Exhibit 10.2
PATENT LICENSE AGREEMENT
between
LUCENT TECHNOLOGIES GRL CORPORATION
and
COMDIAL CORPORATION
Effective as of January 1, 2000
Relating to Business Communication Systems
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PATENT LICENSE AGREEMENT
TABLE OF CONTENTS
ARTICLE I - GRANTS OF LICENSES
1.01 Grant
1.02 Duration
1.03 Scope
1.04 Ability to Provide Licenses
1.05 Joint Inventions
1.06 Publicity
ARTICLE II - ROYALTY AND PAYMENTS
2.01 Royalty Calculation
2.02 Records and Adjustments
2.03 Reports and Payments
ARTICLE III - TERMINATION
3.01 Term
3.02 Breach
3.03 Voluntary Termination
3.04 Survival
ARTICLE IV - MISCELLANEOUS PROVISIONS
4.01 Disclaimer
4.02 Assignability
4.03 Addresses
4.04 Taxes
4.05 Choice of Law
4.06 Integration
4.07 Outside the United States
4.08 Dispute Resolution
4.09 Releases
4.10 Severability
4.11 Modification
APPENDIX A - DEFINITIONS
APPENDIX B - CUSTOMER RELATIONSHIP MANAGEMENT PATENTS
<PAGE>
PATENT LICENSE AGREEMENT
This Patent License Agreement ("Agreement") is between the following Parties:
LUCENT TECHNOLOGIES GRL CORPORATION, a Delaware corporation ("LUCENT-GRL"),
having an office at Suite 105, 14645 N.W. 77th Avenue, Miami Lakes, Florida
33014, and COMDIAL CORPORATION, a Delaware corporation ("COMDIAL"), having an
office at 1180 Seminole Trail, Charlottesville, Virginia 22906. This Agreement
is effective on January 1, 2000 (the "Effective Date"). The Parties agree as
follows:*
ARTICLE I
GRANTS OF LICENSES
1.01 Grant
(a) LUCENT-GRL grants to COMDIAL under LUCENT-GRL's PATENTS personal, worldwide,
nonexclusive and non-transferable (except as otherwise provided for in Section
4.02) licenses for:
LICENSED PRODUCTS
The licenses granted to COMDIAL under this Agreement do not include any licenses
for VOICE PROCESSING PRODUCTS, SPECIALIZED.
(b) COMDIAL grants to LUCENT-GRL under COMDIAL's PATENTS personal, nonexclusive,
worldwide, royalty-free and non-transferable (except as otherwise provided for
in Section 4.02) licenses for:
LICENSED PRODUCTS
1.02 Duration
All licenses granted herein under any patent shall terminate at the earlier of:
(i) termination of such licenses pursuant to Article III; or (ii) the expiration
of the entire unexpired term of such patent. However, upon commencement of the
LIMITED PERIOD or at the time of earliest filing specified in the definition of
LUCENT-GRL's PATENTS or COMDIAL's PATENTS (as the case may be), the grantor has
no rights, or less than full rights, with respect to any of its patents included
--------
*Any term in capital letters which is defined in the APPENDIX A - DEFINITIONS
shall have the meaning specified therein.
<PAGE>
within such definition, the license granted herein under such patent shall be
for as much of such term as, and to the maximum extent that, the grantor has the
right to grant, subsequent to commencement of the LIMITED PERIOD, at or after
such time of earliest filing.
1.03 Scope
(a) The licenses granted herein are licenses to (i) make, have made, use, lease,
sell and import LICENSED PRODUCTS; (ii) make, have made, use and import
machines, tools, materials and other instrumentalities, insofar as such
machines, tools, materials and other instrumentalities are involved in or
incidental to the development, manufacture, testing or repair of LICENSED
PRODUCTS which are or have been made, used, leased, owned, sold or imported by
the grantee of such license; and (iii) convey to any CUSTOMER of the grantee,
with respect to any LICENSED PRODUCT which is sold or leased by such grantee to
such CUSTOMER, rights to use and resell such LICENSED PRODUCTS as sold or leased
by such grantee (whether or not as part of a larger combination); provided,
however, that no rights may be conveyed to NON END-USER CUSTOMERS with respect
to any invention which covers (1) a combination of such LICENSED PRODUCT (as
sold or leased) with any other product unless the LICENSED PRODUCT embodies a
significant portion of the invention and the LICENSED PRODUCT has a fair market
value of at least seventy-five percent (75%) of the total fair market value of
the combination as resold by such a NON END-USER CUSTOMER, (2) a method or
process which is other than the inherent use of such LICENSED PRODUCT itself (as
sold or leased), or (3) a method or process involving the use of a LICENSED
PRODUCT to manufacture (including associated testing) any other product.
(b) Except as otherwise expressly provided in this Agreement, licenses granted
herein are not to be construed either (i) as consent by the grantor to any act
which may be performed by the grantee, or (ii) to include licenses to
contributorily infringe or induce infringement under U.S. law or a foreign
equivalent thereof.
(c) Except as otherwise expressly provided in Section 4.02(c) of this Agreement,
the grant of each license by the grantor hereunder includes the right to grant
sublicenses within the scope of such license to a Party's RELATED COMPANIES for
so long as they remain its RELATED COMPANIES. Any such sublicense may be made
effective retroactively, but not prior to the Effective Date hereof, nor prior
to the sublicensees becoming a RELATED COMPANY of such Party.
(d) Notwithstanding Section 1.03(c), no right is given to COMDIAL, without the
written consent of LUCENT-GRL, to grant a sublicense to a RELATED COMPANY of
COMDIAL under certain or all of LUCENT-GRL'S PATENTS, if said RELATED COMPANY
was a licensee under said certain or all LUCENT-GRL'S PATENTS for LICENSED
PRODUCTS at any time within a two (2)-year period prior to said company becoming
a RELATED COMPANY unless, however, said RELATED COMPANY ceased to be such a
licensee solely due to the termination of the relevant license agreement by
lapse of time (as opposed to voluntary termination or termination by breach).
1.04 Ability to Provide Licenses
(a) It is recognized that certain actions of the Parties to this Agreement may
limit their ability to provide licenses hereunder without constituting a breach.
In particular, (i) prior to the earliest filing of a patent application
disclosing an invention of a Party or its RELATED COMPANY, such Party or RELATED
COMPANY may assign to a third party the title to patents on such invention, or
(ii) prior to the execution of this Agreement, a Party or its RELATED COMPANY
may have limited by contract its ability to provide licenses hereunder with
respect to certain patents or technologies.
(b) A Party's failure to meet any obligation hereunder, due to the assignment of
title to any invention or patent, or the granting of any licenses, to the United
States Government or any agency or designee thereof pursuant to a statute or
regulation of, or contract with, such Government or agency, shall not constitute
a breach of this Agreement.
(c) Each Party represents and warrants that it has all rights (or rights from
third parties) necessary to enter into this Agreement and the power to grant the
rights described in this Agreement.
(d) Either Party may submit to the other Party no more than two (2) inquiries in
writing per calendar year, each inquiry requesting whether up to ten (10)
specifically identified patents fall within the definitions of this Agreement.
The Party to whom such an inquiry is submitted shall, within twenty (20)
business days, respond in writing as to whether each identified patent is
included within COMDIAL's PATENTS (if the recipient of the inquiry is COMDIAL)
or LUCENT-GRL's PATENTS (if the recipient of the inquiry is LUCENT-GRL).
1.05 Joint Inventions
(a) There are countries (not including the United States) which require the
express consent of all inventors or their assignees to the grant of licenses or
rights under patents issued in such countries for joint inventions.
(b) Each Party shall give such consent, or shall obtain such consent from its
RELATED COMPANIES, its employees or employees of any of its RELATED COMPANIES,
as required to make full and effective any such licenses and rights respecting
any joint invention granted to the grantee hereunder by such Party and by
another licensor of such grantee.
(c) Each Party shall take steps which are reasonable under the circumstances to
obtain from third parties whatever other consents are necessary to make full and
effective such licenses and rights respecting any joint invention purported to
be granted by it hereunder. If, in spite of such reasonable efforts, such Party
is unable to obtain the requisite consents from such third parties, the
resulting inability of such Party to make full and effective its purported grant
of such licenses and rights shall not be considered to be a breach of this
Agreement.
1.06 Publicity
Nothing in this Agreement shall be construed as conferring upon either Party or
its RELATED COMPANIES or sublicensees any right to include in advertising,
packaging or other commercial activities related to a LICENSED PRODUCT, any
reference to the other Party (or any of its RELATED COMPANIES or sublicensees),
its trade names, trademarks or service marks in a manner which would be likely
to cause confusion or to indicate that such LICENSED PRODUCT is in any way
certified by the other Party hereto or its RELATED COMPANIES or sublicensees.
ARTICLE II
ROYALTY AND PAYMENTS
2.01 Royalty Calculation
(a) In part payment for the grant of rights hereunder by LUCENT-GRL to COMDIAL
and in addition to the fees specified in Section 2.01(b), COMDIAL shall pay to
LUCENT-GRL a non-refundable sum of six hundred fifty thousand United States
dollars (U.S. $650,000.00) of which only one hundred fifty thousand United
States dollars (U.S. $150,000.00) is creditable with respect to royalties owed
under Sections 2.01(b) and 2.03(b) for the calendar year 2000. This payment is
due to LUCENT-GRL prior to thirty (30) days after the EXECUTION DATE.
(b) In partial consideration for the licenses and rights exchanged herein for
the LUCENT-GRL'S PATENTS and for the convenience of the Parties, COMDIAL has
elected to and shall pay to LUCENT-GRL in United States dollars for each
calendar year beginning January 1, 2000, a royalty amount calculated at a
royalty rate of three hundred seventy-five thousandths of one percent (0.375%)
of the consolidated sales of COMDIAL and its RELATED COMPANIES ("Consolidated
Sales") during such calendar year (or portion thereof) during which this
Agreement is in effect, as reported in its Form 10-K for such calendar year
filed with the Securities and Exchange Commission ("SEC"). As an example,
Consolidated Sales for the year 1998 as reported in the SEC Form 10K-405 filed
on March 24, 1999 were one hundred twenty-eight million nine hundred
seventy-seven thousand U.S. dollars ($128,977,000.00 U.S.). Obligations to pay
accrued royalties shall survive termination of licenses and rights pursuant to
Article III.
(c) When a company ceases to be a RELATED COMPANY of COMDIAL, royalties which
have accrued with respect to such company, but which have not been paid, shall
become payable with COMDIAL's next scheduled royalty payment.
(d) Notwithstanding any other provisions hereunder, royalties shall accrue and
be payable only to the extent that enforcement of COMDIAL's obligation to pay
such royalty would not be prohibited by applicable law.
2.02 Records and Adjustments
(a) LUCENT-GRL will credit to COMDIAL the amount of any overpayment of royalties
made in error which is identified and fully explained in a written notice to
LUCENT-GRL delivered within two (2) years after the due date of the payment
which included such alleged overpayment, provided that LUCENT-GRL is able to
verify the existence and extent of the overpayment.
(b) No refund, credit or other adjustment of royalty payments shall be made by
LUCENT-GRL except as provided in this Section 2.02. Rights conferred by this
Section 2.02 shall not be affected by any statement appearing on any check or
other document, except to the extent that any such right is expressly waived or
surrendered by a Party having such right and signing such statement.
(c) Upon termination of this Agreement or of all the rights and licenses granted
to COMDIAL herein, accrued royalties shall be paid within thirty (30) days of
the date of termination. LUCENT-GRL shall have the right through its accredited
auditors to make an examination, during normal business hours, of those records
that are, under recognized accounting practices, used in the preparation of SEC
filings and that bear upon the amount of royalty payable hereunder. Adjustment
shall be made within sixty (60) days of the completion of such audit to
compensate for any errors or omissions disclosed by such examination. If the
adjustment, if any, reflects an underpayment by COMDIAL in excess of ten percent
(10%) of the amount of royalty payable as determined by such auditors, COMDIAL
shall pay the costs of such audit. Otherwise, the audit shall be at LUCENT-GRL's
expense.
2.03 Reports and Payments
(a) COMDIAL shall furnish to LUCENT-GRL, simultaneously with its filing with the
SEC, a copy of each Form 10-Q and each Form 10-K filed during the term of this
Agreement. Such copy shall be sent by first class mail, postage prepaid, to
LUCENT-GRL at the address specified in Section 4.03.
(b) The annual royalty amount set forth in Section 2.01(b) shall accrue upon the
recognition of revenues by COMDIAL and/or any of its RELATED COMPANIES for
transactions that would be included in Consolidated Sales and shall be payable
quarterly. Such quarterly royalty amount shall be paid by COMDIAL in United
States dollars to LUCENT-GRL at the address specified in Section 4.03 on or
before the date on which COMDIAL files with the SEC its quarterly report on Form
10-Q (as to the first three (3) quarters of each calendar year) and its annual
report as to the last quarter of each calendar year, beginning with the Form
10-Q filed by COMDIAL with respect to the second quarter of the calendar year
2000. For the first three (3) quarters of each calendar year, such quarterly
royalty amount shall be calculated at a royalty rate of three hundred
seventy-five thousandths of one percent (0.375%) of the Consolidated Sales
during such quarter, as reported in the respective Form 10-Q filed by COMDIAL
with the SEC for such quarter. For the fourth quarter of each calendar year,
such quarterly royalty amount shall be an amount equal to a royalty rate of
three hundred seventy-five thousandths of one percent (0.375%) of the
Consolidated Sales during such calendar year, as reported in the respective Form
10-K filed by COMDIAL with the SEC, less the quarterly royalty payments made for
the prior three (3) quarters of that calendar year. However, the Parties agree
that for their convenience the quarterly royalty payment for the first quarter
of calendar year 2000 shall be one hundred fifty thousand United States dollars
($150,000.00 U.S.).
(c) Any conversion to United States dollars shall be at the prevailing rate for
bank cable transfers as quoted for the last day of such quarterly period by
leading United States banks in New York City dealing in the foreign exchange
market.
(d) Overdue payments hereunder shall be subject to a late payment charge for the
period of time such payment is delinquent calculated at an annual rate of one
percentage point (1%) over the prime rate or successive prime rates in effect in
New York City during delinquency. If the amount of such charge exceeds the
maximum permitted by law, such charge shall be reduced to such maximum.
ARTICLE III
TERMINATION
3.01 Term
This Agreement shall terminate upon termination of the LIMITED PERIOD unless
otherwise terminated pursuant to this Article III. Any partial termination of
rights under this Article III will not affect payments due under Section 2.01.
3.02 Breach
In the event of a breach of this Agreement by either Party, the other Party may,
in addition to any other remedies that it may have, at any time terminate any or
all licenses and rights granted by it hereunder by not less than two (2) months
written notice specifying such breach, unless within the period of such notice
all breaches specified therein shall have been remedied. Exercise of the right
of either Party to terminate any or all rights and licenses pursuant to this
Section 3.02 shall be subject to challenge in accordance with Section 4.08, in
which case the effectiveness of such termination shall be suspended (and the
Parties' obligations shall continue) until determined by the Dispute Resolution
process provided for in Section 4.08 provided, however, that should the
breaching Party fail to meet its royalty obligations, such termination shall be
effective as of such prior written notice of breach.
3.03 Voluntary Termination
By written notice to the other Party, either Party may voluntarily terminate all
or a specified portion of the licenses and rights granted to it hereunder. Such
notice shall specify the effective date (not more than six (6) months from the
giving of said notice) of such termination and shall clearly specify any
affected patent, invention or product.
3.04 Survival
(a) If a company ceases to be a RELATED COMPANY of a Party, licenses and rights
granted hereunder with respect to patents of such company that are included in
LUCENT-GRL's PATENTS or COMDIAL's PATENTS (as the case may be) shall not be
affected by such cessation.
(b) Any termination of licenses and rights of a Party under the provisions of
this Article III shall not affect such Party's licenses, rights and obligations
with respect to any LICENSED PRODUCT made prior to such termination, and shall
not affect the other Party's licenses and rights (and obligations related
thereto) hereunder.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.01 Disclaimer
Neither Party nor any of its RELATED COMPANIES makes any representations,
extends any warranties of any kind, assumes any responsibility or obligations
whatever, or confers any right or license by implication, estoppel or otherwise,
other than the licenses, rights and warranties herein expressly granted.
4.02 Assignability
(a) Each Party has entered into this Agreement in contemplation of personal
performance by the other Party and it is each Party's intention that a transfer
of its grantee's licenses or rights not occur, except as provided for in this
Section 4.02, without the grantor's express written consent.
(b) Except as otherwise provided for in this Agreement, neither this Agreement
nor any licenses or rights hereunder, in whole or in part, shall be assignable
or transferable by either Party (by operation of law or otherwise) without the
other Party's express written consent. Any such purported assignment or transfer
of this Agreement or licenses or rights hereunder by either Party without the
other Party's necessary consent shall be void (without affecting any other
licenses or rights hereunder).
(c) Notwithstanding Sections 4.02(a) and (b), any or all of LUCENT-GRL's rights,
title and interest in this Agreement and any or all licenses and rights granted
to it hereunder may be assigned without COMDIAL's consent to any of its RELATED
COMPANIES at any time and for any reason or to SPINCO (before or after its
divestiture from Lucent Technologies Inc.) or to any successor to all or a
portion of its business that is the subject matter of this Agreement. If
LUCENT-GRL so assigns its rights, the terms of this Agreement shall remain the
same and be enforceable by COMDIAL. If Lucent Technologies Inc. divests a
portion of its business and such divested business continues operation as a
separately identifiable business, then the licenses granted hereunder to
LUCENT-GRL may be sublicensed to such divested separate business without the
consent of COMDIAL, but only (i) until the termination of this Agreement
pursuant to Article III; (ii) to the extent and for the time the divested
business functions as a separately identifiable business, and (iii) for products
and services of the kind provided by the divested business prior to its
divestiture and not to any products or services of any entity which acquires the
divested business. This Section 4.02(c) shall apply regardless of whether the
business is divested by a sale of assets or as a sale of a legal entity (e.g.,
sale of a RELATED COMPANY). The sublicensing rights specified herein shall
include any business whose acquisition is after the Effective Date of this
Agreement, provided the acquisition of such business was not a sham for the
purpose of extending rights to the acquired (and then divested) business. In
particular, the licenses granted hereunder to LUCENT-GRL shall be, solely at
LUCENT-GRL's option, sublicensed to SPINCO upon its divestiture from Lucent
Technologies Inc. provided, however, that the sublicense to SPINCO will not
include those ones of COMDIAL's PATENTS that issue on any application filed
(except those applications having a priority date prior to the EXECUTION DATE)
in any or all countries of the world at any time subsequent to the EXECUTION
DATE.
(d) Notwithstanding Sections 4.02(a) and (b), COMDIAL may assign all of its
rights (except as provided herein) and obligations existing or arising under
this Agreement to any successor to all or a portion of its business that is the
subject matter of this Agreement as the result of an acquisition or merger, with
no further right to assign, which successor shall thereafter be deemed
substituted for, and in lieu of, COMDIAL as a Party hereto, subject to written
acceptance by the assignee, provided that COMDIAL may so assign upon written
notice to LUCENT-GRL if: (i) LUCENT-GRL determines that such assignment, if
made, or anticipation of such assignment, would have or had no effect on a
license arrangement between itself and such successor (or any entities relating
to such successor) in effect at any time within a two (2)-year period prior to
such assignment, (ii) only products made by or for COMDIAL prior to the
acquisition or merger will be licensed under this Agreement and not products of
the acquiring entity, except those products of the acquiring entity, its parent
company, and such parent company's other SUBSIDIARIES that are equivalent to
those products made by or for COMDIAL prior to such acquisition or merger, and
(iii) solely for purposes of Section 1.05(b), 1.06, 3.04(a), and the definition
of COMDIAL's PATENTS, RELATED COMPANIES of COMDIAL shall be deemed to include
any parent company of which the acquiring entity is a SUBSIDIARY and such parent
company's other SUBSIDIARIES as of the effective date of the assignment. If
COMDIAL so assigns its rights, the terms of this Agreement shall remain the same
and be enforceable by LUCENT-GRL. The rights so assigned by COMDIAL will not
include any and all rights and licenses under CUSTOMER RELATIONSHIP MANAGEMENT
PATENTS granted to COMDIAL pursuant to this Agreement.
(e) In the event that COMDIAL assigns such rights and obligations to any
acquiring entity pursuant to Section 4.02(d) ("Assignee"), the provisions of
Sections 2.01(b), 2.02(c) and 2.03(a) and (b) shall not apply and shall be
replaced with the following provisions. The term "Reportable Product" shall mean
(i) any COMDIAL product identical to or equivalent to products whose sale was
included in Consolidated Sales prior to such acquisition or merger and (ii) any
product of the Assignee, of its RELATED COMPANIES, of any parent company of
which the Assignee is a SUBSIDIARY, and of such parent company's other
SUBSIDIARIES, that is equivalent to any such COMDIAL product, whether or not
such a product meets the definition of LICENSED PRODUCT. The term "Assignee
Gross Revenues" shall mean those gross revenues recognized for any and all
Reportable Products.
2.01(b) For the licenses and rights exchanged herein under LUCENT-GRL'S
PATENTS and for the convenience of the Parties, Assignee has elected to
and shall pay to LUCENT-GRL in United States Dollars a sum calculated at
a royalty rate of three hundred seventy-five thousandths of one percent
(0.375%) applied to quarterly Assignee Gross Revenues recognized for each
quarterly period during which this Agreement is effective for any time,
beginning with the quarterly period during which the assignment of this
Agreement by COMDIAL to Assignee occurs. Royalty shall accrue upon the
invoicing of the sale or lease for any and all such Reportable Products.
Upon termination of this Agreement or of all the rights and licenses
granted to COMDIAL herein, accrued royalties shall be paid within thirty
(30) days of the date of termination.
2.02(c) Assignee shall keep full, clear and accurate records with respect
to Assignee Gross Revenues and shall furnish any information which
LUCENT-GRL may reasonably prescribe from time to time to enable
LUCENT-GRL to ascertain the proper royalty due hereunder. Assignee shall
retain such records with respect to Assignee Gross Revenues for at least
seven (7) years from the invoicing of the sale or lease for any and all
such Reportable Products. LUCENT-GRL shall have the right through its
accredited auditors to make an examination, during normal business hours,
of all records and accounts bearing upon the amount of royalty payable to
it hereunder. Adjustment shall be made within sixty (60) days of the
completion of such audit to compensate for any errors or omissions
disclosed by such examination. If the adjustment, if any, reflects an
underpayment by COMDIAL in excess of ten percent (10%) of the amount of
royalty payable as determined by such auditors, COMDIAL shall pay the
costs of such audit. Otherwise, the audit shall be at LUCENT-GRL's
expense.
2.03(a) Within thirty (30) days after the end of each quarterly period
ending on March 31st, June 30th, September 30th, or December 31st during
which this Agreement is effective for any time, commencing with the
quarterly period during which the assignment of this Agreement by COMDIAL
to Assignee occurs, Assignee shall furnish to LUCENT-GRL at the address
specified in Section 4.03 a statement certified by a responsible official
of Assignee showing, in a manner acceptable to LUCENT-GRL, Assignee Gross
Revenues.
2.03(b) Within such thirty (30) days, Assignee shall pay in United States
dollars to LUCENT-GRL at the address specified in Section 4.03 the
royalties payable in accordance with such statement.
4.03 Addresses
(a) Any notice or other communication hereunder shall be sufficiently given to
COMDIAL when sent by certified mail addressed to Comdial Corporation, 1180
Seminole Trail, Charlottesville, Virginia 22906, Attention: President, with a
copy to Robert E. Stroud, c/o McGuire, Woods, Battle & Boothe LLP, Court Square
Building, 310 Fourth Street, N.E., Suite 300, Charlottesville, Virginia 22902 or
to LUCENT-GRL when sent by certified mail addressed to Contract Administrator,
Intellectual Property Organization, Lucent Technologies GRL Corporation, Suite
105, 14645 N.W. 77th Avenue, Miami Lakes, Florida 33014, United States of
America. Changes in such addresses may be specified by written notice.
(b) Payments by COMDIAL shall be made to LUCENT-GRL at Lucent Technologies GRL
Corporation, General Post Office, P.O. Box 6219, New York, New York, 10087-6219,
United States of America. Alternatively, payments to LUCENT-GRL may be made by
bank wire transfers to LUCENT-GRL's account at Chase Manhattan Bank: Lucent
Technologies GRL Corporation, Account No. 323857752, Swift Code: CHASUS33, ABA
Code: 021000021. Changes in such address or account may be specified by written
notice.
4.04 Taxes
(a) In anticipation of payments being received from a U.S. corporation and under
current law as of the Effective Date, the Parties do not contemplate that any
taxes (except income taxes), duties, levies, or similar charges will be imposed
as a result of the existence or operation of this Agreement. However, in the
event such charges are imposed, COMDIAL agrees that it shall bear all such
charges (and any related interest and penalties), however designated, imposed as
a result of the existence or operation of this Agreement, except (i) any tax
imposed upon LUCENT-GRL in a jurisdiction other than the United States if such
tax is allowable as a credit against the United States income taxes of
LUCENT-GRL; and (ii) any net income tax imposed upon LUCENT-GRL by the United
States or any governmental entity within the United States (the fifty (50)
states and the District of Columbia). In order for the exception contained in
(i) to apply, COMDIAL must furnish LUCENT-GRL with evidence issued by the taxing
authority in such jurisdiction that such tax has been paid. The evidence must be
furnished within thirty (30) days of issuance by the taxing authority and must
be sufficient to satisfy United States taxing authorities that such tax has been
paid.
(b) If COMDIAL is required to bear a tax, duty, levy or similar charge pursuant
to Section 4.04(a) above, COMDIAL shall pay such tax, duty, levy or similar
charge and any additional amounts as are necessary to ensure that the net
amounts received by LUCENT-GRL hereunder after all such payments or withholdings
equal the amounts to which LUCENT-GRL is otherwise entitled under this Agreement
as if such tax, duty, levy or similar charge did not apply.
4.05 Choice of Law
The Parties are familiar with the principles of New York law, and desire and
agree that the law of New York (exclusive of its conflict of laws provision)
shall apply in any dispute arising with respect to this Agreement.
4.06 Integration
This Agreement, together with a letter of assurance by Lucent Technologies Inc.
and a letter of assurance by COMDIAL, set forth the entire agreement and
understanding between the Parties as to the subject matter hereof and merges all
prior discussions between them. However, the Parties agree that nothing herein
or in such letters of assurance is intended to bind Lucent Technologies Inc. in
any manner, except as to the truth of the statements in its such letter. Lucent
Technologies Inc. has no obligations or duties pursuant to the letters of
assurance, this Agreement, and the subject matter hereof. Neither of the Parties
shall be bound by any warranties, understandings or representations with respect
to such subject matter other than as expressly provided herein or in a writing
signed with or subsequent to execution hereof by an authorized representative of
the Party to be bound thereby.
4.07 Outside the United States
(a) There are countries in which the owner of an invention is entitled to
compensation, damages or other monetary award for another's unlicensed
manufacture, sale, lease, use or importation involving such invention prior to
the date of issuance of a patent for such invention but on or after a certain
earlier date, hereinafter referred to as the invention's "protection
commencement date" (e.g., the date of publication of allowed claims or the date
of publication or "laying open" of the filed patent application). In some
instances, other conditions precedent must also be fulfilled (e.g., knowledge or
actual notification of the filed patent application). The Parties agree that (i)
an invention which has a protection commencement date in any such country may be
used in such country pursuant to the terms of this Agreement on and after any
such date, and (ii) all such conditions precedent are deemed satisfied by this
Agreement. There may be countries in which a Party hereto may have, as a
consequence of this Agreement, rights against infringers of the other Party's
patents licensed hereunder. Each Party hereby waives any such right it may have
by reason of any third party's infringement or alleged infringement of such
patents.
(b) COMDIAL hereby agrees to register or cause to be registered, to the extent
required by applicable law, and without expense to LUCENT-GRL or any of its
RELATED COMPANIES, any agreements wherein sublicenses are granted by it under
LUCENT-GRL's PATENTS. COMDIAL hereby waives any and all claims or defenses,
arising by virtue of the absence of such registration, that might otherwise
limit or affect its obligations to LUCENT-GRL.
(c) LUCENT-GRL hereby agrees to register or cause to be registered, to the
extent required by applicable law, and without expense to COMDIAL or any of its
RELATED COMPANIES, any agreements wherein sublicenses are granted by it under
COMDIAL'S PATENTS. LUCENT-GRL hereby waives any and all claims or defenses,
arising by virtue of the absence of such registration, that might otherwise
limit or affect its obligations to COMDIAL.
4.08 Dispute Resolution
(a) If a dispute arises out of or relates to this Agreement, or the breach,
termination or validity thereof, the Parties agree to submit the dispute to a
sole mediator selected by the Parties or, at any time at the option of a Party,
to mediation by the American Arbitration Association ("AAA"). If not thus
resolved, it shall be referred to a sole arbitrator selected by the Parties
within thirty (30) days of the mediation, or in the absence of such selection,
to AAA arbitration which shall be governed by the Federal Arbitration Act.
(b) Any award made (i) shall be a bare award limited to a holding for or against
a Party and affording such remedy as is deemed equitable, just and within the
scope of the Agreement; (ii) shall be without findings as to issues (including
but not limited to patent validity and/or infringement) or a statement of the
reasoning on which the award rests; (iii) may in appropriate circumstances
(other than patent disputes) include injunctive relief; (iv) shall be made
within four (4) months of the appointment of the arbitrator; (v) may be entered
in any court; and (vi) shall be binding.
(c) The requirement for mediation and arbitration shall not be deemed a waiver
of any right of termination under this Agreement but the exercise of such right
is subject to the provisions of Section 3.02. The arbitrator is not empowered to
act or make any award other than based solely on the rights and obligations of
the Parties prior to any such termination.
(d) The arbitrator shall be knowledgeable in the legal and technical aspects of
this Agreement and shall determine issues of arbitrability but may not limit,
expand or otherwise modify the terms of this Agreement.
(e) The place of mediation and arbitration shall be Washington, D.C.
(f) Each Party shall bear its own expenses, except those related to the
compensation and expenses of the mediator and arbitrator which shall be borne
equally.
(g) A request by a Party to a court for interim measures shall not be deemed a
waiver of the obligation to mediate and arbitrate.
(h) The arbitrator shall not have authority to award punitive or other damages
in excess of compensatory damages and each Party irrevocably waives any claim
thereto.
(i) The Parties, their representatives, other participants and the mediator and
arbitrator shall hold the existence, content and result of mediation and
arbitration in confidence.
4.09 Releases
(a) Subject to Section 4.09(c) and to the receipt by LUCENT-GRL of the payment
by COMDIAL pursuant to Section 2.01(a), LUCENT-GRL, for itself and for its
present RELATED COMPANIES (i.e., RELATED COMPANIES as of the Effective Date),
hereby releases COMDIAL and its present RELATED COMPANIES, all of the present
and former officers and directors of COMDIAL and its present RELATED COMPANIES,
and all CUSTOMERS under any claim that solely LUCENT-GRL or any of its present
RELATED COMPANIES has for patent infringement arising prior to the Effective
Date for which the rights and licenses expressly granted under this Agreement to
COMDIAL and its present RELATED COMPANIES would be a complete defense to such
claim had this Agreement been in effect at the time such patent infringement
arose.
(b) Subject to Section 4.09(c), COMDIAL, for itself and for its present RELATED
COMPANIES, hereby releases LUCENT-GRL and its present RELATED COMPANIES, all of
the present and former officers and directors of LUCENT-GRL and its present
RELATED COMPANIES, and all CUSTOMERS under any claim that solely COMDIAL or any
of its present RELATED COMPANIES has for patent infringement arising prior to
the Effective Date for which the rights and licenses expressly granted under
this Agreement to LUCENT-GRL and its present RELATED COMPANIES would be a
complete defense to such claim had this Agreement been in effect at the time
such patent infringement arose. For the purposes of this Section 4.09(b),
RELATED COMPANIES of LUCENT-GRL also includes Lucent Technologies Inc. and its
SUBSIDARIES as they formerly existed as part of AT&T Corp.
(c) The releases in Sections 4.09(a) and (b) shall not operate to release any
CUSTOMER of COMDIAL or any of its RELATED COMPANIES who is a party to any
lawsuit involving allegations of patent infringement, patent invalidity or
patent unenforceability in which LUCENT-GRL or any of its RELATED COMPANIES is
an adverse party as of two weeks prior to the EXECUTION DATE.
4.10 Severability
If any paragraph or provision of this Agreement shall be deemed void or invalid
as a matter of law, the remaining paragraphs or provisions of this Agreement
shall nevertheless remain in full force and effect and be interpreted to the
extent possible to effect the overall intention of the Parties at the EXECUTION
DATE of this Agreement.
4.11 Modification
This Agreement may not be amended, modified or altered in any way, except in a
writing identified as such and signed by both Parties hereto.
<PAGE>
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
in duplicate originals by its duly authorized representatives on the respective
dates entered below.
LUCENT TECHNOLOGIES GRL CORPORATION
By: /s/ G. G. Partlow
-------------------------------
G. G. Partlow
Chairman of the Board
Date: March 17, 2000
--------------------------------
COMDIAL CORPORATION
By: /s/ William G. Mustain
--------------------------------------
Name: William G. Mustain
--------------------------------------
Title: Chairman/President/CEO
--------------------------------------
Date: March 22, 2000
--------------------
THIS AGREEMENT DOES NOT BIND OR OBLIGATE EITHER PARTY
IN ANY MANNER UNLESS DULY EXECUTED BY AUTHORIZED
REPRESENTATIVES OF BOTH PARTIES.
