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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement"), dated as of the 12th day
of May, 1999, is made by and among Nortel Networks Inc., a Delaware corporation
("NNI"), Elastic Networks Inc., a Delaware corporation ("Elastic") and, for the
limited purpose of agreeing to be bound by Section 7.02, Article IX and Section
10.04, Nortel Networks Corporation, a Canadian corporation ("NNC").
WHEREAS, NNI, among its other activities, presently owns and has been
conducting and operating the Elastic Business (as hereinafter defined) as a
separate business unit; and
WHEREAS, Elastic is a wholly-owned subsidiary of NNI, that has been formed
to operate the Elastic Business in connection with NNI's transfer of the Elastic
Assets (as hereinafter defined) to Elastic in accordance with the terms of this
Agreement; and
WHEREAS Elastic desires to acquire from NNI, certain of NNI's rights and
obligations in and to the assets and liabilities involved in the Elastic
Business, all as more specifically provided for herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, NNI and Elastic, intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement are used as defined in this
Article I or elsewhere in this Agreement. As used herein:
"Affiliate" means, as to a specified individual or entity, any individual
or entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified
individual or entity. For the purposes of this definition, "control" means the
power to direct the management and policies of another, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" has the meaning specified in the preamble hereof.
"Assumed Contracts" has the meaning specified in Section 2.01(a).
"Assumed Liabilities" has the meaning specified in Section 3.01.
"Bonus Plan" means that certain NNI-Elastic Networks (Spin-Out) Completion
Bonus Plan dated October 21, 1998.
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"Company Material Adverse Effect" means a material adverse effect on the
business, assets or financial condition of Elastic.
"Components" means materials, components, assemblies or parts not
originating with NNI or the Elastic Business.
"Confidential Information" means any business, marketing, technical,
scientific or other information that, at the time of disclosure, is designated
as confidential (or like designation), is disclosed in circumstances of
confidence, or would be understood by the Parties, exercising reasonable
business judgment, to be confidential. Confidential Information includes,
without limitation, the terms and conditions of this Agreement.
"Desktop Software" means Nortel Corporate Desktop Software and Single Use
Desktop Software.
"Effective Date" means the close of business on the date of this
Agreement.
"Elastic" has the meaning specified in the preamble hereof.
"Elastic Assets" has the meaning specified in Section 2.01.
"Elastic Business" has the meaning specified in the NNI-ENI Agreement.
"Elastic Employees" means the END Employees that are hired by Elastic,
either solely or as a joint employer, immediately following the closing of the
Private Placement, as provided in Section 4.01, or, if applicable, immediately
upon termination of STD Benefits, an NNI leave of absence or services under the
Loaned Employee Agreement, as provided in Section 4.02(a), (c) and (d),
respectively.
"Elastic Hire Date" means the date on which an Elastic Employee commences
employment with Elastic, as provided in Section 4.01 or 4.02, as applicable.
"Elastic's Employment Liabilities" has the meaning specified in Section
4.06(b).
"Elastic Etherloop Device" means a device or system for communicating
Ethernet data frames between master and slave modems using burst mode, half
duplex transmission, and providing a collision avoidance technique, over a
twisted pair communications path, where such device or system contains all of
the attributes, and uses all of the implementation techniques, described in a
letter from Elastic to NNC dated as of the date hereof.
"Employee Plans" means all incentive, deferred compensation, supplemental
retirement, severance, pension, profit-sharing, retirement, health, welfare,
insurance, or other employee benefit plans and all material arrangements, plans,
programs and practices pertaining to compensation, bonuses, securities
purchases, options,
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commissions, incentives, allowances, vacation, sick days, education assistance,
leaves of absence, relocation and the like, for the benefit of current or former
employees, that are currently maintained by such employee's employer, or with
respect to which such employer currently has or in the future may have any
material liability or obligation to contribute or to make payments.
"END" means the business unit of NNI and its subsidiaries known as the
Elastic Networks Division.
"END Employees" means the employees of NNI assigned to the END immediately
prior to the closing of the Private Placement, as reasonably determined by NNI.
"Etherloop Products" has the meaning specified in the NNI-ENI Agreement.
"Excluded Assets" has the meaning specified in Section 2.02.
"Excluded Intellectual Property" has the meaning specified in the NNC -
ENI Agreement.
"Generalized Searches" has the meaning specified in Section 4.05(a).
"Improvement" has the meaning specified in the NNC - ENI Agreement.
"Included Intellectual Property" has the meaning specified in the NNC -
ENI Agreement;
"Intellectual Property Rights" has the meaning specified in the NNC-ENI
Agreement.
"IPR Agreements" means the NNC-ENI Agreement and the NNI-ENI Agreement.
"IPR Assets" means the NNI IPR Assets and the NNC IPR Assets.
"Knowledge," with respect to NNI and/or NNC, as applicable, means the
knowledge of Michael Pangia, Vice-President, Finance, Sales and Business
Development; Arthur Fisher, Vice-President and Intellectual Property Law
Counsel; Catherine Kyriakatos, Manager, Mergers and Acquisitions; and/or Lynn C.
Egan, Senior Counsel, Law Department; and, with respect to Elastic, means, as
applicable, the knowledge of Guy D. Gill, Phillip Griffith, Larry Hurtado and
Kevin Elop.
"Licensed Intellectual Property" has the meaning specified in the NNC-ENI
Agreement.
"Licensed Products" has the meaning specified in the NNI-ENI Agreement.
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"Loaned Employee Agreement" means that certain Loaned Employee Agreement,
effective as of the date hereof, by and between NNI and Elastic.
"LTD Benefits" has the meaning specified in Section 4.02(a).
"NNC" has the meaning specified in the preamble hereof.
"NNC-ENI Agreement" means the Intellectual Property Transfer and License
Agreement dated as of the date hereof between NNC and Elastic.
"NNC IPR Assets" means all of the assets transferred and/or licensed from
NNC to Elastic pursuant to the NNC-ENI Agreement.
"NNI" has the meaning specified in the preamble hereof.
"NNI-ENI Agreement" means the Patent Transfer and License Agreement dated
as of the date hereof between NNI and Elastic.
"NNI IPR Assets" means all of the assets transferred and/or licensed from
NNI to Elastic pursuant to the NNI-ENI Agreement.
"NNI's Employment Liabilities" has the meaning specified in Section
4.06(a).
"Nortel Corporate Desktop Software" means software used by Elastic under
an NNI or NNC corporate license that is, as of the Effective Date, installed in
personal computers forming a part of the Elastic Assets.
"No Solicitation Period" has the meaning set forth in Section 4.05(a).
"Other Products" means products other than Elastic Etherloop Devices.
"Party" means NNI or Elastic or NNC, and Parties means all of them.
"Patent Cross Licenses" means the general corporate reciprocal patent
cross license agreements listed on Exhibit A.
"Private Placement" means the first sale of Elastic securities to any
person or entity other than NNI, specifically excluding any issuance of Elastic
securities or any right to acquire Elastic securities granted to employees,
vendors or consultants.
"Product Licenses" means the Intellectual Property Rights granted in the
ordinary distribution of products manufactured by the Elastic Business.
"Retained Liabilities" has the meaning specified in Section 3.02.
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"Single Use Desktop Software" means software used by Elastic under a
transferable, shrink-wrap or click-wrap license agreement for use on a single
computer that is, as of the Effective Date, installed in personal computers
forming a part of the Elastic Assets.
"SPA Exhibit C" means Exhibit C to the Elastic Networks Inc. Series A
Redeemable Convertible Participating Preferred Stock Purchase Agreement dated as
of the date hereof among Elastic, NNI and the Purchasers as defined therein.
"Subsidiary" means an entity in which a Party hereto effectively owns or
controls, directly or indirectly, more than fifty percent (50%) of the voting
stock or other ownership interest therein.
"STD Benefits" has the meaning specified in Section 4.02(a).
"Third Party Licenses" means the licenses and other written agreements
that are used in the Elastic Business, including those listed on Exhibit B,
other than the Patent Cross Licenses, the Desktop Software and the Product
Licenses, relating to the Intellectual Property Rights that are used in the
Elastic Business.
"TI Agreement" means the Cooperative Development and License Agreement
dated September 9, 1998 between NNI and Texas Instruments Incorporated, which
agreement has been assigned by NNI to Elastic as of the date hereof.
"Transferred Intellectual Property" has the meaning specified in the
NNC-ENI Agreement.
"Transferred Patents" has the meaning specified in the NNI-ENI Agreement.
ARTICLE II
ELASTIC ASSETS
Section 2.01. Transfers to Elastic. Subject to the terms and conditions
hereof, including, without limitation, the exclusion from transfer under this
Agreement of a portion of such assets as set forth in Section 2.02. NNI hereby
transfers, conveys and assigns to Elastic, and Elastic hereby acquires, NNI's
entire right, title and interest in, to and under all of the assets and
properties described below (collectively, the "Elastic Assets"):
(a) Assumed Contracts. Subject to Section 2.03, all of the contracts and
subcontracts listed on Exhibit C, which relate to the sale, purchase, support,
distribution or licensing of Etherloop Products or related services (including
services of independent contractors), or both, entered into in the course of the
Elastic Business (collectively, the "Assumed Contracts");
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(b) Records. Customer and prospective customer lists, business records,
reports, plans, records, product specifications, training manuals,
correspondence, regulatory reports and documents, maintenance schedules,
operating and production records, business plans, marketing or other studies and
other documents and data that were prepared by employees of the END and relate
to the Elastic Business existing on the Effective Date;
(c) Furniture, Fixtures, Inventory and Equipment. The furniture, fixtures,
inventory and other equipment listed on Exhibit D; and
(d) Domain names. The internet domain names "elastic.com" and
"etherloop.com".
Section 2.02. Excluded Assets. The following assets (the "Excluded
Assets") are specifically excluded from the Elastic Assets and any contribution
or acquisition pursuant to this Agreement, whether or not they would otherwise
be included in the Elastic Assets:
(a) Excluded Contracts. Any and all agreements between NNI and the END
Employees (whether or not they subsequently become the Elastic Employees),
except as otherwise provided in Section 4.03, and any agreements primarily of
general application to NNI and its Affiliates from which the Elastic Business
has benefited, except for those agreements listed on Exhibit C;
(b) Intellectual Property. Any and all Intellectual Property Rights,
including, without limitation, (i) the IPR Assets (which are hereby excluded
from this Agreement, but which are transferred to Elastic under the IPR
Agreements and governed by the terms thereof, except with respect to
consideration for the NNI-IPR Assets, which is governed by Article V hereof),
and (ii) the right to use any management information software programs used by
the Elastic Business;
(c) Cash and Accounts Receivable. All cash (including but not limited to
bank accounts and petty cash); all accounts receivable owed to the END as of the
date hereof and payable to the END at any time, including without limitation
intra-company and other trade receivables; and marketable securities currently
used in connection with the Elastic Business; and
(d) All Other Assets. All other technology, real property, personal
property, agreements and all other assets owned, leased or otherwise possessed
by NNI and/or its Affiliates, whether or not related to the Elastic Business,
that are not listed in Section 2.01 as Elastic Assets, including without
limitation, all copies of NNI personnel, benefits, medical and payroll records
concerning the END Employees (whether or not they become the Elastic Employees).
Section 2.03. Assignment of Contracts. Nothing in this Agreement shall be
construed as an attempt to assign to Elastic any Assumed Contract that, as a
matter of law or by its terms, is not assignable without the consent of any
other party or parties,
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including any Assumed Contracts that do not permit a change of control of the
Elastic Business such as that resulting from the consummation of the
transactions provided for in this Agreement and other agreements executed by the
Parties as of the date hereof, unless such consent has been obtained by Elastic
in writing and a copy of such consent has been delivered to NNI. NNI shall
provide reasonable assistance to Elastic in its efforts to obtain such consents.
ARTICLE III
ASSUMED LIABILITIES
Section 3.01. Assumption of Liabilities by Elastic. Subject to the terms
and conditions hereof, Elastic hereby assumes and agrees to pay and discharge
all liabilities, costs or obligations arising on or after the Effective Date
that are related to or arise under or in connection with the Elastic Assets, the
Licensed Products and/or the Elastic Business, and certain other liabilities as
set forth in this Section 3.01. (collectively, the "Assumed Liabilities"), as
and when the same become due and payable and performance is required thereunder,
including, without limitation the following, but only insofar as the events that
give rise to such liability occur on or after the Effective Date:
(a) any and all liabilities and obligations of any nature whatsoever,
whether fixed or contingent, that arise from or relate to the ownership,
manufacture, sale or use of the Elastic Assets or the Licensed Products,
including, but not limited to, product liability, tort liability, intellectual
property and warranty claims with respect to Licensed Products sold or services
rendered on or after the Effective Date, and any liability for violations of
statutes or breach of contract (including without limitation claims relating to
Assumed Contracts);
(b) any and all liabilities and obligations of any nature whatsoever,
whether fixed or contingent, that arise from or relate to the business and
operations of Elastic;
(c) all taxes (including without limitation deferred taxes) arising from
the conduct of the Elastic Business, including personal property tax liability
attributable to the Elastic Assets (except as otherwise provided in Section 3.02
hereof);
(d) Elastic's Employment Liabilities (except as otherwise provided in
Section 4.06 hereof);
(e) any liability relating to the bulk sales or bulk transfer law of any
jurisdiction, except any liability payable in connection with the transactions
contemplated hereunder or under the IPR Agreements: and
(f) any statutory liens on the Elastic Assets.
Section 3.02. Liabilities Not Assumed. Except as otherwise provided in
Article IV or Article IX hereof, or pursuant to any other written agreement
between Elastic and NNI and/or its Affiliates, Elastic does not and shall not
assume or agree to pay or
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discharge (i) any liability, cost or obligation where the events that gave rise
to such liability occurred prior to the Effective Dare, notwithstanding that
such liability, cost or obligation may arise under or in connection with the
Elastic Assets, the Licensed Products and/or the Elastic Business, and
regardless of whether or not such liability, cost or obligation is recognized as
a liability on any books of account, is absolute or contingent or measurable, or
(ii) any sales, transfer and/or documentary taxes, if any, payable in connection
with the asset transfer contemplated hereunder or under the IPR Agreements
("Retained Liabilities"). The Retained Liabilities include, without limitation,
income tax liabilities and trade payables related to the Elastic Business, the
Licensed Products and the Elastic Assets incurred prior to the Effective Date.
ARTICLE IV
EMPLOYEES
Section 4.01. END Employees, Except as otherwise provided in Section 4.02,
Elastic affirms that, that no less than seven (7) calendar days prior to the
closing of the Private Placement, it made an offer of full time employment, as a
sole employer or joint employer with a third party acceptable to NNI, to all of
the END Employees by means of an offer letter, the form of which has been
approved by NNI, upon terms and conditions reasonably acceptable to NNI. Elastic
covenants and agrees that it, either solely or jointly with such third party,
shall employ all END Employees who have accepted and satisfied those conditions
set forth in such offer of employment, as of 12:00 a.m. on the day following the
closing of the Private Placement, upon terms and conditions reasonably
acceptable to NNI.
Section 4.02 END Employees on Leave and on Loan. Notwithstanding anything
contained in Section 4.01 to the contrary, Elastic's obligations with respect to
the offer of employment to, and employment of, the END Employees receiving NNI's
short-term or long-term disability benefits, on an NNI-approved leave of absence
or providing services under the Loaned Employee Agreement as of the closing of
the Private Placement, are as follows:
(a) Employees Receiving Short-Term Disability Benefits. Any of the END
Employees who, as of the closing of the Private Placement, are receiving
benefits under the Northern Telecom Inc. Short-Term Disability Plan ("STD
Benefits"), shall be offered full time employment by Elastic, as a sole employer
or joint employer with a third party reasonably acceptable to NNI, as provided
in this Section 4.02(a), and shall be employed by Elastic, either solely or
jointly with such third party, at the time such disability benefits terminate,
provided that such employees are released to return to work with accommodations,
if any, which can be reasonably implemented by Elastic, prior to the
commencement of long-term disability benefits under the Northern Telecom Inc.
Long-Term Disability Plan ("LTD Benefits"), and such employees have satisfied
the conditions set forth in Elastic's offer of employment. No later than the day
immediately following the closing of the Private Placement, Elastic shall offer
such END Employees employment by means of an offer letter that is reasonably
acceptable to NNI. Elastic
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shall have no responsibility or liability for payment of any STD Benefits of any
such END Employees prior to their employment by Elastic in accordance with this
Section 4.02(a). If any of such END Employees become Elastic Employees, the
other provisions of this Article IV shall apply to such Elastic Employee.
(b) Employees Receiving Long-Term Disability Benefits. Elastic shall have
no obligation under Section 4.01 to offer employment to or to employ any of the
END Employees who, as of the closing of the Private Placement, are receiving LTD
Benefits, or to employ any of the END Employees who are receiving STD Benefits
as of the closing of Private Placement and proceed to receive LTD Benefits prior
to being released to return to work.
(c) Employees on Other NNI-Approved Leaves. Any of the END Employees who,
as of the closing of the Private Placement, are on leave from employment under
NNI's Family Care, Medical, Personal or Military Leave policies, but are not
receiving STD Benefits or LTD Benefits, shall be offered employment by Elastic,
as a sole employer or joint employer with a third party reasonably acceptable to
NNI, as provided in this Section 4.02(c), and be employed by Elastic, either
solely or jointly with such third party, at the time such leave terminates,
provided that such personnel are released to return to work with accommodations,
if any, which can be reasonably implemented by Elastic and such employees have
satisfied the conditions set forth in Elastic's offer of employment. No later
than the day following the closing of the Private Placement, Elastic shall offer
such END Employees employment as provided in this Section 4.02(c) by means of an
offer letter that is reasonably acceptable to NNI. If any of such END Employees
become Elastic Employees, the other provisions of this Article IV shall apply to
such Elastic Employees.
(d) Employees on Loan. Any of the END Employees who, immediately upon the
closing of the Private Placement, are supplying services to Elastic pursuant to
the Loaned Employee Agreement, shall be offered employment by Elastic (as a sole
employer or joint employer with a third party reasonably acceptable to NNI) and
be employed by Elastic (either solely or jointly with such third party) at the
time that such employees cease to supply services under the Loaned Employee
Agreement, provided that (i) such services ceased for the purpose of such
employees commencing employment with Elastic and (ii) such employees have
satisfied the conditions set forth in Elastic's offer of employment. Elastic
shall offer such END Employees employment as provided in this Section 4.02(d) by
means of an offer letter reasonably acceptable to NNI, to be delivered at a time
determined by NNI. If any of such END Employees become Elastic Employees, the
other provisions of this Article IV shall apply to such Elastic Employees. If
any of such END Employees are receiving STD Benefits or on a leave of absence,
as described in Section 4.02(a) and (c) respectively, when such employee's
employment with Elastic pursuant to this Section 4.02(d) is scheduled to
commence, the provisions of Section 4.02(a) or (c), as applicable, shall apply
to such employee.
Section 4.03. Value Creation Bonus. On a date to be determined by Elastic
during the period beginning on January 1, 2000 and ending on January 31, 2000,
Elastic
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shall pay those END Employees listed on Exhibit E a bonus equal to the first
payout that such employee receives under the Bonus Plan, if such employee
becomes an Elastic Employee and is employed by Elastic on the date such bonus is
paid. The amount of all such bonuses shall be determined by NNI, and NNI shall
reimburse Elastic for all such bonuses paid by Elastic to Elastic Employees.
Section 4.04. Asset Transfer. The accounts (and associated assets) of
Elastic Employees who participate in NNI's defined contribution plan shall be
transferred, as soon as practical after the closing of the Private Placement, in
accordance with applicable law, to the qualified defined contribution plan
sponsored by Elastic for its employees. Such assets shall be transferred in the
form of cash or other assets of NNI's defined contribution plan acceptable to
Elastic.
Section 4.05. No Solicitation of Employment.
(a) No Solicitation by NNC. Unless otherwise agreed by Elastic, during the
twenty-four (24) month period immediately following the closing of the Private
Placement (the "No Solicitation Period"), neither NNC nor its Subsidiaries
(other than Elastic) shall solicit for employment or hire any Elastic Employees
who continue to be employed by Elastic or who have voluntarily terminated their
employment with Elastic during the No Solicitation Period; provided, however,
that nothing in this sub-section (a) shall prevent NNC or its Subsidiaries
(other than Elastic) from (i) conducting generalized employment searches, by
advertisements, engaging firms to conduct searches, or by other means
("Generalized Searches"), that are not focused on Elastic Employees or (ii)
hiring any current or former Elastic Employees identified through such
Generalized Searches.
(b) No Solicitation by Elastic. Unless otherwise agreed to by NNI, during
the No Solicitation Period. Elastic shall not solicit for employment or hire any
employees of NNC or its Subsidiaries or former employees who voluntarily
terminate their employment with NNC or its Subsidiaries during the No
Solicitation Period; provided, however, that nothing in this sub-section (b)
shall prevent Elastic from (i) conducting Generalized Searches that are not
focused on employees of NNC or its Subsidiaries or (ii) hiring current or former
employees of NNC or its Subsidiaries identified through such Generalized
Searches.
Section 4.06. Employment Matters Liabilities and Indemnification.
(a) NNI's Employment Liabilities. Except as otherwise provided in the
Loaned Employee Agreement, Section 4.03 or Section 4.06(b) hereof, or with
respect to the assets transferred by NNI pursuant to Section 4.04 hereof, NNI
shall be liable for any and all liabilities and obligations of any nature
whatsoever, whether fixed or contingent, known or unknown, with respect to any
Elastic Employee, that exist or accrue prior to such employee's Elastic Hire
Date and relate to NNI's employment or termination of employment of such
employee, including without limitation, such liabilities and obligations with
respect to wages, bonuses, workers compensation and benefits (collectively,
"NNI`s Employment Liabilities").
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(b) Elastic's Employment Liabilities. Elastic shall be liable for any and
all liabilities and obligations of any nature whatsoever, whether fixed or
contingent, known or unknown, that exist or accrue on or after the Effective
Date and relate to Elastic's: (A) offer of employment to, or failure to offer
employment to, any END Employee in accordance with the terms of this Agreement,
or (B) utilization of NNI's employees, agents or representatives to generate,
assemble or deliver material related to Elastic's employment offer pursuant to
Section 4.01 or 4.02 or (2) with respect to any Elastic Employee, on or after
such employee's Elastic Hire Date and relate to Elastic's employment or
termination of employment of such employee, including without limitation, such
liabilities and obligations with respect to wages, bonuses, workers compensation
and benefits (collectively, "Elastic's Employment Liabilities").
ARTICLE V
CONSIDERATION
Section 5.01. Consideration. The consideration for the Elastic Assets and
the NNI-IPR Assets shall be paid and satisfied in full by:
a) the assumption by Elastic of the Assumed Liabilities; and
(b) the immediate issuance by Elastic to NNI of fifteen million, three
hundred eighty-four thousand, six hundred fourteen (15,384.614) shares of Common
Stock of Elastic.
ARTICLE VI
TRANSFER
Section 6.01. Transfer of Elastic Assets; Risk of Loss. The transfer of
the Elastic Assets shall take place on the Effective Date. All risk of loss or
damage with respect to the Elastic Assets shall be borne by NNI until 11:59 p.m.
eastern daylight time on the day before the Effective Date, and thereafter shall
be borne by Elastic.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01. Limited Representations and Warranties of NNI.
(a) Recognizing that, immediately prior to the Effective Date, the
officers of Elastic and the Elastic Employees were employees of NNI, and that
some of the officers and employees of Elastic operated the END immediately prior
to the Effective Date, and are familiar with and have been involved with the
creation of the Elastic Assets and the Licensed Products for NNI, Elastic hereby
acknowledges that, except as expressly set forth herein, the Elastic Assets are
being transferred by NNI under this Agreement "AS IS" AND "WHERE IS" WITHOUT ANY
REPRESENTATIONS OR WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR
IMPLIED
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WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(b) Notwithstanding the foregoing, NNI hereby represents and warrants to
Elastic that:
(i) Due Authorization. The transaction provided for under this
Agreement has been duly authorized and approved by NNI and
this Agreement has been duly executed and delivered by NNI:
(ii) Assumed Contracts in Good Standing. NNI has performed in all
material respects the obligations required to be performed by
it under each Assumed Contract as it relates to the Elastic
Business contributed by NNI;
(iii) Good Title. NNI is transferring to Elastic good and valid
title to the furniture, fixtures, inventory and equipment
listed in Exhibit D, free and clear of all title defects,
objections or other encumbrances, except (A) minor
imperfections of title, if any, none of which is substantial
in amount or materially impairs the use of the property
subject thereto, that have arisen in the ordinary course of
business consistent with past practice, (B) liens for current
taxes not yet due, and (C) software incorporated therein;
(iv) Completeness of Assets. The Elastic Assets include all leases,
contracts, furniture, fixtures, inventory and equipment used
by NNI in the operation of the Elastic Business prior to the
Effective Date, except for the Excluded Assets:
(v) Employees and Labor Matters. NNI has paid in full, or shall
pay in full when due, all salaries and other compensation for
all services performed by each Elastic Employee that has
accrued on or prior to such employee's Elastic Hire Date;
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(vi) NNI's Employee Plans. All of NNI's Employee Plans are in
compliance in all material respects with requirements
prescribed by all applicable laws. NNI has performed all
material obligations required to be performed by it under all
of its Employee Plans. There is not, to NNI's knowledge, any
material written claim or dispute in respect of any of NNI's
Employee Plans;
(vii) Intellectual Property Rights. NNI owns the Transferred Patents
as defined in the NNI - ENI Agreement and NNI has the right
and ability to transfer, assign and grant the rights and
licenses conveyed under that agreement;
(viii) Litigation. There is no action, suit or proceeding, or
governmental inquiry or investigation, pending, or, to NNI's
Knowledge, any threat thereof, against Elastic, that questions
the validity of this Agreement or the right of Elastic or NNI
to enter into it, or that might have, either individually or
in the aggregate, a Company Material Adverse Effect, nor is
there any litigation pending, or, to NNI's Knowledge, any
threat thereof, against NNI or Elastic by reason of the
proposed activities of Elastic or negotiations by Elastic
and/or NNI or NNC with possible investors in Elastic. Elastic
is not subject to any outstanding judgment, order or decree;
(ix) Financial Statements. Set forth on SPA Exhibit C is a complete
and correct copy of the income statements, statements of
assets and liabilities and statements of cash flows
(unaudited) of the Elastic Business as of and for the fiscal
years ended December 31, 1997 and 1998 and the three months
ended March 31, 1999 (the "Financial Statements"), during
which periods the Elastic Business was conducted as a separate
business unit of NNI, notwithstanding Elastics separate
incorporation on September 22, 1998. Such Financial Statements
include the assets, liabilities, revenues and expenses that
were directly related to the Elastic Business, including
expenses charged to the Elastic Business by NNI. Except as set
forth on SPA Exhibit C, the Financial Statements have been
prepared in accordance with United States generally accepted
accounting principles ("GAAP") consistently applied, are
complete and correct and present fairly the financial
condition and results of operations of the Elastic Business;
(x) Taxes. Except as set forth on SPA Exhibit C, Elastic has not
been required to file any federal, state, county, local or
foreign tax returns, and any returns prepared by it or on its
behalf are true and correct and all taxes have been timely
paid with exceptions not material to Elastic. Elastic has had
no employees prior to the Elastic Hire Date. Neither Elastic
nor any of its stockholders has ever filed (a) an election
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pursuant to Section 1362 of the Internal Revenue Code of 1986,
as amended (the "Code"), that Elastic be taxed as an S
Corporation or (b) consent pursuant to Section 341(f) of the
Code relating to collapsible corporations. With respect to any
tax periods ending prior to the date hereof, Elastic is, and
at all times has been, a member of the NNC-affiliated group
(the "Affiliated Group") for Federal income tax purposes, and
Elastic has no liability for any Federal, state or other tax
liability asserted by the Internal Revenue Service or any
other competent taxing authority or jurisdiction resulting
from membership in the Affiliated Group or the preparation of
the Affiliated Group's consolidated Federal income tax returns
or otherwise:
(xi) Environmental Matters. There is no pending or, to the
Knowledge of NNI, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding,
or investigation, inquiry or information request by any
governmental entity, relating to environmental matters
involving Elastic, including without limitation those arising
under the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Superfund Amendments
and Reauthorization Act of 1986, the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act,
or any state or local statute, regulation, ordinance, order or
decree relating to health, safety or the environment, which
violation would have a Company Material Adverse Effect;
(xii) Year 2000 Compliance. NNI represents and warrants that both
before and after January 1, 2000, Elastic's products shall
function, during the warranty period for such products,
without any material, service-affecting nonconformance to the
applicable specifications; and
(xiii) Disclosures. Neither this Agreement nor any Exhibit hereto,
nor any report, certificate or instrument furnished to Elastic
or its counsel in connection with the transactions
contemplated by this Agreement, when read together, contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances
under which they were made, not misleading, except that each
projection furnished in the Plan was prepared in good faith
based on reasonable assumptions and represents NNI's best
estimate of Elastic's future results based on information
available as of the date of the Plan.
Section 7.02. Limited Representations and Warranties of NNC. NNC hereby
represents and warrants to Elastic that:
(a) it owns the Included Intellectual Property and it has the right and
ability to transfer, assign and grant the rights and licenses conveyed under the
NNC - ENI
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Agreement;
(b) except for the Intellectual Property Rights relating to (i)
Components, (ii) the Third Party Agreements and (iii) the Desktop Software, and
except for the Excluded Intellectual Property, to its Knowledge the Transferred
Intellectual Property and the Licensed Intellectual Property comprise all
Intellectual Property Rights that are material to the Elastic Business as
conducted as of the Effective Date;
(c) except for the Patent Cross Licenses, the Third Party Licenses, the
Product Licenses, agreements relating to Desktop Software and employment
agreements, there is no other written agreement relating to the Included
Intellectual Property that is material to the Elastic Business;
(d) except as disclosed on Exhibit F, it has received no written notice of
any claims made during the past two (2) years that the conduct of the Elastic
Business infringes any Intellectual Property Right of any third person, and to
its Knowledge, no such claims are threatened;
(e) except as disclosed on Exhibit F, it has no Knowledge that the Elastic
Business, as conducted as of the Effective Date, infringes or misappropriates
any Intellectual Property Right of any third person; and
(f) except as disclosed on Exhibit F, it has received no written notice of
any claims, suits or actions against Elastic relating to the ownership,
licensing or enforceability of the Included Intellectual Property, and to its
Knowledge, no such claims, suits or actions are threatened.
Section 7.03. Limited Representations and Warranties of Elastic. Elastic
hereby represents and warrants to NNI that the source code and specifications
for the Elastic Etherloop Devices submitted by Elastic for deposit (or by
Elastic to NNI for deposit) into escrow as of the date hereof are the true and
correct source code and specifications for such products as of the date hereof
Section 7.04. Survival of Obligations. The representations and warranties
made by each Party in this Article VII shall continue in full force and effect
for the benefit of the other Parties for a period of eighteen (18) months from
and including the Effective Date, after which time each Party is released from
all obligations and liabilities hereunder in respect of such representations and
warranties, except with respect to claims made by any Party in writing prior to
the expiration of such period; provided, however, that Section 7.01(b)(x),
Taxes, shall continue in full force and effect for the benefit of Elastic for a
period of six (6) months beyond the statute of limitation applicable to such
tax.
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ARTICLE VIII
CONDITIONS OF CLOSING
Section 8.01. Conditions Precedent to NNI's Obligations. NNI's obligations
under this Agreement are subject to the satisfaction, as of the Effective Date,
of the following condition, unless waived by NNI in writing; Elastic shall have
delivered to NNI a stock certificate representing the Common Stock described in
Section 5.01.
ARTICLE IX
INDEMNIFICATION
Section 9.01. Indemnification by NNI. Subject to the provisions of this
Article IX and Section 11.10 hereof, NNI hereby agrees to pay and indemnify
fully, hold harmless and defend Elastic and its agents, directors, officers,
partners, employees, servants, consultants, representatives, successors and
assigns, from and against any and all damages, losses, deficiencies,
liabilities, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) that result from, relate to or arise out of any
and all actions, suits, proceedings, claims, demands, judgments or assessments
or legal, administrative, arbitration, governmental or other proceedings or
investigations (whether based on negligent acts or omissions, statutory
liability, strict liability or otherwise) arising out of, relating to or based
upon allegations of:
(a) any inaccuracy or breach of any representation or warranty, or any
nonfulfillment of any covenant or agreement of NNI contained in this Agreement
or the IPR Agreements, as applicable;
(b) any Retained Liability;
(c) any of NNI's Employment Liabilities; or
(d) any and all actions, suits, proceedings, claims, demands, judgments,
assessments, reasonable costs and expenses, incurred in investigating or
attempting to avoid the foregoing or in enforcing this indemnity.
Section 9.02. Indemnification by NNC. Subject to the provisions of this
Article IX and Section 11.10 hereof, NNC hereby agrees to pay and indemnify
fully, hold harmless and defend Elastic and its agents, directors, officers,
partners, employees, servants, consultants, representatives, successors and
assigns, from and against any and all damages, losses, deficiencies,
liabilities, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) that result from, relate to or arise out of any
and all actions, suits, proceedings, claims, demands, judgments or assessments
or legal, administrative, arbitration, governmental or other proceedings or
investigations (whether based on negligent acts or omissions, statutory
liability, strict liability or otherwise) arising out of, relating to or based
upon allegations of:
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(a) any inaccuracy or breach of any representation or warranty, or any
nonfulfillment of any covenant or agreement of NNC contained in this Agreement
or the IPR Agreements, as applicable; and
(b) an and all actions, suits, proceedings, claims, demands, judgments,
assessments, reasonable costs and expenses, incurred in investigating or
attempting to avoid the foregoing or in enforcing this indemnity.
Section 9.03. Indemnification by Elastic. From and after the Effective
Date, subject to the provisions of this Article IX and Section 11.10 hereof,
Elastic agrees to pay and indemnify fully, hold harmless and defend NNI and its
Affiliates, agents, directors, officers, partners, employees, servants,
consultants, representatives, successors and assigns, from and against any and
all damages, losses, deficiencies, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) that result from,
relate to or arise out of any and all actions, suits, proceedings, claims,
demands, judgments or assessments or legal, administrative, arbitration,
governmental or other proceedings or investigations (whether based on negligent
acts or omissions, statutory liability, strict liability or otherwise) arising
out of, relating to or based upon allegations of:
(a) any non-fulfillment of any covenant or agreement of Elastic contained
in this Agreement or the IPR Agreements, as applicable:
(b) any Assumed Liability;
(c) any of Elastic's Employment Liabilities; or
(d) any and all actions, suits, proceedings, claims, demands, judgments,
assessments, reasonable costs and expenses, incurred in investigating or
attempting to avoid the foregoing or in enforcing this indemnity.
Section 9.04. Method of Asserting Claims. The indemnified party
("Indemnitee") shall provide the indemnifying party ("Indemnitor") prompt notice
in writing upon the Indemnitee becoming aware of any action, suit, proceeding,
claim, demand, judgment or assessment for which the Indemnitor would be liable
pursuant to Section 9.01. Section 9.02 or Section 9.03 (a "Claim"), provided,
however, that any failure to give such prompt notice shall not relieve the
Indemnitor of its obligations hereunder. Indemnitor shall provide, at its sole
cost and expense, for the defense of the Claim with legal counsel reasonably
acceptable to Indemnitee. In addition, Indemnitee shall cooperate with
Indemnitor, at Indemnitor's expense, in the defense or settlement of the Claim.
Neither Indemnitee nor Indemnitor shall compromise or settle a Claim without the
other party's prior written consent, which consent shall not be unreasonably
withheld. Indemnitee may participate in the defense of a claim at its own
expense. Notwithstanding the foregoing, if Indemnitee, in its reasonable
discretion, determines that Indemnitor is not vigorously defending the Claim,
Indemnitee may hire additional legal counsel, at the sole cost and expense of
Indemnitor, to assume the defense of the Claim.
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Section 9.05 Coordination of Indemnification Rights.
(a) Indemnification Independent Right. Each right of a person to be
indemnified, defended and/or held harmless pursuant to this Article IX is
independent of such person's rights pursuant to any other Section of this
Agreement and shall not be affected or limited in any way by any event or
circumstance unless this Article IX expressly provides that such event or
circumstance shall affect or limit such right of such person, regardless of
whether or not such event or circumstance affects or limits any other right of
such person or any right of any other person under this Article IX.
(b) Right of Subrogation. In the event that an Indemnitee has a right of
recovery against any third party with respect to any damages in connection with
which a payment is made to such Indemnitee by an Indemnitor, then (i) such
Indemnitor shall, to the extent of such payment, be subrogated to all of the
rights of recovery of Indemnitee against such third party with respect to such
damages and (ii) Indemnitee shall execute all papers required and take all
action necessary to secure such rights, including, but not limited to, the
execution of such documents as are necessary to enable such Indemnitor to bring
suit to enforce such rights.
Section 9.06. Limitation of Liability for Consequential Damages. Except as
expressly provided in this Section 9.06, neither Party (including their
Subsidiaries, Affiliates, shareholders, officers, contractors, directors,
employees and agents) shall be liable for any special, indirect, incidental or
consequential damages of any kind, including without limitation, damages arising
from lost business, lost savings, lost data or lost profits, regardless of the
cause and whether arising in contract (including fundamental breach), tort
(including negligence), or otherwise, even if such party has been advised of the
possibility of such damages.
The foregoing exclusion of liability shall not apply where such damages
arise out of or in connection with (i) an allegation that any Licensed Product
or Improvement thereto infringes or violates any Intellectual Property Right of
a third party, to the extent that such damages are payable to a third party, or
(ii) disclosure of an Confidential Information, provided that:
(a) the Indemnitee permits the Indemnitor to have complete carriage and
control of the defense of the claim;
(b) the Indemnitee cooperates fully with the Indemnitor in all aspects
of the defense against the claim:
(c) such damages are either actual damages finally awarded by a court of
competent jurisdiction, or constitute a settlement approved in
writing by the Indemnitor;
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(d) the Indemnitor shall not be liable for any portion of such damages
arising from willful infringement by any party or constituting
treble damages (except that an Indemnitor shall be liable for
damages resulting from its own willful infringement);
(e) the Indemnitee promptly pays all damages other than those for which
the Indemnitor is responsible in accordance with the provisions of
this Article IX; and
(f) where the claim relates to a Licensed Product or Improvement as
described at (i) above, provided additionally that:
(1) the Indemnitee modifies the Licensed Product or Improvement
thereto within a reasonable time so as to avoid the allegation of
infringement or violation of Intellectual Property Rights, if
requested to do so by the Indemnitor; and
(2) the Licensed Product or Improvement thereto has not been
modified by any party after the Effective Date (A) so as to be a
combination of a Licensed Product or Improvement thereto, with other
hardware or software not constituting a Licensed Product or
Improvement thereto, where such infringement or violation would not
have arisen from the use of such Licensed Product or Improvement
thereto or portion thereof standing alone; (B) in such a manner that
the claim of infringement or violation of Intellectual Property
Rights would not have occurred but for such modification, or (C) to
be used in a manner or for a purpose not contemplated as of the
Effective Date.
Section 9.07. Overall Limitation of Liability of NNI and NNC under this
Contribution Agreement and the Payment Agreement. Notwithstanding anything
herein to the contrary, the combined, cumulative liability of NNI and NNC under
this Agreement, plus the liability of NNI under that certain Agreement Regarding
Payment for Shares ("Payment Agreement") dated as of the date hereof between NNI
and Texas Instruments Incorporated, a Delaware corporation ("TI"), shall not
exceed an amount equal to Twelve Million Six Hundred Thousand U.S. Dollars (US
$12,600,000) (the "Overall Indemnity Cap"). Elastic hereby agrees that NNI shall
reserve for the sole benefit of TI, an amount under the Overall Indemnity Cap
equal to the maximum amount payable to TI under the Payment Agreement, as may be
reduced from time to time pursuant to Section 6 thereof, notwithstanding
anything in this Contribution Agreement to the contrary, and notwithstanding any
prior claims for indemnification under this Contribution Agreement,
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ARTICLE X
CONTINUING COVENANTS
Section 10.01. Further Assurance and Cooperation. The parties shall from
time to time and at all times hereafter make, do and execute or cause and
procure to be made, done and executed all such further acts, deeds, conveyances,
consents and assurances as may be required to carry out the transfer of the
Elastic Assets, the Transferred Intellectual Property and the Transferred
Patents, and assumption of the Assumed Liabilities contemplated under this
Agreement, including without limitation, appropriate assignments (notarized if
required) for filing with any relevant government body or agency. If the parties
agree that an asset that was intended by both of them to be an Elastic Asset as
defined herein was inadvertently not listed on Schedule C or Schedule D hereto,
the parties shall take such actions as may be required to properly convey such
asset to Elastic hereunder, including without limitation execution of an
amendment to this Agreement pursuant to Section 11.03 hereof to amend the
schedules hereto.
Section 10.02. Future Advertising and Sales Activities. Elastic shall
identify itself as the owner of the Elastic Assets, and, as of the Effective
Date, shall use the trade names and trademarks of NNC and/or NNI only as
permitted pursuant to Section 10.3 of the NNC-ENI Agreement.
Section 10.03. Provision of Information to NNI. For so long as NNI owns at
least fifty percent (50%) of the outstanding capital stock of Elastic (assuming
conversion of any preferred shares). Elastic shall provide to the appropriate
officers of NNI any information, financial or otherwise, reasonably requested by
NNI (provided, however, that Elastic may require that NNI execute non-compete
and non-disclosure agreements relating to any such information).
Section 10.04. Noncompetition. For a period of thirty-six (36) months from
the closing of the Private Placement, each of NNI and NNC agrees that it,
directly or through any Affiliate, will not engage in the design, research,
development, manufacture and/or sale of Elastic Etherloop Devices; provided,
however, that nothing herein shall restrict NNC or NNI or their Affiliates from:
(i) being a distributor or reseller of Elastic Etherloop Devices pursuant
to an agreement with Elastic, or otherwise maintaining a strategic
relationship with Elastic.
(ii) having full use and enjoyment of Intellectual Property Rights that
NNC or NNI or their Affiliates have pursuant to license and/or technology
transfer agreements with Elastic, including without limitation licenses
that may be granted by Elastic to NNI pursuant to the TI Agreement;
(iii) acquiring through a stock purchase, asset purchase, merger or any
other form of acquisition, any entity that engages in the design,
research, manufacture, development, marketing, distribution or licensing
of any Elastic Etherloop
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Device, so long as that portion of the acquired entity that engages in
such activity is divested from the acquired entity within twelve (12)
months of such acquisition, and provided, that Elastic is offered an
opportunity to bid with respect to such divestiture, and that NNI does not
accept a bidder that offers a price lower than the price offered by
Elastic for such divestiture.
(iv) selling, transferring and/or licensing any of NNC's or NNI's
Intellectual Property Rights to companies that compete with Elastic,
except as otherwise provided in the IPR Agreements,
(v) (A) designing, researching, manufacturing, developing, marketing,
distributing and/or licensing the products known as InterProxy, and/
or
(B) designing, researching, manufacturing, developing, marketing,
distributing and/or licensing the products known as Billing Manager,
Port Manager and Spectrum Manager, as used in Other Products only,
and/or
(vi) competing with Elastic through the design, research, development,
manufacture and/or sale of high-speed access solutions that constitute
Other Products. Such products shall be considered "Other Products"
hereunder even if they contain some of the attributes, and use some of the
implementation techniques, of Elastic Etherloop Devices (so long as such
products do not contain and utilize all such attributes and techniques),
including without limitation, the 1 Meg Modem, wireless LAN products and
cable modems.
Section 10.05. Confidential Information. For the term of this Agreement
and for a period of ten (10) years thereafter, any Confidential Information of
one Party (hereinafter "Disclosing Party") received by the other Party
(hereinafter "Receiving Party") under this Agreement shall be used, disclosed,
or copied, only for the purposes of, and only in accordance with, this
Agreement. The Receiving Party shall use the same degree of care as it uses to
protect its own Confidential Information of a similar nature, but no less than
reasonable care, to prevent the unauthorized use, disclosure or publication of
the Confidential Information. Without limiting the generality of the foregoing,
the Receiving Party shall only disclose Confidential Information to its
employees, contractors, end users and third party sublicensees who need to
obtain access thereto consistent with such Party's rights under this Agreement.
The Receiving Party shall not make or have made any copies of Confidential
Information except those copies that are necessary for the purposes of this
Agreement; and the Receiving Party shall affix to any copies it makes of the
Confidential Information, all proprietary notices or legends affixed to the
Confidential Information as these appear on the copies of the Confidential
Information originally received from Disclosing Party. Neither Party shall be
bound by any obligation restricting the disclosure and use of Confidential
Information set forth in this Agreement, that:
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(a) is necessary to enable Elastic to provide specifications to
suppliers for the procurement of materials, parts, components and
assemblies for use in the manufacture, use or sale of Licensed
Products, or
(b) is necessary to enable end users purchasing, sublicensing or
otherwise acquiring Licensed Products to operate and maintain such
Licensed Products;
(c) was lawfully in the public domain prior to its disclosure, or
becomes publicly available other than through a breach of this
Agreement;
(d) was disclosed to the Receiving Party by a third party provided such
third party, or any other party from whom such third party receives
such information, is not in breach of any confidentiality obligation
in respect of such information;
(e) is disclosed when such disclosure is required pursuant to legal,
judicial, or administrative proceedings, or otherwise required by
law, subject to the Receiving Party using reasonable efforts to
provide prior notice to the Disclosing Party to allow it to seek
protective or other court orders; or
(f) is disclosed, pursuant to a standard confidentiality agreement, to a
potential purchaser, in connection with a possible acquisition of
Elastic or substantially all of its assets, through an asset
transaction, merger, stock transaction or otherwise.
Within twenty (20) business days of the Disclosing Party's request, the
Receiving Party shall return to the Disclosing Party all Confidential
Information and all copies thereof (or such copies or portion of the
Confidential Information as the Disclosing Party specifies), or, if so directed
by the Disclosing Party, shall immediately destroy such Confidential Information
and all copies thereof (or such copies or portion of the Confidential
Information as the Disclosing Party specifies) and shall certify such
destruction to the Disclosing Party. Each Party shall notify the other Party
immediately upon learning of any unauthorized disclosure of the other Party's
Confidential Information.
Section 10.06. Price for License and Sublicense. Elastic hereby agrees
that it will convey to NNI (i) a license to use the Multiport feature of the
Etherloop DSPS Chipsets and the Etherloop DSPS Chipset Derivatives in the
design, development, manufacture, use and sale of SE Etherloop Products, and
(ii) the right to further sublicense to the purchasers of such SE Etherloop
Products the right to use such SE Etherloop Products, and that, in the case
of (i) and (ii) above, it will do so at a price and upon terms no less favorable
than those enjoyed by comparable customers of Elastic for a comparable number of
ports and/or comparable quantities of such SE Etherloop Products, as applicable.
Capitalized terms used in this Section 10.06 have the meaning specified for such
terms in the TI Agreement.
ARTICLE XI
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MISCELLANEOUS
Section 11.01. Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to Elastic, at 6120 Windward Parkway, Suite 100, Alpharetta, Georgia
30005, Attention: President, or at such other address or addresses as may have
been furnished in writing by Elastic to the other Parties hereto, with a copy to
John A. Burgess, Esq., Hale and Dorr LLP, 60 State Street, Boston, Massachusetts
02109; or
If to NNI, at 200 Athens Way, Nashville, Tennessee 37228, Attention:
President, or at such other address or addresses as may have been furnished to
the other parties hereto in writing by NNI, with a copy to the Law Department at
the same address; or
If to NNC, at 8200 Dixie Road, Suite 100, Brampton, Ontario, L6T 5P6
Canada, Attention: Vice-President, Mergers & Acquisitions, or such other address
or addresses as may have been furnished to the other parties hereto in writing
by NNC, with a copy to the Law Department at the same address.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
Section 11.02. Entire Agreement. This Agreement and the IPR Agreements
embody the complete Agreement and understanding of Elastic and NNI with respect
to the subject matter hereof and thereof. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.
Section 11.03. Modification. No change or modification of this Agreement
shall be of any force unless such change or modification is in writing and has
been signed by the duly authorized representatives of the parties hereto.
Section 11.04. Waivers. No waiver of any breach of any of the terms of
this Agreement shall be effective unless such waiver is in writing and signed by
the party against which such waiver is claimed. No waiver of any breach shall be
deemed to be a waiver of any other or subsequent breach.
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Section 11.05. Severability. In the event that any provision of this
Agreement is found to be invalid, voidable or unenforceable, the Parties agree
that such invalidity, voidability or unenforceability shall affect neither the
validity of this Agreement nor the remaining portions thereof, and that the
provision in question shall be deemed to be replaced with a valid and
enforceable provision most closely reflecting the intent and purpose of the
original provision.
Section 11.06. Governing Law. This Agreement shall be governed by and be
construed in accordance with the laws of the State of Massachusetts, without
regard to principles of conflict of laws.
Section 11.07. Waiver of Jury Trial. THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.08. Limitation on Rights of Others. No person other than a
party hereto shall have any legal or equitable right, remedy or claim under or
in respect of this Agreement.
Section 11.09. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 11.10. Legal Fees. If either party is required to take any action
to enforce its rights under this Agreement, the prevailing party shall be
entitled to its reasonable expenses, including attorneys' fees, incurred in
connection with such action.
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IN WITNESS HEREOF, the parties hereto have duly executed this Agreement as
of the Effective Date.
NORTEL NETWORKS INC. ELASTIC NETWORKS INC.
By: /s/ Michael Pangia By:
------------------------------ --------------------------------
Name: Michael Pangia Name: Guy D. Gill
------------------------------ ------------------------------
Vice President, Finance, Sales
Title: and Business Development Title: President
------------------------------ -----------------------------
Nortel Networks Corporation, a Canadian corporation, executes this Agreement for
the limited purpose of agreeing to be bound by the provisions of Section 7.02,
Article IX and Section 10.04.
NORTEL NETWORKS CORPORATION
By: /s/ Michael Pangia
-------------------------------
Name: Michael Pangia
-------------------------------
Title: Attorney-in-fact
-------------------------------
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IN WITNESS HEREOF, the parties hereto have duly executed this Agreement as
of the Effective Date.
NORTEL NETWORKS INC. ELASTIC NETWORKS INC.
By: By: /s/ Guy D. Gill
------------------------------ --------------------------------
Name: Michael Pangia Name: Guy D. Gill
------------------------------ ------------------------------
Vice President, Finance, Sales
Title: and Business Development Title: President
----------------------------- -----------------------------
Nortel Networks Corporation, a Canadian corporation, executes this Agreement for
the limited purpose of agreeing to be bound by the provisions of Section 7.02,
Article IX and Section 10.04.
NORTEL NETWORKS CORPORATION
By:
-------------------------------
Name: Michael Pangia
-------------------------------
Title: Attorney-in-fact
------------------------------
20
