<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 6, 1999.
REGISTRATION NO. 333-75173
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
GLOBESPAN SEMICONDUCTOR INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3674 75-2658218
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
100 SCHULZ DRIVE
RED BANK, NJ 07701
(732) 345-7500
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ROBERT J. MCMULLAN
CHIEF FINANCIAL OFFICER
GLOBESPAN SEMICONDUCTOR INC.
100 SCHULZ DRIVE
RED BANK, NJ 07701
(732) 345-7500
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
SCOTT C. DETTMER, ESQ. BARRY E. TAYLOR, ESQ.
GUNDERSON DETTMER STOUGH TREVOR J. CHAPLICK, ESQ.
VILLENEUVE FRANKLIN & HACHIGIAN, LLP WILSON SONSINI GOODRICH & ROSATI
155 CONSTITUTION DRIVE PROFESSIONAL CORPORATION
MENLO PARK, CA 94025 650 PAGE MILL ROAD, PALO ALTO, CA 94303
(650) 321-2400 (650) 493-9300
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT 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, as amended (the "Securities Act"), 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. [ ]
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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SUCH
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 1 to the Form S-1 Registration Statement is being filed
for the sole purpose of filing additional exhibits.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by GlobeSpan in connection with
the sale of common stock being registered. All amounts are estimates except the
SEC registration fee and the NASD filing fees.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 15,290
NASD fee.................................................... 6,500
Nasdaq National Market listing fee.......................... 30,000
Printing and engraving expenses............................. 200,000
Legal fees and expenses..................................... 500,000
Accounting fees and expenses................................ 400,000
Blue sky fees and expenses.................................. 10,000
Transfer agent fees......................................... 10,000
Miscellaneous fees and expenses............................. 128,210
----------
Total............................................. $1,300,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Article VII, Section 6, of the Registrant's
bylaws provides for mandatory indemnification of its directors and officers and
permissible indemnification of employees and other agents to the maximum extent
permitted by the Delaware General Corporation Law. The Registrant's certificate
of incorporation provides that, pursuant to Delaware law, its directors shall
not be liable for monetary damages for breach of the directors' fiduciary duty
as directors to GlobeSpan and its stockholders. This provision in the
certificate of incorporation does not eliminate the directors' fiduciary duty,
and in appropriate circumstances equitable remedies such as injunctive or other
forms of non-monetary relief will remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to GlobeSpan for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director's
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. Prior to the closing of this offering, the
Registrant will enter into Indemnification Agreements with its officers and
directors, a form of which is attached as Exhibit 10.1 hereto and incorporated
herein by reference. The Indemnification Agreements provide the Registrant's
officers and directors with further indemnification to the maximum extent
permitted by the Delaware General Corporation Law. Reference is made to Section
of the Underwriting Agreement contained in Exhibit 1.1 hereto, indemnifying
officers and directors of the Registrant against certain liabilities.
II-1
<PAGE> 3
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since June 7, 1996, Registrant has issued and sold the following securities
(which numbers do not reflect the 8.75 for 1 split effected on November 25,
1996, the 2 for 1 split effected on October 16, 1997, the 1.5 for 1 split
effected on February 25, 1998, or the reverse 1 for 3 split to be effected prior
to this offering):
(1) On June 7, 1996, Registrant issued 1,000 shares in a private
placement of its common stock at a purchase price of $1.00 per share, for
cash in the aggregate amount of $1,000, to Communication Partners, L.P.
pursuant to the divestiture of GlobeSpan.
(2) On July 31, 1996, Registrant issued a warrant for 150,000 shares
of its common stock, with an exercise price of $58.83, to Lucent
Technologies in connection with the divestiture of GlobeSpan.
(3) On November 25, 1996, Registrant issued an aggregate of 4,000,000
shares in a private placement of its common stock, at a purchase price of
$1.00 per share, for cash in the aggregate amount of $4,000,000, to
Communication Partners, L.P. pursuant to a Common Stock Purchase Agreement.
(4) As of March 11, 1999, Registrant has sold and issued 897,369
shares of its common stock for an aggregate purchase price of $916,985 to
employees and consultants pursuant to direct issuance and to exercises of
options under its 1996 Option Plan.
The sale of the above securities was deemed to be exempt from registration
under the Securities Act in reliance upon Section 4(2) of the Securities Act or
Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by
an issuer not involving any public offering or transactions pursuant to
compensation benefit plans and contracts relating to compensation as provided
under such Rule 701. The recipients of securities in each such transaction
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof, and
appropriate legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access, through their relationships
with the Registrant, to information about the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<S> <C>
1.1* Form of Underwriting Agreement (preliminary form).
3.1** Certificate of Incorporation of the Registrant, as amended
to date.
3.2** Form of Restated Certificate of Incorporation to be filed
upon the closing of the offering made pursuant to this
Registration Statement.
3.3** Bylaws of the Registrant.
3.4** Bylaws of the Registrant effective upon the close of the
offering made pursuant to this Registration Statement.
4.1 Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
4.2* Specimen Common Stock certificate.
5.1* Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian.
10.1** Form of Indemnification Agreement.
10.2** 1999 Equity Incentive Plan.
10.3** Employee Stock Purchase Plan.
10.4** 1999 Director Stock Plan.
10.5** Business Loan Agreement between BankAmerica Business Credit
and Registrant, dated May 14, 1998.
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<S> <C>
10.6** Warrant for the purchase of Common Stock made by the
Registrant and held by Lucent Technologies Inc., dated July
31, 1996.
10.7*** Real Property Lease between Paradyne Corporation and Shav
Associates, dated October 8, 1996.
10.8*** Real Property Sublease by and between Registrant and
Paradyne Corporation, dated December 10, 1997.
10.9*** Amendment to Real Property Sublease by and between
Registrant and Paradyne Corporation, dated January 1, 1999.
10.10 Termination Agreement between Registrant and Paradyne
Corporation, dated December 31, 1998.
10.11*** Subordinated Promissory Note between Registrant and
Communication Partners, L.P., dated December 15, 1998.
10.12* Bill of Sale between Registrant and Paradyne, dated
, 1999.
10.13*** Employment Agreement between Registrant and Armando Geday,
dated April 1, 1997.
10.14*** Employment Agreement between Registrant and Thomas Epley,
dated August 29, 1997.
10.15+ Agreement for the Manufacture and Sale of ASIC Products
between Registrant and Lucent Technologies Inc.
Microelectronics, dated March 23, 1999.
10.16 Intellectual Property Agreement among Registrant, Lucent
Technologies Inc. and Paradyne Corporation, dated July 31,
1996.
10.17 Tax Matters Agreement between Registrant and Paradyne
Corporation dated July 31, 1996.
10.18+ Product Supply Agreement between Registrant and Paradyne
Corporation dated March 16, 1999.
23.1** Consent of Independent Accountants.
23.2 Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** Power of Attorney (see page II-5).
27.1** Financial Data Schedule for EDGAR Filing.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
*** Corrected version of previously filed document updating exhibit numbers.
+ Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes to provide to the underwriters at the
closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation or the Bylaws of the Registrant, the Underwriting Agreement, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act,
II-3
<PAGE> 5
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Red
Bank, State of New Jersey, on this 6th day of April, 1999.
GLOBESPAN SEMICONDUCTOR INC.
By: /s/ ARMANDO GEDAY
---------------------------------------
Armando Geday
President and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------ -------------------------------------- -------------
<S> <C> <C>
/s/ ARMANDO GEDAY President, Chief Executive Officer April 6, 1999
- ------------------------------------------------ (Principal Executive Officer) and
Armando Geday Director
/s/ ROBERT MCMULLAN Chief Financial Officer April 6, 1999
- ------------------------------------------------ (Principal Financial and Accounting
Robert McMullan Officer)
Director April 6, 1999
- ------------------------------------------------
Thomas Epley*
Director April 6, 1999
- ------------------------------------------------
Keith Geeslin*
Director April 6, 1999
- ------------------------------------------------
David Stanton*
Director April 6, 1999
- ------------------------------------------------
Dipanjan Deb*
Director April 6, 1999
- ------------------------------------------------
James Coulter*
*By: /s/ ARMANDO GEDAY
-------------------------------------
Armando Geday
Attorney-in-Fact
*By: /s/ ROBERT MCMULLAN
-------------------------------------
Robert McMullan
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<S> <C>
1.1* Form of Underwriting Agreement (preliminary form).
3.1** Certificate of Incorporation of the Registrant, as amended
to date.
3.2** Form of Restated Certificate of Incorporation to be filed
upon the closing of the offering made pursuant to this
Registration Statement.
3.3** Bylaws of the Registrant.
3.4** Bylaws of the Registrant effective upon the close of the
offering made pursuant to this Registration Statement.
4.1 Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
4.2* Specimen Common Stock certificate.
5.1* Opinion of Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian.
10.1** Form of Indemnification Agreement.
10.2** 1999 Equity Incentive Plan.
10.3** Employee Stock Purchase Plan.
10.4** 1999 Director Stock Plan.
10.5** Business Loan Agreement between BankAmerica Business Credit
and Registrant, dated May 14, 1998.
10.6** Warrant for the purchase of Common Stock made by the
Registrant and held by Lucent Technologies Inc., dated July
31, 1996.
10.7*** Real Property Lease between Paradyne Corporation and Shav
Associates, dated October 8, 1996.
10.8*** Real Property Sublease by and between Registrant and
Paradyne Corporation, dated December 10, 1997.
10.9*** Amendment to Real Property Sublease by and between
Registrant and Paradyne Corporation, dated January 1, 1999.
10.10 Termination Agreement between Registrant and Paradyne
Corporation, dated December 31, 1998.
10.11*** Subordinated Promissory Note between Registrant and
Communication Partners, L.P., dated December 15, 1998.
10.12* Bill of Sale between Registrant and Paradyne Corporation,
dated , 1999.
10.13*** Employment Agreement between Registrant and Armando Geday,
dated April 1, 1997.
10.14*** Employment Agreement between Registrant and Thomas Epley,
dated August 29, 1997.
10.15+ Agreement for the Manufacture and Sale of ASIC Products
between Registrant and Lucent Technologies Inc.
Microelectronics, dated March 23, 1999.
10.16 Intellectual Property Agreement among Registrant, Lucent
Technologies Inc. and Paradyne Corporation, dated July 31,
1996.
10.17 Tax Matters Agreement between Registrant and Paradyne
Corporation dated July 31, 1996.
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<S> <C>
10.18+ Product Supply Agreement between Registrant and Paradyne
dated March 16, 1999.
23.1** Consent of Independent Accountants.
23.2 Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** Power of Attorney (see page II-5).
27.1** Financial Data Schedule for EDGAR Filing.
</TABLE>
- ---------------
* To be filed by amendment.
** Previously filed.
*** Corrected version of previously filed document updating exhibit numbers.
+ Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
<PAGE> 1
EXHIBIT 10.10
TERMINATION AGREEMENT
This Termination ("Agreement") is dated and effective as of December 31,
1998, and is between Globespan Semiconductor Inc., a Delaware corporation
("Globespan"), and Paradyne Corporation, a Delaware corporation ("Paradyne").
RECITALS
WHEREAS, following the divestiture by Lucent Technologies Inc. of certain
businesses acquired by Globespan and Paradyne, Globespan and Paradyne
collaborated on various matters and established certain commercial relationships
between the two companies;
WHEREAS, as part of these commercial arrangements, Globespan and Paradyne
entered into a Globespan DSL Cooperative Development Agreement dated as of
November 27, 1996 and a Globespan DSL Cooperative Development Agreement Rider
dated as of the same date (collectively, the "1996 Agreements"), which (a)
provided for the sale of Globespan products to Paradyne (the "Product Supply
Arrangement"), (b) contemplated a lease of certain Paradyne equipment to
Globespan (the "Equipment"), and (c) purported to license certain Globespan
technology and intellectual property rights to Paradyne (the "License
Provisions");
WHEREAS, Globespan and Paradyne never intended the License Provisions to
come into current effect, and none of the License Provisions have been performed
in any way by Globespan or Paradyne;
WHEREAS, Globespan and Paradyne also expected that the Product Supply
Arrangement would be terminable by Globespan prior to an initial public offering
of Globespan Common Stock;
WHEREAS, Globespan and Paradyne subsequently agreed that Paradyne would
allow Globespan to use the Equipment at no cost on a month-to-month basis, and
if Paradyne subsequently elected to terminate such usage arrangement, Globespan
would be entitled to purchase the Equipment at a price tied to the depreciated
value of the Equipment.
WHEREAS, Globespan used certain of the Equipment through December 31, 1997,
and then purchased such Equipment from Paradyne for $350,337, and used the
remaining balance of the Equipment through January 1, 1998, and then purchased
such remaining Equipment from Paradyne for $403,228;
WHEREAS, Globespan and Paradyne agreed to terminate the Product Supply
Arrangement effective July 1, 1998, and to thereafter provide for sale of
Globespan products to Paradyne on alternative pricing terms, including the
payment over time of an aggregate of $1,500,000 by Globespan to Paradyne (the
"Royalty Payments"), of which $316,013.59 has been paid by Globespan to date;
WHEREAS, Globespan and Paradyne wish to memorialize and confirm the
foregoing; and
1
<PAGE> 2
WHEREAS, since (a) the License Provisions never came into effect, (b) the
Product Supply Arrangement set forth in the 1996 Agreements were terminated
effective July 1, 1998, and (c) the Equipment usage and purchase rights set
forth in the 1996 Agreements have now been fully performed, Globespan and
Paradyne now wish to formally terminate the 1996 Agreements;
NOW, THEREFORE, the parties hereby agree as follows:
1. Termination. The parties hereby terminate the 1996 Agreements in their
entirety effective immediately, with the 1996 Agreements having no further force
or effect.
2. Confirmation. The parties hereby acknowledge and confirm the various
matters described in the recitals above, and also confirm that no Technical
Information (as such term is defined in the 1996 Agreements) was ever
transferred to Paradyne.
3. Supply Arrangements.
(a) The parties intend to enter into a new, mutually acceptable supply
agreement covering the sale of Globespan products to Paradyne in the future (the
"New Supply Agreement").
(b) All product sales made by Globespan to Paradyne from July 1, 1998
through the date hereof, and all product sales made by Globespan to Paradyne
from the effectiveness of this Agreement through the execution and delivery by
the parties of the New Supply Agreement, shall be pursuant to Globespan's
standard purchase order terms and conditions, a copy of which is attached hereto
as Exhibit A.
(c) Globespan hereby confirms its obligation to pay to Paradyne a
total of $1,183,968.41 in remaining royalty payments, which remaining amount
shall be payable in a lump sum by check or wire transfer on the earlier of:
(i) within 30 days following the closing of Globespan's initial
public offering of Globespan Common Stock;
(ii) December 31, 1999
4. Additional Terms.
(a) Assignment: The rights and liabilities of the parties under this
Agreement will bind and inure to the benefit of the parties and their respective
successors and assigns.
(b) Notices: All notices related to this Agreement will be in writing.
All such notices will be sent to the address as set forth below or to such other
address that the receiving party may have provided for purpose of notice, which,
until changed by a party, shall be:
2
<PAGE> 3
if to Globespan Semiconductor Inc.
President
100 Schulz Drive
Red Bank, NJ 07701
if to Paradyne Corporation
President
8545 - 126th Avenue North
Largo, FL 33773
(c) Governing Law: this Agreement shall in all respects be governed by
and construed under the laws of the State of Delaware without regard to its
conflict of laws provisions.
(d) Entire Agreement: This is the entire agreement between the parties
with respect to the subject matter hereof, and this Agreement supersedes all
prior agreements, proposals, or understandings between the parties, whether oral
or in writing with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GLOBESPAN SEMICONDUCTOR INC.
By:
----------------------------
Title:
-------------------------
Date:
--------------------------
PARADYNE CORPORATION
By:
----------------------------
Title:
-------------------------
Date:
--------------------------
3
<PAGE> 1
EXHIBIT 10.15
AGREEMENT FOR THE MANUFACTURE AND SALE OF ASIC PRODUCTS
between
LUCENT TECHNOLOGIES INC.
MICROELECTRONICS
("SELLER")
and
GlobeSpan Semiconductor Inc.
("BUYER")
1. AGREEMENT This Agreement, effective as of March 23, 1999 ("Effective Date"),
applies to one or more products (hereinafter "Device") that are identified in
Seller's Quotation attached hereto and in any additional quotation that
references this Agreement, (hereinafter "Quotation"). As used herein,
"Agreement" refers to these terms and conditions and any Quotation. This
Agreement supersedes all prior oral or written understandings between the
parties, and constitutes the entire agreement between the parties, with respect
to all transactions relating to the subject matter of the Quotation. In the
event of a conflict between the applicable Quotation and these terms and
conditions, these terms and conditions prevail. Additional or differing terms
appearing on any purchase order or other procurement document do not apply. This
Agreement may not be modified or amended except by a writing signed by both
parties.
2. CHANGE OF QUOTATION Quoted prices, fees and charges are valid only for the
parameters or other particulars relating to the Device as stated in the
Quotation. If any changes in such parameters or particulars become necessary,
including but not limited to revision or redefinition of the specification or
variations in quantities, functional description, package type, or testing
requirements, Seller may revise such prices by amendment to the Quotation. Other
quoted fees and charges are valid only for the respective particulars stated in
the Quotation. Seller may also amend the Quotation with respect to any of such
quoted fees and charges to make adjustments for changes in Buyer's requirements.
Any such amendments to the Quotation shall reference the Quotation and shall be
further identified by their respective dates and shall be signed by both
parties.
3. PROTOTYPE APPROVAL Within ninety (90) days after receipt of prototypes for
any Device covered by this Agreement, Buyer may return any claimed
non-conforming prototypes to Seller with a written rejection statement
specifying the alleged failure or failures of the prototypes to meet the
acceptance criteria as
1
<PAGE> 2
provided in the Quotation or mutually agreed modifications thereof (the
"Acceptance Criteria"). If Buyer does not return the prototypes with a written
rejection statement within such ninety (90) day period, then the design and
prototypes shall be deemed to have been approved by Buyer and development work
shall be deemed to have been completed by Seller.
If any prototype does not meet the Acceptance Criteria and is rejected by Buyer,
Seller shall use commercially reasonable efforts to replace it with one, which
does comply with the Acceptance Criteria. Seller shall not, however, be
obligated to replace any non-complying prototypes of which it has not been
notified within ninety (90) days of shipment of same to Buyer. If Seller, within
ninety (90) days after receipt of Buyer's timely written rejection report, is
unable to supply Buyer with conforming prototypes, then either party may by
written notice to the other terminate this Agreement as to such Device, and if
so terminated, unless otherwise provided in the Quotation, all monies paid by
Buyer to Seller with respect to such Device will be refunded in full within
thirty (30) days. Such refund of monies shall be Buyer's sole and exclusive
remedy and Seller's entire liability with respect to non-conforming prototypes.
In the event that delivered prototypes comply with the Acceptance Criteria, but
do not function in Buyer's application (e.g., logic design error, change in
required function, etc.) Buyer shall pay all charges incurred for the
development of the Device and then Buyer and Seller may negotiate a mutually
agreeable redesign schedule and price.
4. FORECASTS
BUYER shall provide SELLER with a requirements forecast and shall update it on a
quarterly basis (the "Forecast"). The Forecast shall be a rolling monthly
forecast covering a period of six (6) months following the Effective Date of the
Forecast. BUYER shall submit the Forecast so that SELLER receives it at least
one (1) week prior to the Effective Date of the Forecast. BUYER shall submit its
forecast to SELLER within thirty (30) days of the Effective Date.
5. ORDERS No order for production quantities of the Device shall be placed by
Buyer or accepted by Seller unless and until Buyer has approved the prototypes
for the Device, paid all fees due under the Quotation and made any other
payments due to Seller under any order based on this Agreement. All orders for
the design of the Device, for changes, for technical assistance, for production
quantities of the Device or for any other service by Seller relating to this
Agreement shall be in writing, shall reference the Quotation by its number and
date and any current amendments thereto by their respective dates, and shall be
signed by Buyer. Seller shall acknowledge all accepted orders in writing, or
shall notify Buyer if, for any
2
<PAGE> 3
reason, an order cannot be accepted by Seller. The lead-time, as defined by the
time between the date of order placement and shipment date, shall be specified
in the quotation submitted by Seller. Both parties shall comply with the
"Shipment Packaging Requirements" and "Minimum Order & Packaging Specifications"
as defined in Attachments A and B.
6. RESCHEDULING OF ORDERS Buyer may reschedule an order pursuant to the
following schedule:
Days.....Time between date of reschedule request and current factory promise
date. Lead-time.....Time between date of order placement and device shipment
date.
<TABLE>
<CAPTION>
DAYS RESCHEDULE
---- -----------
<S> <C>
o Within 30 days No rescheduling
(0-30)
o Beyond 30 days One time reschedule by up to 90
(31-leadtime) days permissible with no further
reschedule or cancellation.
o Beyond leadtime Reschedules and cancellations
without limits.
</TABLE>
PULL-IN WITHIN AGREED DELIVERY DATE
o Buyer request date ("BRD") may be pulled in as desired by Buyer. o
o Seller will make reasonable efforts to meet the new BRD.
o If improvement of the acknowledged date is possible, a new
acknowledged date will be issued.
o If improvement cannot be made, the current acknowledged date would be
retained; in all cases, the requested pull-in date will be
maintained with the order history in the event an improvement can be
made at a later date.
7. DIE BANK INVENTORY
Buyer has the right to request the establishment of a Die Bank Inventory (DBI)
for any device. Seller has the obligation to create a DBI within [+] after
Buyer's request for quantities equal to [+] percent of the rolling quarterly
backlog, or [+] devices, whichever is greater, as measured at the beginning of
every month. The lead-time for finished devices from the DBI is four
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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<PAGE> 4
(4) weeks. Seller shall automatically replenish the DBI within a maximum of nine
(9) weeks unless Buyer instructs Seller otherwise in writing. If the DBI for a
specific device does not change over a period of 90 days, Buyer will pay a
carrying charge of [+] per quarter. Seller requires a six- (6) month notice for
a device to be removed from the DBI. Should this agreement be terminated or
expire, Buyer is obligated to purchase the remaining DBI over the next six (6)
months.
8. CANCELLATION OF ORDERS Subject to BUYER's rights to reschedule orders
pursuant to Section 6, should Buyer cancel any order which has been acknowledged
and a shipping date assigned, either in whole or in part, such cancellation
shall be upon terms and conditions that will compensate Seller for any loss or
damage resulting from such cancellation. No cancellation will be permitted if a
reschedule has been previously negotiated at the Buyer's request.
Compensation by the Buyer for production quantities of the Device shall be
according to the following schedule:
Days.....Time between date of cancellation and current factory promise date.
Liability.....Liability is the percentage of aggregate purchase price of the
canceled portion of the order.
<TABLE>
<CAPTION>
<S> <C>
DAYS PERCENT OF LIABILITY
---- --------------------
0 to leadtime 100
Greater than leadtime 0
</TABLE>
9. WARRANTY Seller warrants the Device as a production item ("Item"), but not
related services or prototypes of any such Items, to be free from defects in
material and workmanship and to be in conformance with the written specification
contained in the Quotation and amendments thereto, if any, and referenced in an
order accepted by Seller. If any defect in material or workmanship or failure to
conform to such specification ("Defect") is suspected in any such Items, Buyer,
after obtaining a Returned Material Authorization Number from Seller, shall ship
suspected defective samples of the Items to Seller, following Seller's
instructions regarding the return. No product will be accepted for repair,
replacement, credit or refund without the written authorization of and in
accordance with Seller's instructions. Seller shall analyze the failures, making
use, when appropriate, of technical information provided by Buyer relating to
the circumstances surrounding
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
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<PAGE> 5
the failures. Seller will verify whether any Defect appears in the Items. If
Seller determines that the returned products are not defective, Buyer shall pay
Seller all costs of handling, inspection, repairs and transportation at Seller's
then prevailing rates. Seller shall, at the Seller's option either credit or
refund without charge at Seller's manufacturing or repair facility the purchase
price, repair or replace the defective product with the same or equivalent
product provided: (i) Buyer notifies Seller in writing of the claimed Defect
within thirty (30) days after Buyer knows or reasonably should know of the
claimed Defect and (ii) Seller's examination of the Items discloses that the
claimed Defect actually exists. In the event of a replacement, Seller shall ship
the replacing Items FOB BUYER's dock. Any replaced Item shall become Seller's
property. The method of disposition of any replaced Items will be as mutually
agreed by both parties in writing. In no event shall Seller be responsible for
deinstallation or reinstallation of any Item or for the expenses thereof.
Repairs and replacements covered by the above warranty are warranted to be free
from defects as set forth above. Inspection and acceptance of Items by Buyer
and/or payment therefor shall not relieve Seller of responsibilities
hereunder.The above warranty does not apply to, and Seller makes no warranties
with respect to products that: are software programs, experimental products or
prototypes (all of which are provided "AS IS") or to Items which have been
subjected to misuse, neglect, accident or abuse or operating or environmental
conditions that deviate from the parameters established in applicable
specifications; or have been improperly installed, stored, maintained, repaired
or altered by anyone other than Seller; or have had their serial numbers or
month and year of manufacture or shipment removed, defected or altered. This
warranty does not extend to any system into which a Device is incorporated. No
other warranty, including warranties of merchantability or fitness for a
particular purpose is given with respect to any product or any service provided
by Seller under this Agreement or any Quotation. This warranty applies to Buyer
and may not be assigned or extended by Buyer to any of its customers or other
users of the Items, however a resale will not void the warranty hereunder from
Seller to Buyer. Seller will not directly accept returns delivery from Buyer's
customers or users of Buyer's products but will accept returns from Buyer's
customers if such returns are routed through Buyer.
EXCEPT AS STATED IN THE SECTION ENTITLED WARRANTY, SELLER, ITS SUBSIDIARIES AND
AFFILIATES, SUBCONTRACTORS AND SUPPLIERS MAKE NO WARRANTIES, EXPRESS OR IMPLIED,
AND SPECIFICALLY DISCLAIM ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. BUYER'S SOLE AND EXCLUSIVE REMEDY SHALL BE SELLER'S
OBLIGATION TO REPAIR OR REPLACE OR CREDIT OR REFUND AS SET FORTH ABOVE.
10. PROPRIETARY RIGHTS IN TECHNICAL INFORMATION Unless otherwise agreed in
writing, Buyer-supplied design information relating to the Device, as
incorporated in circuit design information, test vectors, test tapes, special
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<PAGE> 6
requirements specifications, and/or netlists, shall remain the property of
Buyer. Seller shall use such information and results exclusively for the design,
manufacture and sale of the Device to Buyer and in providing related production
services specific to the Devices. Seller retains all rights in Seller's
processing information, mask works, mask sets, macro cells, and the like used in
design, production or in filling orders placed by Buyer hereunder. Buyer has no
rights in or to such processing information, mask works, mask sets, macro cells,
and the like. However, Seller agrees that any mask works or mask sets created by
or on behalf of Seller and which are specific to the Devices shall only be used
by Seller in the performance of its services for Buyer under this Agreement, and
not for any other purpose. In the event Seller notices to terminate the
manufacture of a device, Seller shall use reasonable efforts to assist Buyer in
establishing an alternate supplier as a source for the terminated device(s).
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<PAGE> 7
11. INTELLECTUAL PROPERTY INDEMNITY
Seller will: (i) defend or settle, at its option and expense, any claim
against Buyer alleging that any Device furnished under this Agreement
directly infringes any patent, copyright or trademark; (ii) reimburse Buyer
for any costs incurred at Seller's written request relating to such claim;
and (iii) pay damages and costs assessed by final judgment against Buyer
and attributable to such claim. In addition, Seller will have the right, at
any time and at its option and expense to procure for Buyer the right to
continue using such Device. Seller's obligations hereunder are conditioned
upon: (i) Buyer giving Seller written notice within thirty (30) days of
Buyer's receipt of any such claim; (ii) Seller having complete control of
the defense and settlement thereof; (iii) Buyer cooperating fully with
Seller to facilitate the defense or settlement of such claim; and (iv)
Buyer's full compliance with ITS MATERIAL OBLIGATIONS UNDER this section of
the Agreement.
Notwithstanding the foregoing, Seller shall have no obligation to defend or
settle any claim: (i) SOLELY arising from Seller's compliance with Buyer's
specifications, designs or instructions; or (ii) SOLELY relating to any Device
furnished hereunder in combination with item(s) furnished or specified by
parties other than Seller, even if such combination results from the Device's
necessary or inherent use or the use for which the Device is purchased.
Buyer will defend or settle at its option and expense, any claim against Seller
alleging that any Device furnished under this Agreement directly infringes any
patent, copyright or trademark where such infringement: (i) arises SOLELY from
Seller's compliance with Buyer's specifications, designs or instructions; or
(ii) is SOLELY related to any Device furnished hereunder in combination with
item(s) (whether or not such item(s) were furnished or specified by Seller),
even if such combination results from the Device's necessary or inherent use or
the use for which the Device is purchased. Buyer shall reimburse Seller for any
costs incurred at Buyer's written request relating to such claim and pay damages
and costs assessed by final judgment against Seller and attributable to such
claims. In addition, Buyer shall have the right, at any time and at its option
and expense to: (i) procure for Seller the right to continue to manufacture and
sell such Device; or (ii) modify Buyer's specification in manner to render the
Device free of the infringement. Buyer's obligations hereunder are conditioned
upon: (i) Seller giving Buyer written notice within thirty (30) days of Seller's
receipt of such claim; (ii) Buyer having complete control of the defense and
settlement thereof; (iii) Seller cooperating fully with Buyer to facilitate the
defense or settlement of such claim; and (iv) Seller's full compliance with ITS
MATERIAL OBLIGATIONS UNDER this section of the Agreement.
SHOULD ANY CLAIM OR CLAIMS UNDER THE ABOVE PARAGRAPHS
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<PAGE> 8
CAUSE THE INDEMNIFICATION OBLIGATIONS OF BOTH PARTIES TO COME INTO
OPERATION THE PARTIES SHALL EQUITABLY ALLOCATE THE DEFENSE AND INDEMNITY
OBLIGATIONS BETWEEN THEMSELVES.
The sale of any Device by Seller shall not in any way confer upon Buyer, or
upon anyone claiming under Buyer, any license (expressly, by implication,
by estoppel or otherwise) under any patent claim of Seller or others
covering or relating to any process or method of making such Device.
Notwithstanding the foregoing if Seller now or hereafter has, pursuant to
its license agreements with third parties, the right to immunize or
sublicense the intellectual property covered by such third party agreements
in connection with Seller's sale of products of the same nature as the
Devices, Buyer and its customer(s) shall, pursuant to this Agreement, with
respect to the Devices, be immunized or sublicensed. The granting of
immunity or a sublicense shall be at Seller's sole discretion, not to be
exercised unreasonably, and at no cost to Seller and only to the extent
Seller may so immunize or sublicense.
THE FOREGOING STATES THE SOLE AND EXCLUSIVE REMEDY AND OBLIGATION OF THE
PARTIES HERETO FOR INFRINGEMENT OR OTHER VIOLATION OF ANY INTELLECTUAL
PROPERTY RIGHTS ARISING OUT OF THIS AGREEMENT AND IS IN LIEU OF ALL
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, IN REGARD THERETO.
12. NONDISCLOSURE During performance of this Agreement, the parties may
disclose or furnish to each other proprietary marketing, technical, or business
information, including, without limitation, products and/or software
("information"), relating to the subject of this Agreement.
Information provided in tangible form shall be clearly marked as proprietary.
With respect to any devices, any technical information, including but not
limited to circuit layout, design, or software, embedded in any such device is
proprietary information notwithstanding the absence of any proprietary marking
on such device. Information provided orally will be considered proprietary if
the disclosing party says it is proprietary at the time of oral disclosure and
summarizes it in a proprietary writing provided to the other party within thirty
(30) days of the oral disclosure.
The receiving party shall: (a) hold information in confidence using the same
degree of care as it normally exercises to protect its own proprietary
information, (b) restrict disclosure and use of information to employees
(including any contractors or consultants) with a need-to-know, and not disclose
it to any other parties, (c) advise those employees, contractors and consultants
of their obligations with respect to the information, (d) not copy, duplicate,
reverse engineer or decompile information, and (e) use the information only in
furtherance
8
<PAGE> 9
of performance under this Agreement.
The receiving party shall have no obligation to keep confidential information
that: (a) was previously known to it free of any confidentiality obligation, (b)
was independently developed by it, (c) is or becomes publicly available other
than by unauthorized disclosure, (d) is disclosed to third parties by the
disclosing party without restriction, or (e) is received from a third party
without violation of any confidentiality obligation.
If a party is faced with legal action or a requirement under government
regulations to disclose or make available proprietary information received
hereunder, such party shall forthwith notify the furnishing party and, upon
request of the latter, cooperate in contesting such action or requirement at the
requesting party's expense. Neither party shall be liable for damages for any
disclosure or unauthorized access pursuant to legal action or government
regulations or for inadvertent disclosure, access, or use if the customary
degree of care as it uses with respect to its own proprietary information has
been exercised and if, upon discovery of such inadvertent disclosure, access, or
use the furnishing or receiving party has endeavored to prevent any further
(inadvertent or otherwise) disclosure or use.
Obligations imposed by this Section 12 shall survive for a period of five years
after termination or expiration of this Agreement.
13. TERM OF AGREEMENT The term of this Agreement as related to any specific
Device covered by this Agreement shall expire at the end of the purchase period
specified in the Quotation and any agreed extensions thereto. Seller reserves
the right to discontinue the supply of any Device(s) hereunder. Seller shall
provide twelve (12) months written notice of discontinuation, during which
period Seller is obligated to accept orders placed by Buyer for commercially
reasonable quantities calling for delivery within lead time of the Device, with
no rescheduling permitted.
14. PAYMENT TERMS Prices shall be quoted and invoices shall be rendered and paid
in United States currency. Payment terms for all design and development
activities of Seller are as specified in the Quotation. All invoices for the
Device shall be payable net thirty (30) days from the date of invoice, which
invoice shall be rendered upon shipment. Seller may exercise an option to assess
an interest charge of up to one and one-half percent (1-1/2%) per month on all
amounts which are not timely paid (but not to exceed the maximum lawful rate.
The amount of credit or terms of payment may be changed or credit withdrawn by
Seller at any time. Each shipment shall constitute an independent transaction
and Buyer shall pay for same in accordance with the specified payment terms. If
shipments are
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<PAGE> 10
delayed by Buyer, Seller may invoice Buyer when Seller is prepared to ship.
15. DELIVERY, TITLE, RISK OF LOSS AND TRANSPORTATION Unless otherwise agreed to
by Seller in writing as part of the Quotation or any amendment thereto
referenced by Buyer in an order, (a) delivery terms on all shipments to any
point designated by Buyer in the United States shall be F.O.B. Buyer's dock ,
and (b) delivery terms on shipments to any point outside of the United States
shall be pursuant to Incoterms 1990 (DDU, country of export). Where, in order to
meet Buyer's requests, Seller ships or packs the Device or other materials in
other than its normal manner for shipment, additional billing may be rendered.
16. PRODUCT CHANGES Seller may, with Buyer's prior written concurrence, which
may not unreasonably be withheld, make changes in the Devices (i) that do not
materially affect physical or functional interchangeability or performance; or
(ii) when required for purposes of safety.
17. MANUFACTURING FACILITY Notwithstanding anything contained herein to the
contrary, Seller reserves the right to manufacture the Device in any
Seller-qualified facility that is ISO certified. Seller also reserves the right
to transfer production from one qualified facility to another ISO certified
facility or to manufacture at multiple qualified facilities that are ISO
certified, providing that Seller maintains the same level of service provided
previously to Buyer, without interruption of deliverables or slippage of
previously committed delivery dates. Upon Buyer's request, Buyer shall have the
right to visit the facility at such times, as Seller deems reasonable.
18. EXCLUSIVE REMEDIES AND LIMITATIONS OF LIABILITY
A. For purposes of the exclusive remedies and limitations of liability set
forth in this Section, Seller shall be deemed to include Lucent
Technologies Inc., its subsidiaries and affiliates and the directors,
officers, employees, agents, representatives, subcontractors and suppliers
of all of them; and "Damages" shall be deemed to refer collectively to all
injury, damage, loss or expense incurred.
B. Seller's entire liability and Buyer's exclusive remedies against Seller
for any damages caused by any Device defect or failure, or arising from the
performance or non-performance of any work, regardless of the form of
action, whether in contract, tort, including negligence, strict liability
or otherwise, shall be:
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<PAGE> 11
1. For infringement, the remedies set forth in the Section entitled
Intellectual Property Indemnity;
2. For failure to deliver conforming prototypes, Buyer's sole and
exclusive remedy and Seller's entire liability shall be Buyer's right
to a refund of monies paid by Buyer as provided in Section 3. For any
other failure of the Device or work performed, the remedies stated in
the Section entitled Warranty;
3. For failure to deliver or for delays in delivery of production
quantities, Seller shall have no liability unless the delivery is
delayed by more than thirty (30) days by causes not attributable
either to Buyer or to conditions as defined in paragraph 23, in which
case Buyer shall have the right, as its sole remedy, to cancel the
order without incurring cancellation charges;
4. For bodily injury or death to any person proximately caused by
Seller, Buyer's right to proven direct damages; and
5. For claims other than set forth above, Seller's liability shall be
limited to direct damages that are proven, in an amount not to exceed
$200,000
C. Notwithstanding any other provision of this agreement, Seller shall not
be liable for incidental, indirect, special, exemplary or consequential
damages or for lost profits, savings or revenues of any kind, whether or
not Seller has been advised of the possibility of such damages.
19. BUYER'S DESIGNATED EMPLOYEES ON SELLER'S PREMISES
Buyer's personnel shall, while on any location of Seller or any of its
affiliates, comply with rules and regulations with regard to safety and security
at such location. Seller shall inform such personnel of such rules and
regulations. Buyer shall have full control over such personnel and shall be
entirely responsible for their complying with such rules and regulations. Buyer
agrees to indemnify and save Seller and any of its affiliates harmless from any
claims or demands, including the costs, expenses and reasonable attorney's fees
incurred on account thereof, that may be made by (i) anyone for injuries to
persons or damage to property resulting from the acts or omissions of Buyer's
personnel or (ii) Buyer's personnel under Worker's Compensation or similar laws.
Buyer agrees to defend Seller and its affiliates, at Seller's request, against
any such claim or demand.
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20. EXPORT CONTROL The parties acknowledge that any products, software, and
technical information (including, but not limited to, services and training)
provided under this agreement are subject to U.S. exports laws and regulations
and any use of transfer of such products, software, and technical information
must be authorized under those regulations. The parties agree that they will not
use, distribute, transfer, or transmit the products, software, or technical
information (even if incorporated into other products) except in compliance with
U.S. export regulations. If requested by Seller, Buyer also agrees to sign
written assurances and other export-related documents as may be required for
Seller to comply with U.S.
export regulations.
21. ASSIGNMENT Seller shall have the right to assign this Agreement to any of
its affiliates without Buyer's prior written consent. Buyer shall have the right
to assign and transfer this Agreement and its rights and obligations hereunder
to an affiliate or to any third party who succeeds to substantially all its
business or assets, subject to Lucent standard credit approval. Any attempted
assignment in contravention of the above provision shall be void and
ineffective.
22. IDENTIFICATION Neither Seller nor Buyer shall use any identification of, or
reference to, any code, drawing, specification, trade name, trademark, trade
device, insignia, service mark, symbol, or any abbreviation, contraction, or
simulation thereof, of the other party in any advertising or promotional efforts
without such other party's prior approval.
23. EXCUSE OF PERFORMANCE Except with respect to Buyer's obligation to make
timely payments when due, neither party shall be held responsible for any delay
or failure in performance of any part of this Agreement to the extent such delay
or failure is caused by fire, flood, explosion, war, strike, embargo, government
requirement, civil or military authority, act of God, nature or the public
enemy, inability to secure material or transportation facilities, inadequate
yield of products despite Seller's reasonable efforts, act or omission of
carriers or any other causes beyond its reasonable control. Seller may, in the
event of any such circumstance, allocate in a fair and reasonable manner, taking
into account Seller's contractual commitments, its available production output
among itself and its other customers, including at Seller's option those not
under contract as long as such allocation does not adversely impact Buyer's
competitive position relative to Seller.
24. NON-WAIVER No course of dealing or failure of either party to strictly
enforce any term, right or condition with respect to any transaction or order
hereunder shall be construed as a waiver of such term, right or condition.
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25. TAXES Any tax or related charge which Seller shall be required to pay to or
collect for any government upon or with respect to services rendered or the
sale, use or delivery of the Device or other materials shall be billed to the
Buyer as a separate item and paid by Buyer, unless a valid exemption certificate
is furnished by Buyer to Seller.
26. CHOICE OF LAW The construction, interpretation, and performance of this
Agreement and any transaction hereunder shall be governed by the substantive
laws, but not the conflicts of law rules, of the State of New York. The U.N.
Convention on Contracts for the International Sales of Goods shall not apply to
the sale of product hereunder.
27. MEDICAL AND LIFE SUPPORT APPLICATIONS Seller does not recommend the use of
any Devices for medical or life support applications wherein a failure or
malfunction of the Device may directly threaten life or cause injury and Seller
will not knowingly sell its Devices for such use except pursuant to a written
exception to this policy granted on a case-by-case basis. No warranty is made
with respect to any such medical or life support use of any Device.
28. DISPUTES All disputes, controversies or differences which may arise under
this Agreement or for the breach thereof, shall at the request of either party
be initially submitted to mediation and, if not so resolved, be finally settled
by arbitration in New York City in accordance with the rules and regulations of
the American Arbitration Association (AAA). The arbitration shall be before one
(1) arbitrator who shall be selected in accordance with the rules of the AAA.
Each party shall bear its own expenses for the arbitration.
The award rendered by the arbitration shall be final and binding upon all
parties, and may be enforced in any court having jurisdiction over the party
sought to be bound.
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Nothing in this Section 28 shall be construed to preclude any party hereto from
seeking provisional remedies, including, but not limited to, temporary
restraining orders and preliminary injunctions from any court of competent
jurisdiction, in order to protect its rights pending arbitration. The
arbitration award may be enforced by judgment in any court having jurisdiction.
THE PARTIES, agreeing to the above terms and conditions, including by reference
all terms and conditions contained in the Quotation, and intending to be legally
bound thereby, have caused the signatures of their respective authorized
representatives to be affixed below on the date so written.
LUCENT TECHNOLOGIES INC. GLOBESPAN SEMICONDUCTOR INC.
(Signature) (Signature)
(Name and Title - Printed) (Name and Title - Printed)
(Date) (Date)
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<PAGE> 15
Attachment A
Shipment Packaging Requirements
1.0 PURPOSE:
This policy establishes Globespan Semiconductor Inc., (hereinafter GSI)
uniform guidelines governing the shipment packaging requirements for all
purchased devices.
2.0 SCOPE:
This policy applies to all internal and external departments within GSI
responsible for the procurement of devices and all suppliers of GSI.
This specification applies to all production
and other selected material, which shall be delivered to all GSI locations. This
specification shall supersede any and all other specifications issued from or
agreed to by GSI, on all previous agreements or contracts, written or implied.
3.0 REQUIREMENTS:
Suppliers are required to conform to the specifications contained
within the document. All outer shipping containers and unit packs must be
labeled with bar code and human readable labels as set forth in EIA-556-A, dated
October, 1992.
4.0 General Specifications:
All packaging shall conform to NSTA/ASTM standards, providing
protection from damage during transportation, while permitting removal and
replacement of product at destination without causing damage to product or
packaging.
5.0 Electrostatic Discharge Control "ESDC":
Containers, wraps, and cushioning materials, which come into direct
contact with the product, shall be non-corrosive, non-sloughing, electrostatic
free materials, conforming to "MIL-B-81705 {Type II} requirements as a minimum.
5.1 Unless conductive shipping containers are used, all ESDS devices
shall be intimately wrapped and preservation packaged/sealed. Minimum
requirement shall be in accordance with MIL-B-81705 {Type II}
requirements.
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NOTE: PLCC, TQFP, PQFP or BQFP trays are not to be considered as
acceptable static shielding and must be preservation packaged.
6.0 Bar-code Symbology:
The symbology required for all outer {overpack}, inner and unit
packaging shall be code 39, with minimum/maximum height, width, quiet zone, and
X dimension as set forth in EIA-556-A, dated October, 1992.
7.0 Bar-code Labels, General: Maximum label size is 8" x 11".
Inner/unit packaging, box, and reel labels shall conform to package
size. Only thermal transfer labels are acceptable.
Do not place tape and reel labels over hub.
7.1 Bar-code Labels, Specific:
The product packaging label requirements, for labeling individual
component boxes, ESDS bags, tubes, etc. shall be as set forth in Appendix C of
the ANSI/EIA-556-A guidelines dated October 1992.
8.0 Data Identifiers/Descriptions Outer/Overpack Labeling:
8.1 Label Type, ref. 3.2.2., EIA-556-A:
Only 3S, 4S, or 5S, labels shall be used. Under no circumstances should
multi order/single product or multi order/mixed load labels ever be used.
8.2 Ship From, ref. 3.2.4.1., EIA-556-A:
Mandatory human readable field that shall contain the complete supplier
ship from address. This field shall be labeled FROM.
8.3 Ship To, ref. 3.2.4.1., EIA-556-A:
Mandatory human readable field that shall contain the complete GSI
destination address. This field shall be labeled TO.
8.4 Supplier Package Identification, ref. 3.2.3.1., EIA-556-A:
Mandatory bar code and human readable data field.
8.5 Transaction Identification, ref. 3.2.3.2., EIA-556-A:
Mandatory bar code and human readable field containing the GSI
purchase order number.
8.6 Customer Product Identification, ref. 3.2.3.3., EIA-556-A:
Mandatory bar code and human readable field containing the GSI part
number.
NOTE: When this label is used for mixed load packages the message
"MIXED LOAD" shall be printed in place of the bar code and human readable
interpretation.
8.7 Package Count, ref. 3.2.3.4. EIA-556-A:
Mandatory text only data field.
8.8 Quantity, ref. 3.2.3.5., EIA-556-A:
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Mandatory bar code and human readable field.
8.9 Unit of Measure, ref. 3.2.3.5.3., EIA-556-A:
Mandatory bar code and human readable field indicating unit of measure.
8.10 Description, ref. 3.2.4.2., EIA-556-A:
Mandatory bar code and human readable field containing the supplier
part number.
8.11 Special, ref. 3.2.4.3., EIA-556-A:
Mandatory bar code and human readable field containing supplier
internal order number, and package date.
9.0 Data Identifier/Descriptions Unit/Product Labeling, Appendix C,
EIA-556-A: Shall include country of origin.
9.1 Customer Product Identification, ref. C4.1.1.1., Appendix C, EIA-556-A:
9.2 Quantity, ref. C4.1.1.2., Appendix C, EIA-556-A:
9.3 Supplier Product ID, ref. C4.1.2.2., Appendix C, EIA-556-A:
Shall include internal part number, comcode, traveler #, PO #. 9.4
Datecode & Wafer Lot number, ref. C4.1.2.2., Appendix C, EIA-556-A:
10.0 Packing Lists:
A packing list shall accompany each shipment, and shall be securely
attached to the outside of carton number one and applied in such a manner that
accidental removal or loss shall not occur (i.e. envelope, protector, etc.).
Packing lists shall contain the following information as a minimum.
Complete supplier name and address.
Date of Shipment.
Complete GSI ship-to address.
GSI purchase order and part number,
Quantity shipped/backordered, serial numbers,
revision numbers, etc.
11.0 Acronyms:
NSTA: National Safe Transit Association
ASTM: American Society for Testing and Materials
ESDS: Electrostatic Discharge Sensitive
ESDC Electrostatic Discharge Control
PLCC Plastic Leaded Carrying Case
TQFP Thin Quad Flat Pack
PQFP Plastic Quad Flat Pack
BQFP Bumper Quad Flat Pack
ANSI The American National Standards Institute
12.0 Electronic Industries Association:
17
<PAGE> 18
An EIA representative may be reached by telephoning 703-907-7500 or
writing to Electronic Industries Association, 2001 Pennsylvania Avenue N.W.,
Washington, D.C., 20006. Copies of standard ANSI/EIA-556-A may be obtained by
telephoning:
Global Engineering Documents, USA and Canada: 1-800-854-7179 or
International:
1-714-261-1455.
For additional questions or compliance concerns, please contact the GSI
Supply Line Manager @ 732-345-7515.
13.0 Additional EIA-556-A Requirements:
All other EIA standards apply and should be regarded as required to
comply with Globespan Semiconductor Inc. requirements.
Label location as described in Section 6. Environmental
Considerations as described in Section 5. Bar code
requirements as described in Section 4. Standards for label
height and width as described in Section 4. Product package
label guidelines as described in Appendix C.
14.0 Additional Packaging Requirements:
Special packaging requirements may be required for specific devices and
on specific purchase orders. These requirements are not limited to but may be
the individual preservation packaging of single tray TQFP, PQFP, or BQFP devices
allowing for empty trays above and below securing the devices. GSI reserves the
right to require additional specific packaging requirements not mentioned within
these specifications.
18
<PAGE> 19
Attachment B
Minimum Order & Packaging Specifications
1.0 PURPOSE
This policy establishes Globespan Semiconductor Inc., (hereinafter GSI)
uniform guidelines governing the purchasing of all product when minimum
quantities are required.
2.0 SCOPE
This policy applies to all suppliers of GSI for all production and other
selected material, which shall be delivered to all GSI locations. This
specification shall supersede any and all other specifications issued by or
agreed to by GSI or any supplier thereof, on all previous agreements or
contracts, written or implied.
3.0 REQUIREMENTS
Suppliers are required to conform to the specifications contained within
this document.
4.0 Minimum Order Quantity
The minimum order quantity shall be as prescribed below.
TQFP PQFP PLCC Bulk PLCC T & R
360 252 252 1000
5.0 Minimum Order Packaging Requirements
All packaging requirements are to be as specified in (Attachment A, Rev.
01, Dated 03/01/98)
In addition to these specifications all derivatives shall be packaged in
single tray units (preservation packaged) and labeled as required. Two
single units shall be packaged in one box, and labeled as required. This
requirement shall apply only for minimum buys as established under 4.0.
6.0 New Derivative Requests
All requests for new derivatives beyond the established baseline (the first
three derivatives will be zero (0) cost) shall incur an NRE cost of $5k per
derivative.
19
<PAGE> 20
6.1 All derivative requests shall be formally requested using the GSI
Derivative Request form, with attached GSI purchase order for current
requirements.
6.2 All derivative request forms shall have a purchase order attached for
NRE charges, which are billable, once the derivative is in production.
6.3 The committed interval from formal request to availability for all new
derivatives shall be no more than eight weeks.
20
<PAGE> 21
LUCENT TECHNOLOGIES [LOGO]
BELL LABS INNOVATIONS
March 23, 1999
PROPOSAL NUMBER: CAD0009-GS032399
PREPARED FOR:
Mr. Tom Sennhauser
GlobeSpan Semiconductor Inc.
Red Bank NJ.
SUBJECT: 1999 Through 2001 Production Pricing for GlobeSpan Devices.
Lucent Technologies is pleased to submit to GlobeSpan Semiconductor the pricing
roadmap for the GlobeSpan device portfolio covering the period of January 1,
1999 through December 31, 2001.
Pricing is as agreed per 1/15 (see attached). Pricing will be revisited in June
or at the request of either party. NRE payments for[+] &[+] are as of the 8/20
EMAIL & 8/25 letter, respectively.
The table below shared the pricing that will be established for said products
given the product volume thresholds established in the matrix below. The
following two guidelines will govern the matrix.
- - The number of device derivatives that will be supported without any price
premiums is three (3).
- - No set up fees or maintenance fees will be applied to the first three
derivatives. Additional derivatives will be charged a $5,000 set up fee. The
individual piece part price adder for derivative maintenance is currently
being waived. This issue will be re-visited in the June timeframe.
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
<PAGE> 22
GLOBESPAN DEVICE PRODUCTION PRICING 99'
<TABLE>
<CAPTION>
PRODUCTION VOLUME FORECAST VOLUME
DEVICE PRICING-1999/2001 1999 1999
------ ------------------------------------ ---------------------------------------- ------
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
[+] [+] [+] [+] [+] [+] [+] [+] [+] [+]
</TABLE>
* [+] NRE BURRIED IN PRICES FOR THE 1ST & 2ND QTR. 1999 OR IN FIRST [+] PIECES.
** [+] NRE BURRIED IN PRICES FOR 1ST, 2ND & 3RD QTR. 1999 OR FIRST [+] PIECES.
First production quantities would be scheduled for delivery 14 weeks after PDI
and receipt of order. Should the customer require production in less than the
standard 14 week period. Risk Production is available at 50% premium to the
Production Prices listed above. Standard lead-time for normal, follow-on orders
is 10-12 weeks. Product delivery through our Leading Edge Procurement process
(i.e. either Blanket or Consignment Orders) is designed to eliminate the
10-12-week order interval as a planning requirement for the ordering location.
An accelerated production ramp is available to meet critical system
introduction/time-to-market needs. The cost of this accelerated production
service will depend upon the quantity and schedule pull-up requested.
Lucent Technologies values the opportunity to support GlobeSpan Semiconductor
with a winning product and service roadmap. If you should have any questions
about any of the items addressed with this proposal, feel free to contact me at
(610) 712-6544.
Sincerely,
/s/ L. K. Howell, Jr.
- ------------------------------
L. K. Howell, Jr.
Broadband ASIC, Product Manager
Copy to:
G. Malek - GlobeSpan C. A. Daley - Lucent Technologies
P. S. Minnich - Lucent Technologies A. B. Mitchell - Lucent Technologies
F. Schrampf - Lucent Technologies M. E. Scott - Lucent Technologies
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
<PAGE> 1
EXHIBIT 10.16
INTELLECTUAL PROPERTY AGREEMENT
AMONG
LUCENT TECHNOLOGIES INC.,
AT&T PARADYNE CORPORATION
AND
CAP ACQUISITION CORP.
<PAGE> 2
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 ASSIGNMENT OF A-PATENTS AND LICENSE GRANT TO LUCENT
ARTICLE 3 LICENSE GRANTS TO PARADYNE AND CAPCo
ARTICLE 4 AT&T COMPANIES, PRIOR AGREEMENTS
ARTICLE 5 ROYALTY AND REPORTING
ARTICLE 6 PARADYNE PROGRAMS
ARTICLE 7 KNOW-HOW AND OTHER INTELLECTUAL PROPERTY
ARTICLE 8 TRADEMARKS
ARTICLE 9 MISCELLANEOUS
ARTICLE 10 CONFIDENTIALITY
ARTICLE 11 INDEMNIFICATION
APPENDIX A A-PATENTS AND PATENT APPLICATIONS
APPENDIX B-1 paradyne trademarks
APPENDIX B-2 TRADEMARK ASSIGNMENT AGREEMENT (AT&T PARADYNE CORPORATION to
LUCENT TECHNOLOGIES INC.)
APPENDIX C PARADYNE PRODUCTS
APPENDIX D THIRD PARTY LICENSES
APPENDIX E IMMUNITY PATENTS AND APPLICATIONS
APPENDIX F KNOWN REEXAMINATIONS AND OTHER
APPENDIX G MEMBERS OF "KNOWLEDGE" GROUP
APPENDIX H CERTAIN LEGAL PROCEEDINGS
i
<PAGE> 3
INTELLECTUAL PROPERTY AGREEMENT
This Intellectual Property Agreement (hereinafter referred to as the
"Intellectual Property Agreement") is being entered into as of July 31, 1996, by
and among: LUCENT TECHNOLOGIES INC., a corporation of the State of Delaware
(hereinafter referred to as "LUCENT"), AT&T PARADYNE CORPORATION, a corporation
of the State of Delaware (hereinafter referred to as "PARADYNE"), and CAP
ACQUISITION CORP., a corporation of the State of Delaware (hereinafter referred
to as "CAPCo").
This Intellectual Property Agreement is Exhibit K to the Purchase Agreement
(hereinafter referred to as the "Purchase Agreement"), dated June 18, 1996,
among LUCENT, PARADYNE, CAPCo, PARADYNE PARTNERS, L.P., a Delaware limited
partnership, PARADYNE ACQUISITION CORP., a Delaware corporation (hereinafter
referred to as "BUYER"), and RENTAL ACQUISITION CORP., a Delaware corporation
and a wholly owned subsidiary of BUYER (hereinafter referred to as "RentalCo"),
and LEASE ACQUISITION CORP., a Delaware corporation, and shall become effective
as of the Closing Date as specified in the Purchase Agreement.
WHEREAS, LUCENT has agreed to sell and BUYER has agreed to buy PARADYNE
pursuant to the Purchase Agreement; and
WHEREAS Section 1.3(a) of the Purchase Agreement provides for an
Intellectual Property Agreement between the parties hereto.
NOW, THEREFORE, it is hereby agreed by and among the parties as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms without definition in this intellectual Property
Agreement shall have the meanings assigned to them in the Purchase Agreement. As
used herein, the following terms have the following meanings:
1.1 "Affiliated Companies" shall mean, with respect to a party hereto or
any other entity, any and all direct and indirect Subsidiaries of such party or
entity, plus any other company or entity mutually agreed to in writing by the
parties hereto. "Affiliated Companies" shall also include a parent directly or
indirectly owning more than fifty percent (50%) of the voting shares of such
party or entity, or otherwise owning more than fifty percent (50%) of the
ownership interest representing the right to manage such party or other entity.
1.2 "A-Patents" shall mean collectively" CAP A-Patents" and "Non-CAP
A-Patents".
1.3 "LUCENT ETC Patents" shall mean the Patents which are listed in
Appendix E under "ETC Technology".
2
<PAGE> 4
1.4 "LUCENT CAP Patents" shall mean the Patents which are listed in
Appendix E under "CAP Technology".
1.5 "LUCENT Patents" shall mean every Patent (including utility models,
but excluding design patents and design registrations other than those design
patents and design registrations incorporated in Products the design or
development of which was substantially complete as of the Closing Date) issued
in any country of the world on patent applications filed prior to the Closing
Date with respect to which LUCENT:
(i) prior to the Closing Date has ownership or control; and
(ii) as of the Closing Date otherwise has the right to grant any
licenses of the type herein granted by LUCENT.
1.6 "LUCENT VoiceSpan Patents" shall mean the Patents which are listed in
Appendix E under "VoiceSpan Technology."
1.7 "CAP A-Patents" shall mean the Patents and Patent applications listed
in Appendix A under "CAP A-Patents", and which are owned by LUCENT and which are
assigned to CAPCo pursuant to Article 2 hereof. The list of CAP A-Patents shall
be updated from time to time, upon mutual agreement of the parties, until the
Closing Date.
1.8 "CAP Technology" shall mean the carrier-less amplitude/phase
modulation technique, commonly referred to as CAP, using a bandwidth efficient,
two-dimensional passband line code which is derived from quadrature-amplitude
modulation (CAM), applicable to data transmission on various media (e.g.,
copper, coax, fiber and wireless) and able to support a wide range of speeds as
developed and licensed by PARADYNE and/or CAPCo and in existence prior to six
(6) months after the Closing Date.
1.9 "Closing Date" shall have the meaning assigned to it in Section 1.9(a)
of the Purchase Agreement.
1.10 "Derivative Work" shall mean any work based upon one or more
pre-existing works, such as a translation, abridgment, condensation or any other
form in which such preexisting works may be recast, transformed or adapted and
which, if prepared without authorization of the owner of the copyright in such
pre-existing work, would constitute a copyright infringement. For purposes of
this Intellectual Property Agreement, a "Derivative Work" shall also include any
compilation that incorporates such a preexisting work.
1.11 "ETC Technology" shall mean the PARADYNE-owned proprietary protocol,
commonly referred to as "ETC", as developed and licensed by PARADYNE and in
existence prior to six (6) months after the Closing Date, providing improved
data transmission over cellular communications links and other wireless
channels. ETC is described in the "Enhanced Throughput Cellular" (ETC) Release
1.0 Specifications, Document Revision 2, dated December 30, 1993. ETC is further
defined to cover all future revisions of the specification and any derivative
protocols resulting from modifications to ETC as they relate to V.32bis,
V.32terbo or V.34 modulations all of the foregoing as developed and licensed by
PARADYNE and in existence prior to six (6) months after the Closing Date.
3
<PAGE> 5
1.12 "Essential Patents" shall mean Patents which . claim inventions which
are incorporated in the technical information as provided by PARADYNE and/or
CAPCo in its licensing program(s), and which are necessary for the use of the
technical information to manufacture the articles licensed thereby.
1.13 "Hair Market Value" shall mean, with respect to any item sold. leased
or put into use, the greater of (i) the selling price which a seller would
realize from an unaffiliated buyer in an arm's length sale of an identical item
in the same quantity and at the same time and place as such sale, lease or
putting into use; or (ii) the selling price actually obtained for such item in
the form in which it is sold, whether or not assembled (and without excluding
therefrom any components or subassemblies thereof which are included in such
selling price). In determining "selling price", usual trade discounts actually
allowed to unaffiliated persons or entities and Products provided for
demonstration and/or promotional programs shall be excluded.
1.14 "Know-how" shall mean each party's ideas, concepts, know-how,
techniques, technical and commercial information, data and documents of whatever
kind, including drawings, specifications, photographs, samples, models,
processes, procedures, reports and correspondence, including works of authorship
embodying the foregoing, all of which relate to the Products.
1.15 "Knowledge" - a fact or other matter shall be deemed to be within the
"Knowledge of LUCENT and PARADYNE" if such fact or other matter is within the
actual knowledge of any of the individuals identified in Appendix G.
1.16 "Licensed Product" shall mean any Product specified by PARADYNE
pursuant to Section 5.1.
1.17 "Manufacturing Invention" shall mean an invention which is directed to
a process for manufacturing Semiconductive Devices. The term Manufacturing
Invention includes, but is not limited to: (1) depositing, growing, shaping,
etching, polishing, heating, annealing, irradiating, implanting, patterning, or
diffusing, cutting, sawing or dicing (2) housing, sealing, or encapsulating, or
(3) testing or measuring Semiconductive Devices, as well as (4) any apparatus
useful in implementing such a process.
1.18 "Non-CAP A-Patents" shall mean those Patents and Patent applications
listed in Appendix A under Non-CAP A-Patents", and which are owned by LUCENT and
which are assigned to PARADYNE pursuant to Article 2 hereof. The list of Non-CAP
A-Patents shall be updated from time to time, upon mutual agreement of the
parties, until the Closing Date.
1.19 "Other Intellectual Property" shall mean all other intellectual
property of PARADYNE which is not otherwise described herein, including all
copyrights and copyrightable information, software, microcode and firmware (in
both annotated source and object code), flowcharts, manuals, outlines, models,
designs and plans, in existence as of the Closing Date.
1.20 "PARADYNE CAP Patents" shall mean the Patents and Patent applications
listed in Appendix A under the heading "PARADYNE CAP Patents" which are those
Patents and Patent applications that are assigned to PARADYNE hereunder, and/or
were owned by PARADYNE prior to the Closing Date.
4
<PAGE> 6
1.21 "PARADYNE Design" shall mean the manufacturing design, drawings and/or
specifications for any Product for which such manufacturing design, drawings
and/or specifications are originated by or owned by PARADYNE and/or CAPCo.
1.22 "PARADYNE Non-CAP Patents" shall mean the Patents and Patent
applications listed in Appendix A under the heading "PARADYNE Non-CAP Patents"
which are those Patents and Patent applications that are assigned to PARADYNE
hereunder and/or were owned by PARADYNE prior to the Closing Date.
1.23 "PARADYNE Patents" shall mean the PARADYNE CAP Patents and the
PARADYNE Non-CAP Patents.
1.24 "PARADYNE Trademarks" shall mean those trademarks owned by PARADYNE
which are listed in Appendix B-1 to this Intellectual Property Agreement.
1.25 "Patents" shall mean patents, utility models and applications
therefor, including any and all divisionals, continuations, re-examinations,
renewals, provisionals, continuations-in-part, re-issues, in existence as of the
Closing Date and foreign equivalents thereof.
1.26 "PARADYNE Products" shall mean the products of PARADYNE and/or CAPCo
on sale as of the Closing Date or in development as of the Closing Date and for
which there has been at least one (1) sale, lease, rental, license or other
transfer prior to one (1) year from the Closing Date and also products listed in
Appendix C, for which there has been at least one (1) sale, lease, rental,
license or other transfer prior to three (3) years from the Closing Date. The
term shall not include chips other than components of system and board-level
PARADYNE and/or CAPCo Products for which the manufacturing drawings and
specifications are originated by, owned by, licensed to, or created for PARADYNE
and/or CAPCo for the sale of such components to entities which incorporate such
chips into system or board-level products or to distributors which resell
products and provided the sales of such chips by PARADYNE or by CAPCo do not
exceed ten percent (10%) of PARADYNE's (in the case of sales by PARADYNE) or
CAPCo's (in the case of sales by CAPCo) total revenue for any given year. The
term does not include: (1) any other chips or chipsets, or (2) the offering of
Telecommunications Services. Sales and/or licenses of CAP components under the
CAP Technology licensing program by PARADYNE and/or CAPCo are not subject to the
chip sales limitation above.
1.27 "Product(s)" shall mean PARADYNE Products and/or Progeny Products.
1.28 "Progeny Products" shall mean future modified versions of Products
that do not make use of additional LUCENT Patents.
1.29 "Semiconductive Device" shall mean an electronic or optoelectronic
device which includes a semiconductive material as an operable part thereof. The
term includes, but is not limited to: (1) transistors, diodes, capacitors,
resistors, inductors, conductors, and dielectrics; (2) discrete devices; (3)
integrated circuits whether separate from one another or integral with a wafer
and severable therefrom and which are designed to perform a particular function
or set of functions; (4) chips which include a plurality of such devices or one
or more of
5
<PAGE> 7
such integrated circuits and which are designed to perform a particular function
or set of functions; (5) chipsets sold as a plurality of such chips that are
capable of being interconnected as a combination designed to perform a
particular function or set of functions, and, if provided therewith; (6)
supporting members, terminal members, housings, and any environmental
controlling apparatus included within such housing or unitary therewith.
1.30 "Subsidiary" shall, with respect to a company, mean a corporation
(other than a party hereto) or other legal entity: (i) the majority of whose
shares or other securities entitled to vote for election of directors (or other
managing authority) is now or hereafter owned or controlled by such company
either directly or indirectly; or (ii) which does not have outstanding publicly
traded shares or securities, but the majority of whose ownership interest
representing the right to manage such corporation or other legal entity is now
or hereafter owned and controlled by such company either directly or indirectly;
but any such corporation or the other legal entity shall be deemed to be a
Subsidiary of such company only as long as such ownership or control exists
except as otherwise expressly provided herein.
1.31 "Telecommunications Services" shall mean the operation of a
communications network to provide communication, services to customers,
including the processing of information, to the extent needed to transfer
information between locations. The term "Telecommunications Services" includes
on-line and Internet services, and wireless services, whether fixed or mobile.
The term Telecommunications Services does not mean the sale manufacture,
marketing, lease, rental, license or other transfer of products that are used in
the provision of the Telecommunications Services.
1.32 "VoiceSpan Technology" shall mean the set of technologies commonly
referred to as "VoiceSpan" or "SVD", and utilizing quadrature addition of
sampled analog voice to QAM modems for the simultaneous transmission of voice
and data over the public switched telephone network as developed and licensed by
PARADYNE and in existence prior to six (6) months after the Closing Date.
1.33 "Mocha Technology" shall mean the PARADYNE-owned high speed modem
technology which utilizes clocking in the digital network to achieve speeds
greater than 33.4 Kbs in one direction, combined with V.34 communication in the
other direction.
1.34 "Hypermodem Technology" shall mean the PARADYNE-owned QAM-based
technology for combining high speed non-switched data service up to 384 Kbs to
the central office with simultaneous or alternating access to public switched
telephone network service using standard dial modem protocols on ordinary two
wire-connections.
ARTICLE 2
ASSIGNMENT OF A--PATENTS AND LICENSE GRANT TO LUCENT
2.1 LUCENT hereby irrevocably assigns, conveys and delivers to PARADYNE,
its successors, assigns and legal representatives, all right, title and interest
in and to Non-CAP A-Patents, and all rights and privileges relating thereto
including but not limited to the right to recover and take all such proceedings
as may be necessary for the recovery of
6
<PAGE> 8
damages or otherwise in respect of present and future infringement of any
patent(s) issuing thereon. Such assignment shall be subject to other
non-exclusive license agreements between LUCENT, or its Affiliated Companies,
and third parties under such Non-CAP A-Patent(s), which license agreements have
an effective date prior to the Closing Date, or which are replacement agreements
replacing other license agreements to the extent that such replacement
agreements are of the same scope, and have the same expiration date and terms of
termination, with respect to such subject patent(s) as the replaced license
agreements.
2.2 LUCENT hereby irrevocably assigns, conveys and delivers to CAPCo, its
successors, assigns and legal representatives, all right, title and interest in
and to CAP A-Patents, and all rights and privileges relating thereto including
but not limited to the right to recover and take all such proceedings as may be
necessary for the recovery of damages or otherwise in respect of present and
future infringement of any patent(s) issuing thereon. Such assignment shall be
subject to other non-exclusive license agreements between LUCENT, or its
Affiliated Companies, and third parties under such CAP A-Patent(s), which
license agreements have an effective date prior to the Closing Date, or which
are replacement agreements replacing other license agreements to the extent that
such replacement agreements are of the same scope, and have the same expiration
date and terms of termination, with respect to such patent(s) as the replaced
license agreements.
2.3 Any royalties, rights or other value paid or transferred to LUCENT or
its Affiliated Companies pursuant to such preexisting agreements referred to in
Sections 2.1 and 2.2 shall remain with LUCENT or its Affiliated Companies and
any such royalties, rights or values to be paid or transferred pursuant to such
preexisting license agreements or such replacement agreements after the Closing
Date shall continue to be paid or transferred to LUCENT or its Affiliated
Companies. Notwithstanding anything herein to the contrary, such royalties,
rights or other values in respect of such preexisting agreements shall not
include right to use fees, or additional revenue, rights or other value payable
or receivable as a consequence of agreements entered into between PARADYNE and
others with respect to CAP Technology, ETC Technology, Voicespan Technology,
Mocha Technology, and/or Hypermodem Technology.
2.4 PARADYNE hereby grants to LUCENT a non-exclusive, non-transferable,
irrevocable, world-wide, royalty-free license, under the Non-CAP A-Patents and
the PARADYNE Patents, but excluding the right to grant sublicenses (except to
Subsidiaries of LUCENT and except as provided for in Section 9.11) under the
Non-CAP A-Patents and the PARADYNE Patents. CAPCo hereby grants to LUCENT a
nonexclusive, non-transferable. irrevocable, world-wide, royalty free license,
under the CAP A-Patents, but excluding the right to grant sublicenses (except to
Subsidiaries of LUCENT and except as provided for in Section 9.11) under the CAP
A-Patents.
(a) All Patent licenses granted by PARADYNE and CAPCo pursuant to
Section 2.4 shall continue for the entire unexpired term of such Patents.
(b) The Patent licenses granted in this Section 2.4 by PARADYNE and
CAPCo to LUCENT are licenses to: (i) make, have made, use, lease, sell, offer
for sale and import products and offer services; (ii) make, have made, use,
lease, sell, offer for sale and import machines, tools,
7
<PAGE> 9
materials and other instrumentalities, insofar as such machines, tools,
materials and other instrumentalities are involved in or incidental to the
development, manufacture, testing or repair of such products which are, or have
been, or are to be made, used, leased, sold, offered for sale or imported by or
on behalf of LUCENT; and (iii) convey to any customer of LUCENT with respect to
any such product which is sold or leased by LUCENT to such customer, rights to
use, lease and resell such product as sold or leased by LUCENT (whether or not
as part of a larger combination); provided, however, that no rights may be
conveyed to customers with respect to any invention which is directed to: (1) a
combination of such product (as sold or leased) with any other product; (2) a
method or process which is other than the inherent use of such product itself
(as sold or leased); or (3) a method or process involving the use of a product
to manufacture (including associated testing) any other product.
2.5 Notwithstanding the foregoing, PARADYNE and CAPCo understand and
agree that LUCENT has been conducting license negotiations with the following
companies for licenses to such companies of A-Patents now owned by LUCENT and
the PARADYNE Patents, including the Non-CAP A-Patents, the CAP A-Patents, the
PARADYNE CAP Patents and the PARADYNE Non-CAP Patents:
(i) Creative Technology, Ltd.
(ii) Cirrus Logic, Inc.
(iii) Tatung Company
(iv) CalComp Electronics
(v) Acer Peripherals, Inc.
(vi) GVC Corporation
(vii) TECO Information Systems, Inc.
(viii) Tecom Company, Ltd.
(ix) Askey Computer Corporation
(x) Longshine Electronics Corporation
(xi) Motorola, Inc.
(xii) Ricoh, Ltd.
(xiii) Canon
(xiv) Brother Industries Ltd.
(xv) Murata Manufacturing Co., Ltd.
(xvi) The General Electric Co., P.L.C.
(xvii) Advanced Micro Devices
(xviii) Sierra Semiconductor Corporation
2.6 (a) PARADYNE and CAPCo agree that LUCENT may continue such
negotiations only with respect to Non-CAP A-Patents and the PARADYNE Non-AP
Patents for a period not to exceed twelve (12) months from the Closing Date, and
during such twelve (12) month period may grant sublicenses under the Non-CAP
A-Patents and the PARADYNE Non-CAP Patents to the foregoing companies, without
any payment to PARADYNE or CAPCo, provided: (1) such sublicenses are
substantially the same in scope and duration as licenses granted by LUCENT of
similar technology to similar companies in the past; (2) LUCENT shall use
reasonable efforts to ensure that the rights and licenses obtained by LUCENT, if
any, pursuant to the foregoing licenses granted above are extended to PARADYNE
to the extent such rights and licenses would be useful or desirable in
PARADYNE's businesses; and (3) LUCENT makes summaries of such sublicenses
available to PARADYNE under reasonable and
8
<PAGE> 10
appropriate confidentiality terms, which summaries shall contain sufficient
detail to enable PARADYNE to understand the scope of the sublicenses granted to
such companies under the A-Patents, and the scope of the rights and licenses
granted to PARADYNE, and LUCENT agrees to notify PARADYNE when such sublicense
agreements are entered into.
(b) After the Closing Date, CAPCo will, on a case-by-case basis,
consider making the CAP A-Patents and the PARADYNE CAP Patents available for
LUCENT to sublicense to the companies listed in Section 2.5. Any permission
granted to LUCENT for the licensing of CAP A-Patents and PARADYNE CAP Patents
shall be beforehand and in writing and any licenses entered into by LUCENT shall
be in accordance with the provisions specified in Section 2.6(a).
2.7 PARADYNE (and, if permission is granted as per Section 2.6(b), CAPCo)
further agrees that LUCENT may enter into replacement sublicense agreements with
the foregoing companies, also without payment to PARADYNE (or CAPCo), provided
the terms of such replacement sublicense agreements are substantially the same
in scope, and have the same expiration date and terms of termination, with
respect to the Non-CAP A-Patents and/or PARADYNE's Non-CAP patents (and, if
authorized in accordance with the foregoing, CAP Patents and/or PARADYNE CAP
Patents) as the original sublicense agreements entered into with such companies
pursuant to Section 2.6 hereof, and further provided that with respect to any
such replacement sublicense agreements that LUCENT fulfills the conditions
described in Sections 2.6(a)(1), 2.6(a)(2) and 2.6(a)(3)
2.8 PARADYNE and CAPCo shall bear any and all administrative and similar
costs external to LUCENT related to the assignment of the A-Patents from LUCENT
to PARADYNE and CAPCo pursuant to Sections 2.1 and 2.2 above, but not including
legal fees, if any, incurred by LUCENT, and not including those costs related to
LUCENT's fulfilling its obligations described in Section 9.19 hereof which
obligations include solely the recording in the U.S. Patent Office the
assignment from AT&T to LUCENT of U.S. CAP A-Patents and non-CAP A-Patents.
LUCENT shall execute all documents and perform all acts as required for the
assignment of the A-Patents to PARADYNE and CAPCo under this Intellectual
Property Agreement.
2.9 PARADYNE and CAPCo shall bear all costs of prosecution and maintenance
of the A-Patents and the PARADYNE Patents arising after sixty (60) days from the
Closing Date. Notwithstanding the foregoing, PARADYNE and/or CAPCo shall have
the right to abandon or modify any Patent application at their sole discretion
and without notice to, or consent from, LUCENT. LUCENT shall continue to
maintain the A-Patents and the PARALYZE Patents for 60 days after Closing;
provided, however, that PARADYNE and/or CAPCo shall promptly reimburse LUCENT
for any maintenance or similar fees expended by LUCENT in connection with such
maintenance.
2.10 In the event PARADYNE and/or CAPCo and their successors and assigns
undertake to enforce or authorize any person to enforce any of the PARADYNE
Patents or the A-Patents assigned to it under Section 2.1 and/or Section 2.2
above against a third party, upon written request from PARADYNE and or CAPCo,
LUCENT shall, to the best of its knowledge, inform PARADYNE and/or CAPCo in
writing within sixty (60) days following receipt of such
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<PAGE> 11
request whether or not that third party can claim rights under the A-Patents
granted by LUCENT, and to the extent possible without beach of confidentiality,
shall describe in reasonable detail the nature of such rights.
2.11 If any party should discover an infringement of another party's
patents, the party becoming aware of such infringement will use reasonable
efforts to inform the party whose patent is alleged to be infringed.
2.12 To the extent that the enforceability of, or title to, any Patents
owned by PARADYNE and/or CAPCo, and licensed as set forth in Sections 2.4, 2.6
and 2.7 become the subject of controversy arising from any such preexisting
agreement, sublicense or replacement sublicense agreement, as the case may be,
LUCENT shall promptly notify PARADYNE and/or CAPCo thereof. PARADYNE and/or
CAPCo shall have the right itself, or through counsel of its choice, and at its
own expense, to participate in such controversy, including any litigation which
may arise in connection therewith. LUCENT shall not settle any such controversy
or litigation (to the extent such settlement may adversely affect the
enforceability of any such Patent) without the written agreement of PARADYNE
and/or CAPCo as the case may be.
ARTICLE 3
LICENSE GRANTS TO PARADYNE AND CAPCo
3.1 LUCENT hereby grants individually to PARADYNE and to CAPCo (hereafter
referred to as the PARADYNE Companies") a non-exclusive, non-transferable,
irrevocable, worldwide, royalty-free (except as provided in Section 3.7),
license, excluding the right to grant sublicenses (except to Subsidiaries of
PARADYNE Companies, and except as provided in Section 9.11), under LUCENT
Patents for Products, except as provided for in Sections 3.4 and 6.2(b).
3.2 The PARADYNE Companies hereby grant to LUCENT a non-exclusive,
nontransferable, irrevocable, worldwide, royalty-free license, excluding the
right to grant sublicenses (except to LUCENT's Subsidiaries, and except as
provided in Section 9.11), under PARADYNE's and CAPCo's Know-How currently in
possession of LUCENT or its Subsidiaries, solely and exclusively to the extent
reasonably necessary for LUCENT to exercise its rights and licenses hereunder.
3.3 LUCENT hereby grants to the PARADYNE Companies a non-exclusive,
nontransferable, irrevocable, worldwide, fully paid-up license, excluding the
right to grant sublicenses (except to the PARADYNE Companies' Subsidiaries, and
except as provided in Section 3.11) under LUCENT's Know-How currently in
PARADYNE Companies' possession, or in the possession of their Subsidiaries
solely and exclusively to the extent reasonably necessary for the PARADYNE
Companies to exercise their rights and licenses hereunder.
3.4 PARADYNE Companies do not have the right to make or have made
Semiconductive Devices of system and board-level Products under LUCENT Patents
relating to Manufacturing Inventions. PARADYNE Companies' make and have made
rights are limited to a PARADYNE Design.
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3.5 (a) All Patent licenses granted herein by LUCENT pursuant to Section
3.1 shall continue for the entire unexpired term of such Patents, and for
Patents other than U.S. Patents, for as much of such term as LUCENT initially
has the right to grant.
(b) The Patent licenses granted in this Article 3 by LUCENT to
PARADYNE Companies are licenses to: (i) make, have made, use, lease, sell, offer
for sale and import Products and offer services other than Telecommunications
Services; (ii) make, have made, use lease, sell, offer for sale and import
machines, tools, materials and other instrumentalities, insofar as such
machines, tools, materials and other instrumentalities are involved in or
incidental to the development, manufacture, testing or repair of such Products
which are, or have been, or are to be made, used, leased, sold, offered for sale
or imported by or on behalf of PARADYNE Companies; and (iii) convey to any
customer of PARADYNE Companies with respect to any such Product which is sold or
leased by PARADYNE Companies to such customer, rights to use, lease and resell
Product such as sold or leased by PARADYNE Companies (whether or not as part of
a larger combination); provided, however, that no rights may be conveyed to
customers with respect to any invention which is directed to: (1) a combination
of such Product (as sold or leased) with any other product; (2) a method or
process which is other than the inherent use of such Product itself (as sold or
leased); or (3) a method or process involving the use of a Product to
manufacture (including associated testing) any other product.
(c) If the Incremental improvement of a Product results in the use of
a new patent, such Product will continue to be properly licensed under all
Patents which were used in the Product prior to such improvement; provided,
however, that in negotiating license fees for any such new patent LUCENT will
give weight to the fact that the Product is already licensed under other
Patents.
3.6 Licenses granted herein by LUCENT to PARADYNE or CAPCo and by PARADYNE
or CAPCo to LUCENT are not to be construed as consent by either LUCENT,
PARADYNE, CAPCo or any of their Subsidiaries to any act which may be performed
by the other except to the extent allowed by a Patent licensed herein.
3.7 Notwithstanding anything to the contrary in this Article 3, the
license granted by LUCENT pursuant to Section 3.1 shall, with respect to the
Products of the businesses (or parts thereof' sold pursuant to Section 3.7(i)
below, cease to be royalty-free, and shall become subject to a royalty, to be
paid pursuant to Article 5, if and only if all of the following conditions are
met:
(i) PARADYNE and/or CAPCo, or their Subsidiary(ies), has sold either
all of its or their business, or a part of its or their business,
which makes use of some or all of the rights granted by LUCENT to
PARADYNE and/or CAPCo pursuant to Articles 3 and 6;
(ii) PARADYNE and/or CAPCo, or their Subsidiary(ies), has, in the case
of a sale of only part of its or their business, granted to such
part a sublicense to some or all of the rights granted by LUCENT
to PARADYNE under Articles 3 and 6;
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(iii) more than six (6) years have elapsed from the Closing Date; and
(iv) With respect to such sold business or sold part of such
business, as described in Section 3.7(i) and (ii), Change of
Control has occurred.
For the purpose of Section 3.7, "Change of Control" shall be deemed to have
occurred if any Person or group of Persons within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, and the regulations
promulgated thereunder (other than a group controlled by the Partnership) shall
hold immediately following the transaction in question outstanding shares of
capital stock of the company constituting a majority of the voting power for the
election of directors of the Company.
3.8 (a) In the case when PARADYNE and/or CAPCo, and/or their
Subsidiary(ies), has sold all of its or their business in accordance with
Section 3.7(i) above and the conditions of Sections 3.7(iii) and 3.7(iv) are
met, all Products of PARADYNE and/or CAPCo, as the case may be, become
royalty-bearing pursuant to Article 5.
(b) In the case where PARADYNE and/or CAPCo, and/or their
Subsidiary(ies), have sold only a part of its or their business and the
conditions of 3.7(ii), 3.7(iii) and 3.7(iv) are met only the Products of the
sold part of the business become royalty-bearing pursuant to Article 5.
3.9 If the license becomes royalty-bearing with respect to one (1) or more
Products under this Article 3, PARADYNE and/or CAPCo, as the case may be, shall
promptly notify LUCENT.
3.10 LUCENT will not unreasonably forebear, to the extent consistent with
LUCENT's then existing general policies regarding the patents requested to be
licensed, in the granting of licenses on reasonable and nondiscriminatory terms
and conditions, within the scope of the licenses granted herein (which may
include a royalty-free or royalty bearing license from PARADYNE and/or CAPCo to
LUCENT if such is consistent with such policies).
ARTICLE 4
AT&T COMPANIES, PRIOR AGREEMENTS
4.1 PARADYNE acknowledges LUCENTs representation that LUCENT or its
Affiliated Companies have already entered into non-exclusive license agreements
with other companies and other entities (the "Prior Agreements"), under which
Prior Agreements LUCENT or its Affiliated Companies have granted certain rights
and licenses to Patents, including the PARADYNE Patents and the A-Patents; in
consideration for patents of such third parties being licensed to LUCENT, and
its Affiliated Companies, including PARADYNE.
4.2 PARADYNE hereby ratifies and assents to inclusion of PARADYNE Patents
in such Prior Agreements to the extent necessary for LUCENT or its Affiliated
Companies to fulfill its obligations under such Prior Agreements.
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4.3 (a) To the extent and for the duration that LUCENT has the right,
LUCENT grants PARADYNE licenses under the agreements with the companies listed
in Appendix D. (Appendix D shall be updated upon mutual agreement of all parties
until the Closing Date. Such licenses are granted only while PARADYNE operates
as a separately identifiable business and only to the extent LUCENT has the
right, prior to the Closing Date, to grant such licenses as determined by the
agreements with the companies listed in Appendix D.
(b) LUCENT represents that licenses available to PARADYNE under such
agreements listed in Appendix D are limited in scope, have restrictive
provisions and do not enure to the benefit of BUYER or PARADYNE's successor.
LUCENT further represents that some of such licenses are only effective upon
request to, and with approval of, the licenser. LUCENT will provide PARADYNE
with copies of the agreements listed in Appendix D within ninety (90) days after
the Closing Date.
4.4 Except as provided in Article 4.3, PARADYNE hereby further
acknowledges LUCENT's representation that any license rights under third party
patents PARADYNE has under such Prior Agreements or any other agreement under
which PARADYNE obtained rights by virtue of its being a Subsidiary of LUCENT or
AT&T Corp. shall cease upon PARADYNE no longer being a Subsidiary, however,
PARADYNE has not made an independent investigation of such third party
agreements.
4.5 For all Prior Agreements under which LUCENT extends rights under third
party patents to PARADYNE, PARADYNE agrees to cooperate with LUCENT and such
third party (including the licensing of PARADYNE's Patents to such third party,
if required by the Prior Agreement) to effect the extension of rights to
PARADYNE. PARADYNE's failure to cooperate shall relieve LUCENT of any obligation
of indemnity for patent infringement with respect to such third party's patents
if such failure to cooperate is not commercially reasonable in light of all the
facts and circumstances, including but not limited to, the identity of such
third party and the business plans and strategies of PARADYNE.
ARTICLE 5
ROYALTY AND REPORTING
5.1 Royalty Calculation
(a) Within sixty (60) days of a Product becoming royalty-bearing
pursuant to Article 3, PARADYNE and/or CAPCo shall designate which Products
shall become Licensed Products by providing a list to LUCENT. PARADYNE and/or
CAPCo shall have the sole discretion to designate such Products as Licensed
Products or to designate any one (1) or more of such Products as no longer being
Licensed Products in accordance with Section 5.1(9). In consideration for
LUCENT's forbearance from seeking injunctive relief or other damages under
LUCENT Patents for any Products so listed and for other good and valuable
consideration, PARADYNE agrees to pay a royalty in accordance with Section 5.3
for so long as a Product is designated a Licensed Product. Products which are
royalty-bearing and which are not listed will not be licensed under LUCENT
Patents effective as of the date this Intellectual Property Agreement becomes
royalty-bearing with respect thereto.
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(b) Royalty shall be payable to LUCENT at the rate of one point six
two five percent (1.625%) on each Licensed Product which is sold, leased or put
into use by PARADYNE and/or CAPCo, or any of their Subsidiaries or sublicensees.
The royalty rate shall be applied, except as otherwise provided in this Section
5.1, to the Fair Market Value of such Licensed Product.
(c) Royalty shall become payable upon the first sale, lease or
putting into use of a Licensed Product. Rebuilding (or enlarging, to the extent
that such enlarging incurs an additional royalty under a new licensed patent)
any Licensed Product shall be deemed to be a first putting into use of such
Licensed Product. Obligations to pay royalties accrued prior to termination of
licenses and rights pursuant to Section 5.1(9) and the expiration of LUCENT
Patents shall survive.
(d) When a company ceases to be a Subsidiary of or sublicensee of
PARADYNE and/or CAPCo, royalties which have accrued with respect to any products
of such company, but which have not been paid, shall become payable with
PARADYNE's and/or CAPCo's next scheduled royalty payment.
(e) Notwithstanding any other provisions hereunder, royalty shall
accrue and be payable only to the extent that enforcement of PARADYNE's
obligation to pay such royalty would not be prohibited by applicable law.
(f) A Licensed Product may be treated by PARADYNE and/or CAPCo,
and/or their subsidiaries and/or sublicensees as not licensed and not subject to
royalty with respect to sales, leasing or putting into use of such Licensed
Product if the purchaser, manufacturer, lessee and/or importer is licensed under
the same Patent(s) to have said Licensed Product made and/or imported, and the
purchaser, lessee, and or importer advises PARADYNE, in writing at or prior to
the time of such sale, manufacture, lease or importation that it is exercising
its own license under such Patent(s) with respect to such manufacture and/or
importation.
(g) By not less than three (3) months; written notice to LUCENT,
PARADYNE may voluntarily terminate all or a specified portion of the licenses
and rights granted to it hereunder, including the removal of Licensed Products
from the list, (described in Section 5.1(a)). Such notice shall specify the
effective date of such termination and shall clearly specify any affected
Licensed Product.
5.2 Records And Adjustments
(a) PARADYNE and/or CAPCo shall keep full, clear and accurate records
with respect to all Licensed Products and shall furnish any relevant information
which LUCENT may reasonably prescribe from time to time to enable LUCENT to
ascertain the proper royalty due hereunder on account of Licensed Products sold,
leased and put into use by PARADYNE and/or CAPCo or any of their Subsidiaries or
sublicensees. PARADYNE and/or CAPCo shall retain such records with respect to
each Licensed Product for at least five (5) years from the sale, lease or
putting into use of such Licensed Product. LUCENT shall have the right through
accredited external auditors to make an examination, during normal business
hours, of
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all records and accounts bearing upon the amount of royalty payable to it
hereunder. Such audits cannot be conducted more than once per year. All audits
shall be at LUCENT's expense unless an audit uncovers an underpayment by
PARADYNE and/or CAPCo in excess of five percent (5%) in which case PARADYNE or
CAPCo, as the case may be, shall reimburse LUCENT for the audit. Prompt
adjustment shall be made to compensate for any errors or omissions disclosed by
such examination.
(b) Independent of any such examination, LUCENT will credit to
PARADYNE and/or CAPCo the amount of any overpayment of royalties made in error
which is identified and fully explained in a written notice to LUCENT delivered
within twelve (12) months after the due date of the payment which included such
alleged overpayment, provided that LUCENT is able to verify, to its own
reasonable satisfaction, the existence and extent of the overpayment.
(c) No refund, credit or other adjustment of royalty payments shall
be made by LUCENT except as provided in this Section 5.2. Rights conferred by
this Section 5.2 shall not be affected by any statement appearing on any check
or other document, except to the extent that any such right is expressly waived
or surrendered by a party having such right and signing such statement.
5.3 Reports and Payments
(a) Within sixty (60) days after the end of each semiannual period
ending on June 30th or December 31st, commencing with the semiannual period
during which this Intellectual Property Agreement becomes royalty-bearing,
PARADYNE and/or CAPCo shall furnish to LUCENT at the address specified in
Section 9.1 a statement certified by a responsible official of PARADYNE and/or
CAPCo showing in a manner reasonably acceptable to LUCENT:
(i) all Licensed Products which were sold, leased or put into
use during such semiannual period;
(ii) the Fair Market Values of such Licensed Products:
(iii) the amount of royalty payable thereon; and
(iv) all exclusions from royalty pursuant to Section 5.1(f).
(b) Within such sixty (60) days, PARADYNE and/or CAPCo shall pay in
United States dollars to LUCENT at the address specified in Section 9.1 the
royalties payable in accordance with such statement. Any conversion to United
States dollars shall be at the prevailing rate for bank cable transfers as
quoted for the last day of such semiannual period by leading United States banks
in New York City dealing in the foreign exchange market.
(c) Overdue payments hereunder shall be subject to a late payment
charge calculated at an annual rate of three percentage points (3%) over the
prime rate or successive prime rates As posted in New York City) during
delinquency. If the amount of such charge exceeds the maximum permitted by law,
such charge shall be reduced to such maximum.
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5.4 Taxes
PARADYNE and/or CAPCo shall pay any tax, duty, levy, customs fee, or
similar, charge ("taxes"), including interest and penalties thereon, however
designated, imposed as a result of the operation or existence of this
Intellectual Property Agreement, including taxes which PARADYNE and/or CAPCo is
required to withhold or deduct from payments to LUCENT, except (i) net income
taxes imposed upon LUCENT by any governmental entity within the United States
(the fifty (50) states and the District of Columbia), and (ii) net income taxes
imposed upon LUCENT by jurisdictions outside the United States which are
allowable as a credit against the United States Federal income tax of LUCENT or
any of its Subsidiaries. In order for the exception in (ii) to be effective,
PARADYNE and/or CAPCo must furnish to LUCENT evidence sufficient to satisfy the
United States taxing authorities that such taxes have been paid. Such evidence
must be furnished to LUCENT within thirty (30) days of issuance by the local
taxing authority. Except in the cases where (ii) does not apply, the foregoing
shall not be construed as requiring PARADYNE or CAPCo to pay LUCENT's net income
taxes.
ARTICLE 6
PARADYNE PROGRAMS
6.1 LUCENT grants immunity to PARADYNE's and/or CAPCo's licensees and
customers of such licensees under LUCENT CAP Patents, LUCENT VoiceSpan Patents
and LUCENT ETC Patents listed in Appendix E in accordance with the terms and
conditions of Sections 6.2 through 6.5 and as follows:
(a) PARADYNE, in the case of VoiceSpan Technology and ETC Technology,
and CAPCo in the case of CAP Technology, shall with notice to LUCENT have the
right to extend LUCENT's immunity to their respective licensees and customers of
their licensees for VoiceSpan Technology, ETC Technology and/or CAP Technology
solely upon granting a license (or such license already having been granted by
PARADYNE prior to Closing Date) to such related technology and then only for a
period of five (5) years (hereinafter the Limited Period") except as stated in
Section 6.1(b) below. The notice to LUCENT shall identify the licensee, and
under what Patents immunity is being granted.
(b) When all of the conditions in Sections 3.7(i) through 3.7(iv) are
met, such right to extend immunities shall terminate for the business, or part
of such business, which is sold; however, PARADYNE and/or CAPCo may extend the
foregoing immunities solely for the Limited Period to any new licensees or to
existing licensees at the end of their current license, which grants shall take
place prior to the end of the six (6) year period from the Closing Date.
(c) The termination of PARADYNE's and/or CAPCo's right to extend such
immunity shall not affect any immunities already extended and LUCENT agrees to
negotiate comparable licenses with PARADYNE's and CAPCo's licensee's and/or
customers thereof to the extent requested by such licensees and/or customers.
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(d) Neither PARADYNE nor CAPCo shall knowingly extend any immunity
for a particular Patent to any licensee and/or customer thereof who is already
licensed by LUCENT under such Patent. regarding such licensee's and/or
customer's prospective use(s) under such Patent. Any grant of patent. immunity
only applies if any licensee and/or customer is not already licensed by LUCENT.
6.2 (a) The immunity under the LUCENT CAP Patents extended by CAPCo to
its licensees and/or their customers to whom CAPCo grants a license for CAP
Technology, is only to the extent such Patents are Essential Patents to the CAP
Technology and are used specifically in conjunction with the licensed technology
as provided by CAPCo for board and system level products and only to the extent
that if a component is specified in the CAP Technology, the component is
purchased from a vendor approved by CAPCo.
(b) Neither PARADYNE nor CAPCo shall have the right to make or have
made a Semiconductive Device as part of the CAP Technology licensing program,
under LUCENTs Patents relating to Manufacturing Inventions.
(c) The immunity granted under Section 6.2 shall extend until
December 31, 2002 for the licenses granted by PARADYNE to Westell Technologies,
Inc. for CAP Technology.
6.3 The immunity under the LUCENT VoiceSpan Patents extended by PARADYNE
to its licensees and/or their customers to whom PARADYNE grants a license for
VoiceSpan Technology (or such license already having been granted by PARADYNE
prior to the Closing Date) is only to the extent such Patents are Essential
Patents to the VoiceSpan Technology and are used specifically in conjunction
with the licensed technology as provided by PARADYNE.
6.4 The immunity under the LUCENT ETC Patents extended by PARADYNE to its
licensees and/or their customers to whom PARADYNE grants a license for ETC
Technology (or such license already having been granted by PARADYNE prior to the
Closing Date) is only to the extent such Patents are Essential Patents to the
ETC Technology and are used specifically in conjunction with the licensed
technology as provided by PARADYNE.
6.5 No licenses, express or implied, or immunity is granted under any
Patent with respect to any of PARADYNE's or CAPCo's licensing programs except
for the Patents specified in this Article 6, provided, however, if PARADYNE or
CAPCo can demonstrate within two (2) years of the Closing Date that a LUCENT
Patent was an Essential Patent as of the Closing Date to one of its licensing
programs Appendix E will be deemed amended to include such Patents.
6.6 LUCENT agrees to license its Patents which are Essential Patents to
the V.34 standard (as listed below in this Section 6.6) to licensees of PARADYNE
and/or CAPCo in connection with their licensing programs. LUCENT will make
available its standard form patent license agreement within thirty (30) days of
request by the potential licensee. Such potential licensee will have 30 days
from receipt to sign the agreement.
<TABLE>
<S> <C>
U.S. Patent 4304962
</TABLE>
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<TABLE>
<S> <C>
U.S. Patent 4069392
U.S. Patent 4520490
U.S. Patent 4941154
U.S. Patent RE33041
U.S. Patent 5115453
U.S. Patent 5418798
U.S. Patent 5488633
</TABLE>
6.7 LUCENT agrees to license the following Patents to PARADYNE licensees
under reasonably commercial terms and conditions in connection with PARADYNE's
licensing programs for Mocha Technology and Hypermodem Technology:
<TABLE>
<S> <C>
U.S. Patent 4866647
U.S. Patent 5394437
U S. Patent 5406583
U.S. Patent Application 08/176742
U.S. Patent Application 08/390185
U.S. Patent Application 08/384498
U.S. Patent Application 08/384514
U.S. Patent Application 08/556726
</TABLE>
LUCENT will make available its standard form patent license agreement
within thirty (30) days of request by the potential licensee. Such potential
licensee will have 30 days from receipt to sign the agreement.
ARTICLE 7
KNOW-HOW AND OTHER INTELLECTUAL PROPERTY
7.1 With respect to LUCENT Know-How, PARADYNE, CAPCo and their
Subsidiaries shall have the fee-free right to use, reproduce, modify, combine
with other works, make Derivative Works and distribute any of the foregoing and
to perform and/or display such works (all without accounting to LUCENT) to the
extent reasonably necessary to exercise PARADYNE's and/or CAPCo's and/or their
Subsidiaries' rights, and licenses hereunder; provided, however, PARADYNE, CAPCo
and their Subsidiaries agree to hold in confidence LUCENT Know-How so long as
LUCENT Know-How is clearly marked as such and such Know-How (i) is not and does
not become publicly known; (ii) is not independently developed by PARADYNE,
CAPCo or their Subsidiaries; or (iii) is not disclosed by LUCENT without
restriction.
7.2 With respect to PARADYNE Know-How and CAPCo Know-How, LUCENT and its
Subsidiaries shall have the fee-free right to use, reproduce, modify, combine
with other works, make Derivative Works and distribute any of the foregoing and
to perform and/or display such works (all without accounting to PARADYNE or
CAPCo) to the extent reasonably necessary to exercise LUCENT's and its
Subsidiaries' rights and licenses hereunder; provided, however, LUCENT and its
Subsidiaries agree to hold in confidence PARADYNE Know-How and CAPCo Know-How,
so long as PARADYNE Know-How and/or CAPCo's
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Know-How is clearly marked as such and such Know-How: (i) is not and does not
become publicly known; (ii) is not independently developed by LUCENT; or (iii)
is not disclosed by PARADYNE without restriction.
7.3 Each party shall have the right to disclose to its suppliers, business
partners and consultants (under appropriate confidentiality provisions) any
other party's Know-How licensed to it pursuant to this Article 7, to the extent
it is reasonably necessary to exercise the party's rights and licenses
hereunder. The inherent disclosure of Know-How in a product or in connection
with the sale of a product shall not constitute a breach of this Intellectual
Property Agreement.
7.4 LUCENT hereby irrevocably assigns, conveys and delivers to PARADYNE,
its successors, assigns and legal representatives, LUCENTs entire right, title
and interest, if any, in and to PARADYNE Know-How and in and to PARADYNE Other
Intellectual Property. LUCENT further hereby irrevocably assigns conveys and
delivers to CAPCo, its successors, assigns and legal representatives, LUCENT's
entire right, title and interest, if any, to CAPCo Know-How and in and to CAPCo
Other intellectual Property.
ARTICLE 8
TRADEMARKS
8.1 To the extent PARADYNE has any right, title, and interest in and to
the trademarks and common law marks set forth on Appendix B-1 attached hereto
("PARADYNE Marks"), PARADYNE assigns to LUCENT such right, title and interest.
PARADYNE hereby assigns pursuant to the Trademark Assignment Agreement attached
hereto as Appendix B-2, subject to all prior agreements and commitments of
PARADYNE and its Affiliated Companies to third parties entered into prior to the
Closing Date, all of its worldwide rights, title and interest in and to the
PARADYNE Marks to LUCENT, including the goodwill of the business represented by
the PARADYNE Marks, any applications of PARADYNE Marks and any common law rights
in the PARADYNE Marks.
8.2 PARADYNE shall not use the name LUCENT TECHNOLOGIES or the innovation
ring design forming the corporate identity of LUCENT TECHNOLOGIES INC. In
addition, PARADYNE agrees not to adopt names or symbols confusingly similar to
LUCENT TECHNOLOGIES INC. or the innovation ring design.
8.3 LUCENT shall not after the Closing Date: (1) use the mark "PARADYNE"
as a trademark, trade name or as part of a corporate name; (2) use the trademark
"PARADYNE" and/or any logo or design associated therewith; or (3) use or
authorize others to use the following marks:
ACCULINK
ANALYSIS
CHANNELCARE
CHANNELVIEW
CHANNELWATCH
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COMSPHERE
DATAPHONE
DATAPORT
DCX
ETC
GLOBESPAN
INFO-LOCK
KEEP IN TOUCH CARD
KEEP IN TOUCH
KEEPINTOUCH CARD
KIT
PARADYNE
PARADYNE DO
SHARED EXPECTATIONS
SOFTCALL
VOICESPAN
VOICESPAN AND DESIGN
LUCENT shall not use any derivations or combination marks containing the
elements PARADYNE and/or any logo or design associated therewith. The foregoing
restriction shall not apply to sales by LUCENT of existing inventory of PARADYNE
products, or future sales of PARADYNE Companies' products, provided that future
sales are properly authorized pursuant to a written agreement between LUCENT and
one or both of the PARADYNE Companies.
ARTICLE 9
MISCELLANEOUS
9.1 All notices, requests and other communications hereunder shall be in
writing and shall be deemed to have been duly given if addressed, and delivered
by hand, telex or facsimile, and confirmed by registered mail, with postage
pre-paid, to the addresses set forth below (or to such other addresses as may be
given by written notice):
If to PARADYNE, to: Paradyne Corporation
Attention: President
8545 126th Avenue North
P.0. Box 2826
Largo, Florida 34649-2826
Copy to: Paradyne Partners, L.P.
c/o Richard A. Ekleberry, Esq.
201 Main Street
Suite 2420
Fort Worth, Texas 76102
If to LUCENT, to: Lucent Technologies Inc.
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Contract Administrator, Intellectual Property
2333 Ponce de Leon Boulevard
Coral Gables, Florida 33124
Copy to: General Counsel
Lucent Technologies Inc.
150 Allen Road
Suite 2000
Liberty Comer, New Jersey 07938
If to CAPCo to: CAP Acquisition Corp.
Attention: President
8545 126th Avenue North
P.O. Box 2826
Largo, Florida 34649-2826
Copy to: Paradyne Partners, L.P.
c/o Richard A. Ekleberry, Esq.
201 Main Street
Suite 2420
Fort Worth, Texas 76102
9.2 The headings are included for convenience only, and the articles shall
not be construed in accordance with their headings.
9.3 The parties hereto agree that the invalidity or unenforceability of
any of the provisions hereof shall not in any way affect the validity or
enforceability of any other provisions of this Intellectual Property Agreement
except those from which the invalidated or unenforceable provisions comprise an
integral part or are otherwise clearly inseparable.
9.4 LUCENT represents and warrants, to and for the benefit of PARADYNE,
BUYER, CAPCo, and PARADYNE PARTNERS, L.P. and their Affiliated Companies, as
follows:
(a) LUCENT and its Subsidiaries own and/or have the right to convey
all right, title and interest in the Non-CAP A-Patents and CAP A-Patents,
subject only to certain non-exclusive licenses granted by LUCENT and/or its
Affiliated Companies prior to the Closing Date.
(b) LUCENT and its Subsidiaries own all right, title and interest in
the LUCENT Patents, subject only to certain non-exclusive licenses granted by
LUCENT prior to the Closing Date.
(c) LUCENT and its Subsidiaries have the right to license or own all
right, title and interest in the LUCENT Know-How licensed to PARADYNE, and CAPCo
hereunder.
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<PAGE> 23
(d) LUCENT and its Subsidiaries assert, and will assert, no ownership
interest in PARADYNE's Other Intellectual Property.
(e) To the Knowledge of LUCENT and PARADYNE, none of the A-Patents,
or the PARADYNE Patents are involved in any interference, reissue, reexamination
or opposing proceeding except as set forth in Exhibit F.
(f) To the Knowledge of LUCENT and PARADYNE, they are not aware of
any claim, suit, proceeding, or any demand or threat of any of the foregoing,
with respect to any A-Patent, PARADYNE Patent, PARADYNE Know-How, PARADYNE Other
Intellectual Property and/or to PARADYNE Products, except as set forth on
Exhibit H.
(g) PARADYNE has obtained either through ownership or proper license
from LUCENT, all intellectual property rights of LUCENT necessary to-conduct
PARADYNE's business in the manner in which such business is currently being
conducted.
(h) To the Knowledge of LUCENT and PARADYNE (except for the companies
listed in section 2.5),there is no infringement or misappropriation of any
A-Patent, PARADYNE Patents, PARADYNE Know-How or PARADYNE Other Intellectual
Property.
(i) PARADYNE and its Subsidiaries have taken all reasonable measures
and precautions necessary to protect and maintain the confidentiality and
secrecy of the PARADYNE Patents, PARADYNE Know-How and PARADYNE Other
Intellectual Property (collectively referred to as "PARADYNE Intellectual
Property") and otherwise to maintain and protect the value of all PARADYNE
Intellectual Property and have Obtained from all current and former employees
and from all current and former consultants and independent contractors signed
agreements appropriately restricting the use and disclosure of the PARADYNE
Intellectual Property.
(j) The PARADYNE Intellectual Property conforms in all material
respects with any specification, documentation, performance standard,
representation or statement made or provided with respect thereto by or on
behalf or any of the Acquired Companies; and there has not been any material
claim by any customer or other Person alleging that any PARADYNE Intellectual
Property does not conform in all material respects with any specifications,
documentation, performance standard, representation or statement made or
provided by or on behalf of any of the Acquired Companies, and, to the Knowledge
of LUCENT and PARADYNE, there is no basis for any such claim.
9.5 The representations and warranties of LUCENT, and the rights and
remedies that may be exercised by PARADYNE, BUYER, CAPCo, PARADYNE PARTNERS,
L.P., and their Affiliated Companies, shall not be limited or otherwise affected
by or as a result of any information furnished to, or any investigation made by
or knowledge of, PARADYNE, BUYER, CAPCo, PARADYNE PARTNERS, L.P., or any of
their Affiliated Companies or representatives.
9.6 For purposes of this Intellectual Property Agreement, each statement
or other item of information set forth in the Exhibits shall be deemed to be a
representation and warranty made by LUCENT in this Intellectual Property
Agreement.
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<PAGE> 24
9.7 No licenses, express or implied, under this Intellectual Property
Agreement are granted by or among PARADYNE, CAPCo or LUCENT except those
expressly granted under this Intellectual Property Agreement.
9.8 Except as otherwise expressly provided herein, nothing in this
Intellectual Property Agreement shall be construed as a warranty or
representation that anything made, used, sold or otherwise disposed of under any
license granted in this Intellectual Property Agreement is or will be free from
infringement of patents of third parties except for patents licensed under this
Intellectual Property Agreement, although as of the Closing Date hereof, LUCENT
knows of no such infringement unless otherwise disclosed.
9.9 Nothing contained in this Intellectual Property Agreement shall be
deemed or construed to constitute or create among the parties hereto a
partnership, association, joint venture or other agency.
9.10 This Intellectual Property Agreement establishes the rights, duties,
and obligations of LUCENT, CAPCo and PARADYNE with respect to the subject matter
hereof. Except as otherwise agreed in the Purchase Agreement, including the
Intellectual Property Agreement, PARADYNE, CAPCo and LUCENT shall have no right
or interest whatsoever in any product of any other party hereto whether such
product is conceived or developed by any such other party, during, or after the
course of performance of the Purchase Agreement including this Intellectual
Property Agreement.
9.11 Except as otherwise expressly provided herein, no party hereto may
assign this Intellectual Property Agreement or any part thereof, transfer
licenses or rights or grant any sublicenses hereunder, to anyone other than a
Subsidiary of such party without the prior, written consent of all parties
hereto. However, if LUCENT, CAPCo or PARADYNE sells part or all of their
respective businesses including, without limitation, Subsidiaries (the "Sold
Entity"), and if LUCENT, CAPCo or PARADYNE have granted sublicenses thereto
prior to such sale, and in the case of PARADYNE or CAPCo subject to the
provisions of Section 3.7, then such sublicenses so granted shall survive such
sale, provided that:
(i) the Sold Entity shall continue to operate as a separately
identifiable business, corporation, joint venture, partnership,
business unit, division, group, or other sole business entity, or
constitute a separate part of any other business entity,
(ii) the sublicenses so granted do not exceed the scope or duration of
the licenses granted by LUCENT, PARADYNE or CAPCo; and.
(iii) In the case of LUCENT's Sold Entity, such Sold Entity agrees to
be bound by the Noncompetition Agreement, Exhibit "BB" to the
Purchase Agreement.
If any party grants a sublicense to a Sold Entity under this Section 9.11,
such party shall notify all other parties.
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<PAGE> 25
9.12 This Intellectual Property Agreement is the entire agreement by and
among the parties with respect to this subject matter, and supersedes all prior
discussions, negotiations, communications and agreements with respect thereto.
This Intellectual Property Agreement may be modified only in writing, and signed
by all parties hereto. Any purported oral modification of this Intellectual
Property Agreement shall be without any effect whatsoever.
9.13 The failure of any party to enforce at any time any of the provisions
of this Intellectual Property Agreement shall not be deemed to be a waiver of
the right of such party thereafter to enforce such provision.
9.14 The obligations of any party shall be excused to the extent, and for
the period during which, that performance is rendered impossible by strike,
fire, flood, earthquake, other natural disasters, governmental acts, orders or
restrictions, or any other reason beyond the reasonable control of such party.
9.15 Each party's performance of this Intellectual Property Agreement,
including each party's use of any intellectual property of any other party,
including without limitation such other party's Patents, trademarks, Know-How
and Other Intellectual Property shall at all times comply with all requirements,
rules, laws and regulations of all governmental bodies having proper
jurisdiction, and including without limitation any requirements to obtain any
licenses under the export or similar laws of the United States.
9.16 To the extent that this Intellectual Property Agreement calls upon one
or more of the Affiliated Companies of any party to carry out any act, to
refrain from performing any such act, or otherwise to perform any obligations
hereunder, each party hereto shall ensure that such Affiliated Companies do so
consistent with this Intellectual Property Agreement.
9.17 No provision of this Intellectual Property Agreement shall be
construed to permit LUCENT or its Subsidiaries to engage in any activities which
are otherwise prohibited in the Non-Competition Agreement which is Exhibit BB to
the Purchase Agreement.
9.18 Each party hereto shall execute and cause to be delivered to each
other party hereto such instruments and other documents, and shall take such
other actions, as such other party may reasonably request (prior to, at or after
the Closing) for the purpose of carrying out or evidencing any of the
transactions contemplated in this Intellectual Property Agreement. The parties
understand and agree that certain information in Appendix A and Appendix E may
be incorrect regarding whether particular Patents are CAP A-Patents, Non-CAP
A-Patents, PARADYNE CAP Patents and PARADYNE Non-CAP Patents. The parties agree
to work together in mutual good faith for a period not to exceed thirty (30)
days after the Closing Date in order to amend Appendix A and Appendix E, and to
ensure that the Patents are properly represented therein.
9.19 LUCENT represents and warrants that it either has delivered, or shall
deliver within ninety (90) days after the Closing Date, clear record title to
PARADYNE and/or CAPCo, as the case may be, for all CAP A-Patents, Non-CAP
A-Patents. Lucent shall deliver to PARADYNE and CAPCo all documents,
certificates and similar materials evidencing ownership of the CAP A-Patents and
Non-CAP A-Patents to PARADYNE and/or CAPCo.
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<PAGE> 26
ARTICLE 10
CONFIDENTIALITY
10.1 Each party, on behalf of itself and its Affiliated Companies, agree
that they are in receipt of certain non-public information received in the
course of performance or negotiation of this Intellectual Property Agreement, or
their past relationship with another party, including without limitation all
Know-How, Other Intellectual Property, business plans, forecasts, technical
data, financial data, personnel information, and other information of a nature
that is not generally made publicly available, and which, if disclosed, could
reasonably cause damage or loss to the other party (hereinafter referred to as
"the Other Party's Confidential Information").
10.2 Each party agrees that, subject to all other obligations in the
Purchase Agreement, including this Intellectual Property Agreement. and the
Non-Competition Agreement, it will not use the Other Party's Confidential
Information in any manner not expressly permitted by the Purchase Agreement, and
it will use the same degree of care to prevent the disclosure of the Other
Party's Confidential Information as it normally uses with respect to its own
confidential information, but in no event less than a standard of reasonable
care.
10.3 The parties agree that the terms and conditions of this Intellectual
Property Agreement are confidential.
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification by LUCENT
(a) From and after the Closing Date, LUCENT shall hold harmless and
indemnify each Indemnitee from and against, and shall compensate and reimburse
each Indemnitee for, any Damages which are suffered or incurred by any of the
Indemnitees or to which any of the Indemnitees may otherwise become subject (in
respect of clauses (i) and (iii), regardless of whether or not such Damages
relate to any third party claim) and which arise from or as a result of or are
connected with:
(i) any inaccuracy in or breach of any representation or warranty set
forth in Article 9.
(ii) any Covered Intellectual Property Claim asserted by any third
party against any Indemnitee; or
(iii) any of the Legal Proceedings or asserted claims referred to on
Appendix H attached hereto, or any facts or circumstances
underlying any of the assertions or allegations made in
connection with any of such Legal Proceedings or claims.
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<PAGE> 27
(b) (i) For purposes of this Agreement, an "Intellectual Property
Claim" shall mean any claim, demand, threat or Legal Proceeding that is based
upon or related to any actual or alleged infringement, misappropriation or
unlawful use of any third party Proprietary Asset.
(ii) For purposes of this Agreement, a "Covered Intellectual Property
Claim" shall mean any Intellectual Property Claim to the extent
(A) such Intellectual Property Claim is based upon or related to
any actual or alleged infringement, misappropriation or unlawful
use of a third party Proprietary Asset by PARADYNE and/or CAPCo
on account of a Product (or portion of a Product) as manufactured
and/or a service offered (i) as of the Closing Date regardless of
whether the Product is manufactured, or the service is offered,
before or after the Closing Date, or (ii) before the Closing Date
but only for the period prior to the Closing Date and which is
brought, filed, initiated or made against PARADYNE and/or CAPCo
within two (2) years of the Closing Date or (B) if the
Intellectual Property Claim is a demand or threat of the kind
above-specified, (x) such demand or threat is made within two (2)
years of the Closing Date, and (y) if not settled within such two
(2) year period and the factual basis of such demand or threat is
also contained in a Legal Proceeding, such Legal Proceeding is
brought against PARADYNE and/or CAPCo within three (3) years of
the Closing Date.
(iii) Any Intellectual Property Claim received by a licensee,
customer, distributor or reseller of PARADYNE or CAPCo and any
related calm by such licensee, customer, distributor or reseller
against any Indemnitee shall be a Covered Intellectual Property
Claim (in each case within the time periods set forth in Section
11.1 (b)(ii) above) falling within the coverage of Section
11.1(a)(ii) (regardless of whether such licensee, customer,
distributor or reseller is an Indemnitee), if such licensee,
customer, distributor or reseller seeks indemnification from
PARADYNE or CAPCo pursuant to an intellectual property
indemnification provision (i) under a contract or other agreement
entered into with PARADYNE prior to the Closing Date, or (ii) in
connection with any equipment or product sold, licensed or
otherwise made available, or any service performed on or prior to
the Closing Date.
(c) The representations and warranties set forth in Article 9 and in the
AT&T Trademark and Patent Agreement shall expire on the second anniversary of
the Closing Date; provided, however, that if, at any time prior to the second
anniversary of the Closing Date, any Indemnitee (acting in good faith) delivers
to LUCENT a written notice alleging the existence of an inaccuracy in or a
breach of any of such representations and warranties and asserting a claim for
recovery under Section 11.1(a)(i) or Section 11.8 based on such alleged
inaccuracy or
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<PAGE> 28
breach, then the claim asserted in such notice shall survive the second
anniversary of the Closing Date until such time as such claim is fully and
finally resolved.
(d) LUCENT shall not be obliged to provide any indemnification under
Section 11.1 (a)(ii) for any Intellectual Property Claims to the extent such
Intellectual Property Claims are based on changes, modifications or additions
made after the Closing Date or the use of manufacturing processes not used prior
to the Closing Date. Lucent shall be obliged to provide indemnification for any
Covered Intellectual Property Claim to the extent that any such Intellectual
Property Claim is based upon the design or development of a Product as it
existed as of the Closing Date whether or not Products were actually on sale
prior to the Closing Date.
(e) In no event will LUCENT indemnify PARADYNE or CAPCo for claims of
intellectual property infringement when the claim is intentionally provoked by
PARADYNE or CAPCo. PARADYNE and/or CAPCo shall use reasonable best efforts to
mitigate damages. Offering of PARADYNE and/or CAPCo licenses to third parties as
part of PARADYNE's and/or CAPCo's normal customary licensing program shall not
be considered an intentional provocation by PARADYNE and/or CAPCo. A
communication by PARADYNE or CAPCo with a customer, distributor, reseller or
licensee of PARADYNE or CAPCo shall not be deemed provocation hereunder unless
such communication was initiated by PARADYNE or CAPCo and Lucent is able to
demonstrate that the principal intent of PARADYNE or CAPCo in initiating such
communication was to induce such customer, distributor, reseller or licensee to
assert against PARADYNE or CAPCo a Covered Intellectual Property Claim that
otherwise would not have been asserted by such customer, distributor, reseller
or licensee against PARADYNE or CAPCo.
(f) If Damages are suffered or incurred by two or more Indemnitees with
respect to the same facts and circumstances and if the full payment of the
Damages of one Indemnitee (the "Identified Indemnitee") would completely
eliminate the Damages of the other Indemnitees with respect to such same facts
and circumstances then only an amount equal to the full amount of the Damages of
the Identified Indemnitee shall be paid under this Article ,1 with respect to
such facts and circumstances. The Indemnitees shall determine the distribution
of any payment pursuant to this Section 11.1(f), which may be divided among two
or more Indemnitees.
11.2 LUCENT Threshold
(a) For purposes of this Section 11.2:
(i) "Affiliate" shall mean with respect to any Person, any Person
directly or indirectly controlling, controlled by or under common
control with such other Person.
(ii) "Claimant" shall mean a Person, such Person's current and future
Affiliates, and the respective successors and assigns of the
foregoing Persons.
(iii) "Deductible Amount" shall mean that portion of LUCENTs
settlement expense to which PARADYNE or CAPCo must contribute to
LUCENT in the settlement of each Covered
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Intellectual Property Claim. The Deductible Amount shall be up to
$750,000 per Claimant, until the actual aggregate of all
Deductible Amounts is equal to or exceeds $5,000,000. Thereafter,
"Deductible Amount" shall be $500,000 per Claimant, until the
actual aggregate of all Deductible Amounts is equal to or exceeds
$10,000,000. Thereafter, "Deductible Amount" shall be $100,000
per Claimant for all subsequent Covered Intellectual Property
Claims. Notwithstanding anything in this clause (iii) to the
contrary, once the Deductible Amount is paid or satisfied with
respect to a Claimant the Deductible Amount in respect of any
Covered Intellectual Property Claims asserted by such Claimant
shall be zero.
(iv) "Person" shall mean any: (i) individual; or (ii) corporation
(including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability
company or joint stock company), firm or other enterprise,
association, organization or entity.
(b) Pursuant to Section 11.1 (a)(ii) with respect to any Covered
Intellectual Property Claim for which the Indemnitee has elected LUCENT to
assume the defense pursuant to Section 11.3, Indemnitee shall be liable to
LUCENT for the costs and expenses incurred by LUCENT pursuant to its indemnity
obligations under this Article 11 up to the Deductible Amount, and LUCENT shall
be liable for the Indemnitee's Damages covered by this Article 11 indemnity in
excess of the Deductible Amount up to the maximum liability specified in Section
11.2(c) below. Only one (1) Deductible Amount shall be paid to LUCENT per
Claimant, regardless of the number of Indemnitees. Damages covered by this
Article 11 indemnity paid by Indemnitee(s) to third parties (other than
Claimants) prior to such election are creditable against the Deductible Amount.
Pursuant to Section 11.1 (a)(ii), with respect to any Covered Intellectual
Property Claim for which the Indemnitee has not elected LUCENT to assume the
defense pursuant to Section 11.3, LUCENT shall have no obligations or liability
to Indemnitees under this Article 11.
(c) The maximum liability of LUCENT under Section 11.1 (a)(ii) for
Covered Intellectual Property Claims shall be equal to $40,697,000 plus the
Interim Prepayment Amount plus the Final Prepayment Amount less the Interim
Price Reduction Amount less the Final Price Reduction Amount. Upon reaching the
maximum liability of LUCENT under this Section, LUCENT shall have no further
liability or obligation for Covered Intellectual Property Claims.
11.3 Defense of Third Party Claims by LUCENT
In the event of the assertion or commencement by any Person of any claim or
Legal Proceeding against any one or more Indemnitees with respect to which
LUCENT is obligated to indemnify pursuant to this Article 11, and (i) all
Indemnitees against whom a claim is made elect in writing within six (6) months
to designate LUCENT to assume the defense of
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such claim or Legal Proceeding: and (ii) any Indemnitee has not significantly
adversely affected LUCENT's ability to assume the defense of any Legal
Proceeding or settle any Covered Intellectual Property Claim then:
(a) LUCENT shall proceed to defend such claim or Legal Proceeding in
a diligent manner;
(b) Indemnitees shall make available to LUCENT any non-privileged
documents and materials in the possession of Indemnitee that may be useful to
the defense of such claim or Legal Proceeding;
(c) LUCENT shall keep Indemnitees informed of all material
developments and events relating to such claim or Legal Proceeding; and
(d) Indemnitees shall have the right to participate at their own
expense in the defense of such claim or Legal Proceeding;
(e) Indemnitees shall license their intellectual property to Claimant
if such license is required by Claimant (if commercially reasonable to do so in
light of all facts and circumstances, including but not limited to, the identity
of such Claimant and the Indemnitee's business plans and strategies.), to settle
a Covered Intellectual Property Claim.
(f) LUCENT may, at its sole option, settle the Covered Intellectual
Property Claim directly with the Claimant;
(g) All costs and payments in whatever form incurred in defense or
settlement including (any settlement) monies paid directly to Claimant are fully
credited towards the maximum liability of Section 11.2(c).
(h) In the event that LUCENT settles the claim through the delivery
of any intellectual property right (in the form of a license or otherwise),
LUCENT shall use good faith efforts to value such intellectual property rights
for purposes of applying the value towards satisfaction of the maximum liability
of LUCENT under Section 11.2(c) and allocating the Deductible Amount, if any,
due from PARADYNE or CAPCo to LUCENT.
11.4 Settlement Allocation
In allocating such contributions as to each settlement, the contribution of
the LUCENT intellectual property and the contribution of the PARADYNE
intellectual property, if any, used in such settlement ("LUCENT Apportionment'
and PARADYNE Apportionment", respectively) shall be used as follows
(a) The LUCENT Apportionment shall be applied against the then
maximum liability of LUCENT under Section 11.2(c).
(b) The PARADYNE Apportionment shall be accounted for as follows:
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(i) If the PARADYNE Apportionment is equal to or less than the then
applicable Deductible Amount, it shall be fully credited against
such Deductible Amount and the remaining amount, if any, shall be
the then applicable Deductible Amount for the settlement.
(ii) If the PARADYNE Apportionment is greater than the then applicable
Deductible Amount, no such Deductible Amount need be paid by
PARADYNE to LUCENT and the amount of such PARADYNE Apportionment
greater than such Deductible Amount, if any, shall be Editable
against the Deductible Amount for each future settlement, at a
rate of fifty cents per dollar of the PARADYNE contribution for
such future settlement, till such PARADYNE Apportionment is fully
accounted for. In no case shall the creditable amount be more
than fifty cents per dollar of the Deductible Amount.
11.5 Settlement
For the purposes of this Section, settlement discussions (not including
admissions against interest) shall not be deemed to significantly adversely
affect LUCENTs ability to assume the defense of any Legal Proceeding or settle
any Covered Intellectual Property Claim.
11.6 Defense of Third Party Claims by Indemnitee
If the Indemnitees do not elect to designate LUCENT to assume the defense
of any such claim or Legal Proceeding, the Indemnitees may proceed with the
defense of such claim or Legal Proceeding on their own. If the Indemnitees so
proceed with the defense of any such claim or Legal Proceeding on their own:
(a) subject to Section 11.3(h), all settlement expenses relating to
the defense of such claim or Legal Proceeding (whether or not incurred by
Indemnitee) shall be borne and paid exclusively by the Indemnitee without
reimbursement by LUCENT;
(b) LUCENT shall make available to Indemnitee any non-privileged
documents and materials in the possession or control of LUCENT that may be
useful to the defense of such claim or Legal Proceeding;
(c) Indemnitee shall keep LUCENT informed of all material
developments and events relating to such claim or Legal Proceeding; and
(d) Indemnitee shall have the right to settle, adjust or compromise
such claim or Legal Proceeding.
11.7 No Contribution
LUCENT waives, and acknowledges and agrees that it shall not have and shall
not exercise or assert or attempt to exercise or assert, any right of
contribution or right of indemnity or any other right or remedy against any
Acquired Company or Acquisition Entity in
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connection with any indemnification Obligation or any other liability to which
LUCENT may become subject under this Intellectual Property Agreement.
11.8 From and after the Closing Date, LUCENT shall hold harmless and
indemnify PARADYNE and CAPCo from and against, and shall compensate and
reimburse PARADYNE and CAPCo for, any damages, costs, expenses, losses,
liabilities, diminution in value, claims, awards, fines, penalties, charges or
legal fees which are suffered or incurred by PARADYNE or CAPCo or to which they
may otherwise become subject (regardless of whether or not such damages relate
to any third-party claim) and which arise from or as a result of, or are
connected with any inaccuracy in, or breach of, any representation and warranty
set forth in the AT&T Trademark and Patent Agreement, of even date hereof, or
with any claim, demand, threat, suit or Legal Proceeding against AT&T based upon
or related to any actual or alleged infringement, misappropriation or unlawful
use of any of the Assigned Marks, as defined therein.
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AGREED TO:
AT&T PARADYNE CORPORATION
By:
----------------------------------
Print Name:
--------------------------
Title:
-------------------------------
Date:
--------------------------------
LUCENT TECHNOLOGIES INC. CAP ACQUISITION CORP.
By: By:
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Print Name: Print Name:
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Title: Title:
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Date: Date:
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<PAGE> 34
APPENDIX A
A--PATENTS AND PATENT APPLICATIONS
Page 1 of 1
<PAGE> 35
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX A
CAP A-PATENT APPLICATIONS
<TABLE>
<CAPTION>
- ---- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- ---- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1. Amrany 8 Implied Interleaving, A Family of 6/6/95 08/469558
Systematic Interleavers and
Deinterleavers
- ---- ---------------- ------------------------------------- ---------------- ----------------
2. Cupo 11 Improved Sampling System for Radio 10/17/95 08/544244
Frequency Receiver
- ---- ---------------- ------------------------------------- ---------------- ----------------
3. Farrow 28 Digitally Controlled Hhigh 8/15/94 08/290253
Resolution Hybrid Phase Synthesizer
- ---- ---------------- ------------------------------------- ---------------- ----------------
4. Herzberg 3- An Adaptive Pre-Equalizer for User 2/22/96 08/605404
5-22-34 in Data Communications Equipment
- ---- ---------------- ------------------------------------- ---------------- ----------------
5. Langberg 2 Independent Dual HDSL Channel 12/20/95 08/579713
training and Data Alignment
- ---- ---------------- ------------------------------------- ---------------- ----------------
6. Langberg 3 Impulse Effect Reduction 12/29/95 08/586008
- ---- ---------------- ------------------------------------- ---------------- ----------------
7. Langberg 4 Dual Channel Timing Recovery 2/16/96 08/602944
- ---- ---------------- ------------------------------------- ---------------- ----------------
8. Langberg 6-18 A Transmission System for Digital 4/4/96 08/628220
Audio Broadcasting
- ---- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 1 of 1
<PAGE> 36
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX A
CAP A-PATENTS
<TABLE>
<CAPTION>
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
1. AMRANY 1-25 2/11/92 5088057 4/5/90 RATIONAL RATE FREQUENCY GENERATOR
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
2. GOLDEN 3 3/10/92 5095495 9/4/90 USE OF CYCLOSTATIONARY SIGNAL TO
CONSTRAIN THE FREQUENCY RESPONSE OF A
FRACTIONALLY SPACED EQUALIZE
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
3. AMAN 2-6-4 3/10/92 5095497 11/20/89 TECHNIQUE FOR ACHIEVING THE FULL
CODING GAIN OF ENCODED DIGITAL SIGNALS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
4. CUPO 7 5/19/92 5115452 8/2/90 PHASE JITTER CORRECTION ARRANGEMENT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
5. WERNER 17 7/28/92 5134633 11/30/90 DIGITAL COMMUNICATIONS-SYNCHRONIZATION
SCHEME
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
6. HARMAN 1 9/8/92 5146494 7/31/89 OVERLAPPING LOOK-UP-AND-ADD ECHO
CANCELLER REQUIRING A SMALLER MEMORY
SIZE
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
7. FLANAGAN 1 11/10/92 5162762 3/25/91 PHASE-LOCK LOOP WITH ADAPTIVE SCALING
ELEMENT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
8. AMAN 3-9-5 11/10/92 5162812 10/11/91 TECHNIQUE FOR ACHIEVING THE FULL
CODING GAIN OF ENCODED DIGITAL SIGNALS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
9. GOLDEN 4 11/10/92 5163044 1/2/91 USE OF A FRACTIONALLY SPACED
EQUALIZER TO PERFORM ECHO
CANCELLATION IN A FULL-DUPLEX MODEM
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
10. CUPO 8-26 11/10/92 5163066 5/24/91 SYNCHRONIZING THE OPERATION OF
MULTIPLE EQUALIZERS IN A DIGITAL
COMMUNICATIONS SYSTEM
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
11. WANG 10 11/9/93 5260972 7/9/91 TECHNIQUE FOR DETERMINING SIGNAL
DISPERSION CHARACTERISTICS IN
COMMUNICATIONS SYSTEMS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
12. LATURELL 2 1/18/94 5280526 5/26/92 TRANSFORMER-LESS HYBRID CIRCUIT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
13. AMRANY 6 6/7/94 5319585 4/28/93 HIGH RESOLUTION FILTERING USING LOW
RESOLUTION PROCESSORS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
14. SORBARA 1-18 7/19/94 5331670 1/31/92 SYNCHRONIZATION SCHEME FOR A DIGITAL
COMMUNICATION SYSTEM
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
15. CUPO 10-27 10/4/94 5353312 12/27/91 EQUALIZER-BASED TIMING RECOVERY
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
16. GOLDEN 5 12/27/94 5377230 5/1/92 EXTENDED BANDWIDTH TRANSMITTER FOR
CROSSTALK CHANNELS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
17. AMRANY 3 1/24/95 5384810 2/5/92 MODULE DECODER
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
18. BETTS 8/22/95 5444712 8/30/93 COMMUNICATION MODE IDENTIFICATION
49-1-3-2-1-24 TECHNIQUE
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
19. ARCHIBALD 4-6 3/19/96 5499923 11/9/94 COMMUNICATION CARD WITH EXTENDIBLE,
ROTATABLE COUPLING
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
20. GADOT 1-5-1-13 4/30/96 5513216 10/13/94 HYBRID EQUALIZER ARRANGEMENT FOR USE IN
DATA COMMUNICATION EQUIPMENT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
21. AMRANY 7 6/25/96 5530959 5/18/94 SELF-SYNCHRONIZING
SCRAMBLER/DESCRAMBLER WITHOUT ERROR
MULTIPLICATION
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
Page 1 of 1
<PAGE> 37
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX A
NON-CAP A-PATENT APPLICATIONS
<TABLE>
<CAPTION>
- -------- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- -------- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1. Bedingfield 2-1 Sample and Hold Circuit Using an 4/29/96 08/639541
Operational Amplifier and High
Impedance Buffer Connected by a
Switched Diode Capacitor Circuit
- -------- ---------------- ------------------------------------- ---------------- ----------------
2. Betts 48-26 Simultaneous Analog and Digital 6/14/93 08/076517
Communication Using Fractional Rate
Encoding
- -------- ---------------- ------------------------------------- ---------------- ----------------
3. Betts 55-4 Modem Receiver Preemphasis 12/13/94 08/354978
- -------- ---------------- ------------------------------------- ---------------- ----------------
4. Betts 56 Trellis Enhanced Precoder 2/12/95 08/391328
- -------- ---------------- ------------------------------------- ---------------- ----------------
5. Betts 57 Apparatus for High-Speed 10/10/95 08/541863
Simultaneous Voice/Data
Communications
- -------- ---------------- ------------------------------------- ---------------- ----------------
6. Betts 64-6 Compensator for Rob-Bit-Signaling
in PCM Systems
- -------- ---------------- ------------------------------------- ---------------- ----------------
7. Betts 65-7 Transmitter Compensation for
Digital Loss and
Robbed-Bit-Signaling
- -------- ---------------- ------------------------------------- ---------------- ----------------
8. Bingel 1 Line-Poweree Modem witih Capacitive 8/11/95 08/514040
Isolated
- -------- ---------------- ------------------------------------- ---------------- ----------------
9. Bingel 2 Integrated Loop Current Detector 2/28/96 08/608418
Apparatus for a PSTN Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
10. Bottoms Cellular Phone Interface For A 4/26/96 08/639359
10-44-22-3-23 Simultaneous Voice/Data Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
11. Bottoms Sound Modification For Use In 4/20/94 08/23/0565
7-34-14-10 Simultaneous Voice and Data
Communications
- -------- ---------------- ------------------------------------- ---------------- ----------------
12. Bottoms Cellular Phone Interface For A 8/1/94 08/283333
8-35-15-2-12 Simultaneous Voice/Data Modem (NOW ABANDONED)
- -------- ---------------- ------------------------------------- ---------------- ----------------
13. Bremer 19-1-2 Compounding of Voice Signal for 6/14/93 08/076506
Simultaneous Voice and Data
Transmission
- -------- ---------------- ------------------------------------- ---------------- ----------------
14. Bremer 36-7 Simultaneous Voice/Data Answering 6/24/94 08/264880
Machine
- -------- ---------------- ------------------------------------- ---------------- ----------------
15. Bremer 37-17-11 Simultaneous Analog and Digital 10/21/94 08/327270
Communication Having Increased
Phase Immunity
- -------- ---------------- ------------------------------------- ---------------- ----------------
16. Bremer Autorate Method for Simultaneous 12/8/94 08/352297
38-18-12-20 Transmission of Voice and Data
- -------- ---------------- ------------------------------------- ---------------- ----------------
17. Bremer 39 This is a Continuation Technique 1/26/95 08/378766
for Transmitting Analog or Digital
Signals in a Common Frequency Band
of a Communications Channel
- -------- ---------------- ------------------------------------- ---------------- ----------------
18. Chapman 5-1-2 Simultaneous Full Duplex Voice and 5/1/95 08/432486
Group 3 Facsimile System and Method
- -------- ---------------- ------------------------------------- ---------------- ----------------
19. Exner 1-1-1-2 Transparent Call Progress 1/30/95 08/380872
- -------- ---------------- ------------------------------------- ---------------- ----------------
20. Ghahramani 2 A Method for Measuring the 10/11/94 08/320810
Usability of A System and for Task
Analysis and Re-engineering
- -------- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 1 of 1
<PAGE> 38
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
<TABLE>
<CAPTION>
- -------- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- -------- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
21. Hanson 10-19-7 An Enabling Technique for Quickly 4/5/96 08/628410
Establishing High Speed PSTN
Connections in Telecommuting
Applications
- -------- ---------------- ------------------------------------- ---------------- ----------------
22. Hanson 5-17-5 An Enabling Technique for Quickly 11/3/94 08/333686
Establishing High Speed PSTN (NOW ABANDONED)
Connections in Telecommuting
Applications
- -------- ---------------- ------------------------------------- ---------------- ----------------
23. Hecht 1-6-1 Apparatus and Method for 5/8/92 07/880257
Downloading Programs
- -------- ---------------- ------------------------------------- ---------------- ----------------
24. Hiles 1 System and Method for Bus 12/28/96 08/607912
Contention Resolution
- -------- ---------------- ------------------------------------- ---------------- ----------------
25. Hiles 2 Slot-Token Protocol 2/28/96 08/608378
- -------- ---------------- ------------------------------------- ---------------- ----------------
26. Holmquist 14-6 Simultaneous Voice and Data Call 4/8/94 08/225296
Establishment Using a Simultaneous
Voice and Data Modem Pool and
Private Branch Exchange Facilities
- -------- ---------------- ------------------------------------- ---------------- ----------------
27. Holmquist 15-8 A Method For Dial-In Access 6/20/96 08/262169
Security Using a Multimedia Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
28. Ko 13 Independently Switched Voice And 3/23/94 08/21/6373
Data Calls Using a Simultaneous
Voice and Data Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
29. Ko 16 Linear Prediction Filter 12/21/94 08/360906
Coefficient Quantizer & Filter Set
- -------- ---------------- ------------------------------------- ---------------- ----------------
30. Lester 1-1 Circuit and Method for Multiplexing 11/14/95 08/557873
A Frame-Relay Virtual Circuit and
Frame-Relay System Having
Multiplexed Virtual Circuits
- -------- ---------------- ------------------------------------- ---------------- ----------------
31. Moore 2-1 Interchange Circuit Overload 10/7/94 08/320147
Protection Using Driver Current
Limiting
- -------- ---------------- ------------------------------------- ---------------- ----------------
32. Patel 1-2 A Technique for Sending Faxes Over 12/18/95 08/573702
Cellular Communications Channel
- -------- ---------------- ------------------------------------- ---------------- ----------------
33. Patel 2-3 Method and Apparatus for Bypassing 12/18/95 08/573701
a Cellular Modem Pool During a Fax
Transmission
- -------- ---------------- ------------------------------------- ---------------- ----------------
34. Rasmussen 4 Discontinuous Transmission of 3/12/96 08/614225
Circuit-Switching Analog Cellular
Data
- -------- ---------------- ------------------------------------- ---------------- ----------------
35. Scott 10 Adaptive Transmit Levels for Modems 10/18/93 08/137542
Operating Over Cellular (NOW ABANDONED)
- -------- ---------------- ------------------------------------- ---------------- ----------------
36. Scott 22 Adaptive Transmit Levels for Modems 3/21/96 08/619149
Operating Over Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 2 of 2
<PAGE> 39
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX A
NON-CAP A-PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
1. GEORGOPULOS 1 1/17/95 D354500 3/10/93 MODEM HOUSING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
2. CRAFT 1-11 6/18/91 5025211 12/20/89 TECHNIQUE FOR REDUCING
ELECTROMAGNETIC INTERFERENCE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
3. BREMER 14 1/14/92 5081647 1/6/89 COMMUNICATION OF A VOICE SIGNAL VIA
CONTINUOUS QUADRATURE AMPLITUDE
MODULATOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
4. BETTS 35 4/7/92 5103227 9/26/90 MODULUS CONVERTER FOR FRACTIONAL RATE
ENCODING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
5. BETTS 37-4 4/14/92 5105443 5/29/90 INBAND CODING OF SECONDARY DATA
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
6. BETTS 40-2 4/27/93 5206854 9/24/91 DETECTING LOSS OF ECHO CANCELLATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
7. BETTS 36-16 7/20/93 5230010 9/26/90 FRACTIONAL RATE MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
8. BETTS 38-12 9/7/93 5243627 8/22/91 SIGNAL POINT INTERLEAVING TECHNIQUE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
9. SHAW 4 10/5/93 5251328 12/20/90 PREDISTORTION TECHNIQUE FOR
COMMUNICATIONS SYSTEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
10. BETTS 39-25 11/23/93 5265127 9/3/91 NON-LINEAR ENCODER AND DECODER FOR
INFORMATION TRANSMISSION THROUGH
NON-LINEAR CHANNELS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
11. BETTS 42-17 1/18/94 5280503 1/13/92 DATA COMMUNICATION SYSTEM WITH DATA
RATE THROTTLING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
12. BETTS 41-5 3/1/94 5291521 1/31/92 INDEX ASSIGNMENT IN REDUNDANCY -
DOCED DATA COMMUNICATION SYSTEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
13. ARCHIBALD 4/5/94 5301246 7/29/92 DATA COMMUNICATIONS EQUIPMENT
2-1-2 SECURITY DEVICE USING CALLING PARTY
DIRECTORY NUMBER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
14. BETTS 44-1 5/10/94 5311557 7/10/92 CIRCULAR LIMITER FOR USE IN A
RECEIVER TO REDUCE THE EFFECTS OF THE
SIGNAL DISTORTION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
15. BREMER 5/10/94 5311578 5/7/92 TECHNIQUE FOR AUTOMATIC
18-5-1-16 IDENTIFICATION OF A REMOTE MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
16. SCOTT 3-3 5/10/94 5311596 8/31/92 CONTINUOUS AUTHENTICATION USING AN
IN-BAND OR OUT-OF BAND SIDE CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
17. BETTS 45-10-26 8/30/94 5343500 7/9/92 NON-LINEAR ENCODER AND DECODER FORM
INFORMATION TRANSMISSION THROUGH
NON-LINEAR CHANNELS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
18. SCOTT 4 9/20/94 5349635 11/19/92 HALF-DUPLEX OR FULL-DUUPLEX AUTOMODE
OPERATION FOR USE IN DATA
COMMUNICATIONS EQUIPMENT
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
19. HUNT 2-3 11/1/94 5361259 2/19/93 A WIDE AREA NETWORK (WAN) ARRANGEMENT
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
20. ARCHIBALD 11/29/94 5369703 10/18/91 COMMAND AND CONTROL SIGNALLING METHOD
1-1-4 AND APPARATUS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
21. RASMUSSEN 1 12/13/94 5373149 2/1/93 FOLDING ELECTRONIC CARD ASSEMBLY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 1 OF 3
<PAGE> 40
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
22. SCOTT 5 2/28/95 5394392 12/14/92 METHOD FOR TRANSFERRING INFORMATION
USING MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
23. SCOTT 6 3/7/95 5396486 12/17/92 DATA COMMUNICATIONS EQUIPMENT
INTERFACE LEADS TO SIGNAL HALF-DUPLEX
OR FULL-DUPLEX OPERATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
24. BETTS 51-17 3/7/95 5396519 10/22/93 METHOD AND APPARATUS FOR ADAPTIVELY
PROVIDING PRECODING AND PREEMPHASIS
CONDITIONING TO SIGNAL DATA FOR
TRANSFER OVER A COMMUNICATION CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
25. BREMER 27-7-4 7/25/95 5436930 6/14/93 SIMULTANEOUS ANALOG AND DIGITAL
COMMUNICATIONS WITH A SELECTION OF
DIFFERENT SIGNAL POINT CONSTELLATIONS
BASED ON SIGNAL ENERGY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
26. HENDERSON 1-1 8/22/95 5444704 8/12/91 DIAL RESTORAL METHOD AND APPARATUS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
27. BREMER 25-5-7 9/5/95 5448555 6/14/93 SIMULTANEOUS ANALOG AND DIGITAL
COMMUNICATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
28. LANDRY 1-2-7 9/12/95 5450438 7/26/93 1200 BIT PER SECOND FALLBACK METHOD
FOR USE IN MOBILE RADIO
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
29. GEORGOPULOS 10/10/95 5457601 12/8/93 CREDIT CARD-SIZED MODEM WITH
3-3 MODULAR DAA
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
30. CHAPMAN 3-10 12/5/95 5473675 11/12/93 CALL ESTABLISHMENT FOR SIMULTANEOUS
ANALOG AND DIGITAL COMMUNICATIONS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
31. CHAPMAN 4-13 12/12/95 5475691 11/15/93 VOICE ACTIVATED DATA RATE CHANGE IN
SIMULTANEOUS VOICE AND DATA
TRANSMISSION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
32. BETTS 54-19 12/12/95 5475711 9/14/94 SYSTEM FOR CHANNEL CAPACITY MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
33. BREMER 22-3-3 12/12/95 5475713 6/14/93 SHAPED SIGNAL SPACES IN A
SIMULTANEOUS VOICE AND DATA SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
34. SCOTT 11 12/26/95 5479480 12/30/93 DUAL MODE CELLULAR MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
35. ARCHIBALD 3-1 12/26/95 5479650 12/24/92 METHOD AND APPARATUS FOR SWITCHING
COMMUNICATIONS FROM A SECONDARY
CHANNEL TO A PRIMARY CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
36. BETTS 52-18 1/2/96 5481567 9/12/94 METHOD AND APPARATUS FOR
AUTOMATICALLY ADAPTING THE AMOUNT OF
WARPING IN A SYSTEM TRANSMITTING
INFORMATION THROUGH A NON-LINEAR
CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
37. BREMER 4/9/96 5506866 11/15/93 SIDE-CHANNEL COMMUNICATIONS IN
31-12-11-2 SIMULTANEOUS VOICE AND DATA
TRANSMISSION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
38. BREMER 32 4/30/96 5513212 11/15/93 CONVERSION OF A FAX MODULATION TO A
DATA TRANSMISSION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
39. PATEL 5-14 5/30/96 5513213 3/27/95 DATA DRIVEN AUTORATING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 2 OF 3
<PAGE> 41
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
40. BETTS 5/28/96 5521942 6/14/93 A METHOD FOR INCREASING THE DYNAMIC
47-20-6-15 RANGE OF A SIGNAL IN A SIMULTANEOUS
VOICE AND DATA SYSTEM BY THE USE OF
OVERLAPPING SIGNAL POINT REGIONS AND
TRELLIS CODING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
41. ASHLEY 2-2 6/18/96 5528630 4/20/94 COUPLER FOR COMMUNICATION SYSTEMS
WHICH UTILIZE MORE THAN ONE FREQUENCY
BAND
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
42. MASSINI 1-1 7/9/96 5533663 11/21/94 SOLDER WAVE MEASUREMENT DEVICE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
43. BOTTOMS 7/16/96 5537436 6/14/93 SIMULTANEOUS ANALOG AND DIGITAL
6-29-1-2-9-1-4-8 COMMUNICATION APPLICATIONS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
44. BREMER 7/16/96 5537441 6/14/93 CONTROLLED SIMULTANEOUS ANALOG AND
30-2-2-7-10-5 DIGITAL COMMUNICATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
45. BEDINGFIELD 7/16/96 5537654 4/20/94 PCMCIA INTERFACE USING SHARED MEMORY
1-1
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
46. MASSINI 2-2 7/23/96 5538175 11/21/94 ADJUSTMENT OF SOLDER WAVE PROCESS IN
REAL TIME
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
Page 3 of 3
<PAGE> 42
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX A
PARADYNE NON-CAP PATENT APPLICATIONS
<TABLE>
<CAPTION>
- -------- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- -------- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1. Betts 58-1-18 Echo Canceling Method and Apparatus 9/29/95 08/536908
for Data Over Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
2. Betts 59-2-19 Echo Canceling Method and Apparatus 9/29/95 08/536916
for Data Over Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
3. Betts 60-21 Echo Canceler Gain Tracker for 9/29/95 08/536917
Cellular Modems
- -------- ---------------- ------------------------------------- ---------------- ----------------
4. Betts 61-22 Echo Cancellation for Modems 11/14/95 08/557635
- -------- ---------------- ------------------------------------- ---------------- ----------------
5. Betts 62-23 Echo Cancellation for Modems 11/14/95 08/557634
- -------- ---------------- ------------------------------------- ---------------- ----------------
6. Betts 63-5 Interpolation System for Fixed 12/22/95 08/577786
Sample Rate Signal Processing
- -------- ---------------- ------------------------------------- ---------------- ----------------
7. Buck 1-1 Self Locking and Ejecting RJ-11 Plug 9/15/95 08/528819
- -------- ---------------- ------------------------------------- ---------------- ----------------
8. Holmquist 18 A Transparent Technique for 5/31/95 08/457881
"Mu-law" Modems to Detect Mutual
Connection Via an All Digital
Circuit
- -------- ---------------- ------------------------------------- ---------------- ----------------
9. Ko 20 Speech Silence Detection Using 4/12/95 08/420466
Autocorrelation Coefficients
- -------- ---------------- ------------------------------------- ---------------- ----------------
10. Moore 3 Time-division Multiple-access 7/31/95 08/509309
Method for Packet Transmission on
Shared Synchronous Serial Buses
- -------- ---------------- ------------------------------------- ---------------- ----------------
11. Scott 16 Error Control Negotation Based on 5/31/95 08/458048
Modulation
- -------- ---------------- ------------------------------------- ---------------- ----------------
12. Scott 17 The Use of Compression to Improve 12/18/95 08/573700
the Sending of Faxes over Analog
Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
13. Scott 20 An Improved Method for Sending 12/18/95 08/573739
Faxes Over Wireless Llinks
- -------- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 1 of 1
<PAGE> 43
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX A
PARADYNE NON-CAP PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
1. KORZIK 1 1/23/84 D272340 5/11/81 HOUSING FOR PRINTED CIRCUIT BOARDS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
2. KORZIK 3-3-1-1 3/27/84 D273189 8/12/81 DISPLAY TERMINAL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
3. ARMSTRONG 1 6/2/81 4271527 8/31/79 DOUBLE SIDE BAND-QUADRATURE CARRIER
MODULATION SIGNAL STRUCTURES
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
4. ARMSTRONG 2 6/16/81 4273955 3/2/79 ERROR DETECTING AND CORRECTING SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
5. ARMSTRONG 6/15/82 4335464 1/24/80 DUAL MULTIPOINT DATA TRANSMISSION
3-1-1 SYSTEM MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
6. ARMSTRONG 4 2/15/83 4374436 10/17/80 SYSTEM FOR THE MONITORING AND
RESTORATION OF SERIES TERMINALS IN A
LOOPED COMMUNICATION SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
7. ARMSTRONG 5 4/26/83 4381546 3/2/79 SYSTEM FOR THE QUANTITATIVE
MEASUREMENT OF IMPAIRMENTS IN THE
COMMUNICATION CHANNEL OF A QUADRATURE
AMPLITURE MODULATION DATA
COMMUNICATION SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
8. BETTS 2-1 6/28/83 4390843 2/9/81 TELEPHONE SYSTEM RING PERIOD DETECTOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
9. WISSMAN 1 2/8/83 4396239 3/10/81 INTERLOCK MECHANISM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
10. BALLENTINE 1 2/28/84 4434378 11/6/81 D.C. POWER MONITOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
11. KORZIK 2-2 3/20/84 4437717 9/28/81 RACK MOUNTABLE PRIMARY POWER AC PLUG
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
12. BREMER 2 8/7/84 4464767 9/8/81 SYSTEM FOR GENERATION OF MULTIPLE
POINTED QAM SIGNAL SPACES BY USE OF
SYNCHRONOUS QAM TRANSMITTERS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
13. BREMER 3-1 3-5-85 4503545 10/28/81 SYSTEM FOR EVALUATING TRANSMISSION
LINE IMPAIRMENTS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
14. BREMER 4-3 4/2/85 4509171 12/8/82 MODEM MULTIPLEXER SYNCHRONIZATION BY
RADIAL MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
15. ARMSTRONG 6 5/7/85 4516216 5/10/82 IN-SERVICE MONITORING SYSTEM FOR DATA
COMMUNICATIONS NETWORK
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
16. BETTS 4-1 5/14/85 4517680 2/23/83 ERROR VECTOR NORMALIZER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
17. BREMER 5-5-1 6/25/85 4525846 12/27/82 MODEM IN-BAND SECONDARY CHANNEL VIA
RADIAL MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
18. BREMER 6 6/25/85 4525847 11/10/82 QAM ENCODER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
19. BREMER 7-6-2 7/30/85 4532640 8/12/82 MODEM IN-BAND SECONDARY CHANNEL VIA
RADIAL MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
20. MARTINEZ 3-7 8/6/85 4534026 12/6/83 NORMALIZED ERROR COMPENSATOR FOR
MODEMS USING RADIAL AMPLITUDE
MODULATION FOR MULTIPLEXING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 1 OF 4
<PAGE> 44
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
NO. CASE NAME ISSUE PATENT NO. FILING TITLE
DATE DATE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
21. BETTS 8-4 8/6/85 4534036 12/8/82 PHASE TRACKING LOOP IMPAIRMENT
MONITOR FOR MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
22. SANDBERG 1-1 8/13/85 4535452 2/29/84 MULTI-MODEM VARIABLE PART
DEMULTIPLEXER SYNCHRONIZATION ADAPTER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
23. BETTS 9-5 11/26/85 4555790 6/30/83 DIGITAL MODEM HAVING A MONITOR FOR
SIGNAL-TO-NOISE RATIO
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
24. ARMSTRONG 7 12/10/85 4558317 11/17/82 DIGITAL COMMUNICATION LINK MONITORING
DEVICE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
25. BETTS 10-2-1 9/16/86 4612509 1/13/83 FREQUENCY SHIFT KEYED DEMODULATOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
26. ARMSTRONG 8 12/2/86 4627077 12/3/84 MODIFIED QAM DATA POINT CONSTELLATION
FOR SECONDARY CHANNEL SIGNALLING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
27. BETTS 11 12/16/86 4630286 10/10/84 DEVICE FOR SYNCHRONIZATION OF
MULTIPLE TELEPHONE CIRCUITS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
28. ARMSTRONG 9 12/16/86 4630287 6/25/85 SECONDARY CHANNEL SIGNALLING IN A QAM
DATA POINT CONSTELLATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
29. BETTS 12-1 12/23/86 4631738 12/6/84 GAIN TRACKER FOR DIGITAL MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
30. BETTS 13-2 12/30/86 4633485 3/8/85 ADAPTIVE NOISE SUPPRESSION FOR
DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
31. BETTS 14 1/13/87 4637035 2/16/84 DIGITAL MODEM FOR MULTIPLE TELEPHONE
CIRCUITS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
32. ZURANSKI 1/27/87 4639934 4/11/85 LINE IMPAIRMENT DISPLAY FOR DIGITAL
3-1-15 MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
33. BREMER 2/24/87 4645871 6/17/85 NON-INTERFERING IN-BAND
8-10-1-1 PROTOCOL-INDEPENDENT DIAGNOSTIC
SCANNING IN A DIGITAL MULTIPOINT
COMMUNICATION SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
34. ZURANSKI 4-6 2/24/87 4646325 4/15/85 INDEX DECODER FOR DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
35. BREMER 9 3/31/87 4654807 12/6/83 METHOD FOR MEASURING COMMUNICATION
CHANNEL IMPAIRMENT IN POLLING
APPLICATIONS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
36. BREMER 10 5/5/87 4663766 10/10/84 METHOD OF DETERMINING AUTOMATICALLY
THE RATE OF THE DATA SIGNALS IN A
MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
37. BETTS 16-7 5/26/87 4669090 7/5/75 HALF-DUPLEX MODEM WITHOUT TURNAROUND
DELAY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
38. BETTS 17-8 6/30/87 4677624 3/1/85 SELF-SYNCHRONIZING DE-INTERLEAVER FOR
VITERBI DECODER USED IN WIRELINE
MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
39. BETTS 18-9-11 6/30/87 4677625 3/1/85 DISTRIBUTED TRELLIS ENCODER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
40. BETTS 19-10 6/30/87 4677626 3/1/85 SELF-SYNCHRONIZING INTERLEAVER FOR
TRELLIS ENCODER USED IN WIRELINE
MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
41. BETTS 20-5 7/28/87 4683578 7/5/85 AUTOMATIC GAIN CONTROL USING THE
EXTREME POINTS OF A CONSTELLATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
42. MARTINEZ 11-1 11/24/87 4709377 3/13/85 VITERBI DECODER FOR WIRELINE MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 2 OF 4
<PAGE> 45
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
NO. CASE NAME ISSUE PATENT NO. FILING TITLE
DATE DATE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
43. HOLMQUIST 2 3/15/88 4731843 12/30/85 METHOD AND DEVICE OF INCREASING THE
EXECUTION SPEED OF CIPHER FEEDBACK
MODE OF THE DES BY AN ARBITRARY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
44. BETTS 21 3/29/88 4734920 10/10/84 HIGH SPEED MODEM FOR MULTIPLE
COMMUNICATION CIRCUITS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
45. BETTS 22-12 5/10/88 4744092 7/5/75 TRANSPARENT ERROR DETECTION IN HALF
DUPLEX MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
46. MARTINEZ 13-23 6/21/88 4752943 8/7/87 FREQUENCY OF OCCURRENCE RETRAINING
DECISION CIRCUIT
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
47. BETTS 24-6 9/13/88 4771232 1/4/88 NON-INTERRUPTIVE SPECTRUM ANALYZER
FOR DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
48. BETTS 25-14 1/3/89 4796279 6/30/87 SUBRATE PREAMBLE DECODER FOR A HIGH
SPEED MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
49. MOORE 1 1/10/89 4797815 11/22/85 INTERLEAVED SYNCHRONOUS BUS ACCESS
PROTOCOL FOR A SHARED MEMORY
MULTI-PROCESSOR SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
50. ARMSTRONG 11 1/10/89 4797878 8/18/87 MULTIPLE VIRTUAL MULTIPOINT MODEM
USING TDM/TOKEN THROWING TECHNIQUE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
51. LBETTS 26-7 3/7/89 4811357 1/4/88 SECONDARY CHANNEL FOR DIGITAL MODEMS
USING SPREAD SPECTRUM SUBLIMINAL
INDUCED MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
52. BOTTOMS 2-1 3/21/89 4815105 4/7/87 SELECTIVE SIGNALLING ENCODER/ DECODER
FOR MULTIPOINT DATA COMMUNICATION
NETWORKS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
53. ZURANSKI 5/23/89 4833690 8/18/87 REMOTE EYE PATTERN DISPLAY FOR
8-1-1-27 DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
54. LAROWE 1 8/22/89 4860009 2/12/88 BIDIRECTIONAL MULTIFRAME CONVERTER
FOR DATA COMMUNICATIONS SYSTEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
55. BETTS 28-9 8/28/89 4862464 12/30/87 DATA ERROR DETECTOR FOR DIGITAL
MODEMS USING TRELLIS CODING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
56. HOLMQUIST 3 9/5/89 4864617 7/15/87 SYSTEM AND METHOD FOR REDUCING
DEADLOCK CONDITIONS CAUSED BY
REPEATED TRANSMISSION OF DATA
SEQUENCES EQUIVALENT TO THOSE USED
FOR INTER-DEVICE SIGNALLING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
57. BOTTOMS 3-4 2/6/90 4898547 7/30/85 HYBRID INTERFACE ADAPTER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
58. BREMER 12-29 5/8/90 4924516 5/23/89 METHOD AND SYSTEM FOR A SYNCHRONIZED
PSEUDO-RANDOM PRIVACY MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
59. KING 1 6/26/90 4937819 9/26/88 TIME ORTHOGONAL MULTIPLE VIRTUAL DCE
FOR USE IN ANALOG AND DIGIAL NETWORKS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
60. BETTS 30-15 7/3/90 4939748 8/7/87 UNOBSTRUSIVE SIGNATURE FOR MODULATED
SIGNALS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
61. BETTS 53-9-17 12/18/90 4979184 5/9/89 AUTOMATIC EQUALIZER INITIALIZATION
TIME CONTROL FOR MULTIPOINT NETWORKS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
62. BETTS 31-1 4/16/91 5008903 5/25/89 ADAPTIVE TRANSMIT PRE-EMPHASIS FOR
DIGITAL MODEM COMPUTED FROM NOISE
SPECTRUM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 3 OF 4
<PAGE> 46
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
NO. CASE NAME ISSUE PATENT NO. FILING TITLE
DATE DATE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
63. BETTS 34-15 3/24/92 5099478 5/23/89 COMMUNICATION OF SECONDARY CHANNEL
BYTE IN A SYNCHRONOUS MODEM WITHOUT
STATISTICAL UNCERTAINTY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
64. BREHMER 1-3 10/5/93 5251236 4/5/91 FRACTIONAL RATE MODEM WITH TRELLIS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
Page 4 of 4
<PAGE> 47
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX B-1
PARADYNE TRADEMARKS
<TABLE>
<CAPTION>
- -------------------- ------------------ -------------- ------------ -------------
TRADEMARK COUNTRY NAME APPLICATION REGISTRATION STATUS
NUMBER NUMBER
- -------------------- ------------------ -------------- ----------- --------------
<S> <C> <C> <C> <C>
INFORMATION VENDING UNITED STATES OF 74634791 PENDING
ENCRYPTION AMERICA
- -------------------- ------------------ -------------- ----------- --------------
NETCARE BRAZIL 816542953 816542953 REGISTERED
- -------------------- ------------------ -------------- ----------- --------------
NETCARE CANADA 566954 340698 REGISTERED
- -------------------- ------------------ -------------- ----------- --------------
NETCARE JAPAN 119798186 2145918 REGISTERED
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED KINGDOM 1390275 PENDING
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED KINGDOM 1390276 PENDING
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED STATES OF 584594 1340553 REGISTERED
AMERICA
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED STATES OF 603532 1425919 REGISTERED
AMERICA
- -------------------- ------------------ -------------- ----------- --------------
</TABLE>
Page 1 of 1
<PAGE> 48
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX B-2
TRADEMARK ASSIGNMENT AGREEMENT
(AT&T PARADYNE CORPORATION to LUCENT TECHNOLOGIES INC.)
THIS TRADEMARK ASSIGNMENT AGREEMENT, made and effective as of the Closing
Date by AT&T PARADYNE CORPORATION ("PARADYNE"), a Delaware corporation, and
LUCENT TECHNOLOGIES INC. ("LUCENT"), a Delaware corporation.
WHEREAS, PARADYNE, on the effective day hereof, has adopted, used,
registered or applied to register in certain countries throughout the world
certain trademarks and service marks as set forth in Appendix B-1 (collectively,
the "PARADYNE Marks"); and
WHEREAS, PARADYNE wishes to transfer to LUCENT and LUCENT wishes to acquire
the PARADYNE Marks.
NOW, THEREFORE, the PARADYNE and LUCENT agree as follows:
1. For good and valuable consideration, the receipt of which is hereby
acknowledged, PARADYNE hereby assigns and conveys to LUCENT all its right, title
and interest in and to the PARADYNE Marks, together with the goodwill of the
business symbolized by the PARADYNE Marks.
2. This Trademark Assignment Agreement is intended in original and in
certified copy to be filed with the competent domestic and foreign institutions,
together with an application for assignment of the corresponding registrations
and applications for registrations.
3. Should the filing of this document be insufficient for the assignment
of the proprietary rights and applications for proprietary rights, both parties
hereto shall execute all reasonable documents and perform all other acts
necessary to effect transfer of the PARADYNE Marks.
4. LUCENT shall bear the costs arising out of or in connection with the
implementation of the assignments contained herein.
AT&T PARADYNE CORPORATION LUCENT TECHNOLOGIES INC.
By: By:
---------------------------------- ------------------------------------
Its: Its:
--------------------------------- -----------------------------------
Date: Date:
-------------------------------- ----------------------------------
Page 1 of 2
<PAGE> 49
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
NOTARIAL CERTIFICATIONS
I, a Notary Public, certify that on ___________, 1996, before me personally
appeared ______________________, to me known to be an Authorized Signatory of
AT&T PARADYNE CORPORATION and that he executed the foregoing Trademark
Assignment Agreement.
.................
.................
.................
I attest:
Signed in:
Dated:
Notary Public "Official Seal"
- ----------------------------
Signature of Notary Public
* * *
I, a Notary Public, certify that on ___________, 1995, before me personally
appeared ______________________, to me known to be an Authorized Signatory of
LUCENT TECHNOLOGIES INC., and that he executed the foregoing Trademark
Assignment Agreement.
.................
.................
.................
I attest:
Signed in:
Dated:
Notary Public "Official Seal"
- ----------------------------
Signature of Notary Public
Page 2 of 2
<PAGE> 50
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
Page 3 of 2
<PAGE> 51
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX C
PARADYNE PRODUCTS
o GENESIS AND GENEVA FAMILY (3800/3900)
o Triple modem nest for the 3000 Carrier
o Synchronous data compression
o Integrated Diagnostics
o Mocha and Hypermodem
o DEVER FAMILY - SUBRATE DIGITAL LEASE LINE (3600/3500)
o ISDN DBM
o V.34 DBM
o Extended Range
o Autorate
o Cross Pair Detection
o Integrated Diagnostics
o Multiplexor Options
o Paddle Cards
o 64k/128k NTU's
o SPINNAKER FAMILY - T1/E1/HDSL CSU & DSU (31XX,33XX)
o ASCII Interface Redesign
o TCP & Telnet
o Device Specific SNMP MIBs
o Voice Compression
o International Power
o Integrated Dignostics
o Optical Interface
o CARIBBEAN SUBRATE FAMILY - DDS FRAME RELAY
o Aruba - DDS Frame Relay
o Frame Relay Aware/Frame Relay Aggregation
o Synchronous Data Compression
o BRI DBM
o FTP Down Line Load
o 14 Slot Nest
o FRAD
o PCMCIA Management Interfaces
Page 1 of 5
<PAGE> 52
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
o Cost Reduction (Antigua)
o Curacao - DDS Frame Relay Edge Router
o Single Card Router with 1-port Native Element DTE
o Supports above Aruba Functionality
o CARIBBEAN NxDSO FAMILY - T1/E1
o Barbados - T1/FT1 Low End Multiplexor & DSU
o SNMP, Telnet, TCP
o PRI
o 5 Slot Carrier
o 2 Slot Stand Alone Package
o 14 Slot Nest
o Single T1 Leased Line NAM with DSX, with 2 ports
o Dual T1 Leased Line NAM without DSX, no ports
o Dual DSX APM without ports
o PCMCIA Management (via Ethernet or Token Ring LAN, V.34)
o 8-port FXS, FSO, or E&M Voice APM
o Voice Compression APM
o 4-port Synchronous Data APM
o Synchronous Data Compression APM
o 6-port OCU APM
o 5-port SRU APM
o 6-port Management Interface APM
o 4-port BRI APM
o 8-port 4.34 Modem Pool APM
o Martinique - E1/FE1 Low End Multiplexor & DSU
o Dual E1 Leased Line NAM with ports
o Dual E1 Leased Line NAM without ports
o Support for above Barbados configurations and options
o Trinidad - T1/FT1 Frame Relay DSU
o SNMP, Telnet, TCP
o 2 Slot Stand Alone Package
o 14 Slot Nest
o T1 Frame Relay NAM with DSX, with 2 ports
o BRI DBM
o Frame Relay Aware, Frame Relay Aggregation with
Compression APM
Page 2 of 5
<PAGE> 53
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
o FRAD APM
o HEARTLAN FAMILY - LOW END/LOW COST SUBRATE AND T1
o Beagle - Subrate Leased Line DSU
o DDS NI with 1 port
o SNMP, Telnet, TCP
o Ethernet Management Interface
o Greyhound - T1/FT1 Leased Line DSU
o T1/FT1 NI without DSX, with 1 port
o T1/FT1 NI with DSX, with 1 port
o T1/FT1 NI with DSX, with 2 ports
o SNMP, Telnet, TCP
o With or without Ethernet Management Interface
o Poodle - V.11 NTU
o 64k V.11 NI with 1 port DTE
o 64k V.11 NI with 5 port DTE, with X.50
o SYSTEM PRODUCTS
o ADSL/SDSL/HDSL/VDSL/RADSL PC Cards, Workstation Interface Cards,
and Stand Alone "Modems"
o Open Access Gateway (Multiplexor)
o Central Site Concentrators for ADSL/SDSL/HDSL/VDSL/
RADSL lines
o xDSL with packet or cell protocols
o TDM extensions
o Modem Pool extensions for analog, mu-law, ISDN
o Service Translation for broadband, video transmission
o Acculink Access Controller (AAC) Cards
o Direct Interface with Digital Access Cross Connect
System (DACS)
o Modem Pool
o TDM Access Multiplexor
o HAWK - REMOTE ACCESS AND TELECOMMUTING SERVER
o V.34, V.34Q and ISDN BRI Remote Access Port Concentrators
o T1 PRI Network Interface
o Windows NT
o Novell
o Temporary Office Extensions
Page 3 of 5
<PAGE> 54
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
o Remote Office Extensions
o High Card Density (16 ports OCD)
o Very High Card Density (30 ports OCD)
o Mocha and Hypermodem
o E1 Interface
o WIRELESS SYSTEMS
o ETC2 for Wireless Data Gateway, Hawk and Open Access Gateway
o CDPD and PCS protocols (TDMA, CDMA, GSM)
o SOFTWARE PRODUCTS
o Network Management System Applications for all Present Paradyne
Products and Other Products Listed Herein
o Element Management Applications for all Present Paradyne Products
and Other Products Listed Herein
o Extended Leased Line Network Management Applications on HP
Openview and IBM SystemView
o Performance Management Applications for all Present Paradyne
Products and Other Products Listed Herein, on HP Openview and IBM
SystemView
o Service Management Applications for all Present Paradyne Products
and Other Products Listed Herein, on HP Openview and IBM
SystemView
o TL-1 Interface for HP Openview and IBM SystemView o CMIP/SNMP
Wrappers for HP Openview and IBM SystemView
o The following products are to be assessed in January, 1997. The commercial
development status of each product will be determined and such product
will be added to this Appendix C if the product is either
o (I) at the time of assessment under development for a scheduled
commercial release, or
o (II) firmly committed for development to begin no later than
March 31, 1997 for a scheduled commercial release; in this case,
the product is added to this Appendix C only to the extent that
such development does begin before March 31
o The products to be assessed are
o The following modules for CARIBBEAN NxDSO
o ATM NAM
o Encryption APM
o Security APM
o Cayman - FT3 ATM DSU
o ATM Access Multiplexor
o The following modules for Open Access Gateway
Page 4 of 5
<PAGE> 55
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
o POTS Splitting
o Encryption
o Security
Page 5 of 5
<PAGE> 56
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX D
THIRD PARTY LICENSES
1. Alcatel N.V.
2. Analog Devices, Inc.
3. Applied Materials, Inc.
4. Chartered Semiconductor Manufacturing, PTE
5. Cypress Semiconductor Corporation
6. Fraunhoffer-Gesellschaft
7. The General Electric Company, p.l.c.
8. Hayes Microcomputer Products, Inc.
9. Hewlett-Packard Company
10. Hitachi, Ltd.
11. Integrated Device Technology, Inc.
12. Kokusai Denshin Denwa Co., Ltd.
13. Linear Technology Corp.
14. Matsushita Electric Industrial Co., Ltd.
15. NEC
16. Nippon Telegraph and Telephone Corp.
17. OKI Electric
18. Olivetti
19. Phillips' Gloeilampenfabrieken
20. Penril Datacomm Networks, Inc.
21. Rockwell International Corporation
22. Samsung Electronics Company, Ltd.
23. Sanyo Electric Co., Ltd.
24. Seeq Technology, Inc.
25. Siemens Aktiengesellschaft
26. Silicon Systems Incorporated
27. Sony Corporation
28. Sumitomo Electric Industries, Ltd.
29. VLSI Technology, Inc.
30. VMX/Octel
Page 1 of 1
<PAGE> 57
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX E
IMMUNITY PATENTS AND APPLICATIONS
CAP TECHNOLOGY
<TABLE>
<CAPTION>
- ----------------- ---------------------------------------------------------------- --------------
PATENT NUMBER TITLE AUTHOR
- ----------------- ---------------------------------------------------------------- --------------
<S> <C> <C>
4,247,940 Equalizer for complex data signals Mueller et al
- ----------------- ---------------------------------------------------------------- --------------
4,304,962 Data Scrambler Fracassi et al
- ----------------- ---------------------------------------------------------------- --------------
4,464,545 Echo canceller Werner
- ----------------- ---------------------------------------------------------------- --------------
4,483,012 Differentially convolutional channel coding with expanded set Wei
of signaling
- ----------------- ---------------------------------------------------------------- --------------
4,651,320 Inband Coding Of Secondary Data Thapar
- ----------------- ---------------------------------------------------------------- --------------
4,682,358 Echo canceller Werner
- ----------------- ---------------------------------------------------------------- --------------
4,788,694 Trellis coding with substrates Calderbank
- ----------------- ---------------------------------------------------------------- --------------
4,924,492 Method and apparatus for wideband transmission of digital Gitlin et al
signals between, for example, a telephone central office and
customer premises.
- ----------------- ---------------------------------------------------------------- --------------
4,995,057 Technique for Achieving the Theoretical Coding Gain of Digital Chung et al
Signals Incorporating Error Correction
- ----------------- ---------------------------------------------------------------- --------------
5,052,000 Technique for improving the operation of decision feedback Wang et al
equalizers in communications systems utilizing error coreection
- ----------------- ---------------------------------------------------------------- --------------
5,056,117 Decision feedback equalization with trellis coding Gitlin et al
- ----------------- ---------------------------------------------------------------- --------------
5,442,626 Digital Communications System with Symbol Multiplexers Wei
- ----------------- ---------------------------------------------------------------- --------------
RE 31253 Echo cancellation in two-wire, two-way data transmission Weinstein
systems
- ----------------- ---------------------------------------------------------------- --------------
5,488,633 Intersymbol Interference Channel Coding Scheme Laroia
- ----------------- ---------------------------------------------------------------- --------------
5,483,551 Crosstalk Suppression Technique Huang et al
- ----------------- ---------------------------------------------------------------- --------------
5,521,949 Synchronization Scheme for Digital Comunications Systems Huang et al
Transporting Data at a Customer-Controlled Rate
- ----------------- ---------------------------------------------------------------- --------------
5,528,686 Transformerless Hybrid Circuit having Direct Powered Line-Side Cwynar et al
Amplifiers
- ----------------- ---------------------------------------------------------------- --------------
08/215562 Signal Constellation Time Division Multiplexing Chung et al
- ----------------- ---------------------------------------------------------------- --------------
4,800,573 Equalization Arrangement Cupo 3
- ----------------- ---------------------------------------------------------------- --------------
5,214,656 Multiplexed Coded Modulation Chung et al
- ----------------- ---------------------------------------------------------------- --------------
5,371,762 Technology using Signal Storing Devices Amrany et al
- ----------------- ---------------------------------------------------------------- --------------
- ----------------- ---------------------------------------------------------------- --------------
5,406,586 Signal correlation Technique Wang-12
- ----------------- ---------------------------------------------------------------- --------------
08/322878 Hybrid Equalizer Arrangement for DEI Wang-14
- ----------------- ---------------------------------------------------------------- --------------
08/547584 Signal Constellation TDM Arrangement Chung,
Sorbara
- ----------------- ---------------------------------------------------------------- --------------
5,428,608 Call Connector Technique Freeman et al
- ----------------- ---------------------------------------------------------------- --------------
5,440,585 Applications of Simultaneous Analog and Digital Communications Partridge
- ----------------- ---------------------------------------------------------------- --------------
08/453855 Simultaneous Analog and Digital Communication Bremer et al
- ----------------- ---------------------------------------------------------------- --------------
</TABLE>
ETC(R) TECHNOLOGY:
None
Page 1 of 1
<PAGE> 58
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX F
Known Reexaminations and Other
Patent #5280526 is being reexamined.
Patent #5448555 is subject to an interference.
Page 1 of 1
<PAGE> 59
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX G
MEMBERS OF "KNOWLEDGE" GROUP
Donald Cooper
John Brown
Lawrence Chamberlin
William Patchett
James Slattery
Gary Willman
Barry Black
Roberta Cohen
David Greenblott
Rich Musgrave
Gabe Torak
Frank Weiner
Thomas Arnold
John Berndt
W. Preston Granbery
Doug Hotchkiss
William Osl
Joseph Opalach
Page 1 of 1
<PAGE> 60
CONTRACT NO. G 18150-E
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
APPENDIX H
Certain Legal Proceedings
See Exhibit OO in the purchase agreement.
Page 1 of 1
<PAGE> 1
EXHIBIT 10.17
TAX MATTERS AGREEMENT
THIS TAX MATTERS AGREEMENT (this "Agreement") is entered into as
of July 31, 1996, by and among LUCENT TECHNOLOGIES INC., a Delaware corporation
("Lucent"), AT&T PARADYNE CORPORATION, a Delaware corporation and a wholly-owned
subsidiary of Lucent ("Paradyne"), PARADYNE PARTNERS, L.P., a Delaware limited
partnership (the "Partnership"), PARADYNE ACQUISITION CORP., a Delaware
corporation and a wholly-owned subsidiary of the Partnership ("PAC"), RENTAL
ACQUISITION CORP., a Delaware corporation and a wholly-owned subsidiary of the
Partnership ("RentalCo"), CAP ACQUISITION CORP., a Delaware corporation and a
wholly-owned subsidiary of the Partnership ("CAPCo"), and LEASE ACQUISITION
CORP., a Delaware corporation and a wholly-owned subsidiary of PAC ("LeaseCo").
The Partnership, PAC, RentalCo, CAPCo and LeaseCo are sometimes referred to
collectively in this Agreement as the "Acquisition Entities." Certain other
capitalized terms used in this Agreement are defined in Exhibit A. Capitalized
terms which are not defined in this Agreement or in Exhibit A shall have the
meanings ascribed to them in the Purchase Agreement.
RECITALS
A. Pursuant to the Purchase Agreement, RentalCo, CAPCo and
LeaseCo are purchasing certain assets from Paradyne, CAPCo is purchasing certain
assets from Lucent, and PAC is purchasing all of the outstanding capital stock
of Paradyne (the "Paradyne Shares") from Lucent.
B. Lucent, Paradyne and the Acquisition Entities desire to set
forth herein their mutual agreements with respect to certain Tax matters,
including the allocation of responsibility for the payment of federal, state,
local and foreign Taxes.
AGREEMENT
The Parties agree as follows:
SECTION 1. Liability for Taxes
1.1 (a) Except as otherwise provided in Section 4.3, Lucent
shall be liable for all Taxes (i) imposed on Lucent and its Affiliates, other
than Taxes imposed on the Acquired Companies or for which the Acquired Companies
may otherwise be liable, for any taxable year, (ii) imposed on the Acquired
Companies, or for which the Acquired Companies may otherwise be liable, solely
as a result of being members of the Lucent Group (which for purposes of this
sentence includes the Acquired Companies) pursuant to Treasury Regulations
Section 1.1502-6 or analogous state, local or foreign laws for any taxable year,
or (iii) imposed on the Acquired Companies, or for which the Acquired Companies
may otherwise be liable, for any Pre-Closing Tax Period, including any Code
Section 481 adjustments resulting from a change of accounting method by the
Acquired Companies prior to the close of the Closing Date.
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(b) Lucent shall be entitled to any refund of Taxes for
which it is liable pursuant to this Section 1.1.
1.2 (a) Paradyne shall be liable for all Taxes imposed on the
Acquired Companies, or for which the Acquired Companies may otherwise be liable,
for any Post-Closing Tax Period.
(b) Paradyne shall be entitled to any refund of Taxes for
which it is liable pursuant to this Section 1.2.
1.3 For purposes of this Agreement, whenever it is necessary to
determine the liability for Taxes of the Acquired Companies for a portion of any
Straddle Period, the determination of the Taxes of the Acquired Companies for
the portion of the Straddle Period ending on and including, and the portion of
the Straddle Period beginning after, the Closing Date shall be determined by
assuming that the Straddle Period consisted of two taxable years or periods, one
of which ended at the close of the Closing Date and the other of which began at
the beginning of the day following the Closing Date, and items of income, gain,
deduction, loss or credit of the Acquired Companies for the Straddle Period
shall be allocated between such two taxable years or periods on a "closing of
the books" basis by assuming that the books of the Acquired Companies were
closed as of the close of the Closing Date: provided, however, that exemptions,
allowances or deductions that are calculated on an annual basis shall be
apportioned between such two taxable years or periods on a daily basis.
SECTION 2. Asset Sales
2.1 RentalCo has purchased or will purchase assets from Paradyne
in accordance with Section 1.1 of the Purchase Agreement. The Parties have
agreed to allocate the purchase price set forth in Section 1.1(b) of the
Purchase Agreement among the corresponding assets in the manner set forth in
Section 1.1(d) of the Purchase Agreement. RentalCo, Paradyne and Lucent shall
cooperate in the preparation of Treasury Form 8594 for timely filing with each
of their respective federal income tax returns and any comparable foreign, state
or local tax filings.
2.2 CAPCo has purchased or will purchase assets from Paradyne and
Lucent, Paradyne and Lucent have or will enter into assignment and assumption
agreements with CAPCo as to certain liabilities, in each case in accordance with
Section 1.3 of the Purchase Agreement. CAPCo, Lucent and Paradyne have agreed to
allocate the purchase price set forth in Sections 1.3(b) and 1.3(d) of the
Purchase Agreement among the corresponding assets in the manner set forth in
Section 1.3(f) of the Purchase Agreement. CAPCo, Paradyne and Lucent shall
cooperate in the preparation of Treasury Form 8594 for timely filing with each
of their respective federal income tax returns and any comparable foreign, state
or local tax filings.
2.3 LeaseCo has purchased or will purchase assets from Paradyne
in accordance with Section 1.2 of the Purchase Agreement. LeaseCo and Paradyne
have agreed to allocate the purchase price set forth in Section 1.2(b) of the
Purchase Agreement among the corresponding assets in the manner set forth in
Section 1.2(c) of the Purchase Agreement. LeaseCo, Paradyne and Lucent shall
cooperate in the preparation of Treasury Form 8594 for
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timely filing with each of their respective federal income tax returns and any
comparable foreign, state or local tax filings.
SECTION 3. Section 338 Election
3.1 PAC and Lucent shall join in an election to have the
provisions of Section 338(h)(10) of the Code and similar provisions of foreign,
state or local law ("Section 338 Elections") apply to the acquisition of the
Paradyne Shares and the shares of Ark Electronic Products, Inc, ("ARK"). PAC and
Lucent shall timely prepare and file Treasury Form 8023-A, together with any
schedules or attachments thereto, and any other forms, returns, statements or
documents required to be submitted to any foreign, federal, state or local
Taxing Authority in connection with the Section 338 Elections. To the extent
that AT&T is required to execute any such form as the parent of the Lucent
Group, which for purposes of this sentence includes the Acquired Companies,
Lucent shall cause AT&T to execute such form(s).
3.2 The allocation of the purchase price (the "Stock
Purchase Price") specified in Section 1.5(b) of the Purchase Agreement among the
Residual Assets of Paradyne and the assets of ARK shall be made in the manner
set forth in Section 1.5(d) of the Purchase Agreement.
3.3 Lucent shall be responsible for and shall pay any
income, franchise or similar taxes based on net revenue (and shall be entitled
to the benefit of any losses) arising as a result of the Section 338 Elections.
SECTION 4. Tax Covenants
4.1 The Acquisition Entities covenant that they will not
cause or permit any of the Acquired Companies (i) to take any action on the
Closing Date, other than in the ordinary course of business or otherwise
specified in the Purchase Agreement, that could give rise to any Tax liability
of Lucent or the Lucent Group, (ii) to make any election or deemed election
under Section 338 of the Code with respect to the Acquired Companies other than
as specified in this Agreement, or (iii) to make or change any Tax election,
amend any Tax Return or take any position on any Tax Return, take any action,
omit to take any action or enter into any transaction that results in any
increased Tax liability or reduction of any Tax Asset of Lucent or the Lucent
Group in respect of any Pre-Closing Tax Period. The Acquisition Entities agree
that Lucent and the Lucent Group are to have no liability for any Tax resulting
from a breach of the covenants contained in the preceding sentence, and the
Acquisition Entities agree to indemnify and hold harmless Lucent and the Lucent
Group against any such Tax or reduction in a Tax Asset. Lucent agrees to give
prompt notice to the Partnership of the assertion of any claim, or the
commencement of any action or proceeding arising from any such breach and in
respect of which indemnification may be sought under this Section 4.1. The
Partnership or the applicable Acquisition Entity may participate in and assume
the defense of any such suit, action or proceeding at its own expense. If the
Partnership or the applicable Acquisition Entity assumes such defense, Lucent
shall have the right (but not the duty) to participate in the defense thereof
and to employ counsel, at its own expense, separate from the counsel employed by
the Partnership or the applicable Acquisition Entity. Whether or not Lucent
chooses to defend or prosecute any claim, the Parties shall cooperate in the
defense or prosecution thereof.
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4.2 The Acquisition Entities shall promptly pay or shall
cause prompt payment to be made to Lucent of all refunds of Taxes and interest
thereon received by any of the Acquisition Entities or the Acquired Companies
attributable to Taxes paid by Lucent or the Acquired Companies (or any
predecessor or Affiliate of Lucent) with respect to any Pre-Closing Tax Period.
4.3 Except as provided in the Purchase Agreement or the
Additional Agreements, no transfer, documentary, sales, use, stamp,
registration, withholding or other similar Taxes (including any penalties and
interest) incurred in connection with the transactions contemplated by Sections
1.1, 1.2, 1.3, 1.4 and 1.5 of the Purchase Agreement and the Section 338
Elections shall be borne or required to be paid by Lucent. Except as provided in
the Purchase Agreement or the Additional Agreements, the Acquisition Entities
will, at their own expense, file all necessary Tax Returns and other
documentation with respect to the Taxes enumerated in the preceding sentence,
and, if required by applicable law, Lucent will, and will cause its Affiliates
to, join in the execution of any such Tax Returns and other documentation. The
purchase prices set forth in the Purchase Agreement will not be reduced by any
of the Taxes enumerated in this Section 4.3.
4.4 If Lucent shall determine after the Closing that it is
desirable to file an amended Tax Return for any of the Acquired Companies with
respect to any Pre-Closing Tax Period, Lucent shall prepare and submit to PAC
the amended Tax Return, other than a return included in the Acquired Companies
ultimate parent corporation's consolidated federal or unitary state filing, and
PAC shall cause such return to be filed within thirty (30) days after receipt
thereof. PAC agrees not to permit the Acquired Companies to file any amended Tax
Return with respect to a Pre-Closing Tax Period without the express, prior
written consent of Lucent.
4.5 PAC shall give written notice to Lucent of any
notification of audit of a Tax Return for any of the Acquired Companies for any
Pre-Closing Tax Period or proposed adjustments to any items included in such a
return promptly after receipt of notification of the audit or adjustments.
Lucent shall be entitled, at its expense, to participate in all conferences,
meetings and proceedings with Taxing Authorities, or in appearances before any
court, pertaining to such audit or adjustments, and, subject to Section 6.4, to
direct the manner in which all claims, audits, adjustments or proceedings are
conducted and resolved by settlement or otherwise. PAC shall cause the Acquired
Companies to cooperate with Lucent and take such action and execute such
agreements and documents as Lucent shall reasonably request in order to carry
out the foregoing. Except with the prior written consent of Lucent, PAC shall
not permit the Acquired Companies to enter into any agreement after the date
hereof extending the statute of limitations or settling any asserted adjustments
with respect to or affecting any Pre-Closing Tax Period.
SECTION 5. Cooperation on Tax Matters
5.1 The Acquisition Entities and Lucent agree to furnish or
cause to be furnished to each other, upon request, as promptly as practicable,
such information (including access to books and records) and assistance relating
to any of the Acquired Companies as is reasonably necessary for the filing of
any Tax Return, for the preparation for any audit, and for
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the prosecution or defense of any claim, suit or proceeding relating to any
proposed adjustment. Except as otherwise provided in this Agreement, the
Acquisition Entities and Lucent shall cooperate with each other in the conduct
of any audit or other proceedings involving any of the Acquired Companies for
any Tax purposes (but only to the extent such audit or other proceeding will
impact the Tax liability of the other Party) and each shall execute and deliver
such powers of attorney and other documents as are necessary to carry out the
intent of this subsection. The Acquisition Entities and Lucent agree to retain
or cause to be retained all relevant books and records pertinent to the Acquired
Companies until the applicable period for Tax assessment under applicable law
(giving effect to any and all extensions or waivers) has expired, and to abide
by or cause the abidance with all record retention agreements entered into with
any Taxing Authority. The Acquisition Entities and Lucent each agree to give the
other reasonable notice prior to discarding or destroying any such books and
records relating to Tax matters and, if a Party so requests, the Party proposing
to discard or destroy such records shall allow the other Party to take
possession of such books and records. Notwithstanding the foregoing provisions
of this Section 5.1, the Parties shall have no obligation to retain books and
records pertinent to the Acquired Companies for more than ten (10) years or to
notify the other Party prior to discarding and destroying books and records
which are ten (10) years old or older.
5.2 The Acquisition Entities and Lucent further agree, upon
request, to provide the other Party with all information that such Party may be
required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
5.3 Each of the Parties shall keep confidential, and shall
cause its Affiliates and Representatives to keep confidential, and shall not use
or disclose and shall cause its Affiliates and Representatives not to use or
disclose, to any other Person, any non-public document or other non-public
information provided to such Party pursuant to this Agreement; provided,
however, that each of the Parties may use the information provided to it
pursuant to this Agreement for the purposes set forth in the first sentence of
Section 5.1.
SECTION 6. Indemnification
6.1 Lucent shall indemnify and hold harmless the Acquisition
Entities against (a) any and all Taxes for which Lucent is liable pursuant to
Sections 1.1 and 3.3 of this Agreement ("Lucent's Taxes"), (b) any and all
Damages from the breach by Lucent of any representation, warranty or covenant of
Lucent contained in this Agreement, and (c) any interest and penalties and
reasonable attorneys' fees, accountants' fees and other expenses arising out of
or incident to the failure of Lucent to pay Lucent's Taxes, or otherwise fulfill
the obligations of Lucent, in accordance with the provisions of this Agreement.
6.2 The Partnership shall indemnify and hold harmless Lucent
and its Affiliates against (a) any and all Taxes for which Paradyne or any of
the Acquisition Entities are liable pursuant to Section 1.2 of this Agreement
(the "Partnership's Taxes"), (b) any and all Taxes for which Lucent is to have
no liability under Section 4.3 of this Agreement, (c) any and all Damages from
the breach by any of the Acquisition Entities of any representation, warranty or
covenant of the Acquisition Entities (or any of them) contained in this
Agreement, and (d) any interest and penalties and reasonable attorneys' fees,
accountants' fees and other expenses arising out of or incident to the failure
of the Acquisition Entities to pay the Partnership's Taxes,
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or otherwise fulfill the obligations of the Acquisition Entities, in accordance
with the provisions of this Agreement.
6.3 A Party ("Indemnitee") seeking indemnification under
this Section 6 shall notify the other Party ("Indemnitor") in writing of the
estimated amount of the indemnification obligation together with a reasonably
detailed explanation of the Tax liability to which it relates. Except as
otherwise provided in this Agreement, Indemnitor shall make payment to
Indemnitee or the applicable Taxing Authority (as determined by Indemnitee) of
such estimated amount on or before the later of (a) thirty (30) days prior to
the date such Taxes are due and payable by Indemnitee or its Affiliate, which
date shall be stated in the written notification to Indemnitor, or (b) thirty
(30) days following the date of receipt by Indemnitor of such written notice.
6.4 (a) If any assessment, adjustment, claim, demand, suit,
action, litigation, proceeding or audit ("Claim or Demand") for Taxes in respect
of which indemnification may be sought pursuant to this Section 6 is asserted in
writing against a Party or any of its Affiliates, Indemnitee shall notify
Indemnitor of such Claim or Demand within thirty (30) days of receipt thereof,
or such earlier time that would allow Indemnitor to timely respond to such Claim
or Demand, and shall give Indemnitor such information with respect thereto as
Indemnitor may reasonably request. The failure of Indemnitee to provide timely
notice to Indemnitor of a Claim or Demand in accordance with this Section 6.4(a)
shall not serve to eliminate or limit Indemnitor's obligations under this
Section 6 unless such failure materially prejudices Indemnitor. Indemnitor may
discharge, at any time, its indemnification obligation under this Section 6 by
paying to Indemnitee or the applicable Taxing Authority (as determined by
Indemnitee) the amount of the Taxes, together with any interest and penalties
and any other amounts due under this Section 6, calculated on the date of such
payment.
(b) Indemnitor may, at its own expense, participate
in and, upon notice to Indemnitee, assume the defense of any Claim or Demand. If
Indemnitor assumes such defense, Indemnitor shall have no obligation to make a
payment under this Section 6 until a final determination has been made and all
rights of appeal have expired. If Indemnitor assumes such defense, Indemnitor
shall have the right to control such defense in all respects; provided that
Indemnitee shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by Indemnitor. If Indemnitor assumes such defense, Indemnitor shall
consult with Indemnitee regarding significant decisions related to the defense,
but Indemnitor shall have the sole and exclusive right to make such decisions.
If Indemnitor assumes such defense (as indicated by written notice to
Indemnitee), neither Indemnitee nor its Affiliates shall pay such Taxes until
(a) a final determination has been made and all rights of appeal have expired,
or (b) Indemnitor has consented to such payment. Whether or not Indemnitor
chooses to defend or prosecute any claim, all of the Parties shall cooperate in
the defense or prosecution thereof.
(c) Notwithstanding anything in this Agreement to the
contrary, Indemnitor shall not settle or compromise any Claim or Demand without
the consent of Indemnitee unless (A) such settlement or compromise involves no
finding or admission of any violation or breach by Indemnitee of any right of
any other Person or any Legal Requirement (other than a violation or breach by
any Acquired Company on or before the Closing Date of any
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Legal Requirements relating to Taxes), (B) such settlement or compromise has no
material effect on any other claims which are pending against Indemnitee or
likely will be brought against Indemnitee in the future, and (C) the sole relief
provided in connection with such settlement or compromise is a monetary payment
that is paid in full by Indemnitor.
6.5 If Indemnitor fails to provide written notice to
Indemnitee of Indemnitor's assumption of the defense of any Claim or Demand
within twenty (20) days after written notice of such Claim or Demand from
Indemnitee, Indemnitee may pay such Tax or otherwise settle such Claim or Demand
and obtain indemnification from Indemnitor for such liability in accordance with
this Section 6.
6.6 A Party shall not be liable under this Agreement for any
Tax (i) which was paid without such Party's prior written consent or otherwise
in accordance with the provisions of this Agreement, (ii) which was the subject
of any settlements effected without the prior written consent of such Party or
otherwise in accordance with the provisions of this Agreement, or (iii)
resulting from any Claim or Demand in which such Party was not permitted an
opportunity to defend or participate in the manner provided in this Agreement.
6.7 So long as the period for filing an amended Tax Return
remains open, any payment by one Party to another Party under this Agreement
will be deemed to be an adjustment to the Purchase Price unless, under
applicable law, such payment is not treated as received by such other Party. In
all other cases, such payments shall be treated by the Parties under applicable
principles of Tax law.
SECTION 7. Miscellaneous Provisions
7.1 Notices
Any notice or other communication required or permitted to be delivered
to any Party shall be in writing and shall be deemed properly delivered, given
and received when delivered (by hand, by registered mail, by courier or express
delivery service or by facsimile) to the address or facsimile telephone number
set forth beneath the name of such Party below (or to such other address or
facsimile telephone number as such Party shall have specified in a written
notice given to the other Parties):
if to Lucent:
10 Independence Boulevard
Warren, New Jersey 07059
Attention: Mr. William Osl, Jr.
Fax: (908) 580-6088
with a copy to:
Room A2046
131 Morristown Road
Basking Ridge, New Jersey 07920
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Attention: W. Preston Granbery, Esq.
Fax: (908) 953-4657
if to Paradyne, the Partnership or the Acquisition
Entities:
201 Main Street
Suite 2420
Fort Worth, Texas 76102
Fax: (817) 871-4010
Attention: Richard A. Ekleberry, Esq.
7.2 Headings
The bold-faced section headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
7.3 Counterparts
This Agreement may be executed in several counterparts, each of which
shall constitute an original and all of which, when taken together, shall
constitute one agreement.
7.4 Governing Law; Venue
This Agreement shall be construed in accordance with, and governed in
all respects by, the internal laws of the State of New York (without giving
effect to principles of conflicts of laws).
7.5 Successors and Assigns
Except as otherwise provided in this Agreement, this Agreement shall be
binding upon and shall inure to the benefit of the Parties and their respective
successors and assigns (if any). Lucent may not assign its rights and delegate
its obligations under this Agreement without the prior written consent of the
Partnership. Each of the Acquisition Entities may freely assign any or all of
its rights under this Agreement, in whole or in part, to any Person without
obtaining the consent or approval of any other Party or of any other Person.
7.6 Amendments
This Agreement may not be amended, modified, altered or supplemented
other than by means of a written instrument duly executed and delivered on
behalf of all of the Parties.
7.7 Entire Agreement
This Agreement and the other agreements referred to herein set forth
the entire understanding of the Parties relating to the subject matter hereof
and thereof and supersede all prior agreements and understandings among or
between any of the Parties relating to the subject matter hereof and thereof.
Nothing contained in this Agreement shall limit the rights or
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obligations of any party under the Purchase Agreement or any of the Additional
Agreements nor shall any right or obligation of any Party under this Agreement
be limited by any provision of the Purchase Agreement or any of the Additional
Agreements.
7.8 Construction
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
(b) The Parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting Party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.
7.9 Survival
Notwithstanding anything in this Agreement to the contrary, the
provisions of this Agreement shall survive for the full period of all statutes
of limitations (giving effect to any waiver, mitigation or extension thereof).
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and delivered as of the date first above written.
LUCENT TECHNOLOGIES INC.
a Delaware corporation
By:
-------------------------------------
William F. OSI, JR.
Vice President
AT&T PARADYNE CORPORATION
a Delaware corporation
By:
-------------------------------------
William F. OSI, Jr.
Authorized Agent
PARADYNE PARTNERS, L.P.
a Delaware limited partnership
By: Paradyne GenPar Corp.,
a Texas corporation, its
sole general partner
By:
-------------------------------------
David Stanton
President
PARADYNE ACQUISITION CORP.,
a Delaware corporation
By:
-------------------------------------
David Stanton
President
<PAGE> 11
RENTAL ACQUISITION CORP.,
a Delaware corporation
By:
-------------------------------------
David Stanton
President
CAP ACQUISITION CORP.,
a Delaware corporation
By:
-------------------------------------
David Stanton
President
LEASE ACQUISITION CORP.,
a Delaware corporation
By:
-------------------------------------
David Stanton
President
<PAGE> 12
Exhibit A
CERTAIN DEFINITIONS
For purposes of this Agreement, the following definitions shall
apply.
AFFILIATE. "Affiliate" shall mean with respect to any Person, any
Person directly or indirectly controlling, controlled by, or under common
control with, such other Person.
ASSET SALES. "Asset Sales" shall mean the asset sales
contemplated by Sections 1.1, 1.2 and 1.3 of the Purchase Agreement.
CODE. "Code" means the United States Internal Revenue Code of
1986, as amended.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a)
nation, state, commonwealth, province, territory, county, municipality, district
or other jurisdiction of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental authority
of any nature (including any governmental division, department, agency,
commission, instrumentality, official, organization, unit, body or entity and
any court or other tribunal).
LUCENT GROUP. "Lucent Group" means, with respect to federal
income Taxes, the affiliated group of corporations (as defined in Section
1504(a) of the Code) of which Lucent is a member and, with respect to state
income or franchise taxes, the consolidated, combined or unitary group of which
Lucent or any of its Affiliates is a member. For purposes of this Agreement, the
Lucent Group shall not include the Acquired Companies.
PARTY OR PARTIES. "Party" or "Parties" refers to Lucent, Paradyne
and the Acquisition Entities or any one of them.
POST-CLOSING TAX PERIOD. "Post-Closing Tax Period" means (i) with
respect to net income taxes, or franchise taxes based on net income, including
alternative or add-on minimum tax, any tax period ending after the close of the
Closing Date, (ii) with respect to any Straddle Period, that portion that
portion of the Straddle Period beginning after the close of the Closing Date,
and (ii) with respect to all other Taxes, any period after the close of the
Closing Date.
PRE-CLOSING TAX PERIOD. "Pre-Closing Tax Period" means (i) with
respect to net income taxes, or franchise taxes based on net income, including
alternative or add-on minimum tax, any tax period ending on or before the close
of the Closing Date, (ii) with respect to any Straddle Period, that portion of
the Straddle Period ending at the close of the Closing Date, and (iii) with
respect to all other Taxes, any period before the close of the Closing Date.
PURCHASE AGREEMENT. "Purchase Agreement" shall mean the Purchase
Agreement, dated June 18, 1996, made by and among Lucent, Paradyne and the
Acquisition Entities, as amended.
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RESIDUAL ASSETS. "Residual Assets" shall mean the assets of
Paradyne remaining after the Asset Sales, related distributions by Paradyne to
Lucent and the distribution of promissory notes contemplated by Section 1.4 of
the Purchase Agreement.
STRADDLE PERIOD. "Straddle Period" means any tax period beginning
on or before the Closing Date and ending after the close of the Closing Date.
TAX OR TAXES. "Tax" or "Taxes" shall mean any tax (including any
income tax, franchise tax, capital gains tax, gross receipts tax, value-added
tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use
tax, property tax, business tax, withholding tax or payroll tax), levy
assessment, tariff, duty (including any customs duty), deficiency or fee, and
any related charge or amount (including any fine, penalty or interest), imposed,
assessed or collected by or under the authority of any Governmental Body.
TAX ASSET. "Tax Asset" means any net operating loss, net capital
loss, investment tax credit, foreign tax credit, charitable deduction, basis
increase or any other credit or tax attribute which could reduce Taxes
(including, without limitation, deductions and credits related to alternative
minimum taxes).
TAXING AUTHORITY. "Taxing Authority" means any Governmental Body
charged with the duty or authority to administer or collect any Tax.
TAX RETURN. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any legal requirement relating to any Tax.
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EXHIBIT 10.18
PRODUCT SUPPLY AGREEMENT
This Product Supply Agreement ("Agreement") is effective as of March 16,
1999, ("Effective Date"), by and between GlobeSpan Semiconductor Inc., a
Delaware corporation, with offices at 100 Schulz Drive, Red Bank, New Jersey
07701 ("GSI"), and Paradyne Corporation, a Delaware corporation with offices at
8545 126th Avenue North, Largo, Florida 33773 ("Paradyne").
WHEREAS, the parties wish to enter into an agreement which will define the
terms and conditions under which GlobeSpan will sell and Paradyne will buy GSI
PRODUCTS.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
exchanged between the parties contained herein, which consideration GSI and
Paradyne acknowledge is sufficient, the parties hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF GSI PRODUCTS
From time to time, Paradyne may order and purchase GSI PRODUCTS from GSI.
Paradyne shall purchase GSI PRODUCTS in accordance with the TERMS AND CONDITIONS
OF SALE attached hereto as Exhibit A ("Terms and Conditions"). GSI shall accept
all purchase orders for quantities of GSI PRODUCTS that are reasonably
consistent with past ordering practices and known product availability, provide
written acknowledgment of each Paradyne purchase order by fax, EDI or e-mail
within two (2) days after receipt and shall provide written confirmation of the
GSI PRODUCTS' shipment dates by fax, EDI or e-mail within four (4) days. GSI
will use diligent efforts to fill any order for GSI PRODUCTS by the desired
delivery date. GSI may allocate the supply of GSI PRODUCTS to meet the
requirements of multiple customers, provided that Paradyne receives priority for
its orders at least as good as any other similarly situated customer, but in no
case shall Paradyne receive priority less than the priority GSI gives to its
most highly preferred customers. It is the intention of the parties that this
Agreement and the Terms and Conditions be controlling over additional or
different terms of any order, confirmation, invoice or similar document, even if
accepted in writing by both parties, and that waivers and amendments shall be
effective only if made by non-preprinted agreements clearly understood by both
parties to be an amendment or waiver. If there are any conflicts between the
Terms and Conditions and this Agreement, this Agreement shall control.
ARTICLE II
SUPPORT
GSI shall, at no cost to Paradyne, provide commercially reasonable
telephone, facsimile and e-mail support and technical assistance to assist
Paradyne in the use of GSI PRODUCTS and their incorporation into Paradyne
products. GSI shall also make available to Paradyne all additional technical,
development, user and other types of support and upgrade
<PAGE> 2
services that GSI makes generally available to any third party. Paradyne shall
pay to GSI the current standard rates, plus expenses, for such support services;
provided, however, that GSI will charge Paradyne no more than GSI charges any
other customer for such services.
ARTICLE III
PRICING
GSI shall charge Paradyne[+]. If such audit determines that price
adjustments of more than 5% of the total value of orders during the period
audited are required GSI shall reimburse Paradyne for its costs related to such
audit. In the event that GSI announces the discontinuation of a GSI PRODUCT, and
after such discontinuation GSI increases the prices charged for such GSI
PRODUCT, then Paradyne shall pay[+].
ARTICLE IV
DISCLOSED TECHNICAL INFORMATION
GSI hereby grants to Paradyne immunity under all of its IP RIGHTS with
respect to any of Paradyne's products which incorporate GSI PRODUCTS. Paradyne
may extend and shall be deemed to have extended such immunity to its customers
and users in connection with the sale of Paradyne products which incorporate the
GSI PRODUCTS.
[+] Confidential treatment has been requested for certain portions which have
been blacked out in the copy of the exhibit filed with the Securities and
Exchange Commission. The omitted information has been filed separately with
the Securities and Exchange Commission pursuant to the application for
confidential treatment.
2
<PAGE> 3
ARTICLE V
CONFIDENTIALITY
Each party agrees that all CONFIDENTIAL INFORMATION it obtains from the
other party is the confidential property of the disclosing party. Except as
expressly and unambiguously allowed herein, the receiving party will hold in
confidence and not use or disclose any CONFIDENTIAL INFORMATION of the
disclosing party and shall similarly bind its employees in writing. The
receiving party shall not be obligated under this Article V with respect to
information the receiving party can document:
(i) is or has become readily publicly available without restriction
through no fault of the receiving party or its employees or agents; or
(ii) is received without restriction from a third party lawfully in
possession of such information and lawfully empowered to disclose such
information; or
(iii) was rightfully in the possession of the receiving party without
restriction prior to its disclosure by the other party; or
(iv) was independently developed by employees or consultants of the
receiving party without access to such CONFIDENTIAL INFORMATION.
ARTICLE VI
TERM
This Agreement will commence on the Effective Date and will continue until
the fourth anniversary of the Effective Date and shall continue there after
until such time as either party shall give one year's advance written notice of
intent to terminate.
ARTICLE VII
TERMINATION
1. Either party will have the right to terminate this Agreement upon thirty
(30) days written notice if: (i) the other party is in material breach of this
Agreement and fails to cure that breach within the notice period; or (ii) the
other party ceases to do business, commences voluntary insolvency or bankruptcy
proceedings, or such proceedings are initiated involuntarily and not dismissed
within sixty (60) days of commencement.
2. Upon any termination of this Agreement, each party immediately will
deliver to the other party in its possession and will destroy all documents or
electronic media which contain CONFIDENTIAL INFORMATION of the other party;
provided, however, that Paradyne and its customers shall continue to be allowed
to retain copies such rights granted by GSI in connection with their purchase
and use of GSI PRODUCTS.
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<PAGE> 4
3. Any unfilled purchase orders for GSI PRODUCTS at the time of termination
of this Agreement shall remain in effect until completed unless the party
terminating the Agreement provides written notice to the other party that such
unfilled purchase orders are also terminated, or unless the parties mutually
agree to terminate such unfilled purchase orders.
4. All outstanding rights to payment shall survive termination of this
Agreement for any reason. Articles V, and VII through XVIII shall survive the
termination of this Agreement.
ARTICLE VIII
LIMITATION OF LIABILITY
EXCEPT FOR BODILY INJURY, OR IN CONNECTION WITH ARTICLE V, NEITHER PARTY
WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY
CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR
ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS FOR
COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES.
ARTICLE IX
FORCE MAJEURE
EXCEPT FOR THE REQUIREMENT TO MAKE ANY PAYMENTS HEREUNDER, NEITHER PARTY
WILL BE DEEMED IN DEFAULT OF THIS AGREEMENT TO THE EXTENT THAT PERFORMANCE OF
ITS OBLIGATIONS OR ATTEMPTS TO CURE ANY BREACH ARE DELAYED OR PREVENTED BY
REASON OF ANY ACT OF GOD, FIRE, NATURAL DISASTER, ACCIDENT, ACT OF GOVERNMENT,
STRIKES, SHORTAGES OF MATERIAL OR SUPPLIES OR ANY OTHER CAUSE BEYOND THE
REASONABLE CONTROL OF SUCH PARTY ("FORCE MAJEURE"), PROVIDED THAT SUCH PARTY
GIVES THE OTHER PARTY WRITTEN NOTICE THEREOF PROMPTLY AND, IN ANY EVENT, WITHIN
FIFTEEN (15) DAYS OF DISCOVERY THEREOF AND USES GOOD FAITH EFFORTS TO SO PERFORM
OR CURE.
ARTICLE X
PUBLICITY
Without the prior written consent of the other party, neither party may use
any trademarks, service marks, trade names, logos or other commercial or product
designations of the other party, including, but not limited to, in connection
with any press releases, promotions, advertisements or exhibitions.
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<PAGE> 5
ARTICLE XI
ASSIGNMENT
1. The rights and liabilities of the parties under this Agreement will bind
and inure to the benefit of the parties' respective successors permitted
pursuant to this Article XII.
2. Neither party may assign or delegate its obligations under this
Agreement, either in whole or in part, without the prior written consent of the
other party, and any such attempted assignment or delegation shall be void and
without effect; provided, however, that a party may assign this Agreement as
part of a merger, re-organization, consolidation, acquisition of all of the
assets of such party, or other event in which securities possessing more than
fifty percent (50%) of the total combined voting power of such party are
transferred to persons different from the persons holding those securities
immediately prior to such event ("Change of Control Event"), subject to Section
11.3, below.
3. Notwithstanding Section 11.2, and as an exception thereto, if a party
assigns this Agreement (including, but not limited to, taking part in a Change
of Control Event) to a direct competitor of the other party, then: (i) the
assigning party shall give the other party prompt written notice of the
occurrence of such assignment; and, (ii) the non-assigning party shall have the
right to terminate this Agreement by providing written notice to the assigning
party within thirty (30) days of receiving notice of the assignment or Change of
Control Event.
ARTICLE XII
NOTICES
All notices, reports, requests, acceptances and other communications
required or permitted under this Agreement will be in writing. They will be
deemed given:
(a) when delivered personally;
(b) when sent by confirmed fax or telex;
(c) five days after having been sent by commercial overnight courier
with written verification of receipt; or
(d) two weeks after having been sent by registered or certified
airmail, return receipt requested, postage prepaid, or upon actual receipt
thereof, whichever first occurs.
To GSI:
GlobeSpan Semiconductors, Inc.
100 Schulz Drive
Red Bank, NJ 07701
Attn: President
5
<PAGE> 6
To Paradyne:
Paradyne Corporation
8545 126th Ave. N.
Largo, Florida 33773
Attention: President
ARTICLE XIII
GOVERNING LAW
This Agreement shall in all respect be governed by and construed under the
laws of the State of Florida without regard to its conflict of laws provisions
or the UN Convention on the International Sale of Goods).
ARTICLE XIV
ARBITRATION
Except for a breach of the provisions of Article V which may be addressed
pursuant to Article XVI, all disputes between the parties arising out of or
relating to this Agreement, or the breach or alleged breach hereof, shall be
submitted to binding arbitration. The arbitration shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). Each party shall bear its own expenses; the parties will
mutually share the AAA administrative fees and the arbitrator's expenses. A
single arbitrator shall be selected by the parties in accordance with the AAA
selection rules. The arbitrator shall determine issues of arbitrability but may
not limit, expand or otherwise modify the terms of this Agreement. The
arbitration shall be conducted in English, in Atlanta, Georgia, or in some other
location that is mutually agreed to by the parties. The arbitrator shall have no
authority to award punitive damages. Judgment upon an award may be entered in
any court having competent jurisdiction. All transcripts, documents, things and
other information produced and the testimony given in or attendant to the
arbitration proceeding(s) shall be used only for purposes of the arbitration
proceeding(s). If an arbitration action is commenced for breach of this
Agreement, the prevailing party shall be entitled to its attorneys' fees and
costs.
ARTICLE XV
AMENDMENTS, MODIFICATIONS, WAIVERS, UNENFORCEABILTY
No delay or failure by either party to exercise or enforce at any time any
right or provision of this Agreement will be considered a waiver thereof or of
such party's right thereafter to exercise or enforce each and every right and
provision of this Agreement. No single waiver will constitute a continuing or
subsequent waiver. No waiver, modification or amendment or any provision of this
Agreement will be effective unless it is in writing and signed by the parties,
but it need not be supported by consideration. In the event that any provision
of this Agreement shall be determined to be illegal or unenforceable, that
provision will be limited
6
<PAGE> 7
or eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable.
ARTICLE XVI
EQUITABLE RELIEF
Because each party will have access to and become acquainted with
CONFIDENTIAL INFORMATION of the other, the unauthorized use or disclosure of
which would cause irreparable harm and significant injury which would be
difficult to ascertain and which would not be compensable by damages alone, each
party agrees that the other party will have the right to enforce this Agreement
and any of its provisions by injunction, specific performance or other equitable
relief without prejudice to any other rights and remedies that it may have for
breach of this Agreement.
ARTICLE XVII
ENTIRE AGREEMENT
1. The terms and conditions of this Agreement shall prevail in the event of
any conflicting terms or legends which appear in any purchase order for GSI
PRODUCTS.
2. This Agreement is the entire agreement between the parties with respect
to the subject matter hereof. This Agreement supersedes all prior agreements,
proposals or understandings between the parties, whether oral or in writing,
with respect to the subject matter hereof. This Agreement specifically
supersedes the Cooperative Development Agreement and the Rider, which are hereby
terminated, along with all licenses granted therein. The parties shall arrange a
mutually acceptable procedure and schedule for the return of all documents,
leased equipment, CONFIDENTIAL INFORMATION, and other materials of a party that
are in the possession of the other party by virtue of the Cooperative
Development Agreement or the Rider.
ARTICLE XVIII
NONSOLICITATION
Unless otherwise mutually agreed to, each party agrees not to
solicit the employment of any employee of the other party during the term of
this Agreement and for a period of twelve (12) consecutive months thereafter.
This Article shall not apply to general public solicitations made by a party
that do not target particular employees of the other party.
7
<PAGE> 8
ARTICLE XIX
DEFINITIONS
Any term in capital letters used in this Agreement shall have the meaning
specified below:
GSI PRODUCT means any product on GSI's current generally available product
and price list. GSI shall notify Paradyne of changes to the product and price
list as soon as reasonably possible, and in no case later than any other
customer.
CONFIDENTIAL INFORMATION means any informative technical material, software
and firmware (including all copies derived from material furnished hereunder)
provided by a party to the other that is marked as, or otherwise reasonably
understood by the receiving party to be, confidential or proprietary. All IP
RIGHTS of a party is hereby deemed to be CONFIDENTIAL INFORMATION of that party.
IP RIGHTS means all patent, copyright, trade secret and other proprietary
rights that GSI owns or which it has the right to license hereunder without the
payment of royalties and which are reasonably essential for the use of GSI
PRODUCTS.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the dates set forth below.
GLOBESPAN SEMICONDUCTOR INC. PARADYNE CORPORATION
By: By:
----------------------------- -----------------------------
Its: Its:
----------------------------- -----------------------------
Date: Date:
---------------------------- ----------------------------
8
<PAGE> 9
EXHIBIT A
TERMS AND CONDITIONS OF SALE
1. DELIVERY, TITLE, AND RISK OF LOSS - Shipment will be made in a manner
determined by GSI. Title (except as provided in Section 7, ("RIGHTS IN
INTELLECTUAL PROPERTY") and risk of loss or damage to the product shall pass to
Paradyne at the time GSI delivers possession of the product to a carrier at
GSI's plant or warehouse or other facility from which shipment is made without
regard to notification of shipment or selection of carrier. Product held by GSI
at Paradyne's request beyond the scheduled delivery date shall be at Paradyne's
risk and expense.
2. ORDER RESCHEDULE/CANCELLATION POLICY - The following terms and
conditions apply for rescheduling ship dates on purchase orders, or canceling
purchase orders after acceptance by GSI.
<TABLE>
<CAPTION>
<S> <C>
----------------------------------------- -------------------------------------------------
Time period in calendar days before Paradyne Reschedule Option
scheduled ship date
----------------------------------------- -------------------------------------------------
More than 90 days No limit on number of reschedules; no penalty
----------------------------------------- -------------------------------------------------
30 days to 90 days Reschedule one time (by not more than _________
days) without penalty
----------------------------------------- -------------------------------------------------
Less than 30 days 100% of value of cancelled shipment
----------------------------------------- -------------------------------------------------
</TABLE>
3. PAYMENT TERMS - Paradyne shall pay to GSI for orders of GSI product at
prices in effect at the applicable order date for such products. Ally payments
for Product shall be made in US dollars, and will be due within thirty (30) days
of the date of GSI's invoice to Paradyne for such orders. GSI may ship partial
orders provided GSI notifies Paradyne and Paradyne agrees prior to shipment,
which consent shall not be unreasonably withheld. GSI shall ship according to
the carrier, means of transportation and routing, and instructions specified in
Paradyne's purchase order, or, in the absence of specified deliver means and
instructions, by a commercially reasonable means. In addition to the price,
Paradyne will pay all charges, including without limitation transportation
charges, insurance premiums, and shall be responsible for all taxes (except
GSI's U.S. income taxes), duties, costs of compliance with export and import
controls and regulations, and other governmental assessments. GSI may exercise
an option to assess an interest charge of up to one and one-half percent
(1-1/2%) per month on all amounts which are not timely paid (but not to exceed
the maximum lawful rate). Paradyne hereby grants to GSI a purchase money
security interest in the product to secure the purchase price of the product
until the purchase price is paid in full. Paradyne agrees to execute and deliver
all documents requested by GSI to perfect and maintain GSI's security interest.
Each shipment shall constitute an independent transaction and Paradyne shall pay
for same in accordance with the specified payment terms.
4. TAXES - Any tax or related charge that GSI shall be required to pay to
or collect for any government upon or with respect to services rendered or the
sale, use, or delivery of products shall be billed too Paradyne as a separate
item and paid by Paradyne, unless a valid exemption certificate is furnished by
Paradyne to GSI.
9
<PAGE> 10
5. PRODUCT CHANGES - GSI may at any time make changes in the products (i)
that do not materially affect physical or functional interchangeability or (ii)
when required for purposes of safety.
6. WARRANTY - GSI warrants that each Product that is in general commercial
production, but not related services or prototypes of any such Products, to be
free from material defects in material and workmanship and to be in conformance
in form, fit and function with the written specification, if any, and referenced
in an order accepted by GSI. If any defect in material or workmanship or failure
to conform to such specification ("Defect") is suspected in any such Products,
Paradyne, after obtaining a Returned Material Authorization number from GSI,
shall ship suspected defective samples of the Products to GSI, following GSI's
instructions regarding the return. No product will be accepted for repair,
replacement, credit, or refund without the written authorization of and in
accordance with GSI's instructions. GSI shall analyze the failures, making use,
when appropriate, of technical information provided by Paradyne relating to the
circumstances surrounding the failures. GSI will verify whether any Defect
appears in the products. If GSI determines that the returned products are not
defective, Paradyne shall pay GSI all costs of handling, inspection, repairs,
and transportation at GSI's then prevailing rates. GSI shall, at GSI's option,
either credit or refund without charge at GSI's manufacturing or repair facility
the purchase price, repair, or replace the defective product with the same or
equivalent product provided: (i) Paradyne notifies GSI in writing of the claimed
Defect within thirty (30) days after Paradyne knows or reasonably should know of
the claimed Defect, (ii) GSI's examination of the Products discloses that the
claimed Defect actually exists, and (iii) the defect appears within one (1) year
from the date of shipment of the product. In the event of a replacement, GSI
shall ship the replacing Products FOB point of origin, freight prepaid to
Paradyne's destination. Any replaced Product shall become GSI's property. The
method of disposition of any replaced Products will be as mutually agreed by
both parties in writing. In no event shall GSI be responsible for deinstallation
or reinstallation of any Product or for the expenses thereof. Repairs and
replacements covered by the above warranty are warranted to be free from defects
as set forth above. Inspection and acceptance of Products by Paradyne and/or
payment therefor shall not relieve GSI of responsibilities hereunder.
The above warranty does not apply to, and GSI makes no warranties with
respect to products that: are software programs, experimental products or
prototypes (all of which are provided "AS IS"), or to Products which have been
subjected to misuse, neglect, accident or abuse, or operating or environmental
conditions that deviate from the parameters established in applicable
specifications; or have been improperly installed, stored, maintained, repaired,
or altered by anyone other than GSI; or have had their serial numbers or month
and year of manufacture or shipment removed, defected, or altered. This warranty
does not extend to any system into which a product is incorporated. No other
warranty, including warranties of merchantability or fitness for a particular
purpose is given with respect to such service or any other service provided by
GSI under this Agreement. This warranty applies only to Paradyne and may not be
assigned or extended by Paradyne to any of its customers or other users of the
Products. GSI will not accept any returns from Paradyne's customers or users of
Paradyne's products.
EXCEPT AS STATED IN THE SECTION ENTITLED WARANTY, GSI, ITS SUBSIDIARIES AND
AFFILIATES, SUBCONTRACTORS, AND SUPPLIERS MAKE NO
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<PAGE> 11
WARRANTIES, EXPRESSED OR IMPLIED, AND SPECIFICALLY DISCLAIM ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. BUYER'S SOLE AND EXCLUSIVE
REMEDY SHALL BE GSI'S OBLIGATION TO REPAIR OR REPLACE OR CREDIT RO REFUND AS SET
FORTH ABOVE.
7. RIGHTS IN INTELLECTUAL PROPERTY - GSI exclusively shall own all right,
title, and interest in and to any inventions, discoveries, improvements,
methods, ideas, computer, and other apparatus programs and related
documentation, other works of authorship fixed in any tangible medium of
expression, mask works or other forms of intellectual property, whether or not
patentable, copyrightable, or subject to mask work rights or other forms of
protection, which are made, created, developed, written, conceived, or first
reduced to practice by GSI solely, jointly or on its behalf, in the course of,
arising out of or as a result of work done under this Agreement.
No title or other ownership rights in any intellectual property or licensed
products or any copies thereof shall pass to Paradyne under this Agreement or
any performance hereunder.
Paradyne agrees that it will not alter any notices on, prepare derivative
works based on, or reproduce, reverse engineer, disassemble or decompile any
software embodied in licensed products or recorded in the purchased products
furnished under this agreement.
Subject to and conditional on the terms and conditions of, and only for a
period of five years from the date of this Agreement, GSI grants to Paradyne a
non-sublicensable, non-transferable and non-exclusive: (a) right and license to
use any technical information supplied to Paradyne by GSI solely for the
development, manufacture, sale, support, and use by Paradyne in its products,
and (b) immunity under certain patents owned by Lucent Technologies Inc.
("Lucent"), where Lucent has given GSI the royalty-free right to grant such
immunity; provided that, and only to the extent that such patents are essential
to, and used for, the manufacture of, and are used specifically in conjunction
with the product sold hereunder but only for board and system level Paradyne
products incorporating the technical information or products supplied by GSI.
INTELLECTUAL PROPERTY INDEMNITY - GSI shall hold Paradyne and its officers,
directors, agents and employees harmless from liability resulting from
infringement by the product of any US patent or copyright, provided GSI is
promptly notified of any, and all threats, claims and proceedings related
thereto and given reasonable assistance and the opportunity to assume sole
control over the defense and all negotiations for a settlement or compromise.
GSI will not be responsible for any settlement it does not approve in writing.
The foregoing obligation of GSI does not apply with respect to product or
portions or components: (i) not supplied by GSI, (ii) made in whole or in party
in accordance to Paradyne specifications or requests, (iii) which are modified
after shipment, if the alleged infringement relates to such modification, (iv)
combined, processed or sued with other products, processes or materials where
the alleged infringement relates to such combination, process or use, (v) where
Paradyne continues allegedly infringing activity after being notified thereof or
after being informed of modifications that would have avoided the alleged
infringement, (vi) where the infringement is incident to use of the product but
does not result primarily from the product and its intended
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<PAGE> 12
application, or (vii) where GSI has required the return of the product or
component and has offered to refund the purchase price. Paradyne will indemnify
GSI and its officers, directors, agents and employees from all damages,
settlements, attorneys' fees and expenses: (i) related to a claim of
infringement or misappropriation excluded from GSI's indemnity obligation by the
immediately preceding sentence or (ii) in connection with Paradyne's activities
regarding the product or its failure to effectively pass on to its direct or
indirect customers GSI's liability and warranty limitations and disclaimers.
THE FOREGOING STATES THE SOLE AND EXCLUSIVE REMEDY AND OBLIGATION OF THE
PARTIES HERETO FOR INFRINGEMENT OR OTHER VIOLATION OF ANY INTELLECTUAL PROPERTY
RIGHTS ARISING OUT OF THIS AGREEMENT AND IS IN LIEU OF ALL WARRANTIES,
EXPRESSED, IMPLIED, OR STATUTORY, IN REGARD THERETO.
8. FCPA AND EXPORT CONTROL - Paradyne shall comply with the U.S. Foreign
Corrupt Practices Act (regarding, among other things, payments to government
officials) and all export laws and restrictions and regulations of the
Department of Commerce, the United States Department of Treasury Office of
Foreign Assets Control ("OFAC"), or other United States or foreign agency or
authority, and not export, or allow the export or re-export of any product (or
any product incorporating such product) to destinations in Country Group E,
Embargoed countries, specified in the then-current Supplement No. 1 to Section
740 of the U.S. Export Administration Regulations, (or any successor supplement
or regulations), or in violation of any such restrictions, laws or regulations.
Paradyne shall obtain and bear all expenses relating to any necessary licenses
and/or exemptions with respect to the export from the U.S. of all product to any
location and shall demonstrate to GSI compliance with all applicable laws and
regulations prior to delivery thereof by GSI.
9. EXCLUSIVE REMEDIES AND LIMITATIONS OF LIABILITY
FOR PURPOSES OF THE EXCLUSIVE REMEDIES AND LIMITATIONS OF LIABILITY SET
FORTH IN THIS SECTION 9, GSI SHALL BE DEEMED TO INCLUDE ITS SUBSIDIARIES AND
AFFILIATES, AND THE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES,
SUBCONTRACTORS, AND SUPPLIERS OF EACH OF THEM; AND "DAMAGES" SHALL BE DEEMED TO
REFER COLLECTIVELY TO ALL INJURY, DAMAGE, LOSS, OR EXPENSE INCURRED.
EXCEPT FOR INFRINGEMENT, FOR WHICH THE REMEDIES SET FORTH IN THE SECTION
ENTITLED INTELLECTUAL PROPERTY INDEMNITY SHALL CONTROL, GSI'S ENTIRE LIABILITY
AND PARADYNE'S EXCLUSIVE REMEDIES AGAINST GSI FOR ANY DAMAGES CAUSED BY A NY
PRODUCT DEFECT OR FAILURE, OR ARISING FROM THE PERFORMANCE OR NONPERFORMANCE OF
ANY WORK, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT INCLUDING
NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE SHALL BE LIMITED TO DIRECT DAMAGES
THAT ARE PROVEN, IN AN AMOUNT NOT TO EXCEED THE AMOUNTS PAID FOR PRODUCTS
HEREUNDER.
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<PAGE> 13
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY SHALL
BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES
OR FOR LOST PROFITS, SAVINGS, OR REVENUE OF ANY KIND, WHETHER OR NOT SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS PROVISION SHALL
SURVIVE FAILURE OF AN EXCLUSIVE REMEDY.
10. NON-WAIVER - No course or dealing of failure of either party to
strictly enforce any term, right, or condition of this Agreement shall be
construed as a waiver of such term, right, or condition.
11. EXCUSE OF PERFORMANCE - Except with respect to Paradyne's obligation to
make timely payments when due, neither party shall be held responsible for any
delay or failure in performance of any part of this Agreement to the extent such
delay or failure is caused by fire, flood, explosion, war, strike, embargo,
government requirement, civil or military authority, act of God, nature or the
public enemy, inability to secure material or transportation facilities,
inadequate yield of products despite GSI's reasonable efforts, act or omission
of carriers or any other causes beyond its reasonable control. GSI may, in the
event of any such circumstance, allocate in a fair and reasonable manner taking
into account GSI's contractual commitments, its available production output
among itself and its other customers, including at GSI's option those not under
contract.
12. CHOICE OF LAW - The construction, interpretation, and performance of
this Agreement shall be governed by the substantive laws, but not the conflicts
of the law, of the State of New York. The U.N. Convention on the International
Sales of Goods shall not apply to the sale of product hereunder.
13. INDENTIFICATION - Neither GSI nor Paradyne shall use any identification
of, or reference to, any code, drawing, specification, trade name, trademark,
trade device, insignia, service mark, symbol, or any abbreviation, contraction,
or simulation thereof, of the other party in any advertising or promotional
efforts without such other party's prior approval.
CONFIDENTIAL INFORMATION means any informative technical material, software
and firmware (including all copies derived from material furnished hereunder)
provided by a party to the other that is marked as, or otherwise reasonably
understood by the receiving party to be, confidential or proprietary. ALL IP
RIGHTS of a party is hereby deemed to be CONFIDENTIAL INFORMATION of that party.
IP RIGHTS means all patent, copyright, trade secret and other proprietary
rights that GSI owns or which is has the right to license hereunder without the
payment of royalties and which are reasonably essential for the use of GSI
PRODUCTS.
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<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the dates set forth below.
CLOBESPAN SEMICONDUCTOR INC. PARADYNE CORPORATION
By: By:
------------------------ ------------------------
Its: CEO Its: S.V.P.
------------------------ ------------------------
Date: 3/16/99 Date: 3/16/99
------------------------ ------------------------
14
