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Exhibit 10.5
LICENSE, RIGHTS, AND SUPPLY AGREEMENT
This License, Rights, and Supply Agreement ("Agreement") between Aironet
Wireless Communications, Inc., a Delaware corporation, with headquarters at 000
Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxx ("Aironet"), and Telxon Corporation, a
Delaware corporation, with headquarters at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxx
("Telxon") is entered into as of March 31, 1998.
WHEREAS, Telxon acknowledges that Aironet is the owner of certain technology
relating to wireless communications products;
WHEREAS, Telxon is in the business of selling, installing, and servicing
wireless network solutions for its customers, including Aironet products;
WHEREAS, Aironet and Telxon have had a close working relationship since
Aironet's inception as a Telxon affiliate; and
WHEREAS, both parties desire to enter into a license agreement whereby Telxon
may continue to have access to Aironet products and technology in order to
satisfy the needs of its customers.
NOW, THEREFORE, based on the mutual rights, obligations, representations, and
warranties set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1 DEFINITIONS. The following terms shall have the meanings set forth in
this Article 1 throughout this Agreement.
1.1 "Access Point" shall mean a wireless network access point device that
utilizes Aironet Technology.
1.2 "Aironet Products" shall mean all products, subassemblies, and services
that are now or hereafter become available for purchase from Aironet,
but shall exclude products or subassemblies that are custom made for
individual Aironet customers.
1.3 "Aironet Technology" shall mean all Aironet patents, patent
applications, trade secrets, know-how, software, firmware,
documentation, copyrights, and other proprietary rights existing prior
to and as of the date hereof (and as to patents, that may issue after
the date hereof based on patents existing or patent applications
initially filed as of the date hereof, including, but not limited to,
continuations, continuations in part, divisions, reissues, additions,
or extensions) and necessary to exercise rights granted under the
License.
1.4 "Bridge Products" shall mean Aironet's wireless point-to-point and
multipoint bridge products.
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1.5 "Fully-Burdened Manufacturing Cost" shall mean all costs of
manufacturing a product, including labor, materials, and overhead, as
accounted for in the regular course of its business by the party
manufacturing that product, as timely adjusted for purchase price
variance.
1.6 "License" shall mean the licenses under the Aironet Technology (and all
intellectual property rights embodied therein) granted by Aironet to
Telxon in Articles 2 and 3, and under Aironet intellectual property
granted by Aironet to Telxon in Section 8.11.3.
1.7 "Legacy Products" shall mean the products listed in EXHIBIT A.
1.8 "Legacy Software" shall mean all current and prior source and object
code for the Legacy Products, including, but not limited to, the
software identified in EXHIBIT B under "Legacy Software."
1.9 "MAC" shall mean a media access control unit that utilizes Aironet
Technology.
1.10 "New Software" shall mean the object code only of Aironet's (i)
revised, upgraded and otherwise modified versions of the Legacy
Software and of the 802.11 Supported Access Point Software which
incorporate significant enhancements or significant added functionality
to such software and which together with such software constitutes a
single package of new software, (ii) ports of the Legacy Software and
the 802.11 Supported Access Point Software to microprocessors not
currently supported, (iii) access point software (which, without
limitation, supports 802.11) developed on a commercially available real
time operating system and (iv) wholly new software.
1.11 "PC Card" shall mean a wireless transceiver in the pc card format that
includes both a Radio and a MAC.
1.12 "Profit Margin" shall mean the increment above Aironet's Fully-Burdened
Manufacturing Cost in the price of Aironet Products supplied to Telxon
under Article 8.
1.13 "Radio" shall mean a wireless transceiver that does not include a MAC
and utilizes Aironet Technology.
1.14 "Telxon Derived Products" shall mean Telxon's improvements,
refinements, enhancements, modifications, adaptations, revisions, and
derivatives of Legacy Products, as a whole or any part.
1.15 "Telxon Derived Software" shall mean Telxon's improvements,
refinements, enhancements, modifications, adaptations, revisions, and
derivatives of Legacy Software and 802.11 Supported Access Point
Software.
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1.16 "Universal Client" shall mean a stand-alone (external) client, suitable
for connection to a networked device, that utilizes Aironet Technology.
1.17 "802.11" shall mean the IEEE wireless LAN MAC/PHY specification as
ratified in July 1997.
1.18 "802.11 Supported Access Point Software" shall mean Aironet's current
Access Point software that supports 802.11 identified in EXHIBIT B
under 802.11 Supported Access point Software.
2 LEGACY PRODUCTS AND DERIVATIVES.
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2.1 LICENSE OF LEGACY PRODUCTS AND DERIVATIVES. Subject to the covenants
set forth in Section 2.7, and the other provisions of this Agreement,
Aironet hereby grants a perpetual, worldwide, non-exclusive License to
Telxon under the Aironet Technology, including all intellectual
property rights embodied therein, to:
2.1.1 LEGACY PRODUCTS. make, support, service, maintain, repair,
reconstruct, reconfigure, upgrade, prepare improvements,
refinements, enhancements, modifications, adaptations,
revisions and derivatives works, integrate, install, combine,
network, use, market, sell, offer for sale, lease, and
transfer Legacy Products;
2.1.2 LEGACY SOFTWARE. use, port, copy, compile, decompile,
assemble, disassemble, merge, integrate, combine, support,
service, maintain, repair, upgrade, and prepare improvements,
refinements, enhancements, modifications, adaptations,
revisions and derivatives works of the Legacy Software
(current and prior versions only of the Legacy Software), both
in source and object code forms and to network, install, link,
load, market, sell, offer for sale, lease, and transfer
copies, in object code form only, of the Legacy Software;
2.1.3 TELXON DERIVED PRODUCTS. make, support, service, maintain,
repair, reconstruct, reconfigure, upgrade, prepare
improvements, refinements, enhancements, modifications,
adaptations, revisions and derivatives works, integrate,
install, combine, network, use, market, sell, offer for sale,
lease, and transfer Telxon Derived Products; and
2.1.4 TELXON DERIVED SOFTWARE. use, port, copy, compile, decompile,
assemble, disassemble, merge, integrate, combine, support,
service, maintain, repair, upgrade, and prepare improvements,
refinements, enhancements, modifications, adaptations,
revisions and derivatives works of the Telxon Derived Software
(both in source and object code forms) and to network,
install, link, load, market, sell, offer for sale, lease, and
transfer copies, in object code form only, of the Telxon
Derived Software.
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2.2 ROYALTIES FOR LEGACY PRODUCTS AND DERIVATIVES. In consideration for the
rights granted and obligations undertaken pursuant to this Agreement,
Telxon hereby agrees to pay Aironet royalties for the Legacy Products,
Legacy Software, Telxon Derived Products and Telxon Derived Software
sold, or otherwise transferred or invoiced, by Telxon (or, as
applicable, its subsidiaries), at the rates set forth in SCHEDULE 5,
and subject to the provisions of Article 5 "Royalty Rates and
Accounting" and Article 9 "Most Favored Customer Protections." No
royalties for the use of the Aironet Technology, in accordance with the
License grants in this Article 2, shall be due other than as set forth
in Article 5 and SCHEDULE 5.
2.3 IMPLIED CUSTOMER LICENSE. Subject to the covenants set forth in Section
2.7, the restrictions imposed by Telxon and the other provisions of
this Agreement, Telxon's customers shall have an implied license under
the Aironet Technology limited to all customary uses (including, but
not limited to, resales) of the Legacy Products and Telxon Derived
Products, and any Legacy Software or Telxon Derived Software which is
loaded on or provided for hardware products offered by Telxon from time
to time, as originally transferred by Telxon.
2.4 CONTRACTORS. Telxon may have the Licensed activities performed by third
parties (subject to the terms of this Agreement) that are not direct
competitors of Aironet, but other than the implied rights of customers
set forth in Section 2.3, 3.5, 8.8 and 8.11.3.3, and the right to
establish source code escrows set forth in Section 2.5.3 and 3.73,
Telxon shall not otherwise have the right to sublicense the Aironet
Technology.
2.5 SOFTWARE LICENSE TERMS.
2.5.1 VERSIONS PROVIDED. Telxon's License rights under the Aironet
Technology is limited to the current and prior versions of the
Aironet Technology.
2.5.2 REVISIONS, UPDATES AND BUG FIXES. Notwithstanding Section
2.5.1, Aironet shall provide to Telxon, bug fixes, revisions,
updates, and other modifications in object code form only, as
well as corresponding changes to documentation (and in the
case of each bug fix, such additional technical documentation
as is necessary to enable Telxon to implement the bug fix and
to write its own source code therefor), for Legacy Software
and Legacy Product firmware, as and when they become
available, provided that all bug fixes, revisions, updates and
other modifications constituting or to New Software shall be
provided by Aironet to Telxon under Section 4.2. Bug fixes,
revisions, updates and other modifications provided under this
Section 2.5.2 shall constitute part of the software/firmware
to which they relate for all purposes of this Agreement and
shall not bear a separate royalty from that payable by Telxon
upon the original distribution of such underlying
software/firmware, and Telxon shall owe no other amounts with
respect thereto.
2.5.3 SOURCE CODE ESCROW. Notwithstanding that the License grants in
Section 2.1 restrict the transfer of software to copies of the
object code and the transfer restrictions of
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Sections 2.7.5 and 2.7.6, upon reasonable notice to Aironet,
and upon customary terms, Telxon shall be permitted to place
into escrow (with a reliable agent) source code with respect
to which it has rights under the License, if so requested by a
customer.
2.6 SUPPLIERS AND FOUNDRIES. Aironet shall authorize its suppliers and
foundries of custom integrated circuits to sell such components to
Telxon for incorporation into Legacy Products and Telxon Derived
Products. Should any such suppliers discontinue manufacture of any
custom integrated circuit necessary for Telxon to exercise its rights
under this Agreement, Aironet shall cooperate with Telxon in securing a
second source for such components.
2.7 EXERCISE OF TELXON RIGHTS. In addition to the restrictions set forth
elsewhere in this Agreement, Telxon shall not:
2.7.1 in its exercise of the License grants in Section 2.1 prepare
improvements, refinements, enhancements, modifications,
adaptations, revisions, and derivatives which (i) with respect
to Radios, change other than the form factor, (ii) with
respect to Access Points, change other than the backbone
interface daughter card(s) or (iii) are 802.11 client radio
adapters;
2.7.2 sell any subassemblies, which utilize Aironet Technology and
which are for Legacy Products or Telxon Derived Products,
unless they are integrated into such products or are sold as
repair or replacement parts for such products, either by
Telxon directly to an end user or indirectly through a Telxon
reseller, distributor, OEM, or other channel partner or
service or repair vendor;
2.7.3 sell Legacy Products or Telxon Derived Products through its
alternate distribution channels except to those partners which
are certified to sell complete Telxon integrated PTCs and
pen-based products;
2.7.4 sell Radios unless they are integrated into a Legacy Product,
Telxon Derived Product, other products offered by Telxon from
time to time, or Aironet Product (whether purchased from
Aironet or as licensed in Section 8.11.3), or are to replace
Radios in such products;
2.7.5 transfer copies of any Legacy Software or Telxon Derived
Software unless it is embedded in or transferred for loading
on a Legacy Product, Telxon Derived Product, other hardware
products offered by Telxon from time to time, or Aironet
Product (whether purchased from Aironet or as licensed in
Section 8.11.3); or
2.7.6 transfer copies of Aironet's client software included in the
Legacy Software unless it is embedded in or transferred for
loading on Legacy Products, Telxon Derived Products, Aironet
Products (whether purchased from Aironet or as licensed in
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Section 8.11.3), 900 MHz DSSS PC Card products or Aerocomm
2.4GHz radio adapters.
3 802.11 PRODUCTS.
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3.1 PURCHASE OF 802.11 PRODUCTS. Telxon may purchase products which support
or comply with 802.11, including, but not limited to, Access Points and
PC Cards, from Aironet under Article 8 "Supply of Aironet Products."
3.2 LICENSE OF 802.11 SUPPORTED ACCESS POINT SOFTWARE. Subject to the
covenants set forth in this Article 3 and the other provisions of this
Agreement, Aironet hereby grants a perpetual, worldwide, non-exclusive
License to Telxon under the Aironet Technology, including all
intellectual property rights embodied therein, to use, port, copy,
compile, decompile, assemble, disassemble, merge, integrate, combine,
support, service, maintain, repair, upgrade, and prepare improvements,
refinements, enhancements, modifications, adaptations, revisions and
derivatives works of the 802.11 Supported Access Point Software
(current and prior versions only of the 802.11 Supported Access Point
Software, both in source and object code forms) and to network,
install, link, load, market, sell, offer for sale, lease, and transfer
copies, in object code form only, of the 802.11 Supported Access Point
Software.
3.3 ACCESS POINT HARDWARE. The License grants in Sections 2.1.1 and 2.1.3,
and the related rights and obligations in Article 2, apply to Access
Points on or with which 802.11 Supported Access Point Software or
Telxon Derived Software based thereon is to be installed or used.
Telxon and Aironet each acknowledges and confirms that Aironet's 802.11
PC Cards are not Legacy Products and, therefore, are not included
within the rights granted to Telxon under Article 2 or this Section
3.3.
3.4 ROYALTIES FOR 802.11 SUPPORTED ACCESS POINT SOFTWARE. In consideration
for the rights granted and obligations undertaken pursuant to this
Agreement, Telxon hereby agrees to pay Aironet royalties for the 802.11
Supported Access Point Software and the Telxon Derived Software based
thereon sold, or otherwise transferred or invoiced, by Telxon (or, as
applicable, its subsidiaries), at the rates set forth in SCHEDULE 5,
and subject to the provisions of Article 5 "Royalty Rates and
Accounting" and Article 9 "Most Favored Customer Protections." No
royalties for the use of the Aironet Technology, in accordance with the
License grants in this Article 3, shall be due other than as set forth
in Article 5 and SCHEDULE 5.
3.5 IMPLIED CUSTOMER LICENSE. Subject to the covenants set forth in this
Article 3, any restrictions imposed by Telxon and the other provisions
of this Agreement, Telxon's customers shall have an implied license
under the Aironet Technology limited to all customary uses (including,
but not limited to, resales) of the 802.11 Supported Access Point
Software or Telxon Derived Software based thereon, which is loaded on
or provided for hardware products offered by Telxon from time to time,
as originally transferred by Telxon.
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3.6 CONTRACTORS. Telxon may have the Licensed activities performed by third
parties (subject to the terms of this Agreement) that are not direct
competitors of Aironet, but other than the implied rights of customers
set forth in Section 2.3, 3.5, 8.8 and 8.11.3.3, and the right to
establish source code escrows set forth in Section 2.5.3 and 3.73,
Telxon shall not otherwise have the right to sublicense the Aironet
Technology.
3.7 SOFTWARE LICENSE TERMS.
3.7.1 VERSIONS PROVIDED. Telxon's License rights under the Aironet
Technology is limited to the current and prior versions of the
Aironet Technology.
3.7.2 REVISIONS, UPDATES AND BUG FIXES. Notwithstanding Section
3.7.1, Aironet shall provide to Telxon, bug fixes, revisions,
updates, and other modifications in object code form only, as
well as corresponding changes to documentation (and in the
case of each bug fix, such additional technical documentation
as is necessary to enable Telxon to implement the bug fix and
to write its own source code therefor), for the 802.11
Supported Access Point Software, and source and object code
for the foregoing which enable the 802.11 Supported Access
Point Software to support Aironet's PC 3500 and PC 4500 802.11
compliant pc cards, as and when they become available,
provided that all bug fixes, revisions, updates and other
modifications constituting or to New Software shall be
provided by Aironet to Telxon under Section 4.2. Bug fixes,
revisions, updates and other modifications provided under this
Section 3.7.2 shall constitute part of the software/firmware
to which they relate for all purposes of this Agreement and
shall not bear a separate royalty from that payable by Telxon
upon the original distribution of such underlying
software/firmware, and Telxon shall owe no other amounts with
respect thereto.
3.7.3 SOURCE CODE ESCROW. Notwithstanding that the License grant in
Section 3.2 restricts the transfer of software to copies of
the object code and the transfer restrictions of Section 3.8,
upon reasonable notice to Aironet, and upon customary terms,
Telxon shall be permitted to place into escrow (with a
reliable agent) source code with respect to which it has
rights under the License, if so requested by a customer.
3.8 EXERCISE OF TELXON RIGHTS. In addition to the restrictions set forth
elsewhere in this Agreement, Telxon shall not transfer copies of 802.11
Supported Access Point Software or Telxon Derived Software based
thereon unless it is embedded in or transferred for loading on a Legacy
Product, Telxon Derived Product, other hardware products offered by
Telxon from time to time, or Aironet Product (whether purchased from
Aironet or as licensed in Section 8.11.3).
4 NEW PRODUCTS.
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4.1 NEW HARDWARE. Telxon may purchase new Aironet Products from Aironet
under Article 8 "Supply of Aironet Products."
4.2 NEW SOFTWARE. New Software in object code form only shall be provided
by Aironet to Telxon at reasonable negotiated prices and terms, not to
exceed the prices charged, and on terms no less favorable than those
extended, to its most favored customers for similar works or
deliverables. Aironet will use its reasonable best efforts to (i) make
available under this Section 4.2 no later than March 31, 1999, fully
functional access point software in object code form only, which,
without limitation, supports 802.11, developed on a commercially
available real time operating system and (ii) assist Telxon in its
porting to the real time operating system referred to in clause (i) of
any improvements, additions, or modifications made by or for Telxon to
the 802.11 Supported Access Point Software, and Telxon shall pay
Aironet for such assistance at Aironet's cost plus fifty percent (50%).
5 ROYALTY RATES AND ACCOUNTING. The royalties payable by Telxon to
Aironet for the Legacy Products, Legacy Software, Telxon Derived
Products, Telxon Derived Software and 802.11 Supported Access Point
Software sold, or otherwise transferred or invoiced, by Telxon (or, as
applicable, its subsidiaries) are set forth in SCHEDULE 5. Telxon's
obligation to pay such royalties is subject to the provisions of this
Article 5 and Article 9. Only a single royalty shall be due with
respect to any individual unit of any product or individual copy of any
software, and neither the separate references to this Article 5 and
SCHEDULE 5 in Sections 2.2 and 3.4, nor any other provision of this
Agreement, shall be construed to give rise to any duplicative
royalties. No royalties for the use of the Aironet Technology, in
accordance with the License, shall be due other than as set forth in
this Article 5 and SCHEDULE 5.
5.1 Royalties shall be earned by Aironet upon the initial shipment or other
transfer to or invoicing of customers by Telxon (or, as applicable, its
subsidiaries) for any individual unit of any product or individual copy
of any software upon which a royalty is payable under this Article 5
and SCHEDULE 5.
5.2 Royalties shall not be payable with respect to products or software
transferred for promotional, "test and demo," maintenance or warranty
purposes or by Telxon to its subsidiaries until sold by such
subsidiaries, or for products sold to Aironet.
5.3 The royalties for each month shall be reported by Telxon to Aironet in
accordance with Section 13.1.
5.4 The royalties for each month shall be paid by Telxon to Aironet within
ten (10) business days after the last day of the month. Allowances for
returns shall be dealt with equitably by mutual agreement of the
parties.
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6 DELIVERY. To the extent not already in Telxon's possession, Aironet
shall promptly arrange for the delivery or transmission to Telxon of
all tangible forms of the Aironet Technology that may be necessary or
useful for Telxon to exercise its rights under the License, including,
for example, source and object code, documentation, procedures,
engineering drawings, manufacturing specifications, know how,
schematics, diagnostic programs, test procedures and specifications,
vendor and parts lists, technical bulletins, and the like, related to
Legacy Products, Legacy Software and 802.11 Supported Access Point
Software, and to utilize such items in exercising its License rights
under Articles 2 and 3 and Section 8.11.3.
7 PROPRIETARY RIGHTS.
7.1 RELATIVE OWNERSHIP RIGHTS. Neither Telxon nor Aironet shall acquire any
ownership interest in the other's intellectual property rights as a
result of this Agreement. Telxon acknowledges that the Aironet
Technology is Aironet's sole property, and that Telxon has no right,
title, or interest in or thereto except as granted in the License.
Aironet's and Telxon's intellectual property rights shall remain
separate property notwithstanding that they may both be embodied in the
same devices or software, and no such devices or software shall be, or
be deemed to be, a joint work, compilation, or any other type of work
of multiple authorship by reason of this Agreement.
7.2 TRADEMARKS. Telxon and Aironet each agree that their products shall not
carry any of trademarks of the other; provided, however, that Telxon's
current use of Aironet's trademarks may continue until the sooner of
(i) July 31, 1998 or (ii) at such time as Telxon's manufacturing
facility has retooled to discontinue its use thereof; provided,
however, that in the event that Telxon has used reasonable commercial
efforts and is nonetheless unable to discontinue its use of Aironet's
trademarks by July 31, 1998, Aironet will not unreasonably withhold its
consent to extend such deadline by an additional one hundred twenty
(120) days. To the extent either party distributes the products of the
other, that party may identify itself as an authorized distributor of
the other's products, and may utilize the other's trademarks in
connection with advertising such products, subject to the owner's
review and approval, if requested.
7.3 PROPRIETARY NOTICES. As Aironet may reasonably request, Telxon shall
xxxx all Licensed products with any proprietary rights notices required
either (a) by or in accordance with law or (b) to prevent prejudice to
the intellectual property rights embodied therein.
8 SUPPLY OF AIRONET PRODUCTS. At prices determined in accordance with the
formulas and terms set forth in SCHEDULE 8, Aironet shall sell Aironet
Products to Telxon on the terms and conditions set forth in this
Article 8 subject to the provisions of Article 9 "Most Favored Customer
Protection."
8.1 ORDERS.
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8.1.1 Each order by Telxon for Aironet Products must be in writing
and received by Aironet from Telxon's manufacturing division,
and not from Telxon's subsidiaries or customers.
8.1.2 In the event that demand for Aironet Products exceeds supply,
Aironet will allocate available supply to fulfill orders for
Telxon vis a vis its other customers on a first order in,
first order out basis.
8.1.3 This Agreement is a master agreement. As such, the terms of
this Agreement shall automatically be deemed incorporated into
any purchase order, order acknowledgment, invoice or similar
document (each an "Order Document") issued or given by either
party in connection with its purchase or sale of Aironet
Products or services. No term or condition of any Order
Document shall be of any force or effect whatsoever except to
provide or establish in accordance with this Agreement the:
(a) Product model number (including any options or
accessories) and quantity; (b) shipping date, ship-to address,
actual or estimated Shipping and Government Charges (as
defined below) and other delivery instructions; and (c) any
other special information required with respect to the order.
8.2 FORECASTS. Beginning on May 1, 1998, and on the first day of each month
thereafter, Telxon shall provide to Aironet a written forecast of
Telxon's estimated requirements of the Aironet Products to be purchased
during the twelve (12) month period next following (the "Forecast(s)").
Each Forecast made three (3) months prior to the date on which a Telxon
order is received by Aironet is referred to as a "Lead Time Forecast."
The Forecasts are for planning purposes only, and shall not constitute
a commitment by Telxon to purchase any of the Aironet Products;
provided, however, Telxon shall use its best efforts not to over or
under estimate its Lead Time Forecasts by more than fifteen percent
(15%).
8.3 LEAD TIME; POSTPONEMENTS AND CANCELLATIONS.
8.3.1 Aironet's minimum lead time for delivery to Telxon of any
order shall be ninety (90) days. If Telxon requires any
delivery on an expedited basis, Aironet shall use reasonable
commercial efforts to accommodate such requirement.
8.3.2 Telxon: (a) may not postpone delivery of its orders within the
thirty (30) day period prior to the originally scheduled
shipping date; (b) may postpone delivery for up to sixty (60)
days once within the period between thirty one (31) and ninety
(90) days prior to the scheduled shipping date; and (c) may
postpone delivery indefinitely at any time at least ninety one
(91) days prior to the scheduled shipping date.
8.3.3 Telxon may cancel its orders at any time at least ninety one
(91) days prior to the originally scheduled shipping date.
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8.4 PRICES. The prices that Aironet will charge Telxon for Aironet Products
shall be determined according to the formulas set forth in SCHEDULE 8,
subject to the provisions of this Article 8 and Article 9. In addition
to the prices due under this Article 8, Telxon shall pay the following
(collectively, "Shipping and Government Charges") with respect to all
Aironet Products purchased by it from Aironet: (i) all freight,
shipping and insurance and handling charges for the shipment of Aironet
Products from Aironet's shipping point within the United States (the
"Shipping Point") to Telxon's ship-to point; and (ii) any and all
applicable sales, use, excise, import, export, value-added or other
taxes or duties, customs, permit or license fees and similar charges of
any government or governmental authority incurred in connection with
shipment from the Shipping Point to Telxon's ship-to point.
8.4.1 Aironet shall provide not less than ninety (90) days prior
written notice to Telxon of any increase in the prices payable
under this Article 8. No increase in prices shall apply to
orders placed by Telxon within the notice period.
8.5 PAYMENT. Telxon's payment for orders hereunder and of the Shipping and
Government Charges with respect thereto (to the extent the actual
amounts thereof are not known prior to shipment, Aironet's reasonable
estimate of such charges) shall be made by Telxon to Aironet net thirty
(30) days from invoice date (which shall not be prior to the date of
shipment from the Shipping Point (the "Shipping Date")). Aironet may
assess late charges of up to one and one half percent (1.5%) per month
for past due payments. Telxon, at its election, shall receive a credit
or refund from Aironet for all overpayments by Telxon of Shipping and
Government Charges.
8.6 SHIPMENT.
8.6.1 The method of shipment of orders hereunder and carrier will be
chosen by Aironet unless Telxon provides Aironet with written
instructions otherwise.
8.6.2 Aironet will ship all orders to Telxon's manufacturing
facilities. Aironet will not unreasonably refuse to drop ship
orders to other addresses on an order by order basis.
8.6.3 Risk of loss and title to all Aironet Products sold to Telxon
shall pass to Telxon when the Aironet Products are tendered to
the carrier at Aironet*s Shipping Point.
8.7 PRODUCT WARRANTY.
8.7.1 Aironet warrants to Telxon that, effective as of July 1, 1997,
each Aironet Product purchased from Aironet will meet all
specifications and will be free from defects in materials and
workmanship under normal use and service for a period of one
(1) year from the Shipping Date. Telxon acknowledges that for
Aironet Products manufactured prior to July 1, 1997, the
warranty period was ninety (90) days.
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8.7.2 Aironet will deal and is liable only with and to Telxon, and
not with or to any customer of Telxon or other subsequent
transferee of any Aironet Product. Telxon shall return any
defective Aironet Product, freight and insurance collect, to
such service address as Aironet shall designate, in accordance
with reasonable material authorization procedures established
by Aironet.
8.7.3 From the time it is first notified, Aironet shall use its best
efforts to determine the cause of any Aironet Product failure
or defect on a continuous and expedited basis. If such failure
or defect is the result of a design defect, Aironet will
provide Telxon with replacement Aironet Products that
incorporate design corrections on a best-efforts basis after
such discovery. If a failure or defect of an Aironet Product
is the result of defects in material or workmanship, at
Aironet's option and expense, Aironet will repair or replace
the Aironet Product within fifteen (15) days of Aironet's
receipt of the defective unit. In the event that Aironet is
unable to correct a design defect or to repair the Aironet
Product or is unable to replace the defective Aironet Product
with a non-defective Aironet Product, then Aironet shall
refund Telxon's purchase price, reduced by an appropriate
amount for prior use. Replaced parts and products become the
property of Aironet.
8.7.4 Repaired or replaced units will be returned to Telxon freight
and insurance prepaid.
8.7.5 The warranty set forth in this Section 8.7 does not apply to
any Aironet Product to the extent the product's defect is
caused by: (a) use or operating or environmental conditions
not in compliance with Aironet specifications; (b) abuse,
misuse, damage, accident, alteration or neglect of
maintenance; (c) unauthorized repair; or (d) improper
installation.
8.7.6 Except as expressly set forth in this Section 8.7 and subject
to the provisions of Section 8.9, AIRONET MAKES NO WARRANTY OF
ANY KIND WITH RESPECT TO ANY AIRONET PRODUCTS SOLD TO TELXON,
WHETHER EXPRESS OR IMPLIED OR ARISING UNDER ANY STATUTE OR
FROM ANY COURSE OF DEALING, USAGE OF TRADE OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ANY
OTHER PROMISE OR REPRESENTATION WITH RESPECT TO THE AIRONET
PRODUCTS, INCLUDING, WITHOUT LIMITATION, THEIR CONDITION,
FREEDOM FROM ANY LATENT OR PATENT DEFECT OR CONFORMITY TO ANY
DESCRIPTION THEREOF.
8.7.7 This Section 8.7 and Section 8.9 are the sole basis for
liability on the part of Aironet respecting the condition,
quality, use, performance, repair and replacement of Aironet
Products.
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8.8 TELXON AND CUSTOMER RIGHTS. Telxon, as the purchaser of Aironet
Products under this Article 8 and the licensee of New Software, and,
subject to any restrictions imposed by Telxon, each person or entity to
whom Telxon transfers an Aironet Product or New Software which is
loaded on or provided for hardware products offered by Telxon from time
to time, as originally transferred by Telxon, shall have an implied,
non-exclusive, worldwide, perpetual, royalty-free license under the
Aironet Technology or other intellectual property embodied in such
products or software to use, support, service, maintain, repair,
integrate into other products, install, combine, network, market, sell,
offer for sale, lease, and transfer such products, but not such
software separate from the hardware products with which it is
transferred. Telxon agrees to utilize commercially reasonable licensing
terms with respect to copies of software integrated in Aironet Products
that Telxon transfers to its customers, but no less restrictive than
the terms utilized by Telxon in the sale of its own products to its
customers or, if more restrictive, those required under Section 8.12
with respect to third party software.
8.9. PATENT AND COPYRIGHT INDEMNIFICATION.
8.9.1 Aironet agrees to defend (with counsel of Aironet's choosing
which is reasonably acceptable to Telxon) or settle any claim
against Telxon that any Aironet Product infringes any United
States copyrights or patents of any third party and to pay all
costs and damages finally awarded by a court of competent
jurisdiction with respect to such claim, provided that: (a)
Telxon promptly notifies Aironet in writing of the assertion
of such claim; and (b) Telxon and any affected customer(s)
cooperate fully with Aironet in the defense of such claim and
any related settlement negotiations.
8.9.2 Aironet shall keep Telxon fully informed of the progress of
any litigation and settlement negotiations involving any
infringement claims. At Telxon's own cost, Telxon shall have
the right to enter its own defense.
8.9.3 In the event that any Aironet Product is likely in Aironet's
opinion to, or does, become the subject of an infringement
claim, Aironet shall have the right, at its option and
expense, to procure for the user the right to continue to use
the subject Aironet Product or to modify or replace such
Aironet Product to make it non-infringing; provided, however,
that if none of the foregoing options is available on
commercially reasonable terms, Aironet may require the return
of the Aironet Product in exchange for a refund of the amount
paid by Telxon for the Aironet Product, reduced by an
appropriate amount for prior use.
8.9.4 Aironet shall have no obligation under this Section 8.9 where
an otherwise non-infringing Aironet Product is made infringing
because the Aironet Product has been: (a) modified by anyone
other than Aironet; (b) interconnected or otherwise combined
or used in conjunction with any hardware, software or other
equipment or device
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which was neither made, furnished nor approved by Aironet; or
(c) used in a manner for which it was not designed or
otherwise contrary to its intended purpose.
8.9.5 This Section 8.9 states Aironet's entire liability with
respect to any infringements of copyrights and patents by any
Aironet Product.
8.10 NEW PRODUCTS; PRODUCT CHANGES.
8.10.1 Aironet shall provide Telxon with written notice of the
introduction of any new Aironet Product. Such notice shall be
provided promptly, when and as available.
8.10.2 Aironet shall give Telxon written notice at least ninety (90)
days prior to implementing any material changes to the form,
fit or function or any modification, enhancement, upgrade,
engineering change or the like of any Aironet Products except
for Radios, with respect to which Aironet shall give Telxon
written notice at least one hundred eighty (180) days prior to
implementing any material changes to the form, fit or
function.
8.10.3 Aironet shall fulfill Telxon's purchase orders placed during
the ninety (90) or one hundred eighty (180) day period
provided for in Section 8.10.2, as applicable, under the old
specifications, unless otherwise specified by Telxon.
8.11 DISCONTINUED PRODUCTS.
8.11.1 NOTICE. Aironet shall give Telxon written notice at least one
hundred eighty (180) days prior to discontinuing production of
any Aironet Product.
8.11.2 ORDERS. Aironet shall fulfill Telxon's purchase orders for the
discontinued product placed during the one hundred eighty
(180) day period provided for in Section 8.11.1.
8.11.3 MANUFACTURING RIGHTS. Subject to the covenants in Section
8.11.3.6 and the other provisions of this Agreement, Aironet
hereby grants a perpetual, worldwide, non-exclusive License to
Telxon under all Aironet intellectual property rights
necessary to make, copy, assemble, merge, link, load, support,
service, maintain, repair, integrate, install, combine,
network, use, market, sell, offer for sale, lease, and
transfer Aironet Products that (i) shall have been sold by
Telxon to any customer(s), (ii) are hereafter discontinued by
Aironet and (iii) are required for Telxon's continued support
of such customer(s). Such License is limited to the
discontinued Aironet Product in the form and having the
specifications that exist at the time of discontinuance,
without modification or enhancement.
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8.11.3.1 NO AIRONET CUSTOMER SUPPORT. Aironet assumes no
responsibility (such as warranty and end-user
support) for any discontinued Aironet Products made
by or for Telxon pursuant to this Section 8.11.3.
8.11.3.2 ROYALTIES. In consideration for the rights granted
and obligations undertaken pursuant to this
Agreement, Telxon hereby agrees to pay Aironet
royalties for each unit of discontinued Aironet
Product sold, or otherwise transferred or invoiced,
by Telxon (or, as applicable, its subsidiaries), at
the rates set forth in SCHEDULE 8, and in accordance
with the principles in Article 5, and subject to the
provisions of Article 9 "Most Favored Customer
Protection." Royalties shall not be payable with
respect to discontinued Aironet Products transferred
for promotional, "test and demo," maintenance or
warranty purposes or by Telxon to its subsidiaries
until sold by such subsidiaries, or for products sold
to Aironet. Allowances for returns shall be dealt
with equitably by mutual agreement of the parties. No
royalties for discontinued Aironet Products
manufactured in accordance with the License grant in
Section 8.11.3 shall be due other than as set forth
in this Section 8.11.3.2 and SCHEDULE 8, and no other
provision of this Agreement shall be construed to
give rise to any duplicative royalties.
8.11.3.3 IMPLIED CUSTOMER LICENSE. Subject to any restrictions
imposed by Telxon, the covenants set forth in Section
8.11.3.6 and the other provisions of this Agreement,
Telxon's customers shall have an implied license to
all customary uses (including, but not limited to,
resales) of the discontinued Aironet Products as
originally transferred by Telxon.
8.11.3.4 CONTRACTORS. Telxon may have the Licensed activities
performed by third parties (subject to the terms of
this Agreement) that are not direct competitors of
Aironet, but other than the implied rights of
customers set forth in Section 2.3, 3.5, 8.8 and
8.11.3.3, and the right to establish source code
escrows set forth in Section 2.5.3 and 3.73, Telxon
shall not otherwise have the right to sublicense
Aironet's intellectual property.
8.11.3.5 SUPPLIERS AND FOUNDRIES. Aironet shall authorize its
suppliers and foundries of custom integrated circuits
to sell such components to Telxon for incorporation
into discontinued Aironet Products Licensed under
this Section 8.11.3. Should any such suppliers
discontinue manufacture of any custom integrated
circuit necessary for Telxon to exercise its rights
under this Agreement, Aironet shall cooperate with
Telxon in securing a second source for such
components.
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8.11.3.6 EXERCISE OF TELXON RIGHTS. In addition to the restrictions
set forth elsewhere in this Agreement, Telxon shall not:
8.11.3.6.1 in its exercise of the License grant in Section
8.11.3 prepare improvements, refinements,
enhancements, modifications, adaptations, revisions,
or derivatives of the discontinued Aironet Products;
8.11.3.6.2 sell any subassemblies, which utilize Aironet
intellectual property and which are for discontinued
Aironet Products, unless they are integrated into
such products or are sold as repair or replacement
parts for such products, either by Telxon directly to
an end user or indirectly through a Telxon reseller,
distributor, OEM, or other channel partner or service
or repair vendor;
8.11.3.6.3 sell discontinued Aironet Products through its
alternate distribution channels except to those
partners which are certified to sell complete Telxon
integrated PTCs and pen-based products;
8.11.3.6.4 sell discontinued Aironet Products which are
radios unless they are integrated into a product
offered by Telxon from time to time, or are to
replace radios in such products; or
8.11.3.6.5 transfer copies of any software included in any
such discontinued Aironet Product unless it is
embedded in or transferred for loading on such
product.
8.12 THIRD PARTY SOFTWARE.
8.12.1 Aironet Products purchased by Telxon from Aironet may contain,
as embedded therein or otherwise pre-installed thereon, or be
accompanied by, third party software and firmware
(collectively, "Third Party Software"). The price for each
Aironet Product includes a non-exclusive, royalty-free license
to: (a) distribute the Third Party Software as embedded, but
only as embedded, with the Aironet Products; and (b) to use
the Third Party Software as embedded, but only as embedded,
with the Aironet Products. The Third Party Software may be
distributed only embedded in the Aironet Products, in the same
form such Third Party Software and Aironet Products were
provided to Telxon by Aironet.
8.12.2 Telxon's written or shrink wrap licenses shall contain
provisions similar to the following in order to protect the
Third Party Software: (a) an acknowledgment that
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a third party owns all title to the Third Party Software and
all patent, copyright and other intellectual property rights
relating thereto and that the Third Party Software is being
licensed (not sold) to such customer solely for and in
connection with its use of products in which it is imbedded or
with which it is accompanied; (b) an agreement not to adapt,
modify, prepare derivative works of, copy, reverse engineer,
disassemble, decompile, or "unlock" the code of the Third
Party Software; and (c) an agreement to bind any transferee of
the Third Party Software to an agreement at least as
restrictive as such agreements.
8.12.3 To the extent available to Aironet, Aironet shall provide
Telxon with updates and upgrades to the Third Party Software
on the same terms and conditions as such updates and upgrades
are available to Aironet.
8.13 IMPORTS AND EXPORTS. For Aironet Products sourced outside of the United
States customs territory with respect to the importation of which
Telxon requests that it be the importer of record, Aironet shall
provide Telxon with all documentation necessary to facilitate the
importation. Where Telxon is not the importer of record, then Aironet
shall provide Telxon with all import documentation and certificates
necessary for Telxon's duty drawback claims.
9 MOST FAVORED CUSTOMER PROTECTIONS. The royalty rates payable by Telxon
under Article 5 (and referred to in Sections 2.2 and 3.4) and Section
8.11.3, and the prices payable by Telxon under Article 8, shall be
subject to reduction as set forth in this Article 9.
9.1 The royalties payable by Telxon under Article 5 (and referred to in
Sections 2.2 and 3.4) and Section 8.11.3.2 shall not exceed the best
royalty rates charged, and the best non-pricing terms provided, by
Aironet to any of its licensees, excluding licensees from whom Aironet
earns materially greater annual aggregate royalties than those earned
from Telxon.
9.2 The prices payable by Telxon under Section 8.4, or any other amounts
payable by Telxon to Aironet for goods or services, shall not exceed
the best prices charged, and the best non-pricing terms provided, by
Aironet to any of its customers, excluding customers from whom Aironet
earns materially greater annual aggregate gross profit than that from
the Profit Margin and other business (which does not include the
royalties payable by Telxon under Article 5 [and referred to in
Sections 2.2 and 3.4] or Section 8.11.3.2) earned from Telxon, or any
promotional sales by Aironet.
9.3 Aironet shall report to Telxon on a timely basis any new, more
favorable royalty rates, prices or other charges or terms that apply to
Telxon under this Article 9.
10 IMAP FEES. Telxon shall be entitled to receive customer referral "IMAP
Fees" as set forth in this Article 10 at the rates and on the amounts
set forth in SCHEDULE 10.
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10.1 Subject to later adjustments and rebillings for returns and
allowances, IMAP Fees shall be earned upon Aironet's shipment
of the Aironet Products upon which the IMAP Fees are payable,
and shall be paid no later than the last day of the month
immediately following the month of such shipment.
11 INSTALLATION, SERVICE AND SUPPORT. Aironet shall provide a
dedicated sales representative to Telxon to service Telxon's
purchase of Aironet Products hereunder, and to make joint
sales calls with Telxon to Telxon's customers; provided,
however, that Aironet shall not be responsible to Telxon's
customers for installation, service, support, or warranty
obligations with respect to Legacy Products, Telxon Derived
Products, or Aironet Products.
11.1 Aironet will provide Telxon with formal training on all Legacy
Software and 802.11 Supported Access Point Software and repair
training on all Legacy Products (and subassemblies thereof) at
reasonable rates and for reimbursement of reasonable expenses.
A minimum of two (2) copies of all course material will be
provided to Telxon at the time of training. Telxon will have
the right to duplicate such material without restriction for
internal use only.
11.2 Aironet shall maintain a sufficient number of personnel
dedicated to Telxon to fulfill Aironet's obligations under
this Article 11. Aironet will also designate a key contact for
Telxon within its software development and/or support
organization for resolution of software (with respect to
software for which only object code has been provided),
hardware, interoperability, product assembly, subassembly and
component-level support issues with respect to Telxon's
implementation of the Aironet Technology in Legacy Products,
Legacy Software, 802.11 Supported Access Point Software,
Telxon Derived Products, and Telxon Derived Software as well
as for sales of Aironet Products. The key contact will respond
to problems in the following time frames:
11.2.1 system down/end-user operations severely affected -
within 8 hours;
11.2.2 unit down/end-user operational/part of operations
down - within 24 hours;
11.2.3 intermittent problem/end-user operational but
inconvenienced - within 24 hours; and
11.2.4 routine technical assistance calls/no operational
impact - within 5 days.
The Aironet key contact will be responsible for all
Telxon-reported support problems and will act as the Telxon
advocate for all technical issues referred to Aironet.
11.3 Aironet shall provide a dedicated support representative to
Telxon to assist Telxon in its development of Telxon Derived
Products and Telxon Derived Software (in general and based on
802.11 Supported Access Point Software).
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12 ENGINEERING SERVICES. Aironet shall provide reasonable engineering
services in support of requests by Telxon for assistance in its
manufacture of Legacy Products. All Aironet engineering services
provided pursuant to this Article 12 shall be paid by Telxon at
Aironet's cost plus fifty percent (50%).
13 REPORTS, BOOKS, AND RECORDS.
13.1 Within five (5) business days after the last day of each month, each
party shall report to the other, in writing, the sales, costs,
earnings, or other financial data relevant under any section of this
Agreement during such month. Each party shall accompany any payments to
the other with a written report setting forth all amounts owed for the
period covered by the payment, with supporting computations and
descriptions of transactions giving rise to the payment obligation.
Such reports shall be held by the recipient as Confidential Information
(defined in Section 18.3) and shall be used solely in connection with
this Agreement.
13.2 Each party shall prepare and maintain on a current basis complete and
accurate books and records, in accordance with generally accepted
accounting principles, sufficient to document compliance with this
Agreement. All such books and records shall be retained for at least
three (3) years from the date they are created.
13.3 At the request of Aironet and during the normal business hours of
Telxon, no more than once in any twelve (12) month period, Telxon shall
permit a "Big Six" firm of accountants, selected by Aironet, to have
access to such books, records and inventories as may be necessary to
determine the correctness of any report or payment made under this
Agreement. Such audits shall be conducted at the cost of Aironet,
except that if any such audit should reveal an underpayment of
royalties due hereunder of greater than fifteen percent (15%) for any
period audited, Telxon shall bear the cost of such audit, and promptly
pay such underpaid amount.
13.4 At the request of Telxon and during the normal business hours of
Aironet, no more than once in any twelve (12) month period, Aironet
shall permit a "Big Six" firm of accountants, selected by Telxon, to
have access to such books, records and inventories as may be necessary
to determine the correctness of any report or cost upon which Telxon
pays royalties, Profit Margins or IMAP Fees under this Agreement. Such
audits shall be conducted at the cost of Telxon, except that if any
such audit should reveal an overstatement of costs previously reported
to Telxon of greater than fifteen percent (15%) for any period audited,
Aironet shall bear the cost of such audit, and promptly repay any
amount overpaid by Telxon as a consequence of such overstatement.
13.5 Prior to allowing any audit permitted by Sections 13.3 and 13.4, a
party may require that the auditor agree in writing to only reveal to
its client such information as is required to verify compliance with
this Agreement, and not to reveal to its client any other details of
its audit
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or any other information learned during its audit, and in no instance
will the auditors disclose any competitive information, including any
customer, pricing, or cost information.
14 PROTECTION FROM INFRINGEMENTS. Each Party shall promptly notify the
other Party if it becomes aware of any infringement or potential
infringement of intellectual property rights in the Aironet Technology.
Aironet shall have the right, at its discretion, to take such action as
it deems advisable for the protection of Aironet's rights in the
Aironet Technology, but except as set forth in Sections 8.9 and 18.4,
and subject to Section 18.5, it shall not have the obligation to do so.
At Aironet's request, Telxon agrees to cooperate reasonably in any such
action at Aironet's expense.
15 REPRESENTATIONS AND WARRANTIES.
15.1 Telxon hereby represents, warrants and agrees that it shall:
15.1.1 not reverse engineer, disassemble, or make derivative versions
of (a) any custom integrated circuits included in the Legacy
Products, (b) any software provided by Aironet to Telxon in
only object code form, or (c) any Aironet Products, to the
extent any such action would infringe any of Aironet's
proprietary rights not licensed hereunder;
15.1.2 at all times act to protect Aironet's intellectual property
rights in the Aironet Technology with the same level of
diligence and care that it takes to protect its own
intellectual property rights, but in no case less than a
reasonable degree of care;
15.1.3 maintain high standards of quality in Telxon Derived Products
that incorporate an Aironet Product, and in the installation,
service, and support of such Telxon Derived Products and of
Aironet Products;
15.1.4 comply in all material respects with all applicable laws,
rules, and regulations in its performance hereunder, and all
products licensed hereunder made by or for it shall be in
material compliance with all applicable laws, rules, and
regulations; and
15.1.5 not permit its customers to re-label or private label any
Aironet Products, except that this prohibition shall not apply
to sales of any Aironet Products by Telxon to IBM, re-labeled
with IBM's private label.
15.2 Aironet hereby represents, warrants and agrees that:
15.2.1 it has all rights necessary to grant the License;
15.2.2 all software provided pursuant to this Agreement shall
function in conformance with specifications for a period of
ninety (90) days after delivery;
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15.2.3 Telxon's exercise, in accordance with the terms of this
Agreement, of the rights granted to it under the License shall
not infringe the United States intellectual property rights of
third parties;
15.2.4 it will perform all of its warranty, service, and support
obligations to Telxon in a professional manner, consistent
with current industry standards;
15.2.5 at the relevant time, it shall have obtained all regulatory
approvals that may be required for the sale or use of Legacy
Products, Legacy Software, 802.11 Supported Access Point
Software, New Software and Aironet Products;
15.2.6 its performance hereunder, the Aironet Products, Legacy
Software, 802.11 Supported Access Point Software, New Software
and Legacy Products (to the extent manufactured by or for
Telxon pursuant to the specifications provided hereunder),
shall be in material compliance with all applicable laws,
rules, and regulations; and
15.2.7 the design and functionality (hardware, firmware, and
software) of Legacy Products, Legacy Software, 802.11
Supported Access Point Software, New Software and Aironet
Products are and shall be "Year 2000" compliant.
16 DISCLAIMER. THE REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLES 8
AND 15 ARE EXCLUSIVE. BOTH PARTIES HEREBY DISCLAIM ANY AND ALL OTHER
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
17 TERMINATION. Neither party shall have the right to terminate this
Agreement for any reason. Both parties acknowledge that money damages
and/or injunctive relief are a sufficient remedy for any breach hereof.
All licenses granted by Aironet to Telxon herein are perpetual, which
for purposes of this Agreement shall mean the period of at least ninety
nine (99) years. Other than for equitable relief to enjoin or restrain
a breach hereof, which may be sought immediately, a non-breaching party
shall give the breaching party at least thirty (30) days written notice
of its intention to bring suit, prior to bringing suit, specifying the
claimed breach with sufficient specificity to allow the breaching party
to cure the alleged breach.
18 GENERAL PROVISIONS.
18.1 BANKRUPTCY. This Agreement is a license of Intellectual Property within
the meaning of Section 365(n) of the United States Bankruptcy Code.
Aironet is the licensor and Telxon is the licensee hereunder. If
Section 365(n) of the United States Bankruptcy Code (or any successor
provision) is applicable, and the trustee or debtor-in-possession has
rejected this Agreement and Telxon has elected to retain its rights
hereunder, then upon written request of Telxon, to the extent Telxon is
otherwise entitled hereunder, the trustee or debtor-in-
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possession shall provide to Telxon any intellectual property (including
embodiments thereof) held by the trustee or debtor-in-possession.
Unless and until the trustee or debtor-in-possession rejects this
Agreement, on the written request of Telxon, to the extent Telxon is
otherwise entitled hereunder, the trustee or debtor-in-possession shall
provide to Telxon such intellectual property (including any embodiment
of such intellectual property to the extent protected by applicable
non-bankruptcy law) held by the trustee or debtor-in-possession.
18.2 ASSIGNMENT. Except as expressly permitted herein, this Agreement (and
the rights and obligations accruing hereunder) may not be assigned by
either party without the express written consent of the other party in
its sole discretion.
18.3 CONFIDENTIALITY.
18.3.1 Each party has developed a substantial amount of valuable
Confidential Information. For purposes of this Agreement,
"Confidential Information" shall mean this Agreement, as well
as any other agreement between Aironet and Telxon, the
documentation and any information and data marked as
confidential or which the receiving party knows, or has reason
to know given the circumstances in which it was disclosed, is
confidential, including but not limited to proprietary,
technical, developmental, specifications (including those set
forth on SCHEDULE 18.3.1), future product plans, financial,
pricing, marketing, sales, operating, performance, cost,
know-how, business and process information, computer
programming techniques, source and object codes, algorithms,
applications, operating system, data base, communication and
other computer software, and all record-bearing media
containing or disclosing such information and techniques which
are disclosed pursuant to this Agreement.
18.3.2 All Confidential Information of the other party in the
possession of a party, or delivered to it pursuant to this
Agreement: (a) shall not be distributed, disclosed, or
disseminated in any way or form by the recipient to anyone
except its own employees who have a reasonable need to know,
to its contractors in furtherance of its rights hereunder, and
pursuant to governmental or court order; (b) shall be treated
by the recipient with the same degree of care to avoid
disclosure to any third party as is used with respect to
recipient's own information of like importance which is to be
kept secret, but not less than reasonable care; and (c) shall
not be used by the recipient for its own purposes, except in
furtherance of the recipient's rights hereunder, without the
express prior written permission of the disclosing party.
18.3.3 For purposes of this Section 18.3, the following information
shall not be deemed Confidential Information: (a) information
of the other party which, at the time of disclosure is,
through no fault of the recipient, part of the public domain
(provided that any particular Confidential Information which
has not itself directly become a
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part of the public domain shall not be deemed to have
become public because it may be summarized, or
otherwise referenced without specific disclosure
thereof, in a generalized description made available
to the public and that the public disclosure of any
feature(s) or component(s) of any Confidential
Information shall not be deemed to constitute any
other feature or component thereof not so disclosed);
and (b) information which, subsequent to disclosure,
is obtained by recipient without restriction as to
confidential treatment from a third party who is
lawfully in possession of such information and not in
violation of any contractual, legal or fiduciary
obligation with respect to such information.
18.4 INDEMNITIES. Each party shall indemnify, defend, and hold
harmless the other party and its affiliates, officers,
directors, employees, and agents from and against any and all
losses, liabilities, claims, and expenses (including, without
limitation, reasonable attorneys' fees) which result from or
arise in connection with any breach by the indemnifying party
of any of its representations, warranties, or covenants made
in this Agreement. The indemnified party shall promptly notify
the indemnifying party of any such indemnity obligation and
the latter shall have control of the payment, defense, and/or
settlement of any such loss, liability, claim, or expense,
subject to the reasonable consent of the indemnified party as
to choice of counsel and settlement.
18.5 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE
DAMAGES OR LOST PROFITS ARISING OUT OF THIS AGREEMENT OR ANY
TERMINATION OF THIS AGREEMENT WHETHER LIABILITY IS ASSERTED IN
CONTRACT OR TORT, AND IRRESPECTIVE OF WHETHER IT HAS ADVISED
OR HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES.
18.6 NON-SOLICITATION. Neither party shall solicit for employment
the employees of the other party. Further, neither party may
employ any former employee of the other party until at least
one year has elapsed from the date of the former employee's
separation from employment service with the party, absent
agreement by the parties to the contrary.
18.7 NO PARTNERSHIP, JOINT VENTURE, OR AGENCY. This Agreement shall
not be construed to create a partnership, joint venture,
agency relationship, or any similar arrangement between the
parties for any purpose whatsoever.
18.8 FORCE MAJEURE. Neither party shall be liable for any loss or
damage, or be deemed to be in breach of this Agreement, to the
extent that performance of such party's obligations is delayed
or prevented as a result of any event or circumstance beyond
its reasonable control.
18.9 SEVERABILITY; COUNTERPARTS. This Agreement is severable. Any
determination by a court of competent jurisdiction that a
provision of this Agreement is not enforceable shall not
prevent enforcement of the remaining provisions. This
Agreement may be executed in two or more
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counterparts, each of which shall be deemed and enforceable as
an original, and all of which together shall constitute one
and the same instrument.
18.10 GOVERNING LAW AND CHOICE OF FORUM. This Agreement shall be
governed by and construed under the laws of the State of Ohio,
without regard to the conflict of laws principles thereof.
Subject the right of either party to submit any dispute under
this Agreement to arbitration as provided in this Section
18.10, the Parties hereby consent to the exclusive
jurisdiction of the federal and state courts located in Akron,
Ohio with respect to the resolution of any disputes arising
under this Agreement and for the enforcement of any
arbitration findings issued in connection with the arbitration
of any disputes among the parties. The parties hereby waive
any defenses based on venue, forum non conveniens, lack of
personal jurisdiction, or similar grounds for any action or
suit brought in these courts. As an alternative to commencing
litigation in court, a party may elect to commence arbitration
at the American Arbitration Association ("AAA") office
servicing Summit County, Ohio. Such arbitration shall be
conducted pursuant to the AAA commercial arbitration rules,
and shall be binding on the parties thereto. The arbitration
shall be held before three (3) arbitrators. Telxon shall have
the right to appoint one arbitrator, Aironet shall have the
right to appoint the second arbitrator; and the two (2)
aforesaid arbitrators shall jointly select the third
arbitrator, who will preside over the arbitration proceeding.
The costs of the arbitration shall be divided equally between
Telxon and Aironet; provided, however, that each party shall
bear its own costs of counsel and of otherwise participating
in any and all phases of any arbitration. Notwithstanding that
the commercial arbitration rules of the AAA shall apply to any
arbitration commenced under this Section 18.10, the parties
agree that the Federal Rules of Evidence shall govern all
evidentiary matters in such arbitration.
18.11 NOTICES. Any notices required or permitted to be given
pursuant to this Agreement shall be given in writing and
delivered by confirmed fax receipt, confirmed courier
delivery, or confirmed postal delivery and shall be deemed
made upon confirmation of receipt. Such notices shall be made
to:
Attn: Chief Executive Officer Attn: Chief Executive Officer
Aironet Wireless Communications, Inc. Telxon Corporation
000 Xxxxx Xxxx, Xxxxx 000 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000 Xxxxx, Xxxx 00000
18.12 MERGER. This Agreement, together with the Exhibits and
Schedules attached hereto, constitutes the entire agreement
and understanding of the parties with respect to the subject
matter hereof, and supersedes all prior and contemporaneous
agreements, both oral and written. This Agreement shall be
construed as a whole according to its fair meaning and not
strictly for or against either party. This Agreement may not
be amended except pursuant to a written instrument executed by
both parties hereto, nor may any provision hereof be waived
except pursuant to a written instrument executed by the party
granting such waiver.
24
25
IN WITNESS WHEREOF, the authorized representatives of the parties hereby execute
this Agreement as of the date set forth in the first paragraph hereof.
AIRONET WIRELESS TELXON CORPORATION
COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------------------- --------------------------------
Xxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxx, Senior Vice
and Chief Executive Officer President and Chief Financial
Officer
25
26
EXHIBIT A
LEGACY PRODUCTS
-------------------------------- ------------------------------ -------------------------------
1000 SERIES 2000 SERIES
=========== ===========
-------------------------------- ------------------------------ -------------------------------
900 MHz 2.4 GHz
DSSS DSSS
Proprietary Proprietary
-------------------------------- ------------------------------ -------------------------------
RADIOS: R100 (095) R200 (025)
093
091
-------------------------------- ------------------------------ -------------------------------
PC CARDS: PC1000 (690-900) PC2000 (690-2400)
-------------------------------- ------------------------------ -------------------------------
ACCESS POINTS: AP1000E (630-900) AP2000E (630-2400)
AP1000T (631-900) AP2000T (631-2400)
AP1000L (632-900) AP2000L (632-2400)
-------------------------------- ------------------------------ -------------------------------
UNIVERSAL CLIENTS: UC1000E UC2000E
UC1000S UC2000S
-------------------------------- ------------------------------ -------------------------------
OTHERS: IC1000 (655-900) IC2000 (655-2400)
MC1000 (670-900) MC2000 (670-2400)
671-900 671-2400
672-900 672-2400
POSLAN 210-900 DS2415-2400
DS2410-900
DS2445
-------------------------------- ------------------------------ -------------------------------
27
SCHEDULE 5
ROYALTY RATES
1. ACCESS POINT SOFTWARE. Telxon shall pay the following royalties for
each copy of Access Point software licensed under this Agreement which
is sold, or otherwise transferred or invoiced, by Telxon:
a. from April 1, 1998 through March 31, 1999, $80.
b. from April 1, 1999 through March 31, 2000, $70.
c. from April 1, 2000 through March 31, 2001, $60.
d. from April 1, 2001 through March 31, 2002, if the Access Point
on which the software is utilized is sold, transferred or
invoiced with an Aironet Product radio or pc card, $30;
otherwise, $50.
e. from April 1, 2002 through March 31, 2003, if the Access Point
on which the software is utilized is sold, transferred or
invoiced with an Aironet Product radio or pc card, $30;
otherwise, $40.
f. After March 31, 2003, $30.
The royalty under this Section 1 is in addition to the royalty due
under Section 3 or Section 4 of this SCHEDULE 5, if any.
2. CLIENT SOFTWARE AND RELATED CHIP SET. For the License of client
software included in the Legacy Software, Telxon shall pay
Aironet a royalty of $15 per unit up to 20,000 units per year (in
aggregate), and $10 per unit for each unit beyond 20,000
annually, for any Telxon Derived Products sold, or otherwise
transferred or invoiced, by Telxon that are either (1) a 900 MHz
DSSS PC Card product or (2) an Aerocomm 2.4GHz radio adapter, in
either case that utilize the client software included in the
Legacy Software licensed under this Agreement. In the case of
Telxon Derived Products that are 900 MHz DSSS PC Card products
which utilize Aironet's proprietary chip set, Telxon shall, in
addition to the software royalty provided for above in this
Section 2 pay a royalty of $10 per unit. Other than the royalties
due under this Section 2, Telxon shall owe Aironet no royalty in
respect of any 900 MHz DSSS PC Card product or an Aerocomm 2.4GHz
radio adapter.
3. RADIOS. Telxon shall pay Aironet a royalty equal to 15% of
Telxon's Fully-Burdened Manufacturing Cost for each Radio sold,
or otherwise transferred or invoiced, by Telxon in or for use in
any access point, or 25% for each Radio sold, or otherwise
transferred or invoiced, by Telxon in or for use in any handheld
client or other non-access point device. If a royalty is due
under Section 2 or 4 of this SCHEDULE 5, no royalty is due under
this Section 3.
28
4. PC CARDS. Telxon shall pay Aironet a royalty equal to 15% of
Telxon's Fully-Burdened Manufacturing Cost (which cost shall
include the cost of the Radio incorporated into such PC Card but
shall not include the cost of the radio incorporated therein if
purchased from Aironet) for each PC Card sold, or otherwise
transferred or invoiced, by Telxon in or for use in any access
point, or 25% for each PC Card sold by, or otherwise transferred
or invoiced by Telxon in or for use in any handheld client or
other non-access device. If a royalty is due under Section 3 of
this SCHEDULE 5, no royalty is due under this Section 4.
5. UNIVERSAL CLIENTS. Telxon shall pay Aironet a royalty equal to
25% of Telxon's Fully-burdened Manufacturing Cost (not including
the cost of the radio or pc card incorporated into such Universal
Client; the royalty under this Section 5 is in addition to the
royalty due under Sections 2, 3, or 4 of this SCHEDULE 5, if any)
for each Legacy Product Universal Client (listed on EXHIBIT A) or
Telxon Derived Product Universal Client sold, or otherwise
transferred or invoiced, by Telxon.
a. In the case of any new version of a Universal Client (i.e.,
not ethernet or serial), if Aironet does not develop the
interface daughter card, the cost of such card shall not be
included in calculating the corresponding royalty.
6. OTHER LEGACY AND TELXON DERIVED PRODUCTS. Telxon shall pay
Aironet a royalty equal to 25% of Telxon's Fully-Burdened
Manufacturing Cost for each unit of Telxon Derived Product or
Legacy Product sold, or transferred or otherwise invoiced, by
Telxon, that is not an Access Point, Universal Client, Radio, or
PC Card.
7. TERMINATION OF ROYALTIES. Subject to the other provisions of this
SCHEDULE 5, in the event of a Change in Control of Aironet (defined in
Section 7.1 of this SCHEDULE 5), other than as a result of (i) a bona
fide, firm commitment, underwritten, public offering of Aironet stock,
or (ii) a spin-off, a dividend or any other distribution of Aironet
stock by Telxon to its stockholders:
i. royalties shall be payable with respect to Aironet
Technology Access Point software, Aironet Technology client
software and any related chip set (i) until the date that is
four (4) years after such event, (ii) until the date upon
which total royalties of Four Million Dollars ($4,000,000)
shall have been paid by Telxon following such event, or
(iii) immediately if such Change in Control is in a
transaction with a competitor of Telxon which derives twenty
percent (20%) or more of its annual operating revenue from
business(es) representing twenty percent (20%) or more of
Telxon's annual operating revenues, whichever of clauses
(i), (ii) or (iii) comes first, at which time all rights and
licenses granted by Aironet to Telxon in this Agreement with
respect to such software, and all royalties with respect to
such software, shall be deemed to be fully paid up and no
longer required to be paid; and
ii. all rights and licenses granted by Aironet to Telxon in this
Agreement with respect
29
to all Aironet Technology other than the software and chip
set described in Section 7.0.1 of this SCHEDULE 5, and all
royalties with respect to all Aironet Technology other than
the software and chip set described in Section 7.0.1 of this
SCHEDULE 5 shall be deemed to be fully paid up and no longer
required to be paid.
a. A "Change in Control" is deemed to have occurred if:
i. after the date hereof and prior to a bona fide, firm
commitment, underwritten, initial public offering of Aironet
stock, if any ("IPO"), (i) any Person other than the
Investors (defined herein) becomes the "beneficial owner"
(as defined in Rule 13d-3, as in effect on the date hereof,
under the Securities Exchange Act of 1934 (as amended, the
"Exchange Act")), directly or indirectly, of more than fifty
percent (50%) of the combined voting power of Aironet's
Voting Securities, or (ii) any Person other than the
Investors becomes entitled to elect or designate a majority
of the directors of Aironet's Board of Directors;
ii. after an IPO, if (i) any Person becomes the beneficial
owner, directly or indirectly, of twenty percent (20%) or
more of the combined voting power of Aironet's Voting
Securities, provided, that if such event occurs as a result
of a sale or other transfer by Telxon (other than as a
"Participant" pursuant to section 3(d) of the Stockholders
Agreement of even date herewith, by and among Aironet and
its stockholders (the "Stockholders Agreement")) or a Telxon
Group (defined herein) of Voting Securities or an issuance
by Aironet of Voting Securities, then only if such
securities are acquired for no less than Ten Dollars and
50/100 Dollars ($10.50) per share and if Axiom Venture
Partners II Limited Partnership, Telantis Venture Partners
V, Inc., W, A & H Investments LLC, Clarion Capital
Corporation and Xxxxx X. Xxxx, in the aggregate, do not
continue, upon the consummation of such transaction, to own
ten percent (10%) or more of the voting power of Aironet's
Voting Securities, or (ii) the Continuing Directors cease
for any reason to constitute at least a majority of the
Aironet Board of Directors, other than as a result of Telxon
or a Telxon Group (A) voting its Voting Securities to elect
directors other than, or failing to vote its Voting
Securities in favor of, those standing for election as part
of the same vote by Aironet's stockholders who were
nominated by an affirmative vote of at least a majority of
the then Continuing Directors (either by a specific vote or
by approval of the proxy statement of Aironet in which such
person is named as a nominee for director or of the
inclusion of such person in such proxy statement as such a
nominee, in any such case without objection by any member of
such approving majority of the then Continuing Directors to
the nomination of such person or the naming of such person
as a director nominee), (B) voting its Voting Securities to
remove then Continuing Directors or otherwise causing the
then Continuing Directors to resign from Aironet's Board of
Directors or (C) voting its Voting Securities to decrease
the number of directors constituting the Aironet Board of
Directors or to fill any vacancies on the Aironet Board of
Directors resulting from an increase in the number of
directors with persons other than those standing for
election to such vacancies as part of the same vote by
Aironet's stockholders who were nominated by an
30
affirmative vote of at least a majority of the then
Continuing Directors (as evidenced by vote, approval or
inclusion in the manner provided in subclause (A) of this
clause (ii)); and
iii. at any time, there otherwise occurs a sale, lease, exchange
or other disposition to a Person of all or substantially all
the assets, or the dissolution or liquidation, of Aironet,
or any acquisition of stock by a Person, or any merger,
consolidation or reorganization to which Aironet and a
Person are parties, and as the result of which Aironet's
stockholders prior to the transaction do not after the
transaction own at least fifty percent (50%) of the voting
power of Aironet or the surviving entity, as applicable, in
the election of directors,.
b. "Continuing Directors" means and includes the persons constituting
Aironet's Board of Directors as of the date of the IPO as well as each
person who becomes a director of Aironet subsequent to the date of the
IPO whose election, or nomination for election by Aironet's
stockholders, was approved by an affirmative vote of at least a
majority of the then Continuing Directors (either by a specific vote
or by approval of the proxy statement of Aironet in which such person
is named as a nominee for director or of the inclusion of such person
in such proxy statement as such a nominee, in any such case without
objection by any member of such approving majority of the then
Continuing Directors to the nomination of such person or the naming of
such person as a director nominee), for so long as each such director
shall remain in office.
c. "Person" means and includes any individual, corporation, partnership,
group, association or other "person", as such term is used in Section
14(d) of the Exchange Act, but excluding Telxon, any Telxon Group, any
affiliate (as defined in Rule 12b-2, as in effect on the date hereof,
under the Exchange Act) of Telxon, any member of a Telxon Group, or
Aironet, or any employee benefit plan sponsored by any of the
foregoing. For purposes of this Section 7, references to "Telxon"
shall include a Person which succeeds to Telxon's business or assets
as a whole, whether by purchase of the stock or assets of Telxon,
merger or otherwise. "Telxon Group" means one or more Persons that act
or refrain from acting at Telxon's direct or indirect request, alone
or in concert with each other, or with Telxon.
d. "Voting Securities" means the Aironet Common Stock, par value $0.01
per share, and any and all other then outstanding Aironet securities
ordinarily having the right to vote generally in the election of
Aironet directors.
e. All rights and licenses granted by Aironet to Telxon in this Agreement
with respect to all Aironet Technology other than the software or chip
set described in Section 7.0.1 of this SCHEDULE 5, and all royalties
with respect to all Aironet Technology other than the software or chip
set described in Section 7.0.1 of this SCHEDULE 5, shall be deemed to
be fully paid up and no longer required to be paid as of April 1,
2001, unless Section 7.0.2. of this SCHEDULE 5 earlier applies.
f. In no event shall the aggregate royalties payable by Telxon to Aironet
pursuant to Article 5
31
of this Agreement and this SCHEDULE 5 and Section 8.11.3.2 of this
Agreement and Section 4 of SCHEDULE 8 in respect of the following
periods exceed the respective maximum amounts indicated in the
following table, reduced as provided below:
Royalty Period Maximum Aggregate Royalties
April 1, 1998 - March 31, 1999 $7,000,000
April 1, 1999 - March 31, 2000 $6,500,000
April 1, 2000 - March 31, 2001 $5,000,000
Each April 1 - March 31 thereafter $4,000,000
The provisions of this Section 7.6 shall not apply to royalties for
New Software.
8. Upon the termination of software and related chip set royalties under
Section 7.0.1 of this SCHEDULE 5, Telxon shall commence to pay Aironet
for the software related services rendered by it to Telxon under
Article 11 of the Agreement, and upon the termination of royalties for
other than software or the related chip set under Sections 7.0.2
and/or 7.5 of this SCHEDULE 5, Telxon shall commence to pay Aironet
for the services rendered by it to Telxon under Article 11 of the
Agreement related to items other than software and the related chip
set, and in either case at Aironet's cost of rendering such services
plus fifty percent (50%).
32
SCHEDULE 8
AIRONET PRODUCT PRICING
1. BRIDGE PRODUCTS. Telxon shall pay Aironet a price equal to 154% of
Aironet's Fully-Burdened Manufacturing Cost for each unit of any
Bridge Products purchased by Telxon.
2. ALL OTHER AIRONET PRODUCTS. Telxon shall pay Aironet a price equal to
133 1/3 % of Aironet's Fully-Burdened Manufacturing Costs for each
unit of any other Aironet Products purchased by Telxon.
3. RENEGOTIATION OF SUPPLY OBLIGATIONS. The Aironet Product supply
obligations provided for in Article 8 of the Agreement and the pricing
provided for in this SCHEDULE 8 are intended to be effective until the
date four (4) years after the first to occur of (i) Aironet becoming a
publicly traded company through an underwritten firm commitment
initial public offering in which the proceeds to Aironet are at least
Eight Million Dollars ($8,000,000), or (ii) a change in control of
Aironet which results from a merger, consolidation, sale of all of
Aironet's issued and outstanding stock to a single purchaser, or the
sale or other disposition of substantially all of Aironet's assets to
a single purchaser, in a single transaction or a series of
transactions. Prior to the expiration of such expiration date, the
parties shall in good faith renegotiate the original pricing and other
terms of the supply obligations, which shall cease to be effective at
such date. This Section 3 shall not affect the license granted in
Section 8.11.3 of the Agreement, which shall not expire or be subject
to renegotiation under this Section 3.
4. DISCONTINUED AIRONET PRODUCTS. Royalties shall be due from Telxon to
Aironet on discontinued Aironet Products in accordance with the
principles of Article 8 and this SCHEDULE 8, at a rate of thirty three
and one third percent (33 1/3%) of Telxon's Fully-Burdened
Manufacturing Cost, provided that all rights and licenses granted by
Aironet to Telxon in Section 8.11.3 of the Agreement with respect to a
particular discontinued Aironet Product, and all royalties with
respect thereto, shall be deemed to be fully paid up and not required
to be paid from and after the date five (5) years after the date (the
"Commencement Date") that Telxon first exercises rights under Section
8.11.3 with respect to that product.
