall mean, with respect to any particular
Service, the entity or entities identified on the applicable Exhibit as the
party to receive such Service.
1.9 REPRESENTATIVE of any party shall mean a managerial level employee
appointed by such party to have the responsibilities and authority for any
particular Service.
1.10 SERVICE shall have the meaning set forth in Section 2.1(b).
1.11 SYSTEM shall mean the software, hardware, data store or
maintenance and support components or portions of such components of a set of
information technology assets identified in an Exhibit hereto.
1.12 SYSTEM ERROR shall have the meaning set forth in Section
2.4(d)(iii).
1.13 SYSTEMS REPLICATION AND TRANSFER SERVICES shall mean the Services
described in the Exhibits set forth in Section 2.1(a)(iv).
1.14 TELECOMMUNICATIONS SERVICES shall mean the Services described in
the Exhibits set forth in Section 2.1(a)(ii).
-2-
5
1.15 TERMINATION DATE shall have the meaning set forth in Section 2.2.
ARTICLE II.
SERVICES
2.1 SERVICES.
(a) INITIAL SERVICES. Except as otherwise provided herein,
for the term determined pursuant to Section 2.2 hereof, Providing Company shall
provide or cause to be provided to Receiving Company, in each case as identified
in the Exhibits attached hereto, the following "Initial Services":
(i) DATA PROCESSING SERVICES described in Exhibits
DP-1 through DP-3;
(ii) TELECOMMUNICATIONS SERVICES described in
Exhibits TC-1 through TC-32;
(iii) CORPORATE SUPPORT SERVICES described in
Exhibits CS-1 (CFO) through CS-24 (CFO); XX-000 (XX) xxxxxxx XX-000
(XX); CS-201 (GPO) through CS-202 (GPO); CS-301(GRE) through CS-303
(GRE); CS-401 (L&GA) through CS- 411 (L&GA); CS-501 (CIO) through CS-
543 (CIO); CS-701 (BL) through CS- 712 (BL); and CS-801 (GEN) through
CS-802 (GEN), as more fully identified in the list preceding each
series of Exhibits hereto; and
(iv) SYSTEMS REPLICATION AND TRANSFER SERVICES
described in Exhibits SR-1 (CFO, CIO) through SR-8 (CFO, CIO).
(b) ADDITIONAL SERVICES.
(i) From time to time after the Distribution Date,
the parties may identify additional services that one party will
provide to the other party in accordance with the terms of this
Agreement (the "Additional Services" and, together with the Initial
Services, the "Services"). The parties shall create an Exhibit for each
Additional Service setting forth the identities of Providing Company
and Receiving Company, a description of the Service, the time period
during which the Service will be provided, the charge, if any, for the
Service and any other terms applicable thereto and obtain the approval
of each party's Representative. Except as set forth in Section
2.1(b)(ii), the parties may, but shall not be required to, agree on
Additional Services during the term of this Agreement.
(ii) Except as set forth in the next sentence,
Providing Company shall be obligated to perform, at charges established
pursuant to Section 2.3(b), any Additional Service that: (A) was
provided by Providing Company immediately prior to the Effective Date
and that Receiving Company reasonably believes was inadvertently or
-3-
6
unintentionally omitted from the list of Initial Services or (B) is
essential to effectuate an orderly transition under the Contribution
and Distribution Agreement unless such performance would significantly
disrupt Providing Company's operations or materially increase the scope
of its responsibility under this Agreement. If Providing Company
reasonably believes the performance of Additional Services required
under (A) or (B) of the immediately preceding sentence would
significantly disrupt its operations or materially increase the scope
of its responsibility under this Agreement, Providing Company and
Receiving Company shall negotiate in good faith to establish terms
under which Providing Company can provide such Additional Services, but
Providing Company shall not be obligated to provide such Additional
Services if, the following good faith negotiation, it is unable to
reach agreement on such terms.
(c) SERVICES PERFORMED BY OTHERS. At its option,
Providing Company may cause any Service it is required to provide hereunder to
be provided by another member of its Group or by any other Person that is
providing, or may from time to time provide, the same or similar services for
Providing Company. Providing Company shall remain responsible, in accordance
with the terms of this Agreement, for performance of any Service it causes to be
so provided.
2.2 TERM.
The term of this Agreement shall commence on the Effective
Date and shall remain in effect through March 31, 2001 ("Expiration Date"),
unless earlier terminated in accordance with Section 2.7 ("Termination Date").
This Agreement may be extended by the parties in writing either in whole or with
respect to one or more of the Services, provided, however, that such extension
shall only apply to the Service for which the Agreement was extended. The
parties shall be deemed to have extended this Agreement with respect to a
specific Service if the Exhibit for such Service specifies a completion date
beyond the Expiration Date. The parties may agree on an earlier expiration date
with respect to a specific Service by specifying such earlier date on the
Exhibit for that Service. Services shall be provided up to and including the
date set forth in the applicable Exhibit, subject to earlier termination as
provided herein.
2.3 CHARGES AND PAYMENT.
(a) CHARGES FOR INITIAL SERVICES. Receiving Company shall
pay Providing Company the charges, if any, set forth on the Exhibit for each of
the Services listed therein as adjusted, from time to time, in accordance with
the process and procedures established under Section 2.3(f) hereof. Wherever
practical, charges shall be based on the actual incurred costs, not budgeted or
estimated costs. The parties also intend for charges to be easy to administer
and justify and, therefore, they hereby acknowledge it may be counterproductive
to try to recover every cost, charge or expense particularly those that are
insignificant or de minimis. The parties shall use good faith efforts to discuss
any situation in which the actual charge for a Service is reasonably expected to
exceed the estimated charge, if any, set forth on an Exhibit for a particular
Service, provided, however, that the incurrence of charges in excess of any such
-4-
7
estimate shall not justify stopping the provision of, or payment for, Services
under this Agreement.
(i) In the case of Data Processing Services,
Telecommunications Services or Common Support Services, except as
otherwise set forth in an Exhibit for a specific Service, the parties
intend for these charges to allow Providing Company to recover the
fully allocated direct costs of providing such Services plus all
out-of-pocket, third party costs, charges or expenses, but without any
profit. Where the number of employees assigned by each party to jointly
support an Initial Service is in proportion to the parties' historical
or expected use of such Initial Service, and each party is responsible
for the costs and expenses of its employees so assigned, recovery may
be limited to other direct costs, such as data processing and software
license fees.
(ii) In the case of Systems Replication and Transfer
Services, except as otherwise set forth in an Exhibit for a specific
Service, the parties intend that costs and expenses associated with
isolating, separating or replicating a System be borne by the parties
in proportion to their usage of the System prior to the Effective Date.
To the extent not otherwise determined prior to the Effective Date, the
parties shall determine the appropriate proportion of each party for
each Systems Replication and Transfer Service prior to the Distribution
Date. Where the number of employees assigned by each party to jointly
replicate or transfer a System is in proportion to the parties'
historical or expected use of such System, and each party is
responsible for the costs of its employees so assigned, recovery may be
limited to other direct costs such as third party contractor fees or
extraordinary data processing or networking costs. For purposes of the
foregoing, the parties acknowledge that, unless otherwise agreed in
writing, the costs of buying new hardware or obtaining new software
licenses shall be the responsibility of the party purchasing such
hardware or licensing such software.
(b) CHARGES FOR ADDITIONAL SERVICES. Receiving Company
shall pay Providing Company the charges, if any, set forth on each Exhibit
hereafter created for each of the Additional Services listed therein. Except for
Systems Replication and Transfer Services required by Section 2.1(b)(ii), costs
and expenses associated with System Replication and Transfer Additional Services
shall be borne by the party requesting such Additional Services. Charges, if
any, for other Additional Services, including those required by Section
2.1(b)(ii), shall be determined according to methods in use prior to the
Effective Date or such other method as may be mutually agreed that ensures that
Providing Company recovers costs and expenses, but without any profit, in
accordance with Section 2.3(a). Notwithstanding the foregoing, however, the
agreement of a party to provide or receive any Additional Service that is not
required pursuant to Section 2.1(b)(ii) at any given rate or charge shall be at
the sole discretion of such party.
(c) PAYMENT TERMS. Providing Company shall xxxx Receiving
Company monthly for all charges pursuant to this Agreement. Such bills shall be
accompanied by reasonable documentation or other reasonable explanation
supporting such charges. Receiving Company shall pay Providing Company for all
Services provided hereunder within thirty (30)
-5-
8
days after receipt of an invoice therefor. Late payments shall bear interest at
the Prime Rate plus two percent (2%) per annum.
(d) PERFORMANCE UNDER ANCILLARY AGREEMENTS.
Notwithstanding anything to the contrary contained herein, Receiving Company
shall not be charged under this Agreement for any Services that are specifically
required to be performed under the Contribution and Distribution Agreement or
any other Ancillary Agreement and any such other Services shall be performed and
charged for in accordance with the terms of the Contribution and Distribution
Agreement or such other Ancillary Agreement.
(e) RECORDS. As needed from time to time during the
period during which Services are provided, and upon termination of the provision
of any Services, the parties agree to provide each other with records (in any
format, electronic or otherwise) related to the provision of Services under this
Agreement to the extent that (i) such records exist in the ordinary course, (ii)
do not involve the incurrence of any material expense and (iii) are reasonably
necessary by any such party to comply with its obligations hereunder or under
applicable law.
(f) PRICING ADJUSTMENTS. In the even of a tax audit
adjustment relating to the pricing of any or all Services provided pursuant to
this Agreement in which it is determined by a taxing authority that any of the
charges, individually or in combination, did not result in an arm's-length
payment, as determined under internationally accepted arm's-length standards,
then the parties, including a Providing Company subcontractor or a member of
Providing Company's Group providing or receiving Services hereunder, may agree
to make corresponding adjustment to the charges in question for such period to
the extent necessary to achieve arm's-length pricing. Any adjustment made
pursuant to this Section 2.3(f) shall be reflected in the parties' official
books and records, and the resulting overpayment or underpayment shall create an
obligation to be paid in the manner specified in Section 2.3(c).
2.4 GENERAL OBLIGATIONS; STANDARD OF CARE.
(a) PERFORMANCE METRICS: PROVIDING COMPANY. Subject to
Section 2.5(c), Providing Company shall maintain sufficient resources to perform
its obligations hereunder. Specific performance metrics for Providing Company
may be set forth in Exhibits. Where none is set forth for Data Processing
Services, Telecommunications Services and Common Support Services, Providing
Company shall use reasonable efforts to provide Services in accordance with the
policies, procedures and practices in effect before the date hereof and shall
exercise the same care and skill as it exercises in performing similar services
for itself. Where none is set forth for System Replication and Transfer
Services, Providing Company will use reasonable efforts to replicate and
transfer each System so that is has substantially the same functionality for
Receiving Company as it did immediately before the date hereof taking into
account changes reasonably expected and customary in a new operating
environment.
(b) PERFORMANCE METRICS: RECEIVING COMPANY. Specific
performance metrics for Receiving Company may be set forth in Exhibits. Where
none is set forth, Receiving Company shall use reasonable efforts, in connection
with receiving Services, to follow the
-6-
9
policies, procedures and practices in effect before the date hereof including
providing information and documentation sufficient for Providing Company to
perform the Services as they were performed before the date hereof and making
available, as reasonably requested by Providing Company, sufficient resources
and timely decisions, approvals and acceptances in order that Providing Company
may accomplish its obligations hereunder in a timely manner.
(c) TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties
acknowledge the transitional nature of the Services and that Providing Company
may make changes from time to time in the manner of performing the Services if
Providing Company is making similar changes in performing similar services for
members of its own Group and if Providing Company furnishes to Receiving Company
substantially the same notice Providing Company shall provide members of its own
Group respecting such changes. Notwithstanding the foregoing, between the date
hereof and March 31, 2001, Providing Company will not make any material change
to Systems affecting Receiving Company without first providing thirty (30) days
prior written notice and obtaining Receiving Company's prior written consent,
which consent shall not be unreasonably withheld or delayed.
(d) RESPONSIBILITY FOR ERRORS; DELAYS. Providing
Company's sole responsibility to Receiving Company:
(i) for errors or omissions in Data Processing
Services, Telecommunications Services and Common Support Services,
shall be to furnish correct information, payment and/or adjustment in
the Services, at no additional cost or expense to Receiving Company;
provided, Receiving Company must promptly advise Providing Company of
any such error or omission of which it becomes aware after having used
reasonable efforts to detect any such errors or omissions in accordance
with the standard of care set forth in Section 2.4(b);
(ii) for failure to deliver any Data Processing
Service, Telecommunications Service or Common Support Service because
of Impracticability, shall be to use reasonable efforts, subject to
Section 2.5(c), to make the Services available and/or to resume
performing the Services as promptly as reasonably practicable;
(iii) for an error, bug, fault or deficiency in a
replicated or transferred System (a "System Error") shall be to use
reasonable efforts, subject to Section 2.5(c) and taking into account
the importance of the affected System to Receiving Company's business
operations, to cooperate with Receiving Company to correct such System
Error at no additional cost or expense to Receiving Company (such
correction may take the form of new or revised software or an
appropriate work-around); provided, Receiving Company must advise
Providing Company of any such System Error within sixty (60) days after
completion of the activities set forth in (A) the Exhibit for the
System containing a System Error or (B) the Exhibit for any feeder
System that caused the System Error, whichever is later;
-7-
10
(iv) for failure to complete any of the Systems
Replication or Transfer Services because of Impracticability, shall be
to use reasonable efforts, subject to Section 2.5(c), to make the
Systems available to Receiving Company from a Providing Company
facility until Providing Company can resume replication or transfer
activities or until the parties devise an appropriate alternative
approach pursuant to Section 2.4(f).
(e) GOOD FAITH COOPERATION; CONSENTS. The parties will
use good faith efforts to cooperate with each other in all matters relating to
the provision and receipt of Services. Such cooperation shall include exchanging
information, providing electronic access to Systems used in connection with
Services, performing true-ups and adjustments and obtaining all consents,
licenses, sublicenses or approvals necessary to permit each party to perform its
obligations hereunder. The costs of obtaining such consents, licenses,
sublicenses or approvals shall be allocated in accordance with Section 2.3(a).
The parties will maintain documentation supporting the information contained in
the Exhibits and cooperate with each other in making such information available
as needed in the event of a tax audit, whether in the United States or any other
country.
(f) ALTERNATIVES. If Providing Company reasonably
believes it is unable to provide any Service because of a failure to obtain
necessary consents, licenses, sublicenses or approvals pursuant to Section
2.4(e) or because of Impracticability, the parties shall cooperate to determine
the best alternative approach. Until such alternative approach is found or the
problem otherwise resolved to the satisfaction of the parties, the Providing
party shall use reasonable efforts, subject to Sections 2.5(b) and 2.5(c), to
continue providing the Service or, in the case of Systems, to support the
function to which the System relates or permit Receiving Company to have access
to the System so Receiving Company can support the function itself. To the
extent an agreed upon alternative approach requires payment above and beyond
that which is included in Providing Company's charge for the Services in
question, the parties shall share equally in making any such payment unless they
otherwise agree in writing.
2.5 CERTAIN LIMITATIONS.
(a) SERVICE BOUNDARIES. Except as provided in an Exhibit
for a specific Service: (i) Providing Company shall be required to provide the
Services only to the extent and only at the locations such Services are being
provided by Providing Company for the members of Receiving Company's Group
immediately prior to the Effective Date; and (ii) the Services will be available
only for purposes of conducting the business of Receiving Company substantially
in the manner it was conducted prior to the Effective Date.
(b) IMPRACTICABILITY. Providing Company shall not be
required to provide any Service to the extent the performance of such Service
becomes "Impracticable" as a result of a cause or causes outside the reasonable
control of Providing Company including unfeasible technological requirements, or
to the extent the performance of such Services would require Providing Company
to violate any applicable laws, rules or regulations or would result in the
breach of any software license or other applicable contract.
-8-
11
(c) ADDITIONAL RESOURCES. Except as provided in an
Exhibit for a specific Service, in providing the Services, Providing Company
shall not be obligated to: (i) hire any additional employees; (ii) maintain the
employment of any specific employee; (iii) purchase, lease or license any
additional equipment or software; or (iv) pay any costs related to the transfer
or conversion of Receiving Company's data to Receiving Company or any alternate
supplier of Services.
(d) NO SALE, TRANSFER, ASSIGNMENT. Receiving Company may
not sell, transfer, assign or otherwise use the Services provided hereunder, in
whole or in part, for the benefit of any Person other than a member of Receiving
Company's Group.
2.6 CONFIDENTIALITY.
(a) INFORMATION SUBJECT TO OTHER OBLIGATIONS. Providing
Company and Receiving Company agree that all Information regarding the Services,
including, but not limited to, price, costs, methods of operation, and software,
shall be maintained in confidence and shall be subject to Article VIII, relating
to preservation and exchange of information and protection of Proprietary
Information, of the Contribution and Distribution Agreement.
(b) ALL INFORMATION CONFIDENTIAL. Providing Company's
Systems used to perform the Services provided hereunder are confidential and
proprietary to Providing Company or third parties. Receiving Company shall treat
these Systems and all related procedures and documentation as confidential and
proprietary to Providing Company or its third party vendors.
(c) INTERNAL USE; TITLE, COPIES, RETURN. Subject to the
Technology Assignment, between Lucent and Avaya (or their respective
Affiliates), relating to ownership of copyrights, and the Patent and Technology
License Agreement, relating to ownership of and rights to use technology,
Receiving Company agrees that:
(i) all Systems, procedures and related materials
provided to Receiving Company are for Receiving Company's internal use
only and only as related to the Services or any of the underlying
Systems used to provide the Services;
(ii) title to all Systems used in performing the
Services provided hereunder shall remain in Providing Company or its
third party vendors;
(iii) Receiving Company shall not copy, modify,
reverse engineer, decompile or in any way alter Systems without
Providing Company's express written consent; and
(iv) Upon the termination of any of the Services,
Receiving Company shall return to Providing Company, as soon as
practicable, any equipment or other property of Providing Company
relating to the Services which is owned or leased by it and is or was
in Receiving Company's possession or control.
-9-
12
2.7 TERMINATION.
(a) RECEIVING COMPANY TERMINATION. Receiving Company may
terminate this Agreement either with respect to all, or with respect to any one
or more, of the Data Processing Services, Telecommunications Services or Common
Support Services provided hereunder at any time and from time to time, for any
reason or no reason, by giving written notice to the Providing Party at least
ninety (90) days prior to the date of such termination (which notice shall be
given, as to a particular Service, to the Representative responsible for such
Service). Receiving Company may immediately terminate this Agreement either with
respect to all, or with respect to any one or more, of the Systems Replication
and Transfer Services provided hereunder at any time and from time to time, for
any reason or no reason, by giving written notice to the Representative of the
Providing Party responsible for such Service. In the case of termination by
Receiving Company of a Systems Replication and Transfer Service, Receiving
Company shall compensate Providing Party for the costs, in accordance with
Section 2.3(a)(ii), incurred by Providing Party in performing such Service up to
the date on which Providing Party receives written notice of Receiving Company's
termination.
(b) PROVIDING COMPANY TERMINATION. Except where a longer
term is set forth in an Exhibit for any particular Service, Providing Company
may terminate this Agreement either with respect to all, or with respect to any
one or more, of the Services provided hereunder at any time after March 31,
2001, for any reason or no reason, by giving written notice to the Receiving
Company at least ninety (90) days prior to the date of such termination (which
notice shall be given, as to a particular Service, to the Representative
responsible for such Service). If Providing Company terminates this Agreement
under this Section 2.7(b), it will have a continuing obligation to transfer to
Receiving Company all Information of Receiving Company, including but not
limited to data stores for Systems, in an agreed upon format and at mutual equal
expense.
(c) TERMINATION OF LESS THAN ALL SERVICES. In the event
of any termination with respect to one or more, but less than all, Services,
this Agreement shall continue in full force and effect with respect to any
Services not terminated hereby.
(d) USER IDS, PASSWORDS. The parties shall use good faith
efforts at the termination or expiration of this Agreement or any specific
Exhibit hereto, to ensure that all user IDs and passwords are canceled and,
subject to Section 2.5(c), that any data pertaining solely to the other parties
are deleted or removed from the Systems.
2.8 DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY AND
INDEMNIFICATION.
(a) DISCLAIMER OF WARRANTIES. PROVIDING COMPANY DISCLAIMS
ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO THE SERVICES. PROVIDING COMPANY MAKES NO REPRESENTATIONS OR WARRANTIES AS TO
THE QUALITY, SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR USE.
-10-
13
(b) LIMITATION OF LIABILITY; INDEMNIFICATION OF RECEIVING
COMPANY. Providing Company shall have no Liability to Receiving Company with
respect to its furnishing any of the Services hereunder except for Liabilities
arising out of the willful misconduct occurring after the Effective Date of
Providing Company or any member of Providing Company's Group. Providing Company
will indemnify, defend and hold harmless Receiving Company Indemnitees in
respect of all Liabilities related to, arising from, asserted against or
associated with such willful misconduct. Such indemnification obligation shall
be a Liability of Providing Company for purposes of the Contribution and
Distribution Agreement and the provisions of Article V thereof with respect to
indemnification shall govern with respect thereto. In no event shall Providing
Company or any member of Providing Company's Group have any Liability for any
incidental, indirect, special or consequential damages, whether or not caused by
or resulting from negligence or breach of obligations hereunder and whether or
not informed of the possibility of the existence of such damages.
(c) LIMITATION OF LIABILITY; INDEMNIFICATION OF PROVIDING
COMPANY. Receiving Company shall indemnify and hold harmless Providing Company's
Indemnitees in respect of all Liabilities related to, arising from asserted
against or associated with Providing Company' furnishing or failing to furnish
the Services provided for in this Agreement, other than Liabilities arising out
of the willful misconduct following the Effective Date of Providing Company or
any member of Providing Company's Group. The provisions of this indemnity shall
apply only to losses which relate directly to the provision of Services. Such
indemnification obligation shall be a Liability of Receiving Company for
purposes of the Contribution and Distribution Agreement and the provisions of
Article V thereof with respect to indemnification shall govern with respect
thereto. In no event shall Receiving Company or any member of Receiving
Company's Group have any Liability for any incidental, indirect, special or
consequential damages, whether or not caused by or resulting from negligence or
breach of obligations hereunder and whether or not informed of the possibility
of the existence of such damages.
(d) SUBROGATION OF RIGHTS VIS-A-VIS THIRD PARTY
CONTRACTORS. In the event any Liability arises from the performance of Services
hereunder by a third party contractor, Receiving Company shall be subrogated to
such rights, if any, as Providing Company may have against such third party
contractor with respect to the Services provided by such third party contractor
to or on behalf of Receiving Company.
ARTICLE III.
MISCELLANEOUS
3.1 TAXES.
Receiving Company shall bear all taxes, duties and other
similar charges (and any related interest and penalties), imposed as a result of
its receipt of Services under this Agreement, including any tax which Receiving
Company is required to withhold or deduct from payments to
-11-
14
Providing Company, except (a) any tax allowable as a credit against the U.S.
Federal income tax of Providing Company, and (b) any net income tax imposed upon
Providing Company by the country of its incorporation or any governmental entity
within its country of incorporation. To assist Providing Company in obtaining
the credit identified in (b) of the immediately preceding sentence, Receiving
Company shall furnish Providing Company with such evidence as may be required by
the relevant taxing authorities to establish that any such tax has been paid.
3.2 LAW AND GOVERNMENTAL REGULATIONS.
Receiving Company shall be responsible for (a) compliance with
all laws and governmental regulations affecting its business and (b) any use
Receiving Company may make of the Services to assist it in complying with such
laws and governmental regulations. While Providing Company shall not have any
responsibility for Receiving Company's compliance with the laws and regulations
referred to above, Providing Company agrees to use reasonable efforts, subject
to Section 2.5(c), to (i) provide the Services in a manner that complies with
applicable laws and regulations and (ii) cause the Services to be designated in
such manner that such Services shall be able to assist Receiving Company in
complying with applicable legal and regulatory responsibilities. Providing
Company's charge, if any, for such Service may reflect its efforts under this
Section 3.2. In no event, however, shall Receiving Company rely solely on its
use of the Services in complying with any laws and governmental regulations.
3.3 RELATIONSHIP OF PARTIES.
Nothing in this Agreement shall be deemed or construed by the
parties or any third party as creating the relationship of principal and agent,
partnership or joint venture between the parties, it being understood and agreed
that no provision contained herein, and no act of the parties, shall be deemed
to create any relationship between the parties other than the relationship of
independent contractor nor be deemed to vest any rights, interest or claims in
any third parties.
3.4 INCORPORATION OF PROVISIONS OF THE CONTRIBUTION AND
DISTRIBUTION AGREEMENT
The following provisions of the Contribution and Distribution
Agreement are hereby incorporated herein by reference, and unless otherwise
expressly specified herein, such provisions shall apply as if they are fully set
forth herein (references in paragraphs (a) through (d) below to "Article" shall
mean Articles of the Contribution and Distribution Agreement, and except as
expressly set forth below, references in the material incorporated herein by
reference shall be references to the Contribution and Distribution Agreement):
(a) Article V, relating to mutual releases and
indemnification, including procedures;
(b) Article VIII, relating to preservation and exchange
of information and protection of proprietary information;
-12-
15
(c) Article IX, relating to dispute resolution; and
(d) Article XII, miscellaneous provisions.
3.5 EXPENSES.
Except as expressly set forth herein (including in the
Exhibits hereto) or in the Contribution and Distribution Agreement or another
Ancillary Agreement, whether or not the Contribution or the Distribution is
consummated, all legal and other costs and expenses incurred in connection with
this Agreement will be paid by Lucent (in the case of costs or expenses incurred
by Lucent or any other member of the Lucent Group) or Avaya (in the case of
costs or expenses incurred by Avaya or any other member of the Avaya Group).
3.6 REFERENCES.
All reference to Sections, Articles, Exhibits or Schedules
contained herein mean Sections, Articles, Exhibits or Schedules of or to this
Agreement, as the case may be, unless otherwise stated. When a reference is made
in this Agreement to a "party" or "parties", such reference shall be to a party
or parties to this Agreement unless otherwise indicated. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The use of the singular
herein shall be deemed to be or include the plural (and vice versa) whenever
appropriate. The use of the words "hereof", "herein", "hereunder", and words of
similar import shall refer to this entire Agreement, and not to any particular
article, section, subsection, clause, paragraph or other subdivision of this
Agreement, unless the context clearly indicates otherwise. The word "or" shall
not be exclusive; "may not" is prohibitive and not permissive.
3.7 MODIFICATION AND AMENDMENT.
Except for modifications to Exhibits, which may be made by
Representatives, this Agreement may not be modified or amended, or any provision
waived, except in the manner set forth in the Contribution and Distribution
Agreement.
3.8 INCONSISTENCY.
In the event of any inconsistency between the terms of this
Agreement and any of the Exhibits hereto, the terms of this Agreement, other
than charges, shall control.
-13-
16
IN WITNESS WHEREOF, each of the parties hereto have caused
this Agreement to be duly executed on its behalf by its duly authorized officer
as of the date first written above.
LUCENT TECHNOLOGIES INC.
By:______________________________
Name:____________________________
Title:___________________________
AVAYA INC.
By:______________________________
Name:____________________________
Title:___________________________
-14-
