Certain portions of this exhibit have been omitted and filed separately
with the United States Securities and Exchange Commission pursuant to a
request for confidential treatment. The omitted portions have been
replaced by an * enclosed by brackets ([*]).
SETTLEMENT AND RELEASE OF CLAIMS
THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS (the "Agreement") is entered
into this 2nd day of February, 2001, between Telular, Inc., a Delaware
corporation, with offices at 000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxx Xxxxx, XX
("Telular") and Motorola Inc, a Delaware corporation with offices at 0000
Xxxx Xxxxx Xxxxx, Xxxxxxxxx Xxxxxxx, XX ("Motorola"). Telular and Motorola
may be referred to individually as "Party" and collectively as "Parties".
WHEREAS, Telular and Motorola executed a Cross-Licensing Agreement dated
March 23, 1990 (the "Cross-Licensing Agreement"); and
WHEREAS, Telular and Motorola executed an Option Agreement dated November 10,
1995 (the "Option Agreement"); and
WHEREAS, Telular and Motorola executed an OEM Equipment Purchase Agreement
for WAFU dated April 30, 1999 and related amendments thereto (the "OEM
Agreement"); and
WHEREAS, Telular and Motorola executed Amendment No. 2 to Option Agreement
dated April 30, 1999 ("Amendment No. 2"), and
WHEREAS, Telular and Motorola desire to terminate the OEM Agreement and
settle all matters related to the termination of the OEM Agreement and their
business relationship to date.
NOW, THEREFORE, in consideration of the following agreements, Motorola and
Telular agree as follows:
1. Motorola shall waive its option to sub-license Telular Patents under
Section 1 of the Option Agreement.
2. Upon execution of this Agreement, Motorola shall pay Telular $ 5,000,000
(five million dollars). Also upon execution of this Agreement, Telular
shall pay its outstanding receivable balance as of December 31, 2000, of
$2,573,312.50 (two million, five hundred and seventy-three thousand,
three hundred and twelve dollars and fifty cents) to Motorola.
3. For purposes of this Agreement, Fixed Wireless Terminal Units shall be
defined as cellular telephone transceivers that have a telephone xxxx
that provides a loop-dial tip and ring interface to a standard landline
telephone set.
4. Motorola shall cancel factory orders 1900-1000-34478 thru 34503, placed
under purchase order no. 220008543 for 2600 Fixed Wireless Terminal
Units, part no. ST1001B. Motorola shall forgive any restocking fee
otherwise payable by Telular.
5. Telular shall waive the rights to any unpaid royalties for Fixed Wireless
Terminal Units sold or otherwise disposed of prior to the execution of
this Agreement. Telular shall also waive any rights to royalties for the
first [*] Fixed Wireless Terminal Units sold or otherwise disposed of
subsequent to the execution of this Agreement. Motorola shall pay Telular
a royalty of [*] on each Fixed Wireless Terminal Unit sold or otherwise
disposed of in excess of [*] subsequent to the execution of this Agreement
under the otherwise applicable terms of the Option Agreement. Except as
otherwise stated in this Agreement, Motorola shall continue to pay Telular
any other royalties otherwise due.
6. Motorola will honor any warranty obligations for Fixed Wireless Terminal
Units sold to Telular prior to the execution of this Agreement.
7. If Telular attempts to place an order with Motorola subsequent to the
execution of this Agreement, Motorola shall have absolute discretion in
determining whether to accept the order. Should Motorola choose to accept
and fill the order, any Fixed Wireless Terminal Units delivered shall
have no warranty. With respect to Motorola's warranty obligations on
post-Agreement sales to Telular, nothing in any pre-printed order forms
or other documentation shall take precedence over this Agreement unless
specified in writing and signed by both parties.
8. The Cross-License Agreement is not affected by the terms of this
Agreement.
EXCEPT as stated in this Agreement, all obligations and duties of either
Party under, arising out of or relating to the OEM Agreement are hereby
terminated. Except for the obligations set forth in this Agreement and any
confidentiality obligations of either Party, each Party shall release the
other Party (and it's officers, directors, employees, agents, shareholders,
affiliates, predecessors, successors, and assigns) for any and all past,
present and future claims, demands, liabilities and obligations, known or
unknown under, arising out of, or relating to (i) the OEM Agreement, (ii)
rights and obligations related to Fixed Wireless Terminal Units in the Option
Agreement and (iii) the parties' general business relationship as it relates
to Fixed Wireless Terminal Units.
THIS Agreement is the full, final settlement and compromise of all disputed
claims under, arising out of, or related to (i) the OEM Agreement, (ii)
rights and obligations related to Fixed Wireless Terminal Units in the Option
Agreement and (iii) the parties' general business relationship as it relates
to Fixed Wireless Terminal Units. The Parties agree that neither will
initiate any claims, litigation, lawsuit or legal action of any kind, whether
at law or equity, or any other form of dispute resolution, under, arising out
of or relating to (i) the OEM Agreement, (ii) rights and obligations related
to Fixed Wireless Terminal Units in the Option Agreement and (iii) the
parties' general business relationship as it relates to Fixed Wireless
Terminal Units, except as may be necessary to enforce this Agreement.
EACH of the undersigned Parties represents that this Agreement recites the
complete consideration for the agreement of the Parties and that all
understandings between the Parties have been expressly incorporated herein.
This Agreement supersedes all prior agreements or understandings between the
Parties of whatever kind, whether oral or written except for the Option
Agreement as modified by this Agreement's terms.
EACH Party agrees that the terms and provisions of this Agreement are
proprietary, and subject to applicable provisions of law. Each Party shall
keep and hold any information about this Agreement's terms and provisions in
strict confidence.
THIS Agreement shall be governed and construed in accordance with the laws of
the State of Illinois, USA.
IN WITNESS WHEREOF, the undersigned have executed this document, which is
effective on the date stated on the first line.
MOTOROLA, INC. TELULAR, INC.
Date: February 5, 2001 Date: February 2, 2001
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
Its: Senior Vice President & Its: President &
General Manager Telecom Chief Executive Officer
Carrier Solutions Group -
North America
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