BUSINESS OPPORTUNITIES AGREEMENT
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THIS BUSINESS OPPORTUNITIES AGREEMENT dated as of January 1, 1999
(this "Agreement"), by and between Ulticom, Inc., a New Jersey corporation (the
"Corporation"), and Comverse Technology, Inc., a New York corporation
("Comverse").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Comverse is the holder of a majority of the outstanding
shares of common stock, no par value, of the Corporation ("Common Stock"); and
WHEREAS, certain directors, officers and/or employees of Comverse may
from time to time also serve as directors and/or officers of the Corporation;
and
WHEREAS, such directors and/or officers of the Corporation may from
time to time encounter business opportunities or transactions in which both the
Corporation and Comverse may have a reasonable expectation or interest; and
WHEREAS, the parties desire to enter into an agreement which provides
for the allocation of such business opportunities and transactions between the
parties; and
NOW, THEREFORE, in consideration of the premises and the mutual
obligations, covenants and agreements herein contained, the parties hereto agree
as follows:
Article I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following
capitalized terms shall have the meanings set forth below:
"Affiliate" shall mean, with respect to any given Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person. For
purpose of this Agreement the term "control" (including, with correlative
meaning, the terms "controlled by" and "under common control with"), as used
with respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Board" shall mean the Board of Directors of the Corporation.
"Claims" means any and all claims, demands, causes of action,
liabilities, losses, costs, damages, and expenses of any kind or nature
whatsoever, in law or in equity (including attorneys' fees and costs), and
irrespective of whether any such claims or matters arise out of common law,
contract, tort, strict liability, violation of statutory laws, or regulations,
or any other theory or basis.
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"Comverse Designee" shall mean any director, officer or employee of
any Comverse Party who also serves as a director or officer of any Corporation
Party.
"Comverse Party" shall mean Comverse or any of its Affiliates (other
than any Person that is a Corporation Party).
"Corporation Party" shall mean the Corporation and any Person
controlled by the Corporation, whether or not such Person is also controlled by
any Comverse Party.
"Disinterested Director" shall mean any director of the Corporation
who is not a director, officer or employee of any Comverse Party.
"Person" shall mean a natural person, a corporation, a limited
liability company, a joint stock company, a partnership, a limited partnership,
a joint venture, a trust, an estate, an unincorporated organization,
association, agency or any other entity.
1.2 Chairman or Vice Chairman of a Corporation Party. For purposes of
this Agreement, a director of any Corporation Party who is Chairman or Vice
Chairman of the Board of Directors of such Corporation Party or any committee
thereof shall not be deemed to be an officer of such Corporation Party by reason
of holding such position (regardless of whether such position is deemed an
office of the Corporation Party under such Corporation Party's By-laws), unless
such person is a full-time employee of such Corporation Party.
Article II
CONDUCT OF BUSINESS
2.1 Conduct of Comverse's Business. Subject to the provisions of
Section 3.1(a)(2), unless otherwise agreed in writing between Comverse and the
Corporation, a Comverse Party shall have the right to, and shall not have a duty
not to, (i) engage in the same or similar business activities or lines of
business as any Corporation Party engages in, (ii) do business with any
potential or actual customer or supplier of any Corporation Party and (iii)
employ or otherwise engage, or solicit for such purpose, any director, officer
or employee of a Corporation Party. No Comverse Party and no director, officer,
employee or agent of any Comverse Party, whether or not such Person is also a
director, officer, employee, agent or shareholder of a Corporation Party, shall
be liable to any Corporation Party or its stockholders for breach of any
fiduciary or other duty that such Person may have by reason of any Comverse
Party undertaking any activity permitted in this Section 2.1.
Article III
CORPORATE OPPORTUNITIES
3.1 Allocation of Opportunities Relating to Both Parties.
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(a) The parties agree that in determining whether any business
opportunity or transaction shall belong to Comverse or the Corporation for the
purposes of this Agreement, the following rules shall apply:
(1) If such business opportunity or transaction was offered to
an individual who is a director but not an officer or employee
of a Corporation Party and who is also an officer or employee
(whether or not a director) of a Comverse Party, then such
business opportunity or transaction shall belong to Comverse;
(2) If such business opportunity or transaction was offered to
an individual who is an officer or employee (whether or not a
director) of a Corporation Party and who is also a director
but not an officer or employee of a Comverse Party, then such
business opportunity or transaction shall belong to the
Corporation; and
(3) If such business opportunity or transaction was offered to
any other individual who is (i) an officer or employee of a
Corporation Party and an officer or employee of a Comverse
Party or (ii) a director of both a Corporation Party and a
Comverse Party but not an officer or employee of any such
party, then such business opportunity or transaction shall
belong to Comverse.
(b) The provisions of this Section 3.1 shall not apply to any
business transaction or opportunity which the parties agree in writing shall be
excluded from the provisions of this Section 3.1, provided that such agreement
is approved by a majority of the Disinterested Directors or otherwise in
accordance with the New Jersey Business Corporation Act or any other applicable
law; provided, further, however, that no presumption or implication shall arise
from the existence or absence of such agreement as to whether any other business
opportunity or transaction not explicitly covered by such agreement is excluded
from the provisions of this Section 3.1.
3.2 Other Opportunities Acquired by Comverse. In the event that any
director, officer or employee of a Comverse Party who is not also a director,
officer or employee of a Corporation Party acquires knowledge of any business
opportunity or transaction (including any business opportunity or transaction
that by its nature may be in the line or lines of business of a Corporation
Party), such Comverse Party shall have no duty to communicate or present such
business opportunity or transaction to any Corporation Party and shall not be
liable to any Corporation Party or its stockholders for breach of any fiduciary
or other duty that such Comverse Party may have as a stockholder of the
Corporation or otherwise by reason of the fact that such Comverse Party pursues
or acquires such business opportunity or transaction for itself, directs such
business opportunity or transaction to another Person or does not present such
business opportunity to any Corporation Party.
3.3 Other Obligations; Failure to Pursue an Opportunity. Any business
opportunity or transaction that belongs to either Comverse or the Corporation
pursuant to this Agreement shall not be pursued by the other, or directed by the
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other to another Person, unless and until Comverse or the Corporation, as the
case may be, determine not to pursue such opportunity. Notwithstanding anything
herein to the contrary, if the party to whom a business opportunity or
transaction belongs pursuant to this Agreement does not within a reasonable
period of time begin to pursue, or thereafter continue to pursue, such business
opportunity or transaction diligently and in good faith, the other party may
then pursue such business opportunity or transaction or direct it to another
Person.
3.4 Agreements Respecting Opportunities. Nothing herein shall
prohibit one or more Corporation Parties and one or more Comverse Parties from
entering into any contract, agreement, arrangement or transaction involving a
business opportunity, provided that such contract, agreement, arrangement or
transaction is approved in accordance with the New Jersey Business Corporation
Act or any other applicable law. Any such contract, agreement, arrangement or
transaction not so approved shall not by reason thereof result in any breach of
any fiduciary or other duty, but shall be governed by the New Jersey Business
Corporation Act or any other applicable law.
3.5 Acknowledgment, Release and Indemnity.
(a) The Corporation hereby (i) acknowledges and agrees that, except
as provided in this Agreement, no Comverse Party shall have any obligation to
offer a Corporation Party any business opportunity or transaction, (ii)
renounces any interest or expectancy in any business opportunity or transaction
pursued by a Comverse Party in accordance with this Agreement, and (iii) waives
any claim that any such business opportunity or transaction pursued by a
Comverse Party constitutes a corporate opportunity of a Corporation Party,
unless such business opportunity was pursued by a Comverse Party in violation of
this Agreement.
(b) The Corporation hereby acknowledges and agrees that any Comverse
Party and any Comverse Designee that complies with the provisions of this
Agreement relating to business opportunities or transactions (i) shall have
fully satisfied and fulfilled any fiduciary or other duties such Person may have
to such Corporation Party and their stockholders with respect to such business
opportunity or transaction, (ii) shall not be liable to the Corporation Party or
its stockholders for breach of any fiduciary or other duty by reason of the fact
that any Comverse Party pursues or acquires such business opportunity or
transaction for itself or directs such business opportunity or transaction to
another Person or does not communicate information regarding such business
opportunity or transaction to the Corporation Party, (iii) shall be deemed to
have acted in good faith and in a manner such Person reasonably believes to be
in and not opposed to the best interests of the Corporation Party and (iv) shall
be deemed not to have breached any duty of loyalty or other duty such Person may
have to the Corporation Party or its stockholders and not to have derived an
improper benefit therefrom.
(c) The Corporation acknowledges and agrees that with respect to any
business opportunity or transaction not specifically belonging to the
Corporation pursuant to this Agreement, a Comverse Party may pursue such
business opportunity or transaction and conduct the business related thereto
without any obligation to offer it to a Corporation Party. The Corporation
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acknowledges and agrees that in such case, to the extent that a court might hold
that the pursuit of such business opportunity or transaction or the conduct of
any other activity permitted hereunder is a breach of any standard of care, a
duty of loyalty, or other duty owed to the Corporation (and without admitting
that the pursuit of such opportunity or the conduct of such activity is such a
breach of any such standard or duty), the Corporation hereby fully and
irrevocably renounces, releases and waives, to the extent permitted by
applicable law, any interest or expectancy in such business opportunity or
transaction or permitted activity pursued by a Comverse Party pursuant to this
Agreement and any and all Claims that the Corporation or any Person claiming by,
through, or under the Corporation may have to claim that such business
opportunity or transaction is a corporate opportunity of the Corporation or that
the pursuit by a Comverse Party of any such business opportunity or transaction
or the conduct of such activity permitted hereunder is a breach of any standard
of care, duty of loyalty, or other duty owed to the Corporation (including, to
the extent permitted by applicable law, any and all Claims arising either
directly or derivatively, and whether brought by, through, or under the
Corporation, or by any stockholder, creditor, subsidiary or Affiliate of the
Corporation).
(d) The Corporation, for itself and its successors and assigns,
hereby agrees to indemnify, defend, and hold harmless, to the extent permitted
by applicable law, Comverse and its predecessors and successors in interest, and
all of Comverse' and its respective predecessors and successors in interests'
respective Affiliates, stockholders, directors, officers, employees, agents,
attorneys, servants, invitees, contractors, licensees, legal representatives,
successors, and assigns, from any and all such Claims relating to the subject
matter hereof that may be asserted (i) by any Person whomsoever claiming by,
through, or under the Corporation or (ii) by any successors of the Corporation.
It is the express intention of the Corporation that, to the extent permitted by
applicable law, the indemnity to Comverse herein provided covers any such Claims
asserted by, through, or under the Corporation, notwithstanding that such
Persons are not signatories to this Agreement, and whether or not the release
provisions are directly enforceable against any Persons who are not signatories
to this Agreement. This indemnity applies for the benefit of Comverse regardless
of whether such claims are based in whole or in part upon the alleged partial or
sole negligence or strict liability of Comverse (or its predecessors or
successors in interest, or Comverse' or its respective predecessors or
successors in interests' respective Affiliates, stockholders, directors,
officers, employees, agents, attorneys, servants, invitees, contractors,
licensees, legal representatives, successors, and assigns), but shall not apply
in the case of bad faith, willful misconduct or breach of this Agreement by a
Comverse Party or any director, officer or employee of a Comverse Party or any
other indemnified party. The renunciations, waivers and agreements herein apply
equally to activities to be conducted in the future and activities that have
been conducted in the past.
3.6 Other Conduct. Any conduct by any Comverse Party or any of its
directors, officers, employees or agents in connection with the affairs of such
Comverse Party, and any conduct of any Comverse Designee, that does not comply
with this Agreement shall not by reason thereof void a transaction or make it
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voidable or be deemed a breach of any fiduciary or other duty that may be owed
to any Corporation Party but shall be governed by the New Jersey Business
Corporation Act or any other applicable law.
Article IV
TERM
4.1 Term. This Agreement shall expire on the first day on which all
Comverse Parties no longer beneficially own Common Stock representing at least
20 percent (20%) of the combined voting power of outstanding shares of Common
Stock of the Corporation and no person who is a director or officer of a
Corporation Party is also a director, officer or employee of a Comverse Party.
Article V
MISCELLANEOUS
5.1 Amendments; Waivers. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated, except upon the
execution and delivery of a written agreement executed by the parties hereto.
The failure of any party hereto to exercise any right, power or remedy provided
under this Agreement or otherwise available in respect hereof at law or in
equity, or to insist upon compliance by any other party hereto with its
obligations hereunder, and any custom or practice of the parties at variance
with the terms hereof, shall not constitute a waiver by such party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.
5.2 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to its subject matter, and supersedes and
replaces all prior agreements and understandings of the parties in connection
with such subject matter.
5.3 Notices. All notices and other communications hereunder shall be
given in writing and delivered personally, by registered or certified mail
(postage prepaid, return receipt requested), by overnight courier (postage
prepaid), facsimile transmission or similar means, to the party to receive such
notices or communications at the address set forth below (or such other address
as shall from time to time be designated by such party to the other parties in
accordance with this Section 5.3):
If to the Corporation: Ulticom, Inc.
0000 Xxxxxx Xxxx
Xx. Xxxxxx, XX 00000
Attention: President & Chief
Executive Officer
Telecopy: (000) 000-0000
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If to Comverse: Comverse Technology, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Senior Counsel
Telecopy: (000) 000-0000
All such notices and communications hereunder shall be deemed given when
received, as evidenced by the signed acknowledgment of receipt of the person to
whom such notice or communication shall have been personally delivered, the
acknowledgment of receipt returned to the sender by the applicable postal
authorities, the confirmation of delivery rendered by the applicable overnight
courier service, or the confirmation of a successful facsimile transmission of
such notice or communication.
5.4 Governing Law. THE PARTIES HERETO AGREE THAT EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREUNDER.
5.5 Assignment; Binding Effect. No party hereto shall have the right
to assign this Agreement or any of its rights or obligations hereunder without
the prior written consent of the other party hereto; and any purported
assignment of this Agreement or any of the rights or obligations of a party
hereunder without such consent shall be deemed to be null and void ab initio.
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their successors and permitted assigns.
5.6 No Partnership. No term or provision of this Agreement shall be
construed to establish any partnership, agency, or joint venture relationship
between the parties hereto.
5.7 Invalidity. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law. If any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
5.8 Headings. The headings in this Agreement are for convenience of
reference only and are not intended to be a part of this Agreement or to affect
the meaning or interpretation of this Agreement.
5.9 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
ULTICOM, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President and
Chief Executive Officer
COMVERSE TECHNOLOGY, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Cheif Financial Officer
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