SERVICES AGREEMENT
THIS SERVICES AGREEMENT (this "Agreement"), dated as of
February 1, 1998, between Comverse Technology Inc., a New York corporation
("Comverse"), and Ulticom, Inc., a New Jersey corporation (together with its
subsidiaries, the "Company").
WHEREAS, the Company is a wholly owned subsidiary of
Comverse; and
WHEREAS, the Company desires that Comverse, its
subsidiaries and affiliates (hereinafter collectively referred to as "Comverse")
provide to the Company certain services in order to assist the Company, and
Comverse is willing to do so, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Services. During the period commencing on the date
hereof and ending upon termination of this Agreement (as provided in Section 3
below), Comverse shall provide to the Company the following services (the
"Services"):
1.1 Consulting on Financial Planning and Reporting.
Comverse shall provide consulting services with respect to financial planning
and reporting, including without limitation, managing the external auditor
relationship (including fee negotiation, audit scheduling and management letter
representation) as well as handling daily banking activities, cash flow
planning, including loan borrowings and paydowns, investing idle cash balances,
cash forecasting, cash flow reporting and budgeting and capital spending
administration.
1.2 Routine Legal Services. Comverse shall provide routine
legal services to the Company, including without limitation, consultations on
strategies and governmental compliance, attorney selection, reviewing legal
bills and participating in settlement discussions.
1.3 Administration of Employee Benefit Plans. Comverse
shall assist the Company in administering the Company's employee benefit plans,
including without limitation, administering any management incentive plans and
employee profit sharing plans, monitoring and processing pension and 401(k)
plans and employee benefit enrollment, making required employee benefit related
IRS filings, handling other related compliance tasks and general benefits
consulting.
1.4 Directors' and Officers' Insurance. Comverse shall
cause to be maintained in effect a policy of directors' and officers' liability
insurance covering the
hcyq05.DOC
Company's directors and officers with at least the same coverage with respect to
matters and terms as in effect for Comverse and its directors and officers.
1.5 Consulting on Public Relations. Comverse shall provide
consulting services with respect to the Company's public relations, including
without limitation, reviewing accounting pronouncements and advising the Company
on proper accounting and reportable amounts related to pronouncements [(such as
FASB 106 and FASB 109)].
Comverse and the Company agree that Comverse shall furnish
the Services using commercially reasonable efforts consistent with the needs of
the Company and the availability of Comverse's officers and other employees.
Comverse in its sole discretion will determine which personnel shall perform the
Services.
2. Fees and Payment. The Company shall pay Comverse a
quarterly fee of $150,000, payable in arrears at the end of each fiscal quarter,
in consideration for all Services provided by Comverse to the Company under this
Agreement during such fiscal quarter. The quarterly fee shall be subject to
adjustment as may be agreed upon in writing from time to time by Comverse and
the Company. In addition, the Company shall reimburse Comverse for any
out-of-pocket expenses incurred by Comverse in providing Services hereunder
(other than compensation to Comverse's officers and employees engaged in
rendering such Services to the Company). After the end of each fiscal quarter,
Comverse shall deliver to the Company an invoice for the quarterly fee payable
with respect to Services provided by Comverse under this Agreement, plus all
expenses in respect of which Comverse seeks reimbursement hereunder. The Company
shall pay in full the amount due as stated on each Comverse invoice within
thirty days of the date of such invoice.
3. Term. The term of this Agreement shall commence as of
and from February 1, 1998 and shall continue until January 31, 2002 (the
"Initial Term"); provided, however, that on January 31, 2002 and on each
anniversary of such day thereafter, this Agreement shall be automatically
extended for one (1) additional twelve-month period, unless either party gives
the other party written notice of its election to terminate this Agreement at
least thirty (30) days prior to the end of the Initial Term or the end of any
subsequent twelve-month extension period.
4. Post-Termination Obligation.
4.1 Company's Obligations. The termination of this
Agreement shall not terminate the Company's obligation to provide to Comverse
all information required by Comverse if and when necessary in order to present
Comverse's financial and accounting information in accordance with generally
accepted accounting principles.
4.2 Comverse's Obligation. Comverse agrees to (i) furnish
to the Company such further information, (ii) execute and deliver to the Company
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such other documents, and (iii) do such other acts and things, all as the
Company may reasonably request in order to permit the Company to file all
certificates, notices, tax returns, documents or other instruments that may be
required by law to be filed by the Company.
5. Confidentiality. Comverse shall keep confidential and
shall not disclose to others any information that is confidential or proprietary
to the Company or that the Company has labeled in writing as confidential or
proprietary to the same extent as it protects its own confidential information
and trade secrets, except as required by law or court order. Comverse may
disclose to third parties any such information provided that (i) the Company
consents to such disclosure, which consent shall not be unreasonably withheld,
and (ii) such third party agrees in writing to be bound by the provisions of
this Section 5 with respect to such information.
6. Compliance with Laws. Each of the Company and Comverse
shall comply in all material respects with any and all applicable statutes,
rules, regulations, orders or restrictions of any domestic or foreign
government, or instrumentality or agency thereof, in respect of the conduct of
its obligations under this Agreement.
7. Default and Remedies.
7.1 Event of Default. A party shall be in default hereunder
if (i) such party commits a material breach of any term of this Agreement and
such breach continues uncured for 30 days following receipt of written notice
thereof from the other party, (ii) such party makes a general assignment for the
benefit of its creditors, (iii) there is a filing seeking an order for relief in
respect of such party in an involuntary case under any applicable bankruptcy,
insolvency or other similar law and such case remains undismissed for 30 days or
more, (iv) a trustee or receiver is appointed for such party or its assets or
any substantial part thereof, or (v) such party files a voluntary petition under
any bankruptcy, insolvency or similar law of the relief of debtors.
7.2 Remedies.
(a) If there is any default by the Company hereunder,
Comverse may exercise any or all of the following remedies: (a) declare
immediately due and payable all sums for which the Company is liable under this
Agreement (including the entire quarterly fee payable in respect of the fiscal
quarter in which such default occurs); (b) decline to perform any of its
obligations hereunder; and/or (c) terminate this Agreement.
(b) If there is any default by Comverse hereunder, the
Company may terminate this Agreement and recover any fees paid in advance for
Services not performed.
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(c) In addition to the remedies set forth in clauses (i)
and (ii), a non-defaulting party shall have all other remedies available at law
or equity, subject to Section 7.3 below.
7.3 Limitation on Remedies. NOTWITHSTANDING THE FORUM IN
WHICH ANY CLAIM OR ACTION MAY BE BROUGHT OR ASSERTED OR THE NATURE OF ANY SUCH
CLAIM OR ACTION, IN NO EVENT SHALL ANY DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF
COMVERSE BE PERSONALLY LIABLE TO THE COMPANY IN RESPSECT OF ANY SERVICES
RENDERED HEREUNDER BY SUCH PERSON EXCEPT IN THE CASE OF FRAUD. NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL COMVERSE, ITS SUBSIDIARIES
AND ITS AFFILIATES EXCEPT IN THE CASE OF FRAUD, BE LIABLE TO THE COMPANY IN
CONNECTION WITH OR ARISING OUT OF COMVERSE PROVIDING OR FAILING TO PROVIDE THE
SERVICES SPECIFIED IN THIS AGREEMENT IN AN AMOUNT WHICH SHALL EXCEED THE LESSER
OF (A) THE AMOUNT OF THE CLAIM, OR (B) THE QUARTERLY FEE PAID OR PAYABLE BY THE
COMPANY IN RESPECT OF THE FISCAL QUARTER IN WHICH THE SERVICES GIVING RISE TO
SUCH CLAIM OR ACTION WERE RENDERED OR REQUIRED TO BE RENDERED.
The parties agree that this provision limiting remedies and
liquidating damages is reasonable under the circumstances and the Company
acknowledges that Comverse, its subsidiaries and its affiliates (including
directors, officers, employees and agents) shall have no other financial
liability to the Company whatsoever.
8. Indemnification. The Company shall indemnify, defend and
hold harmless Comverse and its officers, directors, employees or agents from and
against any and all liabilities, claims, damages, losses and expenses
(including, but not limited to, court costs and reasonable attorneys' fees) of
any kind or nature, related to, arising out of or in connection with (a) the
Company's failure to fulfill its obligations hereunder or (b) the performance by
Comverse of Services hereunder, except to the extent that any such liability,
claim, damage, loss or expense is found by a court of competent jurisdiction in
a judgment which has become final in that it is no longer subject to appeal or
review to have resulted primarily from Comverse's willful misconduct, bad faith
or gross negligence.
9. General Provisions.
9.1 Notices. All communications to either party hereunder
shall be in writing and shall be delivered in person or sent by facsimile,
telegram, telex, by registered or certified mail (postage prepaid, return
receipt requested) or by reputable overnight courier to the respective parties
at the following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 9.1):
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(i) If to Comverse, to:
Comverse Technology, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attn: Senior Counsel
(ii) If to the Company, to:
Ulticom, Inc.
0000 Xxxxxx Xxxx
Xx. Xxxxxx, Xxx Xxxxxx 00000
Telecopier: (000) 000-0000
Attn: President and Chief Executive Officer
9.2 Force Majeure. A party shall not be deemed to have
breached this Agreement to the extent that performance of its obligations or
attempts to cure any breach are made impossible or impracticable due to any act
of God, fire, natural disaster, act of government, shortage of materials or
supplies after the date hereof, labor disputes or any other cause beyond the
reasonable control of such party (a "Force Majeure"); provided that the party
whose performance is delayed or prevented promptly notifies the other party of
the Force Majeure cause of such prevention or delay.
9.3 Access. The Company shall make available on a timely
basis to Comverse all information reasonably requested by Comverse to enable it
to provide the Services. The Company shall give Comverse reasonable access,
during regular business hours and at such other times as are reasonably
required, to its premises for the purposes of providing the Services.
9.4 Books and Records. Upon the termination of Services
with respect to which Comverse holds books, records or files, including, but not
limited to, current and archived copies of computer files, owned by the Company
and used by Comverse in connection with the provision of a Service to the
Company, Comverse will return all of such books, records or files as soon as
reasonably practicable. In the event Comverse needs access to such books,
records or files for legal or tax reasons, the Company shall cooperate with
Comverse and make such books, records or files available to Comverse.
9.5 Independent Contractors. The parties shall operate as,
and have the status of, independent contractors and neither party shall act as
or be a partner, co-venturer or employee of the other party. Unless specifically
authorized to do so in writing, neither party shall have any right or authority
to assume or create any obligations or to make any representations or warranties
on behalf of the other party, whether express or implied, or to bind the other
party in any respect whatsoever.
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9.6 Amendment and Waiver. No supplement, modification,
waiver or amendment of this Agreement or any provision hereof shall be binding
unless executed in writing and signed by the party to be charged.
9.7 Assignment. Neither Comverse, on the one hand, nor the
Company, on the other, shall be entitled to assign its rights or delegate its
obligations under this Agreement to any third party without the prior written
consent of the other party. Any attempted or purported assignment or delegation
without such required consent shall be void. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective permitted successors and assigns.
9.8 Governing Law. This Agreement shall be governed by the
law of the State of New York.
9.9 Severability. If any provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or
otherwise unenforceable, then such provision shall, to the extent permitted by
the court, not be voided but shall instead be construed to give effect to its
intent to the maximum extent permissible under applicable law and the remainder
of this Agreement shall remain in full force and effect according to its terms.
9.10 Sections and Headings. The sections and headings
contained herein are for the convenience of reference only and are not intended
to define, limit, expand or describe the scope or intent of any clause or
provision of this Agreement.
9.11 Entire Agreement. This Agreement, together with all
exhibits hereto, constitutes the entire agreement and understanding of the
parties relating to the subject matter hereof and supersedes all prior
negotiations and understandings among the parties, both oral and written,
regarding such subject matter.
9.12 Counterparts. This Agreement may be signed in
counterparts and all signed copies of this Agreement shall together constitute
one original of this Agreement.
9.13 No Third Party Beneficiaries. Except as provided in
Section 8, nothing contained in this Agreement, express or implied, is intended
to or shall confer upon anyone other than the parties hereto (and their
successors and permitted assigns) any right, benefit or remedy of any nature
whatsoever under or because of this Agreement except that Services to be
provided by Comverse hereunder shall also be provided, as directed by the
Company, to any wholly-owned subsidiary of the Company, which shall be entitled
to the benefit thereof.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE FOR SERVICES AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have duly executed
and delivered this Agreement effective as of the day and year first written
above.
COMVERSE TECHNOLOGY, INC.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Cheif Financial Officer
ULTICOM, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: President and
Chief Executive Officer
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