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EXHIBIT NO. 10.18
AMENDED AND RESTATED
COOPERATIVE DEVELOPMENT AND
LICENSE AGREEMENT BETWEEN
THE COMPANY AND
TEXAS INSTRUMENTS INCORPORATED
DATED APRIL 5, 2000
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AMENDED AND RESTATED COOPERATIVE
DEVELOPMENT AND LICENSE AGREEMENT
This Amended and Restated Cooperative Development and License Agreement (the
"Amended and Restated Agreement") entered into this 5 day of April, 2000
constitutes an amendment and restatement of that certain Cooperative Development
and License Agreement dated 9th day of September, 1998 (the "Effective Date") by
and between Texas Instruments Incorporated, a Delaware corporation having its
principal office located at 12500 TI Boulevard, Dallas, Texas 75243 (hereinafter
"TI"), and Northern Telecom Inc., a Delaware corporation having its executive
offices at Northern Telecom Plaza, 200 Athens Way, Nashville, Tennessee, U.S.A.
37228-1397 (hereinafter "Nortel") as modified by that certain Amendment No. 1,
dated May 12, 1999, by TI and Elastic Networks Inc., a Delaware corporation,
having its principal office located at 6120 Windward Parkway, Alpharetta,
Georgia 30005 (hereinafter "Elastic") as an assignee of Nortel (collectively,
the "Cooperative Development Agreement").
WHEREAS, TI and Elastic (collectively, the "Parties") desire to amend and
restate the Cooperative Development Agreement in its entirety in the manner set
forth herein; and
WHEREAS, Elastic is developing a proprietary technology known as the Spectrum
Manager Product; and
WHEREAS, pursuant to this Amended and Restated Agreement Elastic desires to
grant to TI a license to Elastic's proprietary technology known as "Spectrum
Manager Product"; and
WHEREAS, a statement of work generally defining the tasks, resource allocation,
milestones, schedules and deliverable items is attached hereto as Exhibit A and
incorporated herein by this reference (the "SOW").
NOW THEREFORE, in consideration of the mutual premises and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS
1.1 "Acceptance/Acceptable" means the determination by TI in its
reasonable judgment that the Deliverables perform in accordance with
the specifications therefor. Acceptance shall be deemed to occur for
any Deliverable at the earliest of (i) the expiration of the thirty
(30) calendar day period immediately following delivery of a
Deliverable or (ii) written notification to Elastic from TI that the
Deliverable is accepted.
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1.2 "Affiliate" means with respect to any specified Person, any other
Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such a Person, but only for so long as such
relationship exists. For the purposes of this definition, "control"
shall mean ownership of fifty percent (50%) or more of the shares
entitled to vote or equivalent voting rights.
1.3 "Analog Front End" or "AFE" means the combination of mixed signal
semiconductor and passive circuit functions required to convert
Etherloop formatted digital information into an analog format
appropriate for use in an Etherloop Product, excluding the
driver/receiver.
1.4 "Completion Date" means the delivery date set forth in the SOW for
each Deliverable as amended from time to time by the Parties.
1.5 "Confidential Information" means any information disclosed by one
party to the other that is in written, graphic, machine readable or
other tangible form and is marked "Confidential", "Proprietary" or
in some other manner to indicate its confidential nature.
"Confidential Information" may also include oral information
disclosed by one party to another pursuant to this Amended and
Restated Agreement, provided that it is designated as confidential
at the time of disclosure or within a reasonable period of time
thereafter and reduced to a written summary, which is marked in a
manner to indicate its confidential nature, that is delivered by the
disclosing party to the receiving party within thirty (30) days
after its oral disclosure.
1.6 "Deliverables" means any tangible personal property delivered by
Elastic to TI under this Amended and Restated Agreement to enable
TI's full exercise of the license granted herein. The Deliverables
shall include the Spectrum Manager Product and all related
documentation in electronic/diskette and tangible, human readable
format.
1.7 "DSP" means digital signal processor.
1.8 "EtherLoop" means high-speed Ethernet-based burst-mode access
communications over copper wiring.
1.9 "EtherLoop Product" means an end-user product that includes the
capability to provide EtherLoop through the use of EtherLoop-based
technology.
1.10 "Object Code" means the representation of Spectrum Manager Product
in the binary instruction code form suitable for execution on or by
a computer, or which may be so suitable after linkage or
incorporation with or into other code.
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1.11 "Person" means any individual, corporation, partnership, joint
venture, association, governmental authority, trust or any other
entity or organization of any kind.
1.12 "Source Code" means the representation of Spectrum Manager Product
in the form amenable to human understanding, as written in a higher
level computer programming language, together with all Comments
included therein and other programmer documentation therefor.
1.13 "Spectrum Manager IP" means all inventions, patented or not,
copyright material, trade secrets, know how, designs, methods,
algorithms, system functional specifications, test systems,
software, methodologies and all other forms of intellectual property
that comprise the Spectrum Manager Product as described in the SOW
and any or all derivatives thereof.
1.14 "Spectrum Manager Product" means all designs, methods, algorithms,
system functional specifications, test systems, software,
methodologies, hardware and all documentation delivered to TI under
this Amended and Restated Agreement.
1.15 "TI Technology" means TMS320C6211-DSP Starter Kit purchased by
Elastic and used in the performance of this Amended and Restated
Agreement.
2. STATEMENT OF WORK
2.1 With respect to the development of Spectrum Manager Product, the SOW
includes (i) a description of each phase of the development, (ii)
the sequence of the tasks to be completed during each such phase,
(iii) the development schedule and the Completion Date for each
task, (iv) the identification of which tasks are dependent upon the
completion of other tasks, (v) the various roles, responsibilities
and resource assignments of the parties required to perform the
tasks, (vi) the Deliverables associated with such tasks and phases,
and (vii) if applicable, any other terms and conditions applicable
to the Parties' activities with respect to such development.
2.2 The Spectrum Manager Product to be delivered under this Amended and
Restated Agreement and the SOW shall be subject to Acceptance by TI.
If TI determines in its reasonable judgment that a Deliverable does
not meet the specifications and performance standards set forth in
this Amended and Restated Agreement and that the Deliverable is not
Acceptable, then TI may reject the Deliverable and shall issue a
written report to Elastic specifying the failure to perform in
accordance with the SOW and the related specifications within ten
(10) business days after rejection of the Deliverable. Elastic will
have up to thirty (30) days after receipt of the
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written report specifying the failure to re-deliver the Deliverable.
If Elastic fails to re-deliver to TI the Deliverable in conformance
with the specifications and performance standards specified herein,
then TI may retain and use those Deliverables previously Accepted
and paid for by TI but TI will not be obligated to make any payments
with respect to the rejected Deliverables under this Amended and
Restated Agreement. TI shall notify Elastic from time to time during
its review of the Deliverables of significant performance problems
with the Deliverables that TI identifies. This notification shall be
in addition to any written report delivered to Elastic by TI
regarding non-Acceptance or Acceptance.
2.3 The Parties shall determine an appropriate set of periodic reports,
meetings or telephone conference calls to be delivered by, or held
among, the Elastic Program Manager, the TI Program Manager (each as
defined in Section 2.5) and other appropriate representatives of
Elastic and TI with respect to the development activities described
in the SOW to address the status of such development activities and
planned or anticipated activities and changes that may adversely
affect the cost or time required for performance of the activities
described in the SOW.
2.4 Prior to the Completion Date and Acceptance of the last Deliverable
described in the SOW, TI may request, by providing written notice to
Elastic's Program Manager, that additional work or changes within
the general scope of the SOW be performed. In the event of such
notification, Elastic shall provide to TI within five (5) business
days following receipt of notification a written response to the
proposed changes. Such response shall include the effect on the SOW
and the estimated Completion Dates. If a change causes an increase
or decrease in the cost or time required for performance as mutually
determined by Elastic and TI, a negotiated adjustment shall be made
to the cost and/or performance schedule for the activities described
in the SOW. The Parties will amend the SOW to reflect any or all
said changes. Any modification(s) to the SOW agreed to in writing by
duly authorized representatives of each Party shall constitute an
amendment to this Amended and Restated Agreement and shall be
governed by the terms and conditions of the Amended and Restated
Agreement. Absent any written agreement, Elastic is not obligated to
implement any change to the SOW requested by TI and Elastic shall
continue work pursuant to the unmodified SOW.
2.5 Elastic acknowledges that it has acquired the materials, tooling and
equipment (including but not limited to TI Technology) required to
complete the work described in the SOW. Elastic agrees that its use
of TI Technology is subject to the terms and conditions set forth in
Exhibit C attached hereto and incorporated herein by this reference.
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2.6 The Parties' representatives listed below (the "Program Managers")
are responsible for (i) managing the performance of the Parties'
respective responsibilities set forth in the SOW, (ii) receipt and
dispatch of all program communications, and (iii) technical liaison
management. Assignment of such responsibilities to another employee
or representative of a Party requires prior written notification to
the non-assigning Party.
For TI: For Elastic:
Mike Spence Rick Folea
8505 Forest Lane, MS 8650 6120 Windward Parkway
Dallas, Texas 75266-0199 Suite 100
Alpharetta, GA 30005
3. DEVELOPMENT AND LICENSE FEES:
3.1 TI has agreed to pay to Elastic Two Million Five Hundred Thousand
U.S. Dollars ($US 2,500,000) for the license granted hereunder,
subject to the terms and conditions of this Amended and Restated
Agreement, and for the delivery of Item 3(A) of the Deliverables set
forth in the SOW. The first payment of One Million U.S. Dollars ($US
1,000,000) was made on or about October 9, 1998 The second payment
of One Million Five Hundred Thousand U.S. Dollars ($US 1,500,000)
was made on or about December 21, 1998.
3.2 In addition to the payment obligations described in Section 3.1
above, TI delivered to Elastic two promissory notes, each dated May
12, 1999, the first in the amount of $498,461.54 ("Note 1") and the
second in the amount of $1,495,386.50 ("Note 2"), referred to
collectively herein as the "Promissory Notes") in exchange for the
issue and sale to TI of 615,385 shares of Elastic's Series A
Redeemable Convertible Participating Preferred Stock. Note 1 shall
be payable on the 30th day following Acceptance of item 3(B) of the
SOW, and Note 2 shall be payable on the 30th day following
Acceptance of item 3(C) of the SOW. For purposes of the Promissory
Notes, all references in the Promissory Notes to Items 4 and 5 of
the SOW of the Agreement shall now mean Item 3(B) of the SOW of this
Amended and Restated Agreement, and all references to Items 7 and 8
of the SOW if the Agreement shall now mean Item 3(C) of the SOW of
the Amended and Restated Agreement.
a. In the event item 3(B) of the SOW is not completed, the
Promissory Notes shall not become due and payable by TI and TI
may transfer to Elastic the shares or Series A Redeemable
Convertible Participating Preferred Stock issued to TI in
consideration of the Promissory Notes for which TI has not
then paid in full (which shares must be unencumbered),
together with
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appropriate stock powers endorsed in blank and any other
transfer agreements deemed necessary or appropriate by
Elastic's counsel, and Elastic shall mark each of the
Promissory Notes (including any promissory notes reissued due
to a partial payment of the Promissory Notes) "Cancelled" and
shall return such Promissory Notes to TI.
b. In the event item 3(B) of the SOW has been completed but item
3(C) of the SOW is not completed, Note 2 shall not become due
and payable by TI and TI may transfer to Elastic the shares of
Series A Redeemable Convertible Participating Preferred Stock
issued to TI in consideration of Note 2 for which TI has not
then paid in full (which shares must be unencumbered),
together with appropriate stock powers endorsed in blank and
any other transfer agreements deemed necessary or appropriate
by Elastic's counsel, and Elastic shall mark Note 2 (including
any promissory notes reissued due to a partial payment of Note
2) as "Cancelled" and shall return such note to TI.
c. Notwithstanding anything herein, TI may, in its sole
discretion, at any time, elect to pre-pay the Promissory Notes
in cash.
3.3 Elastic and TI shall each be responsible for their own internal
costs required to complete their respective obligations in the SOW.
3.4 Elastic hereby acknowledges that the information shared by TI with
Elastic pursuant to this Amended and Restated Agreement is
Confidential Information and that it is not in the best interest of
TI that such information be made available to semiconductor
companies competitive to TI. Accordingly, Elastic hereby agrees that
from the date hereof and until either (i) Elastic's capital stock is
sold pursuant to an initial public offering, or; (ii) December 31,
2000, (whichever occurs first), Elastic will not sell or issue,
without the prior written consent of TI, any equity interests of
Elastic, or any rights to purchase such interests, to Analog
Devices, Inc., Cirrus Logic Inc., Fujitsu Ltd., Intel Corp.,
International Business Machines Corp., LSI Logic Corp., Motorola,
Inc., NEC Corporation, Orckit Communications Ltd., PMC Sierra, Inc.,
Rockwell International Corp., VLSI Technology Inc. or any of their
subsidiary or affiliated companies. Nothing herein shall in any way
restrict Elastic from issuing, or selling, equity interests in
Elastic to any other person pursuant to a private offering or to
any person whosoever pursuant to a public offering.
4. LICENSES:
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4.1 Elastic hereby grants to TI a worldwide, nonexclusive, fully paid,
perpetual license under the Spectrum Manager IP to use, execute,
operate, modify, perform, develop, manufacture, have manufactured
and create derivative works from both the Source Code and Object
Code versions of the Spectrum Manager Product for the sole purpose
of using, copying, distributing, manufacturing, having manufactured,
offering for sale, selling and promoting Spectrum Manager Product
and derivatives thereof with other products manufactured by or on
behalf of TI and the right to sublicense third parties to do any of
the foregoing.
4.2 TI and its sublicensees may not distribute Spectrum Manager Product
and derivatives thereof as a "stand alone" product. In addition,
sublicensees of the Source Code version of Spectrum Manager Product
must execute a written license agreement with TI the terms and
conditions set forth in this Section 4.2 and Sections 11 and 20, 21
hereof.
5. PAYMENT TERMS:
Upon Acceptance by TI of the Deliverables set forth in the SOW, TI will pay the
amounts set forth in Section 3.2 for the respective Deliverables net 30 days.
6. TRAINING AND SUPPORT:
For a period of 30 days following Acceptance of the last Deliverable described
in the SOW by TI, Elastic will offer one day of training in Atlanta at Elastic's
site for up to 4 individuals identified by TI to fully explain the design and
technology developed under this Amended and Restated Agreement, perform a
demonstration of the build environment, provide a sample interferer data set and
PSD creation, and describe the overall operation of Spectrum Manager Product.
Elastic will be responsible for providing all applicable training materials and
documentation. Elastic will provide at least 1 engineer substantially involved
in the development of Spectrum Manager Product qualified to provide the training
described herein. TI will be responsible for expenses related to travel and
lodging associated with attending the training described in this Section 6.
7. PRODUCT COMMITMENT:
For a period beginning on the Effective Date and continuing until December 31,
2002, Elastic agrees to purchase at least 70% of its AFEs from TI if such AFEs
are made available to Elastic by TI or an authorized TI distributor; provided
however, that (i) the Parties mutually agree in good faith on commercially
reasonable supply terms, (ii) TI is not in breach of the terms and conditions of
the terms and conditions of this Amended and Restated Agreement, and (iii) TI
provides an AFE that meets the specification mutually agreed upon by the Parties
in every material respect.
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8. MARKETING ANNOUNCEMENTS
TI and Elastic agree to work together in good faith to announce the relationship
expected to result from this Amended and Restated Agreement. Third party
customers of either company may be informed of the intent to execute this
Amended and Restated Agreement prior to completion of the Amended and Restated
Agreement if an NDA is approved in writing by those responsible for signing this
Amended and Restated Agreement.
9. IMPROVEMENTS AND FUTURE DEVELOPMENTS:
Elastic grants to TI the first right of refusal to participate with Elastic in
future cooperative development related to AFEs required to produce Etherloop
Products for a period beginning on the Effective Date and continuing until
January 1, 2002.
10. INTELLECTUAL PROPERTY, INVENTIONS AND WORK PRODUCT OWNERSHIP:
10.1 The Parties shall retain ownership of their respective inventions,
patents, copyrights, trade secrets and other intellectual property
rights that were in existence prior to the Effective Date.
10.2 The Parties acknowledge that Spectrum Manager Product as developed
for use with TI's C6X DSP instruction set architecture will
incorporate Confidential Information of each Party. Except as set
forth below, the Parties agree that Spectrum Manager IP, shall be
the property of Elastic; provided that TI shall be entitled to
receive a royalty-free, worldwide, perpetual, non-exclusive license
to exploit such Spectrum Manager IP and to design, develop,
manufacture, have manufactured, distribute and sell Spectrum Manager
Products and derivatives thereof only for use with products
manufactured by or on behalf of TI. Notwithstanding the foregoing,
the Parties agree that all Spectrum Manager IP which relates to DSP
and semiconductor AFE components, shall be the sole property of TI;
provided that Elastic shall be entitled to receive a royalty-free,
worldwide, perpetual, non-exclusive license under such Spectrum
Manager IP to design, develop, manufacture, have manufactured,
distribute and sell Spectrum Manager Product and derivatives thereof
only for use with products manufactured by or on behalf of TI.
10.3 Elastic expressly agrees that it shall take all commercially
reasonable steps necessary in prosecution towards obtaining a
maximum patent term with respect to all current and future patent
filings related to Spectrum Manager IP.
10.4 It is expressly agreed by both Parties that incorporation by the
other Party of any preexisting technology or integrated circuit
design in any integrated
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circuit developed under this Amended and Restated Agreement shall
not give rise to any right to the other Party in such preexisting
integrated circuit design and shall not derogate in any way from
such Party's rights in such preexisting design or technology nor
shall it limit the freedom of such Party to use such preexisting
design for the benefit of itself or of other parties. Title and all
rights in any mask work(s), including the right to register such
mask work(s) within the period permitted under the applicable
statute, in the integrated circuit design arising out of performance
under this Amended and Restated Agreement shall be owned by TI
(except as may be limited by section 10.2).
11. PROPRIETARY INFORMATION:
11.1 Each Program Manager shall use his or her best efforts to ensure
that any Confidential Information disclosed by a Party hereunder is
marked and handled in accordance with the marking and handling
procedures of TI and Elastic, as the case may be, with respect to
third party confidential information.
11.2 TI and Elastic respectively agree that the Confidential Information
it receives pursuant to this Amended and Restated Agreement is
received only for its own use and only to the extent expressly
permitted in this Amended and Restated Agreement. Each Party agrees
to keep the Confidential Information of the other confidential and
to disclose it only to such employees, independent contractors and
permitted sublicensees of the receiving Party with a need to know
such information for the purposes of this Amended and Restated
Agreement. Each Party agrees that such employees and independent
contractors shall also be bound by similar confidentiality
obligations. A Party receiving Confidential Information shall
protect such information against unauthorized use or disclosure by
exercising at least the same degree of care as the receiving Party
normally exercises to protect against the unauthorized use or
disclosure of its own confidential or proprietary data and
information of similar importance, but no less than reasonable care.
11.3 Confidential Information of Elastic is and shall remain owned by
Elastic or its licensors, and the grant in this Amended and Restated
Agreement of license or other rights therein or access thereto does
not transfer to TI any present or future ownership rights in the
Confidential Information of Elastic. Similarly, Confidential
Information of TI is and shall remain owned by TI and or its
licensors, and no provision herein shall be deemed to transfer to
Elastic any present or future ownership rights in such Confidential
Information of TI.
11.4 Notwithstanding the provisions of Section 11.1, nothing received by
a Party is required to be treated as Confidential Information if
such information is (i) or becomes publicly known without breach of
the
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confidentiality obligations described herein, (ii) after disclosure
to it, rightfully received from a third party without a breach of an
obligation of confidentiality, (iii) independently developed by the
receiving Party without reference to Confidential Information of the
disclosing Party, (iv) already known by the receiving Party without
an obligation of confidentiality, (v) intentionally disclosed
without restrictions by the disclosing Party to a third party, or
(vi) approved by the disclosing Party for public disclosure.
11.5 Notwithstanding the provisions of Section 11.2, neither Party shall
be liable for its disclosure of any Confidential Information if such
disclosure is in response to a valid order of a court or other
government body or any political subdivision thereof, or if such
disclosure is otherwise required by law, provided that the Party
proposing to disclose such information shall first notify the
disclosing Party and shall make a good faith effort to obtain a
protective order requiring that the Confidential Information so
disclosed be used only for the purpose for which such protective
order is issued. Notwithstanding the provisions of Section 11.2.
neither Party shall he liable for its disclosure of any Confidential
Information if such disclosure is in response to a valid order of a
court or other government body or any political subdivision thereof,
or if such disclosure is otherwise required by law in connection
with a patent application the subject matter of which patent
application belongs to the receiving Party and which the receiving
Party discloses to an appropriate patent agent and/or patent office
or court of any country of the world in pursuance thereof; or
otherwise required by law.
11.6 It is understood that the Parties have performed and will continue
to perform substantial independent development relating to modem
software and hardware products and technologies. Each Party also
understands that, over time, the other Party's employees may gain
familiarity with the general concepts and ideas in the other Party's
technology disclosed under the Amended and Restated Agreement from
independent sources. The Parties understand that either Party may
currently or in the future be developing information internally, or
receiving information from others, that may be similar to
information furnished hereunder. Accordingly, nothing contained in
this Amended and Restated Agreement shall be construed as a
representation or inference that either Party will not develop
products for itself or for others that compete with the products or
systems contemplated by either Party's information.
12. RELATIONSHIP OF THE PARTIES:
Each of the Parties hereto shall conduct the work to be performed hereunder as
an independent contractor and not as an agent or employee of the other Party.
Subject to the terms and conditions of this Amended and Restated Agreement, each
Party shall, at its
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sole discretion, choose the means to be employed and the manner of carrying out
its obligations hereunder. It is recognized by the Parties that the work to be
performed hereunder is state-of-the-art and therefore it is understood that each
of the Parties shall be responsible only to use commercially reasonable efforts
in the performance of its obligations hereunder.
TI/Elastic Confidential Information
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13. REPRESENTATIONS AND WARRANTIES:
13.1 Each Party represents that it is a corporation validly existing and
in good standing under the laws of the state of Delaware. Each Party
represents that it has the full corporate power and authority to
enter into this Amended and Restated Agreement and to perform its
obligations hereunder. Each Party represents that the execution,
delivery and performance of this Amended and Restated Agreement has
been duly and validly authorized by all necessary corporate
proceedings on its part. This Amended and Restated Agreement
constitutes and when executed and delivered will constitute the
legal, valid and binding obligations of Elastic and TI, enforceable
against each of the Parties in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity).
13.2 Elastic warrants that it owns or is licensed to use all of the
intellectual property rights associated with the Spectrum Manager,
and that it has the right to make the Spectrum Manager Product
available to TI and to grant licenses hereunder under the terms of
this Amended and Restated Agreement.
13.3 Elastic further warrants that, to the best of Elastic's knowledge
and belief, Spectrum Manager Product and Spectrum Manager IP as
delivered to TI does not infringe any third party intellectual
property rights, that the delivery of same to, and the use by, TI
pursuant to the terms of this Amended and Restated Agreement will
not violate any trade secret obligation to any third party, that
they have not been granted or dedicated to the public, and that no
adverse claims exist as to Spectrum Manager IP as delivered to TI
and Spectrum Manager Products.
13.4 For the duration of the program described in the SOW, and for a
period of two (2) years thereafter, neither Party shall separately
solicit or attempt to solicit or hire away any employee of the
other, associated with this project, to work on a permanent,
temporary, or part time basis on related matters.
14. INDEMNIFICATION
14.1 Except as provided in Sections 14.2 below, Elastic shall, at its
sole option, either reimburse TI for the cost of defense, or defend
all suits or proceedings brought against TI and hold TI harmless,
but only to the extent which such suits or proceedings are based on
a claim that the Spectrum Manager Product and Spectrum Manager IP
(as such exists on the date of completion of the SOW or acceptance
by TI, without any
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modifications by TI), or TI's use of same, constitute direct
infringement of any trademark, copyright or patent of any third
party. Elastic shall, at its sole option, pay or reimburse TI for
damages and costs finally awarded against TI with respect to such
matter, provided chat Elastic is promptly informed and furnished a
copy of each communication, notice or other action relating to the
alleged infringement and is given authority, information and
assistance (at Elastic's expense) necessary to defend or settle the
proceeding. Indemnification or reimbursement shall not be required
for costs or damages resulting from the negligence, recklessness or
intentional misconduct of TI or if the infringement arises out of
compliance with TI's specifications or requirements. Upon receipt of
a notice of an actual or threatened claim of direct infringement,
Elastic may (or, in the case of an injunction against TI's sale of
Spectrum Manager Product, or any portion thereof, Elastic shall), at
Elastic's sole option and expense:
a) procure for TI the right to continue to use the Spectrum
Manager Product (as such exists on the date of completion of
the SOW, without modifications by TI); or
b) replace or modify the Spectrum Manager Product to make it
non-infringing, provided that, in the event that (a) or (b)
are commercially unreasonable, having regard to the market,
Elastic shall refund to TI the total license fees paid
hereunder.
14.2 Nothing contained in this Amended and Restated Agreement shall be
construed as conferring by implication, or otherwise upon either
Party hereunder any other license or other right except the licenses
and rights expressly granted hereunder to a Party hereto.
14.3 TI shall defend any proceeding brought against Elastic insofar as
the proceeding is based on a claim that TI Technology, or Elastic's
use of same, constitutes direct infringement of any trademark,
copyright or patent of any third party. TI shall pay all damages and
costs finally awarded with respect thereto against Elastic, provided
that TI is promptly informed and furnished a copy of each
communication, notice or other action relating to the alleged
infringement and is given authority, information and assistance (at
TI's expense) necessary to defend or settle the proceeding. TI shall
not be obligated to defend or be liable for costs and damages if the
infringement arises out of applications generated using the TI
Technology, compliance with Elastic's specifications or requirements
or results from the negligence, recklessness or intentional
misconduct of Elastic. TI's obligations hereunder shall not apply to
any infringement by Elastic occurring after Elastic has received
notice of such proceeding unless TI has given express written
permission for such continuing infringement. Upon receipt of a
notice of an actual or threatened claim of direct infringement, TI
may at TI's sole option and expense:
a) procure for Elastic the right to continue to use the TI
Technology, (without modifications by Elastic); or
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b) replace or modify the TI Technology to make it non-infringing,
provided that, in the event that (a) or (b) are commercially
unreasonable, TI shall refund to Elastic the total license
fees paid by Elastic for the TI Technology.
15. LIMITATION OF LIABILITY:
15.1 Except for claims arising from (i) either Party's breach of its
confidentiality obligations as set out in Section 11, (ii) either
Party's infringement of the other Party's intellectual property
rights or (iii) the gross negligence or willful misconduct of a
Party, each Party's liability for damages, costs and expenses under
this Amended and Restated Agreement whether arising in contract
(including fundamental breach), tort (including negligence) or
otherwise, even if the breaching Party has been advised of the
possibility of such damages, shall not exceed the license fees paid
and payable by TI to Elastic pursuant to this Amended and Restated
Agreement. Notwithstanding anything in this Section 15.1 and this
Amended and Restated Agreement to the contrary, TI's liability under
Section 14.3 shall not exceed the license fees paid by Elastic for
the TI Technology.
15.2 IN NO EVENT SHALL EITHER PARTY (INCLUDING AFFILIATES, CONTRACTORS,
DIRECTORS, EMPLOYEES AND AGENTS) BE LIABLE FOR ANY INDIRECT,
INCIDENTAL, MULTIPLE, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF
ANY KIND, INCLUDING WITHOUT LIMITATION, LOST BUSINESS, LOST SAVINGS,
LOST DATA, AND LOST PROFITS, REGARDLESS OF THE CAUSE AND WHETHER
ARISING IN CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT (INCLUDING
NEGLIGENCE), OR OTHERWISE, EVEN IF THE BREACHING PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
16. TERM, TERMINATION AND SURVIVABILITY:
16.1 Unless this Amended and Restated Agreement is terminated as provided
herein, the period of this Amended and Restated Agreement shall
commence on the Effective Date and continue for four (4) years and
shall automatically be renewed thereafter without interruption for
successive one (1) year terms, unless, not less than thirty (30)
days before the end of any term, either Party notifies the other
Party, in writing, of its election not to renew, in which event this
Amended and Restated Agreement will terminate at the end of such
term (the "Term"). Notwithstanding the foregoing, this Amended and
Restated Agreement may also be terminated as set forth in Sections
16.2 and 16.3.
16.2 If either Party breaches any material term of this Amended and
Restated Agreement, and fails to cure such breach within 30 days
following receipt
<PAGE>
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of written complaint from the other Party, such other Party may
terminate this Amended and Restated Agreement. Notwithstanding the
foregoing, in the event a Party breaches its obligations pursuant to
Section 10, or infringes the other Party's intellectual property
rights, the other Party may terminate this Amended and Restated
Agreement immediately upon notice. In the event a Party is working
in good faith employing commercially reasonable efforts to meet a
Completion Date, a failure by such Party to meet such Completion
Date shall not be considered a material breach of this Amended and
Restated Agreement.
16.3 The rights and obligations of the Parties with respect to the
following Sections shall survive expiry and termination of this
Amended and Restated Agreement: 1, 3, 4, 5, 9, 10, 11, 12, 13, 14,
15, 16, 17, 18, 21 and 22.
17. FORCE MAJEURE:
17.1 Neither Party shall be liable, wholly or in part, for
non-performance or a delay in performance of its obligations under
this Amended and Restated Agreement, if such delay is due to force
majeure or contingencies or causes beyond the reasonable control of
the Party, including but not limited to: flood, wind, hurricane,
tornado, earthquake, explosion, or other similar catastrophe,
hostilities, restraint of rulers or people, civil commotion, act of
terrorism, strike, labor dispute, blockage or embargo or any act of
nature, fires, accident, epidemic or quarantine restrictions.
17.2 In the event non-performance or a delay in performance of
obligations under this Amended and Restated Agreement is due to a
force majeure, the period of performance shall be extended by the
delay due to such events of force majeure and any additional time
that the Parties may mutually agree is necessary for the
remobilization of people and equipment. If such delay exceeds ninety
(90) days, either Party shall have the right to terminate further
cooperative development activity required by this Amended and
Restated Agreement forthwith and in this event neither Party shall
have any liability or obligation to the other in connection with
such termination of work.
18. GOVERNING LAW:
The terms and conditions of this Amended and Restated Agreement and performance
hereunder shall be construed in accordance with the laws of the State of New
York without reference to choice of law principles.
19. ASSIGNMENT:
TI/Elastic Confidential Information
<PAGE>
This Amended and Restated Agreement shall not be assignable without the written
consent of both Parties, and any purported assignment, including full of partial
assignment or delegation to any agent or subcontractor, not permitted hereunder,
shall be void.
20. SEVERABILITY:
If any provision or part of any provision of this Amended and Restated
Agreement, or any attachment hereto, is invalidated by operation of law or
otherwise, such provision or part will to that extent be deemed omitted and the
remainder of this Amended and Restated Agreement or applicable attachment will
remain in full force and effect. Should the case arise, the Parties agree that
such invalidated provision or part thereof shall be replaced by a similar but
legally valid provision which is as close as possible in commercial effect to
the invalidated provision or part thereof.
21. EXPORT CONTROL:
Each party agrees to comply with all applicable U.S. and local export control
laws, and none of the Parties shall transfer, directly or indirectly, any
technical data received under this Amended and Restated Agreement or that
certain Non Disclosure Agreement, dated February 16, 1998, by and between
Elastic and TI or the direct product hereof or thereof, to any restricted or
prohibited destination without obtaining prior approval as required by U.S.
export administration regulations, and applicable local law.
22. AMENDMENT; WAIVER:
This Amended and Restated Agreement may not be modified or amended except by a
written instrument executed by an authorized representative of each of the
Parties to this Amended and Restated Agreement. No delay or omission by either
Party to exercise any right or power shall impair such right or power or be
construed as a waiver. A waiver by either of the Parties of any of the covenants
to be performed by the other or any breach shall not be construed to be a waiver
of any succeeding breach or of any other covenant.
23. NOTICE:
Whenever under this Amended and Restated Agreement one Party is required or
permitted to give notice to the other Party, such notice shall be in writing and
shall be delivered personally, sent by facsimile transmission, sent by
nationally recognized express courier or sent by certified, registered, first
class mail. Any such notice shall be deemed given when actually received, when
so delivered personally by facsimile transmission or express courier, or if
mailed, on the fifth (5th) day after its mailing, postage prepaid to the
recipient Party addressed as follows:
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Page 17 of 29
In the case of E1astic:
Elastic Networks Inc.
6120 Windward Parkway
Suite 100
Alpharetta, GA
U.S.A. 30005
Attention: Larry Hurtado, Chief Operating Officer
Facsimile Number: (678) 297-3110
In case of TI:
Texas Instruments Incorporated
Vice President, Broadband Access Group
8505 Forest Lane MS8650
Dallas, TX 75231
Attention: Mr. George Barber
Facsimile Number: (972) 480-2611
with a copy (which shall not constitute effective notice) to:
Assistant General Counsel,
Semiconductor Group
7839 Churchill Way, MS 3999
Dallas, TX 75251
Attention: Mr. Bart Thomas
Facsimile Number: (972) 917-4418
Either Party may change its address for notices upon giving ten days written
notice of the change to the other party in the manner provided above.
24. NEGOTIATION:
Any and all matters in dispute arising from or relating to a change request made
by TI pursuant to Section 2.4 hereof shall first be subject to confidential
negotiation between the senior management of the Parties. The Parties agree that
a good faith attempt to resolve all such issues in negotiation is a
pre-condition to further adversarial proceedings of any kind.
26. HEADINGS:
The headings appearing at the beginning of the several sections contained in
this Amended and Restated Agreement have been inserted for identification and
reference purposes only and shall not be used in the construction and
interpretation of this Amended and Restated Agreement.
TI/Elastic Confidential Information
<PAGE>
26. INDEPENDENT CONTRACTOR:
Elastic shall conduct the work to be performed hereunder as an independent
contractor and not as an agent or employee of TI. Subject to the terms and
conditions of this Amended and Restated Agreement, Elastic shall, at its sole
discretion, choose the means to be employed and the manner of carrying out its
obligations hereunder.
27. MERGER OF AGREEMENT:
This document constitutes the entire agreement between the Parties with respect
to the subject matter hereof, and supersedes all previous communications,
representations, understandings and agreements, either oral or written, between
the Parties or any official or representative thereof.
IN WITNESS WHEREOF, the Parties hereto have caused this Amended and Restated
Agreement to be executed by their duly authorized representatives as of this
____ day of ____, 2000.
TEXAS INSTRUMENTS ELASTIC NETWORKS INC.
INCORPORATED
By: By: /s/ Larry R. Hurtado
----------------------------- -----------------------------
Name: Name: Larry R. Hurtado
--------------------------- ---------------------------
Title: Title: VP, Global Operations
-------------------------- --------------------------
Date: Date: 04/10/00
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