<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 1997
REGISTRATION NO. 333-28519
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CORSAIR COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 3663 77-0390406
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
3408 HILLVIEW AVENUE
PALO ALTO, CALIFORNIA 94304
(415) 842-3300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
MARY ANN BYRNES
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CORSAIR COMMUNICATIONS, INC.
3408 HILLVIEW AVENUE
PALO ALTO, CALIFORNIA 94304
(415) 842-3300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
COPIES TO:
JOHN A. DENNISTON, ESQ. NEIL J. WOLFF, ESQ.
MICHAEL S. KAGNOFF, ESQ. CHRISTOPHER F. BOYD, ESQ.
THOMAS E. HORNISH, ESQ. YOICHIRO TAKU, ESQ.
BROBECK, PHLEGER & HARRISON LLP WILSON SONSINI GOODRICH & ROSATI
550 West "C" Street, Suite 1300 Professional Corporation
San Diego, California 92101 650 Page Mill Road
(619) 234-1966 Palo Alto, California 94304
(415) 493-9300
---------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] _________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY HAS
DULY CAUSED AMENDMENT NO. 3 TO THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF PALO
ALTO, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON THE 28TH DAY OF JULY,
1997.
Corsair Communications, Inc.
By: /s/ Mary Ann Byrnes
--------------------------------
MARY ANN BYRNES
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AMENDMENT NO. 3
TO THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Mary Ann Byrnes President, Chief July 28, 1997
_____________________________________ Executive Officer
(MARY ANN BYRNES) and Director
(Principal
Executive Officer)
* Chief Financial July 28, 1997
_____________________________________ Officer and
(MARTIN J. SILVER) Secretary
(Principal
Financial and
Accounting Officer)
* Chairman of the July 28, 1997
_____________________________________ Board and Director
(KEVIN R. COMPTON)
* Director July 28, 1997
_____________________________________
(PETER L.S. CURRIE)
* Director July 28, 1997
_____________________________________
(DAVID H. RING)
* Director July 28, 1997
_____________________________________
(ROLAND L. ROBERTSON)
* Director July 28, 1997
_____________________________________
(STEVE DOW)
*By: /s/ Mary Ann Byrnes
---------------------------------
MARY ANN BYRNES, ATTORNEY-IN-FACT
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1+ Form of Underwriting Agreement.
3.1+ Amended and Restated Certificate of Incorporation of the Company, as
amended.
3.2+ Form of Amended and Restated Certificate of Incorporation of the
Company to become effective immediately prior to this Offering.
3.3+ Bylaws of the Company, as amended.
3.4+ Form of Restated Bylaws of the Company to be effective upon completion
of this Offering.
4.1+ Form of Certificate for Common Stock.
5.1+ Opinion of Brobeck, Phleger & Harrison LLP with respect to the Common
Stock being registered.
10.1+ Series A Preferred Stock Purchase Agreement between the Company and
the purchasers listed on Schedule A thereto, dated December 10, 1994
10.2+ Asset Purchase Agreement between the Company and ESL Incorporated,
dated December 14, 1994.
10.3+ Series A Preferred Stock Purchase Agreement between the Company and
ESL Incorporated, dated December 14, 1994.
10.4* License and Technical Assistance Agreement between the Company, TRW
Inc. and ESL Incorporated, dated December 14, 1994.
10.5* AirTouch Assignment Agreement between the Company and ESL
Incorporated, dated December 14, 1994.
10.6* Development and License Agreement between ESL Incorporated and PacTel
Corporation, dated October 4, 1993.
10.7*+ First Amendment to the Development and License Agreement between ESL
Incorporated and PacTel Corporation, dated October 23, 1994.
10.8*+ Second Amendment to and Consent of Assignment of the Development and
License Agreement between the Company and AirTouch, dated December 14,
1994.
10.9* Third Amendment to the Development and License Agreement between the
Company and AirTouch, dated August 18, 1995.
10.10+ 1995 Stock Option/Stock Issuance Plan.
10.11+ 1995 Stock Option/Stock Issuance Plan Form of Notice of Grant.
10.12+ 1995 Stock Option/Stock Issuance Plan Form of Stock Option Agreement.
10.13+ 1995 Stock Option/Stock Issuance Plan Form of Stock Purchase
Agreement.
10.14* Patent License Agreement.
10.15+ Master Lease Agreement, as amended, and Schedules VL-1 and VL-2
between the Company and Comdisco, Inc., dated August 31, 1995.
10.16+ Loan and Security Agreement between the Company and Comdisco, Inc.,
dated August 31, 1995.
10.17+ Secured Promissory Note from the Company to Comdisco, Inc., dated
August 31, 1995.
10.18+ Warrant granted to Comdisco, Inc. to purchase Series B Preferred
Stock, dated August 31, 1995.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.19+ Series B Preferred Stock Purchase Agreement between the Company and
the investors listed on Schedule A thereto, dated October 31, 1995.
10.20+ 1996 Stock Option/Stock Issuance Plan, as amended.
10.21+ 1996 Stock Option/Stock Issuance Plan Form of Notice of Grant, as
amended.
10.22+ 1996 Stock Option/Stock Issuance Plan Form of Stock Option Agreement.
10.23+ 1996 Stock Option/Stock Issuance Plan Form of Stock Purchase
Agreement, as amended.
10.24+ Promissory Note from Martin Silver to the Company, dated April 10,
1996.
10.25+ Promissory Note from Martin Silver to the Company, dated April 10,
1996.
10.26+ Loan and Security Agreement between the Company and Comdisco, Inc.,
dated July 31, 1996.
10.27+ Warrant granted to Comdisco, Inc. to purchase Series B Preferred
Stock, dated July 31, 1996.
10.28+ Secured Promissory Note from the Company to Comdisco, Inc., dated July
31, 1996.
10.29+ Loan and Security Agreement between the Company and MMC/GATX
Partnership No. 1, dated July 31, 1996.
10.30+ Warrant granted to MMC/GATX Partnership No. 1 to purchase Series B
Preferred Stock, dated July 31, 1996.
10.31+ Secured Promissory Note from the Company to MMC/GATX Partnership No.
1, dated July 31, 1996.
10.32+ Warrant granted to Comdisco, Inc. to purchase Series B Preferred
Stock, dated August 5, 1996.
10.33+ Loan and Security Agreement between the Company and Silicon Valley
Bank, dated August 30, 1996.
10.34+ Series C Preferred Stock Purchase Agreement between the Company and
the investors listed on Schedule A thereto, dated October 30, 1996.
10.35+ Amended and Restated Investors' Rights Agreement between the Company
and various stockholders, dated October 30, 1996.
10.36+ Amendment No. 1 to the Amended and Restated Investors' Rights
Agreement between the Company and various stockholders, dated March 7,
1997.
10.37+ Directed Share Agreement between the Company and the investors listed
on Exhibit A thereto, dated October 30, 1996.
10.38+ Promissory Note from Mary Ann Byrnes to the Company, dated November
14, 1996, as amended.
10.39+ 1997 Officer Stock Option Plan.
10.40+ 1997 Officer Stock Option Plan Form of Stock Option Agreement, as
amended.
10.41 1997 Employee Stock Purchase Plan.
10.42+ 1997 Stock Incentive Plan.
10.43+ 1997 Stock Incentive Plan Form of Notice of Grant.
10.44+ 1997 Stock Incentive Plan Form of Stock Option Agreement.
10.45+ Lease dated January 10, 1997 between the Company and San Thomas
Investment Company.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.46+ Series D Preferred Stock Purchase Agreement between the Company and
the investors listed on Schedule A thereto, dated March 7, 1997.
10.47+ Form of Master Purchase and Licensing Agreement.
10.48+ Form of Confidential Disclosure Agreement.
10.49+ Form of Indemnification Agreement between the Company and each of its
directors.
10.50+ Form of Indemnification Agreement between the Company and each of its
officers.
10.51+ Form of Written Consent of Holders of Series A, Series B, Series C and
Series D Preferred Stock to conversion.
10.52+ Form of Waiver of Registration Rights.
11.1+ Statement of Computation of Pro Forma Per Share Amounts.
23.1+ Consent of Brobeck, Phleger & Harrison LLP (contained in their opinion
filed as Exhibit 5.1).
23.2+ Consent and Report on Schedule of KPMG Peat Marwick LLP, Independent
Accountants.
24.1+ Power of Attorney (See Page II-7).
27.1+ Financial Data Schedule.
</TABLE>
- --------
* Certain confidential portions of this Exhibit were omitted by means of
redacting a portion of the text (the "Mark"). This Exhibit has been filed
separately with the Secretary of the Commission without the Mark pursuant to
the Company's Application Requesting Confidential Treatment under Rule 406
under the Securities Act.
+ Previously filed with the Commission.
<PAGE>
EXHIBIT 10.4
LICENSE AND TECHNICAL ASSISTANCE AGREEMENT
This LICENSE AND TECHNICAL ASSISTANCE AGREEMENT, ("Agreement") is made
and entered into as of the 14th day of December, 1994, ("Effective Date")
between TRW INC., an Ohio corporation ("TRW"), ESL INCORPORATED, a California
corporation and wholly owned subsidiary of TRW INC. ("ESL") (TRW and ESL are
together referred to as "Licensor"), and PHONEPRINT, INC., a Delaware
corporation ("Licensee").
WHEREAS, Licensor has * * * a *** that * * *
and * * * a * * * based on * * * or * * *
and is able to * * * activities in the "Wireless
Communications Field," as defined below; and
WHEREAS, Licensee desires to avail itself of this * * *
, and Licensor desires to license the technology to Licensee;
NOW THEREFORE, in consideration of the mutual promises contained
herein and the mutual benefits to be derived therefrom, Licensor and Licensee
agree as follows:
ARTICLE 1
DEFINITIONS
-----------
The following words and phrases will have the meanings set forth
below:
1.1 AGREEMENT. This Agreement and the following Schedules attached
---------
hereto:
Schedule 1 Trade Secrets
----------
Schedule 2 Licensed Products
----------
Schedule 3 Licensed Services
----------
Schedule 4 Patent Rights
----------
1.2 *** . Those particular Trade Secrets identified as
----------
*** in Schedule 1 and which consist of mechanical, technological or
----------
computational procedures for solving a problem or achieving a particular result.
1.3 ASSET PURCHASE AGREEMENT. The Asset Purchase Agreement of even
------------------------
date herewith between the parties.
1.4 BUSINESS SUCCESSOR. For purposes of Section 1 of this Agreement,
------------------
"Business Successor" is defined as the Tactical and National Lines of Business
of TRW's
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
Avionics and Surveillance Group and any successor unit or subunit (whether or
not separately incorporated), of TRW conducting some or all of those businesses
currently carried on by ESL.
1.5 * * * . Any * * * technology
-------------------------------
* * * Business Successor that consists of * * *
intended for or that have application with respect to * * *
and that * * * major system * * * . * * *
shall not include any * * * ; the parties intend that * * *
will consist only of * * * described in Schedule 1.
----------
1.6 COOPERATION AGREEMENT. The Cooperation Agreement of even date
---------------------
herewith between Licensee and TRW.
1.7 COPYRIGHTS. All existing copyrights that have been used in or
----------
for manufacture of the Licensed Products, the provision of Licensed Services or
in connection with Trade Secrets (and all * * *
related thereto) in connection with which Licensor owns and has the right to
grant licenses to Licensee, and future copyrights used or created by Business
Successor that have use in, for or with respect to products, services or trade
secrets (including, without limitation, the Licensed Products, Licensed
Services, Trade Secrets, and * * * ) relating to fraud
detection or mitigation in the Wireless Communications Field.
1.8 GOVERNMENTAL ENTITY. Any department, agency, organization,
-------------------
activity, office or the like ("agency") of the United States Government or in
which the United States is a participant; and any agency of the government of
another sovereign state or country throughout the world or in which such
government participates; any contractor or vendor to any such agency or
government proposing to purchase with funds derived from or reimbursable by any
such agency or state, or any other customer under circumstances such that
Licensee knows or has reason to know or believe that the customer intends to use
the product or service in any activity funded by any such agency or state.
1.9 INVESTORS. Kleiner Perkins Caufield & Byers VII, KPCB VII
---------
Founders Fund, Sevin-Rosen IV, Sevin-Rosen-Bayless Management Company, Norwest
Equity Partners IV, Needham Capital SBIC, L.P., and Needham Emerging Growth
Partners.
1.10 LICENSED PRODUCT(S). Each of * * * products that recognizes
-------------------
and identifies a transmitter based on * * * or * * *
for the purpose of detecting fraudulent activities, listed on Schedule 2 or
----------
* * * by Business Successor, whether or not Licensee hereafter
makes any changes, including, without limitation, * * * or other
modifications thereto.
1.11 LICENSED SERVICES. Each of * * * that relates to
-----------------
the * * * of a transmitter based on * * * or
* * * for the purpose of detecting fraudulent
activities, listed on Schedule 3 or * * *
----------
2
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
by Business Successor, whether or not Licensee hereafter makes any changes
or modifications thereof. * * * (a) will include, by way of example
but not of limitation, services for * * * ,
such as * * * for * * * and * * * and the
development of * * * for * * * or * * * and
(b) will not include work in the * * * that involves a
Licensed Product in the * * * .
1.12 LICENSEE IMPROVEMENTS. Any new technology used or developed by
---------------------
Licensee that consists of improvements to the * * * intended for or that
have application with respect to * * *
and that do not require major system redesign. Licensee Improvements shall not
include any * * * ; the parties intend that Licensee Improvements will
consist only of modification to the * * * described in Schedule 1.
----------
1.13 LICENSEE NOTE. The certain promissory note of even date herewith
-------------
made by Licensee in favor of TRW, in the principal amount of $3,000,000.
1.14 LICENSOR. TRW and ESL.
--------
1.15 MILITARY/INTELLIGENCE FIELD. Uses or applications of Trade
---------------------------
Secrets and Copyrights under contract or in collaboration with a Governmental
Entity for the purpose of * * *
and other similar applications.
1.16 NEW INVENTIONS. Any technology, trade secrets, copyrights,
--------------
patents, patent applications, products or services in the * * *
developed by * * * other than * * * .
1.17 PATENT RIGHTS. All rights, benefits and privileges under: (i)
-------------
United States Letters Patent and pending United States patent applications owned
by Licensor that are identified in Schedule 4, Part A; (ii) any future United
--------
States patent applications or patents that relate to the inventions listed on
Schedule 4, Part B; and (iii) all patents now or subsequently issuing throughout
- ----------
the world based on the subject matter described in such patents and
applications, including, without limitation, any continuation, division, reissue
or foreign country counterpart thereof.
1.18 TRADE SECRETS. All of Licensor's existing technical expertise,
-------------
and all proprietary information, data or confidential know-how pertaining to the
design, manufacture, installation, use, repair, maintenance, and operation of
Licensed Products or Licensed Services (and all * * *
) which were developed or acquired by Licensor and are owned by Licensor and
which have been applied to or used or tested for the purpose of fraud detection
or mitigation in the * * * , including, but not limited
to, the methods, processes, * * * , computer programs, databases, formulae,
devices, specifications, drawings and items listed in Schedule 1, and all of the
----------
foregoing that may in the future be developed or created by Business Successor
that which have use in, for, or with respect to products, services or trade
secrets (including, without limitation, the Licensed Products, Licensed Services
and * * * ) relating to fraud detection or mitigation
in the * * * .
3
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
1.19 * * * . The conduct of business pertaining to
--------------------
products or services for use in connection with * * * .
1.20 * * * . The business of * * *
-------------------------
based on combining or * * * products or services (including without
limitation, the Licensed Products and Licensed Services) * * * other products
and services.
1.21 * * * . The process of transmitting and
-----------------------
receiving signals used for communications purposes that can be accomplished
without * * * .
1.22 * * * . The conduct of business
-----------------------------
pertaining to * * * .
ARTICLE 2
LICENSE, PATENT ASSIGNMENT AND GRANT-BACK
-----------------------------------------
2.1 LICENSE. Subject to the provisions of Section 2.2, Licensor
-------
hereby grants to Licensee:
(a) an exclusive (even as to Licensor), worldwide, perpetual,
sublicensable, fully paid up, royalty-free right and license under the Trade
Secrets and the Copyrights (i) to make, have made, manufacture, use or sell
any products, including without limitation, the Licensed Products and
components of the Licensed Products, in the Wireless Communications Field; and
(ii) to provide or deliver any services, including without limitation, the
Licensed Services to customers, in the Wireless Communications Field and
(b) a non-exclusive, worldwide, perpetual, sublicensable, fully
paid up, royalty-free right and license under the Trade Secrets and the
Copyrights to make, have made, manufacture use or sell products (including,
without limitation, the Licensed Products), or provide or deliver services
(including, without limitation, the Licensed Services) in the Transportation
Field and the Systems Integration Field.
2.2 RESERVATION OF RIGHT. * * * reserves * * * to * * *
--------------------
the Trade Secrets or the Copyrights for * * * or * * *
and in the * * * , and * * * is granted to * * * to
practice or use the Trade Secrets or the Copyrights in the * * * .
2.3 PATENT ASSIGNMENT AND GRANT BACK. Pursuant to the Assignment of
--------------------------------
Patents by TRW Inc. dated as of even date herewith, Licensor will assign to
Licensee its Patent Rights in those inventions (including without limitation all
foreign counterpart applications) identified in Schedule 4, Part A. Licensor
----------
will execute such additional documents provided by Licensee as are necessary to
record the Assignment of Patents and for the assignment of the foreign
counterpart applications and to assign and record the assignment to Licensee of
the Patent Rights to any inventions from Schedule 4, Part B that are filed as
----------
patent applications. In consideration thereof, Licensee shall and
4
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
hereby does grant back to Licensor an * * *
right and license to the Patent Rights * * * in the
* * * , and for * * * ,
except that the foregoing license shall be * * * in the
* * * .
ARTICLE 3
TERM
----
3.1 TERM. This Agreement commences as of the Effective Date and will
----
remain in effect indefinitely unless and until terminated by mutual agreement
of the parties or in accordance with Section 11.3.
3.2 NO TERMINATION. Except as otherwise expressly provided in
--------------
Sections 3.1 and 11.3, this Agreement will not be subject to termination during
its term.
ARTICLE 4
DELIVERY AND TECHNICAL ASSISTANCE
---------------------------------
4.1 DELIVERY.
--------
4.1(a) Delivery Upon Closing. Licensor has furnished Licensee copies
---------------------
of such documents, information and other materials in possession of Licensor,
including without limitation, materials relating to the Trade Secrets and the
Copyrights, as Licensor believes are reasonably necessary for Licensee to
understand, implement and use the Trade Secrets, Copyrights, Patent Rights,
Licensed Products and Licensed Services and to be able to manufacture Licensed
Products and provide Licensed Services.
4.1(b) Future Deliveries. Upon Licensee's reasonable written request
-----------------
from time to time and without charge (other than photocopy expense), Licensor
will furnish to Licensee copies of such additional documents, information and
other materials, in possession of Licensor, which have not previously been
provided to Licensee, including without limitation all materials relating to the
* * * , the Trade Secrets and the Copyrights as are reasonably
necessary for Licensee to understand, implement and use the Trade Secrets,
Copyrights, Patent Rights, Licensed Products and Licensed Services and to be
able to manufacture Licensed Products and provide Licensed Services.
4.2 TECHNICAL ASSISTANCE. Upon Licensee's reasonable written request
--------------------
* * * , Licensor shall, * * * and subject to mutual
agreement in good faith between the parties as to scheduling, scope of work and
the * * * , provide technical assistance to
Licensee in connection with the Trade Secrets, Copyrights and Patent Rights, and
in connection with the manufacture, use, delivery or sale of Licensed Products
and the provision, delivery or sale of Licensed Services. At Licensee's
request, such technical assistance shall include, without limitation:
5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
(a) Advice and assistance by qualified engineers and other
personnel who have knowledge of the Copyrights or the Trade Secrets, or
experience in the manufacture and use of Licensed Products or the delivery of
Licensed Services; and
(b) Such other technical services and technical information that
Licensee may reasonably request in connection with this Agreement.
4.3 COMPENSATION. For any services rendered upon Licensee's request
------------
pursuant to Section 4.2, Licensee will pay Licensor's normal rates customarily
charged to third parties consisting of Licensor's actual labor costs
(including, without limitation, direct costs by labor category, overhead,
burden and general and administrative expenses) plus a reasonable profit, and
will reimburse Licensor for all reasonable expenses incurred in connection
with the performance of such services (including but not limited to travel,
lodging and meal expenses).
ARTICLE 5
PROTECTION OF TRADE SECRETS
---------------------------
5.1 USE AND NON-DISCLOSURE. Licensee and Licensor will not use or
----------------------
permit the use of any Trade Secrets for any purpose not authorized by this
Agreement. Subject to the provisions of Section 5.2 and 5.3, Licensee and
Licensor will hold in confidence, and will not disclose or communicate to any
third person, any * * * . Licensee and Licensor will take or cause to be
taken all reasonably necessary precautions to prevent the disclosure or
communications of such * * * to third persons.
5.2 EXCEPTIONS. Licensee and Licensor may disclose * * * to its
----------
employees or to any person or entity in connection with bona fide business or
financing transactions to the extent that each such disclosure is reasonably
necessary for the purpose of manufacturing, selling, delivering, providing,
installing, repairing or servicing any product (including, without limitation
Licensed Products) or providing any services (including, without limitation
Licensed Services) or procuring goods and services required in connection
therewith or discussing or conducting such business or financing transaction;
provided that: (a) Licensee or Licensor clearly marks any document or other
material containing any * * * so disclosed to indicate that such documents
or materials contain the * * * , (b) Licensee or Licensor requires each
entity to whom such documents or materials are disclosed to sign a written
agreement limiting use thereof to the purpose stated in such agreement,
prohibiting the reproduction thereof and the disclosure thereof to any other
person and requiring the prompt return thereof when no longer needed or such
agreement is terminated, and (c) any reproduction, note or summary of such
documents or materials immediately upon the making thereof will become the
property of Licensor. The foregoing restrictions on the use and disclosure of
the * * * shall not apply with respect to any * * * (i) that is in or
(through no improper action or inaction by the disclosing party or any agent or
employee) enters the public domain (and is readily available without substantial
effort), or (ii) in the case of Licensee only, that was rightfully in its
possession or known by Licensee prior to receipt from Licensor, or (iii) in the
case of Licensee only, that was rightfully disclosed to
6
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
Licensee by another person without restriction, or (iv) ten (10) years after the
Effective Date.
5.3 ACCESSIONS. Each modification, improvement and revision of any
----------
of the Trade Secrets (except for direct reproductions thereof) that is made by
or for Licensee will become the property of Licensee.
ARTICLE 6
IMPROVEMENTS; FIRST RIGHT OF OFFER
----------------------------------
6.1 * * * . * * * shall promptly
---------------------------------
disclose to Licensee in writing all * * * .
6.2 FIRST RIGHT OF OFFER FOR NEW INVENTIONS. Licensee will have a
---------------------------------------
right of first offer to license New Inventions in the * * *
. Licensor shall not license or sell any New Inventions to any third party,
* * * , without first offering such New
Inventions to Licensee. Upon receipt of written notification from Licensor as
to the details of the New Invention and the specific terms of an offer ("Offer")
by Licensor to sell or license such New Inventions to Licensee, Licensee shall
have * * * to accept the Offer. In the event that Licensee
* * * , and no other
terms shall apply. If Licensee does * * * , then for a period of
* * * thereafter, Licensor may license such New Inventions to a third
party, but * * * .
6.3 LICENSEE IMPROVEMENT(S). Licensee shall * * *
-----------------------
all Licensee Improvements.
6.4 * * * RIGHT OF FIRST OFFER AND OBLIGATION TO DISCLOSE
-------------------------------------------------------------
* * * AND LICENSEE IMPROVEMENTS. Notwithstanding anything to
- -------------------------------------------------
the contrary in this Agreement, the * * * shall
* * * after the Effective Date, and any * * * or
Licensee Improvements developed or created at any time after * * *
after the Effective Date * * * be included as part of the licenses granted
hereunder.
ARTICLE 7
TRADEMARKS
----------
7.1 PHONEPRINT TRADEMARK. Pursuant to the terms of an Assignment of
--------------------
U.S. Intent-To-Use Trademark Application executed by TRW as of even date
herewith, TRW will assign to Licensee its entire right, title and interest in
and to the application for the trademark "PhonePrint" and any and all trademarks
and service marks related thereto throughout the world. As of the Effective
Date, TRW and ESL will abandon and cease all use of the PhonePrint name and
mark.
7
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
7.2 TRW TRADEMARK. Licensee may use printed material bearing the
-------------
name and mark "TRW PhonePrint" for a period from the Effective Date through
* * * specifically in support of the * * * ; provided it
disclaims its affiliation with TRW Inc. when and as appropriate. Thereafter,
Licensee will cease use of the TRW name, mark or logo either by itself or in
connection with the PhonePrint name and mark. Notwithstanding anything in this
Agreement to the contrary, TRW reserves all right, title and interest to the TRW
name, mark and logo and Licensee may not use the TRW name, mark or logo in any
way except as provided in this Section 7.2. Licensor shall abandon and shall
not use the "TRW PhonePrint" name and mark, and will execute all documents and
take all action reasonably requested by Licensee to permit Licensee to use the
"PhonePrint" name and mark.
ARTICLE 8
PRODUCT LIABILITY * * *
--------------------------------
8.1 PRODUCT DEFECTS. With respect to Licensed Products sold, leased
---------------
or manufactured after the Effective Date, * * * will have * * *
for determining that the designs of the Licensed Products and components
* * * are manufactured in accordance with customary commercial
standards.
8.2 GENERAL INDEMNIFICATION. Except as provided in Section 8.3,
-----------------------
Licensee will indemnify and hold Licensor harmless in respect of any and all
expenses, damages, losses and liabilities resulting from a claim that
Licensee's use of any Patent Rights, the Trade Secrets, the Copyright,
PhonePrint trademark and/or Licensee's manufacture, use and/or sale of
Licensed Products, components of such Licensed Products, or Licensed Services
causes injury or damage to persons or property; provided that (i) Licensor
reasonably promptly notifies Licensee in writing of any claims in this regard,
(ii) Licensor provides Licensee information, assistance and authority to
enable Licensee to defend such claim, and (iii) Licensee assumes control of
the defense and settlement of the claim.
8.3 INTELLECTUAL PROPERTY * * * .
-------------------------------------
a. * * *
and its officers, directors, agents, employees, consignees and customers * * *
from any and * * *
resulting from: (i) the * * * of any Trade Secrets, or (ii) * * *
of any United States or foreign copyright or United States patent issued on or
before * * * , by the Patent Rights listed in Schedule 4 (Part A), Trade
----------
Secrets, Copyrights, or PhonePrint trademark in connection with Licensee's
manufacture, use and/or sale of products (including, without limitation, the
Licensed Products), components of any such products, or * * * provision of
services (including, without limitation, the Licensed Services); * * *
.
The foregoing obligation of Licensor * * * with respect to
* * * (i) * * * of the Patent Rights,
Trade Secrets, Copyright, or PhonePrint trademark, (ii) not relating to the
Patent Rights, Trade Secrets, Copyright, or PhonePrint
8
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Confidential Treatment and filed separately with the commission.
<PAGE>
trademark or portions or components thereof, or * * * the * * *
relates to * * * of the license granted under this
Agreement, (iii) to the extent the Licensed Products * * *
Trade Secrets and Copyrights licensed to Licensee hereunder and
* * * (and
* * * ), (iv) where
* * * activity after being * * * thereof or after being
* * * that would have avoided the * * * , (v) to the
extent * * * to * * * ,
except to the extent that the * * *
working in connection with * * * (and who had knowledge of the
* * * ) * * * of such * * * at the time * * * was
required to notify * * * of such * * * pursuant to
* * * , or (vi) of a * * * to the extent that the * * *
relates to * * * to a Licensed Product or Licensed Service,
* * * (and the * * *
would not have occurred but for * * * ).
b. Licensee shall defend, indemnify and hold Licensor and its
officers, directors, agents, employees, consignees or customers harmless from
any and all liability, damages, settlements, attorneys' fees and expenses
resulting from infringement of any United States patent issued on or after * *
* (including, without limitation, of the rights of * * * and/or * * * in * * *
), in connection with Licensee's manufacture, use and/or sale of products
(including, without limitation, the Licensed Products or components of such
Licensed Products or Licensed Services).
ARTICLE 9
GOVERNMENT APPROVAL
-------------------
9.1 COOPERATION. Licensor and Licensee promptly will seek all
-----------
necessary governmental approvals and licenses that may be required in connection
herewith and will cooperate with each other in every reasonable way to obtain
such approval. Nothing in this Agreement will be deemed to require either party
to agree to any revision or modification of this Agreement that may be required
to obtain any governmental approval.
ARTICLE 10
DEFAULT; REMEDY; TERMINATION
----------------------------
10.1 DEFAULT. A "default" shall exist under this Agreement if either
-------
party fails to perform any written obligation to be performed by it hereunder
within * * * after written notice from the other party that time for
such performance has passed or, if no such time is prescribed, within * * *
after written notice from the other party.
9
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<PAGE>
10.2 REMEDY. If a party is in default hereunder, the party not in
------
default may pursue any remedy available to it at law or in equity if the noticed
default is not cured within the notice period. * * *
; this Agreement may be * * * only pursuant to * * * .
10.3 TERMINATION BY * * * . * * * may terminate this Agreement
-----------------------
only in the event that (i) * * * has not * * * under the
* * * ; and (ii) * * * has provided * * * to the * * * and
* * * of such * * * ; and (iii) * * * has * * * ,
within * * * after the receipt by * * * and the * * * of the
* * * described in (ii) above, of the * * * under the * * *
; and (iv) * * * to * * * and the * * * a * * *
following such * * * period and before * * * by * * *.
10.4 PERFORMANCE AFTER TERMINATION. Upon termination of this
-----------------------------
Agreement pursuant to Section 11.3, Licensee will promptly (a) discontinue the
use of, and will destroy or return to Licensor or its designee, all copies of
Trade Secrets and all notes, summaries and other documents or materials
containing information relating to the Trade Secrets, and (b) refrain from any
manufacture, delivery or sale involving in any manner whatsoever, directly or
indirectly, use or utilization of the Trade Secrets, that (i) is not contained
in a printed publication bearing a date prior to the Effective Date, or (ii)
has not become available to the public or generally known in the trade other
than as a result of the improper action of Licensee, its agents or employees,
or its former agents or employees who have knowledge thereof.
10.5 LIMITATION OF LIABILITY. Subject to the exceptions noted below,
-----------------------
no party shall have liability exceeding $2,000,000 in the aggregate under this
Agreement, that certain Cooperation Agreement of even date herewith and that
certain Non-Competition Agreement of even date herewith ("Non-Competition
Agreement"). The foregoing limitation of liability shall not apply with respect
to: (i) a willful or intentional breach of this Agreement or the Non-
Competition Agreement; or (ii) matters relating to or arising in connection with
* * * of this Agreement. In the event any party to this
Agreement becomes aware of a breach hereunder by any other party to this
Agreement, the non-breaching party shall provide the breaching party with
written notice of the breach and a * * * period in which to cure such
breach.
ARTICLE 11
MISCELLANEOUS
-------------
11.1 NOTICES. All notices and communications required or permitted to
-------
be given under this Agreement shall be sufficient only if written in English and
personally delivered, delivered by a major commercial rapid delivery courier
service with tracking capabilities or mailed by certified or registered mail,
return receipt requested, with postage or delivery charges prepaid and addressed
to a party at its address set forth below (unless by such notice a different
person or address will have been designated by notice pursuant to this Section).
If not received sooner, notice by mail will be deemed received five (5) days
after deposit in the U.S. mails.
10
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<PAGE>
Licensee: PhonePrint Inc.
207 E. Java Drive
Sunnyvale, CA 94088-3510
Attention: Kevin Compton
Licensor: TRW Avionics & Surveillance Group
495 Java Drive
Sunnyvale, CA 94088-3510
Attention: TRW Law Department
11.2 ASSIGNMENTS. TRW and ESL will have no right to assign or
-----------
transfer any of their respective rights or to delegate any of their duties under
this Agreement without the prior written consent of Licensee,
* * * .
Licensee can assign or sublicense any of its rights or licenses under this
Agreement at its sole option.
11.3 HEADINGS. The headings and titles to the Articles and Sections
--------
of this Agreement are inserted for convenience only and will not be deemed a
part hereof or affect the construction or interpretation of any provision
hereof.
11.4 REMEDIES. Unless otherwise expressly provided herein, the rights
--------
and remedies hereunder are in addition to, and not in limitation of, other
rights and remedies under this Agreement, and exercise of one right or remedy
will not be deemed a waiver of any other right or remedy.
11.5 MODIFICATION - WAIVER. No cancellation, modification, amendment,
---------------------
deletion, addition or other change in this Agreement or any provision hereof, or
waiver of any right or remedy herein provided, will be effective for any purpose
unless specifically set forth in a writing signed by the party to be bound
thereby. No waiver of any right or remedy in respect of any occurrence or event
on one occasion will be deemed a waiver of such right or remedy in respect of
such occurrence or event on any other occasion.
11.6 ENTIRE AGREEMENT. This Agreement supersedes all other
----------------
agreements, oral or written, heretofore made with respect to the subject hereof
and the transactions contemplated hereby and, with the Schedules hereto and in
conjunction with the Cooperation Agreement and Asset Purchase Agreement,
contains the entire agreement of the parties.
11.7 CONTROLLING LAW. All questions concerning the validity and
---------------
operation of this Agreement and performance of the obligations imposed upon the
parties hereunder will be governed by the substantive laws of the State of
California.
11
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<PAGE>
11.8 SUCCESSORS AND ASSIGNS. The provisions of this Agreement will be
----------------------
binding upon and inure to the benefit of Licensor and Licensee and their
respective successors and authorized assigns. This provision will not be deemed
to expand or otherwise affect the limitations on assignment and delegation set
forth in Section 12.2.
11.9 PRODUCT MARKING. Licensed Products and/or Licensed Services
---------------
manufactured, delivered or sold by Licensee will be marked by Licensee in
conformance with the patent and copyright laws of the countries of manufacture,
use and sale.
11.10 PUBLICITY. Except as the other party gives its prior written
---------
consent, neither Licensor nor Licensee will use the name of the other party in
any publicity, product announcement, brochure, advertising, product labeling,
promotion or otherwise for any purpose.
11.11 COUNTERPARTS. This Agreement has been executed in several
------------
counterparts, each of which will be deemed to be an original copy hereof.
11.12 ATTORNEY'S FEES. In the event of any dispute or litigation
---------------
relating to this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and court costs from the other party(ies).
[Remainder of This Page Intentionally Left Blank]
12.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
PHONEPRINT INC.
/s/ Kevin Compton
--------------------------
Name
Chairman
--------------------------
Title
12/14/94
--------------------------
Date
TRW INC.
/s/ illegible
--------------------------
Name
Vice President Finance
--------------------------
Title
12/14/94
--------------------------
Date
ESL INCORPORATED
/s/ James Sandstrom
--------------------------
Name
Senior Vice President
--------------------------
Title
12/14/94
--------------------------
Date
13.
<PAGE>
ESL PROPRIETARY INFORMATION
SCHEDULE 1
TRADE SECRETS
-------------
1. Proprietary * * * processing * * * that perform the
following functions on the * * * :
. Reduces the effects of * * * with * * * .
. * * * the call information in the * * *
including the * * * .
. * * * various * * * that are useful in * * *
* * *.
. Calculate * * * of each * * * and the * * *
as a whole. Use these * * * the use of each * * *
based on * * *.
2. Proprietary * * * that perform the following
functions:
. * * * the * * * into a * * * of the phone
emitter.
. * * * from the * * * from * * *
, * * * and * * * .
. * * * from new * * * with * * * to determine if
the * * * comes from the original phone or a different (fraud)
phone.
. Use * * * techniques to determine if the * * * is
similar or dissimilar to the existing * * *.
. Compares new * * * against * * * that were * * *
by phones that were * * * to be either * * *.
. Determine if the * * * or * * * are on * * * the call
to be * * * if fraud is * * * .
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
ESL PROPRIETARY INFORMATION SCHEDULE 1 TRADE SECRETS (cont.)
. Compare new * * * against * * * that were produced by
the * * * that the * * * claims to be.
. Compare new * * * against * * * that were produced by
the * * * (from * * *) the * * * claims to be.
. Use of * * * to * * * which were recently used by
* * * or * * * by PhonePrint.
. Issue a * * * to * * * the call when Fraud is
detected.
. * * * the Good/Fraud * * * on * * * matching based on
the * * * , * * * , * * * and * * * with
that * * * and other * * * information.
. Use of * * * and * * *.
. * * * that will * * * calls for
a period of time that are from the same * * * that has
* * * * * * .
3. Proprietary * * * that perform the following
functions:
. * * * retrieve information, via * * * or network, on call
* * * from the real time PhonePrint systems. This information
includes the * * * , measured * * *
* * * .
. Combine * * * information from * * *
to * * * of all phones observed by all systems.
. Combine new * * * information with * * * to
* * * * * * .
. Transmit the * * * information to the * * *
PhonePrint Systems.
. Generate reports on various system functions from the * * *
information.
2
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<PAGE>
ESL PROPRIETARY INFORMATION SCHEDULE 1 TRADE SECRETS (cont.)
4. * * * and technologies involving methods of * * *
* * * . Use this information
to * * * the * * * that was * * *
. The * * * can come from a variety of means
including:
. Call was * * * that is known only to * * * of
the * *.
. Call was * * * on the * * * for the * * *
that * * * the call was * * * user.
. * * * with the * * * that he did ( * * * ) or did not
( * * * ) * * *.
. Combination of information from * * * that * * * in
good user's * * *.
. Calls flagged by * * * as from * * * or * * *
users.
5. * * * technology that perform the following functions to
* * * calls:
. Receive * * * and information from real time processes
indicating that a call is * * * .
. * * * to * * * containing information on the
call's * * * .
. * * * the * * * information in the * * *.
. * * * a * * * on the * * *.
. * * * both * * * and * * * .
6. Only the following portions of * * * software:
. All libraries and included modules necessary to link and compile
the * * * program, which only includes the * * *
directory and * * * .
3
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<PAGE>
ESL PROPRIETARY INFORMATION SCHEDULE 1 TRADE SECRETS (cont.)
. The executables and help files in the * * * directory.
. One * * * of how to interface to the * * * program, the
* * * program to be * * * .
7. All * * * and software developed on the * * * not
listed above including:
. * * * software to process * * * to evaluate
* * * with * * * .
. * * * and software to evaluate performance of
each * * * and * * * .
8. Other * * * techniques including:
. * * * . * * * the call via * * * the
* * * .
. * * * . Interface with the * * * to * * *
by the same * * * occurring at the * * * .
. * * * . * * * to * * * the * * * (as in
the * * * in item 5 above) and to the * * * the
signal.
. * * * . * * * network to * * * the
call * * * the carrier's * * *.
4
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<PAGE>
SCHEDULE 2
LICENSED PRODUCTS
-----------------
.
. * * *
.
.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
SCHEDULE 3
LICENSED SERVICES
-----------------
.
.
. * * *
.
.
.
.
.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
SCHEDULE 4
PATENT RIGHTS
-------------
PART A
------
1. Patent Applications.
-------------------
* * * Patent Application, * * * Serial No. * * * , by
* * * . Corresponding * * *
are listed below.
<TABLE>
<CAPTION>
Country Serial No. Filing Date
- ------- ---------- -----------
<S> <C> <C>
* * *
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
TRADE SECRETS
SCHEDULE 4
PATENT RIGHTS
-------------
PART B
------
* * * INVENTIONS
---------------------
This is a list of the inventions that apply to * * * of
* * * calls, and are believed to have been * * *
and * * * . Where noted, * * * may
be the sole or joint inventor. These * * * subject to the usual
considerations of determining * * * and * * * sale, offer sale and
delivery dates. * * * may or * * * for
the inventions. If * * * are not * * *, these items remain ***.
1. * * * that perform the following functions
on the * * * of the phone signal:
. * * * the * * * of * * * with * * *
.
. * * *
. * * *
. * * *
2. Proprietary * * * that perform the following functions:
. * * *
. * * * from the signal * * * from * * * .
. Use * * * to determine if the * * * is * * * or
* * * to the * * *.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
TRADE SECRETS
SCHEDULE 4 PART B INVENTIONS (cont.)
. Determine if the * * * or * * * are on * * * the
call to be * * * if fraud is suspected.
. Compare * * * against * * * that were produced by the
* * * and * * * the * * * to be.
. Use of * * * to * * * which were recently used
by * * * or * * * by * * * . This is for the
* * * , where a * * * switches to a
* * * after * * * gets * * * . ( * * * may be a
* * * or * * *.)
. Vary the * * * on * * * based on the * * *
* * * and * * *
with that * * * and other * * * .
. Use of * * * and * * * .
(* * * may be a * * * or * * *.)
. * * * that will * * * for a * * *
that are from the * * * that has been
* * * over a * * * .
3. Proprietary * * * that perform the following functions:
. Combine * * * from * * * to * * *
of * * * observed by * * * using
* * * and * * * .
4. * * * and technologies involving methods of * * *
.
. * * * a signature as the * * * or a * * * by
identifying at least * * * or * * *
. Use this information to * * * that was
* * * by that * * *. ( * * * may be a * * * or
* * *.)
. Call was made to * * * that is known only to * * *
of the * * *.
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Confidential Treatment and filed separately with the commission.
<PAGE>
TRADE SECRETS
SCHEDULE 4 PART B INVENTIONS (cont.)
. Call was to * * * on the * * * list for the
* * * that indicates the call was by the * * *.
. Conversation with the * * * that he * * * or
* * * make a * * *.
. Calls * * * by * * * as from * * * or
* * * .
5. * * * technology that perform the following functions to
* * * calls (* * * may be a joint inventor or owner.):
. * * * to * * *
on the * * * .
. * * * the * * * in the * * *.
. * * * on the * * *.
. * * * both * * * and * * *.
6. Other * * * techniques that have been studied but have not been
implemented such as:
. * * * . * * * the call * * *
the * * * * * *.
. * * * . * * * with the * * * to
block * * * by the * * * occurring at the * * *.
. * * * . * * * to both the * * *
and to the * * * .
. * * * . * * * into the * * *
to * * * within the * * *.
7. The * * * initially drafted but not filed by * * *
for an * * *
including without limitation any and all inventions described in the * * *
.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT 10.5
AIRTOUCH ASSIGNMENT AGREEMENT
-----------------------------
This Assignment Agreement (the "Agreement") is entered into as of December
14, 1994, by and between ESL Incorporated, a California corporation ("ESL"), and
PhonePrint, Inc., a Delaware corporation ("PhonePrint"), with reference to the
following facts:
WHEREAS, ESL is a party to that certain Development and License Agreement
by and between AirTouch Communications Incorporated, formerly known as PacTel
Corporation ("AirTouch") and ESL dated as of October 4, 1993, as amended by
First Amendment to the Development and License Agreement dated October 23, 1993
(collectively, the "AirTouch Agreement"), a copy of which is attached hereto as
Exhibit A.
- ---------
WHEREAS, ESL is willing to grant to PhonePrint and PhonePrint desires to
acquire from ESL, all of ESL's rights and obligations under the AirTouch
Agreement.
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions set forth below, the parties hereto agree as follows:
1. ASSIGNMENT OF RIGHTS AND OBLIGATIONS. ESL hereby assigns to
------------------------------------
PhonePrint, and PhonePrint hereby accepts, all of ESL's rights and obligations
under the AirTouch Agreement. The parties agree that this instrument
constitutes a present assignment of the AirTouch Agreement, but is subject to
the continuing indemnification and other obligations contained in that certain
Asset Purchase Agreement between the parties of even date herewith.
2. OWNERSHIP. ESL represents and warrants that ESL is the sole and
---------
exclusive owner of all of such rights.
3. COVENANTS. ESL covenants that ESL has full right to convey the rights
---------
herein assigned, and that ESL has not executed and will not execute any
agreement in conflict herewith.
4. COUNTERPARTS. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
constitute one in the same instrument.
5. GOVERNING LAW. This Agreement shall be governed by and construed under
-------------
the internal laws of the State of California, without regard to any rules of
conflicts of law applicable to agreements made and to be performed in such state
by and among residents of such state.
<PAGE>
6. FURTHER ASSURANCES. Each of the parties hereto shall execute and
------------------
deliver all additional documents and shall do any and all acts and things
reasonably required in connection with the performance of the obligations
undertaken in the Agreement and to effectuate in good faith the intent of the
parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PHONEPRINT, INC., ESL INCORPORATED,
a Delaware corporation a California corporation
By: /s/ illegible By: /s/ illegible
------------- -------------------------
Title: Chairman Title: Senior Vice President
---------- --------------------
[COUNTERPART SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION AGREEMENT]
<PAGE>
EXHIBIT A
AGREEMENT WITH AIRTOUCH
-----------------------
A-1
<PAGE>
DEVELOPMENT AND LICENSE AGREEMENT
This Development and License Agreement (the "Agreement") is made and
effective as of the later date signed below (the "Effective Date") by and
between ESL Incorporated, a California corporation and a TRW Company with
offices located at 495 Java Drive, Sunnyvale, California 94088-3510 ("ESL"), and
PacTel Corporation, a California corporation with offices located at 2999 Oak
Road, Walnut Creek, California 94596 ("PacTel")
WITNESSETH:
WHEREAS, ESL wishes to develop, and PacTel wishes to have developed, the
"Licensed Products," as that term is defined below; and
WHEREAS, PacTel has expertise in cellular telephony, including ***
*** , alpha and beta testing, field test facilities, and
FCC and regulatory requirements, such as experimental licenses; and
WHEREAS, ESL has expertise in emitter recognition and identification
technology including, but not limited to, *** , developing
and maintaining a database of authorized and unauthorized emitter security
patterns, emitter recognition, and enabling cellular systems to determine
whether to deliver services depending on certain ***
levels; and
WHEREAS, ESL intends to manufacture, have manufactured, use, market, sell
and distribute the Licensed Products in accordance with the terms hereof; and
WHEREAS, PacTel intends to provide business and technical development
support to ESL in accordance with the terms hereof including, but not limited
to, *** ***
; and
WHEREAS, each party intends to bear the costs associated with it own
efforts in the development of the Licensed Products;
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the parties hereby agree as follows:
ARTICLE 1
Definitions and Priority
----------- --- --------
1.1 Definitions. The following words and phrases will have the meanings
------------
set forth below:
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
1.1.1 Agreement. The term the "Agreement" means this Development and
----------
License Agreement between ESL and PacTel, including the following Exhibits
attached hereto, and any amendments thereto:
Exhibit A: The ***
*** . As of the Effective Date, this exhibit is in *** and
the parties *** .
Exhibit B: Statement of Work, Milestones and Functional and Interface
Specifications. As of the Effective Date, this
*** .
Exhibit C: Nondisclosure Agreement, dated *** .
1.1.2 Develop or Development. The term "develop" or "development,"
------- -- ------------
as used herein, means engineering, design, layout, hardware and Licensed
Software generation, prototyping, characterization, qualification, fabrication,
testing, and preparation of data sheets and application notes.
1.1.3 Licensed Products. The term "Licensed Products" means the
-------- ---------
Cellular Fraud Prevention System to be developed hereunder, and any component
parts thereof, developed in accordance with the functional and interface
specifications set forth in Exhibit B hereto, and made under the Licensed
Patents and the inventions described and claimed therein or by the use of
Licensed Technical Information.
1.1.4 Licensed Patents. The term "Licensed Patents" means the
-----------------
United States Patents and patent applications and their corresponding foreign
patents and patent applications relating to the Licensed Products, together
with any continuations, divisions, reissues or foreign country counterparts
thereof.
1.1.5 *** . The term " ***
-----------------------------
" means PacTel's *** containing ***
, as described in Exhibit A, that is used in the Licensed Products for the
*** telephone usage, together with any ***
and other intellectual property rights thereto. The term " ***
" does not include any subscriber information.
1.1.6 *** . The term " *** " means the
-----------------
*** *** and *** for the
scheduling and *** operations within the Licensed Products, as
described in Exhibit A, together with any *** and other
intellectual property rights thereto.
1.1.7 *** . The term " ***
------------------------------
" means the information, as described in Exhibit A, that is directly related to
the *** *** and the production, manufacture, use,
operation, repair, maintenance, modification or reconstruction thereof, together
with any *** and other
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
intellectual property rights thereto. This includes, but is not limited to,
information in the form of blueprints, drawings, plans, photographs,
instructions, masks, Licensed Software and documentation.
1.1.8 Gross Sales Price. The term "Gross Sales Price" means the
----- ----- ------
amount that is the price at which each Licensed Product is sold or delivered to
the customer or user. In the event that the Gross Sales Price is less than the
*** , as a result of *** or *** under arrangements
with the customer or user, or in the event Licensed Products are *** or
otherwise *** , then for purposes of this Agreement, the Gross Sales
Price shall be the sales price ***
*** .
1.1.9 Net Sales Price. The term "Net Sales Price" means the Gross
--- ----- ------
Sales Price, net of expenses for transportation, shipping, insurance, boxing,
handling or similar charges, taxes and duties, if any, and other costs
incidental to shipment.
1.1.10 Affiliate. The term "Affiliate" means any corporation,
----------
partnership or other business entity in which either party hereto owns or
controls more than fifty percent (50%) of the voting stock or otherwise has more
than fifty percent (50%) of the right to control the entity.
1.1.11 Equity Partner. The term "Equity Partner" means any
------ --------
corporation, partnership or other business entity in which either party hereto
owns or controls between five percent (5%) and fifty percent (50%) of the voting
stock or otherwise has between five percent (5%) and fifty percent (50%) of the
right to control the entity.
1.2 Priority. In the event of any inconsistency between the text of the
---------
Agreement and the provisions of any of the Exhibits, the text of the Agreement
shall prevail.
ARTICLE 2
Scope of Work, Cost Sharing and Payment
----- -- ----- ---- ------- --- -------
2.1 Development by PacTel. PacTel will enhance its ***
----------- -- -------
and *** and will perform such other tasks as are set forth
in Exhibit B. PacTel agrees to provide ESL with access to its spectrum and
network to facilitate ESL's work on the Licensed Products. PacTel will be
responsible for *** including, but not limited to,
*** and *** , in *** , for *** of
the Licensed Products, and in *** localities only, for ***
release of the Licensed Products. PacTel will provide functional system
specifications including operating and support requirements.
2.2 Development by ESL. ESL will develop an *** for
----------- -- ----
wireless subscriber systems and perform such other tasks to develop the Licensed
Products as are set forth in Exhibit B.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
2.3 Commercialization by ESL. ESL will commercialize the Licensed
----------------- -- ----
Products to meet the functional and interface specifications in Exhibit B, i.e.,
ESL will *** *** so that the Licensed
Products will be in manufacturable form for worldwide marketing, sales,
distribution and support by ESL to end user customers.
2.4 Cost Sharing. Each party will bear its own costs associated with its
---- --------
respective development efforts described above.
2.5 *** Developments. ESL will have the ***
------- -------------
*** including, without limitation, any upgrades,
modifications, improvements, enhancements, derivatives or other changes to the
Licensed Products. If ESL exercises such rights, it shall have a license in
accordance with *** and ***
, as that term is defined herein. In each instance, ESL will have a reasonable
amount of time to ***
*** its rights under this Section.
ARTICLE 3
Term
----
The term of the Agreement will be five (5) years from the Effective Date,
unless sooner terminated in accordance with Article 9 hereof. Unless a
termination notice is given by either party hereto six (6) months prior to
expiration of such five-year period, the Agreement shall be renewed
automatically for one (1) year from the date of expiration of the said period
under the same terms and conditions. Neither party will make any claims or
demands against the other party for any damages, losses, expenses or costs, if
any, incurred as a result of the expiration, termination without cause, or non-
renewal of the Agreement.
ARTICLE 4
Licenses Granted and Royalties
-------- ------- --- ---------
4.1 License to ESL. Subject to the terms and conditions of this
Agreement, PacTel hereby grants to ESL a worldwide, royalty-bearing,
exclusive, nontransferable, nonsublicensable right and license under PacTel's
Licensed Patents, Licensed Database Information and Licensed Technical
Information:
(a) to make, have made, copy and/or use the Licensed Products, including
the Licensed Database Information;
(b) to sell the Licensed Products, including the Licensed Database
Information; and
(c) to provide support for the Licensed Products, including the
Licensed Database Information.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
4.2 License to PacTel. Subject to the terms and conditions of this
------- -- -------
Agreement, ESL hereby grants to PacTel a *** , non-exclusive, non-
transferable, *** right and license under ESL's *** to
copy and use the *** for PacTel's internal business purposes in
the United States only during the term of this Agreement.
4.3 Royalties. In consideration of the rights, licenses and benefits
----------
conferred upon ESL hereunder, during the term of this Agreement, *** will pay
to *** a *** in the amount of *** of
the *** of all ***
*** . *** will have no obligation
to pay *** . In
no event will more than *** .
Notwithstanding the foregoing, *** will be payable on any
*** , by a customer. In order to maintain the
*** shall pay to *** ***
*** during the *** and
*** *** thereafter,
*** . The first of such
*** later than *** , and every ***
thereafter during the term hereof. Should *** fail to make such
*** , the ***
*** shall retain only a ***
. The amounts of the *** and *** and
*** at the end of the *** of this
Agreement.
4.4 Accounting and Payment. Within *** after every
---------- --- --------
anniversary date of the Agreement during the term hereof, from and after the
date both parties agree that Licensed Products may be released for production,
*** will render to *** a certified check (or other form of payment
acceptable to ***) in the amount of all *** *** on account of
activities of *** under the Agreement during the calendar year preceding the
year in which such *** is required to be made. Further, *** will
transmit to *** , accompanying each such payment, an accurate, itemized
statement (certified upon request) setting forth in sufficient detail for
verification, the basis upon which such *** is determined and made. All
*** will be made to the order of *** in *** and will be
payable at *** address as set forth in Article 13.
4.5 Records and Audit. *** will keep complete and accurate books and
------- --- ------
records, containing adequate details for the calculation of the amounts of all
*** from the *** to *** hereunder. All such books and records will be
available for reasonable time periods during regular business hours, for a
period of three (3) years following the end of the calendar year to which they
pertain, for inspection and audit by *** accountants or independent
auditors for the purpose of verifying all *** submitted by ***. The
obligations of *** under this Article 4 will survive any termination or
expiration of the Agreement.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
4.6 Product Marketing.
------- ----------
(a) ESL will at all times have the sole discretion to set and determine
all terms and conditions of sale of all Licensed Products, including price,
position, distribution channels and name (including ESL trademarks, trade names
or logos). ESL will be responsible for distribution of the Licensed Products in
its sole discretion.
(b) ESL will at all times have the sole discretion to develop and approve
marketing materials and activities for, the Licensed Products. Further, ESL
will at all times during the term of the Agreement be responsible for
manufacturing, assembling and distributing the components that comprise the
Licensed Products.
(c) PacTel has adopted and owns certain trademarks and service marks used
in identifying and marketing PacTel technology, products and services, logos,
trade names and related acronyms and the like, whether or not registered (the
"PacTel Trademarks"). ESL recognizes and consents for all purposes that the
PacTel Trademarks constitute the exclusive property of PacTel and cannot be used
by ESL pursuant to this license, except as specified in the Agreement, nor will
ESL use any confusing similar trademark, logo, trade name or the like. PacTel
hereby grants to ESL the non-exclusive right to use the following statement in
the marketing of the Licensed Products: " ***
*** ." Nothing contained in the Agreement will be construed as
conferring any additional rights upon ESL to use in advertising, publicity or
other promotional activities any PacTel Trademark, other than specifically set
forth in the preceding sentence, unless PacTel grants to ESL its prior express
written consent. ESL will use the PacTel trade name with such words qualifying
or identifying the relationship of PacTel and ESL as PacTel, from time to time,
may reasonably prescribe. PacTel will have the sole right, but not the
obligation, to register and enforce the PacTel Trademarks and other marks it
adopts, acquires or uses in the United States or in any foreign country and all
rights generated by use of same by ESL will inure directly to the benefit of
PacTel.
(d) The parties will mutually plan and agree upon the contents, form and
manner of publicity with respect to the Licensed Products and will not respond
to inquiries from members of the public media, if such inquiries concern the
contents of the Agreement and details of the transactions contemplated by the
Agreement. In no event will the parties act unilaterally with regard to such
disclosures, unless otherwise required to by law.
(e) PacTel will provide to ESL *** , *** , and such
additional information that ESL may require in order to promote the Licensed
Products. In addition, PacTel will *** for Licensed Product ***
on *** .
(f) ESL reserves the right to ESL-developed trademarks, trade names, logos
and related acronyms and the like, whether or not registered, to identify the
Licensed Products or other ESL developed technology, products and services, so
long as such trademarks, etc., are not confusingly similar to the PacTel
Trademarks.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
ARTICLE 5
Ownership of Inventions and Technical Information
--------- -- ---------- --- --------- -----------
5.1 Patent Applications. Each party agrees to notify the other party
------ -------------
within ninety (90) days following the filing of a patent application with
respect to any invention relating to the Licensed Products first reduced to
practice during the term of the Agreement.
5.2 PacTel Inventions. All inventions developed conceived or first
------ -----------
reduced to practice, as those terms are used before the U.S. Patent
and.Trademark Office, by statute and under common law, solely by PacTel
personnel, will be the sole and exclusive property of PacTel. PacTel will
retain any and all rights to file any patent applications thereon and such
inventions shall be subsumed under ***
*** above.
5.3 ESL Inventions. All inventions developed, conceived or first reduced
--- -----------
to practice, as those terms are used before the U.S. Patent and Trademark
Office, by statute and under common law, solely by ESL personnel, will be the
sole and exclusive property of ESL. ESL will retain any and all rights to file
any patent applications thereon ***
in ***
with the ***
for the term of this Agreement.
5.4 Joint Inventions.
----- -----------
(a) Inventions developed, conceived or first reduced to practice, as those
terms are used before the U.S. Patent and Trademark Office, by statute and under
common law, jointly by the parties (the "Joint Inventions"), will be jointly
owned by the parties, each party having an equal and undivided interest therein,
without the duty to account to the other for any use made of such Joint
Inventions. Notwithstanding the foregoing, neither party may use the Joint
Inventions in any way which would harm the other's ownership interest therein.
The parties agree to mutually determine whether a patent application or
applications will be filed on such Joint Inventions, the party which will
prepare and file such application or applications, and the country or countries
in which the same are to be filed. The patent expenses incurred will be divided
equally between the parties.
(b) If the parties are not able to mutually agree to file an application
or applications on a Joint Invention, either one of the parties may elect to
assume such expenses (the "Electing Party"). The Electing Party will control the
preparation and prosecution of any such application and all rights in any
patents granted thereon will belong exclusively to the Electing Party. The party
declining to bear its share of the expenses of prosecuting or maintaining
patents covering a Joint Invention (the "Declining Party") agrees to execute any
and all forms, assignments or other documents to effect the foregoing; provided,
however, that the Declining Party will ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
***
*** ; provided further, however, that such
Declining Party will ***
*** or the U.S. Government. Neither party may, without the prior
written consent of the other party (which consent may be withheld for any
reason, in its sole and absolute discretion), assign or otherwise transfer its
interest in any Joint Invention, except as expressly provided herein.
5.5 Protection and Use of *** .
---------- --- --- -- ------------------------
(a) Each party agrees it will not disclose (unless compelled to disclose
by judicial or administrative process, or in the opinion of such party's
counsel, by other requirement of law), use, or permit the use by others of such
other party's *** *** , at any time during the Agreement, or at any time
thereafter, for a period of *** after the disclosure thereof. Without
limiting the foregoing, each party agrees to do the following with respect of
any such *** : (i) instruct and require all of its employees and agents to
maintain the confidentiality of such information; (ii) exercise either at least
the same degree of care to safeguard the confidentiality of such information as
that party exercises to safeguard the confidentiality of its own information of
a similar type, or a reasonable degree of care, whichever is greater; and (iii)
restrict disclosure of such information to those of its employees who have a
need to know consistent with the purposes for which such information was
disclosed. Each party further agrees not to remove or destroy any proprietary or
confidential legends or markings placed upon documentation or other materials
which contain or set forth the *** of the other party.
(b) The party receiving *** will obtain the
written agreement of any permitted transferee or licenses to hold in confidence
the information transferred to such transferee or licensee in accordance with
terms no less restrictive than those set forth above.
(c) The receiving party may disclose the other party's ***
to its employees, agents, suppliers and subcontractors to the extent that each
such disclosure is reasonably necessary for manufacturing, using, selling,
installing and/or servicing Licensed Products, or procuring goods and services
required in connection therewith; provided, however, that the receiving party
will take all desirable and necessary actions to preserve the confidentiality of
such information including, but not limited to: (i) marking any documents or
other material containing any ***
*** so disclosed to indicate that same contains proprietary data and
***
*** ; (ii) requiring each party to whom same is disclosed to sign a
written agreement limiting the use thereof to authorized purposes, prohibiting
the further reproduction or disclosure thereof and requiring the prompt return
thereof when no longer needed; and (iii) providing that any reproduction, notes
or summaries thereof, immediately upon the making thereof, will become the
property of the disclosing party and will be delivered to the disclosing party
with, and upon the return of, the *** *** .
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
(d) Each reproduction of any *** , together with
each modification and revision thereof, made by or for the receiving party, will
automatically become the property of the disclosing party, will be deemed the
disclosing party's *** *** for all purposes hereunder and will be
clearly marked accordingly.
(e) Upon *** , the receiving party
will immediately discontinue the use of, and will promptly return to the
disclosing party or its designee, all *** , together
with copies thereof, in the possession or control of the receiving party,
together with all written documentation and/or other materials containing
information relating to the *** . The receiving
party further agrees that it will not, for a period of *** after the
date of any termination or expiration of this Agreement, use or disclose to any
third party any of disclosing party's *** , except
such information an the disclosing party has previously made generally available
to the public.
ARTICLE 6
*** *** Support Services, Minimum Order
--------- --------- ------- --------- ------- -----
6.1 *** . ESL will sell the Licensed Products to
------------------
PacTel ***
*** . *** that the ***
to *** and
*** as ***
to its
*** of *** , for *** delivered
within ***
*** calendar days before or *** after *** the
*** to *** . Such ***
shall be *** by an additional *** for ***
by *** , taking into account the fact that
*** on *** by *** and *** . In *** of
the *** of *** to the ***
agrees to *** a *** on ***
by *** who were introduced to *** . No *** will be
*** on any *** , but
*** by an *** . Further, *** shall give *** to
*** by *** and/or its *** , and to the extent that
*** after
*** and its *** have *** , *** may make a ***
to *** for *** to *** to *** . *** will have no
obligation to *** with *** and/or *** , if
*** to *** written request within five (5) business days after the
date of such written request. In addition to the foregoing,
*** shall have the *** to conduct all *** for
all new versions of the *** and/or the *** .
6.2 Minimum Order. PacTel shall place a minimum order for ***
------- ------
Licensed Products by December 31, 1993, at a *** of
***
*** , *** in accordance with the terms of Section
6.1. It is understood that such Licensed Products will initially be installed by
December 31, 1993, for *** PacTel, and that upon ***
of the finished Licensed Products, ESL shall *** such ***
, *** versions no later than March 31, 1994. ***
of the price is payable upon installation
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
and the balance of *** is due when such ***
pass all acceptance criteria set forth in Exhibit B. Provided that such initial
*** Licensed Products pass all acceptance criteria no later than March 31,
1994, PacTel shall place a follow-on order of *** Licensed
Products by March 31, 1994, at a *** *** of
*** , *** in accordance with the terms of Section 6.1
above. Finished, *** of the Licensed Products shall be
installed *** no later than August 30, 1994
6.3 Maintenance and Support. ESL agrees to provide maintenance and
----------- --- --------
support, including all software upgrades and support, to PacTel and its
Affiliates ***
*** .
ARTICLE 7
Indemnification
---------------
7.1 PacTel Indemnity. PacTel shall, at its own expense, defend, or at its
------ ----------
option, settle any suit, claim or proceeding brought against ESL insofar as such
suit or proceeding is based on a claim that PacTel does not have sufficient
right, title and interest in PacTel's ***
and/or ***
*** (collectively " *** ") delivered to ESL under
this Agreement for the design, manufacture, use and sale of the Licensed
Products or that such information constitutes a direct infringement of any
United States trade secret, patent, trademark, copyright or any other
proprietary right of any third party, and PacTel shall indemnify and hold ESL
harmless against all costs, expenses and damages arising from such claim
including, without limitation, reasonable attorneys' fees and shall pay all
settlements and costs finally awarded therein against ESL, provided that PacTel
is promptly informed and furnished a copy of each communication, notice or other
action relating to the alleged infringement and is given all authority,
information and assistance necessary to defend or settle such suit or
proceeding.
7.2 ESL Indemnity. ESL shall, at its own expense, defend, or at its
--- ----------
option, settle any suit, claim or proceeding brought against PacTel insofar as
such suit or proceeding is based on a claim that
***
*** (collectively "ESL Licensed Materials")
licensed to PacTel hereunder or that such information constitutes a
*** ***
of any third party, and ESL shall ***
***
*** PacTel, provided that *** and *** a
copy of each communication, *** relating to the ***
and is *** all *** , information and *** to
*** .
7.3 PacTel Limitations on Indemnity. PacTel shall not be obligated to
------ ----------- -- ----------
defend or be liable for costs and damages to the extent that infringement arises
out of a
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
modification of the PacTel *** after delivery by PacTel, out of
combination of the PacTel *** with other goods or devices not
supplied by PacTel, or from other fault or action of ESL.
7.4 ESL Limitations on Indemnity. ESL shall not be obligated to defend or
--- ----------- -- ----------
be liable for costs and damages to the extent that infringement arises out of
compliance with PacTel's specifications, from a modification of the ESL Licensed
Materials after delivery by ESL, out of combination of the ESL Licensed
Materials with other goods or devices not supplied by ESL, or from other fault
or action of PacTel.
ARTICLE 8
Default and Termination
------- --- -----------
8.1 Default. An event of default on the part of either party will exist
--------
under the Agreement if:
(a) Such party fails to perform any material obligation required to be
performed by it under any provision of the Agreement within the time specified
in such provision, or if no time is specified, within *** after written
notice from the other party that such performance has become due.
(b) Such party becomes insolvent, is unable to pay its debts as they
become due, makes an assignment for the benefit of creditors, files a petition
in any state insolvency proceeding or ceases to carry on its business; or
(c) A receiver or liquidator is appointed for any of such party's
properties or assets, or a petition is filed against such party in any state
insolvency proceeding and such petition is not withdrawn within 30 days after
such appointment or filing.
8.2 *** . Subject to any other provisions hereof
-----------------
***
the *** hereunder, if *** , as *** in this
*** , exists on the part of either party, then the *** may
***
*** and may *** any other ***
to *** .
8.3 Mutual Termination. The parties may mutually agree to terminate the
------ ------------
Agreement at any time.
ARTICLE 9
Arbitration and Dispute Resolution
----------- --- ------- ----------
If a dispute arises between the parties relating to the interpretation or
performance of the Agreement or the grounds for the termination thereof, the
parties agree to meet to try to resolve the dispute. Such meeting will be
attended by individuals with decision-making authority to attempt, in good
faith, to negotiate a resolution of the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
dispute prior to pursuing other available remedies. If, within thirty days
after such a meeting, the parties have not succeeded in negotiating a resolution
of the dispute, either party may request that such dispute be resolved through
final and binding arbitration. Such arbitration will be conducted by three (3)
arbitrators familiar with the wireless telecommunications industry and will be
held in San Francisco, California, in accordance with the then-current Rules of
Conciliation and Arbitration of the American Arbitration Association. Such
arbitrators will be selected by mutual agreement of the parties, or failing such
agreement, each party will select one arbitrator and the two selected
arbitrators will usually agree upon the selection of a third arbitrator. The
arbitrators will be bound to apply California law, and where applicable, federal
statutory law. The parties will be afforded a reasonable period of time to
conduct discovery prior to the arbitration. A court reporter will be present at
all arbitration proceedings in order to transcribe them and such transcription
will be the official record of such proceedings for purposes of any judicial
enforcement or review proceeding. The arbitrators' decision will be binding on
the parties and will specify the basis for any award and the types of damages
awarded. The parties will bear the cost of such arbitration equally and the
prevailing party in any such arbitration will be entitled to reasonable
attorneys fees, in addition to any other award ordered by the arbitrators. The
prevailing party in any judicial enforcement or review proceeding shall also be
entitled to reasonable attorneys' fees and costs, in addition to any other award
ordered by the court. If judicial enforcement is sought by either party,
judgment may be entered in any court of competent jurisdiction. This Article
shall survive any expiration or termination of the Agreement and shall continue
to be enforceable in the event of the bankruptcy of a party.
ARTICLE 10
Limitation of Liability
---------- -- ---------
Notwithstanding anything in the Agreement to the contrary, in no event will
either party be liable to the other for loss of profits, or for any indirect,
incidental, special or consequential damages arising from this Agreement,
however caused, whether as a consequence of the negligence of the one party or
otherwise; and the sole and exclusive liability and maximum liability of one
party to the other hereunder, whether arising in warranty, contract, tort or
otherwise, shall not exceed $ *** .
ARTICLE 11
Licenses and Permits
-------- --- -------
PacTel, at its own expense, will obtain from the appropriate agencies or
departments of the government all experimental licenses during product
development and ***
*** the Licensed Products under this Agreement. This obligation of PacTel
is limited to ***
as more specifically set forth in Section 2.1 above.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
ARTICLE 12
Miscellaneous Provisions
------------- ----------
12.1 Any notice, demand, request, statement or other writing required or
permitted by the Agreement, will be deemed to have been sufficiently given when
personally delivered or mailed by certified or registered mail, postage prepaid,
addressed as follows:
If to PacTel: PacTel Corporation
390 No. Wiget Lane, Suite 200
Walnut Creek, California 94598
Attn: *** , Director
Technology Transfer
With a copy to: PacTel Corporation
2999 Oak Road, MS 800
Walnut Creek, California 94596
Attn: General Counsel
If to ESL: ESL Incorporated, MS __/__
495 Java Drive
Sunnyvale, California 94088
Attn: *** , New Venture Manager
12.2 The Agreement constitutes the entire agreement between the parties and
supersedes all previous agreements and understandings relating to the subject
hereof. The Agreement may not be altered, amended or modified, except by a
written instrument signed by the duly authorized representatives of both
parties.
12.3 The Agreement may not be assigned to any third party, in whole or in
part, by either party without the prior written consent of the other party. An
assignment to Affiliate of either party will not be deemed a third party and
will not require prior written consent from the other party.
12.4 Failure or successive failures on the part of either party, its
successors and assigns, to enforce any covenant or agreement herein, or any
waiver or successive waivers on its or their part of any covenant or condition
of the Agreement will not operate as a discharge of such covenant, agreement or
condition, render the same invalid or impair the right of either party, its
successors or assigns, to enforce the same.
12.5 Headings included in the Agreement are for convenience only and are
not to be used to interpret the Agreement between the parties.
12.6 Any news release, including photographs, films, advertisements,
publicity, public announcements or confirmation of same, to be released by
either party concerning
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
the activities of the other party or on any part of the subject matter of the
Agreement will be subject to the prior written approval of the other party. The
parties further agree that news releases made by either party will recognize the
participation and contributions of the other party. The nature of this
relationship will remain confidential to both parties.
12.7 No failure or omission on the part of either party to carry out or
observe any of the terms or provisions of the Agreement will be deemed a breach
of the Agreement, if same will arise or result from force majeure or from any
cause reasonably beyond the control of PacTel or ESL. Should such delay occur,
the date or dates of performance by the affected party will be extended for a
period equal to the number of days during which performance is so delayed. The
affected party will give the other party written notice of such delay within
fifteen (15) working days after identification of the delay.
12.8 Notwithstanding anything in the Agreement to the contrary, PacTel has
no obligation under the Agreement to perform any act whatsoever which would
violate the terms of the Modification of Final Judgment in U.S. v. Western
---------------
Electric Co., 552 P. Supp. 131 (D.D.C. 1982) (the "MFJ"). Following written
- ------------
notice to ESL, PacTel may discontinue performance of any activity required
herein or terminate the Agreement immediately, if in PacTel's sole opinion, such
discontinuation or termination is necessary in order to comply with the MFJ. In
the event that PacTel has determined that only certain activities, but not the
entire Agreement, must be discontinued, ESL will have the option to continue or
terminate the Agreement. In the event that ESL elects to continue the
Agreement, the parties will mutually agree upon royalty or payment terms which
will reasonably compensate ESL for PacTel's inability to perform certain of
PacTel's obligations hereunder.
12.9 Nothing in the Agreement will be construed to constitute ESL as the
partner or agent of PacTel, nor will either party have any authority to bind the
other. Each party will remain an independent contractor responsible only for
its own actions.
12.10 This Agreement has been entered into, will be governed by and
construed in accordance with the substantive laws of the State of California
applicable to agreements made and to be performed wholly within such
jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed by their duly authorized
representatives as of the Effective Date.
ESL INCORPORATED PACTEL CORPORATION
A TRW COMPANY
By:/s/ Arthur L. Money By:/s/ C. Lee Cox
-------------------- ---------------
Name:Arthur L. Money Name:C. Lee Cox
------------------ -------------
Title:President Title:President
----------------- ------------
Date:01 October 1993 Date:10/4/93
------------------ -------------
<PAGE>
DRAFT
EXHIBIT A
PACTEL
***
***
***
***
Application No:
***
*** to provide input.
***
N/A
***
*** to be provided includes:
. ***
. ***
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT A
ESL
***
*** has *** under the ***:
***
***
*** software is the *** software which will maintain database
information, apply *** of *** , and
*** .
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT B DRAFT
STATEMENT OF WORK
PacTel
Regulatory
PacTel will apply for the *** , tariff modifications and
approvals necessary to *** the ***
product within *** Markets.
Product Specifications
PacTel will translate its market requirements into a complete generic
description of functionality, features, performance and compatibility
characteristics. This will include installation, platform and market location
considerations.
Procurement Requirements
PacTel will provide a description of the procurement procedures, methods and
requirements within its organization.
Field Testing
PacTel will support technology, prototype and product evaluations by providing
ESL access to *** and ***. Evaluations shall
include, but not be limited to, the following: ***
***
*** used for evaluation and deployment shall be selected by PacTel based on
technical and business considerations. The *** will allow *** to test its
product under various conditions including extreme *** and ***.
PacTel will assist with the definition of test requirements and conditions.
*** of the product will be based on the *** as
included herein.
Work In Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT B DRAFT
Operations Training and Support
PacTel will provide documentation specifications including a statement of
requirements and objectives covering installation, maintenance,
repair/replacement and operational procedures. PacTel will assist with
development and implementation of a detailed plan addressing system integration,
FOT training and ongoing vendor support.
***
PacTel will provide *** as described in Exhibit A.
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT B
STATEMENT OF WORK
ESL
Product Development
ESL will design, develop, and test new technology developments, taking into
account PacTel's requirements, for the advancement of the ***
Product.
Field Testing & Evaluation
***
*** will be performed at designated PacTel cell sites. With PacTel
assistance, ESL will generate the definition of the test requirements and
conditions for each test and ***
*** of the product. *** of the product will be based upon
the ***
*** as included herein.
Upon *** of the *** units, ESL will manufacture the quantity of
units being procured by PacTel to the agreed upon production configuration and
functionality performance.
Operations Training & Support
ESL will generate product installation and FOT training documentation taking
into consideration PacTel requirements for installation, maintenance,
replacement/repair, and operational procedures.
***
ESL will *** with PacTel in *** of the
***
*** . This will include engineering and manufacturing consideration through
test and evaluation of the *** and *** units.
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT B
Milestones
.
.
.
.
.
. *** ***
.
.
.
.
.
.
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
PAC(TM) TEL
Corporation
A Pacific Telesis Company
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
GENERAL EQUIPMENT SPECIFICATIONS
This section describes the physical and electrical specifications that are
important to operation in a ***. Most *** are air conditioned and shielded. To
work in most *** the following specifications are required. If more stringent,
FCC Type Acceptance requirements shall apply.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
*** *** ***
*** ***
- ----------------------------------------------------------------------------------------------------------
*** *** ***
***
- ----------------------------------------------------------------------------------------------------------
*** *** ***
- ----------------------------------------------------------------------------------------------------------
*** *** ***
- ----------------------------------------------------------------------------------------------------------
*** *** No performance degradation
- ----------------------------------------------------------------------------------------------------------
*** *** Normal cell site power
- ----------------------------------------------------------------------------------------------------------
*** *** ***
- ----------------------------------------------------------------------------------------------------------
*** ***
- ----------------------------------------------------------------------------------------------------------
*** *** Check FCC specifications
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
PAC(TEL)
Corporation
A Pacific Telesis Company
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
*** (USING JAMMING)
Additional equipment is required to implement the *** function. This includes a
*** that can be used to terminate in process calls as required. This equipment
is controlled by the *** system.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
- ------------------------------------------------------------------------------
<S> <C> <C>
*** *** Only mobile receive is needed
- ------------------------------------------------------------------------------
*** *** Monitor cell site transmit
- ------------------------------------------------------------------------------
*** *** ***
***
- ------------------------------------------------------------------------------
*** *** ***
*** ***
***
- ------------------------------------------------------------------------------
*** *** Need to control SAT frequency and
presence of 10 kHz
- ------------------------------------------------------------------------------
*** *** ***
*** ***
***
- ------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
PAC(TM) TEL
Corporation
A Pacific Telesis Company
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
SYSTEM INTEGRATION
The *** system must integrate into the existing *** and *** functions.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
*** *** Security features must be in place
- ---------------------------------------------------------------------------------------------
*** *** Database must be remotely modified
- ---------------------------------------------------------------------------------------------
*** *** Activity must be available for further
analysis at the host site
- ---------------------------------------------------------------------------------------------
*** ***
- ---------------------------------------------------------------------------------------------
*** ***
- ---------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
DRAFT
TECHNICAL
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
- ------------------- ----------------- --------------- -------------------
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*** *** *** Must capture information on
*** all registrations and attempts
within test sites
- ----------------------------------------------------------------------------------------------------
***
- ----------------------------------------------------------------------------------------------------
***
- ----------------------------------------------------------------------------------------------------
***
- ----------------------------------------------------------------------------------------------------
*** ***
***
- ----------------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
*** DRAFT
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
- ------------------- ----------------- --------------- -------------------
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hardware Installation Operations review prior Commercial equipment ***
to ***
final commercial roll-out
***
-
- ***
-
-
- ------------------------------------------------------------------------------------------------------------------------
Software Installation Operations review prior Commercial equipment ***
to final commercial roll-out
- ------------------------------------------------------------------------------------------------------------------------
Installation Documentation Operations review prior Published documentation Must include:
to final commercial roll-out -
- ***
-
-
- ------------------------------------------------------------------------------------------------------------------------
Trouble-Shooting Operations review prior Commercial equipment Must include:
Capabilities to final commercial roll-out - ***
- ------------------------------------------------------------------------------------------------------------------------
Alarming Operations review prior Commercial equipment ***
to final commercial roll-out
- ------------------------------------------------------------------------------------------------------------------------
Monitoring Operations review prior Commercial equipment ***
to final commercial roll-out
- ------------------------------------------------------------------------------------------------------------------------
Reporting Operations review prior Commercial equipment ***
to final commercial roll-out
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
*** SATISFACTION DRAFT
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
- ------------------- ----------------- --------------- --------------------
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Transparency Subjective evaluation *** and commercial roll- ***
through live drive test out ***
- -------------------------------------------------------------------------------------------------------------
Billing Records Evaluation of affected Commercial roll-out of ***
customer bills through *** *** configuration
***
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
DRAFT
*** MITIGATION
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
- ------------------- ----------------- --------------- -------------------
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
*** Identification *** *** ***
***
- ---------------------------------------------------------------------------------------
Review of performance *** ***
reports ***
- ---------------------------------------------------------------------------------------
Terminations Review of performance *** ***
reports ***
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT C
NONDISCLOSURE AGREEMENT
-----------------------
THIS NONDISCLOSURE AGREEMENT is made as of this 22 day of April, 1993
("Effective Date"), by and between PACTEL CORPORATION, a California corporation
(hereinafter referred to as "PacTel"), with offices located at 2999 Oak Road,
Walnut Creek, California 94596, and ESL INCORPORATED, a California corporation
(hereinafter referred to as "Vendor"), with offices located at 495 Java Drive,
Sunnyvale, California 94088-3510 (collectively "the Parties") which agree as
follows:
WHEREAS each Party wishes to evaluate and understand its potential
involvement in a project of mutual interest; and
WHEREAS PacTel may find it necessary to disclose to Vendor certain
confidential and proprietary information and intellectual property of PacTel,
relating to PacTel and its operations, which will be used by Vendor only for its
work on PacTel projects; and
WHEREAS Vendor may find it necessary to disclose to PacTel certain
confidential and proprietary information relating to Vendor and its operations
which will be used by PacTel only to evaluate its potential use of Vendor's
services; and
WHEREAS each Party is willing to release such Information to the other
on a confidential basis, and is willing to enter into this Agreement;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained, PacTel and Vendor agree as follows:
1. All Information as defined below, provided by one Party (the
"Originator") to the other will be treated as confidential.
"Information" shall include all information in written, oral or other
tangible or intangible forms which may include, but is not limited to,
discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, tracings, diagrams, models,
samples, flow charts, data, computer programs, disks, diskettes,
tapes, marketing plans, customer names and other technical, financial
or business information.
2. For a period of ten (10) years following the effective date of this
Agreement, each Party shall:
-1-
<PAGE>
a. restrict disclosure of the Information solely to those of its
employees with a need to know, and not to disclose it to other
parties; and,
b. advise its employees of the obligation of confidentiality
hereunder; and,
c. require its employees to use the same degree of care as is used
with that Party's own proprietary information.
3. Notwithstanding anything to the contrary herein, neither Party shall
have any obligation to preserve the confidentiality of any Information
that:
a. was previously known by it free of any obligation to keep it
confidential; or,
b. is distributed to third parties by the Originator without
restriction; or,
c. is or becomes publicly available, by other than unauthorized
disclosure by the Party receiving the Information; or,
d. is wholly and independently developed by the Party receiving the
Information.
4. All Information shall be deemed the property of the Originator, and,
upon request, the other Party will return all Information received in
tangible form to the Originator or destroy all such Information.
5. Nothing contained in this Agreement shall be construed as granting or
conferring any rights by license or otherwise in any Information
disclosed by the Originator.
6. This Agreement shall be governed and construed in accordance with the
laws of the State of California and shall benefit and be binding upon
the Parties hereto and their respective successors and assigns.
7. Since either Party may choose not to do business with the other in the
future, each acknowledges that the other is not responsible or liable
for any business decisions made by either in reliance upon disclosures
made during any meetings between the Parties or in reliance on any
results of the discussions.
-2-
<PAGE>
8. This Agreement shall continue until terminated in writing by either
Party. The obligation to protect the confidentiality of Information
received prior to such termination shall survive the termination of
this Agreement.
9. Each Party agrees that it will make no copies or otherwise reproduce
the data provided by the other, and further agrees to remove all such
data from its files and return all data to the other if requested to
do so.
PACTEL CORPORATION ESL INCORPORATED
("PacTel") ("Vendor")
By: /s/ L.R. Daniels By: /s/ Jill Kovacich
----------------------- ----------------------
Lyn R. Daniels Name: Jill Kovacich
---------------------
Chief Financial Officer Title: Manager of Contracts
--------------------
and Treasurer
-3-
<PAGE>
EXHIBIT B
FIRST AMENDMENT TO
THE DEVELOPMENT AND LICENSE AGREEMENT
DATED OCTOBER 4, 1993
BETWEEN
ESL INCORPORATED AND PACTEL CORPORATION
This First Amendment is made this 4th day of October, 1993, by and between
ESL Incorporated ("ESL") and PacTel Corporation ("PacTel").
WHEREAS, the parties entered into a Development and License Agreement,
dated October 4, 1993; and
WHEREAS, the parties now wish to amend that Agreement to correct certain
terms thereof;
NOW THEREFORE, the parties agree as follows:
1. In Section 2.5 of the Agreement the following clause shall be added at
the end of the second sentence:
", and shall be subject to the terms and conditions of this Agreement, with
the exception of Sections 6.2 and 6.3."
2. Section 5.5 of the Agreement is hereby deleted and the following is
substituted therefor:
5.5 Protection and Use of *** .
---------- --- --- -- --------------------
(a) Each party agrees it will not disclose (unless compelled to disclose by
judicial or administrative process, or in the opinion of such party's counsel,
by other requirement of law), use, or permit the use by others of such other
party's *** ,
*** and/or *** , at any time during the
Agreement, or at any time thereafter, for a period of *** years after the
disclosure thereof. Without limiting the foregoing, each party agrees to do the
following with respect of any such
*** , *** and/or *** : (i)
instruct and require all of its employees and agents to maintain the
confidentiality of such information; (ii)
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
exercise either at least the same degree of care to safeguard the
confidentiality of such information as that party exercises to safeguard the
confidentiality of its own information of a similar type, or a reasonable degree
of care, whichever is greater; and (iii) restrict disclosure of such information
to those of its employees who have a need to know consistent with the purposes
for which such information was disclosed. Each party further agrees not to
remove or destroy any proprietary or confidential legends or markings placed
upon documentation or other materials which contain or set forth the ***
*** of the other party.
(b) The party receiving *** , ***
and/or
*** will obtain the written agreement of any permitted
transferee or licensee to hold in confidence the information transferred to such
transferee or licensee in accordance with terms no less restrictive than those
set forth above.
(c) The receiving party may disclose the other party's ***
*** and/or *** to its
employees, agents, suppliers and subcontractors to the extent that each such
disclosure is reasonably necessary for manufacturing, using, selling, installing
and/or servicing Licensed Products, or procuring goods and services required in
connection therewith; provided, however, that the receiving party will take all
desirable and necessary actions to preserve the confidentiality of such
information including, but not limited to: (i) marking any documents or other
material containing any ***
*** so disclosed to indicate that same contains proprietary data
and
*** and/or *** ; (ii)
requiring each party to whom same is disclosed to sign a written agreement
limiting the use thereof to authorized purposes, prohibiting the further
reproduction or disclosure thereof and requiring the prompt return thereof when
no longer needed; and (iii) providing that any reproduction, notes or summaries
thereof, immediately upon the making thereof, will become the property of the
disclosing party and will be delivered to the disclosing party with, and upon
the return of, the ***
and/or *** .
(d) Each reproduction of any ***
and/or *** , together with each modification and
revision thereof, made by or for the receiving party, will automatically become
the property of the disclosing party, will be deemed the disclosing party's
*** and/or *** for all purposes
hereunder and will be clearly marked accordingly.
(e) Upon *** , the receiving party
will immediately discontinue the use of, and will promptly return to the
disclosing party or its designee, all ***
and/or *** , together with copies thereof, in the
possession or control of the receiving party, together with all written
documentation and/or other materials containing information relating to the
*** *** and/or *** .
The receiving party further agrees that it will not for a period of ***
after the date of any termination or expiration of this Agreement, use or
disclose to any third party any of disclosing party's
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** and/or ***
, except such information as the disclosing party has previously made generally
available to the public.
3. In Article 9, the following sentence shall be added at the end:
Any judicial review under this Article shall be limited to arbitrator
misconduct or the arbitrators' non-compliance with or failure to observe
the terms and conditions of this Agreement."
4. Except as amended herein, the Agreement between the parties, dated
October 4, 1993, shall remain in full force and effect.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date first written above.
ESL INCORPORATED PACTEL CORPORATION
By: /s/ Jill Kovacich By: /s/ Don Winters
----------------------- --------------------------
Name: Jill Kovacich Name: Don Winters
--------------------- -----------------------
Title: Manager of Contracts Title: Director Technology Transfer
--------------------- ----------------------------
<PAGE>
EXHIBIT 10.6
DEVELOPMENT AND LICENSE AGREEMENT
This Development and License Agreement (the "Agreement") is made and
effective as of the later date signed below (the "Effective Date") by and
between ESL Incorporated, a California corporation and a TRW Company with
offices located at 495 Java Drive, Sunnyvale, California 94088-3510 ("ESL"), and
PacTel Corporation, a California corporation with offices located at 2999 Oak
Road, Walnut Creek, California 94596 ("PacTel")
WITNESSETH:
WHEREAS, ESL wishes to develop, and PacTel wishes to have developed, the
"Licensed Products," as that term is defined below; and
WHEREAS, PacTel has expertise in cellular telephony, including ***
*** , alpha and beta testing, field test facilities, and
FCC and regulatory requirements, such as experimental licenses; and
WHEREAS, ESL has expertise in emitter recognition and identification
technology including, but not limited to, *** , developing
and maintaining a database of authorized and unauthorized emitter security
patterns, emitter recognition, and enabling cellular systems to determine
whether to deliver services depending on certain ***
levels; and
WHEREAS, ESL intends to manufacture, have manufactured, use, market, sell
and distribute the Licensed Products in accordance with the terms hereof; and
WHEREAS, PacTel intends to provide business and technical development
support to ESL in accordance with the terms hereof including, but not limited
to, *** ***
; and
WHEREAS, each party intends to bear the costs associated with it own
efforts in the development of the Licensed Products;
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the parties hereby agree as follows:
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
ARTICLE 1
Definitions and Priority
----------- --- --------
1.1 Definitions. The following words and phrases will have the meanings
------------
set forth below:
1.1.1 Agreement. The term the "Agreement" means this Development and
----------
License Agreement between ESL and PacTel, including the following Exhibits
attached hereto, and any amendments thereto:
Exhibit A: The ***
*** . As of the Effective Date, this exhibit is in
*** and the parties ***.
Exhibit B: Statement of Work, Milestones and Functional and
Interface Specifications. As of the Effective Date, this
***
*** .
Exhibit C: Nondisclosure Agreement, dated *** .
1.1.2 Develop or Development. The term "develop" or "development,"
------- -- ------------
as used herein, means engineering, design, layout, hardware and Licensed
Software generation, prototyping, characterization, qualification, fabrication,
testing, and preparation of data sheets and application notes.
1.1.3 Licensed Products. The term "Licensed Products" means the
-------- ----------
Cellular Fraud Prevention System to be developed hereunder, and any component
parts thereof, developed in accordance with the functional and interface
specifications set forth in Exhibit B hereto, and made under the Licensed
Patents and the inventions described and claimed therein or by the use of
Licensed Technical Information.
1.1.4 Licenses Patents. The term " Licensed Patents" means the
-----------------
United States Patents and patent applications and their corresponding foreign
patents and patent applications relating to the Licensed Products, together
with any continuations, divisions, reissues or foreign-country counterparts
thereof.
1.1.5 *** . The term " ***
-----------------------------
" means PacTel's *** containing ***
, as described in Exhibit A, that is used in the Licensed Products for the
*** telephone usage, together with any
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
*** and other intellectual property rights thereto. The
term " *** " does not include any subscriber information.
1.1.6 *** . The term " *** " means the
-----------------
*** *** and *** for the
scheduling and *** operations within the Licensed Products, as
described in Exhibit A, together with any *** and other
intellectual property rights thereto.
1.1.7 *** . The term " ***
------------------------------
" means the information, as described in Exhibit A, that is directly related to
the *** *** and the production, manufacture, use,
operation, repair, maintenance, modification or reconstruction thereof, together
with any *** and other intellectual property rights
thereto. This includes, but is not limited to, information in the form of
blueprints, drawings, plans, photographs, instructions, masks, Licensed Software
and documentation.
1.1.8 Gross Sales Price. The term "Gross Sales Price" means the
----- ----- ------
amount that is the price at which each Licensed Product is sold or delivered to
the customer or user. In the event that the Gross Sales Price is less than the
*** , as a result of *** or *** under arrangements
with the customer or user, or in the event Licensed Products are *** or
otherwise *** , then for purposes of this Agreement, the Gross Sales
Price shall be the sales price ***
*** .
1.1.9 Net Sales Price. The term "Net Sales Price" means the Gross
--- ----- ------
Sales Price, net of expenses for transportation, shipping, insurance, boxing,
handling or similar charges, taxes and duties, if any, and other costs
incidental to shipment.
1.1.10 Affiliate. The term "Affiliate" means any corporation,
----------
partnership or other business entity in which either party hereto owns or
controls more than fifty percent (50%) of the voting stock or otherwise has more
than fifty percent (50%) of the right to control the entity.
1.1.11 Equity Partner. The term "Equity Partner" means any
------ --------
corporation, partnership or other business entity in which either party hereto
owns or controls between five percent (5%) and fifty percent (50%) of the voting
stock or otherwise has between five percent (5%) and fifty percent (50%) of the
right to control the entity.
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
1.2 Priority. In the event of any inconsistency between the text of the
---------
Agreement and the provisions of any of the Exhibits, the text of the Agreement
shall prevail.
ARTICLE 2
Scope of Work, Cost Sharing and Payment
----- -- ----- ---- ------- --- -------
2.1 Development by PacTel. PacTel will enhance its ***
----------- -- -------
and *** and will perform such other tasks as are set forth
in Exhibit B. PacTel agrees to provide ESL with access to its spectrum and
network to facilitate ESL's work on the Licensed Products. PacTel will be
responsible for *** including, but not limited to,
*** and *** , in *** , for *** of
the Licensed Products, and in *** localities only, for ***
release of the Licensed Products. PacTel will provide functional system
specifications including operating and support requirements.
2.2 Development by ESL. ESL will develop an *** for
----------- -- ----
wireless subscriber systems and perform such other tasks to develop the Licensed
Products as are set forth in Exhibit B.
2.3 Commercialization by ESL. ESL will commercialize the Licensed
----------------- -- ----
Products to meet the functional and interface specifications in Exhibit B, i.e.,
ESL will *** *** so that the Licensed
Products will be in manufacturable form for worldwide marketing, sales,
distribution and support by ESL to end user customers.
2.4 Cost Sharing. Each party will bear its own costs associated with its
---- --------
respective development efforts described above.
2.5 *** Developments. ESL will have the ***
------- -------------
*** including, without limitation, any upgrades,
modifications, improvements, enhancements, derivatives or other changes to the
Licensed Products. If ESL exercises such rights, it shall have a license in
accordance with *** and ***
, as that term is defined herein. In each instance, ESL will have a reasonable
amount of time to ***
*** its rights under this Section.
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
ARTICLE 3
Term
----
The term of the Agreement will be five (5) years from the Effective Date,
unless sooner terminated in accordance with Article 9 hereof. Unless a
termination notice is given by either party hereto six (6) months prior to
expiration of such five-year period, the Agreement shall be renewed
automatically for one (1) year from the date of expiration of the said period
under the same terms and conditions. Neither party will make any claims or
demands against the other party for any damages, losses, expenses or costs, if
any, incurred as a result of the expiration, termination without cause, or non-
renewal of the Agreement.
ARTICLE 4
Licenses Granted and Royalties
-------- ------- --- ---------
4.1 License to ESL. Subject to the terms and conditions of this
Agreement, PacTel hereby grants to ESL a worldwide, royalty-bearing,
exclusive, nontransferable, nonsublicensable right and license under PacTel's
Licensed Patents, Licensed Database Information and Licensed Technical
Information:
(a) to make, have made, copy and/or use the Licensed Products, including
the Licensed Database Information;
(b) to sell the Licensed Products, including the Licensed Database
Information; and
(c) to provide support for the Licensed Products, including the
Licensed Database Information.
4.2 License to PacTel. Subject to the terms and conditions of this
------- -- -------
Agreement, ESL hereby grants to PacTel a *** , non-exclusive, non-
transferable, *** right and license under ESL's *** to
copy and use the *** for PacTel's internal business purposes in
the United States only during the term of this Agreement.
4.3 Royalties. In consideration of the rights, licenses and benefits
----------
conferred upon ESL hereunder, during the term of this Agreement, *** will pay
to *** a *** in the amount of *** of
the *** of all ***
*** . *** will have no obligation
to pay *** . In
no event will
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
more than *** .
Notwithstanding the foregoing, *** will be payable on any
*** , by a customer. In order to maintain the
*** shall pay to *** ***
*** during the *** and
*** *** thereafter,
*** . The first of such
*** later than *** , and every ***
thereafter during the term hereof. Should *** fail to make such
*** , the ***
*** shall retain only a ***
. The amounts of the *** and *** and
*** at the end of the *** of this
Agreement.
4.4 Accounting and Payment. Within *** after every
---------- --- --------
anniversary date of the Agreement during the term hereof, from and after the
date both parties agree that Licensed Products may be released for production,
*** will render to *** a certified check (or other form of payment
acceptable to ***) in the amount of all *** *** on account of
activities of *** under the Agreement during the calendar year preceding the
year in which such *** is required to be made. Further, *** will
transmit to *** , accompanying each such payment, an accurate, itemized
statement (certified upon request) setting forth in sufficient detail for
verification, the basis upon which such *** is determined and made. All
*** will be made to the order of *** in *** and will be
payable at *** address as set forth in Article 13.
4.5 Records and Audit. *** will keep complete and accurate books and
------- --- ------
records, containing adequate details for the calculation of the amounts of all
*** from the *** to *** hereunder. All such books and records will be
available for reasonable time periods during regular business hours, for a
period of three (3) years following the end of the calendar year to which they
pertain, for inspection and audit by *** accountants or independent
auditors for the purpose of verifying all *** submitted by ***. The
obligations of *** under this Article 4 will survive any termination or
expiration of the Agreement.
4.6 Product Marketing.
------- ----------
(a) ESL will at all times have the sole discretion to set and determine
all terms and conditions of sale of all Licensed Products, including price,
position, distribution channels and name (including ESL trademarks, trade names
or logos). ESL will
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
be responsible for distribution of the Licensed Products in its sole discretion.
(b) ESL will at all times have the sole discretion to develop and approve
marketing materials and activities for, the Licensed Products. Further, ESL
will at all times during the term of the Agreement be responsible for
manufacturing, assembling and distributing the components that comprise the
Licensed Products.
(c) PacTel has adopted and owns certain trademarks and service marks used
in identifying and marketing PacTel technology, products and services, logos,
trade names and related acronyms and the like, whether or not registered (the
"PacTel Trademarks"). ESL recognizes and consents for all purposes that the
PacTel Trademarks constitute the exclusive property of PacTel and cannot be used
by ESL pursuant to this license, except as specified in the Agreement, nor will
ESL use any confusing similar trademark, logo, trade name or the like. PacTel
hereby grants to ESL the non-exclusive right to use the following statement in
the marketing of the Licensed Products: " ***
*** ." Nothing contained in the Agreement will be
construed as conferring any additional rights upon ESL to use in advertising,
publicity or other promotional activities any PacTel Trademark, other than
specifically set forth in the preceding sentence, unless PacTel grants to ESL
its prior express written consent. ESL will use the PacTel trade name with such
words qualifying or identifying the relationship of PacTel and ESL as PacTel,
from time to time, may reasonably prescribe. PacTel will have the sole right,
but not the obligation, to register and enforce the PacTel Trademarks and other
marks it adopts, acquires or uses in the United States or in any foreign country
and all rights generated by use of same by ESL will inure directly to the
benefit of PacTel.
(d) The parties will mutually plan and agree upon the contents, form and
manner of publicity with respect to the Licensed Products and will not respond
to inquiries from members of the public media, if such inquiries concern the
contents of the Agreement and details of the transactions contemplated by the
Agreement. In no event will the parties act unilaterally with regard to such
disclosures, unless otherwise required to by law.
(e) PacTel will provide to ESL *** , *** , and such
additional information that ESL may require in order to promote the Licensed
Products. In addition, PacTel will *** for Licensed Product ***
on *** .
(f) ESL reserves the right to ESL-developed trademarks,
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
trade names, logos and related acronyms and the like, whether or not registered,
to identify the Licensed Products or other ESL developed technology, products
and services, so long as such trademarks, etc., are not confusingly similar to
the PacTel Trademarks.
ARTICLE 5
Ownership of Inventions and Technical Information
--------- -- ---------- --- --------- -----------
5.1 Patent Applications. Each party agrees to notify the other party
------ -------------
within ninety (90) days following the filing of a patent application with
respect to any invention relating to the Licensed Products first reduced to
practice during the term of the Agreement.
5.2 PacTel Inventions. All inventions developed conceived or first
------ -----------
reduced to practice, as those terms are used before the U.S. Patent
and.Trademark Office, by statute and under common law, solely by PacTel
personnel, will be the sole and exclusive property of PacTel. PacTel will
retain any and all rights to file any patent applications thereon and such
inventions shall be subsumed under ***
*** above.
5.3 ESL Inventions. All inventions developed, conceived or first reduced
--- -----------
to practice, as those terms are used before the U.S. Patent and Trademark
Office, by statute and under common law, solely by ESL personnel, will be the
sole and exclusive property of ESL. ESL will retain any and all rights to file
any patent applications thereon ***
in ***
with the ***
for the term of this Agreement.
5.4 Joint Inventions.
----- -----------
(a) Inventions developed, conceived or first reduced to practice, as those
terms are used before the U.S. Patent and Trademark Office, by statute and under
common law, jointly by the parties (the "Joint Inventions"), will be jointly
owned by the parties, each party having an equal and undivided interest therein,
without the duty to account to the other for any use made of such Joint
Inventions. Notwithstanding the foregoing, neither party may use the Joint
Inventions in any way which would harm the other's ownership interest therein.
The parties agree to mutually determine whether a patent application or
applications will be filed on such Joint Inventions, the party which will
prepare and file such application or applications, and the country or countries
in which the same are to be filed. The patent expenses incurred will be divided
equally between the
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
parties.
(b) If the parties are not able to mutually agree to file an application
or applications on a Joint Invention, either one of the parties may elect
to assume such expenses (the "Electing Party"). The Electing Party will
control the preparation and prosecution of any such application and all rights
in any patents granted thereon will belong exclusively to the Electing Party.
The party declining to bear its share of the expenses of prosecuting or
maintaining patents covering a Joint Invention (the "Declining Party") agrees
to execute any and all forms, assignments or other documents to effect the
foregoing; provided, however, that the Declining Party will ***
***
*** ; provided further, however,
that such Declining Party will ***
*** or the U.S. Government. Neither party may, without the
prior written consent of the other party (which consent may be withheld for any
reason, in its sole and absolute discretion), assign or otherwise transfer its
interest in any Joint Invention, except as expressly provided herein.
5.5 Protection and Use of *** .
---------- --- --- -- ------------------------
(a) Each party agrees it will not disclose (unless compelled to disclose
by judicial or administrative process, or in the opinion of such party's
counsel, by other requirement of law), use, or permit the use by others of
such other party's ***
*** , at any time during the Agreement, or at any time
thereafter, for a period of *** after the disclosure thereof.
Without limiting the foregoing, each party agrees to do the following with
respect of any such *** : (i) instruct and require all
of its employees and agents to maintain the confidentiality of such information;
(ii) exercise either at least the same degree of care to safeguard the
confidentiality of such information as that party exercises to safeguard the
confidentiality of its own information of a similar type, or a reasonable degree
of care, whichever is greater; and (iii) restrict disclosure of such information
to those of its employees who have a need to know consistent with the purposes
for which such information was disclosed. Each party further agrees not to
remove or destroy any proprietary or confidential legends or markings placed
upon documentation or other materials which contain or set forth the
*** of the other party.
(b) The party receiving *** will
*** Portions of this page have been omitted to a request for Confidential
Treatment and filed separately with the commission.
<PAGE>
obtain the written agreement of any permitted transferee or licenses to hold in
confidence the information transferred to such transferee or licensee in
accordance with terms no less restrictive than those set forth above.
(c) The receiving party may disclose the other party's ***
to its employees, agents, suppliers and subcontractors to the extent that each
such disclosure is reasonably necessary for manufacturing, using, selling,
installing and/or servicing Licensed Products, or procuring goods and services
required in connection therewith; provided, however, that the receiving party
will take all desirable and necessary actions to preserve the confidentiality of
such information including, but not limited to: (i) marking any documents or
other material containing any ***
*** so disclosed to indicate that same contains proprietary data and
***
*** ; (ii) requiring each party to whom same is disclosed to sign a
written agreement limiting the use thereof to authorized purposes, prohibiting
the further reproduction or disclosure thereof and requiring the prompt return
thereof when no longer needed; and (iii) providing that any reproduction, notes
or summaries thereof, immediately upon the making thereof, will become the
property of the disclosing party and will be delivered to the disclosing party
with, and upon the return of, the *** *** .
(d) Each reproduction of any *** , together with
each modification and revision thereof, made by or for the receiving party, will
automatically become the property of the disclosing party, will be deemed the
disclosing party's *** *** for all purposes hereunder and will be
clearly marked accordingly.
(e) Upon *** , the receiving party
will immediately discontinue the use of, and will promptly return to the
disclosing party or its designee, all *** , together
with copies thereof, in the possession or control of the receiving party,
together with all written documentation and/or other materials containing
information relating to the *** . The receiving
party further agrees that it will not, for a period of *** after the
date of any termination or expiration of this Agreement, use or disclose to any
third party any of disclosing party's *** , except
such information an the disclosing party has previously made generally available
to the public.
ARTICLE 6
*** *** Support Services, Minimum Order
--------- --------- ------- --------- ------- -----
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
6.1 *** . ESL will sell the Licensed Products to PacTel
------------------
***
*** . *** that the ***
to *** and
*** as ***
to its
*** of *** , for ***
delivered within ***
*** calendar days before or *** after *** the
*** to *** . Such ***
shall be *** by an additional *** for ***
by *** , taking into account the fact that
*** on *** by *** and *** . In *** of
the *** of *** to the ***
agrees to *** a *** on ***
by *** who were introduced to *** . No *** will be
*** on any *** , but
*** by an *** . Further, *** shall give *** to
*** by *** and/or its *** , and to the extent that
*** after
*** and its *** have *** , *** may make a ***
to *** for *** to *** to *** . *** will have no
obligation to *** with *** and/or *** , if
*** to *** written request within five (5) business days after the
date of such written request. In addition to the foregoing,
*** shall have the *** to conduct all ***
for all new versions of the *** and/or the *** .
6.2 Minimum Order. PacTel shall place a minimum order for ***
------- ------
Licensed Products by December 31, 1993, at a *** of
***
*** , *** in accordance with the terms of Section
6.1. It is understood that such Licensed Products will initially be installed by
December 31, 1993, for *** PacTel, and that upon ***
of the finished Licensed Products, ESL shall *** such ***
, *** versions no later than March 31, 1994. ***
of the price is payable upon installation and the balance of ***
is due when such *** pass all acceptance criteria set
forth in Exhibit B. Provided that such initial *** Licensed Products pass
all acceptance criteria no later than March 31, 1994, PacTel shall place a
follow-on order of *** Licensed Products by March 31, 1994,
at a *** *** of *** ,
*** in accordance with the terms of Section 6.1 above. Finished,
*** of the
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
Licensed Products shall be installed *** no
later than August 30, 1994
6.3 Maintenance and Support. ESL agrees to provide maintenance and
----------- --- --------
support, including all software upgrades and support, to PacTel and its
Affiliates ***
*** .
ARTICLE 7
Indemnification
---------------
7.1 PacTel Indemnity. PacTel shall, at its own expense, defend, or at its
------ ----------
option, settle any suit, claim or proceeding brought against ESL insofar as such
suit or proceeding is based on a claim that PacTel does not have sufficient
right, title and interest in PacTel's ***
and/or ***
*** (collectively " *** ") delivered to ESL
under this Agreement for the design, manufacture, use and sale of the Licensed
Products or that such information constitutes a direct infringement of any
United States trade secret, patent, trademark, copyright or any other
proprietary right of any third party, and PacTel shall indemnify and hold ESL
harmless against all costs, expenses and damages arising from such claim
including, without limitation, reasonable attorneys' fees and shall pay all
settlements and costs finally awarded therein against ESL, provided that PacTel
is promptly informed and furnished a copy of each communication, notice or other
action relating to the alleged infringement and is given all authority,
information and assistance necessary to defend or settle such suit or
proceeding.
7.2 ESL Indemnity. ESL shall, at its own expense, defend, or at its
--- ----------
option, settle any suit, claim or proceeding brought against PacTel insofar as
such suit or proceeding is based on a claim that ***
*** (collectively "ESL Licensed
Materials")
licensed to PacTel hereunder or that such information constitutes a
*** ***
of any third party, and ESL shall ***
***
*** PacTel, provided that *** and ***
a copy of each communication, *** relating to the
*** and is *** all *** , information and *** to
*** .
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
7.3 PacTel Limitations on Indemnity. PacTel shall not be obligated to
------ ----------- -- ----------
defend or be liable for costs and damages to the extent that infringement arises
out of a modification of the PacTel *** after delivery by PacTel,
out of combination of the PacTel *** with other goods or devices
not supplied by PacTel, or from other fault or action of ESL.
7.4 ESL Limitations on Indemnity. ESL shall not be obligated to defend or
--- ----------- -- ----------
be liable for costs and damages to the extent that infringement arises out of
compliance with PacTel's specifications, from a modification of the ESL Licensed
Materials after delivery by ESL, out of combination of the ESL Licensed
Materials with other goods or devices not supplied by ESL, or from other fault
or action of PacTel.
ARTICLE 8
Default and Termination
------- --- -----------
8.1 Default. An event of default on the part of either party will exist
--------
under the Agreement if:
(a) Such party fails to perform any material obligation required to be
performed by it under any provision of the Agreement within the time specified
in such provision, or if no time is specified, within *** after written
notice from the other party that such performance has become due.
(b) Such party becomes insolvent, is unable to pay its debts as they
become due, makes an assignment for the benefit of creditors, files a petition
in any state insolvency proceeding or ceases to carry on its business; or
(c) A receiver or liquidator is appointed for any of such party's
properties or assets, or a petition is filed against such party in any state
insolvency proceeding and such petition is not withdrawn within 30 days after
such appointment or filing.
8.2 *** . Subject to any other provisions hereof
-----------------
***
the *** hereunder, if *** , as *** in this
*** , exists on the part of either party, then the *** may
***
*** and may *** any other ***
to *** .
8.3 Mutual Termination. The parties may mutually agree to terminate the
------ ------------
Agreement at any time.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
ARTICLE 9
Arbitration and Dispute Resolution
----------- --- ------- ----------
If a dispute arises between the parties relating to the interpretation or
performance of the Agreement or the grounds for the termination thereof, the
parties agree to meet to try to resolve the dispute. Such meeting will be
attended by individuals with decision-making authority to attempt, in good
faith, to negotiate a resolution of the dispute prior to pursuing other
available remedies. If, within thirty days after such a meeting, the parties
have not succeeded in negotiating a resolution of the dispute, either party may
request that such dispute be resolved through final and binding arbitration.
Such arbitration will be conducted by three (3) arbitrators familiar with the
wireless telecommunications industry and will be held in San Francisco,
California, in accordance with the then-current Rules of Conciliation and
Arbitration of the American Arbitration Association. Such arbitrators will be
selected by mutual agreement of the parties, or failing such agreement, each
party will select one arbitrator and the two selected arbitrators will usually
agree upon the selection of a third arbitrator. The arbitrators will be bound to
apply California law, and where applicable, federal statutory law. The parties
will be afforded a reasonable period of time to conduct discovery prior to the
arbitration. A court reporter will be present at all arbitration proceedings in
order to transcribe them and such transcription will be the official record of
such proceedings for purposes of any judicial enforcement or review proceeding.
The arbitrators' decision will be binding on the parties and will specify the
basis for any award and the types of damages awarded. The parties will bear the
cost of such arbitration equally and the prevailing party in any such
arbitration will be entitled to reasonable attorneys fees, in addition to any
other award ordered by the arbitrators. The prevailing party in any judicial
enforcement or review proceeding shall also be entitled to reasonable attorneys'
fees and costs, in addition to any other award ordered by the court. If judicial
enforcement is sought by either party, judgment may be entered in any court of
competent jurisdiction. This Article shall survive any expiration or termination
of the Agreement and shall continue to be enforceable in the event of the
bankruptcy of a party.
ARTICLE 10
Limitation of Liability
---------- -- ---------
Notwithstanding anything in the Agreement to the contrary, in no event
will either party be liable to the other for loss of profits, or for any
indirect, incidental, special or consequential damages arising from this
Agreement, however
<PAGE>
caused, whether as a consequence of the negligence of the one party or
otherwise; and the sole and exclusive liability and maximum liability of one
party to the other hereunder, whether arising in warranty, contract, tort or
otherwise, shall not exceed $ *** .
ARTICLE 11
Licenses and Permits
-------- --- -------
PacTel, at its own expense, will obtain from the appropriate agencies or
departments of the government all experimental licenses during product
development and ***
*** the Licensed Products under this Agreement. This obligation of PacTel
is limited to ***
as more specifically set forth in Section 2.1 above.
ARTICLE 12
Miscellaneous Provisions
------------- ----------
12.1 Any notice, demand, request, statement or other writing required
or permitted by the Agreement, will be deemed to have been sufficiently given
when personally delivered or mailed by certified or registered mail, postage
prepaid, addressed as follows:
If to PacTel: PacTel Corporation
390 No. Wiget Lane, Suite 200
Walnut Creek, California 94598
Attn: *** , Director
Technology Transfer
With a copy to: PacTel Corporation
2999 Oak Road, MS 800
Walnut Creek, California 94596
Attn: General Counsel
If to ESL: ESL Incorporated, MS __/__
495 Java Drive
Sunnyvale, California 94088
Attn: *** , New Venture Manager
12.2 The Agreement constitutes the entire agreement between the
parties and supersedes all previous agreements and understandings relating to
the subject hereof. The Agreement may not be altered, amended or modified,
except by a written instrument signed by the duly authorized representatives of
both parties.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
12.3 The Agreement may not be assigned to any third party, in whole or in
part, by either party without the prior written consent of the other party. An
assignment to Affiliate of either party will not be deemed a third party and
will not require prior written consent from the other party.
12.4 Failure or successive failures on the part of either party, its
successors and assigns, to enforce any covenant or agreement herein, or any
waiver or successive waivers on its or their part of any covenant or condition
of the Agreement will not operate as a discharge of such covenant, agreement or
condition, render the same invalid or impair the right of either party, its
successors or assigns, to enforce the same.
12.5 Headings included in the Agreement are for convenience only and are
not to be used to interpret the Agreement between the parties.
12.6 Any news release, including photographs, films, advertisements,
publicity, public announcements or confirmation of same, to be released by
either party concerning the activities of the other party or on any part of the
subject matter of the Agreement will be subject to the prior written approval of
the other party. The parties further agree that news releases made by either
party will recognize the participation and contributions of the other party. The
nature of this relationship will remain confidential to both parties.
12.7 No failure or omission on the part of either party to carry out or
observe any of the terms or provisions of the Agreement will be deemed a breach
of the Agreement, if same will arise or result from force majeure or from any
cause reasonably beyond the control of PacTel or ESL. Should such delay occur,
the date or dates of performance by the affected party will be extended for a
period equal to the number of days during which performance is so delayed. The
affected party will give the other party written notice of such delay within
fifteen (15) working days after identification of the delay.
12.8 Notwithstanding anything in the Agreement to the contrary, PacTel has
no obligation under the Agreement to perform any act whatsoever which would
violate the terms of the Modification of Final Judgment in U.S. v. Western
---------------
Electric Co., 552 P. Supp. 131 (D.D.C. 1982) (the "MFJ"). Following written
- ------------
notice to ESL, PacTel may discontinue performance of any activity required
herein or terminate the Agreement immediately, if in PacTel's sole opinion, such
discontinuation or termination is necessary in order to comply with the MFJ. In
the event that PacTel has determined that only certain activities, but not the
entire Agreement, must be discontinued, ESL will have the option to continue or
terminate the Agreement. In the event that ESL elects to continue the Agreement,
<PAGE>
the parties will mutually agree upon royalty or payment terms which will
reasonably compensate ESL for PacTel's inability to perform certain of PacTel's
obligations hereunder.
12.9 Nothing in the Agreement will be construed to constitute ESL as the
partner or agent of PacTel, nor will either party have any authority to bind the
other. Each party will remain an independent contractor responsible only for its
own actions.
12.10 This Agreement has been entered into, will be governed by and
construed in accordance with the substantive laws of the State of California
applicable to agreements made and to be performed wholly within such
jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed by their duly authorized representatives as of the Effective Date.
ESL INCORPORATED PACTEL CORPORATION
A TRW COMPANY
By:/s/ Arthur L. Money By:/s/ C. Lee Cox
--------------------------- ----------------------------
Name:Arthur L. Money Name:C. Lee Cox
------------------------- --------------------------
Title:President Title:President
------------------------ -------------------------
Date:01 October 1993 Date:10/4/93
------------------------- --------------------------
<PAGE>
DRAFT
EXHIBIT A
PACTEL
***
***
***
***
Application No:
***
*** to provide input.
***
N/A
***
*** to be provided includes:
. ***
. ***
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT A
ESL
***
*** has *** under the ***:
***
***
*** software is the *** software which will maintain database
information, apply *** of *** , and
*** .
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
DRAFT
EXHIBIT B
STATEMENT OF WORK
PacTel
Regulatory
PacTel will apply for the *** , tariff modifications and
approvals necessary to *** the ***
product within *** Markets.
Product Specifications
PacTel will translate its market requirements into a complete generic
description of functionality, features, performance and compatibility
characteristics. This will include installation, platform and market location
considerations.
Procurement Requirements
PacTel will provide a description of the procurement procedures, methods and
requirements within its organization.
Field Testing
PacTel will support technology, prototype and product evaluations by providing
ESL access to *** and ***. Evaluations shall include, but
not be limited to, the following: ***
*** .
*** used for evaluation and deployment shall be selected by PacTel based
on technical and business considerations. The *** will allow *** to test its
product under various conditions including extreme *** and ***.
PacTel will assist with the definition of test requirements and conditions.
*** of the product will be based on the *** as
included herein.
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
DRAFT
EXHIBIT B
Operations Training and Support
PacTel will provide documentation specifications including a statement of
requirements and objectives covering installation, maintenance,
repair/replacement and operational procedures. PacTel will assist with
development and implementation of a detailed plan addressing system integration,
FOT training and ongoing vendor support.
***
PacTel will provide *** as described in Exhibit A.
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT B
STATEMENT OF WORK
ESL
Product Development
ESL will design, develop, and test new technology developments, taking into
account PacTel's requirements, for the advancement of the ***
Product.
Field Testing & Evaluation
***
*** will be performed at designated PacTel cell sites. With PacTel
assistance, ESL will generate the definition of the test requirements and
conditions for each test and ***
*** of the product. *** of the product will be based upon
the ***
*** as included herein.
Upon *** of the *** units, ESL will manufacture the quantity of
units being procured by PacTel to the agreed upon production configuration and
functionality performance.
Operations Training & Support
ESL will generate product installation and FOT training documentation taking
into consideration PacTel requirements for installation, maintenance,
replacement/repair, and operational procedures.
***
ESL will *** with PacTel in *** of the
***
*** . This will include engineering and manufacturing consideration through
test and evaluation of the *** and *** units.
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT B
Milestones
.
.
.
.
.
. *** ***
.
.
.
.
.
.
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
PAC(TM) TEL
Corporation
A Pacific Telesis Company
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
GENERAL EQUIPMENT SPECIFICATIONS
This section describes the physical and electrical specifications that are
important to operation in a ***. Most *** are air conditioned and shielded. To
work in most *** the following specifications are required. If more stringent,
FCC Type Acceptance requirements shall apply.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
- --------------------------------------------------------------------------------
<S> <C> <C>
*** *** ***
*** ***
- --------------------------------------------------------------------------------
*** *** ***
***
- --------------------------------------------------------------------------------
*** ***
***
- --------------------------------------------------------------------------------
*** *** ***
*** ***
***
***
- --------------------------------------------------------------------------------
*** *** No performance degradation
- --------------------------------------------------------------------------------
*** *** Normal cell site power
- --------------------------------------------------------------------------------
*** *** ***
- --------------------------------------------------------------------------------
*** ***
***
- --------------------------------------------------------------------------------
*** *** Check FCC specifications
*** ***
- --------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
PAC(TM) TEL
Corporation
A Pacific Telesis Company
THE *** SYSTEM
GENERIC PRODUCT SPECIFICATIONS
*** (USING JAMMING)
Additional equipment is required to implement the *** function. This includes a
*** that can be used to terminate in process calls as required. This equipment
is controlled by the *** system.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
- -------------------------------------------------------------------------------
<S> <C> <C>
*** *** Only mobile receive is needed
***
- --------------------------------------------------------------------------------
*** *** Monitor cell site transmit
***
- --------------------------------------------------------------------------------
*** *** ***
***
- --------------------------------------------------------------------------------
*** *** ***
*** ***
***
- --------------------------------------------------------------------------------
*** *** Need to control SAT frequency
*** presence of 10 kHz
- --------------------------------------------------------------------------------
*** *** ***
*** ***
***
- --------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
PAC(TM) TEL
Corporation
A Pacific Telesis Company
THE *** SYSTEM
PRODUCT SPECIFICATIONS
SYSTEM INTEGRATI
The *** system mto the existing *** and ***
functions.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
ITEM SPECIFICATION COMMENTS
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
*** *** Security features must be in place
- -----------------------------------------------------------------------------------------------
*** *** Database must be remotely modified
- -----------------------------------------------------------------------------------------------
*** *** Activity must be available for further
analysis at the host site
- -----------------------------------------------------------------------------------------------
*** ***
***
***
- -----------------------------------------------------------------------------------------------
*** ***
***
***
- -----------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
DRAFT
TECHNICAL
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
- --------------------- ----------------- --------------- -------------------
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*** *** *** Must capture information on
*** all registrations and attempts
within test sites
- ------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------
*** ***
***
- ------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
DRAFT
***
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
- ------------------- ----------------- --------------- -------------------
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hardware Installation Operations review prior Commercial equipment ***
to ***
final commercial roll-out
***
-
- ***
-
-
d----------------------------------------------------------------------------------------------------------
Software Installation Operations review prior Commercial equipment ***
to
final commercial roll-out
- ----------------------------------------------------------------------------------------------------------
Installation Documentation Operations review prior Published documentation Must include:
to -
final commercial roll-out - ***
-
-
- ----------------------------------------------------------------------------------------------------------
Trouble-Shooting Operations review prior Commercial equipment Must include:
Capabilities to - ***
final commercial roll-out
- ----------------------------------------------------------------------------------------------------------
Alarming Operations review prior Commercial equipment ***
to
final commercial roll-out
- ----------------------------------------------------------------------------------------------------------
Monitoring Operations review prior Commercial equipment ***
to
final commercial roll-out
- ----------------------------------------------------------------------------------------------------------
Reporting Operations review prior Commercial equipment ***
to
final commercial roll-out
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
DRAFT
*** SATISFACTION
<TABLE>
<CAPTION>
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- ------------------- ----------------- --------------- -------------------
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<S> <C> <C> <C>
Transparency Subjective evaluation *** and commercial roll- ***
through live drive test out ***
- ----------------------------------------------------------------------------------------------------------------
Billing Records Evaluation of affected Commercial roll-out of ***
customer bills through *** *** configuration
***
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
*** ACCEPTANCE CRITERIA
DRAFT
**** MITIGATION
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PERFORMANCE METRICS EVALUATION METHOD TEST CONDITIONS ACCEPTANCE CRITERIA
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*** Identification *** *** ***
***
- ---------------------------------------------------------------------------------------
Review of *** ***
performance
reports ***
- ---------------------------------------------------------------------------------------
Terminations Review of *** ***
performance
reports ***
- ---------------------------------------------------------------------------------------
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</TABLE>
Work in Progress
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
EXHIBIT C
NONDISCLOSURE AGREEMENT
-----------------------
THIS NONDISCLOSURE AGREEMENT is made as of this 22 day of April, 1993
("Effective Date"), by and between PACTEL CORPORATION, a California corporation
(hereinafter referred to as "PacTel"), with offices located at 2999 Oak Road,
Walnut Creek, California 94596, and ESL INCORPORATED, a California corporation
(hereinafter referred to as "Vendor"), with offices located at 495 Java Drive,
Sunnyvale, California 94088-3510 (collectively "the Parties") which agree as
follows:
WHEREAS each Party wishes to evaluate and understand its potential
involvement in a project of mutual interest; and
WHEREAS PacTel may find it necessary to disclose to Vendor certain
confidential and proprietary information and intellectual property of PacTel,
relating to PacTel and its operations, which will be used by Vendor only for its
work on PacTel projects; and
WHEREAS Vendor may find it necessary to disclose to PacTel certain
confidential and proprietary information relating to Vendor and its operations
which will be used by PacTel only to evaluate its potential use of Vendor's
services; and
WHEREAS each Party is willing to release such Information to the other
on a confidential basis, and is willing to enter into this Agreement;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained, PacTel and Vendor agree as follows:
1. All Information as defined below, provided by one Party (the
"Originator") to the other will be treated as confidential.
"Information" shall include all information in written, oral or other
tangible or intangible forms which may include, but is not limited to,
discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, tracings, diagrams, models,
samples, flow charts, data, computer programs, disks, diskettes,
tapes, marketing plans, customer names and other technical, financial
or business information.
2. For a period of ten (10) years following the effective date of this
Agreement, each Party shall:
a. restrict disclosure of the Information solely to those of its
employees with a need to know, and not
-1-
<PAGE>
to disclose it to other parties; and,
b. advise its employees of the obligation of confidentiality
hereunder; and,
c. require its employees to use the same degree of care as is used
with that Party's own proprietary information.
3. Notwithstanding anything to the contrary herein, neither Party shall
have any obligation to preserve the confidentiality of any Information
that:
a. was previously known by it free of any obligation to keep it
confidential; or,
b. is distributed to third parties by the Originator without
restriction; or,
c. is or becomes publicly available, by other than unauthorized
disclosure by the Party receiving the Information; or,
d. is wholly and independently developed by the Party receiving the
Information.
4. All Information shall be deemed the property of the Originator, and,
upon request, the other Party will return all Information received in
tangible form to the Originator or destroy all such Information.
5. Nothing contained in this Agreement shall be construed as granting or
conferring any rights by license or otherwise in any Information
disclosed by the Originator.
6. This Agreement shall be governed and construed in accordance with the
laws of the State of California and shall benefit and be binding upon
the Parties hereto and their respective successors and assigns.
7. Since either Party may choose not to do business with the other in the
future, each acknowledges that the other is not responsible or liable
for any business decisions made by either in reliance upon disclosures
made during any meetings between the Parties or in reliance on any
results of the discussions.
-2-
<PAGE>
8. This Agreement shall continue until terminated in writing by either
Party. The obligation to protect the confidentiality of Information
received prior to such termination shall survive the termination of
this Agreement.
9. Each Party agrees that it will make no copies or otherwise reproduce
the data provided by the other, and further agrees to remove all such
data from its files and return all data to the other if requested to
do so.
PACTEL CORPORATION ESL INCORPORATED
("PacTel") ("Vendor")
By: /s/ L.R. Daniels By: /s/ Jill Kovacich
----------------------------- ------------------------------
Lyn R. Daniels Name: Jill Kovacich
------------------------------
Chief Financial Officer Title: Manager of Contracts
-----------------------------
and Treasurer
-3-
<PAGE>
EXHIBIT 10.9
THIRD AMENDMENT TO
THE DEVELOPMENT AND LICENSE AGREEMENT
DATED OCTOBER 4, 1993
BETWEEN CORSAIR COMMUNICATIONS, INC. (ESL
INCORPORATED)
AND AIRTOUCH COMMUNICATIONS (PACTEL CORPORATION)
This Third Amendment is made this 18th day of August, 1995, by and between
Corsair Communications, Inc., formerly PhonePrint, Inc. and assignee of ESL
Incorporated ("Corsair"), and AirTouch Communications, Inc., formerly AirTouch
Communications and formerly PacTel Corporation ("AirTouch").
WHEREAS, the parties entered into a Development and License
Agreement, dated October 4, 1993 (the "Agreement'); and
WHEREAS, the parties amended such Agreement in a First Amendment, dated
October 23, 1993; and
WHEREAS, the parties amended such Agreement in a Second Amendment, dated
December 7, 1994; and
WHEREAS, the parties now wish to further amend the Agreement;
NOW, THEREFORE, the parties agree as follows:
1. Section 1.1.1 of the Agreement is hereby deleted and the
following is substituted therefor:
"1.1.1 Agreement. The term the "Agreement" means this Development and
---------
License Agreement between Corsair and AirTouch, including the following Exhibits
attached hereto, and any amendments thereto:
Exhibit A: The *** .
Exhibit B: Nondisclosure Agreement, dated April 22, 1993.
Exhibit C: Nondisclosure Agreement, dated June 1, 1995.
2. Section 1.1.2 of the Agreement shall be amended to read as
follows:
"1.1.2 Develop or Development. The term "develop" or "development," as
----------------------
used herein, means engineering, design, layout and hardware generation,
prototyping,
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
characterization, qualification, fabrication, testing, and preparation of data
sheets and application notes."
3. Section 1.1.3 of the Agreement shall be amended to read as
follows:
"1.1.3 Licensed Products. The term "Licensed Products" means the ***
-----------------
*** to be developed hereunder, and any component parts thereof,
made under the *** described ***
therein."
4. Section 1.1.5 of the Agreement is hereby deleted.
5. Section i.1.6 of the Agreement is hereby deleted.
6. Section 1.1.7 of the Agreement is hereby deleted.
7. Section 1.2 of the Agreement is hereby deleted.
8. The first sentence of Section 2.1 of the Agreement is hereby
deleted.
9. Section 2.2 of the Agreement shall be amended to read as follows:
"2.2 Development by Corsair. Corsair will develop ***
----------------------
for wireless subscriber systems."
10. Section 2.3 of the Agreement shall be amended to read as follows:
"2.3 Commercialization by Corsair. Corsair will commercialize the Licensed
----------------------------
Products, i.e., Corsair will *** so that the Licensed
Products will be in manufacturable form for worldwide marketing, sales,
distribution and support by Corsair to end user customers."
11. Section 4.1 of the Agreement is hereby deleted and the following
is substituted therefor:
"4.1 License to Corsair. Subject to the terms and conditions of this
------------------
Agreement, AirTouch hereby grants to Corsair a perpetual, worldwide,
royalty-bearing, non-exclusive, non-transferable, non-sublicensable, right and
license under AirTouch's Licensed Patents:
(a) to make, have made, copy and/or use the Licensed Products;
(b) to sell the Licensed Products; and
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
(c) to provide support for the Licensed Products.
The license to use shall be extended to end user customers.
This license shall survive and shall be deemed to be fully paid-up upon any
expiration or termination of this Agreement, subject to full payment of any
royalties due for units sold, leased, exchanged or otherwise disposed of prior
to such expiration or termination in accordance with Section 4.3 below."
12. Section 4.2 of the Agreement is hereby deleted and the following
is substituted therefor:
"4.2 License to AirTouch. Subject to the terms and conditions of this
-------------------
Agreement, Corsair hereby grants to AirTouch a *** , nonexclusive,
non-transferable, *** for AirTouch's internal business purposes
in the United States."
13. Section 4.3 of the Agreement is hereby deleted and the following
is substituted therefor:
"4.3 Royalties. In consideration of the rights, licenses and benefits
---------
conferred *** hereunder, during the term of this Agreement, will pay
to *** a *** in the *** of *** of the *** of all *** or otherwise
disposed of or put into use by ***; provided, however, that the *** shall
*** than *** *** thereafter, nor shall the *** than ***
in the *** of this ***
*** in any *** . *** will have no obligation to ***
*** on *** , its *** or *** . In no event will more than ***
to *** for any *** . Notwithstanding the foregoing, *** *** on any
*** , but *** , by a ***. *** *** shall be *** no later than
*** during the term hereof."
14. The last sentence of Section 5.3 of the Agreement is hereby
deleted and the following is substituted therefor:
"Corsair will retain any and all rights to file any patent applications
thereon ***
***
*** thereunder for the term of this Agreement."
15. Section 7.1 of the Agreement shall be amended to delete the
words:
", ***
(collectively "PacTel *** ")"
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
16. Section 7.2 of the Agreement shall be amended to delete the
words:
", and/or *** (collectively "ESL Licensed Materials")"
17. Section 7.3 of the Agreement shall be amended to replace the word
"Materials", wherever it should appear, with the word " *** ".
18. Section 7.4 of the Agreement shall be amended to replace the word
"Materials", wherever it should appear, with the word " *** ".
19. The last three paragraphs of Section 12.1 of the Agreement
pertaining to the addresses of the parties are hereby deleted and the following
is substituted therefor:
"If to AirTouch: AirTouch Communications, Inc.
2785 Mitchell Drive, MS 8-1
Walnut Creek, CA 94598
Attn: *** , Director
Technology Transfer
With a copy to: AirTouch Communications, Inc.
1 California Street
San Francisco, CA 94111
Attn: Intellectual Property Counsel
If to Corsair: Corsair Communications
3408 Hillview Avenue
Palo Alto, CA 94304
Attn: ***
***
With a copy to: Brobeck Phleger & Harris
550 West C Street, Suite 1300
San Diego, CA 92101
Attention: ***
20. Exhibit A of the Agreement is hereby deleted and the following is
substituted therefor:
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission.
<PAGE>
"EXHIBIT A
AirTouch *** :
***
***
***
Corsair ***
***
***
21. Exhibit B of the Agreement is hereby deleted and the following is
substituted therefor:
"EXHIBIT B
Nondisclosure Agreement, dated April 22, 1993"
22. Exhibit C of the Agreement is hereby deleted and the following is
substituted therefor:
"EXHIBIT C
Nondisclosure Agreement, dated June 1, 1995"
23. Section 2 of the First Amendment to the Agreement is hereby
amended to add the following paragraph before Subsection (a):
"Each party may find it necessary to disclose to the other party
certain confidential and proprietary information and intellectual
property relating to its operations which will be used by the
other party only for its work on the Licensed Products. Such
confidential and proprietary information is known to the parties
as: *** and *** ."
24. Section 4 of the Second Amendment to the Agreement is
hereby deleted and the following is substituted therefor:
"4. Should AirTouch elect at any time to *** Licensed Products ***
*** for its own use, Corsair *** to the *** of the ***
*** such Licensed Products to *** of such ***
*** ."
*** Portions of this page have been omitted pursuant to a request for
Confidential Treament and filed separately with the commission
<PAGE>
25. In conjunction with the operation of Licensed Products purchased
by AirTouch under the terms of this Agreement and any subsequent agreement,
AirTouch shall have a license to use application software installed in said
Licensed Products to the extent required for the authorized use of the Licensed
Products.
26. Except as amended herein, the Agreement dated October 4, 1993 and
amended by the First Amendment on October 23, 1993 and amended again by the
Second Amendment on December 7, 1994 shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
as of the date first written above.
Corsair Communications, Inc. AirTouch Communications, Inc.
By:/s/ John F. Scott By:/s/ Michael Scullin
---------------------------- ------------------------------
Name:John F. Scott Name:Michael Scullin
-------------------------- ----------------------------
Title:Vice President Title:Director, Technology Transfer
------------------------- -----------------------------
6
<PAGE>
***
EXHIBIT 10.14
CORSAIR/*** PATENT LICENSE AGREEMENT
------------------------------------
This CORSAIR/*** PATENT LICENSE AGREEMENT ("Agreement") is effective as of
*** , ("Effective Date") by and between the Parties,
*** ("LICENSOR"), a
corporation organized and existing under the laws of the State of
*** and having its principal place of business at *** ,
*** , and
CORSAIR COMMUNICATIONS, INC. ("LICENSEE"), a corporation organized and
existing under the laws of the State of Delaware and having a
principal place of business at 207 Java Drive, Sunnyvale, California
94089.
RECITALS
--------
0.1 WHEREAS, *** Patent *** issued ***
with inventor *** and entitled ***
*** .
0.2 WHEREAS, LICENSOR has obtained all rights to license and enforce the
*** ***.
0.3 WHEREAS, LICENSOR believes the *** has commercial potential in
*** including ***
*** , and in other *** .
0.4 ***
*** .
1
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
0.5 WHEREAS, LICENSEE is desirous of acquiring and LICENSOR is desirous of
granting a *** , *** license under the *** .
NOW THEREFORE, for the mutual promises and other good and valuable
consideration set forth, the Parties agree to the terms and conditions as
follows:
TERM AND CONDITIONS
-------------------
ARTICLE 1
---------
1. DEFINITIONS. Terms defined in this ARTICLE 1, and elsewhere in this
Agreement, shall have the same meaning throughout the Agreement and will appear
in singular or plural form as the context indicates.
1.1 " *** " means *** Patent No. *** and any
reissues, extensions, reexaminations, or renewals thereof.
1.2 "Cellular Service" means a service in which a plurality of Cell
Sites, each covering a different limited geographic region, are established
for wireless communication, each Cell Site for communication with a
plurality of transmitters within the geographic region of the Cell Site.
***
*** .
1.3 "Cell Site" means any physical location containing installed
wireless receiver equipment for receiving transmitter signals from
transmitters in a limited geographic region where the transmitter signals
are processed in connection with Cellular Service.
2
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
1.4 "Unit" means any and all equipment, including hardware and/or
software, for a Cell Site that operates for ***
in accordance with the claims of the *** .
1.5 "Territory" means the *** including ***
where *** Patents have effect.
1.6 "Disposition" means delivery of a Unit in connection with a sale,
lease, license or other marketing of a Unit.
ARTICLE 2
---------
2. LICENSE.
2.1 LICENSOR hereby grants to LICENSEE a nonexclusive, fully-paid
(for the payment specified under ARTICLE 3) field-of-use license under
the *** as follows:
2.1.1 to make, to have made and/or to import Units for the field of
Cellular Service and in connection therewith to practice any method,
2.1.2 to lease, to sell or otherwise to market Units in the field
of Cellular Service and in connection therewith to practice any method,
and
2.1.3 to use, alone or in combination with other hardware
and/or software, Units in the field of Cellular Service and in
connection therewith to practice any method.
3
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
2.2 LICENSEE shall have the right, without further payment to
LICENSOR, to extend to remarketers of Units from LICENSEE, the license granted
to LICENSEE under Section 2.1.2.
2.3 LICENSEE shall have the right, without further payment to
LICENSOR, to extend to users of Units obtained from LICENSEE, directly or
through remarketers, the license granted to LICENSEE under Section 2.1.3.
2.4 Except as provided in this Section 2 and Section 7.2.2, LICENSEE
shall have no right to sublicense, assign, encumber or otherwise transfer the
licenses granted under this Agreement without the express written consent of
LICENSOR and LICENSOR shall retain the exclusive right to decide whether to
permit such sublicense, assignment or other transfer by LICENSEE.
2.5 LICENSOR retains exclusive rights to the *** , subject
to the license granted to LICENSEE under this Agreement.
ARTICLE 3
---------
3. PAYMENT
3.1 On the Effective Date, LICENSEE shall pay LICENSOR ***
*** .
ARTICLE 4
---------
4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
4.1 LICENSOR represents, warrants and covenants to LICENSEE that:
4
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
4.1.1 It is a corporation duly organized, validly existing and in
good standing under the laws of the State of ***.
4.1.2 It has the corporate authority to own its own assets and
properties and to carry on its business as now being and heretofore
conducted.
4.1.3 The execution, delivery and performance of this Agreement
4.1.3.1 has been duly authorized and does not violate its
certificate of incorporation, bylaws or similar governing instruments
or applicable law; and
4.1.3.2 will not, with the passage of time, materially conflict
with or constitute a breach of any other agreement, judgment or
instrument to which LICENSOR is a party or by which LICENSOR is bound.
4.1.4 It is the *** of the *** and has the
consent of ***, the inventor, to enter into this Agreement.
4.1.5 Nothing in this Agreement shall be deemed to be a
representation or warranty by LICENSOR of the validity of the *** or
its accuracy, safety, merchantability or usefulness for any purpose, of any
technical information, techniques, or practices at any time made available
by
LICENSOR to LICENSEE.
4.1.6 *** and LICENSOR together own all right, title and
interest in the *** and no other person or entity has, or has
made, any claim of ownership or other interest in the *** .
4.1.7 Other than the *** , neither LICENSOR nor ***
5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
have any ownership or other right, title or interest in any patent or
application therefor that has claims that might cover equipment, including
hardware and/or software, for a *** or any *** .
4.1.8 The REPRESENTATIONS AND WARRANTIES OF ***
*** are attached hereto and are an integral part of this Agreement.
4.2 LICENSEE represents, warrants and covenants to LICENSOR that:
4.2.1 It is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
4.2.2 It has the corporate authority to own its own assets and
properties and to carry on its business as now being and heretofore
conducted.
4.2.3 The execution, delivery and performance of this Agreement:
4.2.3.1 has been duly authorized and does not violate its
certificate of incorporation, bylaws or similar governing instruments
or applicable law; and
4.2.3.2 will not, with the passage of time, materially conflict
with or constitute a breach of any other agreement, judgment or
instrument to which LICENSEE is a party or by which LICENSEE is bound.
ARTICLE 5
---------
5. PATENT INFRINGEMENT AND PATENT RENEWAL COSTS.
5.1 *** shall be solely responsible for the payment of all
costs and legal expenses in pursuing any action to recover damages for
infringement, violation or
6
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
challenges to the *** .
5.2 *** shall control any litigation, dispute, cause of
action, affirmative defense or other legal remedy pertaining to any third party
infringement or challenge to the *** , including but not limited to,
all decisions relating to compromise or settlement.
5.3 *** shall, to the extent that it is successful in recovering
damages for infringement of the *** , be solely entitled to any recovery of
damages, costs and expenses recovered by *** for infringement of the ***
in the Territory.
5.4 *** shall be solely responsible for paying all patent
fees, including renewal fees, and related expenses for securing and maintaining
the *** .
ARTICLE 6
---------
6. TERM
6.1 The term of this Agreement shall commence on the Effective Date
and terminate upon the expiration of the *** .
6.2 The waiver by LICENSOR of any single breach or default by
LICENSEE, or of any successions of breaches or defaults, shall not be construed
as a wavier of any similar breach or default by LICENSEE or any other breach or
default of any other provisions of this Agreement.
7
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
ARTICLE 7
---------
7. GENERAL PROVISIONS.
7.1 PATENT MARKING AND NOTICE: Units having a Disposition under this
-------------------------
Agreement shall bear the notice "Licensed under *** ".
7.2 ASSIGNMENT:
----------
7.2.1 This Agreement and the license granted herein under the ***
***, shall inure to the benefit of and be binding upon LICENSOR'S
successors or assigns.
7.2.2 This Agreement and the licenses granted herein ***
*** the *** of ***
in connection with a ***
which relates to ***.
7.3 NOTICES: All notices, requests, demands or other communications to or
-------
from the respective Parties required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been received when
delivered in person or sent by registered or certified mail, return receipt
requested, postage and registration or certification fees prepaid, or sent by a
reliable overnight delivery service providing a receipt evidencing such
delivery, to the recipient at its address given above or at such other address
as hereafter shall be furnished by a notice sent in like manner to such address
by the other.
7.4 NO WAIVER: No modification, limitation, waiver, termination,
---------
rescission, discharge or cancellation of this Agreement or any provision thereof
shall be binding on
8
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
a Party to be bound unless in writing and signed by the Party to be bound.
7.5 ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
----------------
between the Parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings, oral and written, of
the Parties concerning the subject matter hereof.
7.6 EXECUTION IN COUNTERPARTS: This Agreement is executed in two
-------------------------
counterparts, each of which when executed shall be deemed to be an original and
both counterparts shall constitute one and the same agreement.
7.7 CONFIDENTIALITY: The Parties shall maintain the terms and conditions
---------------
of this Agreement in strict confidence except that either Party may disclose
information concerning this Agreement to the extent required by law or by order
of any court of competent jurisdiction.
7.8 ARBITRATION: Other than for matters relating to the scope and/or
-----------
validity of the *** , the Parties shall submit all disputes arising out
of the interpretation of this Agreement to binding arbitration.
7.8.1 Any arbitration will be in the *** before a panel
of three (3) Arbitrators certified by the American Arbitration Association
and conducted under its rules, with any decision thereunder to be final and
nonappealable.
7.8.2 All costs of arbitration shall be paid by *** . The
award shall be binding and conclusive and may be sued on or enforced by the
prevailing party in any court of competent jurisdiction.
9
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
7.8.3 The prevailing party in any arbitration shall recover all
costs and reasonable attorney's fees, including attorney's fees for
services rendered on appeal.
7.9 PATENT DISPUTES: Any dispute involving the scope and/or validity of
---------------
the *** shall only be brought in the ***
or in a *** court of competent jurisdiction.
IN WITNESS WHEREOF, the Parties have hereunto set their hands and seals.
By: ***
By:/s/ Mary Ann Byrnes
-----------------------------------------------------
MARY ANN BYRNES, as President
of CORSAIR COMMUNICATIONS, INC. (LICENSEE)
10
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
***
REPRESENTATIONS AND WARRANTIES OF ***
1. I, *** , represent and warrant that,
1.1 I am the inventor of and sole owner of ***
*** ;
1.2 I have granted exclusive rights under the *** to
*** and
under such rights *** has the right to enter into the ***
*** set forth above;
1.3 Other than to ***, I have not granted any rights in or under
the *** to any person or entity;
1.4 I am not aware that any claim has been made adverse to my
ownership of or my right to license the *** ;
1.5 I consent to *** entering into the ***
*** and to the terms and conditions thereof as set
forth above.
***
***
11
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the commission. ***
<PAGE>
CORSAIR COMMUNICATIONS, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of Corsair Communications, Inc., a Delaware corporation, by providing eligible
employees with the opportunity to acquire a proprietary interest in the
Corporation through participation in a payroll-deduction based employee stock
purchase plan designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall
be final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of Common
Stock purchased on the open market. The maximum number of shares of Common
Stock which may be issued in the aggregate over the term of the Plan shall not
exceed one hundred sixty six thousand six hundred sixty seven (166,667)
shares.
B. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a
class without the Corporation's receipt of consideration, appropriate
adjustments shall be made to (i) the maximum number and class of securities
issuable in the aggregate under the Plan, (ii) the maximum number and class of
securities purchasable per Participant on any one Purchase Date and (iii) the
number and class of securities and the price per share in effect under each
outstanding purchase right in order to prevent the dilution or enlargement of
benefits thereunder.
<PAGE>
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under
the Plan through a series of successive offering periods until such time as
(i) the maximum number of shares of Common Stock available for issuance under
the Plan shall have been purchased or (ii) the Plan shall have been sooner
terminated.
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date. However, the initial offering period shall commence on the
Effective Date and terminate on the last business day in July 1999. The next
offering period shall commence on the first business day in August 1999, and
subsequent offering periods shall commence on designated by the Plan
Administrator.
C. Each offering period shall be comprised of a series of one or
more successive Purchase Intervals. Purchase Intervals shall run from the
first business day in February each year to the last business day in July of
the same year and from the first business day in August each year to the last
business day in January of the following year. However, the initial Purchase
Interval in effect under the initial offering period shall commence on the
Effective Date and terminate on the last business day in January 1998.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair Market Value per
share of Common Stock on the start date of that offering period, then that
offering period shall automatically terminate with the purchase of shares of
Common Stock on such Purchase Date, and a new offering period shall commence
on the next business day. The new offering period shall have a duration of
twenty-four (24) months, unless a shorter duration is established by the Plan
Administrator within five (5) business days following the start date of that
offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date
of any offering period under the Plan may enter that offering period on such
start date or on any subsequent Semi-Annual Entry Date within that offering
period, provided he or she remains an Eligible Employee.
B. Each individual who first becomes an Eligible Employee after
the start date of an offering period may enter that offering period on any
subsequent Semi-Annual Entry Date within that offering period on which he or
she is an Eligible Employee.
C. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering period.
2.
<PAGE>
D. To participate in the Plan for a particular offering period,
the Eligible Employee must complete the enrollment forms prescribed by the
Plan Administrator (including a stock purchase agreement and a payroll
deduction authorization) and file such forms with the Plan Administrator (or
its designate) on or before his or her scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. Prior to the start date of each offering period, the Plan
Administrator shall determine the percentage of Base Salary which may be
applied by each Participant to the acquisition of shares of Common Stock under
the Purchase Plan during such offering period. Such percentage may be any
multiple of one percent (1%) of the Base Salary paid to the Participant during
each Purchase Interval within that offering period, up to a maximum of ten
percent (10%). In no event shall the Plan Administrator change the rate of
payroll deduction established for an offering period.
B. The deduction rate nominated by the Participant shall
continue in effect throughout the offering period, except to the extent such
rate is changed in accordance with the following guidelines:
(i) The Participant may, at any time during the offering
period, reduce his or her rate of payroll deduction to become effective as
soon as possible after filing the appropriate form with the Plan
Administrator. The Participant may not, however, effect more than one (1)
such reduction per Purchase Interval.
(ii) The Participant may, prior to the commencement of any
new Purchase Interval within the offering period, increase the rate of his or
her payroll deduction by filing the appropriate form with the Plan
Administrator. The new rate (which may not exceed the maximum percentage
established by the Plan Administrator for that offering period) shall become
effective on the start date of the first Purchase Interval following the
filing of such form.
C. Payroll deductions shall begin on the first pay day following
the Participant's Entry Date into the offering period and shall (unless sooner
terminated by the Participant) continue through the pay day ending with or
immediately prior to the last day of that offering period. The amounts so
collected shall be credited to the Participant's book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account. The amounts collected from the Participant shall not be held in
any segregated account or trust fund and may be commingled with the general
assets of the Corporation and used for general corporate purposes.
3.
<PAGE>
D. Payroll deductions shall automatically cease upon the
termination of the Participant's purchase right in accordance with the
provisions of the Plan.
E. The Participant's acquisition of Common Stock under the Plan
on any Purchase Date shall neither limit nor require the Participant's
acquisition of Common Stock on any subsequent Purchase Date, whether within
the same or a different offering period.
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
-----------------------
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments
over the remainder of such offering period, upon the terms set forth below.
The Participant shall execute a stock purchase agreement embodying such terms
and such other provisions (not inconsistent with the Plan) as the Plan
Administrator may deem advisable.
Under no circumstances shall purchase rights be granted under the
Plan to any Eligible Employee if such individual would, immediately after the
grant, own (within the meaning of Code Section 424(d)) or hold outstanding
options or other rights to purchase, stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of
the Corporation or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
------------------------------
automatically exercised in installments on each successive Purchase Date
within the offering period, and shares of Common Stock shall accordingly be
purchased on behalf of each Participant (other than Participants whose payroll
deductions have previously been refunded pursuant to the Termination of
Purchase Right provisions below) on each such Purchase Date. The purchase
shall be effected by applying the Participant's payroll deductions for the
Purchase Interval ending on such Purchase Date to the purchase of whole shares
of Common Stock at the purchase price in effect for the Participant for that
Purchase Date.
C. PURCHASE PRICE. The purchase price per share at which Common
--------------
Stock will be purchased on the Participant's behalf on each Purchase Date
within the offering period shall not be less than eighty-five percent (85%) of
the lower of (i) the Fair Market Value per share of Common Stock on the
Participant's Entry Date into that offering period or (ii) the Fair Market
Value per share of Common Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
----------------------------
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the Purchase
Interval ending with that Purchase Date by the purchase price in effect for
the Participant for that Purchase Date.
4.
<PAGE>
However, the maximum number of shares of Common Stock purchasable per
Participant on any one Purchase Date shall not exceed One Thousand Five Hundred
(1,500) shares, subject to periodic adjustments in the event of certain changes
in the Corporation's capitalization.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not
-------------------------
applied to the purchase of shares of Common Stock on any Purchase Date
because they are not sufficient to purchase a whole share of Common Stock
shall be held for the purchase of Common Stock on the next Purchase Date.
However, any payroll deductions not applied to the purchase of Common Stock by
reason of the limitation on the maximum number of shares purchasable by the
Participant on the Purchase Date shall be promptly refunded.
F. TERMINATION OF PURCHASE RIGHT. The following provisions
-----------------------------
shall govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next
scheduled Purchase Date in the offering period, terminate his or her
outstanding purchase right by filing the appropriate form with the Plan
Administrator (or its designate), and no further payroll deductions
shall be collected from the Participant with respect to the terminated
purchase right. Any payroll deductions collected during the Purchase
Interval in which such termination occurs shall, at the Participant's
election, be immediately refunded or held for the purchase of shares on
the next Purchase Date. If no such election is made at the time such
purchase right is terminated, then the payroll deductions collected with
respect to the terminated right shall be refunded as soon as possible.
(ii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the
offering period for which the terminated purchase right was granted. In
order to resume participation in any subsequent offering period, such
individual must re-enroll in the Plan (by making a timely filing of the
prescribed enrollment forms) on or before his or her scheduled Entry
Date into that offering period.
(iii) Should the Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in
status) while his or her purchase right remains outstanding, then that
purchase right shall immediately terminate, and all of the Participant's
payroll deductions for the Purchase Interval in which the purchase right
so terminates shall be immediately refunded. However, should the
Participant cease to remain in active service by reason of an approved
unpaid leave of absence, then the Participant shall have the right,
exercisable up until the last business day of the Purchase Interval in
which such leave commences, to (a) withdraw all the payroll deductions
collected to date on his or her behalf for that Purchase
5.
<PAGE>
Interval or (b) have such funds held for the purchase of shares on his
or her behalf on the next scheduled Purchase Date. In no event, however,
shall any further payroll deductions be collected on the Participant's
behalf during such leave. Upon the Participant's return to active
service, his or her payroll deductions under the Plan shall
automatically resume at the rate in effect at the time the leave began,
unless the Participant withdraws from the Plan prior to his or her
return.
G. CORPORATE TRANSACTION. Each outstanding purchase right shall
---------------------
automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the Purchase Interval in which such Corporate Transaction occurs to the
purchase of whole shares of Common Stock at a purchase price per share not
less than eighty-five percent (85%) of the lower of (i) the Fair Market Value
per share of Common Stock on the Participant's Entry Date into the offering
period in which such Corporate Transaction occurs or (ii) the Fair Market
Value per share of Common Stock immediately prior to the effective date of
such Corporate Transaction. However, the applicable limitation on the number
of shares of Common Stock purchasable per Participant shall continue to apply
to any such purchase.
The Corporation shall use its best efforts to provide at least ten
(10) days prior written notice of the occurrence of any Corporate Transaction,
and Participants shall, following the receipt of such notice, have the right
to terminate their outstanding purchase rights prior to the effective date of
the Corporate Transaction.
H. PRORATION OF PURCHASE RIGHTS. Should the total number of
----------------------------
shares of Common Stock to be purchased pursuant to outstanding purchase rights
on any particular date exceed the aggregate number of shares then available
for issuance under the Plan, the Plan Administrator shall make a pro-rata
allocation of the available shares on a uniform and nondiscriminatory basis,
and the payroll deductions of each Participant, to the extent in excess of the
aggregate purchase price payable for the Common Stock pro-rated to such
individual, shall be refunded.
I. ASSIGNABILITY. The purchase right shall be exercisable only
-------------
by the Participant and shall not be assignable or transferable by the
Participant.
J. SHAREHOLDER RIGHTS. A Participant shall have no shareholder
------------------
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such
6.
<PAGE>
accrual, when aggregated with (i) rights to purchase Common Stock accrued under
any other purchase right granted under this Plan and (ii) similar rights accrued
under other employee stock purchase plans (within the meaning of Code Section
423) of the Corporation or any Corporate Affiliate, would otherwise permit such
Participant to purchase more than Twenty-Five Thousand Dollars ($25,000) worth
of stock of the Corporation or any Corporate Affiliate (determined on the basis
of the Fair Market Value per share on the date or dates such rights are granted)
for each calendar year such rights are at any time outstanding.
B. For purposes of applying such accrual limitations to the
purchase rights granted under the Plan, the following provisions shall be in
effect:
(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue in a series of installments on each
successive Purchase Date during the offering period on which such right
remains outstanding.
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already
accrued in the same calendar year the right to acquire Common Stock
under one (1) or more other purchase rights at a rate equal to Twenty-
Five Thousand Dollars ($25,000) worth of Common Stock (determined on the
basis of the Fair Market Value per share on the date or dates of grant)
for each calendar year such rights were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right
of a Participant does not accrue for a particular Purchase Interval, then the
payroll deductions which the Participant made during that Purchase Interval
with respect to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of
this Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective on the Effective Date,
provided no purchase rights granted under the Plan shall be exercised, and no
shares of Common Stock shall be issued hereunder, until (i) the Plan shall
have been approved by the shareholders of the Corporation and (ii) the
Corporation shall have complied with all applicable requirements of the 1933
Act (including the registration of the shares of Common Stock issuable under
the Plan on a Form S-8 registration statement filed with the Securities and
Exchange Commission), all applicable listing requirements of any stock
exchange (or the Nasdaq National Market, if applicable) on which the Common
Stock is listed for trading and all other applicable requirements established
by law or regulation. In the event such
7.
<PAGE>
shareholder approval is not obtained, or such compliance is not effected,
within twelve (12) months after the date on which the Plan is adopted by the
Board, the Plan shall terminate and have no further force or effect, and all
sums collected from Participants during the initial offering period hereunder
shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall
terminate upon the earliest of (i) the last business day in July 2007, (ii)
the date on which all shares available for issuance under the Plan shall have
been sold pursuant to purchase rights exercised under the Plan or (iii) the
date on which all purchase rights are exercised in connection with a Corporate
Transaction. No further purchase rights shall be granted or exercised, and no
further payroll deductions shall be collected, under the Plan following such
termination.
X. AMENDMENT OF THE PLAN
The Board may alter, amend, suspend or discontinue the Plan at any
time to become effective immediately following the close of any Purchase
Interval. However, the Board may not, without the approval of the
Corporation's shareholders, (i) materially increase the number of shares of
Common Stock issuable under the Plan or the maximum number of shares
purchasable per Participant on any one Purchase Date, except for permissible
adjustments in the event of certain changes in the Corporation's
capitalization, (ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of Common Stock purchasable under the
Plan or (iii) materially increase the benefits accruing to Participants under
the Plan or materially modify the requirements for eligibility to participate
in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the
Plan shall be paid by the Corporation; however, each Plan Participant shall
bear all costs and expenses incurred by such individual in the sale or other
disposition of any shares purchased under the Plan.
B. Nothing in the Plan shall confer upon the Participant any
right to continue in the employ of the Corporation or any Corporate Affiliate
for any period of specific duration or interfere with or otherwise restrict in
any way the rights of the Corporation (or any Corporate Affiliate employing
such person) or of the Participant, which rights are hereby expressly reserved
by each, to terminate such person's employment at any time for any reason,
with or without cause.
C. The provisions of the Plan shall be governed by the laws of
the State of Delaware without resort to that State's conflict-of-laws
rules.
8.
<PAGE>
SCHEDULE A
----------
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE DATE
------------------------
Corsair Communications, Inc.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. BASE SALARY shall mean the (i) regular base salary paid to a
-----------
Participant by one or more Participating Companies during such individual's
period of participation in one or more offering periods under the Plan,
determined prior to any deductions for any pre-tax contributions made by the
Participant to any Code Section 401(k) salary deferral plan or any Code
Section 125 cafeteria benefit program now or hereafter established by the
Corporation or any Corporate Affiliate. The following items of compensation
shall not be included in Base Salary: (i) all overtime payments, bonuses,
commissions (other than those functioning as base salary equivalents),
profit-sharing distributions and other incentive-type payments and (ii) any
and all contributions (other than Code Section 401(k) or Code Section 125
contributions) made on the Participant's behalf by the Corporation or any
Corporate Affiliate under any employee benefit or welfare plan now or
hereafter established.
B. BOARD shall mean the Corporation's Board of Directors.
-----
C. CODE shall mean the Internal Revenue Code of 1986, as
----
amended.
D. COMMON STOCK shall mean the Corporation's common stock.
------------
E. CORPORATE AFFILIATE shall mean any "parent" or "subsidiary"
-------------------
corporation of the Corporation, whether now existing or subsequently
established. "Parent" and "subsidiary" shall be determined as follows:
(i) "parent" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the
Corporation, provided each corporation in the unbroken chain (other than
the Corporation) owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain, and
(ii) "subsidiary" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation)
in the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
F. CORPORATE TRANSACTION shall mean either of the following
---------------------
shareholder-approved transactions to which the Corporation is a party:
A-1
<PAGE>
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete
liquidation or dissolution of the Corporation.
G. CORPORATION shall mean Corsair Communications, Inc., a
-----------
Delaware corporation, and any corporate successor to all or substantially all
of the assets or voting stock of Corsair Communications, Inc. which shall by
appropriate action adopt the Plan.
H. EFFECTIVE DATE shall mean the date on which the Underwriting
--------------
Agreement is executed and finally priced. Any Corporate Affiliate which
becomes a Participating Corporation after such Effective Date shall designate
a subsequent Effective Date with respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
-----------------
Participating Corporation on a basis under which he or she is regularly
expected to render more than twenty (20) hours of service per week for more
than five (5) months per calendar year for earnings considered wages under
Code Section 3401(a).
J. ENTRY DATE shall mean the date an Eligible Employee first
----------
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Date.
K. FAIR MARKET VALUE per share of Common Stock on any relevant
-----------------
date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price
is reported by the National Association of Securities Dealers on the
Nasdaq National Market or any successor system. If there is no closing
selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price
for the
A-2
<PAGE>
Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(iii) For purposes of the initial offering period which begins
at the Effective Date, the Fair Market Value shall be deemed to be equal
to the price per share at which the Common Stock is sold in the initial
public offering pursuant to the Underwriting Agreement.
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
---------
M. PARTICIPANT shall mean any Eligible Employee of a
-----------
Participating Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such
-------------------------
Corporate Affiliate or Affiliates as may be authorized from time to time by
the Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan as of the Effective Date are listed in
attached Schedule A.
O. PLAN shall mean the Corporation's 1997 Employee Stock
----
Purchase Plan, as set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or
------------------
more Board members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each
-------------
Purchase Interval. The initial Purchase Date shall be January 30, 1998.
R. PURCHASE INTERVAL shall mean each successive six (6)-month
-----------------
period within the offering period at the end of which there shall be purchased
shares of Common Stock on behalf of each Participant. The initial Purchase
Interval, however, shall end on January 30, 1998.
S. SEMI-ANNUAL ENTRY DATE shall mean the first business day in
----------------------
February and August each year on which an Eligible Employee may first enter an
offering period.
T. STOCK EXCHANGE shall mean either the American Stock Exchange
--------------
or the New York Stock Exchange.
U. UNDERWRITING AGREEMENT shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
A-3
