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Exhibit 10.2
EXECUTION COPY
INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT
BY AND BETWEEN
LUCENT TECHNOLOGIES INC.
AND
AGERE SYSTEMS INC.
DATED AS OF FEBRUARY 1, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................ 1
ARTICLE II SERVICES............................................................... 2
2.1 Services................................................................. 2
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......................................................... 12
3.1 Taxes.................................................................... 12
3.2 Law and Governmental Regulations......................................... 13
3.3 Relationship of Parties.................................................. 13
3.4 Incorporation of Provisions of the Separation and Distribution Agreement. 13
3.5 Expenses................................................................. 14
3.6 References............................................................... 14
3.7 Modification and Amendment............................................... 14
3.8 Inconsistency............................................................ 00
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XXXXXXX SERVICES AND SYSTEMS REPLICATION AGREEMENT
THIS INTERIM SERVICES AND SYSTEMS REPLICATION AGREEMENT (this
"Agreement"), dated as of February 1, 2001 (the "Effective Date"), is by and
between LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent"), and AGERE
SYSTEMS INC., a Delaware corporation ("Agere").
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 Agere have
entered into a Separation and Distribution Agreement, dated the date hereof (the
"Separation and Distribution Agreement"), which provides, among other things,
subject to the terms and conditions thereof, for the Separation of the Lucent
Assets and Lucent Liabilities, the IPO, 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
Separation and Distribution Agreement it will be necessary for each party 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 Separation 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:
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(c).
1.2 CORPORATE SUPPORT SERVICES shall mean the Services described in the
Exhibits set forth in Section 2.1(a)(iii).
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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(c).
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).
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 or subsequently agreed to prior to the Closing Date in
accordance with the procedures set forth herein, the following "Initial
Services":
(i) DATA PROCESSING SERVICES described in Exhibit MEDP-001;
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(ii) TELECOMMUNICATIONS SERVICES described in Exhibits METC-001
through METC-037;
(iii) CORPORATE SUPPORT SERVICES described in Exhibits MECS-001
(CFO) through MECS-029 (CFO); XXXX-000 (XX) xxxxxxx XXXX-000 (XX); MECS-401
(Law) through MECS-408 (Law), MECS-411 (Law) and MECS-412 (Law); MECS-409 (PR),
MECS-410 (PR) and MECS-428 (PR); MECS-424 (IP) and MECS-425 (IP); MECS-426 (GT)
and MECS-427 (GT); MECS-501 (CIO) through MECS-528 (CIO); MECS-601 (EH&S) and
MECS-602 (EH&S); MECS-701 (BL) through MECS-713 (BL); and MECS-801 (GEN) through
MECS-804 (GEN), as more fully identified in the list preceding each series of
Exhibits hereto; and
(iv) SYSTEMS REPLICATION AND TRANSFER SERVICES none of which have
been identified as of the date hereof.
(b) FINAL EXHIBITS. The parties have made a good faith efforts as of
the date hereof to identify each Initial Service and complete the content of
each Exhibit pertaining to the Initial Services. To the extent an Exhibit has
not been prepared for an Initial Service or an Exhibit is otherwise incomplete
as of the date hereof, the parties shall use good faith efforts to prepare or
complete Exhibits by the Closing Date. Any Services reflected on any such
additional or amended Exhibit shall be deemed an "Initial Service" as if set
forth on such Exhibit as of the date hereof.
(c) ADDITIONAL SERVICES.
(i) From time to time after the Closing 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(c)(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 Closing Date and that Receiving Company
reasonably believes was inadvertently or unintentionally omitted from the list
of Initial Services or (B) is essential to effectuate an orderly transition
under the Separation 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
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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.
(d) 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 September 30, 2001 ("Expiration Date"), unless
earlier terminated in accordance with Section 2.7. 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, with the
understanding that Services scheduled to expire on September 30, 2001 shall
expire on the later of September 30, 2001 and the Distribution Date unless the
parties otherwise agree with respect to a specific Service.
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 estimate
shall not justify stopping the provision of, or payment for, Services under this
Agreement.
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(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. The parties shall determine the appropriate
proportion of each party for each Systems Replication and Transfer Service prior
to the Closing 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(c)(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(c)(ii), shall be determined according to methods in use prior to the Closing
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(c)(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) days after receipt of an invoice
therefor. Late payments shall bear interest at the Prime Rate plus two percent
(2%) per annum.
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(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 Separation 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 Separation 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 policies, procedures and practices in effect
before the date hereof including providing
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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 October 1, 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") that did not exist in the System
immediately before the Closing Date, 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;
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(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, Providing Company shall use
reasonable efforts, subject to Section 2.5(b) and Section 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.
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(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 Separation 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 and Joint Ownership Agreement, dated the date hereof, between Lucent
and Agere (or their respective Affiliates), relating to ownership of copyrights,
and the Patent and Technology License Agreement, dated the date hereof, between
Lucent and Agere (or their respective Affiliates), 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
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(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.
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 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).
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 Company responsible for such Service. In the case of termination by
Receiving Company of a Systems Replication and Transfer Service, Receiving
Company shall compensate Providing Company for the costs, in accordance with
Section 2.3(a)(ii), incurred by Providing Company in performing such Service up
to the date on which Providing Company 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 October 1, 2001, for any
reason or no reason, by giving written notice to 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.
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(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.
(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 Separation 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 Separation 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.
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ARTICLE III
MISCELLANEOUS
3.1 TAXES.
The parties agree taxes shall allocated as follows:
(a) Receiving Company shall bear all taxes, duties, levies and similar
charges (and any related interest and penalties), however designated, imposed as
a result of the provision by the Providing Company of Services under this
Agreement, except (i) any tax imposed upon the Providing Company in a
jurisdiction other than the jurisdiction under the laws of which the Providing
Company was formed (hereinafter referred to as the "Resident Jurisdiction") if
such tax is allowable as a credit against the Resident Jurisdiction income taxes
of the Providing Company; and (ii) any net income tax imposed upon the Providing
Company by any government entity within the Providing Company's Resident
Jurisdiction. In order for the exception contained in the foregoing clause (i)
to apply, the Receiving Company must furnish the Providing Company with such
evidence as may be required by the Resident Jurisdiction taxing authorities to
establish that such tax has been paid within thirty (30) days of issuance of
notice by the local taxing authority so that the Providing Company may claim the
credit.
(b) If the Receiving Company is required to bear a tax, duty, levy or
similar charge pursuant to the preceding paragraph, the Receiving Company shall
pay such tax, duty, levy or similar charge and any additional amounts as are
necessary to ensure that the net amounts received by the Providing Company
hereunder after all such payments or withholdings equal the amounts to which the
Providing Company is otherwise entitled under this Agreement as if such tax,
duty, levy or similar charge did not exist.
(c) Providing Company shall not collect an otherwise applicable tax if
Receiving Company's purchase is exempt from Providing Company's collection of
such tax and a valid tax exemption certificate is furnished by Receiving Company
to Providing Company.
(d) All cost associated with a Service are exclusive of value added
taxes, turnover taxes, sales taxes or similar taxes, including any related
interest and penalties (hereinafter all referred to as "VAT"). In the event that
any VAT is payable on a Service supplied by Providing Company to Receiving
Company under this Agreement, this VAT shall be added to the prices mentioned
and shall be for the account of Receiving Company. If VAT on the supplies of
Providing Company is payable by Receiving Company under a reverse charge
procedure (i.e., shifting of liability, accounting or payment requirement to
recipient of supplies), Receiving Company shall ensure that Providing Company
will not effectively be held liable for this VAT by the relevant taxing
authorities or other parties. Where applicable, Providing Company shall use its
reasonable commercial efforts to ensure that its invoices to Receiving Company
are issued in such a way that these invoices meet the requirements for deduction
of input VAT by Receiving Company, if Receiving Company is permitted by law to
do so.
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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 SEPARATION AND DISTRIBUTION
AGREEMENT
The following provisions of the Separation 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 Separation and Distribution Agreement, and except as expressly
set forth below, references in the material incorporated herein by reference
shall be references to the Separation 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;
(c) Article IX, relating to dispute resolution; and
(d) Article XII, miscellaneous provisions.
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3.5 EXPENSES.
Except as expressly set forth herein (including in the Exhibits hereto)
or in the Separation and Distribution Agreement or another Ancillary Agreement,
whether or not the IPO 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 Agere (in the case of costs or expenses incurred by
Agere or any other member of the Agere 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 Separation 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.
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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: /s/ XXXXXX X. XXXXXX
__________________________________
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
AGERE SYSTEMS INC.
By: /s/ XXXX X. XXXXXXX
__________________________________
Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
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