<PAGE> 1
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1999
REGISTRATION NO. 333-76385
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
PARADYNE CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3670 52-0891723
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification Number)
incorporation or organization)
</TABLE>
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8545 126TH AVENUE NORTH
LARGO, FLORIDA 33773
(727) 530-2000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
JAMES L. SLATTERY
SENIOR VICE PRESIDENT, CHIEF LEGAL AND INTELLECTUAL PROPERTY OFFICER AND
CORPORATE SECRETARY
PARADYNE CORPORATION
8545 126TH AVENUE NORTH
LARGO, FLORIDA 33773
(727) 530-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:
<TABLE>
<S> <C>
KENNETH L. GUERNSEY BRYAN E. DAVIS
SUZANNE SAWOCHKA HOOPER ADAM V. BATTANI
LAURA A. BEREZIN ASHLEY E. HUFFT
PAUL D. HUIE ALSTON & BIRD LLP
COOLEY GODWARD LLP ONE ATLANTIC CENTER
FIVE PALO ALTO SQUARE 1201 WEST PEACHTREE STREET
3000 EL CAMINO REAL ATLANTA, GA 30309-3424
PALO ALTO, CA 94306 (404) 881-7000
(650) 843-5000
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement
---------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) of the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
THIS AMENDMENT NO. 1 TO THE FORM S-1 REGISTRATION STATEMENT IS BEING FILED
FOR THE SOLE PURPOSE OF FILING ADDITIONAL EXHIBITS.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by the Registrant in
connection with the sale of the common stock being registered. All of the
amounts shown are estimates, except for the SEC registration fee, the NASD
filing fee and the Nasdaq National Market application fee.
<TABLE>
<CAPTION>
AMOUNT TO
BE
PAID
<S> <C>
Registration fee............................................ *
NASD filing fee............................................. *
Nasdaq Stock Market Listing Application fee................. *
Blue sky qualification fees and expenses.................... *
Printing and engraving expenses............................. *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Transfer agent and registrar fees........................... *
Miscellaneous............................................... *
Total............................................. *
</TABLE>
- ---------------
* This information shall be provided by amendment.
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its Directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act.
The Registrant's Certificate of Incorporation and Bylaws include provisions
to (i) eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty to the extent permitted by
Section 102(b)(7) of the General Corporation Law of Delaware (the "Delaware
Law") and (ii) require the Registrant to indemnify its Directors and officers to
the fullest extent permitted by Section 145 of the Delaware Law, including
circumstances in which indemnification is otherwise discretionary. Pursuant to
Section 145 of the Delaware Law, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are,
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as Directors and officers.
These provisions do not eliminate the Directors' duty of care, and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware Law. In addition,
each Director will continue to be subject to liability for breach of the
Director's duty of loyalty to the Registrant, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the Director believes to be contrary to the best
interests of the Registrant or its stockholders, for any transaction from which
the Director derived an improper personal
II-1
<PAGE> 3
benefit, for acts or omissions involving a reckless disregard for the Director's
duty to the Registrant or its stockholders when the Director was aware or should
have been aware of a risk of serious injury to the Registrant or its
stockholders, for acts or omissions that constitute an unexcused pattern of
inattention that amounts to an abdication of the Director's duty to the
Registrant or its stockholders, for improper transactions between the Director
and the Registrant and for improper distributions to stockholders and loans to
Directors and officers. The provision also does not affect a Director's
responsibilities under any other law, such as the federal securities law or
state or federal environmental laws.
At present, there is no pending litigation or proceeding involving a
Director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or Director.
The Registrant has an insurance policy covering the officers and Directors
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since June 14, 1996, Registrant has issued and sold the following
securities, which numbers do not reflect the split to be effected
prior to this offering:
(1) On June 14, 1996, Registrant issued 1,000 shares (not accounting
for the 17,000 for 1 split effected on January 7, 1997 or the 3 for 1 split
effected on April 24, 1997) in a private placement of its common stock at a
purchase price of $1.00 per share, for cash in the aggregate amount of
$1,000, to Communication Partners, L.P. pursuant to the divestiture of
Paradyne.
(2) As of March 31, 1999, Registrant has sold and issued 1,516,463
shares of its common stock to employees, officers and directors pursuant to
direct issuances and exercises of options under its 1996 Equity Incentive
Plan.
The sale of the above securities was deemed to be exempt from registration
under the Securities Act in reliance upon Section 4(2) of the Securities Act or
Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by
an issuer not involving any public offering or transactions pursuant to
compensation benefit plans and contracts relating to compensation as provided
under such Rule 701. The recipients of securities in each such transaction
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof, and
appropriate legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access, through their relationships
with the Registrant, to information about the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
1.1* -- Form of Underwriting Agreement.
3.1* -- Certificate of Incorporation.
3.2* -- Bylaws.
3.3* -- Merger Agreement.
4.1 -- Reference is made to Exhibits 3.1, 3.2 and 3.3.
4.2* -- Specimen Stock Certificate.
5.1* -- Opinion of Cooley Godward LLP.
10.1* -- Amended and Restated 1996 Equity Incentive Plan.
10.2* -- Form of Stock Option Agreement pursuant to the 1996 Equity
Incentive Plan.
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
10.3* -- Form of Early Exercise Stock Purchase Agreement.
10.4* -- 1999 Employee Stock Purchase Plan and related offering
documents.
10.5* -- 1999 Non-Employee Director's Stock Option Plan.
10.6** -- Loan and Security Agreement between Paradyne and Bank of
America NT&SA, dated July 31, 1996.
10.7** -- Amended and Restated Subordinated Revolving Promissory Note
between Paradyne and Paradyne Partners, L.P., dated October
16, 1998.
10.8** -- Lease Agreement between Paradyne and Shav Associates, dated
October 8, 1996.
10.9 -- Sublease Agreement between Paradyne and GlobeSpan
Semiconductor, Inc. dated December 10, 1997.
10.10 -- Amendment to Sublease Agreement between Paradyne and
GlobeSpan Semiconductor, Inc. dated January 1, 1999.
10.11** -- Lease Agreement between Paradyne and Townsend Property Trust
Lease, dated June 27, 1997.
10.12** -- Key Employee Agreement between Paradyne and Thomas Epley,
dated August 1, 1997.
10.13** -- Employment Agreement between Paradyne and Andrew May, dated
December 3, 1996.
10.14** -- Key Employee Agreement between Paradyne and Patrick Murphy,
dated August 1, 1996.
10.15** -- Key Employee Agreement between Paradyne and James Slattery,
dated August 1, 1996.
10.16 -- Indemnification Agreement between Paradyne and William
Stensrud, dated November 6, 1996.
10.17+ -- Supply Agreement between Paradyne and Lucent Technologies,
Inc., dated July 31, 1996.
10.18+ -- Exclusivity and Amendment Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
August 6, 1998.
10.19+ -- Noncompetition Agreement between Paradyne, Communication
Partners, L.P., Lucent Technologies, Inc., and GlobeSpan
Semiconductor, Inc. dated July 31, 1996.
10.20 -- Trademark and Patent Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
July 31, 1996.
10.21 -- Tax Matters Agreement between Paradyne, Lucent Technologies,
Inc., and GlobeSpan Semiconductor, Inc. dated July 31, 1996.
10.22 -- Intellectual Property Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
July 31, 1996.
10.23+ -- OEM Agreement between Paradyne and Xylan Corporation, dated
March 16, 1999.
10.24+ -- Distribution Agreement between Paradyne and Tech Data
Corporation, dated September 21, 1993.
10.25+ -- OEM Agreement between Paradyne and Premisys Communications,
Inc., dated December 4, 1992.
23.1** -- Consent of Independent Accountants.
23.2* -- Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** -- Power of Attorney (see page II-5).
27.1** -- Financial Data Schedule for EDGAR Filing.
</TABLE>
- ------------------------------
* To be filed by amendment.
** Previously filed
+Confidential treatment has been requested for certain portions which have been
blanked out in the copy of the exhibit filed with the Securities and Exchange
Commission. The omitted information has been filed separately with the
Securities and Exchange Commission pursuant to the application for confidential
treatment.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 14 or otherwise, the registrant has
II-3
<PAGE> 5
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) That, for purposes of determining any liability under the Act each
post-effective amendment that contains a form prospectus shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Atlanta, County of Fulton, State of Georgia, on April 28, 1999.
By: /s/ ANDREW S. MAY
------------------------------------
Andrew S. May
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<C> <S> <C>
/s/ ANDREW S. MAY President, Chief April 28, 1999
- ----------------------------------------------------- Executive Officer, and
Andrew S. May Director (Principal
Executive Officer)
/s/ PATRICK M. MURPHY Senior Vice President, April 28, 1999
- ----------------------------------------------------- Chief Financial
Patrick M. Murphy Officer, and Treasurer
(Principal Financial
and Accounting
Officer)
* /S/ THOMAS E. EPLEY Chairman of the Board April 28, 1999
- -----------------------------------------------------
Thomas E. Epley
* /S/ DAVID M. STANTON Director April 28, 1999
- -----------------------------------------------------
David M. Stanton
* /S/ WILLIAM R. STENSRUD Director April 28, 1999
- -----------------------------------------------------
William R. Stensrud
*By: /s/ ANDREW S. MAY
------------------------------------------------
Andrew S. May
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
1.1* -- Form of Underwriting Agreement.
3.1* -- Certificate of Incorporation.
3.2* -- Bylaws.
3.3* -- Merger Agreement.
4.1 -- Reference is made to Exhibits 3.1, 3.2 and 3.3.
4.2* -- Specimen Stock Certificate.
5.1* -- Opinion of Cooley Godward LLP.
10.1* -- Amended and Restated 1996 Equity Incentive Plan.
10.2* -- Form of Stock Option Agreement pursuant to the 1996 Equity
Incentive Plan.
10.3* -- Form of Early Exercise Stock Purchase Agreement.
10.4* -- 1999 Employee Stock Purchase Plan and related offering
documents.
10.5* -- 1999 Non-Employee Director's Stock Option Plan.
10.6** -- Loan and Security Agreement between Paradyne and Bank of
America NT&SA, dated July 31, 1996.
10.7** -- Amended and Restated Subordinated Revolving Promissory Note
between Paradyne and Paradyne Partners, L.P., dated October
16, 1998.
10.8** -- Lease Agreement between Paradyne and Shav Associates, dated
October 8, 1996.
10.9 -- Sublease Agreement between Paradyne and GlobeSpan
Semiconductor, Inc., dated December 10, 1997.
10.10 -- Amendment to Sublease Agreement between Paradyne and
GlobeSpan Semiconductor, Inc., dated January 1, 1999.
10.11** -- Lease Agreement between Paradyne and Townsend Property Trust
Lease, dated June 27, 1997.
10.12** -- Key Employee Agreement between Paradyne and Thomas Epley,
dated August 1, 1997.
10.13** -- Employment Agreement between Paradyne and Andrew May, dated
December 3, 1996.
10.14** -- Key Employee Agreement between Paradyne and Patrick Murphy,
dated August 1, 1996.
10.15** -- Key Employee Agreement between Paradyne and James Slattery,
dated August 1, 1996.
10.16 -- Indemnification Agreement between Paradyne and William
Stensrud, dated November 6, 1996.
10.17+ -- Supply Agreement between Paradyne and Lucent Technologies,
Inc. dated July 31, 1996.
10.18+ -- Exclusivity and Amendment Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc., dated
August 6, 1998.
10.19+ -- Noncompetition Agreement between Paradyne, Communication
Partners, L.P., Lucent Technologies, Inc., and GlobeSpan
Semiconductor, Inc., dated July 31, 1996.
10.20 -- Trademark and Patent Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc., dated
July 31, 1996.
10.21 -- Tax Matters Agreement between Paradyne, Lucent Technologies,
Inc., and GlobeSpan Semiconductor, Inc., dated July 31,
1996.
10.22 -- Intellectual Property Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc., dated
July 31, 1996.
10.23+ -- OEM Agreement between Paradyne and Xylan Corporation, dated
March 16, 1999.
10.24+ -- Distribution Agreement between Paradyne and Tech Data
Corporation, dated September 21, 1993.
10.25+ -- OEM Agreement between Paradyne and Premisys Communications,
Inc., dated December 4, 1992.
23.1** -- Consent of Independent Accountants.
23.2* -- Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** -- Power of Attorney (see page II-5).
27.1** -- Financial Data Schedule for EDGAR Filing.
</TABLE>
- ------------------------------
* To be filed by amendment.
** Previously filed
+Confidential treatment has been requested for certain portions which have been
blanked out in the copy of the exhibit filed with the Securities and Exchange
Commission. The omitted information has been filed separately with the
Securities and Exchange Commission pursuant to the application for confidential
treatment.
<PAGE> 1
EXHIBIT 10.9
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("Sublease") is made and entered into this ___ day
of August, 1997, by and between PARADYNE CORPORATION, a Delaware corporation,
whose address is 8548 126th Avenue North, P.O. Box 2826, Largo, Florida
34649-2268, Attn: Real Estate Manager ("Sublandlord"), and GLOBESPAN
TECHNOLOGY, INC., a Delaware corporation whose address is 100 Schultz Drive,
Red Bank, New Jersey 07701 ("Subtenant").
WITNESSETH:
Sublandlord did, on the 8th day of October, 1996, enter into this certain
Lease Agreement, with SHAV ASSOCIATES ("Landlord"), a copy of which Lease
Agreement is attached hereto and marked "Exhibit A" (the "Overlease").
The Subtenant herein does hereby sublease the premises consisting of
approximately twenty-one thousand six hundred (21,600) rentable square feet
(the "Subleased Premises"), consisting of the First Floor in the building
located at 100 Schultz Drive, Red Bank, New Jersey. The Subleased Premises
shall be leased on an exclusive basis except for the lunch room and video
conference room located on the First Floor which shall be used on a
non-exclusive basis with Sublandlord . The Subleased
Premises shall be leased on exactly the same terms and conditions stated in the
Overlease, with the following exceptions, to wit:
1. Overlease. The rights of Subtenant under this Sublease are subject and
subordinate in all respects to the Overlease. The provisions of the Overlease
(including any provisions in the Overlease that are incorporated by reference
from other documents) are incorporated by reference in this Sublease with the
same effect as if they were set forth in this Sublease, except as follows:
(a) The term of this Sublease is as provided in Section 2 of this
Sublease;
(b) Subtenant shall pay to Sublandlord the Rent and Additional Rent
pursuant to Section 3 of this Sublease.
(c) Subtenant will be responsible for all expenses related to the
retrofit and buildout of the Subleased Premises except for the costs to
divide the lunch room constituting a part of the Subleased Premises.
Sublandlord and Subtenant shall each pay one-half (1/2) of the cost to
divide the lunchroom. In addition Sublandlord and Subtenant shall pay the
cost of the contract facilities engineer engaged by Sublandlord to manage
and oversee the retrofit and buildout of the Subleased Premises with
Sublandlord paying fifty-five percent (55%) of such cost and Subtenant
paying forty-five percent (45%) of such cost.
<PAGE> 2
Subtenant shall use the Subleased Premises in accordance with the
provisions of the Overlease. Except as otherwise provided in this
Sublease, Subtenant shall perform and satisfy all the covenants and
conditions of "Tenant" under the Overlease, and shall not do or suffer
anything that constitutes a "Default" under the Overlease. Sublandlord
grants to Subtenant all rights and privileges granted to "Tenant" under
the Overlease. Sublandlord does not purport to grant to Subtenant any
better rights or remedies under the Overlease than are possessed by
Sublandlord, and Sublandlord is not obligated to compel Landlord to
perform any of its obligations under the Overlease.
2. Commencement. The Sublease shall commence on September 1, 1997. The
Sublease shall expire on April 30, 2002 at Noon, Edison, New Jersey time.
3. Rent. The Subtenant shall pay to the Sublandlord as rent for the
Subleased Premises the sum of $628,596.00 per year, which equates to $52,383.00
per month (the "Rent"), payable in advance on the first day of each month
without deduction, abatement, counterclaim or offset whatsoever, throughout the
term of the Sublease plus forty-five percent (45%) of (i) any additional
payments due Landlord under the Overlease and (ii) any cost of security
including, but not limited to security systems and guards (collectively the
"Additional Rent") which Additional Rent shall include but shall not be limited
to Tenant's Proportionate Share of Increase in Taxes, and Tenant's
Proportionate Share of Increase in Operating Expenses. Subtenant shall also be
responsible for the cost of its own utilities including but not limited to
electricity, telephone, HVAC system and I/S expenses together with all
applicable sales tax. The current sublease account includes ??? ???? ????.
Sublandlord does not warrant that it will be providing any security services
and shall not be liable for the failure to provide such services. In addition,
sublandlord shall not be liable if the security services are provided in a
negligent manner.
4. Notices. The Subtenant shall pay the Rent and Additional Rent and shall
forward all notices to Sublandlord at the following address (or such other place
as Sublandlord may hereafter designate in writing):
Paradyne Corporation
8545 126th Avenue North
P.O. Box 2826
Largo, Florida 3449-2268
Attn: Real Estate Manager
The Sublandlord shall forward all notices to Subtenant at the following
address (or at such other place as Subtenant may hereafter designate in
writing):
2
<PAGE> 3
(a) Any notice by either party to the other shall be valid only if in
writing and shall be deemed to be duly given only if delivered personally or
sent by registered or certified, postage prepaid, mail addressed (i) if to
Subtenant, at:
Globespan Technology, Inc.
100 Schultz Drive
Red Bank, New Jersey 07701
and (ii) if to Sublandlord, at Sublandlord's address as set forth above, or
at such other address for either party as that party may designate by notice
to the other; notice shall be deemed given, if delivered personally, upon
delivery thereof, or if mailed upon the posting thereof.
(b) Subtenant hereby appoints as its agent to receive service of all
dispossessory or distraint proceedings, the person in charge of the
Subleased Premises at the time of occupying the Subleased Premises; and if
there is no person occupying same, then such service may be made by
attachment thereof on the main entrance of the Subleased Premises.
Notwithstanding the changes in the name and place of notice, all of the
other provisions and conditions contained in the Overlease described above shall
remain in full force and effect.
5. ACCESS. Sublandlord and Sublandlord's agents shall have the right to
enter the Subleased Premises at all times subsequent to giving Subtenant
reasonable notice except in the case of an emergency, for which such notice is
not required, to examine the Subleased Premises, to survey the Subleased
Premises, to show the Subleased Premises to prospective mortgagees or lessees,
and to make such decoration, repairs, or alterations, improvements or additions
as Sublandlord may deem necessary and desirable to the Subleased Premises.
Sublandlord shall be allowed to take all material into and upon the Subleased
Premises that may be required in connection with such activity without the same
constituting an eviction or constructive eviction of Subtenant in whole or in
part and the Rent and Additional Rent shall in no way abate while said
activities are being conducted, by reason of loss or interruption of business of
Subtenant or otherwise. If Subtenant shall not be personally present to open and
permit an entry into the Subleased Premises, at any time, when for any reason an
entry therein shall be necessary and permissible, Sublandlord and Sublandlord's
agents may enter the same by a master key or may forcibly enter the same without
rendering Sublandlord or such agents liable therefore (if during such entry
Sublandlord or Sublandlord's agents shall accord reasonable care to Subtenant's
property), and without in any manner affecting the obligations and covenants of
the Sublease. Nothing herein contained, however, shall be deemed or construed to
impose upon Sublandlord any obligation, responsibility, or liability
3
<PAGE> 4
whatsoever, for the care, supervision, repair of the building or any part
thereof.
6. Assignment. Subtenant shall not assign, sublease, transfer, pledge
or encumber this Sublease or any interest therein without the prior written
consent of Sublandlord which consent may be withheld in Sublandlord's sole
discretion and any attempted assignment, sublease or other transfer or
encumbrance of this Sublease shall be in violation of the terms and conditions
of this Sublease.
7. Warranties and Representations. Subtenant shall lease the Subleased
Premises in "AS IS, WHERE IS" condition and without any warranties or
representations whatsoever either expressed or implied. Subtenant shall not
make any alterations to the Subleased Premises without the prior written
consent of Sublandlord which consent may be withheld in Sublandlord's sole
discretion. Upon expiration of the term, Subtenant shall leave the Subleased
Premises in good condition, normal wear and tear excepted.
8. Services. Referencing Article 16, Heating, Ventilation, and
Air-Conditioning of the Overlease, Subtenant shall be responsible for all costs
associated with "after hours" air conditioning services requested by Subtenant.
9. Indemnity. Subtenant shall indemnify and hold harmless Sublandlord
and Landlord from all cost, loss, expense or liability incurred by Sublandlord
in connection with its sublease to Subtenant of the Subleased Premises or
otherwise arising from Subtenant's use of Sublandlord and Landlord's property
or any portion of the Subleased Premises. Without limitation, indemnified
losses shall include Sublandlord's loss of all or part of its security deposit
under the Sublease and any other expense or liability incurred by Sublandlord
as a result of a default under the Sublease that is caused by any act or
omission of the Subtenant. Subtenant shall fully reimburse Sublandlord and
Landlord for any indemnified loss within thirty (30) days following the date
Sublandlord or Landlord gives Subtenant notice of the loss. Subtenant shall
make all indemnity payments to Sublandlord at its addresses set forth in
Section 4 of this Sublease or such other address or addresses as Subtenant may
designate in its notice to Sublandlord. The Subtenant's indemnity obligation
under this Sublease is absolute and not subject to any setoff, defense,
deduction, or counterclaim based on a claim that Subtenant may have against
Sublandlord. The obligation of Subtenant under this section will survive the
expiration or termination of this Sublease.
10. Default. Any breach of any covenant, obligation, or representation
by a party under this Sublease, or any "Default" described in the Overlease
constitutes a default under this Sublease. Upon the occurrence of a "Default"
as defined under the Lease, Sublandlord shall have all the rights and remedies
of
4
<PAGE> 5
Landlord under the Lease. Additionally, any breach by Subtenant of any
covenant, condition or obligation set forth in this Sublease that is not cured
in the event of a monetary default within three (3) days and in the event of a
non-monetary default within ten (10) days after Subtenant receives from
Sublandlord written notice of the breach will constitute a default hereunder.
Upon the occurrence of a default by Subtenant, Sublandlord may elect to
exercise any one of the following remedies, without prior notice or demand:
(a) Sublandlord may re-let the Subleased Premises for and on
behalf of Subtenant and apply all payments received from said third
party against the Rent payable by Subtenant under this Sublease for the
balance of its stated term, without any obligation to account to
Subtenant for any excess payments received, and Sublandlord may sue to
recover any damage, deficiency, or loss of Rent and Additional Rent
suffered by Sublandlord because of its re-entry and re-letting of the
Subleased Premises; or
(b) Sublandlord may terminate this Sublease and sue Subtenant
to recover all unpaid Rent and Additional Rent through the effective
date of the termination, but the parties otherwise will not have any
further rights or obligations under this Sublease; or
(c) Sublandlord, monthly or at such longer intervals as it
elects, may sue Subtenant to recover any accrued, unpaid Rent and
Additional Rent without any obligation to wait until the end of the
stated term of this Sublease for a final determination of Subtenant's
account; or
(d) Sublandlord may accelerate the Rent and Additional Rent
for the remaining term of this Sublease and sue Subtenant to recover
the total amount of unpaid Rent and Additional Rent.
The rights given to Sublandlord herein are in addition to any rights that may be
given to Sublandlord by a statute or under law. Pursuit of any of the foregoing
remedies shall not preclude pursuit of any of the other remedies herein provided
or other remedies provided by law. If any provision of this Sublease, or its
application to any situation shall be invalid or unenforceable to any extent,
the remainder of this Sublease, or the application thereof to situations other
than that as to which it is invalid or unenforceable, shall be affected thereby,
and every provision of this Sublease shall be valid and enforceable to the
fullest extent permitted by law.
11. Insurance. During the term of the Sublease, Subtenant shall
maintain at its expense and for the mutual benefit of Sublandlord and Subtenant
such casualty insurance and liability
5
<PAGE> 6
insurance on the Subleased Premises as is required pursuant to Article 10 of the
Overlease.
12. Consent to Sublease. This Sublease is subject to Landlord's approval.
If Landlord fails to give its prior written approval then this Sublease shall
be null and void with no further obligation between parties.
13. Attorney's Fees. If any Rent or Additional Rent owing under this
Sublease is collected by or through an attorney at law, Subtenant shall pay all
attorney's fees incurred by Sublandlord as a result of any breach or default by
Subtenant under this Sublease.
14. Miscellaneous. All of the other provisions and conditions contained
in the Overlease described above shall remain in full force and effect.
15. Time of Essence. Time is of the essence of this Sublease.
IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this Sublease
Agreement dated as of the date set forth above.
Witness: SUBLANDLORD:
PARADYNE CORPORATION, a
Delaware corporation
By: /s/
- ------------------------------------ -------------------------------------
Name: Name:
------------------------------- -----------------------------------
Title:
----------------------------------
- ------------------------------------
Name: Date: 1/15/98
------------------------------- -----------------------------------
SUBTENANT:
GLOBESPAN TECHNOLOGY, INC., a
Delaware corporation
By: /s/
- ------------------------------------ ------------------------------------
Name: Name:
------------------------------- -------------------------------
Title:
------------------------------
Date:
- ------------------------------------ ----------------------------------
Name:
-------------------------------
6
<PAGE> 1
EXHIBIT 10.10
AMENDMENT TO SUBLEASE AGREEMENT
THIS AMENDMENT TO SUBLEASE AGREEMENT ("Amendment") is made this ___ day of
August, 1998, by and between PARADYNE CORPORATION, a Delaware corporation, whose
address is 9548 126th Avenue N., P.O. Box 2826, Largo. Florida 34649-2268,
Touchton Real Estate Manager ("Sublandlord"), and GLOBESPAN SEMICONDUCTOR INC.,
a Delaware corporation, whose address is 100 Schultz Drive, Red Bank, New Jersey
07701 ("Subtenant").
R E C I T A L S
A. Sublandlord and Subtenant entered into that certain Sublease Agreement
dated December 10, 1997 ("Sublease").
B. Sublandlord and Subtenant desire to amend the Sublease.
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties do hereby agree as
follows:
1. Recitals. The above stated recitals are true and correct.
2. Rent. Paragraph 3 of the Sublease shall be amended to reflect the
following Rent which shall be paid to Sublandlord together with any Additional
Rent described in the Sublease Agreement and sales and use taxes which may be
owed:
<TABLE>
<CAPTION>
MONTHS ANNUAL RENTAL MONTHLY RENTAL
- ---------- ---------------- ----------------
<S> <C> <C>
1 - 60 $812,300.00 $67,706.33
61 -66 $950,000.04 $79,166.67
</TABLE>
3. Premises. The Sublease shall be amended to reflect that the Subleased
Premises is the entire first two floors of the building located at 100 Schultz
Drive, Red Bank, New Jersey, consisting of approximately 50,000 rentable square
feet.
4. Effective Date. The parties agree and acknowledge that all provisions
of this Amendment are effective retroactively to September 1, 1997. All rent
due under this Amendment which have not been paid, are due and payable within
fifteen (15) days after the day first written above.
5. Amendment. All provisions and conditions contained in the Sublease
that have not been expressly amended herein are hereby ratified and affirmed
and to remain in full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this
Amendment to Sublease Agreement dated as of the date first set forth above.
Witness: SUBLANDLORD:
PARADYNE CORPORATION, a
Delaware corporation
/s/ By: /s/
- --------------------- --------------------------
Name: Name:
---------------- ------------------------
Title:
- --------------------- -----------------------
Name: Date: 1-1-99
---------------- ------------------------
SUBTENANT:
GLOBESPAN SEMICONDUCTOR, INC. a
Delaware corporation
/s/ By: /s/
- --------------------- --------------------------
Name: Name:
---------------- ------------------------
Title:
- --------------------- -----------------------
Name: Date: 12-4-98
---------------- ------------------------
<PAGE> 1
EXHIBIT 10.16
INDEMNIFICATION AGREEMENT
AGREEMENT, made as of the 6th day of November, 1996 between PARADYNE
CORPORATION, a Delaware corporation (the "Corporation"), and the person
signing this agreement as "DESIGNEE" (the "Designee"), with an address as set
forth opposite his name.
WITNESSETH:
WHEREAS, the Corporation has asked the Designee to be available to
assist the Corporation or one or more other affiliated companies or entities in
an advisory capacity;
WHEREAS, the Designee is willing to serve in such capacity or
in similar or additional capacities including but not limited to the providing
product and marketing advice, interim management services and consulting and
the identification of potential candidates for employment for the Corporation
on the condition that the Corporation indemnify him for liability which he
might incur in such capacity or performing such services; and
WHEREAS, the Corporation is willing to extend to the Designee such
indemnification.
NOW, THEREFORE, the Corporation and the Designee hereby agree as
follows:
1. Indemnification Obligation. Except to the extent expressly
prohibited by applicable law, the Corporation shall promptly indemnify, defend,
protect and hold harmless Designee (or such person's executor, administrator or
personal representative being referred to hereafter as an "Indemnitee") if he,
she or it was or is made, or is threatened to be made, a party to any action or
proceeding, whether civil or criminal (including without limitation any action
brought by or in the right of the Corporation), or who is a subject of a
government investigation, by reason of: (A) the fact that at any time the
Designee (i) is or was a director, officer or agent of the Corporation or any
subsidiary or affiliate thereof, (ii) serves or served, at the request of the
Corporation, as a director or officer or agent of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
or (iii) provided services on behalf of the Corporation whether prior to or
subsequent to the date hereof; or (B) the hiring by the Corporation of any
candidate with whom Designee has had any communication or conversation whether
prior to or subsequent to the date hereof, against any and all liabilities,
losses, judgments, fines (including excise taxes assessed with respect to an
employee benefit plan pursuant to applicable law), amounts paid in settlement
and expenses (including attorneys' fees, reasonably incurred) in connection
with such action or proceeding, or any appeal therein, or government
investigation, except where a judgment or other final adjudication adverse to
such person establishes that with respect to (A) above: (a) the Designee's acts
were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action so adjudicated, or (b) that
the Designee personally gained in fact a material financial advantage to which
the Designee not legally entitled resulting directly from the acts or with
respect to (B) above, Designee failed to act in good faith and in a manner
Designee reasonably believed to be in or not opposed to the best interests of
the Corporation.
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<PAGE> 2
2. Advancement of Expenses. The Corporation shall advance or promptly
reimburse upon request of the Indemnitee all expenses, including attorneys'
fees, reasonably incurred by the Indemnitee in connection with any action,
proceeding or government investigation of the kind referred to in Section 1 in
advance of the final disposition thereof, subject to receipt of a written
undertaking by or on behalf of the Indemnitee to repay such amounts if such
person is ultimately found not to be entitled to indemnification under this
Agreement or otherwise or, where found not to be entitled to indemnification
under this Agreement or otherwise or, where indemnification is granted, to the
extent the expenses so advanced or reimbursed exceed the amount to which the
Indemnitee is ultimately determined to be entitled, provided that the Indemnitee
shall cooperate in good faith with any request of the Corporation that common
counsel be used by parties to any action, proceeding or government investigation
who are similarly situated unless to do so would be inappropriate because of
actual or potential differing interest between such parties.
3. Interpretation. An Indemnitee may elect to have the provisions of this
Agreement interpreted on the basis of the applicable law in effect either (i) at
the time of the occurrence of the event or events giving rise to the action,
proceeding or government investigation, to the extent permitted by law, or (ii)
at the time indemnification or advancement or reimbursement of expense is
provided or sought.
4. Sanctions for Nonpayment. If a request to be indemnified or for the
advancement or reimbursement of expenses pursuant to this Agreement or any other
obligation of the Corporation is not paid in full by the Corporation within 30
days after a written claim has been received by either the President or
Secretary of the Corporation therefor and the Indemnitee thereafter brings
suit against the Corporation to recover the unpaid amount of the claim, the
Corporation shall be obligated to pay the Indemnitee the expenses, including
reasonable attorneys' fees, of prosecuting such claim, if such claim is
successful in whole or in part. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending a
civil or criminal action or proceeding in advance of the final disposition
thereof where the required undertaking has been tendered to the Corporation)
that the Indemnitee has not met the standards of conduct which, under the terms
of this Agreement, require the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or independent legal counsel) prior to the commencement of such action
to have made a determination that indemnification of the Indemnitee is proper in
the circumstances because the Designee has met the applicable standard of
conduct set forth in this Agreement, nor an actual determination by the
Corporation (including its Board of Directors or independent legal counsel) that
the Designee has not met such applicable standard of conduct, shall be a defense
to such action or create a presumption that the Designee has not met such
applicable standard of conduct.
5. Nonexclusivity. The indemnification or advancement or reimbursement of
expenses granted pursuant to or provided by the provisions of this Agreement
shall be in addition to and shall not be exclusive of any other rights to
indemnification and advancement or reimbursement of expenses to which such
person may otherwise be entitled by law, Certificate or Incorporation, By-Law,
insurance policy, contact or otherwise.
2
<PAGE> 3
6. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "The Corporation" shall include any legal successor to the
Corporation, including any corporation or other entity which acquires all or
substantially all of the assets of the Corporation in one or more transactions.
(b) "Service" at the request of the Corporation shall include serving
any corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise by virtue of (i) designation by resolution of the
Board of Directors or Executive Committee of the Corporation or any subsidiary
or affiliate thereof, (ii) a request by any officer of the Corporation or any
subsidiary or affiliate thereof, whether or not in writing or (iii) election by
action of the Corporation or any subsidiary or affiliate thereof as a
shareholder, partner or other participant of or in such corporation,
partnership, joint venture, trust, employee benefit plan or other entity or
enterprise.
(c) "Subsidiary" shall include any corporation or other business
organization of which the Corporation owns 20% or more of the voting equity.
7. Invalidity. If any provision of this Agreement is determined to be
unenforceable in whole or in part, such provision shall be modified so as to
be enforceable, to the maximum extent allowed by law, and as so modified be
enforced to the fullest extent permissible, it being the intent of this
Agreement to provide indemnification to all persons eligible hereunder to
the fullest extent permitted under law.
8. No Waiver. The failure by either party at any time to require
performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter. The waiver by either party of a breach of any provision
hereof shall not be taken or held to be a waiver of any preceding or succeeding
breach of such provision or as a waiver of the provision itself. No waiver of
any kind shall be effective or binding, unless it is in writing and is signed
by the party against which such waiver is sought to be enforced.
9. Assignment. This Agreement and all rights hereunder are personal to
the parties hereto and may not be transferred or assigned without the consent
of the other party at any time.
10. Amendment. This Agreement may be amended, modified, superseded,
canceled, renewed or extended only by a written instrument executed by both of
the parties hereto.
11. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered personally or mailed by certified mail, return receipt requested,
postage prepaid to the address of the applicable party as set forth below or as
may be changed by notice given in accordance with the provisions of this Section
11 except that a notice of change of address shall not be deemed to have been
duly given until actually received by the addressee.
12. Binding Nature. This Agreement shall be binding upon and inure to the
benefit of the personal representatives and successors of the respective parties
hereto.
3
<PAGE> 4
13. Headings. The headings contained in this Agreement are for reference
purposes only and shall in no way affect the meaning or interpretation of this
Agreement.
14. Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be construed in accordance with the laws of the State of
Delaware without reference to choice-of-law rules.
15. If a dispute shall arise hereunder and litigation is commenced to
resolve such dispute the prevailing party shall be entitled to recover costs
and reasonable attorney fees.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
PARADYNE CORPORATION
By: /s/ JAMES L. SLATTERY
------------------------------
Name: James L. Slattery
Title: Senior Vice President
Address: 8545 126th Ave. N.
Largo, FL 33773
Dated: November 6, 1996 Attn: James Slattery
DESIGNEE
By: /s/ W. R. STENSRUD
------------------------------
Name: W. R. Stensrud
Title:
Address: 14309 Blue Sage Road
Dated: November 7, 1996 Poway, CA 92064
4
<PAGE> 1
Exhibit 10.17
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") is entered into as of
July 31, 1996 by and among LUCENT TECHNOLOGIES INC., a Delaware corporation,
having a principal office at 211 Mt. Airy Road, Basking Ridge, New Jersey 07920
and its affiliates ("Company"), AT&T Paradyne Corporation, a Delaware
corporation, having a principal office at 8545 126th Avenue North, Largo,
Florida 33773 and CAP Acquisition Corp., a Delaware corporation, having a
principal office at 8545 126th Avenue North, Largo, Florida 33773 ("CAPCO"),
collectively referred to herein as "Supplier".
1. TERM
This Agreement shall become effective as of the date here of
and shall continue in effect for a period of four (4) years. The amendment or
termination of this Agreement shall not affect the obligations of either party
to the other under then existing Orders issued pursuant to this Agreement, but
such Orders shall continue in effect as though this Agreement had not expired or
been terminated and was still in effect with respect to said Orders.
2. ORDER
For the purpose of this Agreement, an "Order" shall mean
Company's form of purchase order or contract used for the purpose of ordering
Material. Each Order shall reference this Agreement, thereby incorporating in
such Order the terms and conditions stated in this Agreement. In addition,
orders from affiliates (excluding AT&T Corp. and NCR Corp. when purchasing as
affiliates but not when purchasing as subcontractors) and subcontractors shall
be considered Orders for purposes of the Volume/Price Letter as outlined in a
letter agreement between Texas Pacific Group and Company dated the date of this
Agreement ("Volume/Price Letter").
3. MATERIAL
For the purpose of this Agreement, "Material" shall be defined
as those services performed by Supplier for Company and those communications
products that are identified by comcode numbers and described on Exhibit A to
this Agreement ("Existing Products"); which attachment shall be continuously
updated, to include Enhanced and New Products if such products satisfy the
requirements of the clause ENHANCED AND NEW PRODUCTS.
4. ENHANCED AND NEW PRODUCTS
For the purpose of this Agreement, "Enhanced Product" or
"Enhanced Products" shall mean any product which results out of Company's desire
to have Supplier redesign, modify, or enhance an Existing Product or family of
Existing Products. For the purpose of this Agreement, "New Product" or "New
Products" shall mean any product which is not an Enhanced Product or Existing
Product but which is substantially similar to an of this Agreement, "New
Product" or "New Products" shall mean any product which is not an Enhanced
Product or
<PAGE> 2
Existing Product but which is substantially similar to an Existing Product with
respect to design and function and possesses reasonable performance
improvements. If Company desires to purchase an Enhanced or New Product(s) from
Supplier, Company shall so notify Supplier and provide Supplier the opportunity
to manufacture such Enhanced or New Product(s), subject to the following
conditions and procedures.
Supplier shall, within thirty (30) days from the date of
Supplier's receipt of Company's notice, inform Company whether Supplier desires
to manufacture and supply such Enhanced or New Product(s) to Company. If
Supplier desires to manufacture and supply such Enhanced or New Product(s),
Supplier shall provide Company (a) a written production plan demonstrating
Supplier's ability to satisfy the Performance Requirement, as described in the
next sentence, for such Enhanced or New Product(s) (such plan shall include
production locations and proposed dates for prototypes, sample production and
full production) and (b) Supplier's proposed Price for such Enhanced or New
Product(s). "Performance Requirement" shall mean the Company's reasonably
prescribed performance standards for Material, including, but not limited to,
quality, compliance with Specifications, delivery and service support, each
determined in the case of an Enhanced Product with reference to standards for an
Existing Product or family of Existing Products.
The parties shall then negotiate in good faith to reach an
agreement on such production plan's ability to satisfy the Performance
Requirements and the Price to be charged for the Enhanced or New Product(s). In
the event the parties agree on the production plan's satisfaction of the
Performance Requirement and the Price for such Enhanced or New Product(s), and
Supplier fulfills its obligations under the production plan (including the
commencement of full production runs), then such Enhanced or New Product(s) will
be added to Exhibit A for the purposes of this Agreement. All work performed by
Supplier under this clause will be at Supplier's sole risk and expense, unless
otherwise agreed to by the parties.
If despite good faith negotiations the parties fail to agree
(i) that the Enhanced or New Product(s) production plan satisfies the
Performance Requirement or (ii) on a Price for the Enhanced or New Product(s),
the parties agree to resolve the dispute through mediation as set forth in the
Clause MEDIATION. In the event that as a result of such mediation, if necessary,
the production plan is deemed to not satisfy the Performance Requirement, or the
product plan slips the Company may purchase the Enhanced or New Product(s) from
another source or sources and, the Volume/Price levels as outlined in the
("Volume/Price Letter") shall be adjusted to reflect the dollar amount purchased
by Company from the other source or sources.
If the Supplier desires not to make available for order by
Company any Enhanced or New Product, the Company may purchase the Enhanced or
New Product(s) from another source or sources and, the Volume/Price levels as
outlined in the Volume Price Letter shall be adjusted to reflect the dollar
amount purchased by Company from the other source or sources.
2
<PAGE> 3
5. MATERIAL PURCHASE
During the term of this Agreement, Company shall purchase and
Supplier shall sell Material to Company in accordance with the terms and
conditions set forth in this Agreement and the Exhibits shown which are hereby
made a part of this Agreement.
In the event the terms and conditions of the Exhibits shown
above conflict with the terms and conditions of the Agreement, the terms and
conditions of this Agreement shall prevail.
6. PRICE
For the purposes of this Agreement, the "Price" for Material
shall mean [***] and shall be as set forth on Exhibit A which attachment shall
be revised from time to time as provided in this Agreement. Supplier agrees to
accept Orders directly from any of Company's subcontractors as designated by
Company and extend to Company's subcontractors the Prices set forth for
Material.
7. BEST PRICE
Supplier's Prices to Company for Material contained herein
with applicable discounts and with any increases permitted hereunder, shall be
[***]. If Supplier at any time [***], Supplier shall [***]. For purposes of
determining if Supplier's prices are Best Prices, within the meaning of this
paragraph only. Supplier's Prices shall [***].
8. MARKET RIGHTS
Company has selected Supplier as a preferred supplier for the
Material described in Exhibit A during the four (4) year term of this Agreement.
"Preferred Supplier" means that Company will use commercially reasonable efforts
to purchase Material from Supplier over equivalent (i.e., price, functionality
or performance) material offered by another supplier pursuant to the terms and
conditions of this Agreement. Except for the Preferred Supplier status described
in the foregoing sentence, it is expressly understood and agreed that this
Agreement neither grants to Supplier an exclusive right or privilege to
manufacture, repair, or source all Material of the type described in this
Agreement, nor requires the purchase of any manufactured, repaired, or sourced
Material from Supplier by Company. It is, therefore, understood that Company may
contract with other manufacturers and suppliers for the manufacture or repair of
Material and other products.
9. BENCHMARKING
On [***] basis, or [***] by either party, Supplier and Company
shall undertake to benchmark price, quality, product functionality, and service
performance of the Material
- -------------------
* Confidential Treatment Requested
3
<PAGE> 4
offered by Supplier here under. The Material benchmarked shall be the comcodes
that comprise [***] purchased by Company. Supplier and Company shall review such
benchmark information and Supplier shall develop a plan of action for improving
Material Price, quality, product functionality, and service performance if such
benchmark information indicates improvements are needed when compared to the
then existing standards of the industry of comparable Price, quality, product
functionality and service. Should Supplier fail to introduce improvements that
assure Company that Material is meeting or exceeding competitive benchmarks with
respect to: (1) Material Price within ten (10) days of such review, and (2) for
Material quality, product functionality, or service performance within ninety
(90) days of such review (with Supplier to provide a plan for introducing such
improvements within the first thirty (30) days of such review) then Company
shall have the right to competitively quote such Material in the marketplace.
Company will give Supplier a thirty (30) day prior written notice of an intent
to place business with any other supplier and provide Supplier that thirty (30)
day period to match or beat such other offer received by Company. If Supplier
matches or beats such other offer, Company agrees to continue to place Orders
with Supplier at the new Price, quality, product functionality, and service
levels subject to the terms and conditions of this Agreement. If Supplier does
not match or beat Company's offer, Company may elect to purchase Material from
another source and the Volume/Price levels set forth in the Volume Price Letter
shall be adjusted to reflect the dollar amount purchased by Company from the
other source or sources.
In the event of a dispute with respect to the approach,
procedures or results of the benchmarking, the parties agree to promptly retain
an independent, nonaffiliated consultant experienced in the industry to provide
an objective assessment of the issue(s) in dispute. The determination of the
consultant shall be final and binding.
10. PAYMENT TERMS
Except as otherwise provided in an individual Order issued
hereunder, net thirty (30) days from the later of the date of shipment of
Material to Company or receipt of the invoice therefor by Company.
11. TRANSPORTATION TERMS
FOB Origin, unless both parties mutually agree otherwise.
12. FLEXIBLE DELIVERY ARRANGEMENTS
During the term of this Agreement, Company may give written
notice to Supplier requesting that Supplier implement "Demand Pull", "Pull
Replenishment", "Consignment", and/or some other form of flexible delivery
arrangement for one or more types of Material. Upon mutual agreement between
Company and Supplier, Company shall have the right to implement such flexible
delivery arrangements by providing written notice to Supplier at least thirty
(30) days prior to the agreed upon implementation date. Such notice shall
specify the particular Company facility which will be covered by such flexible
delivery arrangement, the Material covered by such flexible delivery arrangement
and the agreed upon implementation date. The proposed terms and
- -------------------
* Confidential Treatment Requested
4
<PAGE> 5
conditions of Company's Demand Pull, Pull Replenishment, and Consignment
arrangements are set forth on Exhibits B, C and D of this Agreement.
13. FLEXIBLE ORDERING AND PAYMENT ARRANGEMENTS
During the term of this Agreement, Company may give written
notice to Supplier requesting that Supplier implement Electronic Data
Interchange ("EDI") ordering and payment arrangements for one or more types of
Material. Upon mutual agreement between Company and Supplier, Company shall have
the right to implement such ordering and payment arrangements by providing
written notice to Supplier at least thirty (30) days prior to the implementation
date. Such notice shall specify the particular Company facility which will be
covered by such ordering and payment arrangement, the Material covered by such
ordering and payment arrangement and the requested implementation date. The
parties acknowledge and agree that the implementation of an EDI program will
entail the cooperation of both parties and that such parties will work in good
faith to implement such program as soon as practicable. The proposed terms and
conditions of the applicable ordering and payment arrangement are set forth on
Exhibit E of this Agreement.
14. SPECIFICATIONS OR DRAWINGS
All technical, functional, and safety specifications, designs,
drawings, schematics, test procedures, and packaging, packing, and container
marking specifications (collectively "Specifications"), as mutually agreed upon
by the parties are hereby made a part of this Agreement. Specifications may be
modified from time to time with agreement of the parties and the parties shall
promptly endeavor to mutually agree to equitable adjustments to the Price and/or
delivery schedules resulting from any such modifications. Supplier shall
manufacture Material in accordance with Specifications, so that Material
conforms to such Specifications.
Company's ownership, design, inspection, and/or approval of
Material shall in no way limit Supplier's responsibility for its obligations
under this or any other part of this Agreement.
15. MANUFACTURE DISCONTINUED
Supplier shall provide Company at least one (1) year prior
written notice that any Material covered by this Agreement is recommended as a
candidate to be manufacture discontinued by Supplier. Company shall, within
sixty (60) days after receipt of Supplier's written notice, provide Supplier a
written response indicating Company's approval or disapproval of the manufacture
discontinued status of such Material based upon such Material's impact on the
Company's business, including but not limited to the Company's obligations to
its customers.
If Company does not approve of the Material being manufacture
discontinued, the parties shall negotiate in good faith to determine the final
disposition of such Material.
If the parties agree that Material shall become manufacture
discontinued, Supplier shall accept Company's Orders for such manufacture
discontinued Material under the terms and conditions of this Agreement for one
(1) year from the Supplier's notification date of manufacture discontinued
status. Once the manufacture discontinued Material is no longer available to
order
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by Company, Supplier agrees that the Volume/Price levels set forth in the
Volume/Price Letter shall be adjusted to reflect the dollar amount that can no
longer be purchased by Company.
16. PROCESS CERTIFICATION
In regard to Supplier's manufacturing processes, Company
reserves the right to perform periodic quality surveys and evaluations
including, but not limited to, analysis of manufacturing or assembly position
procedures, equipment calibration, and operator performance, as well as
evaluation of quality control/quality assurance and data collection and analysis
procedures.
Supplier shall conduct appropriate incoming inspection of
components in accordance with its standard practices. Such practices may be
modified from time to time to address specific conditions as requested by
Company after any increases or decreases to Price resulting from such
modifications have been mutually agreed upon.
17. COMPANY ACCEPTANCE AND QUALIFICATION TESTS
Prior to Supplier initiating volume manufacture of Material at
any new facility, Company shall have the right to conduct acceptance or
qualification tests of manufactured Material and associated piece parts and
processes, including but not limited to technical acceptance tests to ensure
conformance to Company's specifications.
18. RIGHT OF ENTRY AND PLANT RULES
Each party shall have the right upon reasonable notice to
enter the premises of the other party during normal business hours with respect
to the performance of this Agreement, subject to all plant rules and
regulations, security regulations and procedures and U.S. Government clearance
requirements if applicable.
19. ATTENDANCE AT SUPPLIER'S PLANT
Company reserves the right to place, at any time, with
reasonable prior notice one or more personnel in Supplier's facility to carry
out the inspection and acceptance tests, process certification, and other
functions Company may deem reasonably necessary ("Inspection Representatives").
The salaries of said personnel, as well as their travel and
living expenses, shall be [***]. Supplier agrees to furnish said personnel with
reasonable working facilities, as necessary, to perform their work and, if
needed, provide office space and support services as required. Supplier will
make suitable arrangements so that said personnel will have access to the areas
where Material is manufactured, tested, stored and shipped. Personnel authorized
in writing by Company shall be empowered to reject the Material to be delivered
to Company in the event that such Material fails to meet required Specifications
and/or acceptance tests.
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20. SHIPPING AND BILLING
For shipments against an Order placed pursuant to this
Agreement Supplier shall: (1) ship such Order complete unless instructed
otherwise; (2) ship to the destination designated in the Order; (3) ship
according to routing instructions given by Company; (4) place the Order number
on all subordinate documents; (5) enclose a packing memorandum with each
shipment and when more than one package is shipped, identify the package
containing the memorandum; (6) mark the Order number on all packages and
shipping papers; (7) render invoices in duplicate or as otherwise specified,
showing the Order number, (8) render invoices for shipments, (9) render invoice
containing carrier name, waybill number and date of shipment; and (10) mail
invoices, bills, and notices to the address shown in the Order. If prepayment of
transportation charges is authorized, Supplier shall include the transportation
charges from the FOB point to the destination as a separate item on the invoice
stating the name of the carrier used. Adequate protective packaging shall be
furnished at no additional charge. Shipping and routing instructions may be
altered as mutually agreed without a writing. [***] permitted [***].
21. MARKING
All Material furnished under this Agreement shall be marked
for identification purposes in accordance with the Specifications set forth in
this Agreement and at a minimum as follows:
(a) Supplier model/serial number; and
(b) Month and year of manufacture.
In addition, Supplier agrees to add any other identification
which might be reasonably requested by Company such as but not limited to
distinctive marks conforming to Company's Serialization Plan or to Company's
Bar-coding Plan after charges, if any, for such additional identification
marking have been agreed upon by Supplier and Company.
22. SUPPLIER INTERVAL
For the purpose of this Agreement, "Lead Time" or "Supplier
Interval" shall mean the period of time expressed in days commencing on the date
an Order for Material is placed with Supplier by Company and ending upon
delivery of such Material to Company's point of destination.
If, during the course of this Agreement, Supplier determines
that it will no longer be able to deliver Material within the then existing Lead
Times, Supplier shall immediately notify Company's Buyer to that effect.
Supplier is encouraged to quote reduced Lead Times when responding to Orders
placed under this Agreement if required to meet Company's requested delivery
date.
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23. TAXES AND INSURANCE PAYMENTS
All [***], and [***] will be paid by [***]. The parties agree
that the charges stated herein include [***] and will not be changed hereafter
as a result of [***], [***] shall indemnify and hold [***] harmless from any
loss which [***] may incur as a result of [***] failure to make tax or insurance
payments.
24. TITLE AND RISK OF LOSS
Title and risk of loss and damage to Material purchased by
Company under this Agreement shall vest in Company when the Material has been
delivered to the FOB point.
25. VARIATION IN QUANTITY
Company assumes no liability for Material produced, processed
or shipped in excess of the amount specified in this Agreement or any Order.
26. UTILIZATION OF MINORITY AND WOMEN OWNED BUSINESS ENTERPRISES
It is Company's policy that Minority and Women-Owned Business
Enterprise ("MWBEs") shall have the maximum practicable opportunity to
participate in the performance of contracts. Supplier agrees to use its good
faith efforts to award subcontracts to carry out this policy to the fullest
extent consistent with the efficient performance of this Agreement. Supplier
agrees to conduct a program which will enable MWBEs to be considered fairly as
subcontractors and suppliers under this Agreement. Supplier shall submit to
Company periodic reports of subcontracting with known MWBEs in such manner and
at such time (not more than quarterly) as Company's representative may
prescribe. Such periodic report shall state separately for Minority and Women
Owned Businesses the subcontracted work which is attributable to Company. In
instances where direct correlation cannot be determined, such MWBE payments may
be established by Supplier comparing Company's payments to Supplier, in that
period, to total payments to Supplier from all of its customers, in that period,
and then arriving at Company's apportionment of such MWBE payments. Nothing in
this clause shall affect or diminish the Supplier's obligations as set forth in
the assignment and subcontracting provisions or any other provision of this
Agreement. Supplier's record of compliance with the provisions of this clause
will be a factor Company will consider favorably in making procurement decisions
about future business with Supplier.
27. RECORDS
Supplier shall identify all records associated with this
Agreement and maintain accurate and complete records including charges payable
by Company under this Agreement. These records shall be maintained in accordance
with recognized commercial accounting practices and shall be readily available
to review and audit by Company.
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28. REPORTS
Supplier agrees to maintain the following auditable Order and
shipment reports and provide copies to Company on or before the fifth working
day of each month:
(1) Order and shipment reports for each shipment, including
Bill of Lading information, if applicable.
(2) At the request of Company, monthly summaries of actual
shipping intervals achieved on Material ordered and manufactured hereunder,
identifying the number of units and such other information as Company may
reasonably request, consistent with Supplier's current practices.
Supplier further agrees to maintain and render quality and
yield data of the type and frequency reasonably specified by Company to assure
proper control of Material quality and reliability. This data may include such
items as in-process daily yields, quality control, and quality assurance daily
records. Supplier shall furnish and render additional reports as may be
reasonably requested by Company.
29. FORECASTS BY COMPANY
The parties acknowledge and agree that the implementation of
an improved forecasting process is important to both parties. The parties agree
to cooperate and will work in good faith to implement such program as soon as
reasonably practicable.
30. SERVICE
Company shall have the right to monitor the delivery
performance of Supplier via special performance reports. Delivery for such
purposes shall mean arrival at the final destination specified in the Order.
Company's goal is that Supplier will strive to achieve or exceed an Average
Percent Received By Lead Time and an Average Percent Received To Required Date
(Past And Current) of [***] of the Orders. "Average Percent Received by Lead
Time" shall mean the required percentage of Material (based in units) delivered
within the applicable lead time for such Material, which percentage will be
calculated monthly. "Average Percent Received to Required Date (Past and
Current)" shall mean the required percentage of Material (based in units)
delivered on the date such Material was requested to be delivered by the
Company, which percentage shall be calculated monthly.
Supplier is expected to make every effort to deliver Material
in accordance with Company's required delivery schedule as contained in
Company's Orders, and as the delivery schedule may be subsequently modified by
Company. Supplier will promptly notify Company of its "Acknowledged Delivery
Schedule", the schedule by which Supplier can deliver Material requested by
Company. Supplier is also expected to communicate to Company any foreseeable
change to Supplier's Acknowledged Delivery Schedule. Supplier's compliance with
the foregoing
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expectations will not relieve Supplier of the minimum service requirements
established in the preceding paragraph.
If Supplier advises Company that it will be unable to meet its
Acknowledged Delivery Schedule, and Company elects to call for expedited
shipment, Supplier will be required to pay the difference in cost between the
method of shipping specified in the Order and the actual cost incurred for
expedited shipment.
31. OZONE DEPLETING CHEMICALS
Supplier hereby warrants that it is aware of international
agreements and pending legislation in several nations, including the United
States, which would limit, ban, and/or tax importation of any product
containing, or produced using, ozone depleting chemicals ("ODCs"), including
chlorofluorocarbons, halons, and certain chlorinated solvents. Supplier hereby
warrants that manufactured and/or repaired Material will conform to applicable
requirements established pursuant to such agreements, legislation, or
regulations, and that manufactured and repaired Material will be able to be
imported into and used lawfully in (and without additional taxes associated with
ODCs not reported to Company by Supplier as set forth in this clause) the United
States and other countries designated by Company, under all such agreements,
legislation, and regulations. Supplier also warrants that it is currently
reducing, and is currently using good faith efforts to cause all of its parts
and component manufacturing vendors to reduce, in an expeditious manner,
eliminate and cause its parts and component manufacturing vendors to eliminate,
the use of ODCs in the manufacture and repair of Material and all of its parts
and components.
Supplier shall, upon execution of this Agreement, and at any
time that New Products or Enhanced Products are ordered under this Agreement or
changes are made to Material manufactured and/or repaired under this Agreement,
complete, sign, and return to Company an ODC Content Certification, in the form
requested by Company. The ODC Content Certification must be signed by Supplier's
facility manager, corporate officer, or delegate.
The term "ODC content" on the ODC Content Certification means
the total pounds of ODC used directly in the manufacture and/or repair of each
unit of Material. This includes all ODCs Supplier uses in its manufacturing,
assembly, and repair operations. Supplier will use good faith efforts to include
all ODC information, used by Supplier's vendors and any other vendors in
producing parts, components, or other products incorporated into Material.
Supplier warrants to Company that all information furnished by
Supplier on each ODC Content Certification will be complete and accurate and
that Company may rely on such information for any purpose, including but not
limited to providing reports to government agencies or otherwise complying with
applicable laws. Supplier agrees to defend, indemnify, and hold Company harmless
of and from any claims, demands, suits, judgments, liabilities, costs, and
expenses (including additional ODC taxes and reasonable attorney's fees) which
Company may incur under any applicable federal, state, or local laws or
international agreements, and any and all amendments thereto, by reason of
Company's use of or reliance on inaccurate or incomplete information furnished
to Company by Supplier on any ODC Content Certification or by reason of
Supplier's breach of this clause.
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Supplier agrees to cooperate with Company in responding to any
inquiry concerning the use of ODCs to manufacture and/or repair Material or
components thereof and to execute without additional charge any documents
reasonably required to certify the absence or quantity of ODCs used to
manufacture and/or repair Material or components thereof.
32. COMPLIANCE WITH ENVIRONMENTAL/HEALTH AND SAFETY/TRANSPORTATION LAWS
Supplier agrees to comply with applicable country or state
environmental, health and safety, and transportation laws and regulations
including but not limited to applicable United States environmental, health and
safety, and transportation laws and regulations. Supplier agrees to indemnify
and hold Company harmless from any loss or damage that may be sustained by
Company by reason of Supplier's failure to comply with this clause.
33. OZONE DEPLETING SUBSTANCES LABELING
Supplier warrants and certifies that all products, including
packaging and packaging components, provided to Company under this Agreement
will be accurately labeled, in accordance with the requirements of 40 CFR Part
82, entitled "Protection of Stratospheric Ozone, Subpart E -- The Labeling of
Products Using Ozone Depleting Substances."
Supplier agrees to indemnify, defend, and save harmless
Company, its officers, directors, and employees from and against any losses,
damages, claims, demands, suits, liabilities, fines, penalties, and expenses
(including reasonable attorney's fees) that may be sustained by Company by
reason of Supplier's noncompliance with such applicable law or the terms of this
warranty and certification.
34. CFC PACKAGING
Supplier warrants that all packaging materials furnished under
this Agreement and all packaging associated with Material furnished under this
Agreement will not have been manufactured using and will not contain
chlorofluorocarbons. "Packaging" means all bags, wrappings, boxes, cartons, and
any other packing materials used for packaging. Supplier shall indemnify and
hold Company harmless for any liability, fine, or penalty incurred by Company to
any third party or governmental agency arising out of Company's good faith
reliance upon said warranty.
35. HEAVY METALS IN PACKAGING
Supplier warrants to Company that no lead, cadmium, mercury,
or hexavalent chromium have been intentionally added to any packaging or
packaging component (as defined under applicable laws) to be provided to Company
under this Agreement. Supplier further warrants to Company that the sum of the
concentration levels of lead, cadmium, mercury, and hexavalent chromium in the
packaging or packaging component provided to Company under this Agreement will
not exceed one hundred (100) parts per million. Upon request, Supplier shall
provide to Company Certificates of Compliance certifying that the packaging
and/or packaging components provided under this Agreement are in compliance with
the requirements set forth
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above in this clause. Supplier shall indemnify and hold Company harmless for any
liability, fine, or penalty incurred by Company to any third party or
governmental agency arising out of Company's good faith reliance upon said
warranties or any Certificates Compliance.
36. INDEMNITY AND INFRINGEMENT
All Work performed by Supplier under this Agreement shall be
performed by Supplier as an independent contractor and not as an agent of
Company. All persons furnished by Supplier shall be considered solely Supplier's
Employees or agents, and Supplier shall be responsible for compliance with all
applicable laws, rules, and regulations relating to labor, working conditions,
wages, and payment of all unemployment, social security, and other payroll
taxes, including contributions when required by law.
Supplier agrees to indemnify and save harmless Company, its
affiliates and its customers and their officers, directors, employees,
successors and assigns (all hereinafter referred to in this clause as "Company")
from and against any losses, damages, claims, demands, suits, liabilities, and
expenses (including reasonable attorneys' fees) that arise out of or result
from: (1) injuries or death to persons or damage to property, including theft,
in any way arising out of or occasioned by, caused or alleged to have been
caused by or on account of the Material, or the performance of Work or Services
performed by Supplier or persons furnished by Supplier; (2) assertions under
Workers' Compensation or similar acts made by persons furnished by Supplier or
by any subcontractor or by reason of any injuries to such persons for which
Company would be responsible under Workers' Compensation or similar acts if the
persons were employed by Company; (3) any failure by Supplier to perform
Supplier's obligations under this Indemnity and Infringement Section; and/or (4)
any infringement or claim of infringement of any patent, trademark, copyright,
trade secret, or other intellectual property right of third parties based on the
manufacture, repair, sale, use, importation, reproduction and/or distribution of
Material furnished to Company hereunder, and/or any part, component, feature or
design of such Material, except that this infringement indemnity shall not apply
to the extent that such claims or infringements arise solely and directly from
Company supplied parts or components, or from Supplier's required adherence to
Company's written instructions or Specifications which are so specified that
such adherence directly causes such claims or infringement and which
instructions or Specifications require the use of Material other than (i)
commercial material which is available on the open market or the same as such
Material or (ii) Material of Supplier's origin, design or selection.
In the case of the infringement indemnity, if Company's or its
customers' manufacture, repair, use, sale, importation, reproduction and/or
distribution of Material is restricted or prevented by injunction, court order
or negotiated settlement on account of such infringement, Supplier shall, at its
expense: (i) procure for Company and Company's customers the right to continue
manufacturing, using, selling, importing, reproducing and/or distributing such
Material; or (ii) replace such Material with a noninfringing product
substantially complying with such Material's Specifications and satisfactory to
Company; or (iii) modify such Material so it becomes noninfringing and performs
in a substantially similar manner to the original Material and satisfactory to
Company; or (iv) in the event of inability to reasonably perform any of the
foregoing, refund to Company the purchase price for affected Material. All
payments refunded
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pursuant to the foregoing provision would continue to be counted toward the
Company's revenue commitment as set forth in the Volume/Price Letter.
Supplier agrees to defend Company, at Company's request,
against any of the referenced claims, demands, or suits at Supplier's expense.
Company agrees to notify Supplier within a reasonable time of any written claims
or demands against Company for which Supplier is responsible under this Clause.
37. TECHNICAL SUPPORT
Ongoing technical support via telephone to Company or
Company's customers will be [***] and shall include but not be limited to the
following: (a) answering technical questions, (b) explaining proper operation
procedures for Material, (c) providing up-to-date information on the status of
Material returned to Supplier for repair, and (d) quoting and explaining any
repair or replacement charges for Material.
38. LATE DELIVERY / LIQUIDATED DAMAGES AND CANCELLATIONS
Supplier agrees that in the event that Company is able to
provide to Supplier demonstrable evidence that any delay by Supplier in
delivering any Material committed to by Supplier under any Order caused the loss
of a contract of Company or caused Company to obtain substitute material from a
third party in order to fulfill the contract, then Company shall [***] set forth
in the Volume/Price Letter for the applicable period.
These provisions concerning late delivery of conforming
Material are intended to be and shall be cumulative and in addition to every
other remedy now or hereafter possessed by Company, including but not limited to
its right to recover damages under the clause entitled WARRANTY.
39. AUDIT
Supplier shall maintain accurate and complete records
including termination charges payable by Company under this Agreement. These
records shall be maintained in accordance with recognized commercial accounting
practices so they may be readily audited and shall be held until costs have been
finally determined under this Agreement and payment or final adjustment of
payment, as the case may be, has been made. Supplier shall permit Company or
Company's Representative to examine and audit these records and all supporting
records at all reasonable times. Audits shall be made not later than one (1)
calendar year after the final delivery date of Material ordered or completion of
services rendered or one (1) calendar year after the expiration date of this
Agreement, whichever comes later. In addition, Supplier shall permit a third
party audit of its sales records to determine compliance with the Volume/Price
Letter.
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40. CLAUSE HEADINGS
The headings of the clauses in this Agreement are inserted for
convenience only and are not intended to affect the meaning or interpretation of
this Agreement.
41. DEFAULT
In the event Supplier shall be in breach or default of any of
the material terms, conditions, or covenants of this Agreement and if such
breach or default shall continue for a period of forty-five (45) days after the
giving of written notice to Supplier thereof by Company that Company intends to
cancel because of such default, then, in addition to all other rights and
remedies which Company may have at law or equity or otherwise, Company shall
have the right to cancel this Agreement and/or Orders without any charge or
obligation or liability of Company, including the right to make appropriate
adjustments to the Volume/Price Levels set forth in the Volume/Price Letter.
42. TERMINATION OF ORDER FOR CAUSE
In the event Supplier exceeds the shipping interval, plus five
(5) working days as specified in an Order issued hereunder because of reasons
attributable to Supplier (other than those contained in the FORCE MAJEURE
Section of this Agreement), then in addition to all other rights and remedies of
law or equity or otherwise and without liability or obligation to Supplier,
Company shall have the right to: [***].
43. TERMINATION OF ORDER WITHOUT CAUSE
Company may at any time terminate without cause any or all
Orders placed by it hereunder. Unless otherwise specified herein, Company's
liability to Supplier with respect to such terminated Order or Orders shall be
limited to [***]. However, no such termination charges will be invoiced, if
within sixty (60) days of notice of termination, manufactured or repaired
Material equivalent in volume to that being terminated is ordered by Company. If
requested, Supplier agrees to substantiate such costs with proof satisfactory to
Company.
Supplier shall use its best efforts to cancel, stop, return,
or otherwise dispose of all Supplier sourced parts not used in manufacture or
repair of Material. Upon request, Supplier shall identify its parts suppliers
and cancellation terms, and shall permit and assist Company in discussions
concerning cancellation charges with such parts suppliers.
44. EMERGENCY BACKUP PLAN
Supplier will furnish to Company for Company's approval,
within sixty (60) days of execution of this Agreement a written plan of action
(an "Emergency Backup Plan") that covers Supplier's plans on how it will
continue to perform its obligations under this Agreement in case of an
unforeseen catastrophe, including a force majeure condition, or any other
condition in which Supplier will be unable to produce and ship Material for four
(4) consecutive weeks. The
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Emergency Backup Plan will identify Supplier's secondary manufacturing
location(s) and include the estimated time for the implementation of such
Emergency Backup Plan and production of Material.
The Emergency Backup Plan shall provide, among other things,
that in the event of any unforeseen catastrophe, including a force majeure
condition, or any other condition in which Supplier will be unable to produce
and ship acceptable Material for four (4) consecutive weeks, Supplier shall use
its reasonable best efforts to (a) manufacture and ship the Material from one or
more of its other manufacturing facilities to meet Company's requirements for
Material; (b) commence shipments of Material to Company from such secondary
manufacturing facilities no later than thirty (30) days after the commencement
of the unforeseen catastrophe or other condition; and (c) achieve the following
levels of shipments from such secondary manufacturing facilities: (i) a minimum
of forty (40) percent of Company's then current forecast after thirty (30) days
of the commencement of the unforeseen catastrophe or any other condition; (ii) a
minimum of sixty (60) percent of Company's then current forecast after
forty-five (45) days of the commencement of the unforeseen catastrophe or any
other condition; and (iii) one hundred (100) percent of Company's then current
forecast after sixty (60) days from the commencement of the unforeseen
catastrophe or any other condition.
45. EXPORT CONTROL
Supplier acknowledges that any software and technical
information (hereinafter referred to as "technology"), including but not limited
to services and training, provided under this Agreement may in fact be subject
to United States export laws and regulations, and may require the prior written
approval of the U.S. Department of Commerce for export or reexport. Supplier
further acknowledges that it has the responsibility for obtaining such approval,
and will, in fact, do so prior to exportation.
Supplier and Company agree that they will not, without the
prior written approval of the U.S. Department of Commerce, transfer or release
(directly or indirectly) any unpublished technology, written, oral, or
otherwise, acquired from Lucent Technologies Inc. or Supplier (as applicable),
or any direct product of such technology (including processes, materials, and
services) to any country listed below, or to any resident or national of such
country, or to any party listed on the U.S. Table of Denial Orders or any other
blocked or denied parties list published by the U.S. Government:
Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Cambodia,
Cuba, Estonia, Georgia, Iran, Iraq, Kazakhstan, Krygystan, Laos, Latvia, Libya,
Lithuania, Moldova, Mongolia, North Korea, People's Republic of China, Romania,
Russia, Syria, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Vietnam, and the
Bosnian-Serb controlled areas of Bosnia/Herzegovina.
It is understood that this restriction does not apply to
technology (1) that has been made generally available to the public in any form
including technology released orally or visually in public conferences, lectures
and trade shows; (2) in publications that may be obtained without cost or at
minimal cost, or are readily available in public libraries; and, (3) which can
not be used
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or adapted for use in design, manufacture, production, utilization or
reconstruction of articles or materials.
46. NOTICES
Any notice or demand which under the terms of this Agreement
or under any statute must or may be given or made by Supplier or Company shall
be in writing addressed to the respective parties as stated in the applicable
Order. Notices shall deemed to have been given or made when sent by telegram,
telex, confirmed facsimile, certified or registered mail. Addresses may be
changed at any time by giving prior written notice.
47. INSURANCE
Supplier shall maintain and cause Supplier's subcontractors
performing work for Company in connection with this Agreement to maintain during
the term of this Agreement: (1) Workers Compensation insurance as prescribed by
the law of the state or nation in which the Work is performed, (2) employer's
liability insurance with limits of at least [***] each occurrence, and (3)
comprehensive automobile liability insurance if the use of motor vehicles is
required, with limits of at least [***] for bodily injury and property damage
for each occurrence and (4) Comprehensive General Liability ("CGL") insurance,
including Blanket Contractual Liability, and Broad Form Property damage, with
limits of at least [***] combined single limit for personal injury and property
damage for each occurrence, and (5) if the furnishing to Company (by sale or
otherwise) of products or Material is involved, CGL insurance endorsed to
include products liability and completed operations coverage in the amount of
[***] for each occurrence. All CGL insurance shall designate LUCENT TECHNOLOGIES
INC., its assigns, affiliates, and their officers, directors and employees (all
hereinafter referred to in this clause as "Company") as an additional insured.
Supplier agrees that Supplier, Supplier's insurer(s) and
anyone claiming by, through, under or in Supplier's behalf shall have no claim,
right of action or right of subrogation against Company and its customers based
on any loss or liability insured against under the foregoing insurance. Supplier
and Supplier's applicable subcontractors performing work for Company shall
furnish prior to the start of work certificates or adequate proof of the
foregoing insurance including, if specifically requested by Company, copies or
endorsements and insurance policies. Company shall be notified in writing at
least thirty (30) days prior to cancellation of or any change in the policy.
48. SEVERABILITY
If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire Agreement, but rather the entire Agreement shall
be construed as if not containing the particular invalid or
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unenforceable provision or provisions, and the rights and obligations of
Supplier and Company shall be construed and enforced accordingly.
49. WAIVER
The failure of either party at any time to enforce any right
or remedy available to it under this Agreement or otherwise with respect to any
breach or failure by the other party shall not be construed to be a waiver of
such right or remedy with respect to any other breach or failure by the other
party.
50. SUPPLIER'S INFORMATION
Except as otherwise provided for in a Nondisclosure Agreement,
no Specifications, drawings, sketches, models, samples, tools, computer or other
apparatus programs, technical or business information, or data, written, oral,
or otherwise, furnished by Supplier to Company under this Agreement or any
Order, or in contemplation of this Agreement shall be considered by Supplier to
be confidential or proprietary.
51. USE OF INFORMATION
Any Developed Information, Specifications, drawings, sketches,
models, samples, tools, computer or other apparatus programs, technical or
business information or data, written, oral, or otherwise, owned or controlled
by Company (information") and furnished to or acquired by Supplier under this
Agreement, or in contemplation of this Agreement, shall remain Company's
property. All copies of such Information in written, graphic, or other tangible
form shall be returned to Company at its request. Unless such Information was
previously known to Supplier free of any obligation to keep it confidential, or
has been or is subsequently made public by Company or a third party, it shall be
kept confidential by Supplier, shall be used only in performing under this
Agreement, and may not be used for any other purposes except upon such terms as
may be agreed upon between Supplier and Company in writing.
52. FUNDED DEVELOPMENT/INTELLECTUAL PROPERTY
Supplier agrees not to engage and nor to perform for Company
specific development or design work ("Development") without an advance written
agreement defining ownership of the Development.
53. SURVIVAL OF OBLIGATIONS
Company's and Supplier's obligations and warranties under this
Agreement, which by their nature would continue beyond the termination or
expiration of this Agreement, including, by way of illustration only and not
limitation, those in the clauses COMPLIANCE WITH LAWS, RELEASES VOID, IMPLEADER,
USE OF INFORMATION, FUNDED DEVELOPMENT/INTELLECTUAL PROPERTY, WARRANTY,
INSURANCE, and INDEMNITY AND INFRINGEMENT, shall survive termination,
cancellation, or expiration of this Agreement.
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54. RELEASES VOID
Neither party shall require (i) waivers or releases of any
personal rights or (ii) execution of documents which conflict with the terms of
this Agreement, from employees. representatives or customers of the other in
connection with visits to its premises and both parties agree that no such
releases, waivers or documents shall be pleaded by them or third persons in any
action or proceeding.
55. ASSIGNMENT
Except as set forth below, neither Company nor Supplier shall
assign any right or interest under this Agreement and the Volume/Price Letter or
(with respect to Supplier) under an Order issued pursuant to this Agreement
(excepting monies due or to become due) or delegate any Work or other obligation
to be performed or owed under this Agreement and the Volume/Price Letter or an
Order either in whole or in part without the prior written consent of the other
party which consent shall not be unreasonably withheld. Any attempted assignment
or delegation in contravention of the above provisions shall be void and
ineffective. Any assignment of monies shall be void and ineffective to the
extent that (1) Supplier shall not have given Company at least thirty (30) days
prior written notice of such assignment or (2) such assignment attempts to
impose upon Company obligations to the assignee additional to the payment of
such monies, or to preclude Company from dealing solely and directly with
Supplier in all matters pertaining to this Agreement including the negotiation
of amendments or settlements of charges due.
Notwithstanding the provisions set forth above, Company shall
have the right to assign this Agreement and the Volume/Price Letter and to
assign its rights and delegate its duties under this Agreement and the Volume
Price Letter either in whole or in part, at any time and without Supplier's
consent; provided however that such assignment shall only be permitted to an
affiliate or subsidiary of Company having assets greater than [***]. Company
shall give Supplier thirty (30) days prior written notice of any such
assignment. The assignment shall neither affect nor diminish any rights or
duties that Supplier or Company may then or thereafter have as to services or
Material ordered by Company prior to the effective date of the assignment.
Upon the acceptance of the assignment and assumption of the
duties under this Agreement and the Volume/Price Letter by the assignee, Company
shall be released and discharged, to the extent of the assignment, from all
further duties under this Agreement and the Volume/Price Letter as to services
or Material not ordered by Company by the effective date of the assignment.
56. CHOICE OF LAW
The construction, interpretation and performance of this
Agreement and all transactions under it shall be governed by the laws of the
State of New York excluding its choice of laws rules and excluding the
Convention for the International Sale of Goods. The parties agree
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*Confidential Treatment Requested
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that the provisions of Article 2 "Sales" of the New York Uniform Commercial Code
apply to this Agreement and all transactions under it, including agreements and
transactions relating to the furnishing of services, the lease or rental of
equipment or Material, and the license of software. Supplier agrees to appear in
any court wherein an action is commenced against Company based on a claim for
which Supplier has agreed to indemnify Company under this Agreement.
57. COMPLIANCE WITH LAWS
Supplier and all persons furnished by Supplier shall at their
own expense comply with all applicable laws, ordinances, regulations, and codes
in their performance of this Agreement. Supplier and all persons furnished by
Supplier shall at their own expense be responsible for identifying and obtaining
any and all approvals (except for foreign country homologation and foreign
country approvals or certifications as set forth under the clause COMPLIANCE
WITH FEDERAL COMMUNICATIONS COMMISSION'S RULES AND REGULATIONS PARTS 15 AND 68),
permits, licenses, certificates, insurance, inspections, or the like which may
be required to perform their obligations under the Agreement including, but not
limited to, any licenses required for export of Material Supplier agrees to
indemnify and hold Company harmless from any loss or damage that may be
sustained by Company by reason of Supplier's or Supplier's suppliers failure to
do so.
58. LICENSES
No licenses, express or implied, under any patents,
copyrights, trademarks, or other intellectual property rights are granted by
Company to Supplier under this Agreement or any contract or Order issued
pursuant to this Agreement.
59. IMPLEADER
Supplier shall not implead or bring an action against Company
or its customers or the employees of either based on any claim by any person for
personal injury or death to an employee of Company or its affiliates or their
respective customers occurring in the course or scope of employment and that
arises out of Material or services furnished under this Agreement.
60. FORCE MAJEURE
Neither party shall be held responsible for any delay or
failure in performance of any part of this Agreement or Order to the extent such
delay or failure is caused by fire, flood, explosion, war, strike, embargo,
government requirement, civil or military authority, act of God, act or omission
of carriers or other similar causes beyond its control and without the fault or
negligence of the delayed or nonperforming party or its subcontractors ("force
majeure conditions"). Notwithstanding the foregoing, Supplier's liability for
loss or damage to Company's Material in Supplier's possession or control shall
not be modified by this clause. If any force majeure condition occurs, the party
delayed or unable to perform shall give immediate notice to the other party and
the party affected by the other's delay or inability to perform may elect to:
(1) suspend this Agreement or Order for the duration of the force majeure
condition and (i) at its option obtain elsewhere manufacturing or repair
services to have been furnished under this
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Agreement or Order and deduct from any commitment the quantity obtained or for
which commitments have been made elsewhere and the Volume/Price levels set forth
in the Volume Price Letter shall be adjusted to reflect the dollar amount
purchased by Company from the other source or sources, and (ii) once the force
majeure condition ceases, resume performance under this Agreement or Order with
an option in the affected party to extend the period of this Agreement or Order
up to the length of time the force majeure condition endured and/or (2) when the
delay or nonperformance continues for a period of at least thirty (30) days,
terminate, at no charge, the applicable Order or the part of it relating to
Material not already shipped or Services not already performed. Unless written
notice is given within forty-five (45) days after the affected party is notified
of the force majeure condition, (1) shall be deemed selected.
61. IDENTIFICATION
Supplier shall make no use of any identification of Company or
its affiliated companies in its advertising or promotional efforts in reference
to activities undertaken by Supplier under this Agreement without Company's
prior written consent. The term "identification" includes any trade name,
trademark, service mark, insignia, symbol, or any simulation thereof, and any
code, drawing, specification, or evidence of Company's inspection. Supplier
agrees to remove any such identification prior to any sale, use or disposition
of Material or equipment rejected or not purchased by Company, and shall
indemnify. Company, Lucent Technologies Inc. and its affiliated companies
against any claim arising out of Supplier's failure to do so. This clause does
not modify the USE OF INFORMATION clause.
62. COMPLIANCE WITH FEDERAL COMMUNICATIONS COMMISSION'S RULES AND
REGULATIONS PARTS 15 AND 68
Material sold to, manufactured and/or repaired for Company
hereunder for sale or use within the United States shall comply with the
requirements of Parts 15 and 68 of the FCC Rules and Regulations. Material sold
to, manufactured and/or repaired for Company hereunder for sale or use outside
the United States shall comply with the requirements of those targeted
countries. All countries not previously identified as acceptable by Supplier
must be approved in advance by Supplier.
In the event that Supplier does not obtain such Agency
approvals and/or certifications as required by law, Supplier agrees to indemnify
and save Company harmless from any damages, liabilities, claims, or demands,
costs, expenses (including but not limited to rework expressly necessary to
bring Material into compliance) and reasonable attorney's fees which Company may
incur on account thereof.
Nothing herein shall be deemed to diminish or otherwise limit
Supplier's obligations under the clause WARRANTY clause of this Agreement.
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63. FIELD RETURNS (REPAIR SERVICE)
Supplier agrees to provide repair services on all Material
ordered hereunder both during the term of, and for a period of five (5) years
after the expiration of this Agreement. Company agrees to obtain a Return
Material Authorization prior to returning the Material.
Field Returns are Material returned to Supplier that has been
purchased by a customer and either used or not used. This Material may represent
both defective and non-defective units. Supplier agrees to repair all Material,
returning it to a state of repair whereby it will satisfy all terms and
conditions of this Agreement, and applicable Orders. All Material furnished for
repair will remain the property of Company. The interval for this repair shall
not exceed seven (7) working days from receipt of product at Supplier's
facility. The price and any new terms for Repairs not covered by this Agreement
shall be mutually agreed upon by the parties. The price for these repairs shall
be set forth in the applicable Orders.
Supplier agrees to identity all costs associated with this
repair activity. Complete and accurate records will be maintained by Supplier so
as to enable Company and Supplier to effectively evaluate this Field Return
procedure.
Material repaired by Supplier shall have the repair completion
date stenciled on the bottom of the base of Material or otherwise identified in
a permanent manner at a readily visible location on Material as mutually agreed
upon.
All invoices originated by Supplier for repair services must
be clearly identified as such, and must contain a reference to Company's Order
for these repair services. Further, the provisions of the clause SHIPPING AND
BILLING, other than provisions relating to transportation charges with respect
to Material repaired under warranty, shall apply to Supplier's return to Company
of repaired Material. Company shall give Supplier six (6) months notice if
Company decides to terminate repair services performed by Supplier.
64. INITIALLY DEFECTIVE MATERIAL
"Initially Defective" as used in this clause shall mean any
defective Material returned by Company within thirty (30) days from the date of
sale to end-user. Such Initially Defective Material may be returned to Supplier
by Company for replacement with risk of in transit loss or damage borne by and
freight paid by Company.
Accompanying the Initially Defective Material will be a repair
order, which will include the following:
(1) Identify Material as Initially Defective and contain a
brief description of the defect, if possible.
(2) Identify whether Material is used.
(3) Ship-to address of Company.
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In the event Supplier decides that Initially Defective
Material should be replaced, and Supplier has a "Refurbishment Replacement
Program" in place for Material, then Supplier shall ship a new replacement unit
within seven (7) days of receipt of the defective Material. Supplier shall bear
the transportation cost and risk of loss for the return of such Material. If
Supplier does not have a "Refurbishment Replacement Program" currently in place,
and then implements a program, Supplier shall notify Company within thirty (30)
days and extend to Company the seven (7) day replacement provision for Initially
Defective Material. Until Supplier implements the "Refurbishment Replacement
Program", Supplier shall repair Initially Defective Material as set forth above.
After the initial thirty (30) day period for Company's return
of defective Material to Supplier, defective Material shall be returned to
Supplier by Company accompanied by the Repair Order, with risk of loss borne and
freight paid by Company. At the option of Supplier, such Material will be
repaired or replaced by Supplier at no cost to Company for in warranty returns.
Unless otherwise agreed upon, Supplier shall complete repairs
and ship returned Material to Company within twenty (20) days of receipt of the
defective Material. Supplier shall bear the cost of freight and assume the risk
of loss for shipment to Company of repaired or replaced Material.
If Material returned to Supplier for repair as provided for in
this clause is determined to be beyond repair, Supplier shall promptly so notify
Company and, unless otherwise agreed to by Supplier and Company, ship
replacement Material without charge within seven (7) days of receipt of in
warranty Material if Supplier has a "Refurbishment Replacement Program" in place
for Material. If Supplier does not have a "Refurbishment Replacement Program"
currently in place, and then implements a program Supplier shall notify Company
within thirty (30) days and extend to Company the seven (7) day replacement
provision for in warranty Material. Until Supplier implements the "Refurbishment
Replacement Programs, Supplier shall repair Initially Defective Material as set
forth above.
Any Material which is repaired, modified, replaced, or
otherwise serviced by Supplier shall be warranted as provided in the clause
WARRANTY for the remainder of the warranty period or ninety (90) days after
Material is shipped to Company, whichever is later (based upon the date repair,
modification, or other service is completed and accepted by Company).
A repair and/or replacement report detailing the repairs or
modification to all units returned by Company will be provided on a monthly
basis.
65. EPIDEMIC CONDITION
In the event that during the term of this Agreement and for
one year after the last shipment date of Material hereunder, Company notifies
Supplier (in accordance with the NOTICES clause) that Material shows evidence of
an Epidemic Condition, Supplier shall prepare and propose a "Corrective Action
Plan" (CAP) with respect to such Material within ten (10)
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working days of such notification, addressing implementation and procedure
milestones for remedying such Epidemic Condition(s). An extension of this
time-frame is permissible upon mutual agreement of the parties.
Upon notification of the Epidemic Condition to Supplier,
Company shall have the right to postpone shipments of unshipped Material by
giving written notice of such postponement to Supplier, pending correction of
the Epidemic Condition. Such postponement shall temporarily relieve Supplier of
its shipment liability and Company of its shipment acceptance liability. Should
Supplier not agree to the existence of an Epidemic Condition or should Company
not agree to the Corrective Action Plan, then Company shall have the right to
suspend all or part of its unshipped Orders without liability to Company until
such time as a mutually acceptable solution is reached.
An Epidemic Condition, excluding potential safety hazards,
will be considered to exist when one or more of the following conditions occur:
1. Failure reports or statistical sampling showing that three
percent (3%) or more of any consecutive one hundred (100) units of Material
delivered to Company or Company's customers are rejected for defective materials
or workmanship; or repair reports indicate nonconformance for the same defect of
five percent (5%) of the installed Material base.
2. Reliability plots of relevant data indicate that Material
has actual Mean Time Between Failures (MTBF) of less than eighty (80%) percent
of the MTBF stipulated in Specification for Material. The MTBF parameter of
Material is defined as the total operation or power-on time of any population
under observation ("T"), in hours, divided by the total number of critical
failures ("n") that have occurred during the observed period. A critical failure
is defined as a failure to operate per the requirements of Specification. The
total operating time for a population is the summation of operating time of
individual units in that population. MTBF is expressed as MTBF=T/n. An Epidemic
Condition shall exist when data derived from populations being tracked confirms
the condition with eighty (80%) percent statistical confidence.
3. Material Dead on Arrival ("DOA") failures exceed the
Epidemic DOA failure rate which is defined as two percent (2%) of Material
delivered to Company or Company's customer within a one (1) month period.
Only major functional visual/mechanical/appearance defects are
considered for determining Epidemic Condition. Material could be either sampled,
or at Company option, one hundred (100%) percent audited at Company warehouses,
factories, or Company's customers' locations. If Material is sampled, the data
must have eighty (80%) percent or better statistical confidence.
For the purpose of this Agreement, functional DOA shall not
include Material for which no defect is found and shall be defined as any
Material that during the test, installation or upon its first use fails to
operate as expected or specified. Visual/mechanical/appearance DOA is defined as
any Material containing one or more major defects that would make Material unfit
for use or installation.
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An Epidemic Condition shall not include failure due to
customer misapplication, misuse, abuse, lightning, utilization of parts not
approved by Supplier, or chain failures induced by internally or externally
integrated subassemblies.
In the event that Supplier develops a remedy for the defect(s)
that caused the Epidemic Condition and Company agrees in writing that the remedy
is acceptable, Supplier shall:
(a) Incorporate the remedy in the affected Material in
accordance with Engineering Change Control procedures or manufacturing
procedures, as applicable, agreed to by the parties.
(b) Ship all subsequent Material incorporating the required
modification correcting the defect(s) at no additional charge to Company; and
(c) Repair and/or replace at Supplier's option Material that
caused the Epidemic Condition. In the event that Company incurs costs due to
such repair and/or replacement, including but not limited to labor and shipping
costs, Supplier shall reimburse Company for such costs, as mutually determined
and agreed upon by both parties. Supplier shall bear such risk of in transit
loss and damage for such repaired and/or replaced Material shipped to Company.
Supplier and Company shall mutually agree in writing as to the
remedy's implementation schedule. Supplier agrees to utilize its best efforts to
implement in accordance with agreed-upon schedule.
In the event that Supplier is unable to develop a mutually
agreeable remedy, or does not adequately take into account the business
interests of Company, as reasonably agreed by the parties, Company may (1)
develop such remedy and implementation cost and risk of in transit loss and
damage shall be allocated between the parties as set forth in this clause,
and/or (2) cancel postponed Orders without liability and return all confirmed
Material affected by such Epidemic Condition for full refund, payable by
Supplier within thirty (30) days after receipt of returned Material (with risk
of loss of in transit damage borne by Supplier) and Company shall have the right
to adjust the Volume/Price levels set forth in the Volume/Price Letter to
reflect the dollar amount being canceled, and/or (3) terminate this Agreement
without further liability.
66. TITLE TO PARTS FURNISHED BY COMPANY
All parts furnished by Company shall remain Company's property
and be kept segregated and marked PROPERTY OF LUCENT TECHNOLOGIES INC. Supplier
agrees to be responsible for any loss or damage to such parts while in
Supplier's possession or under Supplier's control. Company may inspect,
inventory, and authenticate the amount of parts that are furnished under this
Agreement during Supplier's normal business hours. Supplier shall provide
Company access to the premises wherein all such parts are located. Supplier
shall at Company's option, return to Company or hold for Company's disposition
any and all of such parts and any scrap produced remaining in Supplier's
possession upon termination of this Agreement.
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Supplier will not assert or file common law or statutory lien
against parts furnished by Company, and hereby waives any such common law and
statutory liens. Supplier shall, within ten (10) days of receipt of Company's
parts, notify Company in writing of any claims for quantity variation in the
parts furnished to Supplier.
Supplier shall store Company parts in protected areas approved
by Company. In case of removal from one building to another, Supplier's
responsibility for loss or damage shall continue and Supplier shall give Company
advance notice in writing of the removal, except when the removal is required
during Supplier's manufacturing process.
Supplier shall list parts furnished by Company on all
documents covering manufactured and/or repaired Material shipped from Supplier
to Company.
67. TITLE TO SPECIAL TOOLING AND TEST EQUIPMENT
Special tooling and test equipment ("Tooling") furnished by
Company for use by Supplier under this Agreement shall remain Company's property
at all times, and Supplier shall:
(1) Be responsible for the safekeeping of Tooling and assume
all risks of loss or damage to same, except for reasonable wear and tear.
(2) Maintain and use Tooling in accordance with all applicable
local and country occupational safety and health requirements and other safety
requirements, codes, or standards. Supplier agrees to indemnify and hold
harmless Company from and against any and all losses, damages, claims, demands,
suits, and liabilities (including reasonable attorney's fees) of any kind and
nature whatsoever (including but not limited to claims resulting from injuries
or death to persons or damage to property) in any way arising out of or
resulting from the maintenance, ownership, possession, operation, use,
condition, storage, or movement of Tooling or any accident in connection
therewith.
(3) Permanently mark or if impracticable to do so then affix
labeling stating that Tooling is the PROPERTY OF LUCENT TECHNOLOGIES INC.
(4) Store Tooling, when not in use, on racks or in sections of
Supplier's plant marked PROPERTY OF LUCENT TECHNOLOGIES INC., and, in case of
removal of all or any part of it from one building to another, Supplier's
responsibility for loss or damage shall continue and Supplier shall give Company
advance notice in writing of the removal, except when the removal is required
during Supplier's manufacturing process.
(5) Use Tooling only in the manufacture and/or repair of
Material furnished to Company, unless otherwise agreed in writing by Company,
and deliver it to Company upon demand FOB Supplier's plant without additional
charge for removal, packing, or crating.
(6) Repair or replace parts of Tooling as needed from time to
time without charge to Company. This includes, among other things, adjusting,
replaces punches or die sections, and sharpening and keeping tools in good
working condition. At any time when Supplier proposes replacing the entire tool
because (a) tool life has been expended or worn
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beyond economical repair, or (b) design changes by Company necessitate
modification or complete replacement, Supplier shall first obtain Company's
written approval, and the replacement Tooling shall be subject to the terms of
this Agreement. Company shall bear the cost of components needed to repair its
test equipment.
(7) Permit Company to inspect, inventory, and authenticate the
account of Tooling furnished under this Agreement during Supplier's normal
business hours. Supplier shall provide Company access to the premises where all
such Tooling is located. The obligations assumed by Supplier with respect to
Tooling as furnished under this Agreement are for the protection of Company's
property. Supplier shall, at Company's option, return to Company or hold for
Company's disposition any or all of such Tooling and associated drawings in
Supplier's possession free of restrictions at (a) the completion of the
applicable Order, if such tooling relates to such Order, or (b) termination of
this Agreement.
68. WARRANTY
Supplier warrants to Company that the Material furnished will
be new product free from defects in design, material, and workmanship, and will
conform to the Specifications, drawings, and samples referred to in this
Agreement or any Order under this Agreement and will perform satisfactorily for
a period of twenty-four (24) months or such longer period as may be agreed to
from time to time from the date of delivery to Company. Supplier warrants that
at time of delivery of the Material, such Material shall be free of any security
interest or any other lien or any other encumbrance whatsoever. Supplier also
warrants to Company that Services will be performed in a first class workmanlike
manner. In addition, if Material furnished contains components subject to one or
more manufacturer's warranties, Supplier hereby assigns such warranties to
Company to the extent permissible. All warranties shall survive inspection,
acceptance, and payment. Material not meeting the warranties will be repaired or
replaced at no cost to Company.
At Company's option, defective or nonconforming Material will
be returned to Supplier for repair or replacement at no cost to Company, with
risk of in-transit loss and damage borne by Company and freight paid by Company.
Unless otherwise agreed upon by Supplier and Company, Supplier shall complete
repairs and ship the repaired Material within seven (7) working days of receipt
of defective or nonconforming Material.
Supplier shall bear the risk of in-transit loss and damage and
shall prepay and bear the cost of freight for shipments to Company of repaired
or replaced Material.
Supplier should be contacted for a Return Material
Authorization Number prior to the return of any Material.
69. QUALITY
Supplier commits to ensure that all manufacturing and design
operations which contribute to the design, development, production and services
of Material remain ISO 9001 or 9002 certified and with respect to certain of
Supplier's subcontractors, are on a plan to achieve
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such certification. Furthermore, Supplier will use its reasonable best efforts
to attain and maintain acceptable ratings in any future quality programs as
agreed to by the parties hereto.
70. MEDIATION
If a dispute arises out of or relates to this Agreement or its
breach and the parties have not been successful in resolving such dispute
through negotiation, the parties agree to attempt to resolve the dispute through
non-binding mediation by submitting 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"). Each party shall bear its own expenses
and an equal share of the expenses of the mediator and the fees of the AAA. The
parties, their representatives, other participants and the mediator shall hold
the existence, content and result of the mediation in confidence. If such
dispute is not resolved by such mediation or either party elects to terminate
such mediation, the parties shall have the right to resort to any remedies
permitted by law. All defenses based on passage of time shall be tolled pending
the termination of the mediation. Nothing in this clause shall be construed to
preclude any party from seeking injunctive relief in order to protect its rights
pending mediation. A request by a party to a court for such injunctive relief
shall not be deemed a waiver of the obligation to mediate. During the pendency
of the mediation, pricing for Material shall be held at the then existing
levels.
71. ENTIRE AGREEMENT
This Agreement shall incorporate any additional typed or
written provisions on the front side of Company's Orders issued and accepted
pursuant to this Agreement and shall constitute the entire agreement between the
parties with respect to the subject matter of this Agreement, and this Agreement
and the Order(s) and shall not be modified or rescinded, except by a writing
signed by Supplier and Company. In the event of a conflict between this
Agreement and the typed provisions on the Order, this Agreement shall prevail.
All references in these terms and conditions to this Agreement or to work,
services, Material, equipment, products, software or information furnished
under, in performance of, pursuant to, or in contemplation of, this Agreement
shall also apply to any Orders issued pursuant to this Agreement. Printed
provisions on the reverse side of Company's Orders and all provisions on
Supplier's forms shall be deemed deleted, alterations, addenda, or otherwise,
shall be of no force and effect, unless expressly consented to by the parties in
writing. Estimates or forecasts furnished by Company shall not constitute
commitments. The provisions of this Agreement supersede all contemporaneous oral
agreements and all prior oral and written quotations, communications, agreements
and understandings of the parties with respect to the subject matter of this
Agreement. The term "Work" as used in this Agreement may also be referred to as
"services."
AT&T PARADYNE CORPORATION LUCENT TECHNOLOGIES INC.
By: /s/ W. Preston Granbery By: /s/ Carleton S. Fiorina
----------------------------- ------------------------------
Name: W. Preston Granbery Name: Carleton S. Fiorina
----------------------------- ------------------------------
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Title: Authorized Agent Title: Vice President
----------------------------- ------------------------------
Date: 7/31/96 Date:
----------------------------- ------------------------------
CAP ACQUISITION CORP.
By: /s/ David M. Stanton
-----------------------------
Name: David M. Stanton
-----------------------------
Title: President
-----------------------------
Date: 7/31/96
-----------------------------
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EXHIBIT A
MATERIAL PRICE AND LEAD TIME
[***]
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A-1
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EXHIBIT B
MATERIAL ON CONSIGNMENT
The terms set forth herein (the "Consignment Arrangement")
will govern any Material on Consignment ("Consigned Material") at a Company
location, each as mutually agreed upon by Company and Supplier and as set forth
in Schedule(s) in the form attached hereto.
1. TERM OF CONSIGNMENT ARRANGEMENT - The term of the
Consignment Arrangement shall be specified in the acknowledged Consignment
Purchase Order.
2. FOB - Consignment site.
3. MATERIAL MANAGEMENT - Supplier shall ship all Consigned
Material via any nationally recognized carrier selected by Company and Supplier.
At the beginning of each 12 month period of this Consignment
Arrangement or otherwise agreed to by Company and Supplier, Company shall issue
to Supplier a "Master Purchase Order" for each Consigned Material. The Master
Purchase Order shall contain Company's twelve (12) month good faith estimated
annual usage for each Consigned Material. The estimated annual usage will be
provided by the Company solely for administrative purpose and shall not
constitute a commitment by the Company to purchase from Supplier the amount set
forth in the estimated annual usage.
Each week the Company shall send to Supplier a Forecast (the
"Weekly Consignment Forecast") for each Consigned Material. The Weekly
Consignment Forecast shall contain an updated twelve (12) month forecast,
including the Company's good faith weekly estimated requirements for a minimum
of the next 26 weeks, for each Consigned Material. Such Forecast shall be issued
by the Company solely for Supplier's Material planning purposes and shall not
constitute a commitment by the Company to purchase from Supplier the amount of
Material set forth in such Weekly Consignment Forecast. The Weekly Consignment
Forecast may differ from the Master Purchase Order estimated annual usage. In
addition, the Weekly Consignment Forecast shall (a) show the quantities
delivered by Supplier that are currently in Consigned Material storage (as
hereinafter defined) and (b) list by part number the amount of Material
withdrawn by Company from Consigned Material storage during such week and the
balance of such Consigned Material Storage. Supplier shall invoice Company each
month for Consigned Material withdrawn by Company in the previous month.
Supplier shall review the Weekly Consignment Forecast and
shall adjust Consigned Material Storage Stock support levels and Supplier's work
in process as set forth herein for the mutually agreed to quantities. Supplier
shall manufacture and ship enough Material into Consigned Material Storage so
that Consigned Material Storage contains the following: one (1) week forecast
plus a level of safety stock not to exceed the next three (3) weeks of Company's
forecast for such part numbers based on the then current Weekly Consignment
Forecast.
B-1
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Supplier shall have the Material Management (which shall be
based upon the Weekly Consignment Forecast) responsibility for Company's
Consignment Site for the Consigned Material. Supplier shall be responsible for
notifying Company of inventory fluctuations considered to be excessive by
Supplier. If upside fluctuations are deemed excessive by Supplier, Supplier and
Company shall work together on a delivery plan mutually agreeable to both
parties.
Company's commitment to purchase Consigned Material shall be
only those quantities withdrawn by Company from Consigned Material Storage and
as set forth below. Returns to Consigned Material Storage must be with the prior
written approval of Supplier.
If at any time during the twelve (12) month period covered by
a Master Purchase Order, this Consignment Arrangement is terminated by either
party as set forth below, or if Company changes its Weekly Consignment Forecast
to eliminate or materially reduce the quantities forecasted under the Master
Purchase Order, or if this Consignment Arrangement expires and is not renewed
during the term of this Agreement, Company's liability to Supplier shall be to
purchase the sum of the first four (4) weeks of gross forecasted amounts for
such terminated, eliminated or materially reduced or expired items (as
forecasted in the previous week's Weekly Consignment Forecast) and Supplier's
work in process and/or raw materials and components. Company's liability for
work in process and/or raw materials and components should not exceed the
Supplier's Lead Time referenced on Exhibit A of gross forecasted amounts for
such terminated, eliminated or materially reduced or expired items (as
forecasted in the previous week's Weekly Consignment Forecast), Such total of
gross forecasted amounts shall be referred to in this clauses as "Forecasted
Material". For that portion of the Forecasted Material at Supplier's location,
Company's obligation under this subsection shall be limited to the sum of (a)
[***] and (b) [***], (i) [***] and (ii) [***] other customers in the ordinary
course of business over a reasonable period of time); less [***] set forth in
(a) and (b) above. If requested by the Company, Supplier agrees to substantiate
such costs and purchase Price with proof reasonable satisfactory to Company.
Upon such termination, elimination, material reduction or
expiration the parties shall meet promptly to determine the finished Materials,
work in process, components and raw materials for which Company is responsible
as set forth above. Supplier shall, at Company's option and expense, ship to
Company or scrap such finished Materials, work in process and raw materials and
components for which Company is liable under this clause.
4. MATERIAL ON CONSIGNMENT - Supplier shall deliver the
Consigned Material as set forth below:
a. Contact Person - The Company's contact person for
each Consignment Arrangement shall be set forth in Company's Weekly Consignment
Forecast.
b. Consigned Material Storage - Upon receipt of each
shipment of Consigned Material, Company shall cause it to be placed in
segregated storage ("Consigned Material Storage") at the Consignment Site
partitioned or marked to evidence Supplier's
- -------------------
*Confidential Treatment Requested
B-2
<PAGE> 32
ownership and in such a way that the Consigned Material may be readily
distinguished from other inventory by physical inspection. Supplier may
physically inspect Consigned Material in Consigned Material Storage at mutually
agreeable times during normal business hours. After such inspection, Supplier
may invoice Company for any unaccounted for inventory of Consigned Material at
the Price then in effect under this Agreement.
c. Title and Risk of Loss - Upon receipt of
Consignment Material, risk of loss of such lot shall pass to Company. Upon
withdrawal of any item in such lot by Company from Consigned Material Storage,
title to such item shall pass to Company and sale of that lot shall be deemed to
occur.
d. Terms of Payment - Net 30 days.
e. Withdrawal from Consigned Material Storage -
Company may withdraw or cause to be withdrawn Consigned Material from Consigned
Material Storage at any time. Company shall keep or cause to be kept records and
report to Supplier weekly the quantities withdrawn and the balance of Consigned
Material in Consigned Material Storage as set forth in the clause MATERIAL
MANAGEMENT. Supplier's invoices for the Consigned Material shall be based upon
such withdrawal reports. Supplier shall regularly replace quantities withdrawn
to maintain mutually agreed upon stock support levels as set forth in the clause
MATERIAL MANAGEMENT.
f. Shipping Information - Promptly after each
shipment of Consigned Material under this Agreement, Supplier shall furnish to
Company and if Company so requests, to a designated party at the Consignment
Site, a written report setting forth at least the following (i) Company's Order
number; (ii) Consignment Destination; (iii) Origin location; (iv) Name of
Carrier and Truck number (v) lot identification number of each lot; (vi) net
weight of each lot; and (vii) description and quantity of Material in each lot.
g. Personal Property Taxes - Supplier shall be
responsible for the reporting and payment of personal property taxes, if any, on
any Consigned Material in such Consigned Material Storage by Company, except
state and local sale use taxes, as applicable.
h. Transportation Loss - As to loss of or damage to
Consigned Material which is reasonably apparent upon delivery from the carrier,
Company shall cause the following to be done:
(i) At time of delivery, mark the delivery
receipt before signing with appropriate exceptions describing the damage;
(ii) At the time of delivery, request the
carrier to either inspect the loss or damage and forward to Supplier a signed
exception report outlining the extent of loss or damage, or issue a written
waiver of inspection and forward it to Supplier; and
(iii) Within ten days after delivery,
inspect the damaged Material and notify Supplier whether Company will (a) accept
it at a mutually agreed lower Price reflecting the transportation damage (if
Supplier had the risk of loss), or (b) reject it. Rejected items shall
B-3
<PAGE> 33
be set aside by Company pending disposition by Supplier as soon as reasonably
possible but no later than sixty days following delivery, after which time any
such damaged Consigned Material remaining undisposed of shall be deemed to be
abandoned and Company may dispose of it as it sees fit without any obligation to
Supplier.
As to concealed transportation damage, if after withdrawal of
any Consigned Material from Consigned Material Storage, Company discovers
concealed transportation damage, Company shall notify Supplier within five days
of such discovery, take reasonable steps to preserve evidence of how such damage
occurred and take all actions provided in for (b)(iii) above. Where Consigned
Material Storage is located on premises other than Company premises, Company
shall direct the owner of such other premises to comply with the procedure set
forth in this clause.
5. OPTION TO EXTEND - Company shall have the right to extend
the period specified in the clause TERM OF CONSIGNMENT ARRANGEMENT with the
consent of Supplier for up to six(6) months without any increase in Price by
giving Supplier at least thirty (30) days prior written notice.
6. TERMINATION (Consignment Arrangement Only) - Either party
may terminate the Consignment Arrangement with prior written notice of at least
sixty (60) days. Upon receipt or sending such notice, as applicable, Supplier
shall immediately stop work as specified in the notice. Company's liability to
Supplier with respect to such termination shall be limited to the purchase of
the quantities set forth in Clause 3 above, such quantities to be counted as of
the termination date set forth in the notice.
7. CONSIGNMENT SERVICE PERFORMANCE - The Company intends to
monitor the delivery performance of Supplier via special performance reports as
set forth in the Clause SERVICE in the Supply Agreement. In addition, so long as
Company complies with its obligations pursuant to Section 4, Material for
Consignment purposes, Supplier shall strive to achieve or exceed [***]
performance rating for percent of forecasted quantity on hand when measured.
- -------------------
*Confidential Treatment Requested
B-4
<PAGE> 34
EXHIBIT C
PULL REPLENISHMENT ARRANGEMENT
The terms set forth herein (the "Pull Replenishment
Arrangement") will govern any Material on Pull Replenishment at a Company
location, each as mutually agreed upon by Company and Supplier.
1. TERM OF PULL REPLENISHMENT ARRANGEMENT - The term of the
Pull Replenishment Arrangement shall be specified in the Pull Replenishment
Purchase ("PRP") Order acknowledged by Supplier.
2. PULL REPLENISHMENT PROCESS - For Pull Replenishment
Material, Company shall prepare and deliver to Supplier an annual PRP order(s)
establishing the minimum release quantity for Material. On Monday of each week,
Company shall provide Supplier with an updated twelve (12) month forecast,
including the Company's reasonable and good faith estimated requirements for a
minimum of the next twenty six (26) weeks, for each Pull Replenishment Material
(the "Forecast"). Supplier will receive "Request to Ship" notices as Company
uses Material and requires replenishment of Material. Supplier will deliver
within two to three days of Supplier's receipt of the Request to Ship" 100% of
the quantity designated in the "Request to Ship" notice. Supplier shall
reference the annual PRP order number on its shipping and invoicing documents.
The Forecast received weekly from Company shall be for planning purposes only
and, except to the extent set forth below, shall not be deemed a commitment by
the Company to purchase from Supplier the amount set forth in the Forecast.
Company will acknowledge receipt of Material delivered in the prior week via the
succeeding week's Forecast.
Supplier shall maintain (a) an inventory of inspected finished
Pull Replenishment Material equal to the amount of such Material forecasted to
be used by the Company during weeks one (1) through three (3) of the then
current Forecast and (b) work in process and/or raw materials and components in
the aggregate sufficient to manufacture such Pull Replenishment Material
equivalent to weeks four (4) through eight (8) of then current Forecast. From
time to time, the parties will review the foregoing levels of inventory, work in
process and/or raw material and components and will negotiate on lower inventory
levels, work in process and materials and components based on Supplier's
satisfactory Pull Replenishment service performance.
Supplier shall review the weekly Forecast and make adjustments
to Supplier's inspected inventory of Pull Replenishment Material, work in
process and raw materials and components based upon increases/decreases in the
Forecast. Supplier shall be responsible for notifying Company of inventory
fluctuations considered to be excessive by Supplier. If upside fluctuations are
deemed excessive by Supplier, Supplier and Company shall work together on a
delivery plan mutually agreeable to both parties.
The Company's commitment for the purchase of Pull
Replenishment Material shall be limited to (a) the quantities set forth in the
"Request to Ship" notice of the Forecast and (b) the finished and inspected by
Supplier inventory of Pull Replenishment Materials, work in process, raw
materials and components as set forth above.
C-1
<PAGE> 35
The Company's liability for the items above shall be limited
to the sum of (a) [***]; (b) [***]; and (c) for [***].
3. TERMINATION OF PULL REPLENISHMENT ARRANGEMENTS - Company
may at any time terminate any or all annual PRP orders, in whole or in part,
upon thirty (30) days written notification to Supplier. Upon receipt of such
notice, Supplier shall immediately stop work as specified in the notice to
Supplier. Company liability to Supplier with respect to such termination shall
be as set forth in paragraph 2 above. Upon such termination, the parties shall
meet promptly to determine the finished Pull Replenishment Material, work in
process and raw material and components for which Company is responsible as set
forth above. Supplier shall, at Company's option and expense, ship to Company or
scrap such finished Material, work in process and raw materials and components
for which Company is liable under this Agreement.
4. PULL REPLENISHMENT SERVICE PERFORMANCE - The Company
intends to monitor the delivery performance of Supplier via special performance
report set forth in the clause SERVICE of the Supply Agreement. Supplier will
strive to achieve or exceed the service goals established in the clause SERVICE.
- -------------------
*Confidential Treatment Requested
C-2
<PAGE> 36
EXHIBIT D
DEMAND - PULL
The terms set forth herein (the "Demand Pull Arrangement")
will govern any Material on Demand Pull at a Company location, each as mutually
agreed upon by Company and Supplier.
1. TERM OF DEMAND PULL ARRANGEMENT - The term of the Demand
Pull Arrangement shall be specified in the Demand Pull purchase (DPP) order
acknowledged by Supplier.
2. DEMAND PULL PROCESS - For Demand Pull Material, Company
shall prepare and deliver to Supplier an annual DPP order(s). On Monday of each
week, Company shall provide Supplier with an updated twelve (12) month forecast,
including the Company's reasonable and good faith estimated requirements for a
minimum of the next twenty six (26) weeks, for each Demand Pull Material (the
"Forecast"). The Forecast may also contain authorization by Company to Supplier
to ship within twenty-four hours and Supplier will deliver within the week of
Supplier's receipt of the Forecast provided said Forecast is actually received
on Monday, 100% of the quantity designated in the column entitled "Ship Action"
to be received by Thursday of the current week. Supplier shall reference the
annual DPP order number on its shipping and invoicing documents. The Forecast
shall be for planning purposes only and except to the extent set forth below,
shall not be deemed a commitment by the Company to purchase from Supplier the
amount set forth in the annual DPP order or the Forecast. Company will
acknowledge receipt of Material delivered in the prior week via the succeeding
week's Forecast.
Supplier shall maintain (a) an inventory of inspected finished
Demand Pull Material equal to the amount of such Material forecasted to be used
by the Company during weeks one (1) through three (3) of the then current
Forecast and (b) work in process and/or raw materials and components in the
aggregate sufficient to manufacture such Demand Pull Material equivalent to
weeks four (4) through eight (8) of then current Forecast. From time to time,
the parties will review the foregoing levels of inventory, work in process
and/or raw material and components and will negotiate on lower inventory levels,
work in process and materials and components based on Supplier's satisfactory
demand pull service performance.
Supplier shall review the weekly Forecast and make adjustments
to Supplier's inspected inventory of Demand Pull Material, work in process and
raw materials and components based upon increases/decreases in the Forecast.
Supplier shall be responsible for notifying Company of inventory fluctuations
considered to be excessive by Supplier. If upside fluctuations are deemed
excessive by Supplier, Supplier and Company shall work together on a delivery
plan mutually agreeable to both parties.
The Company's commitment for the purchase of Demand Pull
Material shall be limited to (a) the quantities set forth in the "Ship Action"
column of the Forecast and (b) the finished and inspected by Supplier inventory
of Demand Pull Materials, work in process, raw materials and components as set
forth above.
D-1
<PAGE> 37
The Company's liability for the items above shall be limited
to the sum of (a) the [***]; (b) [***]; and (c) [***]; less (d) [***] set forth
in (a), (b), and (c) of this paragraph. If requested by the Company, Supplier
will substantiate such costs and purchase prices with proof reasonably
satisfactory to the Company.
3. TERMINATION OF DEMAND PULL ARRANGEMENTS - Company may at
any time terminate any or all annual DPP orders, in whole or in part, upon
thirty (30) days written notification to Supplier. Upon receipt of such notice,
Supplier shall immediately stop work as specified in the notice to Supplier.
Company liability to Suppliers with respect to such termination shall be as set
forth in paragraph 2 above. Upon such termination, the parties shall meet
promptly to determine the finished Demand Pull Material, work in process and raw
material and components for which Company is responsible as set forth above.
Supplier shall, at Company's option and expense, ship to Company or scrap such
finished Material, work in process and raw materials and components for which
Company is liable under this Agreement.
4. DEMAND PULL SERVICE PERFORMANCE - The Company intends to
monitor the delivery performance of Supplier via special performance report set
forth in the clause SERVICE. Supplier will strive to achieve or exceed the
service goals established in the clause SERVICE of the Supply Agreement.
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*Confidential Treatment Requested
D-2
<PAGE> 38
EXHIBIT E
FLEXIBLE ORDERING AND PAYMENT SPECIFICATIONS
"How to Get Started on Electronic Procurement Communications
with AT&T" dated May 1, 1995 is attached hereto and made part of this
Attachment.
<PAGE> 1
Exhibit 10.18
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 240
EXCLUSIVITY AND AMENDMENT AGREEMENT
THIS IS AN EXCLUSIVITY AND AMENDMENT AGREEMENT ("Amendment") by and
between LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent"), PARADYNE
CORPORATION (formerly "AT&T Paradyne Corporation"), a Delaware corporation
("Paradyne"), and GLOBESPAN SEMICONDUCTOR INC. (Formerly "CAP Acquisition
Corp."), a Delaware corporation ("GlobeSpan").
RECITALS
WHEREAS, Lucent, Paradyne, GlobeSpan (or their controlling entities), and other
entities over which Lucent, Paradyne or GlobeSpan have control, have entered
into certain agreements with respect to, arising from or in relation to the sale
by. Lucent to Paradyne Partners L.P of AT&T Paradyne Corporation in 1996;
WHEREAS, Lucent, Paradyne and GlobeSpan now wish to amend certain of the
foregoing agreements and to assume the rights and obligations stated herein;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Lucent, GlobeSpan and Paradyne hereby agree as
follows:
AGREEMENT
Unless otherwise defined herein, all capitalized terms shall have the meanings
assigned to them in the Volume Purchase Letter or the Supply Agreement, as such
agreements are hereinafter defined.
1. NOTE. The parties acknowledge the cash payment from Lucent to Paradyne
on May 5, 1998, in the amount of Eight Million One Hundred Thirty-six
Thousand Six Hundred and Sixty-nine Dollars and Fifty-three Cents
($8,136,669.53) which represents a Ten Million Dollar ($10,000,000.00)
cash payment to Paradyne net of One Million Eight Hundred and
Sixty-three Thousand Three Hundred and Thirty Dollars and Forty-seven
Cents ($1,863,330.47) of interest due Lucent on the Core Business Note
for the period January 1, 1998 through March 31, 1998. In addition to
this payment, the parties agree that the Core Business Note issued by
AT&T Paradyne Corporation in favor of Lucent on July 31, 1996 (the
"Note")[***]. As of March 31, 1998, the principal and deferred interest
balance on the Note was Sixty Five Million Seven Hundred Eleven
Thousand Six Hundred Fifty Four Dollars and Twenty-nine Cents
($65,711,654.29). Lucent hereby forgives payment of principal in the
amount of Sixty Three Million Dollars ($63,000,000) and all accrued
interest thereon for the period beginning April 1, 1998 through August
6, 1998 in the amount of Nineteen Thousand Eight Hundred and Forty-nine
Dollars and Thirty-two Cents ($19,849.32) per day. The remaining
balance of Two Million Seven Hundred and Eleven Thousand Six Hundred
Fifty-four Dollars and Twenty-nine cents ($2,711,654.29) plus accrued
interest on such remaining balance for the period beginning
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* Confidential Treatment Requested
<PAGE> 2
April l, 1998 through August 6, 1998 will be paid in accordance with
the terms of the payoff letter ("Payoff Letter") attached hereto as
EXHIBIT A ("PAYOFF LETTER").
2. WARRANT. The parties agree that the definition of "Expiration Date" set
forth in SECTION 1 ("DEFINITIONS") of the Warrant to Purchase Common
Stock of CAP Acquisition Corp. (also referred to as Warrant No. 1)
entered into on July 31, 1996, by and between CAP Acquisition Corp. and
Lucent shall be deleted in its entirety and replaced with the
following: "Expiration Date" shall mean the earlier of (i) June 30,
2001; or (ii) the date on which the Warrant shall be cancelled pursuant
to subsection 2.2(d).
3. SECURITY AGREEMENT. The parties agree that the Security Agreement
("Security Agreement") entered into on July 31, 1996 by and between
AT&T Paradyne Corporation and Lucent is hereby terminated. Lucent shall
deliver executed financing statements as evidence such termination in
accordance with the terms of the Payoff Letter.
4. GUARANTY. The parties agree that the Guaranty ("Guaranty") entered into
on July 31, 1996, by and between Paradyne Canada, Ltd., a Canadian
corporation, and Lucent is hereby terminated.
5. STOCK PLEDGE AGREEMENT. The parties agree that the Stock Pledge
Agreement ("Stock Pledge Agreement") entered into on July 31, 1996, by
and between Paradyne Acquisition Corp., a Delaware corporation,
("PAC"), AT&T Paradyne Corporation and Lucent is hereby terminated.
Lucent shall deliver the original stock certificate to PAC in
accordance with the terms of the Payoff Letter.
6. VOLUME PURCHASE LETTER. The parties agree that the volume purchase
letter ("Volume Purchase Letter") entered into on July 31, 1996, by
and between AT&T Paradyne Corporation and CAP Acquisition Corp., is
hereby terminated. All references in the Volume Purchase Letter
contained in the Supply Agreement (as hereinafter defined) shall be
deleted, except to the extent inconsistent with the intent of this
Amendment.
7. SUPPLY AGREEMENT: MARKET RIGHTS. The parties agree that SECTION 8
("MARKET RIGHTS") of the Supply Agreement ("Supply Agreement") entered
into on July 31, 1996, by and among AT&T Paradyne Corporation, CAP
Acquisition Corp., and Lucent, shall be deleted in its entirety and
replaced with the following:
8. MARKET RIGHTS.
(a) Supplier will supply 100% of Company's requirements for Access
Products (as defined in Subsection 8(d)) for resale as "Stand-Alone
Products" through June 30, 2001. Stand-Alone Products means products
that operate individually or as a component in a Supplier system.
Examples of Stand-Alone Products are the Supplier 3160 DSU/CSUs and/or
cards that are inserted into a carrier to create a system. An example
of a product that is not Stand-Alone would be a board or component that
is to be inserted into another vendor's product as an OEM in order to
complete a function that the other vendor wishes to provide. Company
shall not purchase products for resale as Stand-Alone Products that
2.
<PAGE> 3
are substantially similar in design, functionality, and operating
characteristics to and compete in the marketplace with those Access
Products defined in Subsection 8(d), and as they basically exist on the
date of this Amendment. With respect to Company's internal requirements
for Access Products, Supplier shall have Preferred Supplier status
("Preferred Supplier") through the same period. Preferred Supplier
status shall mean, with respect to Company's internal requirements,
that Supplier shall be given the first opportunity to supply such
products. Supplier's ability to sell to any customer will not be
restricted. Supplier will use diligent efforts to meet such
requirement, shall be free to contract at its discretion with third,
parties to manufacture products of its design or otherwise assist in
fulfilling the requirements for its Access Products.
(b) Quarterly relationship meetings will occur with alternating sites
between Supplier and Company. Attendees shall include decision level
making representatives of each party. The host company shall assume
agenda and minute responsibility. Minutes require joint approval or
noted objections but such minutes should not be construed as binding or
enforceable legal agreements. Interim working group meetings will
continue similar to the structure today.
(c) Appropriate concepts contained in the Supply Agreement, modified to
be consistent with this Agreement, will continue including best price
(as amended for the agreed upon process for international sales and
excluding special bid situations, governmental sales, other unique
sales opportunities and an added, provision for comparability of
quantities), forecasting, ordering and delivery terms and a
benchmarking provision.
(d)-(i) Company shall satisfy 100% of its requirements for Access
Products for resale as "Stand-Alone Products" during the term of this
Amendment from Supplier for the following core products, their
enhancement, and their normal evolution within currently defined market
segments:
1. ANALOG PRODUCTS [***]
2. SUBRATE DSUs [***]
3. TI CSU'S AND TI DSU/CSUs [***]
4. TI ACCESS MULTIPLEXERS [***]
5. FRAME RELAY ACCESS UNITS
a) [***]
b) T3 ATM "OVER" FRAME RELAY NETWORK ACCESS PRODUCTS [***]
c) NxTI ATM/FRAME RELAY NETWORK ACCESS PRODUCTS [***]
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*Confidential Treatment Requested
3.
<PAGE> 4
(ii) Company shall not be restricted by this Agreement for Access
Products in the following market segments:
L. TI ACCESS MULTIPLEXERS [***]
2. T3 ATM "OVER" FRAME RELAY OUTSIDE THE SCOPE OF
"FRAMEAWARE" APPLICATIONS.
3. NxTL ATM "OVER" FRAME RELAY OUTSIDE THE SCOPE OF
"FRAME AWARE" APPLICATIONS.
4. ALL ATM PRODUCTS MANUFACTURED BY COMPANY, UNLESS
OTHERWISE PROHIBITED UNDER THE TERMS OF THE
NONCOMPETITION AGREEMENT DATED 7/31/96 BETWEEN
COMPANY AND SUPPLIER.
5. ALL VOICE OVER PRODUCTS, RFC 1490 TRANSLATION
DEVICES, AND FRAME RELAY ROUTING-DEVICES [***]
(iii)Exception Statements-
1. APPLICABLE ONLY TO THE SUPPLIER'S ANALOG PRODUCTS OF
SECTION 8(d)(i)-1 - Company shall not be obligated to purchase
100% of its requirements from Supplier unless the products are
currently embedded, in Company designs, drawings, or
configurators. Company will not proactively encourage current
analog customers to replace Supplier's analog products with
like products from other manufacturers. Company shall not be
obligated to purchase 100% of its requirements from Supplier
if customer has called for a specific vendor's product in an
RFP or sale. In those cases where customer has called for a
specific vendor's product, Company may not make a concerted
effort to expend marketing dollars, include as part of an
offer, promote, pay commission or incentives, nor PEC/Com code
such products for general availability of the other vendor's
analog products. Company should first attempt to respond with
Supplier's equipment and revert to another vendor as a last
resort.
2. APPLICABLE ONLY TO THE SUPPLIER'S TI CSU AND TI DSU/CSUs OF
SECTION 8(d)(i)-3 - Company shall not be obligated to purchase
100% of its requirements from Supplier to respond to special
situations where the customer has called for a specific
DSU/CSU vendor product in a RFP or sale on a one-off basis.
Company may not, however, make any concerted effort to expend
marketing dollars, include as pan of an offer, promote, pay
commission or incentives nor PEC/Com code products for general
availability, of the other vendor's DSU/CSU products. Company
should first attempt to respond with Supplier's equipment and
revere to another vendor as a last resort.
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*Confidential Treatment Requested
4.
<PAGE> 5
3. In all of the above cases, Company will provide Supplier
with written notification of the one-off, sale of the other
vendor's products. Company shall provide information
consisting of product, type, dollar value of the transaction,
and rationale for the resale of the other vendor's product.
4. Excluded from the exclusivity obligations of rigs Amendment
are products purchased by Acquired Companies, where prior to
acquisition by Company, these Acquired Companies purchased and
included substantially similar product from other sources in
their systems designs. However, not excluded are substantially
similar Stand-Alone Products where a Supplier Access Product
is or becomes a feasible alternative. To determine if such
substantially similar product is or becomes a feasible
alternative, Company and Supplier shall utilize the
Benchmarking provisions, and if required, follow the dispute
resolution process outlined under Benchmarking. Use of "Other
Sourced Product" in any form other than the original offer
will be subject to the exclusivity, provisions and not an
exception under subsection 4. Additionally, if after
acquisition, the Acquired Company develops a need for an
Access Product substantially similar to those defined herein,
then they shall satisfy 100% of this requirement from
Supplier. In no way is this meant to relieve Company of its
obligations under the Noncompetition Agreement, dated 7/31/96.
(e) Requests for Access Product enhancements and new features or new
products shall be processed through the Quarterly Meeting process, or
as needed, and decisions to proceed shall be based upon a business
relationship, that assures a positive business case for each party.
Upon failure to reach an agreed upon action plan, the resolution
escalation process shall go to Supplier CEO and Company Purchasing Vice
President or designee. In the event of a dispute, the "industry
consultant" steps described under SECTION 9 ("BENCHMARKING"), as
amended in this Amendment, may be invoked by either party.
8. SUPPLY AGREEMENT: BENCHMARKING. The parties agree that SECTION 9
("BENCHMARKING") of the Supply Agreement shall be deleted in its
entirety and replaced with the following:
9. BENCHMARKING
On a quarterly basis, Company and Supplier shall, if requested
by either party, undertake to benchmark price, quality, product
functionality, and service performance of material offered by
Supplier. Price shall mean general pricing issues or trends, not
specific opportunities which shall, continue to be handled under
the Supplier "P Quote" process. Product functionality shall mean
a major function that represents an industry trend and which is
considered essential to compete in the current marketplace and
preserve market share. Singular features that Supplier may or
may not have as part of the product offering would not qualify
for benchmarking. The decision to benchmark will be presented
and developed at regularly scheduled quarterly business
meetings. Prior to any benchmarking, both companies shall agree
5.
<PAGE> 6
upon the framework to conduct the benchmarking process (see
Exhibit B). This shall include clear identification of industry,
leaders to be benchmarker.
Following the benchmark study, Supplier and Company shall review
such benchmark information and Supplier shall develop a plan of
action for improving Material Price, quality, product
functionality, and service performance if such benchmark
information indicates improvements are needed when compared to
the then existing standards of the industry of comparable Price,
quality, product functionality and service. Supplier shall
introduce improvements that assure Company that Material is
meeting or exceeding competitive benchmarks with respect to: (1)
Material Price within thirty (30) days after the later of such
review or objective assessment as described below, and (2) for
Material quality, product functionality, or service performance
within a mutually agreed upon period after the later of such
review or objective assessment. Supplier will provide a plan for
introducing such improvements within the first thirty (30) days
of such review objective assessment. If Supplier fails to
perform as described in items 1 or 2 above, Company shall have
the right to competitively quote such Material in the
marketplace. Company will give Paradyne a thirty (30) day prior
written notice of such intent to place business with any other
vendor and provide Supplier that thirty (30) day period to match
or beat such other offer received by Company. If Supplier
matches or beats such other offer, Company agrees to continue to
place Orders with Supplier at the new price, quality, product
functionality, and service levels subject to the terms and
conditions of this Amendment. If Supplier does not match or beat
Company's offer, Company may elect to purchase Material from
another source without further obligation of exclusivity for
those products. Where Company and Supplier have agreed upon a
schedule and the scheduled General Availability for such new
feature, functionality or quality slips without contributing
fault by Company, Company may procure a competitive product.
In the event of a dispute with respect to approach, procedure or
results of the benchmarking, the parties agree to promptly
retain an independent, non-affiliated consultant experienced in
the industry to provide an objective assessment of the issue(s)
in dispute. The determination of the consultant shall be final
and binding.
This Amendment is the complete and exclusive statement of the parties with
respect to this subject matter, and merges and supersedes all communications,
negotiations and agreements between the parties with respect thereto. This
Amendment may be executed in counterparts, each of which shall be deemed an
original, and ail of which together shall constitute one and the same
instrument. Except as expressly modified herein, all agreements between, the
parties shall remain fully in effect and shall continue to bind the parties.
Without limiting the generality of the foregoing, the parties understand and
agree that the Noncompetition Agreement of July 31, 1996, by and among Lucent,
Paradyne Partners L.P., Paradyne Acquisition Corp., AT&T Paradyne Corporation,
and CAP Acquisition Corp., shall remain fully in effect and shall continue to
bind the parties.
6.
<PAGE> 7
AGREED TO:
LUCENT TECHNOLOGIES INC.
BY: /s/
----------------------------------------------
TITLE: Vice President, Enterprise Networks
-------------------------------------------
DATE: 8/6/98
-------------------------------------------
PARADYNE CORPORATION
BY: /s/ Andrew S. May
----------------------------------------------
TITLE: CEO
-------------------------------------------
DATE: 8/6/98
--------------------------------------------
GLOBESPAN SEMICONDUCTOR INC.
BY: /s/
----------------------------------------------
TITLE: President and CEO
-------------------------------------------
DATE: 8/28/98
--------------------------------------------
7.
<PAGE> 8
EXHIBIT A
PAYOFF LETTER
LUCENT TECHNOLOGIES INC.
600 MOUNTAIN AVENUE. ROOM 6A-408
MURRAY HILL, NEW JERSEY 07974
August 6, 1998
Paradyne Corporation
8545 126th Avenue North
Largo, Florida 33779-2826
RE: PAYOUT ARRANGEMENTS AND FORGIVENESS OF DEBT
Ladies and Gentlemen:
We refer to the Core Business Note dated as of July 3l, 1996 (as
amended and in effect from time to time, the "Note") issued by Paradyne
Corporation f/k/a AT&T Paradyne Corporation ("Paradyne") (the "Borrower") in
favor of Lucent Technologies Inc. (the "Lender") in the original principal
amount of [***].
The Borrower has advised the Lender that it intends to repay certain
amounts due and owing under the Note (the "Loans") and has requested that the
Lender provide the Borrower with appropriate pay-off figures of the principal,
interest and other amounts owing by the Borrower to the Lender under the Note.
The pay-off figures for the Borrower as of August 6, 1998 (the "Computation
Date") under the Note are as follows (collectively, together with any additional
interest accruing, or fees and expenses incurred, after the Computation Date,
that must be paid by the Borrower, the "Pay-Off Amount"):
<TABLE>
<CAPTION>
<S> <C>
Principal: $2,711,654.29
Interest: $ [***]
Total Amount Owing $ [***]
</TABLE>
From and after the Computation Date and until the Pay-Off Date (as
defined, below), interest shall continue to accrue on the unpaid principal
amount of the Loans at the rates set forth in the Notes. The per diem accrual of
interest on the Loans would be [***]. Upon request of the Borrower, the Lender
shall provide the Borrower with a revised figure for the amount of interest to
be paid as part of the Pay-Off Amount plus any additional fees and expenses
incurred since the Computation Date that must be paid as part of the Pay-Off
Amount.
Lender hereby waives the five day notice requirement set forth in
Section 2(b) of the Note.
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*Confidential Treatment Requested
8.
<PAGE> 9
Effective immediately upon receipt of the Pay-Off amount Lender hereby
releases its lien and security interest in Borrower's assets and relinquishes
any and all right, title and interest Lender may have in such assets. Promptly
after the date hereof, but in no event later than three (3) business days,
Lender agrees to execute any UCC financing statements, including releases,
termination statements, or other documentation as Borrower may request. Lender
also agrees to promptly return the shares of capital stock of Borrower and the
stock powers issued in connection therewith to Paradyne Acquisition Corp., a
Delaware Corporation ("PAC"), pursuant to that certain Pledge Agreement dated as
of July 31, 1996 by and between Lender, PAC and Paradyne. Lender further agrees
to promptly return the cancelled Guaranty; (Core Note and Lucent Interim Note)
made by Paradyne Canada Ltd., a Canadian corporation ("Paradyne Canada"), in
favor of Lender on July 3l, 1996 to Paradyne Canada.
Very truly yours,
LUCENT TECHNOLOGIES INC.
By: /s/ D. K. Peterson
-----------------------------
D. K. Peterson
Title: EVP & CFO
--------------------------
Date:
---------------------------
ACCEPTED AND AGREED TO:
PARADYNE CORPORATION F/K/A AT&T PARADYNE
CORPORATION
By: /s/ Andrew S. May
-------------------------------
Title: CEO
----------------------------
Date: 8/27/98
-----------------------------
9.
<PAGE> 10
EXHIBIT B
BENCHMARKING PROCESS
[***] [***]
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*Confidential Treatment Requested
10.
<PAGE> 1
Exhibit 10.19
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement"), dated as of
this 31st day of July, 1996 is being entered into by and among LUCENT
TECHNOLOGIES INC., a Delaware corporation ("Lucent"), PARADYNE PARTNERS, L.P., a
Delaware limited partnership ("the Partnership"), PARADYNE ACQUISITION CORP., a
Delaware corporation ("PAC"), AT&T PARADYNE CORPORATION, a Delaware corporation
("Paradyne"), and CAP ACQUISITION CORP., a Delaware corporation ("CAPCo") ( the
Partnership, PAC, Paradyne and CAPCo are collectively referred to herein as the
"Acquisition Persons").
RECITALS
A. Lucent is the sole stockholder of Paradyne and has in its
possession valuable knowledge and information concerning the business of
Paradyne.
B. Pursuant to a Purchase Agreement dated as of June 18, 1996
by and among Lucent, Paradyne, the Partnership, PAC, Rental Acquisition Corp.,
CAPCo and Lease Acquisition Corp. (the "Purchase Agreement"), Lucent is selling
all of the outstanding shares of capital stock of Paradyne to PAC, selling
certain assets to CAPCo and causing the sale of certain assets of Paradyne to
CAPCo. It is a condition to the obligations of the Partnership, CAPCo and PAC to
consummate the transactions contemplated by Purchase Agreement that Lucent
execute and deliver this Agreement.
C. Lucent and Paradyne have conducted and are conducting their
respective businesses on a worldwide basis.
NOW, THEREFORE, the parties to this Agreement hereby agree as
follows:
Section 1. General Definitions. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement. As used herein, the following terms have the following
meanings:
"Current Paradyne Products" shall mean the Paradyne products
listed on Schedule I hereto.
"Lucent Subsidiary" means any direct or indirect Subsidiary of
Lucent.
"Paradyne Competitor" as of a specified time means a Person
then engaged in, either directly or indirectly through a Subsidiary, one or more
activities that constitute Paradyne Competition.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any governmental agency or
political subdivision.
<PAGE> 2
"Stand-Alone Product" shall mean any product that is marketed
or sold by a Person as a separate product, provided, however that a product
which a Person markets and generally sells as an integrated component or part of
a materially larger system with significantly broader functionality, which
system is being sold by such Person, will not be deemed to be a Stand-Alone
Product even if it is also sold as a spare or replacement part for a component
or part of such larger systems and has relatively incidental sales to potential
customers for such larger systems.
"Subsidiary" shall mean, with respect to a Person, a
corporation, partnership, limited liability company or other entity in which
such Person holds an equity interest constituting a majority in respect of the
voting power of all equity or ownership interests of such entity.
"Substantially Similar Product" means a product that is
substantially similar in design, functionality and operating characteristics to
and competes in the marketplace with (or, as to products not yet being marketed,
will upon introduction in the marketplace compete with) any Current Paradyne
Product.
Section 2. Basic Restrictions. Except as provided in Section 4
below, Lucent shall not, and shall not permit any Lucent Subsidiary to, at any
time during the four year period commencing on the date of this Agreement:
(i) engage in any Paradyne Competition
anywhere in the world; or
(ii) be or become a stockholder, owner
or co-owner of, or partner in, or acquire any material debt interest in, any
Paradyne Competitor anywhere in the world (the "Competitor Acquisition
Restrictions); or
(iii) provide consulting or management
services to any Paradyne Competitor, other than customer support services for
Lucent or Lucent Subsidiary products the design, development, production,
manufacture or assembly of which does not otherwise violate this Agreement.
Section 3. Definitions of Competition.
For the purposes of this Agreement, a Person shall be deemed
to be engaged in Paradyne Competition if and only if:
(a) such Person engages in the design, development,
production, manufacture or assembly of a Substantially Similar Product and
markets or sells it as a Stand-Alone Product unless:
(i) neither Paradyne nor CAPCo then offers the
corresponding Current Paradyne Product; or
(ii) there is a similarly situated customer with
respect to a corresponding Current Paradyne Product, and neither Paradyne nor
CAPCo then offers such
2
<PAGE> 3
Current Paradyne Product to Lucent or a Lucent Subsidiary on terms and
conditions which are at least as favorable to Lucent or a Lucent Subsidiary as
those Paradyne or CAPCo, as the case may be, offers similarly situated
customer(s); or
(iii) Paradyne has no other similarly situated
customers for the corresponding Current Paradyne Product and does not agree to
supply such Current Paradyne Product to Lucent on terms previously agreed to by
Lucent or a Lucent Subsidiary with respect to such Current Paradyne Product in
accordance with the Supply Agreement executed pursuant to Section 1.8(a) of the
Purchase Agreement; or
(iv) CAPCo and Lucent or a Lucent Subsidiary have a
supply agreement relating to the corresponding Current Paradyne Product and
CAPCo has no other similarly situated customers for such Current Paradyne
Product and CAPCo does not agree to supply such Current Paradyne Product to
Lucent on terms previously agreed to by Lucent or a Lucent Subsidiary with
respect to such Current Paradyne Product in accordance with such supply
agreement; or
(b) such Person engages in the design, development,
production, manufacture or assembly of a Substantially Similar Product other
than as a Stand-Alone Product without offering Paradyne (and CAPCo with respect
to those Current Paradyne Products offered by CAPCo) a Right of First Refusal
(as defined in Section 4(c) below). In this regard, the performance of
installation, maintenance or repair services with respect to products shall not
be deemed to constitute "assembly" of such products, nor will the licensing of
intellectual property be deemed the sale of a product.
Section 4. Exceptions to Restrictions. The restrictions set
forth in Section 2 above shall be subject to the following exceptions:
(a) The design, development, production, manufacture or
assembly and sale of a Substantially Similar Product by a Person shall not be
deemed to constitute Paradyne Competition unless such Substantially Similar
Product falls within one of the following product categories and the gross
revenues received by such Person from the sales of Substantially Similar
Products in such Product Category in any twelve month period exceeds $[***]:
(i) [***]
(ii) [***]
(iii) [***]
(iv) [***]
(v) [***]
(vi) [***]
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*Confidential Treatment Requested
3
<PAGE> 4
(b) The design, development, production, manufacture or
assembly and sale of one or more Substantially Similar Products by a Person
shall not be deemed to constitute Paradyne Competition unless the aggregate
annual gross revenues received by Paradyne from the sale of products that
compete with the Substantially Similar Products designed, developed, produced,
manufactured or assembled and sold by such Person constitutes more than [***].
(c) The design, development, production, manufacture or
assembly of one or more Substantially Similar Products that are not Stand-Alone
Products by a Person shall not be deemed to constitute Paradyne Competition if
such Person has given Paradyne a reasonable opportunity to supply the
Substantially Similar Product to such Person and Paradyne is unwilling or unable
to provide such products (or satisfactory equivalents) on prices, terms,
quantities and schedules that such Person would realize if designing,
developing, producing, manufacturing or assembling the products itself (the
"Right of First Refusals").
(d) The continuation by Lucent or Lucent Subsidiaries of the
activities listed on Schedule A hereto shall not be deemed to constitute
Paradyne Competition.
(e) None of the following shall be deemed to violate the
Competitor Acquisition Restriction: (i) the acquisition or holding by Lucent or
a Lucent Subsidiary as a passive investment of not more than five percent (5%)
of the outstanding capital stock of a Paradyne Competitor provided that the
applicable class or classes of capital stock are publicly traded on an
established U.S. or foreign national securities exchange, or the NASDAQ National
Market, (ii) the extension of loans or credit facilities by any finance
subsidiary or division of Lucent to a Paradyne Competitor in the ordinary course
of business on an arm's length basis on terms substantially similar to those
generally offered customers of Lucent or the obtaining by such subsidiary or
division of warrants or other equity kickers in connection with such activities,
(iii) the extension by Lucent or any Lucent Subsidiary of loans to, or the
acquisition by any such Person of notes or any other form of debt of, any
Paradyne Competitor as seller financing in connection with a sale of any
business or non-ordinary course sale of any assets of Lucent or any Lucent
Subsidiary and (iv) the extension by Lucent or any Lucent Subsidiary of trade
credit to such Paradyne Competitor in the ordinary course of business on an
arm's length basis on terms substantially similar to those generally offered
customers of Lucent.
(f) Neither Lucent nor any Lucent Subsidiary shall be deemed
to violate the Competitor Acquisition Restriction if: (i) such Person acquires
an interest in a Paradyne Competitor (an "Acquired Person") where the activities
of such Acquired Person that cause such Acquired Person to be characterized as a
Paradyne Competitor (the "Competing Activities") are secondary to other lines of
business carried on by such Acquired Person, (ii) within two (2) years after the
acquisition of such interest, such Competing Activities are wound down or
disposed of and (iii) during the period prior to such sale or winding-down, such
Competing Activities are not integrated with the other businesses of Lucent and
the Lucent Subsidiaries in any manner that would materially strengthen, improve
or expand any such Competing Activities that are to be sold.
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*Confidential Treatment Requested
4
<PAGE> 5
(g) The design, development, manufacture, fabrication, sale,
lease, licensing, and distribution by the Micro-Electronics Division of Lucent
of (i) semiconductor wafers, devices, chips, and components, (ii) energy systems
and power products, (iii) printed circuit boards and interconnection components,
(iv) opto-electronic devices, (v) software and firmware associated with any of
the foregoing whether used in conjunction therewith or used on a stand-alone
basis and (vi) the technologies associated with any of the foregoing shall not
be deemed to constitute Paradyne Competition. In addition, Lucent and the Lucent
Subsidiaries shall retain the right to engage in the licensing of any and all of
its technology associated with the above-listed products whether protected by
patent, copyright, trade secret, trademark, mask work right or any other form of
protection associated with intellectual property and to engage in contract
manufacturing operations for Persons not Affiliates of Lucent. Notwithstanding
the above provisions, with respect to Current Paradyne Products, Lucent and the
Lucent Subsidiaries will not (except as otherwise permitted herein) design,
develop, produce, manufacture or assemble either (x) Substantially Similar
Products that are System Level Products or (y) board level products (other than
reference design boards) with substantially the same functionality as System
Level Products that are Substantially Similar Products. For the purposes of this
Section 4(g), a System Level Product means any product that is functional
without requiring additional components or products.
Section 5. Acknowledgements by Lucent. Lucent acknowledges
that the promises and restrictive covenants it is providing in this Agreement
are reasonable and necessary to the Acquisition Persons' protection of their
legitimate interests in the acquisition of Paradyne and its assets and certain
assets from Lucent pursuant to the Purchase Agreement, including but not limited
to Paradyne's goodwill. Lucent acknowledges that, pursuant to the Purchase
Agreement, Lucent is selling all of Lucent's shares of stock of Paradyne to PAC,
selling certain assets to CAPCo and causing the sale of certain assets of
Paradyne to CAPCo. Lucent acknowledges that the amount allocated to this
Agreement pursuant to Section 1.5(d) of the Purchase Agreement is not intended
to limit the amount of the Damages that may be recovered for any breach by
Lucent of this Agreement.
Section 6. Independence of Obligations. The covenants of
Lucent set forth in this Agreement shall be construed as independent of any
other agreement or arrangement between Lucent, on the one hand, and the
Acquisition Persons, on the other. The existence of any claim or cause of action
by Lucent against any of the Acquisition Persons shall not constitute a defense
to the enforcement of such covenants against Lucent.
Section 7. Specific Performance. Lucent agrees that in the
event of any breach or threatened breach by Lucent of any covenant, obligation
or other provision contained in this Agreement, each of the Acquisition Persons
shall be entitled (in addition to any other remedy that may be available to
them) to (a) a decree or order of specific performance or mandamus to enforce
the observance and performance of such covenant, obligation or other provision,
and (b) an injunction restraining such breach or threatened breach.
Section 8. Nonexclusivity. The rights and remedies of the
Acquisition Persons hereunder are not exclusive of or limited by any other
rights or remedies which the Acquisition Persons may have, whether at law, in
equity, by contract or otherwise, all of which shall be
5
<PAGE> 6
cumulative (and not alternative). Without limiting the generality of the
foregoing, the rights and remedies of the Acquisition Persons hereunder, and the
obligations and liabilities of Lucent hereunder, are in addition to their
respective rights, remedies, obligations and liabilities under the law of unfair
competition, misappropriation of trade secrets and the like.
Section 9. Notices. Any notice or other communication required
or permitted to be delivered to Lucent or any of the Acquisition Persons under
this Agreement shall be in writing and shall be deemed properly delivered, given
and received when delivered (by hand, by registered mail, by courier or express
delivery service or by facsimile) to the address or facsimile telephone number
set forth beneath the name of such party below (or to such other address or
facsimile telephone number as such party shall have specified in a written
notice given to the other party hereto):
if to Lucent:
Lucent Technologies Inc.
Room 4A71
10 Independence Boulevard
Warren, New Jersey 07059
Attention: William F. Osl, Jr.
Fax: (908) 508-6088
with a copy to:
Lucent Technologies Inc.
Room A2046
131 Morristown Road
Basking Ride, New Jersey 07920
Attention: W. Preston Granbery, Esq.
Fax: (908) 9853-4657
if to Paradyne:
AT&T Paradyne Corporation
8545 126th Avenue North
Largo, Florida 33773
Attention: President
Fax: (813) 530-2210
with a copy to:
Paradyne Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Fax: (817) 871-4010
6
<PAGE> 7
if to the Partnership:
Paradyne Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Fax: (817) 871-4010
if to PAC:
Paradyne Acquisition Corp.
8545 126th Ave. North
Largo, Florida 33773
Attention: President
Fax: (813) 530-2210
with a copy to:
Paradyne Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Fax: (817) 871-4010
if to CAPCo:
CAP Acquisition Corp.
8545 126th Ave. North
Largo, Florida 33773
Attention: President
Fax: (813) 530-2210
with a copy to:
Paradyne Partners, L.P.
201 Main Street, Suite 2420
Fort Worth, Texas 76102
Attention: Richard A. Ekleberry, Esq.
Fax: (817) 871-4010
Section 10. Severability. If any provision of this Agreement
or any part of any such provision is held under any circumstances to be invalid
or unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such
7
<PAGE> 8
jurisdiction, be deemed amended to conform to applicable laws so as to be valid
and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) such invalidity of enforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
Agreement. Each provision of this Agreement is separable from every other
provision of this Agreement, and each part of each provision of this Agreement
is separable from every other part of such provision.
Section 11. Governing Law. This Agreement shall be construed
in accordance with, and governed in all respect by, the laws of the State of New
York (without giving effect to principles of conflicts of laws).
Section 12. Waiver. No failure on the part of any of the
Acquisition Persons to exercise any power, right, privilege or remedy under this
Agreement, and no delay on the part of any of the Acquisition Persons in
exercising any power, right, privilege or remedy under this Agreement, shall
operate as a waiver of such power, right, privilege or remedy; and no single or
partial exercise of any such power, right, privilege or remedy shall preclude
any other or further exercises thereof or of any other power, right, privilege
or remedy. None of the Acquisition Persons shall be deemed to have waived any
claim arising out of this Agreement, or any power, right, privilege or remedy
under this Agreement, unless the waiver of such claim, power, right, privilege
or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given.
Section 13. Construction. The captions contained in this
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement. All references to "Section" or
"Sections" refer to the corresponding Section or Sections of this Agreement
unless otherwise specified. All words used in this Agreement will be construed
to be of such number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms. The
parties hereto agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.
Section 14. Entire Agreement. This Agreement and the Purchase
Agreement (and the other agreements referred to in the Purchase Agreement) set
forth the entire understanding of Lucent and the Acquisition Persons relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings between any of such parties relating to the subject matter hereof
and thereof.
Section 15. Amendments. This Agreement may not be amended,
modified, altered, or supplemented other than by means of a written instrument
duly executed and delivered on behalf of the Acquisition Persons and Lucent.
8
<PAGE> 9
Section 16. Assignment. This Agreement and all obligations
hereunder are personal to Lucent and may not be transferred or assigned by
Lucent at any time. Each of the Acquisition Persons may assign, in whole or in
part, its rights under this Agreement in connection with the acquisition of all
or a substantial portion of its assets or business.
Section 17. Binding Nature. Subject to Section 16, this
Agreement will be binding upon Lucent and Lucent's successors and assigns, and
will inure to the benefit of the Acquisition Persons and their respective
successors and assigns.
Section 18. Attorneys' Fees and Expenses. If any legal action
or other legal proceeding relating to the enforcement of any provision of this
Agreement is brought against Lucent, the prevailing party shall be entitled to
recover reasonable attorneys' fees, costs and disbursements (in addition to any
other relief to which the prevailing party may be entitled).
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
LUCENT TECHNOLOGIES INC.
By: /s/ W. F. Osl, Jr.
------------------------------------------
PARADYNE PARTNERS, L.P.
by Paradyne GenPar, Inc., its General Partner
By: /s/ David Stanton
------------------------------------------
AT&T PARADYNE CORPORATION
By: /s/ W. F. Osl, Jr.
------------------------------------------
CAP ACQUISITION CORP.
By: /s/ David Stanton
------------------------------------------
PARADYNE ACQUISITION CORP.
By: /s/ David Stanton
------------------------------------------
9
<PAGE> 10
SCHEDULE A
The following product line [***]:
[***]
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<PAGE> 11
SCHEDULE I
CURRENT PARADYNE PRODUCTS
- - [***]
- - [***]
- - [***]
- - [***]
- - [***]
- - [***]
- - [***]
- - [***]
- - [***]
- - [***]
- - [***]
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12
<PAGE> 1
Exhibit 10.20
EXHIBIT FF
AT&T TRADEMARK AND PATENT AGREEMENT
THIS AT&T TRADEMARK AND PATENT AGREEMENT ("Agreement") is
being entered into as of July 31, 1996 by and between AT&T CORP., a corporation
of the State of New York ("AT&T"), AT&T PARADYNE CORPORATION, a corporation of
the State of Delaware ("PARADYNE"), and CAP ACQUISITION CORP., a corporation of
the State of Delaware ("CAPCo"), and is Exhibit FF to the Purchase Agreement
("Purchase Agreement") dated June 18, 1996 between PARADYNE, CAPCo, LUCENT
TECHNOLOGIES, INC., a corporation of the State of Delaware ("LUCENT"), PARADYNE
PARTNERS, L.P., a Delaware limited partnership, PARADYNE ACQUISITION CORP., a
Delaware limited partnership ("BUYER"), RENTAL ACQUISITION CORP., a corporation
of the State of Delaware, and LEASE ACQUISITION CORP., a corporation of the
State of Delaware.
WHEREAS, LUCENT, a majority-owned subsidiary of AT&T; has
agreed to sell and BUYER has agreed to buy PARADYNE pursuant to the Purchase
Agreement; and
WHEREAS, the Purchase Agreement provides for an AT&T Trademark
and Patent Agreement between the parties hereto;
NOW, THEREFORE, it is hereby agreed by the parties:
ARTICLE 1
Definitions
Capitalized terms without definition in this Agreement shall
have the meanings assigned to them in the Purchase Agreement. As used herein,
the following terms have the following meanings:
1.1 "AT&T's Patents" shall mean every Patent as defined below
in Section 1.4, (including, without limitation, utility models, design patents
and design registrations) issued in any country of the world on patent
applications filed prior to the Closing Date with respect to which AT&T:
(a) prior to the Closing Date has ownership or
control, and
(b) as of the Closing Date otherwise has the right to
grant any licenses of the type herein granted by AT&T.
Notwithstanding the foregoing, "AT&T's Patents" do not include
(a) any patents or patent applications first filed prior to February 1, 1996
which patents or patent applications are (i) owned or controlled by AT&T
Wireless Services, Inc. ("AWS") or any of its Subsidiaries, and (ii) relate to
the business of wireless telecommunications services; or (b) any patents or
patent applications first filed on or after February 1, 1996 but before the
Closing Date and covering
<PAGE> 2
inventions made by employees of AWS or by third parties other than AT&T or any
of its Subsidiaries, which patents and applications (i) are owned or controlled
by AWS or any of its Subsidiaries, and (ii) which relate to the business of
wireless telecommunications services.
1.2 "Inherent Use" shall mean a use that would be completely
performed by a product and/or service as furnished by PARADYNE and/or CAPCo,
without the need for any additional product, service, development, modification
or programming by a customer of PARADYNE and/or CAPCo, or by a third party.
1.3 "PARADYNE/CAPCo Products" shall mean the products and/or
services of PARADYNE and of CAPCo in development by PARADYNE and/or CAPCo as of
the Closing Date and sold prior to one (1) year from the Closing Date and
products and/or services listed in Appendix 4, which must be sold prior to three
(3) years from the Closing Date.
1.4 "Patent" shall mean all the patents listed in Appendix 5
hereto, including all divisionals, continuations, re-examinations, renewals,
provisionals, continuations-in-part, re-issues, and foreign equivalents thereof
in existence as of the Closing Date and any other patents used by PARADYNE
and/or CAPCo as of the Closing Date, and identified in writing by PARADYNE
and/or CAPCo, and agreed to in writing by AT&T, within thirty (30) days after
the Closing Date. PARADYNE and CAPCo agree that they will make reasonably
diligent efforts to ascertain which patents of AT&T read on the PARADYNE/CAPCo
Products, and PARADYNE, CAPCo and AT&T will during the foregoing thirty (30) day
period, in mutual good faith, include only such patents in Appendix 5.
1.5 "Subsidiary" shall mean a corporation or other legal
entity: (i) the majority of whose shares or other securities entitled to vote
for election of directors (or other managing authority) is now or hereafter
owned or controlled by such company either directly or indirectly; or (ii) which
does not have outstanding publicly traded shares or securities but the majority
of whose ownership interest representing the right to manage such corporation or
other legal entity is now or hereafter owned or controlled by such company
either directly or indirectly; but any such corporation or the other legal
entity shall be deemed to be a Subsidiary of such company only as long as such
ownership or control exists.
1.6 "Telecommunication Services" means the operation of a
communications network to provide communication services to customers, including
the processing of information to the extent needed to transfer information
between locations. The term "Telecommunications Services" includes online and
Internet services, and wireless service, whether fixed or mobile. The provision
by PARADYNE and/or CAPCo of goods or services to entities which are themselves
providers of Telecommunication Services shall not be deemed to constitute the
provision of Telecommunication Services by PARADYNE and/or CAPCo.
2
<PAGE> 3
ARTICLE 2
Grants of Licenses
2.1 Grant.
AT&T hereby grants to PARADYNE and CAPCo under AT&T's Patents
non-exclusive, non-transferable (except as otherwise provided in Section 5.2),
irrevocable, world-wide licenses for PARADYNE/CAPCo Products. No license is
granted for the provision of Telecommunication Services.
2.2 Duration.
(a) All licenses granted herein under any Patent
shall continue for the entire unexpired term of such Patent. Notwithstanding the
foregoing, and notwithstanding Section 5.2 hereof, in the event that PARADYNE
and/or CAPCo, and/or the part(s) of their respective businesses, including their
Subsidiaries to whom sublicenses of AT&T's Patents have been granted, are sold
to any of the companies listed in Section 2.2(b), the licenses and/or
sublicenses extended to them under AT&T's Patents pursuant to this Agreement
shall immediately terminate. PARADYNE and/or CAPCo, as the case may be, will
promptly notify AT&T in writing of any such sale.
(b) MCI, Sprint, Microsoft Corporation, Excel and/or
any of the Regional Bell Operating Companies ("RBOCs").
2.3 Scope.
(a) The licenses granted herein are licensed to (i)
make, have made, use, lease, sell, offer to sell and import PARADYNE/CAPCo
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 PARADYNE/CAPCo Products which are or have been made, used,
leased, owned, sold, offered for sale or imported by PARADYNE and/or CAPCo; and
(iii) convey to any customer of PARADYNE and/or CAPCo with respect to any
PARADYNE/CAPCo Product which is sold or leased by PARADYNE and/or CAPCo to such
customer, rights to use and resell such PARADYNE/CAPCo Product as sold or leased
by PARADYNE and/or CAPCo (whether or not as part of a larger combination);
provided, however, that no rights may be conveyed to customers with respect to
any invention which is directed to (1) a combination of such PARADYNE/CAPCo
Product (as sold or leased) with any other product, (2) a method or process
which is other than the Inherent Use of such Product itself (as sold or leased),
or (3) a method or process involving the use of a PARADYNE/CAPCo Product to
manufacture (including associated testing) any other product.
(b) Licenses granted herein are not be construed
either (i) as consent by AT&T to any act which may be performed by PARADYNE
and/or CAPCo except to the extent covered by AT&T's Patents licensed herein to
PARADYNE and/or CAPCo, or (ii) to include
3
<PAGE> 4
licenses to conributorily infringe or induce infringement under U.S. law or a
foreign equivalent thereof; provided, however, that any products licensed under
this Agreement may be used by the end user thereof for its intended purpose.
(c) The grant of each license hereunder includes the
right of PARADYNE and/or CAPCo to grant sublicenses within the scope of such
license to PARADYNE's and/or CAPCo's Subsidiaries for so long as they remain
their respective Subsidiaries, and thereafter as provided in Section 5.2
("Nonassignability"). Any such sublicense may be made effective retroactively,
but not prior to the effective date hereof, nor prior to the sublicensee
becoming a Subsidiary of PARADYNE and/or CAPCo.
ARTICLE 3
Trademarks
3.1 AT&T owns all right, title and interest in and to the
trademarks and common law marks set forth on Appendix 1 attached hereto
("Assigned Marks"). AT&T hereby assigns pursuant to the Trademark Assignment
Agreement attached hereto as Appendix 2 all of its worldwide rights, title and
interest in and to the Assigned Marks to PARADYNE, including the goodwill of the
business represented by the Assigned Marks, any AT&T registrations of Assigned
Marks, any AT&T applications of Assigned Marks, and any AT&T common law rights
in the Assigned Marks.
3.2 PARADYNE and CAPCo shall not use after the Closing Date
(1) the mark AT&T as a tradename or as part of a corporate name, (2) the
trademark AT&T and/or the AT&T Globe design, nor will PARADYNE or CAPCo use any
derivations or combination marks containing the elements AT&T and/or the AT&T
Globe design. However, PARADYNE and/or CAPCo is allowed to use up for a period
not exceeding one year after the Closing Date (1) all of PARADYNE's inventory of
products existing as of the Closing Date which bears the trademark AT&T and/or
AT&T Globe design, and (2) all printed matter other than letterheads, business
cards, etc. now used, bearing the trademark AT&T and/or AT&T Globe design.
3.3 AT&T shall not use after the Closing Date (1) the mark
PARADYNE as a tradename or as part of a corporate name; (2) the trademark
PARADYNE and/or the PARADYNE logo design, nor will AT&T use any derivations or
combination marks containing the elements PARADYNE and/or the PARADYNE logo
design; or (3) any of the Assigned Marks; provided, however, that AT&T
acknowledge and agrees that PARADYNE may use and register VOICESPAN for the
PARADYNE VOICESPAN GOODS as defined below and PARADYNE and CAPCo acknowledges
and agree that AT&T may use and register VOICESPAN for the AT&T VOICESPAN GOODS
as defined below. In no event will PARADYNE or CAPCo use VOICESPAN in connection
with the AT&T VOICESPAN GOODS and in no event will AT&T use VOICESPAN in
connection with the PARADYNE VOICESPAN GOODS. The parties agree to grant each
other consents to use and register VOICESPAN for their respective PARADYNE
VOICESPAN GOODS and AT&T VOICESPAN GOODS.
4
<PAGE> 5
PARADYNE VOICESPAN GOODS shall mean electronic products,
namely a microchip which allows the simultaneous transmission of voice and data
over analog communications lines, computer software to operate
telecommunications modems and to allow for simultaneous transmission of voice
and data over a telecommunications network, telecommunications modems and
microprocessors, and computer software for telecommunications purposes.
AT&T VOICESPAN GOODS shall mean satellite-related products and
software and satellite telecommunications services.
3.4 With respect to the registered marks described in Appendix
6 hereto, AT&T agrees that it will withdraw any and all of registrations of such
marks promptly upon prior written instruction by PARADYNE and/or CAPCo.
ARTICLE 4
Termination
4.1 Breach.
In the event of a material breach of this Agreement by any
party hereto, the other parties shall have all rights available to them under
law, including the right to terminate this Agreement upon the delivery of
written notice to the breaching party, such breach having remained uncured for a
period of thirty (30) days from the date of receipt of such notice; provided,
however, that such termination shall not affect in any way any rights or
licenses granted by any party hereto prior to such breach.
4.2 Voluntary Termination.
By written notice to AT&T, PARADYNE and/or CAPCo may
voluntarily terminate all or a specified portion of the licenses and rights
granted to them hereunder. Such notice shall specify the effective date (not
more than six (6) months prior to the giving of said notice) of such termination
and shall clearly specify any affected Patent, invention or product; provided,
however, that such termination shall not affect in any way any rights or
licenses already granted by any party hereto.
ARTICLE 5
Miscellaneous Provisions
5.1 Disclaimer.
OTHER THAN AS EXPRESSLY SET FORTH IN THIS AGREEMENT, WITH
RESPECT TO THE SUBJECT MATTER HEREOF, NEITHER AT&T NOR ANY OF ITS SUBSIDIARIES
MAKE ANY REPRESENTATIONS, EXTEND ANY WARRANTIES OF ANY KIND, ASSUME ANY
RESPONSIBILITY OR OBLIGATIONS WHATSOEVER, OR CONFER ANY RIGHT BY IMPLICATION,
ESTOPPEL OR OTHERWISE, OTHER THAN THE LICENSES AND RIGHTS HEREIN EXPRESSLY
GRANTED.
5
<PAGE> 6
5.2 Nonassignability.
(a) Except as otherwise expressly provided herein, no
party hereto may assign this Agreement or any part thereof, transfer licenses or
rights or grant any sublicenses hereunder, to anyone other than a Subsidiary of
such party without the prior, written consent of the other party. However, if
PARADYNE and/or CAPCo sells part or all of their respective businesses,
including without limitation Subsidiaries (the "Sold Entity"), and if PARADYNE
and/or CAPCo have granted sublicenses thereto prior to such sale, then such
sublicenses shall survive such sale.
(b) Any purported assignment or transfer of this
Agreement or licenses or rights hereunder by any party hereto without the prior,
written consent of all other parties shall be void (without affecting any other
licenses or rights hereunder).
5.3 Addresses.
Any notice or other communication hereunder shall be
sufficiently given to PARADYNE when sent by certified mail, return receipt
requested, addressed to: AT&T Paradyne Corporation, 8545 126th Avenue North,
Attention: General Counsel, Largo, FL 34649-2826, or to CAPCo when sent by
certified mail, return receipt requested, addressed to: CAP Acquisition Corp.,
201 Main Street, Suite 2420, Attention: Richard A. Ekleberry, Esq., Forth Worth,
TX 76102, or to AT&T when sent by certified mail, return receipt requested,
addressed to: AT&T Corp., 10 Independence Blvd., Warren, NJ 07059.
5.4 Validity.
Should any provision hereof be ineffective or infeasible the
validity of the Agreement shall not be affected in other respects. The parties
shall cooperate to replace the ineffective or infeasible provision by coming as
close as possible in the economic result of the ineffective or infeasible
provision.
5.5 Taxes.
PARADYNE and/or CAPCo shall pay any tax, duty, levy, customs
fee, or similar charge ("taxes"), including interest and penalties thereon,
however designated, imposed as a result of the operation or existence of this
Agreement, including taxes which PARADYNE and/or CAPCo is required to withhold
or deduct from payments to AT&T, except (i) net income taxes imposed upon AT&T
by any governmental entity within the United States (the fifty (50) states and
the District of Columbia), and (ii) net income taxes imposed upon AT&T by
jurisdictions outside the United States.
5.6 Choice of Law.
The parties are familiar with the principles of New York
commercial law, and desire and agree that the law of New York shall apply in any
dispute arising with respect to this Agreement.
6
<PAGE> 7
5.7 Integration.
This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges all
prior discussions between them. 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.
5.8 Dispute Resolution.
(a) All contractual disputes, controversies and
differences between the parties relating to any breach of this Agreement, shall
be settled exclusively by binding arbitration pursuant to the Commercial
Arbitration Rules of the American Arbitration Association, upon thirty (30)
days' written notice of the demand therefor served by one party hereto upon the
other party. Judgment upon the award rendered may be entered in any court having
proper jurisdiction. The arbitrators shall be instructed, in connection with the
issuance of their award, to prepare a written finding of facts and law
concerning the award. If any arbitration or other proceeding is commenced
pursuant to this Section 5.8, the prevailing party shall be entitled to recover
from the other party all reasonable attorneys' fees, costs and other
disbursements actually incurred by it in connection with such arbitration or
other proceeding and in enforcing any award, order or judgment thereby obtained.
If AT&T is the party serving such notice, the arbitration shall be held in New
York, New York, in which case this Agreement shall be interpreted in accordance
with the laws of the State of New York, without reference to its principles of
conflicts of laws. If either PARADYNE or CAPCo is the party serving such notice,
the arbitration shall be held in Tampa, Florida, in which case this Agreement
shall be interpreted in accordance with the laws of the State of Florida, also
without reference to its principles of conflicts of laws.
(b) The requirement for arbitration shall not be
deemed a waiver of any right of termination under this Agreement and the
arbitrators shall not be empowered to act or make any award other than based
solely on the rights and obligations of the parties prior to any such
termination.
(c) The arbitrators shall not limit, expand or
otherwise modify the terms of this Agreement.
(d) This Agreement shall be interpreted in accordance
with the laws of the State of New York, without reference to its principles of
conflicts of law, unless otherwise dictated by invocation by one party of its
rights under Section 5.8(a), above.
(e) Discovery shall be held in accordance with the
provisions of the Federal Rules of Civil Procedure of the taking of depositions.
(f) This Article 5.8 shall survive any termination of
this Agreement or rights granted hereunder.
(a)
7
<PAGE> 8
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.
AT&T Corp. AT&T Paradyne Corporation
By: /s/ Wendy W. Koba By: /s/ William F. Osl, Jr.
---------------------------------- ---------------------------------
Print Name: Wendy W. Koba Print Name: William F. Osl. Jr.
---------------------------------- ---------------------------------
Title: General Attorney - IP Law Title: Authorized Agent
---------------------------------- ---------------------------------
Date: 7/31/96 Date: 7/31/96
CAP Acquisition Corp.
By: /s/ David M. Stanton
----------------------------------
Print Name: David M. Stanton
--------------------------
Title: President
-------------------------------
Date: 7/31/
<PAGE> 9
LIST OF APPENDICES TO EXHIBIT FF
<TABLE>
<CAPTION>
<S> <C> <C>
APPENDIX 1 - ASSIGNED MARKS
APPENDIX 2 - TRADEMARK ASSIGNMENT AGREEMENT (AT&T CORP. TO AT&T PARADYNE CORPORATION)
APPENDIX 3 - SUMMARY OF SETTLEMENT AGREEMENT RELATING TO "KEEP IN TOUCH" TRADEMARKS
APPENDIX 4 - PARADYNE/CAPCO PRODUCTS
APPENDIX 5 - AT&T'S PATENTS LICENSED TO AT&T PARADYNE CORPORATION
APPENDIX 6 - AT&T REGISTRATIONS DISCUSSED IN SECTION 3.4 OF EXHIBIT FF
</TABLE>
A-1
<PAGE> 10
APPENDIX 1 TO EXHIBIT FF
ASSIGNED MARKS
ACCULINK
ANALYSIS
CHANNELVIEW
CHANNELWATCH
COMSPHERE
DATAPHONE
DATAPORT
DCX
ETC
GLOBESPAN
INFO-LOCK
KEEP IN TOUCH CARD
KEEPINTOUCH CARD
KIT
PARADYNE
PARADYNE DCX
SHARED EXPECTATIONS
SOFTCALL
VOICESPAN
VOICESPAN AND DESIGN
A-2
<PAGE> 11
APPENDIX 1
A-3
<PAGE> 12
APPENDIX 2 TO EXHIBIT FF
TRADEMARK ASSIGNMENT AGREEMENT
(AT&T CORP. TO AT&T PARADYNE CORPORATION)
This Trademark Assignment Agreement, effective as of the
Closing Date, is made between AT&T CORP., a New York corporation duly organized
and existing under the laws of the State of New York, whose registered office is
at 32 Avenue of the Americas, New York, New York 10013-2412, United States of
America (hereinafter referred to as the "Assignor") and AT&T PARADYNE
CORPORATION, a Delaware corporation, having an office at 8545 126th Avenue
North, P.O. Box 2826, Largo, Florida 34649-2826 (hereinafter referred to as the
"Assignee").
WHEREAS, the Assignor has adopted, used, registered or applied
to register in certain countries throughout the world certain trademarks and
service marks set forth in Appendix 1 annexed hereto, including without
limitation, the registrations and applications and common law marks set out in
Appendix 1 (hereinafter referred to as the "Assigned Marks"); and
WHEREAS, the Assignor wishes to transfer and assign to the
Assignee, and the Assignee wishes to acquire from the Assignor, all of the
Assignor's rights, title and interest in and to the Assigned Marks and all of
the goodwill associated therewith, as well as all registrations and applications
and other rights, including common law rights, the Assignor may have throughout
the world with respect to such Assigned Marks.
NOW, THEREFORE, the Assignor and the Assignee agree as
follows:
Section 1
Effective the Closing Date, and for good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Assignor does hereby assign to the Assignee all proprietary rights and
applications for proprietary rights, title and interest in and to the Assigned
Marks, including without limitation, the registrations and applications and
common law marks set forth in Appendix 1, any common law rights in the Assigned
Marks, the goodwill of the business relating to the Assigned Marks, and the
right to sue for past infringement of the Assigned Marks.
The Assignee does hereby accept this assignment.
Section 2
This Assignor will promptly transfer to or provide to the
Assignee copies of all files relating to the use, registration of, and
applications for registration of, the Assigned Marks.
A-4
<PAGE> 13
Section 3
(A) This agreement in the form of a notarial deed is intended in original and in
certified copy to be lodged with the competent domestic and foreign
institutions, more particularly administrative agencies and courts, together
with an application for assignment of the corresponding proprietary rights and
applications for proprietary rights.
(B) Should the lodging of this deed be insufficient for the assignment of the
proprietary rights and applications for proprietary rights, both parties hereto
shall immediately attend to the necessary formalities and will execute all
reasonable documents necessary to effect transfer of the Assigned Marks.
(C) The Assignee shall bear the costs arising out of or in connection with the
implementation of the assignment contained herein.
(D) Amendments hereto and amplifications hereof shall be in writing.
Assignor Assignee
Given at Basking Ridge Accepted at New York,
New Jersey, USA New York, USA
on July 31, 1996 On July 31, 1996
AT&T CORP. AT&T PARADYNE CORPORATION
By: By:
------------------------------ ------------------------------------
Name: Michele Farber, Esq. Name: William F. Osl, Jr.
Trademark and Copyright Attorney Title: Authorized Agent
Authorized Signatory Authorized Signatory
A-5
<PAGE> 14
NOTARIAL CERTIFICATIONS
I, a Notary Public, certify that on July 31, 1996, before me
personally appeared Michele A. Farber, to me known to be an authorized signatory
of AT&T CORP. and that she executed the foregoing Trademark Assignment
Agreement.
I attest:
Signed in: Basking Ridge, NJ USA
Dated: July 31, 1996
Notary Public "Official Seal"
Signature of Notary Public
I, a Notary Public, certify that on July 31, 1995, before me
personally appeared William F. Osl, to me known to be an Authorized Signatory of
AT&T PARADYNE, and that he executed the foregoing Trademark Assignment
Agreement.
I attest:
Signed in: New York, NYC
Dated: July 31, 1996
Notary Public "Official Seal"
Signature of Notary Public
A-6
<PAGE> 15
APPENDIX 1
TO TRADEMARK ASSIGNMENT AGREEMENT
ASSIGNED MARKS
ACCULINK
ANALYSIS
CHANNELVIEW
CHANNELWATCH
COMSPHERE
DATAPHONE
DATAPORT
DCX
ETC
GLOBESPAN
INFO-LOCK
KEEP IN TOUCH CARD
KEEPINTOUCH CARD
KIT
PARADYNE
PARADYNE DCX
SHARED EXPECTATIONS
SOFTCALL
VOICESPAN
VOICESPAN AND DESIGN
A-7
<PAGE> 16
APPENDIX 1
A-8
<PAGE> 17
APPENDIX 3 TO EXHIBIT FF
SUMMARY OF SETTLEMENT AGREEMENT
RELATING TO "KEEP IN TOUCH" TRADEMARKS
The following is a partial summary of a Settlement Agreement
dated April 17, 1995 between AT&T Corp. and Gnossos Software, Inc., a Delaware
corporation having offices at 162 SK Street, Suite 410, Washington, D.C.
2006-1604, effecting AT&T's (and its successor's) use of certain trademarks
identified below. Whenever the term "Paradyne" is used, it shall also be meant
to include Paradyne's successor or assignee:
1. Paradyne may use the mark "KIT" without restriction.
2. So long as Gnossos has not abandoned use of "KEEP IN TOUCH"
for computer software, Paradyne shall use "KeepInTouch" only as part of a
compound mark, such as "KeepInTouch Card", "KeepInTouch Express", "Paradyne
KeepInTouch", "KeepInTouch Cellular Modem" and "KeepInTouch 2000" (the "Agreed
Marks"). For the purposes of the Settlement Agreement, any such Agreed Mark used
by Paradyne shall be comprised of the "KeepInTouch" element plus at least one
other alphabetical and/or numeric element depicted in the same type face and
size as the "KeepInTouch" element, so as to create a unitary commercial
impression. If the other element in the compound mark is comprised of word(s) or
letters of the alphabet, that other element is to be depicted with at least
initial capitalization. Thus, "KeepInTouch Card" or "KeepInTouch Cellular Modem"
would be Agreed Marks, while "KeepInTouch card" or "KeepInTouch cellular modem"
would not. Moreover, while "KeepInTouch 2000" is acceptable, the use of a number
that merely connotes a version number (e.g., "KeepInTouch 5.1") would not be an
acceptable compound mark. Paradyne may register acceptable compound Agreed
Marks, as defined herein. However, Paradyne shall not use or register the marks
"KeepInTouch" by itself or "KEEP IN TOUCH" by itself, and shall not use or TM
symbols, or a trademark legend to indicate rights in "KeepInTouch" by itself.
These restrictions apply to use on the products, packaging, advertising and
promotional material.
3. So long as Gnossos has not abandoned use of "KEEP IN TOUCH"
for computer software, Paradyne shall use the Agreed Marks in proximity to any
Paradyne mark, or any successor thereof then functioning as Paradyne's house
mark, or the house mark of any assignee or successor to Paradyne.
4. So long as Gnossos has not abandoned use of "KEEP IN TOUCH"
for computer software, Paradyne shall limit its use of the Agreed Marks to
modems and software used for operating such modems, including software sold for
the purpose of upgrading the functionality of modems ("Related Software").
Specifically excluded from the definition of Related Software is communications
applications software, such as faxing software and e-mail software. Such
exclusion, however, shall not apply to any software that is used to allow a
modem to operate to send and receive facsimile, data, information, voice, video
and electronic mail transmissions when such software is sold as a unit with or
as an upgrade to modems sold under the Agreed Marks. A "modem" shall mean any
machine, device, or computer software, now
A-9
<PAGE> 18
known or later developed, which converts digital signals to analog signals and
analog signals to digital signals for transmission of facsimile, data,
information, voice, video or electronic mail over a telecommunications network.
For purposes of this definition analog signals include any signal which becomes
analog at any point in the transmission.
A-10
<PAGE> 19
APPENDIX 4 TO EXHIBIT FF
PARADYNE PRODUCTS
- - All products offered commercially at any time prior to Closing Date
- - GENESIS AND GENEVA FAMILY (3800/3900)
- Triple Modem nest for the 3000 Carrier
- Synchronous data compression
- Integrated Diagnostics
- Mocha
- - DEVER FAMILY - SUBRATE DIGITAL LEASED LINE (3600/3500)
- ISDN DBM
- V.34 DBM
- Extended Range
- Autorate
- Cross Pair Detection
- Integrated Diagnostics
- Multiplexor Options
- Paddle Cards
- 64k/128k NTU's
- - SPINNAKER FAMILY - T1/E1/HDSL CSU & DSU (31XX,33XX)
- ASCII Interface Redesign
- TCP & Telnet
- Device Specific SNMP MIBs
- Voice Compression
- International Power
- Integrated Diagnostics
- Optical Interface
- - CARRIBEAN SUBRATE FAMILY - DDS FRAME RELAY
- Aruba - DDS Frame Relay
- Frame Relay Aware/Frame Relay Aggregation
- Synchronous Data Compression
- BRI DBM
- FTP Down Line Loan
- 14 Slot Nest
- FRAD
- PCMCIA Management Interfaces
- Cost Reduction (Antigua)
- Curacao - DDS Frame Relay Edge Router
A-11
<PAGE> 20
- Single Card Router with 1-port Native Ethernet DTE
- Supports above Aruba Functionality
- - CARRIBEAN NxDSO FAMILY - T1/E1
- Barbados - T1/FT1 Low End Multiplexor & DSU
- SNMP, Telnet, TCP
- PRI
- 5 Slot Carrier
- 2 Slot Stand Alone Package
- 14 Slot Nest
- Single T1 Leased Line NAM with DSX, with 2 ports
- Dual T1 Leased Line NAM without DSX, no ports
- Dual DSX APM without ports
- PCMCIA Management (via Ethernet or Token Ring LAN,
V.34)
- 8-port FXS, FSO, or E&M Voice APM
- Voice Compression APM
- 4-port Synchronous Data APM
- Synchronous Data Compression APM
- 6-port OCU APM
- 5-port SRU APM
- 6-port Management Interface APM
- 6-port BRI APM
- 8-port V.34 Modem Pool APM
- Martinique - E1/FE1 Low End Multiplexor & DSU
- Dual E1 Leased Line NAM with ports
- Dual E1 Leased Line NAM without ports
- Support for above Barbados configurations and options
- Trinidad - T1/FT1 Frame Relay DSU
- SNMP, Telnet, TCP
- 2 Slot Stand Alone Package
- 14 Slot Nest
- T1 Frame Relay NAM with DSX, with 2 ports
- BRI DBM
- Frame Relay Aware, Frame Relay Aggregation with
Compression APM
- FRAD APM
- - HEARTLAN FAMILY - LOW END/LOW COST SUBRATE AND T1
- Beagle-Subrate Leased Line DSU
- DDS NI with 1 port
- SNMP, Telnet, TCP
- Ethernet Management Interface
A-12
<PAGE> 21
- Greyhound - T1/F1 Leased Line DSU
- T1/FT1 NI without DSX, with 1 port
- T1/FT1 NI with DSX, with 1 port
- T1/FT1 NI with DSX, with 2 ports
- T1/FT1 NI with DSX, without ports (CSU)
- SNMP, Telnet, TCP
- With or without Ethernet Management Interface
- Poodle - V.11 NTU
- 64k V.11 NI with 1 port DTE
- 64k V.11 NI with 5 port DTE, with X.50
- - SYSTEM PRODUCTS
- ADSL/SDSL/HDSL/VDSL/RADSL PC Cards, Workstation Interface
Cards, and Stand Alone "Modems"
- Open Access Gateway (Multiplexor)
- Central Site Concentrators for ADSL/SDSL/VDSL/RADSL
Lines
- xDSL with packet or cell protocols
- TDM extensions
- Modem Pool extensions for analog, mu-law, ISDN
- Service Translation for broadband, video transmission
- Acculink Access Controller (AAC) Cards
- (DACS)
- Modem Pool
- TDM Access Multiplexor
- - HAWK - REMOTE ACCESS AND TELECOMMUTING SERVER
- V.34, V.34Q and ISDN BRI Remote Access Port Concentrators
- T1 PRI Network Interface
- Windows NT
- Novell
- Temporary Office Extensions
- Remote Office Extensions
- High Card Density (16 ports OCD)
- Very High Card Density (30 ports OCD)
- Mocha
- E1 Interface
- - WIRELESS SYSTEMS
- ETC2 for Wireless Data Gateway, Hawk and Open Access Gateway
- CDPD and PCS protocols (TDMA, CDMA, GSM)
A-13
<PAGE> 22
- - SOFTWARE PRODUCTS
- Network Management System Applications for all Present
Paradyne Products and Other Products Listed Herein
- Element Management Applications for all Present Paradyne
Products and Other Products Listed Herein.
- Extended Leased Line Network Management Applications on HP
Openview and IBM SystemView
- Performance Management Applications for all Present Paradyne
Products and Other Products Listed Herein, on HP Openview
and IBM SystemView
- Service Management Applications for all Present Paradyne
Products and Other Products Listed Herein, on HP Openview
and IBM SystemView
- TL-1 Interface for HP Openview and IBM SystemView
- CMIP/NMP Wrappers for HP Openview and IBM SystemView
- - The following products are to be assessed in January, 1997. The
commercial development status of each product will be determined and
such product will be added to this Appendix C if the product is either
- (I) at the time of assessment under development for a
scheduled commercial release, or
- (II) firmly committed for development to begin no later than
March 31, 1997 for a scheduled commercial release; in this
case, the product is added to this Appendix C only to the
extent that such development does begin before March 31
- The products to be assessed are
- The following modules for CARIBBEAN NxDSO
- ATM NAM
- Encryption APM
- Security APM
- Cayman - FT3 ATM DSU
- ATM Access Multiplexor
- The following modules for Open Access Gateway
- PDTS Splitting
- Encryption
- Security
A-14
<PAGE> 23
APPENDIX 5
AT&T CORPORATION PATENTS LICENSED TO AT&T PARADYNE CORPORATION
<TABLE>
<CAPTION>
PATENT DATE
NO. ISSUED TITLE AREA OF APPLICATION
--- ------ ----- -------------------
<S> <C> <C> <C>
4348554 9/7/92 Method of providing virtual private Modem, DSU, Mux
network telephone service
4383332 5/10/83 High capacity digital mobile radio Wireless Data Gateway
system
4472832 9/18/84 Digital speech coder Modem, Access Server
4578531 3/25/86 Encryption system key distribution Modem, DSU, Mux, Access Server
method and apparatus
4586186 4/29/86 Maintenance response signaling Mux, Access, Server
arrangement for digital transmission
system
4611094 9/9/86 Method for customer definable telephony Modem, Access Server
capability
4616359 10/07/86 Adaptive preferential flow control for Mux, DSU, Access Server
packet switching system
4633464 12/30/86 Control signaling management for DSU, Mux, Access Server
digital transmission system
4700339 10/13/87 Wavelength division multiplexed silicon DSU, Mux
optical fiber telecommunication system
4756020 7/6/88 Method and apparatus for disallowing the Access Server
extension of a call through a network
4827600 6/2/89 Automatic speech recognition to select Access Server
among call destinations
4899373 2/6/90 Method and apparatus for providing Access Server
personalized telephone subscriber
features at remote locations
4814655 4/3/90 Multiplexing arrangement for digital DSU, Mux
transmission system
4922348 4/10/90 Facsimile service Modem, Access Server
4932042 6/6/90 Spontaneous voice and data managing Mux, Access Server
4959849 7/31/89 End-to-end network surveillance Mux, DSU, Access Server
5033079 7/16/91 Establishment of facsimile calls Modem, Access Server
5063659 11/5/91 Optimized Wavelength Division DSU, Mux
Multiplexed Lightwave Communication
System
</TABLE>
15
<PAGE> 24
<TABLE>
<S> <C> <C> <C>
5086460 2/4/92 Communications system ingress and egress Mux, Access Server
arrangement
5164983 11/17/92 Telemarketing complex performance Access Server
management system
5181238 1/19/93 Authenticated communications access Access Server
service
5182744 1/26/93 Telecommunications Network Restoration Mux, DSU, Modem
Architecture
5195132 3/16/93 Telephone network speech signal Modem, Access Server
enhancement
5222125 5/22/93 A system for providing personalized Access Server
telephone calling features
5243645 9/7/93 Automatic System for Forwarding of call Access Server
5270919 12/14/93 Network planning tool Mux, Access Server
5276444 1/4/94 Centralized security control system Mux, Access Server
5278889 1/11/94 Video Telephony dialing Modem, Access Server
5283624 2/1/94 Calling Line identification Access Server
5287199 2/16/94 Facsimile message processing and Access Server
routing system
5291551 2/1/94 Home agent telecommunication technique Access Server
6311572 5/10/94 Cooperative databases call processing Access Server
system
5325421 6/28/94 Voice directed communications system Modem, Access Server
platform
5329308 7/12/94 Bidirectional video telephony between Mux, Access Server
cable television and switched telephone
systems
5329581 7/12/94 Target area calling system Access Server
5333195 7/26/94 Telephone network speech signal Modem, Access Server
enhancement
5333308 7/26/94 Method and apparatus for operating a Modem, DSU, Mux, Access Server
communication network monitor
arrangement
5335224 8/2/94 Service guarantee/congestion control at Mux, Access Server
high-speed networks
5353396 10/4/94 Voice directed communication system Modem, Access Server
architecture
5353339 10/4/94 Simplified Uniform Network Provisioning Modem, DSU, Mux, Access Server
and Restoration
5369695 11/29/94 Method of redirecting a telephone call Access Server
to an alternate destination (ADCR)
5375124 12/20/94 Method and apparatus for providing ISDN Mux, Access Server
access
5384831 1/24/95 A system for providing personalized Access Server
telephone call features
5386467 1/31/95 Intelligent Network Communication System Mux, Access Server
5392345 2/21/95 Work at home ACD agent network Access Server
</TABLE>
A-16
<PAGE> 25
<TABLE>
<CAPTION>
<S> <C> <C> <C>
5409526 4/18/95 Conference Calling System Mux, Access Server
5410538 4/25/95 Method and apparatus for transmitting Modem, DSL
signals in a multi-tone code
5420851 5/30/96 Method of Multiple Access Modem, Access Server
5420917 5/30/95 Automated Recovery of telecommunication DSU, Modem, Mux, Access Server
network elements
5428608 6/27/95 Call connection technique Modem, Access Server
5434920 7/18/95 Secure telecommunications DSU, Modem, Mux, Access Server
5442625 8/15/95 Code division multiple access system Modem, Wireless Data Gateway
providing variable data rate access to
a user
5448632 9/5/95 Call monitoring system for intelligent Access Server
call processing
5450123 9/12/95 A method to enhance voice communications Modem, Access Server
using encoded one-way video signals
under bi-directional user or network
control for transmitting stored or
real-time video or image
information
5450479 9/12/95 Method and apparatus for facilitating Modem, Access Server
the making of card calls
5463677 10/31/95 Method and apparatus for facilitating Modem, Access Server
the making of collect calls
5463683 10/31/95 Blocked call notification system Modem, Access Server
5463685 10/31/95 Network based outbound call management Mux, Access Server
5473468 12/5/95 Soliton data transmission using DSU, Mux
non-soliton transmitter
5473671 12/5/95 Selective Screening of Incoming Calls Wireless Data Gateway
for Cellular
5473677 12/5/95 Telecommunications network architecture Modem, DSU, Mux, Access Server
and system
5473679 12/5/95 A signaling system for broadbased Mux, DSL
communications networks
5473681 12/5/95 Method for Use in completing telephone Mux, Access Server
calls
5475746 12/12/95 Method for permitting subscriber to Access Server
change call features in real-time
5481603 1/2/96 Intelligent call processing based upon Modem, Access Server
complete identification of calling station
5485515 1/16/96 Background noise compensation in a Modem, Access Server
telephone network
5487171 1/23/96 Telecommunications system sequences Modem, Access Server
calling
5488569 1/30/96 Application-oriented telecommunication Access Server
system interface
</TABLE>
A-17
<PAGE> 26
<TABLE>
<CAPTION>
<S> <C> <C> <C>
5491576 2/13/96 Dual-wavelength data transmitter for DSU, Mux
reducing fading in an optical
transmission system
5509055 4/16/96 Inbound telecommunications services Mux, Access Server
resources management system
5509060 4/16/96 Network accessible intelligent Modem, Access Server
telephone services
5513254 4/30/96 Method and apparatus for processing Modem, Access Server
facsimile transmissions
5515425 5/7/96 Telecommunications system with active Access Server
databases
5521966 5/26/96 Method & system for mediating Modem, Access Server
transactions that use portable smart
cards
5521969 5/28/96 Telephone caller identity delivery Modem, Access Server
system and method with enhanced caller
privacy
</TABLE>
A-18
<PAGE> 27
APPENDIX 6 TO EXHIBIT FF
A-19
<PAGE> 1
EXHIBIT 10.21
TAX MATTERS AGREEMENT
THIS TAX MATTERS AGREEMENT (this "Agreement") is entered into as
of July 31, 1996, by and among LUCENT TECHNOLOGIES INC., a Delaware corporation
("Lucent"), AT&T PARADYNE CORPORATION, a Delaware corporation and a wholly-owned
subsidiary of Lucent ("Paradyne"), PARADYNE PARTNERS, L.P., a Delaware limited
partnership (the "Partnership"), PARADYNE ACQUISITION CORP., a Delaware
corporation and a wholly-owned subsidiary of the Partnership ("PAC"), RENTAL
ACQUISITION CORP., a Delaware corporation and a wholly-owned subsidiary of the
Partnership ("RentalCo"), CAP ACQUISITION CORP., a Delaware corporation and a
wholly-owned subsidiary of the Partnership ("CAPCo"), and LEASE ACQUISITION
CORP., a Delaware corporation and a wholly-owned subsidiary of PAC ("LeaseCo").
The Partnership, PAC, RentalCo, CAPCo and LeaseCo are sometimes referred to
collectively in this Agreement as the "Acquisition Entities." Certain other
capitalized terms used in this Agreement are defined in Exhibit A. Capitalized
terms which are not defined in this Agreement or in Exhibit A shall have the
meanings ascribed to them in the Purchase Agreement.
RECITALS
A. Pursuant to the Purchase Agreement, RentalCo, CAPCo and
LeaseCo are purchasing certain assets from Paradyne, CAPCo is purchasing certain
assets from Lucent, and PAC is purchasing all of the outstanding capital stock
of Paradyne (the "Paradyne Shares") from Lucent.
B. Lucent, Paradyne and the Acquisition Entities desire to set
forth herein their mutual agreements with respect to certain Tax matters,
including the allocation of responsibility for the payment of federal, state,
local and foreign Taxes.
AGREEMENT
The Parties agree as follows:
SECTION 1. Liability for Taxes
1.1 (a) Except as otherwise provided in Section 4.3, Lucent
shall be liable for all Taxes (i) imposed on Lucent and its Affiliates, other
than Taxes imposed on the Acquired Companies or for which the Acquired Companies
may otherwise be liable, for any taxable year, (ii) imposed on the Acquired
Companies, or for which the Acquired Companies may otherwise be liable, solely
as a result of being members of the Lucent Group (which for purposes of this
sentence includes the Acquired Companies) pursuant to Treasury Regulations
Section 1.1502-6 or analogous state, local or foreign laws for any taxable year,
or (iii) imposed on the Acquired Companies, or for which the Acquired Companies
may otherwise be liable, for any Pre-Closing Tax Period, including any Code
Section 481 adjustments resulting from a change of accounting method by the
Acquired Companies prior to the close of the Closing Date.
1
<PAGE> 2
(b) Lucent shall be entitled to any refund of Taxes for
which it is liable pursuant to this Section 1.1.
1.2 (a) Paradyne shall be liable for all Taxes imposed on the
Acquired Companies, or for which the Acquired Companies may otherwise be liable,
for any Post-Closing Tax Period.
(b) Paradyne shall be entitled to any refund of Taxes for
which it is liable pursuant to this Section 1.2.
1.3 For purposes of this Agreement, whenever it is necessary to
determine the liability for Taxes of the Acquired Companies for a portion of any
Straddle Period, the determination of the Taxes of the Acquired Companies for
the portion of the Straddle Period ending on and including, and the portion of
the Straddle Period beginning after, the Closing Date shall be determined by
assuming that the Straddle Period consisted of two taxable years or periods, one
of which ended at the close of the Closing Date and the other of which began at
the beginning of the day following the Closing Date, and items of income, gain,
deduction, loss or credit of the Acquired Companies for the Straddle Period
shall be allocated between such two taxable years or periods on a "closing of
the books" basis by assuming that the books of the Acquired Companies were
closed as of the close of the Closing Date: provided, however, that exemptions,
allowances or deductions that are calculated on an annual basis shall be
apportioned between such two taxable years or periods on a daily basis.
SECTION 2. Asset Sales
2.1 RentalCo has purchased or will purchase assets from Paradyne
in accordance with Section 1.1 of the Purchase Agreement. The Parties have
agreed to allocate the purchase price set forth in Section 1.1(b) of the
Purchase Agreement among the corresponding assets in the manner set forth in
Section 1.1(d) of the Purchase Agreement. RentalCo, Paradyne and Lucent shall
cooperate in the preparation of Treasury Form 8594 for timely filing with each
of their respective federal income tax returns and any comparable foreign, state
or local tax filings.
2.2 CAPCo has purchased or will purchase assets from Paradyne and
Lucent, Paradyne and Lucent have or will enter into assignment and assumption
agreements with CAPCo as to certain liabilities, in each case in accordance with
Section 1.3 of the Purchase Agreement. CAPCo, Lucent and Paradyne have agreed to
allocate the purchase price set forth in Sections 1.3(b) and 1.3(d) of the
Purchase Agreement among the corresponding assets in the manner set forth in
Section 1.3(f) of the Purchase Agreement. CAPCo, Paradyne and Lucent shall
cooperate in the preparation of Treasury Form 8594 for timely filing with each
of their respective federal income tax returns and any comparable foreign, state
or local tax filings.
2.3 LeaseCo has purchased or will purchase assets from Paradyne
in accordance with Section 1.2 of the Purchase Agreement. LeaseCo and Paradyne
have agreed to allocate the purchase price set forth in Section 1.2(b) of the
Purchase Agreement among the corresponding assets in the manner set forth in
Section 1.2(c) of the Purchase Agreement. LeaseCo, Paradyne and Lucent shall
cooperate in the preparation of Treasury Form 8594 for
2
<PAGE> 3
timely filing with each of their respective federal income tax returns and any
comparable foreign, state or local tax filings.
SECTION 3. Section 338 Election
3.1 PAC and Lucent shall join in an election to have the
provisions of Section 338(h)(10) of the Code and similar provisions of foreign,
state or local law ("Section 338 Elections") apply to the acquisition of the
Paradyne Shares and the shares of Ark Electronic Products, Inc, ("ARK"). PAC and
Lucent shall timely prepare and file Treasury Form 8023-A, together with any
schedules or attachments thereto, and any other forms, returns, statements or
documents required to be submitted to any foreign, federal, state or local
Taxing Authority in connection with the Section 338 Elections. To the extent
that AT&T is required to execute any such form as the parent of the Lucent
Group, which for purposes of this sentence includes the Acquired Companies,
Lucent shall cause AT&T to execute such form(s).
3.2 The allocation of the purchase price (the "Stock
Purchase Price") specified in Section 1.5(b) of the Purchase Agreement among the
Residual Assets of Paradyne and the assets of ARK shall be made in the manner
set forth in Section 1.5(d) of the Purchase Agreement.
3.3 Lucent shall be responsible for and shall pay any
income, franchise or similar taxes based on net revenue (and shall be entitled
to the benefit of any losses) arising as a result of the Section 338 Elections.
SECTION 4. Tax Covenants
4.1 The Acquisition Entities covenant that they will not
cause or permit any of the Acquired Companies (i) to take any action on the
Closing Date, other than in the ordinary course of business or otherwise
specified in the Purchase Agreement, that could give rise to any Tax liability
of Lucent or the Lucent Group, (ii) to make any election or deemed election
under Section 338 of the Code with respect to the Acquired Companies other than
as specified in this Agreement, or (iii) to make or change any Tax election,
amend any Tax Return or take any position on any Tax Return, take any action,
omit to take any action or enter into any transaction that results in any
increased Tax liability or reduction of any Tax Asset of Lucent or the Lucent
Group in respect of any Pre-Closing Tax Period. The Acquisition Entities agree
that Lucent and the Lucent Group are to have no liability for any Tax resulting
from a breach of the covenants contained in the preceding sentence, and the
Acquisition Entities agree to indemnify and hold harmless Lucent and the Lucent
Group against any such Tax or reduction in a Tax Asset. Lucent agrees to give
prompt notice to the Partnership of the assertion of any claim, or the
commencement of any action or proceeding arising from any such breach and in
respect of which indemnification may be sought under this Section 4.1. The
Partnership or the applicable Acquisition Entity may participate in and assume
the defense of any such suit, action or proceeding at its own expense. If the
Partnership or the applicable Acquisition Entity assumes such defense, Lucent
shall have the right (but not the duty) to participate in the defense thereof
and to employ counsel, at its own expense, separate from the counsel employed by
the Partnership or the applicable Acquisition Entity. Whether or not Lucent
chooses to defend or prosecute any claim, the Parties shall cooperate in the
defense or prosecution thereof.
3
<PAGE> 4
4.2 The Acquisition Entities shall promptly pay or shall
cause prompt payment to be made to Lucent of all refunds of Taxes and interest
thereon received by any of the Acquisition Entities or the Acquired Companies
attributable to Taxes paid by Lucent or the Acquired Companies (or any
predecessor or Affiliate of Lucent) with respect to any Pre-Closing Tax Period.
4.3 Except as provided in the Purchase Agreement or the
Additional Agreements, no transfer, documentary, sales, use, stamp,
registration, withholding or other similar Taxes (including any penalties and
interest) incurred in connection with the transactions contemplated by Sections
1.1, 1.2, 1.3, 1.4 and 1.5 of the Purchase Agreement and the Section 338
Elections shall be borne or required to be paid by Lucent. Except as provided in
the Purchase Agreement or the Additional Agreements, the Acquisition Entities
will, at their own expense, file all necessary Tax Returns and other
documentation with respect to the Taxes enumerated in the preceding sentence,
and, if required by applicable law, Lucent will, and will cause its Affiliates
to, join in the execution of any such Tax Returns and other documentation. The
purchase prices set forth in the Purchase Agreement will not be reduced by any
of the Taxes enumerated in this Section 4.3.
4.4 If Lucent shall determine after the Closing that it is
desirable to file an amended Tax Return for any of the Acquired Companies with
respect to any Pre-Closing Tax Period, Lucent shall prepare and submit to PAC
the amended Tax Return, other than a return included in the Acquired Companies
ultimate parent corporation's consolidated federal or unitary state filing, and
PAC shall cause such return to be filed within thirty (30) days after receipt
thereof. PAC agrees not to permit the Acquired Companies to file any amended Tax
Return with respect to a Pre-Closing Tax Period without the express, prior
written consent of Lucent.
4.5 PAC shall give written notice to Lucent of any
notification of audit of a Tax Return for any of the Acquired Companies for any
Pre-Closing Tax Period or proposed adjustments to any items included in such a
return promptly after receipt of notification of the audit or adjustments.
Lucent shall be entitled, at its expense, to participate in all conferences,
meetings and proceedings with Taxing Authorities, or in appearances before any
court, pertaining to such audit or adjustments, and, subject to Section 6.4, to
direct the manner in which all claims, audits, adjustments or proceedings are
conducted and resolved by settlement or otherwise. PAC shall cause the Acquired
Companies to cooperate with Lucent and take such action and execute such
agreements and documents as Lucent shall reasonably request in order to carry
out the foregoing. Except with the prior written consent of Lucent, PAC shall
not permit the Acquired Companies to enter into any agreement after the date
hereof extending the statute of limitations or settling any asserted adjustments
with respect to or affecting any Pre-Closing Tax Period.
SECTION 5. Cooperation on Tax Matters
5.1 The Acquisition Entities and Lucent agree to furnish or
cause to be furnished to each other, upon request, as promptly as practicable,
such information (including access to books and records) and assistance relating
to any of the Acquired Companies as is reasonably necessary for the filing of
any Tax Return, for the preparation for any audit, and for
4
<PAGE> 5
the prosecution or defense of any claim, suit or proceeding relating to any
proposed adjustment. Except as otherwise provided in this Agreement, the
Acquisition Entities and Lucent shall cooperate with each other in the conduct
of any audit or other proceedings involving any of the Acquired Companies for
any Tax purposes (but only to the extent such audit or other proceeding will
impact the Tax liability of the other Party) and each shall execute and deliver
such powers of attorney and other documents as are necessary to carry out the
intent of this subsection. The Acquisition Entities and Lucent agree to retain
or cause to be retained all relevant books and records pertinent to the Acquired
Companies until the applicable period for Tax assessment under applicable law
(giving effect to any and all extensions or waivers) has expired, and to abide
by or cause the abidance with all record retention agreements entered into with
any Taxing Authority. The Acquisition Entities and Lucent each agree to give the
other reasonable notice prior to discarding or destroying any such books and
records relating to Tax matters and, if a Party so requests, the Party proposing
to discard or destroy such records shall allow the other Party to take
possession of such books and records. Notwithstanding the foregoing provisions
of this Section 5.1, the Parties shall have no obligation to retain books and
records pertinent to the Acquired Companies for more than ten (10) years or to
notify the other Party prior to discarding and destroying books and records
which are ten (10) years old or older.
5.2 The Acquisition Entities and Lucent further agree, upon
request, to provide the other Party with all information that such Party may be
required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
5.3 Each of the Parties shall keep confidential, and shall
cause its Affiliates and Representatives to keep confidential, and shall not use
or disclose and shall cause its Affiliates and Representatives not to use or
disclose, to any other Person, any non-public document or other non-public
information provided to such Party pursuant to this Agreement; provided,
however, that each of the Parties may use the information provided to it
pursuant to this Agreement for the purposes set forth in the first sentence of
Section 5.1.
SECTION 6. Indemnification
6.1 Lucent shall indemnify and hold harmless the Acquisition
Entities against (a) any and all Taxes for which Lucent is liable pursuant to
Sections 1.1 and 3.3 of this Agreement ("Lucent's Taxes"), (b) any and all
Damages from the breach by Lucent of any representation, warranty or covenant of
Lucent contained in this Agreement, and (c) any interest and penalties and
reasonable attorneys' fees, accountants' fees and other expenses arising out of
or incident to the failure of Lucent to pay Lucent's Taxes, or otherwise fulfill
the obligations of Lucent, in accordance with the provisions of this Agreement.
6.2 The Partnership shall indemnify and hold harmless Lucent
and its Affiliates against (a) any and all Taxes for which Paradyne or any of
the Acquisition Entities are liable pursuant to Section 1.2 of this Agreement
(the "Partnership's Taxes"), (b) any and all Taxes for which Lucent is to have
no liability under Section 4.3 of this Agreement, (c) any and all Damages from
the breach by any of the Acquisition Entities of any representation, warranty or
covenant of the Acquisition Entities (or any of them) contained in this
Agreement, and (d) any interest and penalties and reasonable attorneys' fees,
accountants' fees and other expenses arising out of or incident to the failure
of the Acquisition Entities to pay the Partnership's Taxes,
5
<PAGE> 6
or otherwise fulfill the obligations of the Acquisition Entities, in accordance
with the provisions of this Agreement.
6.3 A Party ("Indemnitee") seeking indemnification under
this Section 6 shall notify the other Party ("Indemnitor") in writing of the
estimated amount of the indemnification obligation together with a reasonably
detailed explanation of the Tax liability to which it relates. Except as
otherwise provided in this Agreement, Indemnitor shall make payment to
Indemnitee or the applicable Taxing Authority (as determined by Indemnitee) of
such estimated amount on or before the later of (a) thirty (30) days prior to
the date such Taxes are due and payable by Indemnitee or its Affiliate, which
date shall be stated in the written notification to Indemnitor, or (b) thirty
(30) days following the date of receipt by Indemnitor of such written notice.
6.4 (a) If any assessment, adjustment, claim, demand, suit,
action, litigation, proceeding or audit ("Claim or Demand") for Taxes in respect
of which indemnification may be sought pursuant to this Section 6 is asserted in
writing against a Party or any of its Affiliates, Indemnitee shall notify
Indemnitor of such Claim or Demand within thirty (30) days of receipt thereof,
or such earlier time that would allow Indemnitor to timely respond to such Claim
or Demand, and shall give Indemnitor such information with respect thereto as
Indemnitor may reasonably request. The failure of Indemnitee to provide timely
notice to Indemnitor of a Claim or Demand in accordance with this Section 6.4(a)
shall not serve to eliminate or limit Indemnitor's obligations under this
Section 6 unless such failure materially prejudices Indemnitor. Indemnitor may
discharge, at any time, its indemnification obligation under this Section 6 by
paying to Indemnitee or the applicable Taxing Authority (as determined by
Indemnitee) the amount of the Taxes, together with any interest and penalties
and any other amounts due under this Section 6, calculated on the date of such
payment.
(b) Indemnitor may, at its own expense, participate
in and, upon notice to Indemnitee, assume the defense of any Claim or Demand. If
Indemnitor assumes such defense, Indemnitor shall have no obligation to make a
payment under this Section 6 until a final determination has been made and all
rights of appeal have expired. If Indemnitor assumes such defense, Indemnitor
shall have the right to control such defense in all respects; provided that
Indemnitee shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by Indemnitor. If Indemnitor assumes such defense, Indemnitor shall
consult with Indemnitee regarding significant decisions related to the defense,
but Indemnitor shall have the sole and exclusive right to make such decisions.
If Indemnitor assumes such defense (as indicated by written notice to
Indemnitee), neither Indemnitee nor its Affiliates shall pay such Taxes until
(a) a final determination has been made and all rights of appeal have expired,
or (b) Indemnitor has consented to such payment. Whether or not Indemnitor
chooses to defend or prosecute any claim, all of the Parties shall cooperate in
the defense or prosecution thereof.
(c) Notwithstanding anything in this Agreement to the
contrary, Indemnitor shall not settle or compromise any Claim or Demand without
the consent of Indemnitee unless (A) such settlement or compromise involves no
finding or admission of any violation or breach by Indemnitee of any right of
any other Person or any Legal Requirement (other than a violation or breach by
any Acquired Company on or before the Closing Date of any
6
<PAGE> 7
Legal Requirements relating to Taxes), (B) such settlement or compromise has no
material effect on any other claims which are pending against Indemnitee or
likely will be brought against Indemnitee in the future, and (C) the sole relief
provided in connection with such settlement or compromise is a monetary payment
that is paid in full by Indemnitor.
6.5 If Indemnitor fails to provide written notice to
Indemnitee of Indemnitor's assumption of the defense of any Claim or Demand
within twenty (20) days after written notice of such Claim or Demand from
Indemnitee, Indemnitee may pay such Tax or otherwise settle such Claim or Demand
and obtain indemnification from Indemnitor for such liability in accordance with
this Section 6.
6.6 A Party shall not be liable under this Agreement for any
Tax (i) which was paid without such Party's prior written consent or otherwise
in accordance with the provisions of this Agreement, (ii) which was the subject
of any settlements effected without the prior written consent of such Party or
otherwise in accordance with the provisions of this Agreement, or (iii)
resulting from any Claim or Demand in which such Party was not permitted an
opportunity to defend or participate in the manner provided in this Agreement.
6.7 So long as the period for filing an amended Tax Return
remains open, any payment by one Party to another Party under this Agreement
will be deemed to be an adjustment to the Purchase Price unless, under
applicable law, such payment is not treated as received by such other Party. In
all other cases, such payments shall be treated by the Parties under applicable
principles of Tax law.
SECTION 7. Miscellaneous Provisions
7.1 Notices
Any notice or other communication required or permitted to be delivered
to any Party shall be in writing and shall be deemed properly delivered, given
and received when delivered (by hand, by registered mail, by courier or express
delivery service or by facsimile) to the address or facsimile telephone number
set forth beneath the name of such Party below (or to such other address or
facsimile telephone number as such Party shall have specified in a written
notice given to the other Parties):
if to Lucent:
10 Independence Boulevard
Warren, New Jersey 07059
Attention: Mr. William Osl, Jr.
Fax: (908) 580-6088
with a copy to:
Room A2046
131 Morristown Road
Basking Ridge, New Jersey 07920
7
<PAGE> 8
Attention: W. Preston Granbery, Esq.
Fax: (908) 953-4657
if to Paradyne, the Partnership or the Acquisition
Entities:
201 Main Street
Suite 2420
Fort Worth, Texas 76102
Fax: (817) 871-4010
Attention: Richard A. Ekleberry, Esq.
7.2 Headings
The bold-faced section headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
7.3 Counterparts
This Agreement may be executed in several counterparts, each of which
shall constitute an original and all of which, when taken together, shall
constitute one agreement.
7.4 Governing Law; Venue
This Agreement shall be construed in accordance with, and governed in
all respects by, the internal laws of the State of New York (without giving
effect to principles of conflicts of laws).
7.5 Successors and Assigns
Except as otherwise provided in this Agreement, this Agreement shall be
binding upon and shall inure to the benefit of the Parties and their respective
successors and assigns (if any). Lucent may not assign its rights and delegate
its obligations under this Agreement without the prior written consent of the
Partnership. Each of the Acquisition Entities may freely assign any or all of
its rights under this Agreement, in whole or in part, to any Person without
obtaining the consent or approval of any other Party or of any other Person.
7.6 Amendments
This Agreement may not be amended, modified, altered or supplemented
other than by means of a written instrument duly executed and delivered on
behalf of all of the Parties.
7.7 Entire Agreement
This Agreement and the other agreements referred to herein set forth
the entire understanding of the Parties relating to the subject matter hereof
and thereof and supersede all prior agreements and understandings among or
between any of the Parties relating to the subject matter hereof and thereof.
Nothing contained in this Agreement shall limit the rights or
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obligations of any party under the Purchase Agreement or any of the Additional
Agreements nor shall any right or obligation of any Party under this Agreement
be limited by any provision of the Purchase Agreement or any of the Additional
Agreements.
7.8 Construction
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
(b) The Parties agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting Party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.
7.9 Survival
Notwithstanding anything in this Agreement to the contrary, the
provisions of this Agreement shall survive for the full period of all statutes
of limitations (giving effect to any waiver, mitigation or extension thereof).
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed and delivered as of the date first above written.
LUCENT TECHNOLOGIES INC.
a Delaware corporation
By: W.F. OSL, JR.
-------------------------------------
William F. Osl, Jr.
Vice President
AT&T PARADYNE CORPORATION
a Delaware corporation
By: W.F. OSL, JR.
-------------------------------------
William F. Osl, Jr.
Authorized Agent
PARADYNE PARTNERS, L.P.
a Delaware limited partnership
By: Paradyne GenPar Corp.,
a Texas corporation, its
sole general partner
By: DAVID STANTON
-------------------------------------
David Stanton
President
PARADYNE ACQUISITION CORP.,
a Delaware corporation
By: DAVID STANTON
-------------------------------------
David Stanton
President
<PAGE> 11
RENTAL ACQUISITION CORP.,
a Delaware corporation
By: DAVID STANTON
-------------------------------------
David Stanton
President
CAP ACQUISITION CORP.,
a Delaware corporation
By: DAVID STANTON
-------------------------------------
David Stanton
President
LEASE ACQUISITION CORP.,
a Delaware corporation
By: DAVID STANTON
-------------------------------------
David Stanton
President
<PAGE> 12
Exhibit A
CERTAIN DEFINITIONS
For purposes of this Agreement, the following definitions shall
apply.
AFFILIATE. "Affiliate" shall mean with respect to any Person, any
Person directly or indirectly controlling, controlled by, or under common
control with, such other Person.
ASSET SALES. "Asset Sales" shall mean the asset sales
contemplated by Sections 1.1, 1.2 and 1.3 of the Purchase Agreement.
CODE. "Code" means the United States Internal Revenue Code of
1986, as amended.
GOVERNMENTAL BODY. "Governmental Body" shall mean any: (a)
nation, state, commonwealth, province, territory, county, municipality, district
or other jurisdiction of any nature; (b) federal, state, local, municipal,
foreign or other government; or (c) governmental or quasi-governmental authority
of any nature (including any governmental division, department, agency,
commission, instrumentality, official, organization, unit, body or entity and
any court or other tribunal).
LUCENT GROUP. "Lucent Group" means, with respect to federal
income Taxes, the affiliated group of corporations (as defined in Section
1504(a) of the Code) of which Lucent is a member and, with respect to state
income or franchise taxes, the consolidated, combined or unitary group of which
Lucent or any of its Affiliates is a member. For purposes of this Agreement, the
Lucent Group shall not include the Acquired Companies.
PARTY OR PARTIES. "Party" or "Parties" refers to Lucent, Paradyne
and the Acquisition Entities or any one of them.
POST-CLOSING TAX PERIOD. "Post-Closing Tax Period" means (i) with
respect to net income taxes, or franchise taxes based on net income, including
alternative or add-on minimum tax, any tax period ending after the close of the
Closing Date, (ii) with respect to any Straddle Period, that portion that
portion of the Straddle Period beginning after the close of the Closing Date,
and (ii) with respect to all other Taxes, any period after the close of the
Closing Date.
PRE-CLOSING TAX PERIOD. "Pre-Closing Tax Period" means (i) with
respect to net income taxes, or franchise taxes based on net income, including
alternative or add-on minimum tax, any tax period ending on or before the close
of the Closing Date, (ii) with respect to any Straddle Period, that portion of
the Straddle Period ending at the close of the Closing Date, and (iii) with
respect to all other Taxes, any period before the close of the Closing Date.
PURCHASE AGREEMENT. "Purchase Agreement" shall mean the Purchase
Agreement, dated June 18, 1996, made by and among Lucent, Paradyne and the
Acquisition Entities, as amended.
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RESIDUAL ASSETS. "Residual Assets" shall mean the assets of
Paradyne remaining after the Asset Sales, related distributions by Paradyne to
Lucent and the distribution of promissory notes contemplated by Section 1.4 of
the Purchase Agreement.
STRADDLE PERIOD. "Straddle Period" means any tax period beginning
on or before the Closing Date and ending after the close of the Closing Date.
TAX OR TAXES. "Tax" or "Taxes" shall mean any tax (including any
income tax, franchise tax, capital gains tax, gross receipts tax, value-added
tax, surtax, excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use
tax, property tax, business tax, withholding tax or payroll tax), levy
assessment, tariff, duty (including any customs duty), deficiency or fee, and
any related charge or amount (including any fine, penalty or interest), imposed,
assessed or collected by or under the authority of any Governmental Body.
TAX ASSET. "Tax Asset" means any net operating loss, net capital
loss, investment tax credit, foreign tax credit, charitable deduction, basis
increase or any other credit or tax attribute which could reduce Taxes
(including, without limitation, deductions and credits related to alternative
minimum taxes).
TAXING AUTHORITY. "Taxing Authority" means any Governmental Body
charged with the duty or authority to administer or collect any Tax.
TAX RETURN. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any legal requirement relating to any Tax.
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<PAGE> 1
EXHIBIT 10.22
INTELLECTUAL PROPERTY AGREEMENT
AMONG
LUCENT TECHNOLOGIES INC.,
AT&T PARADYNE CORPORATION
AND
CAP ACQUISITION CORP.
<PAGE> 2
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS
ARTICLE 2 ASSIGNMENT OF A-PATENTS AND LICENSE GRANT TO LUCENT
ARTICLE 3 LICENSE GRANTS TO PARADYNE AND CAPCo
ARTICLE 4 AT&T COMPANIES, PRIOR AGREEMENTS
ARTICLE 5 ROYALTY AND REPORTING
ARTICLE 6 PARADYNE PROGRAMS
ARTICLE 7 KNOW-HOW AND OTHER INTELLECTUAL PROPERTY
ARTICLE 8 TRADEMARKS
ARTICLE 9 MISCELLANEOUS
ARTICLE 10 CONFIDENTIALITY
ARTICLE 11 INDEMNIFICATION
APPENDIX A A-PATENTS AND PATENT APPLICATIONS
APPENDIX B-1 paradyne trademarks
APPENDIX B-2 TRADEMARK ASSIGNMENT AGREEMENT (AT&T PARADYNE CORPORATION to
LUCENT TECHNOLOGIES INC.)
APPENDIX C PARADYNE PRODUCTS
APPENDIX D THIRD PARTY LICENSES
APPENDIX E IMMUNITY PATENTS AND APPLICATIONS
APPENDIX F KNOWN REEXAMINATIONS AND OTHER
APPENDIX G MEMBERS OF "KNOWLEDGE" GROUP
APPENDIX H CERTAIN LEGAL PROCEEDINGS
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<PAGE> 3
INTELLECTUAL PROPERTY AGREEMENT
This Intellectual Property Agreement (hereinafter referred to as the
"Intellectual Property Agreement") is being entered into as of July 31, 1996, by
and among: LUCENT TECHNOLOGIES INC., a corporation of the State of Delaware
(hereinafter referred to as "LUCENT"), AT&T PARADYNE CORPORATION, a corporation
of the State of Delaware (hereinafter referred to as "PARADYNE"), and CAP
ACQUISITION CORP., a corporation of the State of Delaware (hereinafter referred
to as "CAPCo").
This Intellectual Property Agreement is Exhibit K to the Purchase Agreement
(hereinafter referred to as the "Purchase Agreement"), dated June 18, 1996,
among LUCENT, PARADYNE, CAPCo, PARADYNE PARTNERS, L.P., a Delaware limited
partnership, PARADYNE ACQUISITION CORP., a Delaware corporation (hereinafter
referred to as "BUYER"), and RENTAL ACQUISITION CORP., a Delaware corporation
and a wholly owned subsidiary of BUYER (hereinafter referred to as "RentalCo"),
and LEASE ACQUISITION CORP., a Delaware corporation, and shall become effective
as of the Closing Date as specified in the Purchase Agreement.
WHEREAS, LUCENT has agreed to sell and BUYER has agreed to buy PARADYNE
pursuant to the Purchase Agreement; and
WHEREAS Section 1.3(a) of the Purchase Agreement provides for an
Intellectual Property Agreement between the parties hereto.
NOW, THEREFORE, it is hereby agreed by and among the parties as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms without definition in this intellectual Property
Agreement shall have the meanings assigned to them in the Purchase Agreement. As
used herein, the following terms have the following meanings:
1.1 "Affiliated Companies" shall mean, with respect to a party hereto or
any other entity, any and all direct and indirect Subsidiaries of such party or
entity, plus any other company or entity mutually agreed to in writing by the
parties hereto. "Affiliated Companies" shall also include a parent directly or
indirectly owning more than fifty percent (50%) of the voting shares of such
party or entity, or otherwise owning more than fifty percent (50%) of the
ownership interest representing the right to manage such party or other entity.
1.2 "A-Patents" shall mean collectively" CAP A-Patents" and "Non-CAP
A-Patents".
1.3 "LUCENT ETC Patents" shall mean the Patents which are listed in
Appendix E under "ETC Technology".
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1.4 "LUCENT CAP Patents" shall mean the Patents which are listed in
Appendix E under "CAP Technology".
1.5 "LUCENT Patents" shall mean every Patent (including utility models,
but excluding design patents and design registrations other than those design
patents and design registrations incorporated in Products the design or
development of which was substantially complete as of the Closing Date) issued
in any country of the world on patent applications filed prior to the Closing
Date with respect to which LUCENT:
(i) prior to the Closing Date has ownership or control; and
(ii) as of the Closing Date otherwise has the right to grant any
licenses of the type herein granted by LUCENT.
1.6 "LUCENT VoiceSpan Patents" shall mean the Patents which are listed in
Appendix E under "VoiceSpan Technology."
1.7 "CAP A-Patents" shall mean the Patents and Patent applications listed
in Appendix A under "CAP A-Patents", and which are owned by LUCENT and which are
assigned to CAPCo pursuant to Article 2 hereof. The list of CAP A-Patents shall
be updated from time to time, upon mutual agreement of the parties, until the
Closing Date.
1.8 "CAP Technology" shall mean the carrier-less amplitude/phase
modulation technique, commonly referred to as CAP, using a bandwidth efficient,
two-dimensional passband line code which is derived from quadrature-amplitude
modulation (CAM), applicable to data transmission on various media (e.g.,
copper, coax, fiber and wireless) and able to support a wide range of speeds as
developed and licensed by PARADYNE and/or CAPCo and in existence prior to six
(6) months after the Closing Date.
1.9 "Closing Date" shall have the meaning assigned to it in Section 1.9(a)
of the Purchase Agreement.
1.10 "Derivative Work" shall mean any work based upon one or more
pre-existing works, such as a translation, abridgment, condensation or any other
form in which such preexisting works may be recast, transformed or adapted and
which, if prepared without authorization of the owner of the copyright in such
pre-existing work, would constitute a copyright infringement. For purposes of
this Intellectual Property Agreement, a "Derivative Work" shall also include any
compilation that incorporates such a pre-existing work.
1.11 "ETC Technology" shall mean the PARADYNE-owned proprietary protocol,
commonly referred to as "ETC", as developed and licensed by PARADYNE and in
existence prior to six (6) months after the Closing Date, providing improved
data transmission over cellular communications links and other wireless
channels. ETC is described in the "Enhanced Throughput Cellular" (ETC) Release
1.0 Specifications, Document Revision 2, dated December 30, 1993. ETC is further
defined to cover all future revisions of the specification and any derivative
protocols resulting from modifications to ETC as they relate to V.32bis,
V.32terbo or V.34 modulations all of the foregoing as developed and licensed by
PARADYNE and in existence prior to six (6) months after the Closing Date.
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1.12 "Essential Patents" shall mean Patents which . claim inventions which
are incorporated in the technical information as provided by PARADYNE and/or
CAPCo in its licensing program(s), and which are necessary for the use of the
technical information to manufacture the articles licensed thereby.
1.13 "Hair Market Value" shall mean, with respect to any item sold. leased
or put into use, the greater of (i) the selling price which a seller would
realize from an unaffiliated buyer in an arm's length sale of an identical item
in the same quantity and at the same time and place as such sale, lease or
putting into use; or (ii) the selling price actually obtained for such item in
the form in which it is sold, whether or not assembled (and without excluding
therefrom any components or subassemblies thereof which are included in such
selling price). In determining "selling price", usual trade discounts actually
allowed to unaffiliated persons or entities and Products provided for
demonstration and/or promotional programs shall be excluded.
1.14 "Know-how" shall mean each party's ideas, concepts, know-how,
techniques, technical and commercial information, data and documents of whatever
kind, including drawings, specifications, photographs, samples, models,
processes, procedures, reports and correspondence, including works of authorship
embodying the foregoing, all of which relate to the Products.
1.15 "Knowledge" - a fact or other matter shall be deemed to be within the
"Knowledge of LUCENT and PARADYNE" if such fact or other matter is within the
actual knowledge of any of the individuals identified in Appendix G.
1.16 "Licensed Product" shall mean any Product specified by PARADYNE
pursuant to Section 5.1.
1.17 "Manufacturing Invention" shall mean an invention which is directed to
a process for manufacturing Semiconductive Devices. The term Manufacturing
Invention includes, but is not limited to: (1) depositing, growing, shaping,
etching, polishing, heating, annealing, irradiating, implanting, patterning, or
diffusing, cutting, sawing or dicing (2) housing, sealing, or encapsulating, or
(3) testing or measuring Semiconductive Devices, as well as (4) any apparatus
useful in implementing such a process.
1.18 "Non-CAP A-Patents" shall mean those Patents and Patent applications
listed in Appendix A under Non-CAP A-Patents", and which are owned by LUCENT and
which are assigned to PARADYNE pursuant to Article 2 hereof. The list of Non-CAP
A-Patents shall be updated from time to time, upon mutual agreement of the
parties, until the Closing Date.
1.19 "Other Intellectual Property" shall mean all other intellectual
property of PARADYNE which is not otherwise described herein, including all
copyrights and copyrightable information, software, microcode and firmware (in
both annotated source and object code), flowcharts, manuals, outlines, models,
designs and plans, in existence as of the Closing Date.
1.20 "PARADYNE CAP Patents" shall mean the Patents and Patent applications
listed in Appendix A under the heading "PARADYNE CAP Patents" which are those
Patents and Patent applications that are assigned to PARADYNE hereunder, and/or
were owned by PARADYNE prior to the Closing Date.
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1.21 "PARADYNE Design" shall mean the manufacturing design, drawings and/or
specifications for any Product for which such manufacturing design, drawings
and/or specifications are originated by or owned by PARADYNE and/or CAPCo.
1.22 "PARADYNE Non-CAP Patents" shall mean the Patents and Patent
applications listed in Appendix A under the heading "PARADYNE Non-CAP Patents"
which are those Patents and Patent applications that are assigned to PARADYNE
hereunder and/or were owned by PARADYNE prior to the Closing Date.
1.23 "PARADYNE Patents" shall mean the PARADYNE CAP Patents and the
PARADYNE Non-CAP Patents.
1.24 "PARADYNE Trademarks" shall mean those trademarks owned by PARADYNE
which are listed in Appendix B-1 to this Intellectual Property Agreement.
1.25 "Patents" shall mean patents, utility models and applications
therefor, including any and all divisionals, continuations, re-examinations,
renewals, provisionals, continuations-in-part, re-issues, in existence as of the
Closing Date and foreign equivalents thereof.
1.26 "PARADYNE Products" shall mean the products of PARADYNE and/or CAPCo
on sale as of the Closing Date or in development as of the Closing Date and for
which there has been at least one (1) sale, lease, rental, license or other
transfer prior to one (1) year from the Closing Date and also products listed in
Appendix C, for which there has been at least one (1) sale, lease, rental,
license or other transfer prior to three (3) years from the Closing Date. The
term shall not include chips other than components of system and board-level
PARADYNE and/or CAPCo Products for which the manufacturing drawings and
specifications are originated by, owned by, licensed to, or created for PARADYNE
and/or CAPCo for the sale of such components to entities which incorporate such
chips into system or board-level products or to distributors which resell
products and provided the sales of such chips by PARADYNE or by CAPCo do not
exceed ten percent (10%) of PARADYNE's (in the case of sales by PARADYNE) or
CAPCo's (in the case of sales by CAPCo) total revenue for any given year. The
term does not include: (1) any other chips or chipsets, or (2) the offering of
Telecommunications Services. Sales and/or licenses of CAP components under the
CAP Technology licensing program by PARADYNE and/or CAPCo are not subject to the
chip sales limitation above.
1.27 "Product(s)" shall mean PARADYNE Products and/or Progeny Products.
1.28 "Progeny Products" shall mean future modified versions of Products
that do not make use of additional LUCENT Patents.
1.29 "Semiconductive Device" shall mean an electronic or optoelectronic
device which includes a semiconductive material as an operable part thereof. The
term includes, but is not limited to: (1) transistors, diodes, capacitors,
resistors, inductors, conductors, and dielectrics; (2) discrete devices; (3)
integrated circuits whether separate from one another or integral with a wafer
and severable therefrom and which are designed to perform a particular function
or set of functions; (4) chips which include a plurality of such devices or one
or more of
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such integrated circuits and which are designed to perform a particular function
or set of functions; (5) chipsets sold as a plurality of such chips that are
capable of being interconnected as a combination designed to perform a
particular function or set of functions, and, if provided therewith; (6)
supporting members, terminal members, housings, and any environmental
controlling apparatus included within such housing or unitary therewith.
1.30 "Subsidiary" shall, with respect to a company, mean a corporation
(other than a party hereto) or other legal entity: (i) the majority of whose
shares or other securities entitled to vote for election of directors (or other
managing authority) is now or hereafter owned or controlled by such company
either directly or indirectly; or (ii) which does not have outstanding publicly
traded shares or securities, but the majority of whose ownership interest
representing the right to manage such corporation or other legal entity is now
or hereafter owned and controlled by such company either directly or indirectly;
but any such corporation or the other legal entity shall be deemed to be a
Subsidiary of such company only as long as such ownership or control exists
except as otherwise expressly provided herein.
1.31 "Telecommunications Services" shall mean the operation of a
communications network to provide communication, services to customers,
including the processing of information, to the extent needed to transfer
information between locations. The term "Telecommunications Services" includes
on-line and Internet services, and wireless services, whether fixed or mobile.
The term Telecommunications Services does not mean the sale manufacture,
marketing, lease, rental, license or other transfer of products that are used in
the provision of the Telecommunications Services.
1.32 "VoiceSpan Technology" shall mean the set of technologies commonly
referred to as "VoiceSpan" or "SVD", and utilizing quadrature addition of
sampled analog voice to QAM modems for the simultaneous transmission of voice
and data over the public switched telephone network as developed and licensed by
PARADYNE and in existence prior to six (6) months after the Closing Date.
1.33 "Mocha Technology" shall mean the PARADYNE-owned high speed modem
technology which utilizes clocking in the digital network to achieve speeds
greater than 33.4 Kbs in one direction, combined with V.34 communication in the
other direction.
1.34 "Hypermodem Technology" shall mean the PARADYNE-owned QAM-based
technology for combining high speed non-switched data service up to 384 Kbs to
the central office with simultaneous or alternating access to public switched
telephone network service using standard dial modem protocols on ordinary two
wire-connections.
ARTICLE 2
ASSIGNMENT OF A-PATENTS AND LICENSE GRANT TO LUCENT
2.1 LUCENT hereby irrevocably assigns, conveys and delivers to PARADYNE,
its successors, assigns and legal representatives, all right, title and interest
in and to Non-CAP A-Patents, and all rights and privileges relating thereto
including but not limited to the right to recover and take all such proceedings
as may be necessary for the recovery of
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damages or otherwise in respect of present and future infringement of any
patent(s) issuing thereon. Such assignment shall be subject to other
non-exclusive license agreements between LUCENT, or its Affiliated Companies,
and third parties under such Non-CAP A-Patent(s), which license agreements have
an effective date prior to the Closing Date, or which are replacement agreements
replacing other license agreements to the extent that such replacement
agreements are of the same scope, and have the same expiration date and terms of
termination, with respect to such subject patent(s) as the replaced license
agreements.
2.2 LUCENT hereby irrevocably assigns, conveys and delivers to CAPCo, its
successors, assigns and legal representatives, all right, title and interest in
and to CAP A-Patents, and all rights and privileges relating thereto including
but not limited to the right to recover and take all such proceedings as may be
necessary for the recovery of damages or otherwise in respect of present and
future infringement of any patent(s) issuing thereon. Such assignment shall be
subject to other non-exclusive license agreements between LUCENT, or its
Affiliated Companies, and third parties under such CAP A-Patent(s), which
license agreements have an effective date prior to the Closing Date, or which
are replacement agreements replacing other license agreements to the extent that
such replacement agreements are of the same scope, and have the same expiration
date and terms of termination, with respect to such patent(s) as the replaced
license agreements.
2.3 Any royalties, rights or other value paid or transferred to LUCENT or
its Affiliated Companies pursuant to such preexisting agreements referred to in
Sections 2.1 and 2.2 shall remain with LUCENT or its Affiliated Companies and
any such royalties, rights or values to be paid or transferred pursuant to such
preexisting license agreements or such replacement agreements after the Closing
Date shall continue to be paid or transferred to LUCENT or its Affiliated
Companies. Notwithstanding anything herein to the contrary, such royalties,
rights or other values in respect of such preexisting agreements shall not
include right to use fees, or additional revenue, rights or other value payable
or receivable as a consequence of agreements entered into between PARADYNE and
others with respect to CAP Technology, ETC Technology, Voicespan Technology,
Mocha Technology, and/or Hypermodem Technology.
2.4 PARADYNE hereby grants to LUCENT a non-exclusive, non-transferable,
irrevocable, world-wide, royalty-free license, under the Non-CAP A-Patents and
the PARADYNE Patents, but excluding the right to grant sublicenses (except to
Subsidiaries of LUCENT and except as provided for in Section 9.11) under the
Non-CAP A-Patents and the PARADYNE Patents. CAPCo hereby grants to LUCENT a
nonexclusive, non-transferable, irrevocable, world-wide, royalty free license,
under the CAP A-Patents, but excluding the right to grant sublicenses (except to
Subsidiaries of LUCENT and except as provided for in Section 9.11) under the CAP
A-Patents.
(a) All Patent licenses granted by PARADYNE and CAPCo pursuant to
Section 2.4 shall continue for the entire unexpired term of such Patents.
(b) The Patent licenses granted in this Section 2.4 by PARADYNE and
CAPCo to LUCENT are licenses to: (i) make, have made, use, lease, sell, offer
for sale and import products and offer services; (ii) make, have made, use,
lease, sell, offer for sale and import machines, tools,
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materials and other instrumentalities, insofar as such machines, tools,
materials and other instrumentalities are involved in or incidental to the
development, manufacture, testing or repair of such products which are, or have
been, or are to be made, used, leased, sold, offered for sale or imported by or
on behalf of LUCENT; and (iii) convey to any customer of LUCENT with respect to
any such product which is sold or leased by LUCENT to such customer, rights to
use, lease and resell such product as sold or leased by LUCENT (whether or not
as part of a larger combination); provided, however, that no rights may be
conveyed to customers with respect to any invention which is directed to: (1) a
combination of such product (as sold or leased) with any other product; (2) a
method or process which is other than the inherent use of such product itself
(as sold or leased); or (3) a method or process involving the use of a product
to manufacture (including associated testing) any other product.
2.5 Notwithstanding the foregoing, PARADYNE and CAPCo understand and
agree that LUCENT has been conducting license negotiations with the following
companies for licenses to such companies of A-Patents now owned by LUCENT and
the PARADYNE Patents, including the Non-CAP A-Patents, the CAP A-Patents, the
PARADYNE CAP Patents and the PARADYNE Non-CAP Patents:
(i) Creative Technology, Ltd.
(ii) Cirrus Logic, Inc.
(iii) Tatung Company
(iv) CalComp Electronics
(v) Acer Peripherals, Inc.
(vi) GVC Corporation
(vii) TECO Information Systems, Inc.
(viii) Tecom Company, Ltd.
(ix) Askey Computer Corporation
(x) Longshine Electronics Corporation
(xi) Motorola, Inc.
(xii) Ricoh, Ltd.
(xiii) Canon
(xiv) Brother Industries Ltd.
(xv) Murata Manufacturing Co., Ltd.
(xvi) The General Electric Co., P.L.C.
(xvii) Advanced Micro Devices
(xviii) Sierra Semiconductor Corporation
2.6 (a) PARADYNE and CAPCo agree that LUCENT may continue such
negotiations only with respect to Non-CAP A-Patents and the PARADYNE Non-CAP
Patents for a period not to exceed twelve (12) months from the Closing Date, and
during such twelve (12) month period may grant sublicenses under the Non-CAP
A-Patents and the PARADYNE Non-CAP Patents to the foregoing companies, without
any payment to PARADYNE or CAPCo, provided: (1) such sublicenses are
substantially the same in scope and duration as licenses granted by LUCENT of
similar technology to similar companies in the past; (2) LUCENT shall use
reasonable efforts to ensure that the rights and licenses obtained by LUCENT, if
any, pursuant to the foregoing licenses granted above are extended to PARADYNE
to the extent such rights and licenses would be useful or desirable in
PARADYNE's businesses; and (3) LUCENT makes summaries of such sublicenses
available to PARADYNE under reasonable and
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appropriate confidentiality terms, which summaries shall contain sufficient
detail to enable PARADYNE to understand the scope of the sublicenses granted to
such companies under the A-Patents, and the scope of the rights and licenses
granted to PARADYNE, and LUCENT agrees to notify PARADYNE when such sublicense
agreements are entered into.
(b) After the Closing Date, CAPCo will, on a case-by-case basis,
consider making the CAP A-Patents and the PARADYNE CAP Patents available for
LUCENT to sublicense to the companies listed in Section 2.5. Any permission
granted to LUCENT for the licensing of CAP A-Patents and PARADYNE CAP Patents
shall be beforehand and in writing and any licenses entered into by LUCENT shall
be in accordance with the provisions specified in Section 2.6(a).
2.7 PARADYNE (and, if permission is granted as per Section 2.6(b), CAPCo)
further agrees that LUCENT may enter into replacement sublicense agreements with
the foregoing companies, also without payment to PARADYNE (or CAPCo), provided
the terms of such replacement sublicense agreements are substantially the same
in scope, and have the same expiration date and terms of termination, with
respect to the Non-CAP A-Patents and/or PARADYNE's Non-CAP patents (and, if
authorized in accordance with the foregoing, CAP Patents and/or PARADYNE CAP
Patents) as the original sublicense agreements entered into with such companies
pursuant to Section 2.6 hereof, and further provided that with respect to any
such replacement sublicense agreements that LUCENT fulfills the conditions
described in Sections 2.6(a)(1), 2.6(a)(2) and 2.6(a)(3)
2.8 PARADYNE and CAPCo shall bear any and all administrative and similar
costs external to LUCENT related to the assignment of the A-Patents from LUCENT
to PARADYNE and CAPCo pursuant to Sections 2.1 and 2.2 above, but not including
legal fees, if any, incurred by LUCENT, and not including those costs related to
LUCENT's fulfilling its obligations described in Section 9.19 hereof which
obligations include solely the recording in the U.S. Patent Office the
assignment from AT&T to LUCENT of U.S. CAP A-Patents and non-CAP A-Patents.
LUCENT shall execute all documents and perform all acts as required for the
assignment of the A-Patents to PARADYNE and CAPCo under this Intellectual
Property Agreement.
2.9 PARADYNE and CAPCo shall bear all costs of prosecution and maintenance
of the A-Patents and the PARADYNE Patents arising after sixty (60) days from the
Closing Date. Notwithstanding the foregoing, PARADYNE and/or CAPCo shall have
the right to abandon or modify any Patent application at their sole discretion
and without notice to, or consent from, LUCENT. LUCENT shall continue to
maintain the A-Patents and the PARADYNE Patents for 60 days after Closing;
provided, however, that PARADYNE and/or CAPCo shall promptly reimburse LUCENT
for any maintenance or similar fees expended by LUCENT in connection with such
maintenance.
2.10 In the event PARADYNE and/or CAPCo and their successors and assigns
undertake to enforce or authorize any person to enforce any of the PARADYNE
Patents or the A-Patents assigned to it under Section 2.1 and/or Section 2.2
above against a third party, upon written request from PARADYNE and or CAPCo,
LUCENT shall, to the best of its knowledge, inform PARADYNE and/or CAPCo in
writing within sixty (60) days following receipt of such
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<PAGE> 11
request whether or not that third party can claim rights under the A-Patents
granted by LUCENT, and to the extent possible without beach of confidentiality,
shall describe in reasonable detail the nature of such rights.
2.11 If any party should discover an infringement of another party's
patents, the party becoming aware of such infringement will use reasonable
efforts to inform the party whose patent is alleged to be infringed.
2.12 To the extent that the enforceability of, or title to, any Patents
owned by PARADYNE and/or CAPCo, and licensed as set forth in Sections 2.4, 2.6
and 2.7 become the subject of controversy arising from any such preexisting
agreement, sublicense or replacement sublicense agreement, as the case may be,
LUCENT shall promptly notify PARADYNE and/or CAPCo thereof. PARADYNE and/or
CAPCo shall have the right itself, or through counsel of its choice, and at its
own expense, to participate in such controversy, including any litigation which
may arise in connection therewith. LUCENT shall not settle any such controversy
or litigation (to the extent such settlement may adversely affect the
enforceability of any such Patent) without the written agreement of PARADYNE
and/or CAPCo as the case may be.
ARTICLE 3
LICENSE GRANTS TO PARADYNE AND CAPCo
3.1 LUCENT hereby grants individually to PARADYNE and to CAPCo (hereafter
referred to as the PARADYNE Companies") a non-exclusive, non-transferable,
irrevocable, worldwide, royalty-free (except as provided in Section 3.7),
license, excluding the right to grant sublicenses (except to Subsidiaries of
PARADYNE Companies, and except as provided in Section 9.11), under LUCENT
Patents for Products, except as provided for in Sections 3.4 and 6.2(b).
3.2 The PARADYNE Companies hereby grant to LUCENT a non-exclusive,
nontransferable, irrevocable, worldwide, royalty-free license, excluding the
right to grant sublicenses (except to LUCENT's Subsidiaries, and except as
provided in Section 9.11), under PARADYNE's and CAPCo's Know-How currently in
possession of LUCENT or its Subsidiaries, solely and exclusively to the extent
reasonably necessary for LUCENT to exercise its rights and licenses hereunder.
3.3 LUCENT hereby grants to the PARADYNE Companies a non-exclusive,
nontransferable, irrevocable, worldwide, fully paid-up license, excluding the
right to grant sublicenses (except to the PARADYNE Companies' Subsidiaries, and
except as provided in Section 3.11) under LUCENT's Know-How currently in
PARADYNE Companies' possession, or in the possession of their Subsidiaries
solely and exclusively to the extent reasonably necessary for the PARADYNE
Companies to exercise their rights and licenses hereunder.
3.4 PARADYNE Companies do not have the right to make or have made
Semiconductive Devices of system and board-level Products under LUCENT Patents
relating to Manufacturing Inventions. PARADYNE Companies' make and have made
rights are limited to a PARADYNE Design.
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3.5 (a) All Patent licenses granted herein by LUCENT pursuant to Section
3.1 shall continue for the entire unexpired term of such Patents, and for
Patents other than U.S. Patents, for as much of such term as LUCENT initially
has the right to grant.
(b) The Patent licenses granted in this Article 3 by LUCENT to
PARADYNE Companies are licenses to: (i) make, have made, use, lease, sell, offer
for sale and import Products and offer services other than Telecommunications
Services; (ii) make, have made, use lease, sell, offer for sale and import
machines, tools, materials and other instrumentalities, insofar as such
machines, tools, materials and other instrumentalities are involved in or
incidental to the development, manufacture, testing or repair of such Products
which are, or have been, or are to be made, used, leased, sold, offered for sale
or imported by or on behalf of PARADYNE Companies; and (iii) convey to any
customer of PARADYNE Companies with respect to any such Product which is sold or
leased by PARADYNE Companies to such customer, rights to use, lease and resell
Product such as sold or leased by PARADYNE Companies (whether or not as part of
a larger combination); provided, however, that no rights may be conveyed to
customers with respect to any invention which is directed to: (1) a combination
of such Product (as sold or leased) with any other product; (2) a method or
process which is other than the inherent use of such Product itself (as sold or
leased); or (3) a method or process involving the use of a Product to
manufacture (including associated testing) any other product.
(c) If the Incremental improvement of a Product results in the use of
a new patent, such Product will continue to be properly licensed under all
Patents which were used in the Product prior to such improvement; provided,
however, that in negotiating license fees for any such new patent LUCENT will
give weight to the fact that the Product is already licensed under other
Patents.
3.6 Licenses granted herein by LUCENT to PARADYNE or CAPCo and by PARADYNE
or CAPCo to LUCENT are not to be construed as consent by either LUCENT,
PARADYNE, CAPCo or any of their Subsidiaries to any act which may be performed
by the other except to the extent allowed by a Patent licensed herein.
3.7 Notwithstanding anything to the contrary in this Article 3, the
license granted by LUCENT pursuant to Section 3.1 shall, with respect to the
Products of the businesses (or parts thereof' sold pursuant to Section 3.7(i)
below, cease to be royalty-free, and shall become subject to a royalty, to be
paid pursuant to Article 5, if and only if all of the following conditions are
met:
(i) PARADYNE and/or CAPCo, or their Subsidiary(ies), has sold either
all of its or their business, or a part of its or their business,
which makes use of some or all of the rights granted by LUCENT to
PARADYNE and/or CAPCo pursuant to Articles 3 and 6;
(ii) PARADYNE and/or CAPCo, or their Subsidiary(ies), has, in the case
of a sale of only part of its or their business, granted to such
part a sublicense to some or all of the rights granted by LUCENT
to PARADYNE under Articles 3 and 6;
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(iii) more than six (6) years have elapsed from the Closing Date; and
(iv) With respect to such sold business or sold part of such
business, as described in Section 3.7(i) and (ii), Change of
Control has occurred.
For the purpose of Section 3.7, "Change of Control" shall be deemed to have
occurred if any Person or group of Persons within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, and the regulations
promulgated thereunder (other than a group controlled by the Partnership) shall
hold immediately following the transaction in question outstanding shares of
capital stock of the company constituting a majority of the voting power for the
election of directors of the Company.
3.8 (a) In the case when PARADYNE and/or CAPCo, and/or their
Subsidiary(ies), has sold all of its or their business in accordance with
Section 3.7(i) above and the conditions of Sections 3.7(iii) and 3.7(iv) are
met, all Products of PARADYNE and/or CAPCo, as the case may be, become
royalty-bearing pursuant to Article 5.
(b) In the case where PARADYNE and/or CAPCo, and/or their
Subsidiary(ies), have sold only a part of its or their business and the
conditions of 3.7(ii), 3.7(iii) and 3.7(iv) are met only the Products of the
sold part of the business become royalty-bearing pursuant to Article 5.
3.9 If the license becomes royalty-bearing with respect to one (1) or more
Products under this Article 3, PARADYNE and/or CAPCo, as the case may be, shall
promptly notify LUCENT.
3.10 LUCENT will not unreasonably forebear, to the extent consistent with
LUCENT's then existing general policies regarding the patents requested to be
licensed, in the granting of licenses on reasonable and nondiscriminatory terms
and conditions, within the scope of the licenses granted herein (which may
include a royalty-free or royalty bearing license from PARADYNE and/or CAPCo to
LUCENT if such is consistent with such policies).
ARTICLE 4
AT&T COMPANIES, PRIOR AGREEMENTS
4.1 PARADYNE acknowledges LUCENTs representation that LUCENT or its
Affiliated Companies have already entered into non-exclusive license agreements
with other companies and other entities (the "Prior Agreements"), under which
Prior Agreements LUCENT or its Affiliated Companies have granted certain rights
and licenses to Patents, including the PARADYNE Patents and the A-Patents; in
consideration for patents of such third parties being licensed to LUCENT, and
its Affiliated Companies, including PARADYNE.
4.2 PARADYNE hereby ratifies and assents to inclusion of PARADYNE Patents
in such Prior Agreements to the extent necessary for LUCENT or its Affiliated
Companies to fulfill its obligations under such Prior Agreements.
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4.3 (a) To the extent and for the duration that LUCENT has the right,
LUCENT grants PARADYNE licenses under the agreements with the companies listed
in Appendix D. (Appendix D shall be updated upon mutual agreement of all parties
until the Closing Date. Such licenses are granted only while PARADYNE operates
as a separately identifiable business and only to the extent LUCENT has the
right, prior to the Closing Date, to grant such licenses as determined by the
agreements with the companies listed in Appendix D.
(b) LUCENT represents that licenses available to PARADYNE under such
agreements listed in Appendix D are limited in scope, have restrictive
provisions and do not enure to the benefit of BUYER or PARADYNE's successor.
LUCENT further represents that some of such licenses are only effective upon
request to, and with approval of, the licenser. LUCENT will provide PARADYNE
with copies of the agreements listed in Appendix D within ninety (90) days after
the Closing Date.
4.4 Except as provided in Article 4.3, PARADYNE hereby further
acknowledges LUCENT's representation that any license rights under third party
patents PARADYNE has under such Prior Agreements or any other agreement under
which PARADYNE obtained rights by virtue of its being a Subsidiary of LUCENT or
AT&T Corp. shall cease upon PARADYNE no longer being a Subsidiary, however,
PARADYNE has not made an independent investigation of such third party
agreements.
4.5 For all Prior Agreements under which LUCENT extends rights under third
party patents to PARADYNE, PARADYNE agrees to cooperate with LUCENT and such
third party (including the licensing of PARADYNE's Patents to such third party,
if required by the Prior Agreement) to effect the extension of rights to
PARADYNE. PARADYNE's failure to cooperate shall relieve LUCENT of any obligation
of indemnity for patent infringement with respect to such third party's patents
if such failure to cooperate is not commercially reasonable in light of all the
facts and circumstances, including but not limited to, the identity of such
third party and the business plans and strategies of PARADYNE.
ARTICLE 5
ROYALTY AND REPORTING
5.1 Royalty Calculation
(a) Within sixty (60) days of a Product becoming royalty-bearing
pursuant to Article 3, PARADYNE and/or CAPCo shall designate which Products
shall become Licensed Products by providing a list to LUCENT. PARADYNE and/or
CAPCo shall have the sole discretion to designate such Products as Licensed
Products or to designate any one (1) or more of such Products as no longer being
Licensed Products in accordance with Section 5.1(9). In consideration for
LUCENT's forbearance from seeking injunctive relief or other damages under
LUCENT Patents for any Products so listed and for other good and valuable
consideration, PARADYNE agrees to pay a royalty in accordance with Section 5.3
for so long as a Product is designated a Licensed Product. Products which are
royalty-bearing and which are not listed will not be licensed under LUCENT
Patents effective as of the date this Intellectual Property Agreement becomes
royalty-bearing with respect thereto.
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(b) Royalty shall be payable to LUCENT at the rate of one point six
two five percent (1.625%) on each Licensed Product which is sold, leased or put
into use by PARADYNE and/or CAPCo, or any of their Subsidiaries or sublicensees.
The royalty rate shall be applied, except as otherwise provided in this Section
5.1, to the Fair Market Value of such Licensed Product.
(c) Royalty shall become payable upon the first sale, lease or
putting into use of a Licensed Product. Rebuilding (or enlarging, to the extent
that such enlarging incurs an additional royalty under a new licensed patent)
any Licensed Product shall be deemed to be a first putting into use of such
Licensed Product. Obligations to pay royalties accrued prior to termination of
licenses and rights pursuant to Section 5.1(9) and the expiration of LUCENT
Patents shall survive.
(d) When a company ceases to be a Subsidiary of or sublicensee of
PARADYNE and/or CAPCo, royalties which have accrued with respect to any products
of such company, but which have not been paid, shall become payable with
PARADYNE's and/or CAPCo's next scheduled royalty payment.
(e) Notwithstanding any other provisions hereunder, royalty shall
accrue and be payable only to the extent that enforcement of PARADYNE's
obligation to pay such royalty would not be prohibited by applicable law.
(f) A Licensed Product may be treated by PARADYNE and/or CAPCo,
and/or their subsidiaries and/or sublicensees as not licensed and not subject to
royalty with respect to sales, leasing or putting into use of such Licensed
Product if the purchaser, manufacturer, lessee and/or importer is licensed under
the same Patent(s) to have said Licensed Product made and/or imported, and the
purchaser, lessee, and or importer advises PARADYNE, in writing at or prior to
the time of such sale, manufacture, lease or importation that it is exercising
its own license under such Patent(s) with respect to such manufacture and/or
importation.
(g) By not less than three (3) months; written notice to LUCENT,
PARADYNE may voluntarily terminate all or a specified portion of the licenses
and rights granted to it hereunder, including the removal of Licensed Products
from the list, (described in Section 5.1(a)). Such notice shall specify the
effective date of such termination and shall clearly specify any affected
Licensed Product.
5.2 Records And Adjustments
(a) PARADYNE and/or CAPCo shall keep full, clear and accurate records
with respect to all Licensed Products and shall furnish any relevant information
which LUCENT may reasonably prescribe from time to time to enable LUCENT to
ascertain the proper royalty due hereunder on account of Licensed Products sold,
leased and put into use by PARADYNE and/or CAPCo or any of their Subsidiaries or
sublicensees. PARADYNE and/or CAPCo shall retain such records with respect to
each Licensed Product for at least five (5) years from the sale, lease or
putting into use of such Licensed Product. LUCENT shall have the right through
accredited external auditors to make an examination, during normal business
hours, of
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all records and accounts bearing upon the amount of royalty payable to it
hereunder. Such audits cannot be conducted more than once per year. All audits
shall be at LUCENT's expense unless an audit uncovers an underpayment by
PARADYNE and/or CAPCo in excess of five percent (5%) in which case PARADYNE or
CAPCo, as the case may be, shall reimburse LUCENT for the audit. Prompt
adjustment shall be made to compensate for any errors or omissions disclosed by
such examination.
(b) Independent of any such examination, LUCENT will credit to
PARADYNE and/or CAPCo the amount of any overpayment of royalties made in error
which is identified and fully explained in a written notice to LUCENT delivered
within twelve (12) months after the due date of the payment which included such
alleged overpayment, provided that LUCENT is able to verify, to its own
reasonable satisfaction, the existence and extent of the overpayment.
(c) No refund, credit or other adjustment of royalty payments shall
be made by LUCENT except as provided in this Section 5.2. Rights conferred by
this Section 5.2 shall not be affected by any statement appearing on any check
or other document, except to the extent that any such right is expressly waived
or surrendered by a party having such right and signing such statement.
5.3 Reports and Payments
(a) Within sixty (60) days after the end of each semiannual period
ending on June 30th or December 31st, commencing with the semiannual period
during which this Intellectual Property Agreement becomes royalty-bearing,
PARADYNE and/or CAPCo shall furnish to LUCENT at the address specified in
Section 9.1 a statement certified by a responsible official of PARADYNE and/or
CAPCo showing in a manner reasonably acceptable to LUCENT:
(i) all Licensed Products which were sold, leased or put into
use during such semiannual period;
(ii) the Fair Market Values of such Licensed Products:
(iii) the amount of royalty payable thereon; and
(iv) all exclusions from royalty pursuant to Section 5.1(f).
(b) Within such sixty (60) days, PARADYNE and/or CAPCo shall pay in
United States dollars to LUCENT at the address specified in Section 9.1 the
royalties payable in accordance with such statement. Any conversion to United
States dollars shall be at the prevailing rate for bank cable transfers as
quoted for the last day of such semiannual period by leading United States banks
in New York City dealing in the foreign exchange market.
(c) Overdue payments hereunder shall be subject to a late payment
charge calculated at an annual rate of three percentage points (3%) over the
prime rate or successive prime rates As posted in New York City) during
delinquency. If the amount of such charge exceeds the maximum permitted by law,
such charge shall be reduced to such maximum.
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5.4 Taxes
PARADYNE and/or CAPCo shall pay any tax, duty, levy, customs fee, or
similar, charge ("taxes"), including interest and penalties thereon, however
designated, imposed as a result of the operation or existence of this
Intellectual Property Agreement, including taxes which PARADYNE and/or CAPCo is
required to withhold or deduct from payments to LUCENT, except (i) net income
taxes imposed upon LUCENT by any governmental entity within the United States
(the fifty (50) states and the District of Columbia), and (ii) net income taxes
imposed upon LUCENT by jurisdictions outside the United States which are
allowable as a credit against the United States Federal income tax of LUCENT or
any of its Subsidiaries. In order for the exception in (ii) to be effective,
PARADYNE and/or CAPCo must furnish to LUCENT evidence sufficient to satisfy the
United States taxing authorities that such taxes have been paid. Such evidence
must be furnished to LUCENT within thirty (30) days of issuance by the local
taxing authority. Except in the cases where (ii) does not apply, the foregoing
shall not be construed as requiring PARADYNE or CAPCo to pay LUCENT's net income
taxes.
ARTICLE 6
PARADYNE PROGRAMS
6.1 LUCENT grants immunity to PARADYNE's and/or CAPCo's licensees and
customers of such licensees under LUCENT CAP Patents, LUCENT VoiceSpan Patents
and LUCENT ETC Patents listed in Appendix E in accordance with the terms and
conditions of Sections 6.2 through 6.5 and as follows:
(a) PARADYNE, in the case of VoiceSpan Technology and ETC Technology,
and CAPCo in the case of CAP Technology, shall with notice to LUCENT have the
right to extend LUCENT's immunity to their respective licensees and customers of
their licensees for VoiceSpan Technology, ETC Technology and/or CAP Technology
solely upon granting a license (or such license already having been granted by
PARADYNE prior to Closing Date) to such related technology and then only for a
period of five (5) years (hereinafter the Limited Period") except as stated in
Section 6.1(b) below. The notice to LUCENT shall identify the licensee, and
under what Patents immunity is being granted.
(b) When all of the conditions in Sections 3.7(i) through 3.7(iv) are
met, such right to extend immunities shall terminate for the business, or part
of such business, which is sold; however, PARADYNE and/or CAPCo may extend the
foregoing immunities solely for the Limited Period to any new licensees or to
existing licensees at the end of their current license, which grants shall take
place prior to the end of the six (6) year period from the Closing Date.
(c) The termination of PARADYNE's and/or CAPCo's right to extend such
immunity shall not affect any immunities already extended and LUCENT agrees to
negotiate comparable licenses with PARADYNE's and CAPCo's licensee's and/or
customers thereof to the extent requested by such licensees and/or customers.
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(d) Neither PARADYNE nor CAPCo shall knowingly extend any immunity
for a particular Patent to any licensee and/or customer thereof who is already
licensed by LUCENT under such Patent. regarding such licensee's and/or
customer's prospective use(s) under such Patent. Any grant of patent. immunity
only applies if any licensee and/or customer is not already licensed by LUCENT.
6.2 (a) The immunity under the LUCENT CAP Patents extended by CAPCo to
its licensees and/or their customers to whom CAPCo grants a license for CAP
Technology, is only to the extent such Patents are Essential Patents to the CAP
Technology and are used specifically in conjunction with the licensed technology
as provided by CAPCo for board and system level products and only to the extent
that if a component is specified in the CAP Technology, the component is
purchased from a vendor approved by CAPCo.
(b) Neither PARADYNE nor CAPCo shall have the right to make or have
made a Semiconductive Device as part of the CAP Technology licensing program,
under LUCENTs Patents relating to Manufacturing Inventions.
(c) The immunity granted under Section 6.2 shall extend until
December 31, 2002 for the licenses granted by PARADYNE to Westell Technologies,
Inc. for CAP Technology.
6.3 The immunity under the LUCENT VoiceSpan Patents extended by PARADYNE
to its licensees and/or their customers to whom PARADYNE grants a license for
VoiceSpan Technology (or such license already having been granted by PARADYNE
prior to the Closing Date) is only to the extent such Patents are Essential
Patents to the VoiceSpan Technology and are used specifically in conjunction
with the licensed technology as provided by PARADYNE.
6.4 The immunity under the LUCENT ETC Patents extended by PARADYNE to its
licensees and/or their customers to whom PARADYNE grants a license for ETC
Technology (or such license already having been granted by PARADYNE prior to the
Closing Date) is only to the extent such Patents are Essential Patents to the
ETC Technology and are used specifically in conjunction with the licensed
technology as provided by PARADYNE.
6.5 No licenses, express or implied, or immunity is granted under any
Patent with respect to any of PARADYNE's or CAPCo's licensing programs except
for the Patents specified in this Article 6, provided, however, if PARADYNE or
CAPCo can demonstrate within two (2) years of the Closing Date that a LUCENT
Patent was an Essential Patent as of the Closing Date to one of its licensing
programs Appendix E will be deemed amended to include such Patents.
6.6 LUCENT agrees to license its Patents which are Essential Patents to
the V.34 standard (as listed below in this Section 6.6) to licensees of PARADYNE
and/or CAPCo in connection with their licensing programs. LUCENT will make
available its standard form patent license agreement within thirty (30) days of
request by the potential licensee. Such potential licensee will have 30 days
from receipt to sign the agreement.
<TABLE>
<S> <C>
U.S. Patent 4304962
</TABLE>
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<TABLE>
<S> <C>
U.S. Patent 4069392
U.S. Patent 4520490
U.S. Patent 4941154
U.S. Patent RE33041
U.S. Patent 5115453
U.S. Patent 5418798
U.S. Patent 5488633
</TABLE>
6.7 LUCENT agrees to license the following Patents to PARADYNE licensees
under reasonably commercial terms and conditions in connection with PARADYNE's
licensing programs for Mocha Technology and Hypermodem Technology:
<TABLE>
<S> <C>
U.S. Patent 4866647
U.S. Patent 5394437
U S. Patent 5406583
U.S. Patent Application 08/176742
U.S. Patent Application 08/390185
U.S. Patent Application 08/384498
U.S. Patent Application 08/384514
U.S. Patent Application 08/556726
</TABLE>
LUCENT will make available its standard form patent license agreement
within thirty (30) days of request by the potential licensee. Such potential
licensee will have 30 days from receipt to sign the agreement.
ARTICLE 7
KNOW-HOW AND OTHER INTELLECTUAL PROPERTY
7.1 With respect to LUCENT Know-How, PARADYNE, CAPCo and their
Subsidiaries shall have the fee-free right to use, reproduce, modify, combine
with other works, make Derivative Works and distribute any of the foregoing and
to perform and/or display such works (all without accounting to LUCENT) to the
extent reasonably necessary to exercise PARADYNE's and/or CAPCo's and/or their
Subsidiaries' rights, and licenses hereunder; provided, however, PARADYNE, CAPCo
and their Subsidiaries agree to hold in confidence LUCENT Know-How so long as
LUCENT Know-How is clearly marked as such and such Know-How (i) is not and does
not become publicly known; (ii) is not independently developed by PARADYNE,
CAPCo or their Subsidiaries; or (iii) is not disclosed by LUCENT without
restriction.
7.2 With respect to PARADYNE Know-How and CAPCo Know-How, LUCENT and its
Subsidiaries shall have the fee-free right to use, reproduce, modify, combine
with other works, make Derivative Works and distribute any of the foregoing and
to perform and/or display such works (all without accounting to PARADYNE or
CAPCo) to the extent reasonably necessary to exercise LUCENT's and its
Subsidiaries' rights and licenses hereunder; provided, however, LUCENT and its
Subsidiaries agree to hold in confidence PARADYNE Know-How and CAPCo Know-How,
so long as PARADYNE Know-How and/or CAPCo's
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Know-How is clearly marked as such and such Know-How: (i) is not and does not
become publicly known; (ii) is not independently developed by LUCENT; or (iii)
is not disclosed by PARADYNE without restriction.
7.3 Each party shall have the right to disclose to its suppliers, business
partners and consultants (under appropriate confidentiality provisions) any
other party's Know-How licensed to it pursuant to this Article 7, to the extent
it is reasonably necessary to exercise the party's rights and licenses
hereunder. The inherent disclosure of Know-How in a product or in connection
with the sale of a product shall not constitute a breach of this Intellectual
Property Agreement.
7.4 LUCENT hereby irrevocably assigns, conveys and delivers to PARADYNE,
its successors, assigns and legal representatives, LUCENTs entire right, title
and interest, if any, in and to PARADYNE Know-How and in and to PARADYNE Other
Intellectual Property. LUCENT further hereby irrevocably assigns conveys and
delivers to CAPCo, its successors, assigns and legal representatives, LUCENT's
entire right, title and interest, if any, to CAPCo Know-How and in and to CAPCo
Other intellectual Property.
ARTICLE 8
TRADEMARKS
8.1 To the extent PARADYNE has any right, title, and interest in and to
the trademarks and common law marks set forth on Appendix B-1 attached hereto
("PARADYNE Marks"), PARADYNE assigns to LUCENT such right, title and interest.
PARADYNE hereby assigns pursuant to the Trademark Assignment Agreement attached
hereto as Appendix B-2, subject to all prior agreements and commitments of
PARADYNE and its Affiliated Companies to third parties entered into prior to the
Closing Date, all of its worldwide rights, title and interest in and to the
PARADYNE Marks to LUCENT, including the goodwill of the business represented by
the PARADYNE Marks, any applications of PARADYNE Marks and any common law rights
in the PARADYNE Marks.
8.2 PARADYNE shall not use the name LUCENT TECHNOLOGIES or the innovation
ring design forming the corporate identity of LUCENT TECHNOLOGIES INC. In
addition, PARADYNE agrees not to adopt names or symbols confusingly similar to
LUCENT TECHNOLOGIES INC. or the innovation ring design.
8.3 LUCENT shall not after the Closing Date: (1) use the mark "PARADYNE"
as a trademark, trade name or as part of a corporate name; (2) use the trademark
"PARADYNE" and/or any logo or design associated therewith; or (3) use or
authorize others to use the following marks:
ACCULINK
ANALYSIS
CHANNELCARE
CHANNELVIEW
CHANNELWATCH
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COMSPHERE
DATAPHONE
DATAPORT
DCX
ETC
GLOBESPAN
INFO-LOCK
KEEP IN TOUCH CARD
KEEP IN TOUCH
KEEPINTOUCH CARD
KIT
PARADYNE
PARADYNE DO
SHARED EXPECTATIONS
SOFTCALL
VOICESPAN
VOICESPAN AND DESIGN
LUCENT shall not use any derivations or combination marks containing the
elements PARADYNE and/or any logo or design associated therewith. The foregoing
restriction shall not apply to sales by LUCENT of existing inventory of PARADYNE
products, or future sales of PARADYNE Companies' products, provided that future
sales are properly authorized pursuant to a written agreement between LUCENT and
one or both of the PARADYNE Companies.
ARTICLE 9
MISCELLANEOUS
9.1 All notices, requests and other communications hereunder shall be in
writing and shall be deemed to have been duly given if addressed, and delivered
by hand, telex or facsimile, and confirmed by registered mail, with postage
pre-paid, to the addresses set forth below (or to such other addresses as may be
given by written notice):
If to PARADYNE, to: Paradyne Corporation
Attention: President
8545 126th Avenue North
P.0. Box 2826
Largo, Florida 34649-2826
Copy to: Paradyne Partners, L.P.
c/o Richard A. Ekleberry, Esq.
201 Main Street
Suite 2420
Fort Worth, Texas 76102
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If to LUCENT, to: Lucent Technologies Inc.
Contract Administrator, Intellectual Property
2333 Ponce de Leon Boulevard
Coral Gables, Florida 33124
Copy to: General Counsel
Lucent Technologies Inc.
150 Allen Road
Suite 2000
Liberty Comer, New Jersey 07938
If to CAPCo to: CAP Acquisition Corp.
Attention: President
8545 126th Avenue North
P.O. Box 2826
Largo, Florida 34649-2826
Copy to: Paradyne Partners, L.P.
c/o Richard A. Ekleberry, Esq.
201 Main Street
Suite 2420
Fort Worth, Texas 76102
9.2 The headings are included for convenience only, and the articles shall
not be construed in accordance with their headings.
9.3 The parties hereto agree that the invalidity or unenforceability of
any of the provisions hereof shall not in any way affect the validity or
enforceability of any other provisions of this Intellectual Property Agreement
except those from which the invalidated or unenforceable provisions comprise an
integral part or are otherwise clearly inseparable.
9.4 LUCENT represents and warrants, to and for the benefit of PARADYNE,
BUYER, CAPCo, and PARADYNE PARTNERS, L.P. and their Affiliated Companies, as
follows:
(a) LUCENT and its Subsidiaries own and/or have the right to convey
all right, title and interest in the Non-CAP A-Patents and CAP A-Patents,
subject only to certain non-exclusive licenses granted by LUCENT and/or its
Affiliated Companies prior to the Closing Date.
(b) LUCENT and its Subsidiaries own all right, title and interest in
the LUCENT Patents, subject only to certain non-exclusive licenses granted by
LUCENT prior to the Closing Date.
(c) LUCENT and its Subsidiaries have the right to license or own all
right, title and interest in the LUCENT Know-How licensed to PARADYNE, and CAPCo
hereunder.
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<PAGE> 23
(d) LUCENT and its Subsidiaries assert, and will assert, no ownership
interest in PARADYNE's Other Intellectual Property.
(e) To the Knowledge of LUCENT and PARADYNE, none of the A-Patents,
or the PARADYNE Patents are involved in any interference, reissue, reexamination
or opposing proceeding except as set forth in Exhibit F.
(f) To the Knowledge of LUCENT and PARADYNE, they are not aware of
any claim, suit, proceeding, or any demand or threat of any of the foregoing,
with respect to any A-Patent, PARADYNE Patent, PARADYNE Know-How, PARADYNE Other
Intellectual Property and/or to PARADYNE Products, except as set forth on
Exhibit H.
(g) PARADYNE has obtained either through ownership or proper license
from LUCENT, all intellectual property rights of LUCENT necessary to-conduct
PARADYNE's business in the manner in which such business is currently being
conducted.
(h) To the Knowledge of LUCENT and PARADYNE (except for the companies
listed in section 2.5),there is no infringement or misappropriation of any
A-Patent, PARADYNE Patents, PARADYNE Know-How or PARADYNE Other Intellectual
Property.
(i) PARADYNE and its Subsidiaries have taken all reasonable measures
and precautions necessary to protect and maintain the confidentiality and
secrecy of the PARADYNE Patents, PARADYNE Know-How and PARADYNE Other
Intellectual Property (collectively referred to as "PARADYNE Intellectual
Property") and otherwise to maintain and protect the value of all PARADYNE
Intellectual Property and have Obtained from all current and former employees
and from all current and former consultants and independent contractors signed
agreements appropriately restricting the use and disclosure of the PARADYNE
Intellectual Property.
(j) The PARADYNE Intellectual Property conforms in all material
respects with any specification, documentation, performance standard,
representation or statement made or provided with respect thereto by or on
behalf or any of the Acquired Companies; and there has not been any material
claim by any customer or other Person alleging that any PARADYNE Intellectual
Property does not conform in all material respects with any specifications,
documentation, performance standard, representation or statement made or
provided by or on behalf of any of the Acquired Companies, and, to the Knowledge
of LUCENT and PARADYNE, there is no basis for any such claim.
9.5 The representations and warranties of LUCENT, and the rights and
remedies that may be exercised by PARADYNE, BUYER, CAPCo, PARADYNE PARTNERS,
L.P., and their Affiliated Companies, shall not be limited or otherwise affected
by or as a result of any information furnished to, or any investigation made by
or knowledge of, PARADYNE, BUYER, CAPCo, PARADYNE PARTNERS, L.P., or any of
their Affiliated Companies or representatives.
9.6 For purposes of this Intellectual Property Agreement, each statement
or other item of information set forth in the Exhibits shall be deemed to be a
representation and warranty made by LUCENT in this Intellectual Property
Agreement.
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<PAGE> 24
9.7 No licenses, express or implied, under this Intellectual Property
Agreement are granted by or among PARADYNE, CAPCo or LUCENT except those
expressly granted under this Intellectual Property Agreement.
9.8 Except as otherwise expressly provided herein, nothing in this
Intellectual Property Agreement shall be construed as a warranty or
representation that anything made, used, sold or otherwise disposed of under any
license granted in this Intellectual Property Agreement is or will be free from
infringement of patents of third parties except for patents licensed under this
Intellectual Property Agreement, although as of the Closing Date hereof, LUCENT
knows of no such infringement unless otherwise disclosed.
9.9 Nothing contained in this Intellectual Property Agreement shall be
deemed or construed to constitute or create among the parties hereto a
partnership, association, joint venture or other agency.
9.10 This Intellectual Property Agreement establishes the rights, duties,
and obligations of LUCENT, CAPCo and PARADYNE with respect to the subject matter
hereof. Except as otherwise agreed in the Purchase Agreement, including the
Intellectual Property Agreement, PARADYNE, CAPCo and LUCENT shall have no right
or interest whatsoever in any product of any other party hereto whether such
product is conceived or developed by any such other party, during, or after the
course of performance of the Purchase Agreement including this Intellectual
Property Agreement.
9.11 Except as otherwise expressly provided herein, no party hereto may
assign this Intellectual Property Agreement or any part thereof, transfer
licenses or rights or grant any sublicenses hereunder, to anyone other than a
Subsidiary of such party without the prior, written consent of all parties
hereto. However, if LUCENT, CAPCo or PARADYNE sells part or all of their
respective businesses including, without limitation, Subsidiaries (the "Sold
Entity"), and if LUCENT, CAPCo or PARADYNE have granted sublicenses thereto
prior to such sale, and in the case of PARADYNE or CAPCo subject to the
provisions of Section 3.7, then such sublicenses so granted shall survive such
sale, provided that:
(i) the Sold Entity shall continue to operate as a separately
identifiable business, corporation, joint venture, partnership,
business unit, division, group, or other sole business entity, or
constitute a separate part of any other business entity,
(ii) the sublicenses so granted do not exceed the scope or duration of
the licenses granted by LUCENT, PARADYNE or CAPCo; and.
(iii) In the case of LUCENT's Sold Entity, such Sold Entity agrees to
be bound by the Noncompetition Agreement, Exhibit "BB" to the
Purchase Agreement.
If any party grants a sublicense to a Sold Entity under this Section 9.11,
such party shall notify all other parties.
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<PAGE> 25
9.12 This Intellectual Property Agreement is the entire agreement by and
among the parties with respect to this subject matter, and supersedes all prior
discussions, negotiations, communications and agreements with respect thereto.
This Intellectual Property Agreement may be modified only in writing, and signed
by all parties hereto. Any purported oral modification of this Intellectual
Property Agreement shall be without any effect whatsoever.
9.13 The failure of any party to enforce at any time any of the provisions
of this Intellectual Property Agreement shall not be deemed to be a waiver of
the right of such party thereafter to enforce such provision.
9.14 The obligations of any party shall be excused to the extent, and for
the period during which, that performance is rendered impossible by strike,
fire, flood, earthquake, other natural disasters, governmental acts, orders or
restrictions, or any other reason beyond the reasonable control of such party.
9.15 Each party's performance of this Intellectual Property Agreement,
including each party's use of any intellectual property of any other party,
including without limitation such other party's Patents, trademarks, Know-How
and Other Intellectual Property shall at all times comply with all requirements,
rules, laws and regulations of all governmental bodies having proper
jurisdiction, and including without limitation any requirements to obtain any
licenses under the export or similar laws of the United States.
9.16 To the extent that this Intellectual Property Agreement calls upon one
or more of the Affiliated Companies of any party to carry out any act, to
refrain from performing any such act, or otherwise to perform any obligations
hereunder, each party hereto shall ensure that such Affiliated Companies do so
consistent with this Intellectual Property Agreement.
9.17 No provision of this Intellectual Property Agreement shall be
construed to permit LUCENT or its Subsidiaries to engage in any activities which
are otherwise prohibited in the Non-Competition Agreement which is Exhibit BB to
the Purchase Agreement.
9.18 Each party hereto shall execute and cause to be delivered to each
other party hereto such instruments and other documents, and shall take such
other actions, as such other party may reasonably request (prior to, at or after
the Closing) for the purpose of carrying out or evidencing any of the
transactions contemplated in this Intellectual Property Agreement. The parties
understand and agree that certain information in Appendix A and Appendix E may
be incorrect regarding whether particular Patents are CAP A-Patents, Non-CAP
A-Patents, PARADYNE CAP Patents and PARADYNE Non-CAP Patents. The parties agree
to work together in mutual good faith for a period not to exceed thirty (30)
days after the Closing Date in order to amend Appendix A and Appendix E, and to
ensure that the Patents are properly represented therein.
9.19 LUCENT represents and warrants that it either has delivered, or shall
deliver within ninety (90) days after the Closing Date, clear record title to
PARADYNE and/or CAPCo, as the case may be, for all CAP A-Patents, Non-CAP
A-Patents. Lucent shall deliver to PARADYNE and CAPCo all documents,
certificates and similar materials evidencing ownership of the CAP A-Patents and
Non-CAP A-Patents to PARADYNE and/or CAPCo.
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<PAGE> 26
ARTICLE 10
CONFIDENTIALITY
10.1 Each party, on behalf of itself and its Affiliated Companies, agree
that they are in receipt of certain non-public information received in the
course of performance or negotiation of this Intellectual Property Agreement, or
their past relationship with another party, including without limitation all
Know-How, Other Intellectual Property, business plans, forecasts, technical
data, financial data, personnel information, and other information of a nature
that is not generally made publicly available, and which, if disclosed, could
reasonably cause damage or loss to the other party (hereinafter referred to as
"the Other Party's Confidential Information").
10.2 Each party agrees that, subject to all other obligations in the
Purchase Agreement, including this Intellectual Property Agreement, and the
Non-Competition Agreement, it will not use the Other Party's Confidential
Information in any manner not expressly permitted by the Purchase Agreement, and
it will use the same degree of care to prevent the disclosure of the Other
Party's Confidential Information as it normally uses with respect to its own
confidential information, but in no event less than a standard of reasonable
care.
10.3 The parties agree that the terms and conditions of this Intellectual
Property Agreement are confidential.
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification by LUCENT
(a) From and after the Closing Date, LUCENT shall hold harmless and
indemnify each Indemnitee from and against, and shall compensate and reimburse
each Indemnitee for, any Damages which are suffered or incurred by any of the
Indemnitees or to which any of the Indemnitees may otherwise become subject (in
respect of clauses (i) and (iii), regardless of whether or not such Damages
relate to any third party claim) and which arise from or as a result of or are
connected with:
(i) any inaccuracy in or breach of any representation or warranty set
forth in Article 9.
(ii) any Covered Intellectual Property Claim asserted by any third
party against any Indemnitee; or
(iii) any of the Legal Proceedings or asserted claims referred to on
Appendix H attached hereto, or any facts or circumstances
underlying any of the assertions or allegations made in
connection with any of such Legal Proceedings or claims.
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<PAGE> 27
(b) (i) For purposes of this Agreement, an "Intellectual Property
Claim" shall mean any claim, demand, threat or Legal Proceeding that is based
upon or related to any actual or alleged infringement, misappropriation or
unlawful use of any third party Proprietary Asset.
(ii) For purposes of this Agreement, a "Covered Intellectual Property
Claim" shall mean any Intellectual Property Claim to the extent
(A) such Intellectual Property Claim is based upon or related to
any actual or alleged infringement, misappropriation or unlawful
use of a third party Proprietary Asset by PARADYNE and/or CAPCo
on account of a Product (or portion of a Product) as manufactured
and/or a service offered (i) as of the Closing Date regardless of
whether the Product is manufactured, or the service is offered,
before or after the Closing Date, or (ii) before the Closing Date
but only for the period prior to the Closing Date and which is
brought, filed, initiated or made against PARADYNE and/or CAPCo
within two (2) years of the Closing Date or (B) if the
Intellectual Property Claim is a demand or threat of the kind
above-specified, (x) such demand or threat is made within two (2)
years of the Closing Date, and (y) if not settled within such two
(2) year period and the factual basis of such demand or threat is
also contained in a Legal Proceeding, such Legal Proceeding is
brought against PARADYNE and/or CAPCo within three (3) years of
the Closing Date.
(iii) Any Intellectual Property Claim received by a licensee,
customer, distributor or reseller of PARADYNE or CAPCo and any
related calm by such licensee, customer, distributor or reseller
against any Indemnitee shall be a Covered Intellectual Property
Claim (in each case within the time periods set forth in Section
11.1 (b)(ii) above) falling within the coverage of Section
11.1(a)(ii) (regardless of whether such licensee, customer,
distributor or reseller is an Indemnitee), if such licensee,
customer, distributor or reseller seeks indemnification from
PARADYNE or CAPCo pursuant to an intellectual property
indemnification provision (i) under a contract or other agreement
entered into with PARADYNE prior to the Closing Date, or (ii) in
connection with any equipment or product sold, licensed or
otherwise made available, or any service performed on or prior to
the Closing Date.
(c) The representations and warranties set forth in Article 9 and in the
AT&T Trademark and Patent Agreement shall expire on the second anniversary of
the Closing Date; provided, however, that if, at any time prior to the second
anniversary of the Closing Date, any Indemnitee (acting in good faith) delivers
to LUCENT a written notice alleging the existence of an inaccuracy in or a
breach of any of such representations and warranties and asserting a claim for
recovery under Section 11.1(a)(i) or Section 11.8 based on such alleged
inaccuracy or
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breach, then the claim asserted in such notice shall survive the second
anniversary of the Closing Date until such time as such claim is fully and
finally resolved.
(d) LUCENT shall not be obliged to provide any indemnification under
Section 11.1 (a)(ii) for any Intellectual Property Claims to the extent such
Intellectual Property Claims are based on changes, modifications or additions
made after the Closing Date or the use of manufacturing processes not used prior
to the Closing Date. Lucent shall be obliged to provide indemnification for any
Covered Intellectual Property Claim to the extent that any such Intellectual
Property Claim is based upon the design or development of a Product as it
existed as of the Closing Date whether or not Products were actually on sale
prior to the Closing Date.
(e) In no event will LUCENT indemnify PARADYNE or CAPCo for claims of
intellectual property infringement when the claim is intentionally provoked by
PARADYNE or CAPCo. PARADYNE and/or CAPCo shall use reasonable best efforts to
mitigate damages. Offering of PARADYNE and/or CAPCo licenses to third parties as
part of PARADYNE's and/or CAPCo's normal customary licensing program shall not
be considered an intentional provocation by PARADYNE and/or CAPCo. A
communication by PARADYNE or CAPCo with a customer, distributor, reseller or
licensee of PARADYNE or CAPCo shall not be deemed provocation hereunder unless
such communication was initiated by PARADYNE or CAPCo and Lucent is able to
demonstrate that the principal intent of PARADYNE or CAPCo in initiating such
communication was to induce such customer, distributor, reseller or licensee to
assert against PARADYNE or CAPCo a Covered Intellectual Property Claim that
otherwise would not have been asserted by such customer, distributor, reseller
or licensee against PARADYNE or CAPCo.
(f) If Damages are suffered or incurred by two or more Indemnitees with
respect to the same facts and circumstances and if the full payment of the
Damages of one Indemnitee (the "Identified Indemnitee") would completely
eliminate the Damages of the other Indemnitees with respect to such same facts
and circumstances then only an amount equal to the full amount of the Damages of
the Identified Indemnitee shall be paid under this Article ,1 with respect to
such facts and circumstances. The Indemnitees shall determine the distribution
of any payment pursuant to this Section 11.1(f), which may be divided among two
or more Indemnitees.
11.2 LUCENT Threshold
(a) For purposes of this Section 11.2:
(i) "Affiliate" shall mean with respect to any Person, any Person
directly or indirectly controlling, controlled by or under common
control with such other Person.
(ii) "Claimant" shall mean a Person, such Person's current and future
Affiliates, and the respective successors and assigns of the
foregoing Persons.
(iii) "Deductible Amount" shall mean that portion of LUCENTs
settlement expense to which PARADYNE or CAPCo must contribute to
LUCENT in the settlement of each Covered
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Intellectual Property Claim. The Deductible Amount shall be up to
$750,000 per Claimant, until the actual aggregate of all
Deductible Amounts is equal to or exceeds $5,000,000. Thereafter,
"Deductible Amount" shall be $500,000 per Claimant, until the
actual aggregate of all Deductible Amounts is equal to or exceeds
$10,000,000. Thereafter, "Deductible Amount" shall be $100,000
per Claimant for all subsequent Covered Intellectual Property
Claims. Notwithstanding anything in this clause (iii) to the
contrary, once the Deductible Amount is paid or satisfied with
respect to a Claimant the Deductible Amount in respect of any
Covered Intellectual Property Claims asserted by such Claimant
shall be zero.
(iv) "Person" shall mean any: (i) individual; or (ii) corporation
(including any non-profit corporation), general partnership,
limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability
company or joint stock company), firm or other enterprise,
association, organization or entity.
(b) Pursuant to Section 11.1 (a)(ii) with respect to any Covered
Intellectual Property Claim for which the Indemnitee has elected LUCENT to
assume the defense pursuant to Section 11.3, Indemnitee shall be liable to
LUCENT for the costs and expenses incurred by LUCENT pursuant to its indemnity
obligations under this Article 11 up to the Deductible Amount, and LUCENT shall
be liable for the Indemnitee's Damages covered by this Article 11 indemnity in
excess of the Deductible Amount up to the maximum liability specified in Section
11.2(c) below. Only one (1) Deductible Amount shall be paid to LUCENT per
Claimant, regardless of the number of Indemnitees. Damages covered by this
Article 11 indemnity paid by Indemnitee(s) to third parties (other than
Claimants) prior to such election are creditable against the Deductible Amount.
Pursuant to Section 11.1 (a)(ii), with respect to any Covered Intellectual
Property Claim for which the Indemnitee has not elected LUCENT to assume the
defense pursuant to Section 11.3, LUCENT shall have no obligations or liability
to Indemnitees under this Article 11.
(c) The maximum liability of LUCENT under Section 11.1 (a)(ii) for
Covered Intellectual Property Claims shall be equal to $40,697,000 plus the
Interim Prepayment Amount plus the Final Prepayment Amount less the Interim
Price Reduction Amount less the Final Price Reduction Amount. Upon reaching the
maximum liability of LUCENT under this Section, LUCENT shall have no further
liability or obligation for Covered Intellectual Property Claims.
11.3 Defense of Third Party Claims by LUCENT
In the event of the assertion or commencement by any Person of any claim or
Legal Proceeding against any one or more Indemnitees with respect to which
LUCENT is obligated to indemnify pursuant to this Article 11, and (i) all
Indemnitees against whom a claim is made elect in writing within six (6) months
to designate LUCENT to assume the defense of
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such claim or Legal Proceeding: and (ii) any Indemnitee has not significantly
adversely affected LUCENT's ability to assume the defense of any Legal
Proceeding or settle any Covered Intellectual Property Claim then:
(a) LUCENT shall proceed to defend such claim or Legal Proceeding in
a diligent manner;
(b) Indemnitees shall make available to LUCENT any non-privileged
documents and materials in the possession of Indemnitee that may be useful to
the defense of such claim or Legal Proceeding;
(c) LUCENT shall keep Indemnitees informed of all material
developments and events relating to such claim or Legal Proceeding; and
(d) Indemnitees shall have the right to participate at their own
expense in the defense of such claim or Legal Proceeding;
(e) Indemnitees shall license their intellectual property to Claimant
if such license is required by Claimant (if commercially reasonable to do so in
light of all facts and circumstances, including but not limited to, the identity
of such Claimant and the Indemnitee's business plans and strategies), to settle
a Covered Intellectual Property Claim.
(f) LUCENT may, at its sole option, settle the Covered Intellectual
Property Claim directly with the Claimant;
(g) All costs and payments in whatever form incurred in defense or
settlement including (any settlement) monies paid directly to Claimant are fully
credited towards the maximum liability of Section 11.2(c).
(h) In the event that LUCENT settles the claim through the delivery
of any intellectual property right (in the form of a license or otherwise),
LUCENT shall use good faith efforts to value such intellectual property rights
for purposes of applying the value towards satisfaction of the maximum liability
of LUCENT under Section 11.2(c) and allocating the Deductible Amount, if any,
due from PARADYNE or CAPCo to LUCENT.
11.4 Settlement Allocation
In allocating such contributions as to each settlement, the contribution of
the LUCENT intellectual property and the contribution of the PARADYNE
intellectual property, if any, used in such settlement ("LUCENT Apportionment"
and "PARADYNE Apportionment", respectively) shall be used as follows
(a) The LUCENT Apportionment shall be applied against the then
maximum liability of LUCENT under Section 11.2(c).
(b) The PARADYNE Apportionment shall be accounted for as follows:
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(i) If the PARADYNE Apportionment is equal to or less than the then
applicable Deductible Amount, it shall be fully credited against
such Deductible Amount and the remaining amount, if any, shall be
the then applicable Deductible Amount for the settlement.
(ii) If the PARADYNE Apportionment is greater than the then applicable
Deductible Amount, no such Deductible Amount need be paid by
PARADYNE to LUCENT and the amount of such PARADYNE Apportionment
greater than such Deductible Amount, if any, shall be Editable
against the Deductible Amount for each future settlement, at a
rate of fifty cents per dollar of the PARADYNE contribution for
such future settlement, till such PARADYNE Apportionment is fully
accounted for. In no case shall the creditable amount be more
than fifty cents per dollar of the Deductible Amount.
11.5 Settlement
For the purposes of this Section, settlement discussions (not including
admissions against interest) shall not be deemed to significantly adversely
affect LUCENT's ability to assume the defense of any Legal Proceeding or settle
any Covered Intellectual Property Claim.
11.6 Defense of Third Party Claims by Indemnitee
If the Indemnitees do not elect to designate LUCENT to assume the defense
of any such claim or Legal Proceeding, the Indemnitees may proceed with the
defense of such claim or Legal Proceeding on their own. If the Indemnitees so
proceed with the defense of any such claim or Legal Proceeding on their own:
(a) subject to Section 11.3(h), all settlement expenses relating to
the defense of such claim or Legal Proceeding (whether or not incurred by
Indemnitee) shall be borne and paid exclusively by the Indemnitee without
reimbursement by LUCENT;
(b) LUCENT shall make available to Indemnitee any non-privileged
documents and materials in the possession or control of LUCENT that may be
useful to the defense of such claim or Legal Proceeding;
(c) Indemnitee shall keep LUCENT informed of all material
developments and events relating to such claim or Legal Proceeding; and
(d) Indemnitee shall have the right to settle, adjust or compromise
such claim or Legal Proceeding.
11.7 No Contribution
LUCENT waives, and acknowledges and agrees that it shall not have and shall
not exercise or assert or attempt to exercise or assert, any right of
contribution or right of indemnity or any other right or remedy against any
Acquired Company or Acquisition Entity in
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connection with any indemnification Obligation or any other liability to which
LUCENT may become subject under this Intellectual Property Agreement.
11.8 From and after the Closing Date, LUCENT shall hold harmless and
indemnify PARADYNE and CAPCo from and against, and shall compensate and
reimburse PARADYNE and CAPCo for, any damages, costs, expenses, losses,
liabilities, diminution in value, claims, awards, fines, penalties, charges or
legal fees which are suffered or incurred by PARADYNE or CAPCo or to which they
may otherwise become subject (regardless of whether or not such damages relate
to any third-party claim) and which arise from or as a result of, or are
connected with any inaccuracy in, or breach of, any representation and warranty
set forth in the AT&T Trademark and Patent Agreement, of even date hereof, or
with any claim, demand, threat, suit or Legal Proceeding against AT&T based upon
or related to any actual or alleged infringement, misappropriation or unlawful
use of any of the Assigned Marks, as defined therein.
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AGREED TO:
AT&T PARADYNE CORPORATION
By: /s/ W. Preston Granbery
----------------------------------
Print Name: W. Preston Granbery
--------------------------
Title: Authorized Agent
-------------------------------
Date: 7/31/96
--------------------------------
LUCENT TECHNOLOGIES INC. CAP ACQUISITION CORP.
By: /s/ W. F. Osl, Jr. By: /s/ David M. Stanton
---------------------------------- -----------------------------------
Print Name: William F. Osl, Jr. Print Name: David M. Stanton
-------------------------- ---------------------------
Title: Vice President Title: President
------------------------------- --------------------------------
Date: 7/31/96 Date: 7/31/96
-------------------------------- ---------------------------------
<PAGE> 34
APPENDIX A
A--PATENTS AND PATENT APPLICATIONS
<PAGE> 35
APPENDIX A
CAP A-PATENT APPLICATIONS
<TABLE>
<CAPTION>
- ---- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- ---- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1. Amrany 8 Implied Interleaving, A Family of 6/6/95 08/469558
Systematic Interleavers and
Deinterleavers
- ---- ---------------- ------------------------------------- ---------------- ----------------
2. Cupo 11 Improved Sampling System for Radio 10/17/95 08/544244
Frequency Receiver
- ---- ---------------- ------------------------------------- ---------------- ----------------
3. Farrow 28 Digitally Controlled Hhigh 8/15/94 08/290253
Resolution Hybrid Phase Synthesizer
- ---- ---------------- ------------------------------------- ---------------- ----------------
4. Herzberg 3- An Adaptive Pre-Equalizer for User 2/22/96 08/605404
5-22-34 in Data Communications Equipment
- ---- ---------------- ------------------------------------- ---------------- ----------------
5. Langberg 2 Independent Dual HDSL Channel 12/20/95 08/579713
training and Data Alignment
- ---- ---------------- ------------------------------------- ---------------- ----------------
6. Langberg 3 Impulse Effect Reduction 12/29/95 08/586008
- ---- ---------------- ------------------------------------- ---------------- ----------------
7. Langberg 4 Dual Channel Timing Recovery 2/16/96 08/602944
- ---- ---------------- ------------------------------------- ---------------- ----------------
8. Langberg 6-18 A Transmission System for Digital 4/4/96 08/628220
Audio Broadcasting
- ---- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 1 of 1
<PAGE> 36
APPENDIX A
CAP A-PATENTS
<TABLE>
<CAPTION>
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
1. AMRANY 1-25 2/11/92 5088057 4/5/90 RATIONAL RATE FREQUENCY GENERATOR
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
2. GOLDEN 3 3/10/92 5095495 9/4/90 USE OF CYCLOSTATIONARY SIGNAL TO
CONSTRAIN THE FREQUENCY RESPONSE OF A
FRACTIONALLY SPACED EQUALIZE
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
3. AMAN 2-6-4 3/10/92 5095497 11/20/89 TECHNIQUE FOR ACHIEVING THE FULL
CODING GAIN OF ENCODED DIGITAL SIGNALS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
4. CUPO 7 5/19/92 5115452 8/2/90 PHASE JITTER CORRECTION ARRANGEMENT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
5. WERNER 17 7/28/92 5134633 11/30/90 DIGITAL COMMUNICATIONS-SYNCHRONIZATION
SCHEME
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
6. HARMAN 1 9/8/92 5146494 7/31/89 OVERLAPPING LOOK-UP-AND-ADD ECHO
CANCELLER REQUIRING A SMALLER MEMORY
SIZE
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
7. FLANAGAN 1 11/10/92 5162762 3/25/91 PHASE-LOCK LOOP WITH ADAPTIVE SCALING
ELEMENT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
8. AMAN 3-9-5 11/10/92 5162812 10/11/91 TECHNIQUE FOR ACHIEVING THE FULL
CODING GAIN OF ENCODED DIGITAL SIGNALS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
9. GOLDEN 4 11/10/92 5163044 1/2/91 USE OF A FRACTIONALLY SPACED
EQUALIZER TO PERFORM ECHO
CANCELLATION IN A FULL-DUPLEX MODEM
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
10. CUPO 8-26 11/10/92 5163066 5/24/91 SYNCHRONIZING THE OPERATION OF
MULTIPLE EQUALIZERS IN A DIGITAL
COMMUNICATIONS SYSTEM
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
11. WANG 10 11/9/93 5260972 7/9/91 TECHNIQUE FOR DETERMINING SIGNAL
DISPERSION CHARACTERISTICS IN
COMMUNICATIONS SYSTEMS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
12. LATURELL 2 1/18/94 5280526 5/26/92 TRANSFORMER-LESS HYBRID CIRCUIT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
13. AMRANY 6 6/7/94 5319585 4/28/93 HIGH RESOLUTION FILTERING USING LOW
RESOLUTION PROCESSORS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
14. SORBARA 1-18 7/19/94 5331670 1/31/92 SYNCHRONIZATION SCHEME FOR A DIGITAL
COMMUNICATION SYSTEM
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
15. CUPO 10-27 10/4/94 5353312 12/27/91 EQUALIZER-BASED TIMING RECOVERY
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
16. GOLDEN 5 12/27/94 5377230 5/1/92 EXTENDED BANDWIDTH TRANSMITTER FOR
CROSSTALK CHANNELS
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
17. AMRANY 3 1/24/95 5384810 2/5/92 MODULE DECODER
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
18. BETTS 8/22/95 5444712 8/30/93 COMMUNICATION MODE IDENTIFICATION
49-1-3-2-1-24 TECHNIQUE
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
19. ARCHIBALD 4-6 3/19/96 5499923 11/9/94 COMMUNICATION CARD WITH EXTENDIBLE,
ROTATABLE COUPLING
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
20. GADOT 1-5-1-13 4/30/96 5513216 10/13/94 HYBRID EQUALIZER ARRANGEMENT FOR USE IN
DATA COMMUNICATION EQUIPMENT
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
21. AMRANY 7 6/25/96 5530959 5/18/94 SELF-SYNCHRONIZING
SCRAMBLER/DESCRAMBLER WITHOUT ERROR
MULTIPLICATION
- ---- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
Page 1 of 1
<PAGE> 37
APPENDIX A
NON-CAP A-PATENT APPLICATIONS
<TABLE>
<CAPTION>
- -------- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- -------- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1. Bedingfield 2-1 Sample and Hold Circuit Using an 4/29/96 08/639541
Operational Amplifier and High
Impedance Buffer Connected by a
Switched Diode Capacitor Circuit
- -------- ---------------- ------------------------------------- ---------------- ----------------
2. Betts 48-26 Simultaneous Analog and Digital 6/14/93 08/076517
Communication Using Fractional Rate
Encoding
- -------- ---------------- ------------------------------------- ---------------- ----------------
3. Betts 55-4 Modem Receiver Preemphasis 12/13/94 08/354978
- -------- ---------------- ------------------------------------- ---------------- ----------------
4. Betts 56 Trellis Enhanced Precoder 2/12/95 08/391328
- -------- ---------------- ------------------------------------- ---------------- ----------------
5. Betts 57 Apparatus for High-Speed 10/10/95 08/541863
Simultaneous Voice/Data
Communications
- -------- ---------------- ------------------------------------- ---------------- ----------------
6. Betts 64-6 Compensator for Rob-Bit-Signaling
in PCM Systems
- -------- ---------------- ------------------------------------- ---------------- ----------------
7. Betts 65-7 Transmitter Compensation for
Digital Loss and
Robbed-Bit-Signaling
- -------- ---------------- ------------------------------------- ---------------- ----------------
8. Bingel 1 Line-Poweree Modem with Capacitive 8/11/95 08/514040
Isolated
- -------- ---------------- ------------------------------------- ---------------- ----------------
9. Bingel 2 Integrated Loop Current Detector 2/28/96 08/608418
Apparatus for a PSTN Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
10. Bottoms Cellular Phone Interface For A 4/26/96 08/639359
10-44-22-3-23 Simultaneous Voice/Data Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
11. Bottoms Sound Modification For Use In 4/20/94 08/23/0565
7-34-14-10 Simultaneous Voice and Data
Communications
- -------- ---------------- ------------------------------------- ---------------- ----------------
12. Bottoms Cellular Phone Interface For A 8/1/94 08/283333
8-35-15-2-12 Simultaneous Voice/Data Modem (NOW ABANDONED)
- -------- ---------------- ------------------------------------- ---------------- ----------------
13. Bremer 19-1-2 Compounding of Voice Signal for 6/14/93 08/076506
Simultaneous Voice and Data
Transmission
- -------- ---------------- ------------------------------------- ---------------- ----------------
14. Bremer 36-7 Simultaneous Voice/Data Answering 6/24/94 08/264880
Machine
- -------- ---------------- ------------------------------------- ---------------- ----------------
15. Bremer 37-17-11 Simultaneous Analog and Digital 10/21/94 08/327270
Communication Having Increased
Phase Immunity
- -------- ---------------- ------------------------------------- ---------------- ----------------
16. Bremer Autorate Method for Simultaneous 12/8/94 08/352297
38-18-12-20 Transmission of Voice and Data
- -------- ---------------- ------------------------------------- ---------------- ----------------
17. Bremer 39 This is a Continuation Technique 1/26/95 08/378766
for Transmitting Analog or Digital
Signals in a Common Frequency Band
of a Communications Channel
- -------- ---------------- ------------------------------------- ---------------- ----------------
18. Chapman 5-1-2 Simultaneous Full Duplex Voice and 5/1/95 08/432486
Group 3 Facsimile System and Method
- -------- ---------------- ------------------------------------- ---------------- ----------------
19. Exner 1-1-1-2 Transparent Call Progress 1/30/95 08/380872
- -------- ---------------- ------------------------------------- ---------------- ----------------
20. Ghahramani 2 A Method for Measuring the 10/11/94 08/320810
Usability of A System and for Task
Analysis and Re-engineering
- -------- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 1 of 1
<PAGE> 38
APPENDIX A
NON-CAP A-PATENT APPLICATIONS
<TABLE>
<CAPTION>
- -------- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- -------- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
21. Hanson 10-19-7 An Enabling Technique for Quickly 4/5/96 08/628410
Establishing High Speed PSTN
Connections in Telecommuting
Applications
- -------- ---------------- ------------------------------------- ---------------- ----------------
22. Hanson 5-17-5 An Enabling Technique for Quickly 11/3/94 08/333686
Establishing High Speed PSTN (NOW ABANDONED)
Connections in Telecommuting
Applications
- -------- ---------------- ------------------------------------- ---------------- ----------------
23. Hecht 1-6-1 Apparatus and Method for 5/8/92 07/880257
Downloading Programs
- -------- ---------------- ------------------------------------- ---------------- ----------------
24. Hiles 1 System and Method for Bus 12/28/96 08/607912
Contention Resolution
- -------- ---------------- ------------------------------------- ---------------- ----------------
25. Hiles 2 Slot-Token Protocol 2/28/96 08/608378
- -------- ---------------- ------------------------------------- ---------------- ----------------
26. Holmquist 14-6 Simultaneous Voice and Data Call 4/8/94 08/225296
Establishment Using a Simultaneous
Voice and Data Modem Pool and
Private Branch Exchange Facilities
- -------- ---------------- ------------------------------------- ---------------- ----------------
27. Holmquist 15-8 A Method For Dial-In Access 6/20/96 08/262169
Security Using a Multimedia Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
28. Ko 13 Independently Switched Voice And 3/23/94 08/21/6373
Data Calls Using a Simultaneous
Voice and Data Modem
- -------- ---------------- ------------------------------------- ---------------- ----------------
29. Ko 16 Linear Prediction Filter 12/21/94 08/360906
Coefficient Quantizer & Filter Set
- -------- ---------------- ------------------------------------- ---------------- ----------------
30. Lester 1-1 Circuit and Method for Multiplexing 11/14/95 08/557873
A Frame-Relay Virtual Circuit and
Frame-Relay System Having
Multiplexed Virtual Circuits
- -------- ---------------- ------------------------------------- ---------------- ----------------
31. Moore 2-1 Interchange Circuit Overload 10/7/94 08/320147
Protection Using Driver Current
Limiting
- -------- ---------------- ------------------------------------- ---------------- ----------------
32. Patel 1-2 A Technique for Sending Faxes Over 12/18/95 08/573702
Cellular Communications Channel
- -------- ---------------- ------------------------------------- ---------------- ----------------
33. Patel 2-3 Method and Apparatus for Bypassing 12/18/95 08/573701
a Cellular Modem Pool During a Fax
Transmission
- -------- ---------------- ------------------------------------- ---------------- ----------------
34. Rasmussen 4 Discontinuous Transmission of 3/12/96 08/614225
Circuit-Switching Analog Cellular
Data
- -------- ---------------- ------------------------------------- ---------------- ----------------
35. Scott 10 Adaptive Transmit Levels for Modems 10/18/93 08/137542
Operating Over Cellular (NOW ABANDONED)
- -------- ---------------- ------------------------------------- ---------------- ----------------
36. Scott 22 Adaptive Transmit Levels for Modems 3/21/96 08/619149
Operating Over Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 2 of 2
<PAGE> 39
APPENDIX A
NON-CAP A-PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
1. GEORGOPULOS 1 1/17/95 D354500 3/10/93 MODEM HOUSING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
2. CRAFT 1-11 6/18/91 5025211 12/20/89 TECHNIQUE FOR REDUCING
ELECTROMAGNETIC INTERFERENCE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
3. BREMER 14 1/14/92 5081647 1/6/89 COMMUNICATION OF A VOICE SIGNAL VIA
CONTINUOUS QUADRATURE AMPLITUDE
MODULATOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
4. BETTS 35 4/7/92 5103227 9/26/90 MODULUS CONVERTER FOR FRACTIONAL RATE
ENCODING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
5. BETTS 37-4 4/14/92 5105443 5/29/90 INBAND CODING OF SECONDARY DATA
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
6. BETTS 40-2 4/27/93 5206854 9/24/91 DETECTING LOSS OF ECHO CANCELLATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
7. BETTS 36-16 7/20/93 5230010 9/26/90 FRACTIONAL RATE MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
8. BETTS 38-12 9/7/93 5243627 8/22/91 SIGNAL POINT INTERLEAVING TECHNIQUE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
9. SHAW 4 10/5/93 5251328 12/20/90 PREDISTORTION TECHNIQUE FOR
COMMUNICATIONS SYSTEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
10. BETTS 39-25 11/23/93 5265127 9/3/91 NON-LINEAR ENCODER AND DECODER FOR
INFORMATION TRANSMISSION THROUGH
NON-LINEAR CHANNELS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
11. BETTS 42-17 1/18/94 5280503 1/13/92 DATA COMMUNICATION SYSTEM WITH DATA
RATE THROTTLING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
12. BETTS 41-5 3/1/94 5291521 1/31/92 INDEX ASSIGNMENT IN REDUNDANCY -
DOCED DATA COMMUNICATION SYSTEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
13. ARCHIBALD 4/5/94 5301246 7/29/92 DATA COMMUNICATIONS EQUIPMENT
2-1-2 SECURITY DEVICE USING CALLING PARTY
DIRECTORY NUMBER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
14. BETTS 44-1 5/10/94 5311557 7/10/92 CIRCULAR LIMITER FOR USE IN A
RECEIVER TO REDUCE THE EFFECTS OF THE
SIGNAL DISTORTION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
15. BREMER 5/10/94 5311578 5/7/92 TECHNIQUE FOR AUTOMATIC
18-5-1-16 IDENTIFICATION OF A REMOTE MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
16. SCOTT 3-3 5/10/94 5311596 8/31/92 CONTINUOUS AUTHENTICATION USING AN
IN-BAND OR OUT-OF BAND SIDE CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
17. BETTS 45-10-26 8/30/94 5343500 7/9/92 NON-LINEAR ENCODER AND DECODER FORM
INFORMATION TRANSMISSION THROUGH
NON-LINEAR CHANNELS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
18. SCOTT 4 9/20/94 5349635 11/19/92 HALF-DUPLEX OR FULL-DUPLEX AUTOMODE
OPERATION FOR USE IN DATA
COMMUNICATIONS EQUIPMENT
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
19. HUNT 2-3 11/1/94 5361259 2/19/93 A WIDE AREA NETWORK (WAN) ARRANGEMENT
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
20. ARCHIBALD 11/29/94 5369703 10/18/91 COMMAND AND CONTROL SIGNALLING METHOD
1-1-4 AND APPARATUS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
21. RASMUSSEN 1 12/13/94 5373149 2/1/93 FOLDING ELECTRONIC CARD ASSEMBLY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 1 OF 3
<PAGE> 40
APPENDIX A
NON-CAP A-PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
22. SCOTT 5 2/28/95 5394392 12/14/92 METHOD FOR TRANSFERRING INFORMATION
USING MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
23. SCOTT 6 3/7/95 5396486 12/17/92 DATA COMMUNICATIONS EQUIPMENT
INTERFACE LEADS TO SIGNAL HALF-DUPLEX
OR FULL-DUPLEX OPERATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
24. BETTS 51-17 3/7/95 5396519 10/22/93 METHOD AND APPARATUS FOR ADAPTIVELY
PROVIDING PRECODING AND PREEMPHASIS
CONDITIONING TO SIGNAL DATA FOR
TRANSFER OVER A COMMUNICATION CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
25. BREMER 27-7-4 7/25/95 5436930 6/14/93 SIMULTANEOUS ANALOG AND DIGITAL
COMMUNICATIONS WITH A SELECTION OF
DIFFERENT SIGNAL POINT CONSTELLATIONS
BASED ON SIGNAL ENERGY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
26. HENDERSON 1-1 8/22/95 5444704 8/12/91 DIAL RESTORAL METHOD AND APPARATUS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
27. BREMER 25-5-7 9/5/95 5448555 6/14/93 SIMULTANEOUS ANALOG AND DIGITAL
COMMUNICATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
28. LANDRY 1-2-7 9/12/95 5450438 7/26/93 1200 BIT PER SECOND FALLBACK METHOD
FOR USE IN MOBILE RADIO
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
29. GEORGOPULOS 10/10/95 5457601 12/8/93 CREDIT CARD-SIZED MODEM WITH
3-3 MODULAR DAA
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
30. CHAPMAN 3-10 12/5/95 5473675 11/12/93 CALL ESTABLISHMENT FOR SIMULTANEOUS
ANALOG AND DIGITAL COMMUNICATIONS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
31. CHAPMAN 4-13 12/12/95 5475691 11/15/93 VOICE ACTIVATED DATA RATE CHANGE IN
SIMULTANEOUS VOICE AND DATA
TRANSMISSION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
32. BETTS 54-19 12/12/95 5475711 9/14/94 SYSTEM FOR CHANNEL CAPACITY MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
33. BREMER 22-3-3 12/12/95 5475713 6/14/93 SHAPED SIGNAL SPACES IN A
SIMULTANEOUS VOICE AND DATA SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
34. SCOTT 11 12/26/95 5479480 12/30/93 DUAL MODE CELLULAR MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
35. ARCHIBALD 3-1 12/26/95 5479650 12/24/92 METHOD AND APPARATUS FOR SWITCHING
COMMUNICATIONS FROM A SECONDARY
CHANNEL TO A PRIMARY CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
36. BETTS 52-18 1/2/96 5481567 9/12/94 METHOD AND APPARATUS FOR
AUTOMATICALLY ADAPTING THE AMOUNT OF
WARPING IN A SYSTEM TRANSMITTING
INFORMATION THROUGH A NON-LINEAR
CHANNEL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
37. BREMER 4/9/96 5506866 11/15/93 SIDE-CHANNEL COMMUNICATIONS IN
31-12-11-2 SIMULTANEOUS VOICE AND DATA
TRANSMISSION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
38. BREMER 32 4/30/96 5513212 11/15/93 CONVERSION OF A FAX MODULATION TO A
DATA TRANSMISSION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
39. PATEL 5-14 5/30/96 5513213 3/27/95 DATA DRIVEN AUTORATING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 2 OF 3
<PAGE> 41
APPENDIX A
NON-CAP A-PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
40. BETTS 5/28/96 5521942 6/14/93 A METHOD FOR INCREASING THE DYNAMIC
47-20-6-15 RANGE OF A SIGNAL IN A SIMULTANEOUS
VOICE AND DATA SYSTEM BY THE USE OF
OVERLAPPING SIGNAL POINT REGIONS AND
TRELLIS CODING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
41. ASHLEY 2-2 6/18/96 5528630 4/20/94 COUPLER FOR COMMUNICATION SYSTEMS
WHICH UTILIZE MORE THAN ONE FREQUENCY
BAND
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
42. MASSINI 1-1 7/9/96 5533663 11/21/94 SOLDER WAVE MEASUREMENT DEVICE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
43. BOTTOMS 7/16/96 5537436 6/14/93 SIMULTANEOUS ANALOG AND DIGITAL
6-29-1-2-9-1-4-8 COMMUNICATION APPLICATIONS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
44. BREMER 7/16/96 5537441 6/14/93 CONTROLLED SIMULTANEOUS ANALOG AND
30-2-2-7-10-5 DIGITAL COMMUNICATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
45. BEDINGFIELD 7/16/96 5537654 4/20/94 PCMCIA INTERFACE USING SHARED MEMORY
1-1
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
46. MASSINI 2-2 7/23/96 5538175 11/21/94 ADJUSTMENT OF SOLDER WAVE PROCESS IN
REAL TIME
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
Page 3 of 3
<PAGE> 42
APPENDIX A
PARADYNE NON-CAP PATENT APPLICATIONS
<TABLE>
<CAPTION>
- -------- ---------------- ------------------------------------- ---------------- ----------------
No. Case Name Title Filing Date Serial No.
- -------- ---------------- ------------------------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
1. Betts 58-1-18 Echo Canceling Method and Apparatus 9/29/95 08/536908
for Data Over Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
2. Betts 59-2-19 Echo Canceling Method and Apparatus 9/29/95 08/536916
for Data Over Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
3. Betts 60-21 Echo Canceler Gain Tracker for 9/29/95 08/536917
Cellular Modems
- -------- ---------------- ------------------------------------- ---------------- ----------------
4. Betts 61-22 Echo Cancellation for Modems 11/14/95 08/557635
- -------- ---------------- ------------------------------------- ---------------- ----------------
5. Betts 62-23 Echo Cancellation for Modems 11/14/95 08/557634
- -------- ---------------- ------------------------------------- ---------------- ----------------
6. Betts 63-5 Interpolation System for Fixed 12/22/95 08/577786
Sample Rate Signal Processing
- -------- ---------------- ------------------------------------- ---------------- ----------------
7. Buck 1-1 Self Locking and Ejecting RJ-11 Plug 9/15/95 08/528819
- -------- ---------------- ------------------------------------- ---------------- ----------------
8. Holmquist 18 A Transparent Technique for 5/31/95 08/457881
"Mu-law" Modems to Detect Mutual
Connection Via an All Digital
Circuit
- -------- ---------------- ------------------------------------- ---------------- ----------------
9. Ko 20 Speech Silence Detection Using 4/12/95 08/420466
Autocorrelation Coefficients
- -------- ---------------- ------------------------------------- ---------------- ----------------
10. Moore 3 Time-division Multiple-access 7/31/95 08/509309
Method for Packet Transmission on
Shared Synchronous Serial Buses
- -------- ---------------- ------------------------------------- ---------------- ----------------
11. Scott 16 Error Control Negotiation Based on 5/31/95 08/458048
Modulation
- -------- ---------------- ------------------------------------- ---------------- ----------------
12. Scott 17 The Use of Compression to Improve 12/18/95 08/573700
the Sending of Faxes over Analog
Cellular
- -------- ---------------- ------------------------------------- ---------------- ----------------
13. Scott 20 An Improved Method for Sending 12/18/95 08/573739
Faxes Over Wireless Llinks
- -------- ---------------- ------------------------------------- ---------------- ----------------
</TABLE>
Page 1 of 1
<PAGE> 43
APPENDIX A
PARADYNE NON-CAP PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
No. Case Name Issue Patent No. Filing Title
Date Date
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
1. KORZIK 1 1/23/84 D272340 5/11/81 HOUSING FOR PRINTED CIRCUIT BOARDS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
2. KORZIK 3-3-1-1 3/27/84 D273189 8/12/81 DISPLAY TERMINAL
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
3. ARMSTRONG 1 6/2/81 4271527 8/31/79 DOUBLE SIDE BAND-QUADRATURE CARRIER
MODULATION SIGNAL STRUCTURES
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
4. ARMSTRONG 2 6/16/81 4273955 3/2/79 ERROR DETECTING AND CORRECTING SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
5. ARMSTRONG 6/15/82 4335464 1/24/80 DUAL MULTIPOINT DATA TRANSMISSION
3-1-1 SYSTEM MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
6. ARMSTRONG 4 2/15/83 4374436 10/17/80 SYSTEM FOR THE MONITORING AND
RESTORATION OF SERIES TERMINALS IN A
LOOPED COMMUNICATION SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
7. ARMSTRONG 5 4/26/83 4381546 3/2/79 SYSTEM FOR THE QUANTITATIVE
MEASUREMENT OF IMPAIRMENTS IN THE
COMMUNICATION CHANNEL OF A QUADRATURE
AMPLITURE MODULATION DATA
COMMUNICATION SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
8. BETTS 2-1 6/28/83 4390843 2/9/81 TELEPHONE SYSTEM RING PERIOD DETECTOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
9. WISSMAN 1 2/8/83 4396239 3/10/81 INTERLOCK MECHANISM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
10. BALLENTINE 1 2/28/84 4434378 11/6/81 D.C. POWER MONITOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
11. KORZIK 2-2 3/20/84 4437717 9/28/81 RACK MOUNTABLE PRIMARY POWER AC PLUG
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
12. BREMER 2 8/7/84 4464767 9/8/81 SYSTEM FOR GENERATION OF MULTIPLE
POINTED QAM SIGNAL SPACES BY USE OF
SYNCHRONOUS QAM TRANSMITTERS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
13. BREMER 3-1 3-5-85 4503545 10/28/81 SYSTEM FOR EVALUATING TRANSMISSION
LINE IMPAIRMENTS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
14. BREMER 4-3 4/2/85 4509171 12/8/82 MODEM MULTIPLEXER SYNCHRONIZATION BY
RADIAL MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
15. ARMSTRONG 6 5/7/85 4516216 5/10/82 IN-SERVICE MONITORING SYSTEM FOR DATA
COMMUNICATIONS NETWORK
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
16. BETTS 4-1 5/14/85 4517680 2/23/83 ERROR VECTOR NORMALIZER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
17. BREMER 5-5-1 6/25/85 4525846 12/27/82 MODEM IN-BAND SECONDARY CHANNEL VIA
RADIAL MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
18. BREMER 6 6/25/85 4525847 11/10/82 QAM ENCODER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
19. BREMER 7-6-2 7/30/85 4532640 8/12/82 MODEM IN-BAND SECONDARY CHANNEL VIA
RADIAL MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
20. MARTINEZ 3-7 8/6/85 4534026 12/6/83 NORMALIZED ERROR COMPENSATOR FOR
MODEMS USING RADIAL AMPLITUDE
MODULATION FOR MULTIPLEXING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 1 OF 4
<PAGE> 44
APPENDIX A
PARADYNE NON-CAP PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
NO. CASE NAME ISSUE PATENT NO. FILING TITLE
DATE DATE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
21. BETTS 8-4 8/6/85 4534036 12/8/82 PHASE TRACKING LOOP IMPAIRMENT
MONITOR FOR MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
22. SANDBERG 1-1 8/13/85 4535452 2/29/84 MULTI-MODEM VARIABLE PART
DEMULTIPLEXER SYNCHRONIZATION ADAPTER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
23. BETTS 9-5 11/26/85 4555790 6/30/83 DIGITAL MODEM HAVING A MONITOR FOR
SIGNAL-TO-NOISE RATIO
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
24. ARMSTRONG 7 12/10/85 4558317 11/17/82 DIGITAL COMMUNICATION LINK MONITORING
DEVICE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
25. BETTS 10-2-1 9/16/86 4612509 1/13/83 FREQUENCY SHIFT KEYED DEMODULATOR
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
26. ARMSTRONG 8 12/2/86 4627077 12/3/84 MODIFIED QAM DATA POINT CONSTELLATION
FOR SECONDARY CHANNEL SIGNALLING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
27. BETTS 11 12/16/86 4630286 10/10/84 DEVICE FOR SYNCHRONIZATION OF
MULTIPLE TELEPHONE CIRCUITS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
28. ARMSTRONG 9 12/16/86 4630287 6/25/85 SECONDARY CHANNEL SIGNALLING IN A QAM
DATA POINT CONSTELLATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
29. BETTS 12-1 12/23/86 4631738 12/6/84 GAIN TRACKER FOR DIGITAL MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
30. BETTS 13-2 12/30/86 4633485 3/8/85 ADAPTIVE NOISE SUPPRESSION FOR
DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
31. BETTS 14 1/13/87 4637035 2/16/84 DIGITAL MODEM FOR MULTIPLE TELEPHONE
CIRCUITS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
32. ZURANSKI 1/27/87 4639934 4/11/85 LINE IMPAIRMENT DISPLAY FOR DIGITAL
3-1-15 MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
33. BREMER 2/24/87 4645871 6/17/85 NON-INTERFERING IN-BAND
8-10-1-1 PROTOCOL-INDEPENDENT DIAGNOSTIC
SCANNING IN A DIGITAL MULTIPOINT
COMMUNICATION SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
34. ZURANSKI 4-6 2/24/87 4646325 4/15/85 INDEX DECODER FOR DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
35. BREMER 9 3/31/87 4654807 12/6/83 METHOD FOR MEASURING COMMUNICATION
CHANNEL IMPAIRMENT IN POLLING
APPLICATIONS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
36. BREMER 10 5/5/87 4663766 10/10/84 METHOD OF DETERMINING AUTOMATICALLY
THE RATE OF THE DATA SIGNALS IN A
MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
37. BETTS 16-7 5/26/87 4669090 7/5/75 HALF-DUPLEX MODEM WITHOUT TURNAROUND
DELAY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
38. BETTS 17-8 6/30/87 4677624 3/1/85 SELF-SYNCHRONIZING DE-INTERLEAVER FOR
VITERBI DECODER USED IN WIRELINE
MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
39. BETTS 18-9-11 6/30/87 4677625 3/1/85 DISTRIBUTED TRELLIS ENCODER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
40. BETTS 19-10 6/30/87 4677626 3/1/85 SELF-SYNCHRONIZING INTERLEAVER FOR
TRELLIS ENCODER USED IN WIRELINE
MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
41. BETTS 20-5 7/28/87 4683578 7/5/85 AUTOMATIC GAIN CONTROL USING THE
EXTREME POINTS OF A CONSTELLATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
42. MARTINEZ 11-1 11/24/87 4709377 3/13/85 VITERBI DECODER FOR WIRELINE MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 2 OF 4
<PAGE> 45
APPENDIX A
PARADYNE NON-CAP PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
NO. CASE NAME ISSUE PATENT NO. FILING TITLE
DATE DATE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
43. HOLMQUIST 2 3/15/88 4731843 12/30/85 METHOD AND DEVICE OF INCREASING THE
EXECUTION SPEED OF CIPHER FEEDBACK
MODE OF THE DES BY AN ARBITRARY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
44. BETTS 21 3/29/88 4734920 10/10/84 HIGH SPEED MODEM FOR MULTIPLE
COMMUNICATION CIRCUITS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
45. BETTS 22-12 5/10/88 4744092 7/5/75 TRANSPARENT ERROR DETECTION IN HALF
DUPLEX MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
46. MARTINEZ 13-23 6/21/88 4752943 8/7/87 FREQUENCY OF OCCURRENCE RETRAINING
DECISION CIRCUIT
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
47. BETTS 24-6 9/13/88 4771232 1/4/88 NON-INTERRUPTIVE SPECTRUM ANALYZER
FOR DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
48. BETTS 25-14 1/3/89 4796279 6/30/87 SUBRATE PREAMBLE DECODER FOR A HIGH
SPEED MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
49. MOORE 1 1/10/89 4797815 11/22/85 INTERLEAVED SYNCHRONOUS BUS ACCESS
PROTOCOL FOR A SHARED MEMORY
MULTI-PROCESSOR SYSTEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
50. ARMSTRONG 11 1/10/89 4797878 8/18/87 MULTIPLE VIRTUAL MULTIPOINT MODEM
USING TDM/TOKEN THROWING TECHNIQUE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
51. LBETTS 26-7 3/7/89 4811357 1/4/88 SECONDARY CHANNEL FOR DIGITAL MODEMS
USING SPREAD SPECTRUM SUBLIMINAL
INDUCED MODULATION
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
52. BOTTOMS 2-1 3/21/89 4815105 4/7/87 SELECTIVE SIGNALLING ENCODER/ DECODER
FOR MULTIPOINT DATA COMMUNICATION
NETWORKS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
53. ZURANSKI 5/23/89 4833690 8/18/87 REMOTE EYE PATTERN DISPLAY FOR
8-1-1-27 DIGITAL MODEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
54. LAROWE 1 8/22/89 4860009 2/12/88 BIDIRECTIONAL MULTIFRAME CONVERTER
FOR DATA COMMUNICATIONS SYSTEMS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
55. BETTS 28-9 8/28/89 4862464 12/30/87 DATA ERROR DETECTOR FOR DIGITAL
MODEMS USING TRELLIS CODING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
56. HOLMQUIST 3 9/5/89 4864617 7/15/87 SYSTEM AND METHOD FOR REDUCING
DEADLOCK CONDITIONS CAUSED BY
REPEATED TRANSMISSION OF DATA
SEQUENCES EQUIVALENT TO THOSE USED
FOR INTER-DEVICE SIGNALLING
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
57. BOTTOMS 3-4 2/6/90 4898547 7/30/85 HYBRID INTERFACE ADAPTER
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
58. BREMER 12-29 5/8/90 4924516 5/23/89 METHOD AND SYSTEM FOR A SYNCHRONIZED
PSEUDO-RANDOM PRIVACY MODEM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
59. KING 1 6/26/90 4937819 9/26/88 TIME ORTHOGONAL MULTIPLE VIRTUAL DCE
FOR USE IN ANALOG AND DIGITAL NETWORKS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
60. BETTS 30-15 7/3/90 4939748 8/7/87 UNOBSTRUSIVE SIGNATURE FOR MODULATED
SIGNALS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
61. BETTS 53-9-17 12/18/90 4979184 5/9/89 AUTOMATIC EQUALIZER INITIALIZATION
TIME CONTROL FOR MULTIPOINT NETWORKS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
62. BETTS 31-1 4/16/91 5008903 5/25/89 ADAPTIVE TRANSMIT PRE-EMPHASIS FOR
DIGITAL MODEM COMPUTED FROM NOISE
SPECTRUM
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
PAGE 3 OF 4
<PAGE> 46
APPENDIX A
PARADYNE NON-CAP PATENTS
<TABLE>
<CAPTION>
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
NO. CASE NAME ISSUE PATENT NO. FILING TITLE
DATE DATE
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
63. BETTS 34-15 3/24/92 5099478 5/23/89 COMMUNICATION OF SECONDARY CHANNEL
BYTE IN A SYNCHRONOUS MODEM WITHOUT
STATISTICAL UNCERTAINTY
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
64. BREHMER 1-3 10/5/93 5251236 4/5/91 FRACTIONAL RATE MODEM WITH TRELLIS
- ------- --------------- ---------- ----------- ---------- ---------------------------------------
</TABLE>
Page 4 of 4
<PAGE> 47
APPENDIX B-1
PARADYNE TRADEMARKS
<TABLE>
<CAPTION>
- -------------------- ------------------ -------------- ------------ -------------
TRADEMARK COUNTRY NAME APPLICATION REGISTRATION STATUS
NUMBER NUMBER
- -------------------- ------------------ -------------- ----------- --------------
<S> <C> <C> <C> <C>
INFORMATION VENDING UNITED STATES OF 74634791 PENDING
ENCRYPTION AMERICA
- -------------------- ------------------ -------------- ----------- --------------
NETCARE BRAZIL 816542953 816542953 REGISTERED
- -------------------- ------------------ -------------- ----------- --------------
NETCARE CANADA 566954 340698 REGISTERED
- -------------------- ------------------ -------------- ----------- --------------
NETCARE JAPAN 119798186 2145918 REGISTERED
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED KINGDOM 1390275 PENDING
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED KINGDOM 1390276 PENDING
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED STATES OF 584594 1340553 REGISTERED
AMERICA
- -------------------- ------------------ -------------- ----------- --------------
NETCARE UNITED STATES OF 603532 1425919 REGISTERED
AMERICA
- -------------------- ------------------ -------------- ----------- --------------
</TABLE>
Page 1 of 1
<PAGE> 48
APPENDIX B-2
TRADEMARK ASSIGNMENT AGREEMENT
(AT&T PARADYNE CORPORATION to LUCENT TECHNOLOGIES INC.)
THIS TRADEMARK ASSIGNMENT AGREEMENT, made and effective as of the Closing
Date by AT&T PARADYNE CORPORATION ("PARADYNE"), a Delaware corporation, and
LUCENT TECHNOLOGIES INC. ("LUCENT"), a Delaware corporation.
WHEREAS, PARADYNE, on the effective day hereof, has adopted, used,
registered or applied to register in certain countries throughout the world
certain trademarks and service marks as set forth in Appendix B-1 (collectively,
the "PARADYNE Marks"); and
WHEREAS, PARADYNE wishes to transfer to LUCENT and LUCENT wishes to acquire
the PARADYNE Marks.
NOW, THEREFORE, the PARADYNE and LUCENT agree as follows:
1. For good and valuable consideration, the receipt of which is hereby
acknowledged, PARADYNE hereby assigns and conveys to LUCENT all its right, title
and interest in and to the PARADYNE Marks, together with the goodwill of the
business symbolized by the PARADYNE Marks.
2. This Trademark Assignment Agreement is intended in original and in
certified copy to be filed with the competent domestic and foreign institutions,
together with an application for assignment of the corresponding registrations
and applications for registrations.
3. Should the filing of this document be insufficient for the assignment
of the proprietary rights and applications for proprietary rights, both parties
hereto shall execute all reasonable documents and perform all other acts
necessary to effect transfer of the PARADYNE Marks.
4. LUCENT shall bear the costs arising out of or in connection with the
implementation of the assignments contained herein.
AT&T PARADYNE CORPORATION LUCENT TECHNOLOGIES INC.
By: By:
---------------------------------- ------------------------------------
Its: Its:
--------------------------------- -----------------------------------
Date: Date:
-------------------------------- ----------------------------------
Page 1 of 2
<PAGE> 49
NOTARIAL CERTIFICATIONS
I, a Notary Public, certify that on ___________, 1996, before me personally
appeared ______________________, to me known to be an Authorized Signatory of
AT&T PARADYNE CORPORATION and that he executed the foregoing Trademark
Assignment Agreement.
.................
.................
.................
I attest:
Signed in:
Dated:
Notary Public "Official Seal"
- ----------------------------
Signature of Notary Public
* * *
I, a Notary Public, certify that on ___________, 1995, before me personally
appeared ______________________, to me known to be an Authorized Signatory of
LUCENT TECHNOLOGIES INC., and that he executed the foregoing Trademark
Assignment Agreement.
.................
.................
.................
I attest:
Signed in:
Dated:
Notary Public "Official Seal"
- ----------------------------
Signature of Notary Public
Page 2 of 2
<PAGE> 50
APPENDIX C
PARADYNE PRODUCTS
o GENESIS AND GENEVA FAMILY (3800/3900)
o Triple modem nest for the 3000 Carrier
o Synchronous data compression
o Integrated Diagnostics
o Mocha and Hypermodem
o DEVER FAMILY - SUBRATE DIGITAL LEASE LINE (3600/3500)
o ISDN DBM
o V.34 DBM
o Extended Range
o Autorate
o Cross Pair Detection
o Integrated Diagnostics
o Multiplexor Options
o Paddle Cards
o 64k/128k NTU's
o SPINNAKER FAMILY - T1/E1/HDSL CSU & DSU (31XX,33XX)
o ASCII Interface Redesign
o TCP & Telnet
o Device Specific SNMP MIBs
o Voice Compression
o International Power
o Integrated Diagnostics
o Optical Interface
o CARIBBEAN SUBRATE FAMILY - DDS FRAME RELAY
o Aruba - DDS Frame Relay
o Frame Relay Aware/Frame Relay Aggregation
o Synchronous Data Compression
o BRI DBM
o FTP Down Line Load
o 14 Slot Nest
o FRAD
o PCMCIA Management Interfaces
Page 1 of 5
<PAGE> 51
o Cost Reduction (Antigua)
o Curacao - DDS Frame Relay Edge Router
o Single Card Router with 1-port Native Element DTE
o Supports above Aruba Functionality
o CARIBBEAN NxDSO FAMILY - T1/E1
o Barbados - T1/FT1 Low End Multiplexor & DSU
o SNMP, Telnet, TCP
o PRI
o 5 Slot Carrier
o 2 Slot Stand Alone Package
o 14 Slot Nest
o Single T1 Leased Line NAM with DSX, with 2 ports
o Dual T1 Leased Line NAM without DSX, no ports
o Dual DSX APM without ports
o PCMCIA Management (via Ethernet or Token Ring LAN, V.34)
o 8-port FXS, FSO, or E&M Voice APM
o Voice Compression APM
o 4-port Synchronous Data APM
o Synchronous Data Compression APM
o 6-port OCU APM
o 5-port SRU APM
o 6-port Management Interface APM
o 4-port BRI APM
o 8-port 4.34 Modem Pool APM
o Martinique - E1/FE1 Low End Multiplexor & DSU
o Dual E1 Leased Line NAM with ports
o Dual E1 Leased Line NAM without ports
o Support for above Barbados configurations and options
o Trinidad - T1/FT1 Frame Relay DSU
o SNMP, Telnet, TCP
o 2 Slot Stand Alone Package
o 14 Slot Nest
o T1 Frame Relay NAM with DSX, with 2 ports
o BRI DBM
o Frame Relay Aware, Frame Relay Aggregation with
Compression APM
Page 2 of 5
<PAGE> 52
o FRAD APM
o HEARTLAN FAMILY - LOW END/LOW COST SUBRATE AND T1
o Beagle - Subrate Leased Line DSU
o DDS NI with 1 port
o SNMP, Telnet, TCP
o Ethernet Management Interface
o Greyhound - T1/FT1 Leased Line DSU
o T1/FT1 NI without DSX, with 1 port
o T1/FT1 NI with DSX, with 1 port
o T1/FT1 NI with DSX, with 2 ports
o SNMP, Telnet, TCP
o With or without Ethernet Management Interface
o Poodle - V.11 NTU
o 64k V.11 NI with 1 port DTE
o 64k V.11 NI with 5 port DTE, with X.50
o SYSTEM PRODUCTS
o ADSL/SDSL/HDSL/VDSL/RADSL PC Cards, Workstation Interface Cards,
and Stand Alone "Modems"
o Open Access Gateway (Multiplexor)
o Central Site Concentrators for ADSL/SDSL/HDSL/VDSL/
RADSL lines
o xDSL with packet or cell protocols
o TDM extensions
o Modem Pool extensions for analog, mu-law, ISDN
o Service Translation for broadband, video transmission
o Acculink Access Controller (AAC) Cards
o Direct Interface with Digital Access Cross Connect
System (DACS)
o Modem Pool
o TDM Access Multiplexor
o HAWK - REMOTE ACCESS AND TELECOMMUTING SERVER
o V.34, V.34Q and ISDN BRI Remote Access Port Concentrators
o T1 PRI Network Interface
o Windows NT
o Novell
o Temporary Office Extensions
Page 3 of 5
<PAGE> 53
o Remote Office Extensions
o High Card Density (16 ports OCD)
o Very High Card Density (30 ports OCD)
o Mocha and Hypermodem
o E1 Interface
o WIRELESS SYSTEMS
o ETC2 for Wireless Data Gateway, Hawk and Open Access Gateway
o CDPD and PCS protocols (TDMA, CDMA, GSM)
o SOFTWARE PRODUCTS
o Network Management System Applications for all Present Paradyne
Products and Other Products Listed Herein
o Element Management Applications for all Present Paradyne Products
and Other Products Listed Herein
o Extended Leased Line Network Management Applications on HP
Openview and IBM SystemView
o Performance Management Applications for all Present Paradyne
Products and Other Products Listed Herein, on HP Openview and IBM
SystemView
o Service Management Applications for all Present Paradyne Products
and Other Products Listed Herein, on HP Openview and IBM
SystemView
o TL-1 Interface for HP Openview and IBM SystemView o CMIP/SNMP
Wrappers for HP Openview and IBM SystemView
o The following products are to be assessed in January, 1997. The commercial
development status of each product will be determined and such product
will be added to this Appendix C if the product is either
o (I) at the time of assessment under development for a scheduled
commercial release, or
o (II) firmly committed for development to begin no later than
March 31, 1997 for a scheduled commercial release; in this case,
the product is added to this Appendix C only to the extent that
such development does begin before March 31
o The products to be assessed are
o The following modules for CARIBBEAN NxDSO
o ATM NAM
o Encryption APM
o Security APM
o Cayman - FT3 ATM DSU
o ATM Access Multiplexor
o The following modules for Open Access Gateway
Page 4 of 5
<PAGE> 54
o POTS Splitting
o Encryption
o Security
Page 5 of 5
<PAGE> 55
APPENDIX D
THIRD PARTY LICENSES
1. Alcatel N.V.
2. Analog Devices, Inc.
3. Applied Materials, Inc.
4. Chartered Semiconductor Manufacturing, PTE
5. Cypress Semiconductor Corporation
6. Fraunhoffer-Gesellschaft
7. The General Electric Company, p.l.c.
8. Hayes Microcomputer Products, Inc.
9. Hewlett-Packard Company
10. Hitachi, Ltd.
11. Integrated Device Technology, Inc.
12. Kokusai Denshin Denwa Co., Ltd.
13. Linear Technology Corp.
14. Matsushita Electric Industrial Co., Ltd.
15. NEC
16. Nippon Telegraph and Telephone Corp.
17. OKI Electric
18. Olivetti
19. Phillips' Gloeilampenfabrieken
20. Penril Datacomm Networks, Inc.
21. Rockwell International Corporation
22. Samsung Electronics Company, Ltd.
23. Sanyo Electric Co., Ltd.
24. Seeq Technology, Inc.
25. Siemens Aktiengesellschaft
26. Silicon Systems Incorporated
27. Sony Corporation
28. Sumitomo Electric Industries, Ltd.
29. VLSI Technology, Inc.
30. VMX/Octel
Page 1 of 1
<PAGE> 56
APPENDIX E
IMMUNITY PATENTS AND APPLICATIONS
CAP TECHNOLOGY
<TABLE>
<CAPTION>
- ----------------- ---------------------------------------------------------------- --------------
PATENT NUMBER TITLE AUTHOR
- ----------------- ---------------------------------------------------------------- --------------
<S> <C> <C>
4,247,940 Equalizer for complex data signals Mueller et al
- ----------------- ---------------------------------------------------------------- --------------
4,304,962 Data Scrambler Fracassi et al
- ----------------- ---------------------------------------------------------------- --------------
4,464,545 Echo canceller Werner
- ----------------- ---------------------------------------------------------------- --------------
4,483,012 Differentially convolutional channel coding with expanded set Wei
of signaling
- ----------------- ---------------------------------------------------------------- --------------
4,651,320 Inband Coding Of Secondary Data Thapar
- ----------------- ---------------------------------------------------------------- --------------
4,682,358 Echo canceller Werner
- ----------------- ---------------------------------------------------------------- --------------
4,788,694 Trellis coding with substrates Calderbank
- ----------------- ---------------------------------------------------------------- --------------
4,924,492 Method and apparatus for wideband transmission of digital Gitlin et al
signals between, for example, a telephone central office and
customer premises.
- ----------------- ---------------------------------------------------------------- --------------
4,995,057 Technique for Achieving the Theoretical Coding Gain of Digital Chung et al
Signals Incorporating Error Correction
- ----------------- ---------------------------------------------------------------- --------------
5,052,000 Technique for improving the operation of decision feedback Wang et al
equalizers in communications systems utilizing error correction
- ----------------- ---------------------------------------------------------------- --------------
5,056,117 Decision feedback equalization with trellis coding Gitlin et al
- ----------------- ---------------------------------------------------------------- --------------
5,442,626 Digital Communications System with Symbol Multiplexers Wei
- ----------------- ---------------------------------------------------------------- --------------
RE 31253 Echo cancellation in two-wire, two-way data transmission Weinstein
systems
- ----------------- ---------------------------------------------------------------- --------------
5,488,633 Intersymbol Interference Channel Coding Scheme Laroia
- ----------------- ---------------------------------------------------------------- --------------
5,483,551 Crosstalk Suppression Technique Huang et al
- ----------------- ---------------------------------------------------------------- --------------
5,521,949 Synchronization Scheme for Digital Communications Systems Huang et al
Transporting Data at a Customer-Controlled Rate
- ----------------- ---------------------------------------------------------------- --------------
5,528,686 Transformerless Hybrid Circuit having Direct Powered Line-Side Cwynar et al
Amplifiers
- ----------------- ---------------------------------------------------------------- --------------
08/215562 Signal Constellation Time Division Multiplexing Chung et al
- ----------------- ---------------------------------------------------------------- --------------
4,800,573 Equalization Arrangement Cupo 3
- ----------------- ---------------------------------------------------------------- --------------
5,214,656 Multiplexed Coded Modulation Chung et al
- ----------------- ---------------------------------------------------------------- --------------
5,371,762 Technology using Signal Storing Devices Amrany et al
- ----------------- ---------------------------------------------------------------- --------------
- ----------------- ---------------------------------------------------------------- --------------
5,406,586 Signal correlation Technique Wang-12
- ----------------- ---------------------------------------------------------------- --------------
08/322878 Hybrid Equalizer Arrangement for DEI Wang-14
- ----------------- ---------------------------------------------------------------- --------------
08/547584 Signal Constellation TDM Arrangement Chung,
Sorbara
- ----------------- ---------------------------------------------------------------- --------------
5,428,608 Call Connector Technique Freeman et al
- ----------------- ---------------------------------------------------------------- --------------
5,440,585 Applications of Simultaneous Analog and Digital Communications Partridge
- ----------------- ---------------------------------------------------------------- --------------
08/453855 Simultaneous Analog and Digital Communication Bremer et al
- ----------------- ---------------------------------------------------------------- --------------
</TABLE>
ETC(R) TECHNOLOGY:
None
Page 1 of 1
<PAGE> 57
APPENDIX F
Known Reexaminations and Other
Patent #5280526 is being reexamined.
Patent #5448555 is subject to an interference.
Page 1 of 1
<PAGE> 58
APPENDIX G
MEMBERS OF "KNOWLEDGE" GROUP
Donald Cooper
John Brown
Lawrence Chamberlin
William Patchett
James Slattery
Gary Willman
Barry Black
Roberta Cohen
David Greenblott
Rich Musgrave
Gabe Torak
Frank Weiner
Thomas Arnold
John Berndt
W. Preston Granbery
Doug Hotchkiss
William Osl
Joseph Opalach
Page 1 of 1
<PAGE> 59
APPENDIX H
Certain Legal Proceedings
See Exhibit OO in the purchase agreement.
Page 1 of 1
<PAGE> 1
Exhibit 10.23
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
OEM AGREEMENT
This Agreement is made on March 16, 1999 ("Effective Date") by and between XYLAN
CORPORATION, a California Corporation with offices at 26707 West Agoura Rd.,
Calabasas, California 91302 ("Xylan"), and PARADYNE CORPORATION with offices at
8545 126th Avenue North, Largo, Florida 33773 ("Buyer"), under which Xylan will
sell and Buyer will purchase certain computer hardware and software.
1. RESALE RIGHTS
Subject to the terms of this Agreement, Xylan grants to Buyer a
non-exclusive, non-transferable worldwide license to market,
distribute, sell, lease, rent and maintain the products identified in
Exhibit A ("Products") under Buyer's label to end-users and other
resellers. The Products shall be modified per Buyer's private label
specifications as mutually agreed in accordance with Exhibit B. Buyer
shall supply, at its expense and reasonably in advance of orders, the
necessary artwork labels and color information for the Products as more
fully described in Exhibit B.
2. PRODUCT PURCHASE AND PRICES
2.1 Price. Buyer's prices for the Products are listed in Exhibit A
in relation to Xylan's OEM Price List and are subject to the
terms contained therein. All prices specified are for Buyer as
purchaser. All Xylan prices are [***]. In lieu of [***], Buyer
[***]. Xylan shall show [***].
Xylan may [***] amend the prices on its OEM Price List from
time to time and add or remove products from the OEM Price. In
the event of a [***], Buyer's new purchase price shall [***]
of [***]. Buyer's existing backlog of open orders will be
credited the difference between the original price and the
decreased price. Xylan will notify Buyer of any price change
at least fifteen (15) days prior to said change.
2.2 Annual Delivery Period. The first Annual Delivery Period shall
commence on the Effective Date and shall last twelve (12)
months. Subsequent Annual Delivery Periods shall begin at the
end of each Annual Delivery Period and last for the next
twelve (12) months.
2.3 Forecast. On the Effective Date of this Agreement and no later
than the first day of each calendar month thereafter, Buyer
will provide Xylan a written, non-binding detailed forecast
setting forth buyer's anticipated monthly needs for the
Products during the four (4) calendar month period following
the issuance of the forecast. This forecast is to be sent to
Xylan at the address indicated in Section 17, to the attention
of OEM Program Manager.
2.4 Under GSA Schedule Agreements, distributors are required to
guarantee to their resellers that the prices proposed for
products will not increase during the term of the GSA
Agreement except where the product cost is authorized to be
raised by official GSA modification utilizing the economic
price adjustment
- ----------------------------
* Confidential Treatment Requested
Page 1
<PAGE> 2
clause. Xylan agrees to support this guarantee for any
agreements that Buyer may enter into for sale of Product(s) to
a GSA distributor or reseller during the term of this
Agreement and any extensions thereof.
3. RESCHEDULING AND CANCELLATION
3.1 Rescheduling. Buyer may, [***] reschedule the delivery date of
a purchase order by giving Xylan notice at least five (5) days
prior to the originally requested delivery date; provided,
such order must be rescheduled to a date not later than sixty
(60) days following the originally scheduled delivery date.
After any initial rescheduling of a purchase order, all other
rescheduling shall be subject to [***].
3.2 Cancellation. Buyer may cancel purchase orders (in whole or in
part) subject to the schedule and charges set forth in this
Section by giving written notice to Xylan. Such notice shall
be effective on the date of receipt. Buyer must pay in
accordance with Section 5 the full amount of any portion of
any Order which is not subject to rescheduling or cancellation
by Buyer.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Number of Days Prior to Scheduled Percent of Order Cancellation
Delivery Cancelable Charge
- -------------------------------------------------------------------------------
<S> <C> <C>
Less than 5 days [***] [***]
- -------------------------------------------------------------------------------
6-30 days [***] [***]
- -------------------------------------------------------------------------------
More than 30 days [***] [***]
- -------------------------------------------------------------------------------
</TABLE>
4. TERM AND TERMINATION
4.1 Term. This Agreement shall commence on the Effective Date and,
unless earlier terminated as provided herein, shall continue
for twenty-four (24) months after which this Agreement shall
automatically renew thereafter for additional one (1) year
periods unless either party gives written notice of
termination at least 60 days prior to the end of the then
current term.
4.2 Termination for Cause. Either party may terminate this
Agreement (i) if the other materially breaches any provision
of this Agreement and fails to cure such breach within thirty
(30) days of written notice describing the breach or (ii)
immediately, if Buyer materially breaches the provisions of
Section 5.
4.3 Termination for Insolvency. This Agreement may be terminated
with written notice (i)upon the institution by or against
Buyer of insolvency, liquidation, receivership, bankruptcy
proceedings, or any other proceedings for the settlement of
Buyer's debt, if such proceeding is not dismissed within
thirty (30) days; or (ii) following Buyer's making an
assignment for the benefit of creditors; or (iii) following
Buyer's dissolution.
4.4 Termination for Convenience. This Agreement may be terminated
for convenience by mutual agreement upon one hundred eighty
(180) days written notice by either party.
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4.5 Obligations of Termination. Upon any of the following events,
Buyer shall reimburse Xylan for reasonable direct expenses
incurred relating to Unique Components not delivered to Buyer
for any of the following reasons: (i) Xylan's termination for
cause, (ii) Buyer's termination for convenience, or (iii)
Buyer's cancellation of all or part of a purchase order (see
Section 3.2).
Buyer's maximum reimbursement obligation under this Section
4.5 shall be [***]. Xylan shall take reasonable steps to
mitigate such costs and shall notify subcontractors, if any,
to do likewise. Upon Buyer's request, Xylan will provide
appropriate support documentation for such costs.
4.6 Survival of Certain Terms. The provision in Sections 1,2.4, 5,
7, 9, 11, 12, 13, 14, 15, 16, 17, and 18 shall survive
expiration or termination of this Agreement for any reason.
All other rights and obligations shall cease upon termination
of this Agreement, except that in the event Buyer terminates
this Agreement under Section 4.4, any minimum purchase
requirement mutually agreed upon (Deleted) shall, at Xylan's
option, survive and be satisfied in accordance with the terms
and conditions of this Agreement.
4.7 Return of Materials. All of Xylan's trademarks, marks, trade
names, patents, copyrights, designs, drawings, formulas or
other data, photographs, samples, literature, and sales aids
of every kind will remain the property of Xylan. Within thirty
(30) days after the termination of this Agreement, Buyer will
prepare all such items in its possession for shipment, as
Xylan may direct, at Xylan's expense. Buyer will not make or
retain any copies of any of Xylan's Proprietary Information
which may have been entrusted to it. Effective upon any
termination of this Agreement pursuant to Section 4.2 or 4.3
above, Buyer will cease to use all trademarks and trade names
of Xylan. Upon termination of this Agreement, Xylan may at its
option repurchase all or part of the Buyer's existing
inventory of the Products.
5. PAYMENT TERMS
All payments shall be made in U.S. currency in the United States and
shall be due within thirty (30) days after the date of invoice. Without
limiting any other remedy provided in this Agreement, in the event
Buyer is delinquent in the payment of any invoice or is otherwise in
breach of this Agreement, Xylan, may in its discretion, withhold
shipment (including partial shipments) of any order or may, at its
option, require Buyer to pay C.O.D. for further shipments. Buyer agrees
to pay [***] on payments more than ten (10) days past due.
6. ORDERING, SHIPMENT AND ACCEPTANCE
6.1 Ordering. All purchase orders shall be dated, uniquely
numbered for identification and incorporate the terms and
conditions of this Agreement. The terms and conditions of this
Agreement prevail regardless of any terms or conditions on the
purchase order. Orders are subject to acceptance by Xylan and
assignment of delivery schedules in accordance with
availability. With respect to Generally Available Products,
Xylan agrees to accept and fill any requested delivery date
with a standard lead time of at least thirty (30) days
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from the order date; provided however, beginning with the
fourth calendar month following the Effective Date, Xylan
agrees to accept and fill forecasted Generally Available
Products with a lead time of fourteen (14) calendar days from
the order date. Additionally, Xylan agrees to make
commercially reasonable efforts to meet non-forecasted
delivery orders requesting delivery within fourteen (14)
calendar days of the order. Xylan will accept or reject
Buyer's orders within two (2) days of receipt. If Xylan does
not confirm or reject Buyer's order by written notice within
two (2) days, Buyer's order will be deemed accepted by Xylan.
Facsimile release orders will be accepted as releases against
purchase orders. Buyer may order Products either as fully
configured units or as subassemblies. Buyer shall purchase
Products by issuing a written purchase order indicating a
model number, description of the Products being ordered,
quantity, price, ship-to location, invoice point and delivery
date requested.
Xylan shall provide Buyer with the TELCO version of the models
ordered, where available. Such TELCO versions will include
Buyer's CLEI codes where provided by Buyer.
Xylan shall use reasonable commercial efforts to fill Buyer's
orders for the Products within fourteen (14) days after
receipt of order, but only if Buyer has issued a detailed
forecast in accordance with Section 2.3.
6.2 Shipment and Delivery. Delivery is F.O.B. Xylan, Calabasas.
All title and risk of loss or damage with respect to the
Products shall pass to Buyer on delivery to the Buyer's common
carrier. Xylan will provide Buyer with a shipment
acknowledgement form by facsimile within twelve (12) to
twenty-four (24) hours of the shipment to Buyer's customer.
Xylan will include at a minimum, the serial number of the
unit, the date shipped, the part number and quantity shipped
and the carrier name on the acknowledgement form along with a
copy of the waybill. Buyer grants Xylan a security interest in
Products purchased under this Agreement to secure payment for
those Products purchased. If requested by Xylan, Buyer shall
execute financing statements, from time to time, to perfect
this security interest. Xylan shall make commercially
reasonable efforts to deliver Products in accordance with
Buyer's instructions regarding shipping and choice of common
carrier at the F.O.B. point. Buyer must notify Xylan within
thirty (30) days of receipt of the Products of any
discrepancies or of any reason for rejection of the Products.
If Buyer fails to so notify Xylan within such thirty (30) day
period, Buyer will be deemed to have accepted the Products.
7. WARRANTY AND LIMITATIONS
7.1 Xylan warrants to Buyer, and only to Buyer, that hardware
Products delivered on or after the Effective Date of this
Agreement will be free from material defects in material and
workmanship under conditions of normal and proper use and will
substantially conform to Product specifications for a period
of twelve (12) months from date of shipment to the Buyer.
7.2 Xylan warrants to Buyer and only to Buyer that hardware
Products delivered prior to the Effective Date of this
Agreement will be free from material defects in material and
workmanship under conditions of normal and proper use and
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will substantially conform to Product specifications for a
period of twenty-four (24) months from the date of shipment to
the Buyer.
7.3 BUYER'S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THE
FOREGOING WARRANTY SHALL BE REPLACEMENT OF OR (AT XYLAN'S
OPTION IF DESPITE COMMERCIALLY REASONABLE EFFORTS REPLACEMENT
IS IMPRACTICAL) REFUND FOR RETURNED NON-CONFORMING UNITS OF
THE PRODUCTS FOR WHICH FULL DOCUMENTATION AND PROOF OF NON-
CONFORMITY IS PROVIDED TO XYLAN WITHIN THE APPLICABLE WARRANTY
PERIOD AFTER THE ORIGINAL NON-CONFORMING UNITS ARE RECEIVED BY
BUYER. EXCEPT FOR THE FOREGOING WARRANTIES XYLAN DOES NOT
WARRANT THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF ANY PRODUCT OR PERFORMANCE, DOES NOT MAKE ANY
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO, PRODUCT,
SPECIFICATIONS, SUPPORT SERVICE OR ANYTHING ELSE AND DOES NOT
MAKE ANY WARRANTY TO BUYER'S DISTRIBUTORS, CUSTOMERS OR
AGENTS. XYLAN HAS NOT AUTHORIZED ANYONE TO MAKE ANY
REPRESENTATION OR WARRANTY OTHER THAN AS PROVIDED ABOVE.
7.4 THIS WARRANTY DOES NOT INCLUDE AND XYLAN SHALL NOT BE
RESPONSIBLE FOR DAMAGE TO THE PRODUCTS RESULTING FROM A CAUSE
OTHER THAN PRODUCT DEFECT OR MALFUNCTION, INCLUDING IMPROPER
INSTALLATION, NEGLECT, ACCIDENT, UNREASONABLE USE, OR
SERVICING OR MODIFICATION OF THE PRODUCT BY ANYONE OTHER THAN
XYLAN OR AN ORGANIZATION CERTIFIED BY XYLAN.
7.5 Warranty service may be obtained by (i) providing the Xylan
Customer Service Department with written notification of a
defect before the expiration of the warranty period, (ii)
returning the defective product to Xylan's designated repair
depot within sixty (60) days of Xylan's issuance of a Return
Material Authorization ("RMA"), and (iii) providing proof of
purchase date and written description of the problem or
failure. Buyer agrees to prepay shipping charges and assume
risk of loss or damage in transit. Buyer's failure to package
the hardware Product in the original packaging or packaging
substantially similar to the original packaging may void the
warranty. If the hardware Product is damaged in transit, the
customer must file a claim with the carrier. Xylan will be
responsible for payment of shipping charges for return of the
hardware Product to Buyer.
Upon return of such repaired Product, the warranty with
respect to such Product will continue for the remaining
unexpired warranty or ninety (90) days, whichever is longer.
7.6 No hardware Product may be returned or exchanged for repair
except as provided for herein. All repairs shall be performed
at a Xylan authorized service center. To return an item for
repair, the Xylan Customer Service Department must be
contacted to obtain an RMA number. No equipment may be
returned without obtaining this RMA number.
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7.7 Xylan will provide Buyer with Software Fixes (bug fixes and
critical patches intended to correct feature or function
deficiencies in the Product) and maintenance releases for
Products during the first ninety (90) days after the Products
are purchased from Xylan. Outside this period, software fixes
shall be available only through new software releases pursuant
to the terms and conditions of Exhibit D.
7.8 Xylan shall provide to Buyer out of warranty repair for
Products at its then prevailing repair rates less Buyer's
discount per Exhibit A and according to the terms and
conditions of this Section 7.
7.9 If a revision change to the Product addresses an identified
customer problem which has not been previously resolved by a
Fix or Update, Xylan will, at its expense, provide Buyer with
the new version of the Product.
8. ENGINEERING CHANGES
8.1 Xylan may, without prior approval from or prior notice to
Buyer, make changes to the Products (i) which do not adversely
affect form, fit, or function or performance at a higher level
of assembly, and/or (ii) when required for safety regulatory,
or legal purposes.
8.2 Xylan will make reasonable efforts to notify Buyer of changes
to the Products which affect form, fit or function forty-five
(45) days in advance of scheduled shipment. If Buyer notifies
Xylan that the changes are unacceptable within thirty (30)
days of notification by Xylan, Xylan shall, at its option,
either (i) accommodate Buyer's objections in the changed
configuration; or (ii) provide Buyer end-of-life Products
under the previous configuration in a quantity mutually
agreed; or (iii) cancel the entire order and refund to Buyer
any pre-paid amount. If Buyer does not provide Xylan with
written notification of objection within thirty (30) days
after such notification by Xylan, Xylan shall have no
obligation to accommodate Buyer's objections.
8.3 Xylan agrees to negotiate in good faith any engineering
changes requested by Buyer. Engineering changes, as defined by
this Section 8.3, represent changes in either cosmetic
appearance of or functionality of the Products that is not
currently included in Xylan's specifications and user manuals
and which are not addressed in the Statement of Work, Exhibit
B. In the event Buyer requests an engineering change, Xylan's
acceptance of the change shall be conditioned upon Buyer's
agreement (i) to pay for all rework of units not shipped, (ii)
to pay for all work in progress, (iii) to pay Non-Recurring
Engineering charges to implement such change and (iv) to
reimburse Xylan for any and all reasonable costs of raw
materials, equipment and other goods and services, if any,
required for the Products and made obsolete by the engineering
change. Xylan shall take all reasonable steps to mitigate such
costs and shall notify subcontractors, if any, to do likewise.
9. TRADEMARK USAGE
9.1 Except as provided in Section 9.2 below, Xylan hereby grants
to Buyer a non-exclusive, worldwide, royalty-free right and
license, during the term of this Agreement, to utilize any
trademarks, logotypes and similar materials of Xylan
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("Trademarks") solely in connection with the sale and
distribution of the Products by Buyer. However, Buyer is
limited to such use in a manner, which is not reasonably
misleading, confusing, or deceiving nor likely to be injurious
or inimical to the best interests of Xylan. Buyer agrees to
diligently safeguard such Trademarks.
9.2 Any right to use Trademarks of Xylan shall terminate with this
Agreement, except that Buyer shall retain such rights with
respect to any Products remaining in Buyer's inventory or
right to sell spares parts or manuals to be purchased from
Xylan, if any, after termination. Buyer shall respect all
rights of Xylan in Trademarks during the term of this
Agreement and thereafter.
10. NON-COMPETITION
Xylan will not sell the OmniSwitch product directly to end-users where
Xylan is aware that: (i) the end user has purchased the OmniSwitch
product and Buyer's DSLAMS from Buyer and (ii) the end user's intent is
to use the OmniSwitch it would purchase from Xylan to directly
collocate with and/or connect to Buyer's DSLAMS. Moreover, Xylan will
not encourage distributors or resellers of the OmniSwitch product
(other than Buyer) to sell the OmniSwitch product to end-users under
circumstances set forth in the preceding sentence.
11. CONFIDENTIALITY
11.1 Confidentiality. The Mutual Confidentiality Agreement between
the Buyer and Xylan dated April 28, 1997 is hereby
incorporated into and made a part of this Agreement and shall
remain in effect for a period of five (5) years after the
termination of this Agreement.
11.2 This Agreement shall impose no obligation upon the receiving
party with respect to any proprietary information which (i) is
now or which subsequently becomes generally known or available
by publication, general use, or otherwise; (ii) was known by
the receiving party prior to the time of disclosure as showed
by the receiving party's files and records immediately prior
to the time of disclosure; (iii) is furnished by the
disclosing party to third parties without restriction on
disclosure; (iv) is subsequently rightfully furnished to the
receiving party by a third party without restriction on
disclosure; or (v) is independently developed by the receiving
party as demonstrated by such party's files and records,
provided that the person or persons developing same have not
had access to the proprietary information.
12. INDEMNIFICATION AGAINST INFRINGEMENT
12.1 Xylan represents that it has the sufficient right, title and
interest in the Products to enter into this Agreement and to
grant the license rights as stated in Section 14.4. Xylan
agrees, at its own expense, to defend, indemnify and hold
Buyer, its directors, officers, shareholders, employees and
agents harmless against any suit, claim, or proceeding brought
against Buyer alleging that any use of the Products as
delivered by Xylan infringes any duly issued patent, copyright
or trademark or any trade secret of any third party, provided
that Buyer (i) promptly notifies Xylan in writing of any such
suit, claim or proceeding; (ii) allows Xylan to defend, settle
or otherwise dispose of such suit or proceeding and, at its
expense, to direct the defense of such suit, claim, or
proceeding; (iii) gives Xylan sole authority, full information
and, at Xylan's
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expense, assistance necessary to defend such suit, claim, or
proceeding; and, (iv) does not enter into any settlement of
any such suit, claim or proceeding without Xylan's written
consent. This obligation will not cover (a) any claim that the
combination or operation of any of the Products with products
not supplied by Xylan infringes any third party's rights as
used in combination with products not supplied by Xylan to the
extent such claim relates to such combination; or (b) any
claim that arises out of Xylan's compliance with technical
specifications provided by Buyer.
12.2 If such claim has occurred, or in Xylan's opinion is likely to
occur, Buyer agrees to permit Xylan at its option and expense,
either to procure for Buyer the right to continue using the
Product or to replace or modify the same so that it becomes
non-infringing, or, if in Xylan's judgment neither of the
foregoing alternatives is reasonably available, cease all use
and distribution of the Product and refund to Buyer the price
thereof as depreciated by an equal annual amount over a five
(5) year period. Xylan shall not be responsible for any
settlement it does not approve in writing. THE FOREGOING
PROVISIONS OF THIS SECTION 12 STATE THE ENTIRE LIABILITY AND
OBLIGATION OF XYLAN AND THE EXCLUSIVE REMEDY OF BUYER AND ITS
CUSTOMERS, WITH RESPECT TO ANY VIOLATION OR INFRINGEMENT OF
ANY ALLEGED PATENT, COPYRIGHT, TRADEMARK OR OTHER INTELLECTUAL
PROPERTY RIGHT BY THE PRODUCTS OR ANY PART THEREOF.
12.3 Buyer shall be solely responsible for any claims, warranties
or representation made by Buyer or its employees, agents or
resellers that differ from the warranty provided by Xylan.
13. LIMITATIONS OF LIABILITY
Except for payment obligations, violation of a license, breaches of
confidentiality or express indemnity obligations, each party's
liability to the other under this Agreement shall be limited to [***]
([***]) or the [***], whichever is greater. IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES IN CONNECTION WITH OR ARISING OUT OF ITS PERFORMANCE OR FAILURE
TO PERFORM PURSUANT TO THIS AGREEMENT EVEN IF INFORMED OF THE
POSSIBILITY THEREOF IN ADVANCE. Both parties release the other from all
obligation, liability, claims or demands in excess of the limitations
provided in this Section 13.
14. INTELLECTUAL PROPERTY RIGHTS
14.1 Xylan represents and warrants that it has sufficient right,
title and interest in existing products to modify the products
to develop the Products specified in Exhibit A. Xylan will
have and retain all proprietary rights in the results of the
development work; including, without limitation, all
intermediate and final specifications and products unless
otherwise expressly agreed in this Agreement or any addendum
thereto. Xylan may incorporate those results into any Xylan
product for use, license, lease or other disposition, and/or
Xylan may use or dispose of the technology and/or resulting
products in any manner Xylan chooses.
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With respect to any jointly developed products between Xylan
and Buyer, the issues of ownership and obtaining and paying
for any necessary third party licenses will be separately
addressed in an addendum executed by both parties to this
Agreement.
14.2 Buyer agrees that nothing in this Agreement may be construed
to grant by implication any license to Xylan's intellectual
property or design rights. Buyer agrees that as between the
parties Xylan retains full title to any intellectual property,
or design rights for Products mentioned herein. Buyer agrees
not to reverse engineer the Products or any software,
firmware, hardware, or other technology contained therein.
14.3 With respect to software and firmware, hardware or other
technology delivered hereunder, notwithstanding any use of the
terms "Sale" or "Sell" or the like elsewhere in this
Agreement, Buyer agrees not to copy, use, or distribute such
software or firmware except as specifically provided for in
this Agreement.
14.4 Xylan grants to Buyer a non-exclusive, non-transferable,
worldwide license to redistribute software Products purchased
by Buyer under this Agreement, solely to end-users of the
software Products. Xylan does not grant Buyer the right to
reproduce, alter, modify or change the software Products. Each
copy of each software Product shall be sublicensed pursuant to
terms and conditions at least as protective of Xylan's rights
as the end-user license agreement attached as Exhibit C. Buyer
agrees to use commercially diligent efforts to enforce the
obligations of its end-user license agreements and to inform
Xylan immediately of any known breach of such obligations.
Breach of this provision may result in immediate termination
of this Agreement.
14.5 Buyer is notified that the software Products delivered
hereunder may contain software licensed to Xylan by certain
third party licensors. LICENSORS MAKE NO WARRANTIES, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, AND LICENSORS SPECIFICALLY
DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. Licensors do not warrant that the
software will meet the requirements of Buyer or its end-users
or that the operation of the software will be uninterrupted or
error-free. Licensors are third party beneficiaries of this
Section 14 with rights of enforcement.
15. ASSIGNMENT
15.1 Assignment. Either party shall have the right to assign this
Agreement, whether by sale, merger or otherwise, and to assign
its rights and delegate its duties under this Agreement in
whole at any time upon written notice to the non-assigning
party and without the non-assigning party's consent. Upon an
assignment by either party and with thirty days prior written
notice the non-assigning party may terminate the Agreement in
the event that the assignee, in the non-assigning party's
reasonable opinion, is a competitor of the non-assigning
party or is of questionable financial stability and/or
soundness. Notwithstanding the above, either pasty may without
consent assign or transfer this Agreement, in whole or in
part, to its parent or any of its affiliates in which it has
greater than fifty percent (50%) ownership. An assignment
pursuant to this section shall neither affect nor diminish any
rights or duties that either party may then thereafter have as
to Products, licensed materials or services
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delivered prior to the effective date of this assignment. Upon
the assumption of the duties under this Agreement by the
assignee, the assigning party shall be released and
discharged, to the extent of the assignment, from all further
duties under this Agreement as to Products, licensed materials
or services not delivered by the assigning party by the
effective date of the assignment.
15.2 Subject to the limitations herein expressed, this Agreement
will inure to the benefit of and be binding upon the parties,
their successors, administrators, personal representatives,
guardians, heirs and assigns.
16. EXPORT CONTROLS
Both parties agree to fully comply with all applicable United States
and EU or other countries regulations and laws in effect now and
hereinafter, including compliance with all export controls on the
distribution or dissemination of Products, technology, and information
related to and/or exchanged under this Agreement. A party's failure to
comply strictly with this clause will constitute its material breach of
this Agreement and if not cured within thirty (30) days may result in
immediate termination for cause. Xylan will provide Buyer with required
documents and reasonable assistance with respect to export compliance.
17. NOTICES
All notices shall be sent to the following address or to such other
address as one party notifies the other of in writing:
If to Buyer: PARADYNE CORPORATION
LAW DEPARTMENT
8545 126th Avenue North
Largo, Florida 33773
Attn: Manager, Corporate Contracts
TEL: 727/530-2612
FAX: 727/532-5234
If to Xylan: XYLAN CORPORATION
26707 West Agoura Road
Calabasas, California 91302
Attn: Legal Department
FAX: 818-880-3505
Telephone: 818-880-3500
All notices required under this Agreement shall be deemed given when hand
delivered; mailed by certified mail, return receipt, postage prepaid; or
deposited for next-day delivery with a reliable overnight courier service.
18. GENERAL PROVISIONS
18.1 Force Majeure. Neither party shall be responsible for delays
or failures in performance resulting from acts beyond the
reasonable control of such party. Such acts shall include but
not be limited to acts of God, labor conflicts, acts of war or
civil disruption, governmental regulations imposed after the
fact, public utility failures, industry wide shortages of
labor or material, or natural disasters. In the event of
interruption of Xylan's manufacture or shipment for reasons
beyond Xylan's reasonable control, Xylan may allocate
production or shipment among its customers in a fair and
reasonable manner. Should such
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force majeure condition continue uninterrupted for a period of
sixty (60) days, the parties agree to negotiate in good faith
a fair and equitable solution.
18.2 Compliance and Separability. Both parties shall comply with
all applicable country, federal, state, and local laws, rules
and regulations. Each party shall indemnify and hold harmless
the other party, its successors, assigns and its customers
against any liability, loss or expense (excluding attorneys'
fees) arising out of such party's non-compliance therewith.
Also, each party shall furnish to the other party any
non-confidential information in such furnishing party's
possession required by such other party during the term of
this Agreement to enable it to comply with the requirements of
any federal, state, local or foreign government agency.
If any term or provision of the Agreement shall be found to be
illegal or unenforceable therein, this Agreement shall remain
in full force and effect and such term or provision shall be
deemed stricken and the parties will endeavor to substitute
similar language that is as consistent as possible with the
original intent.
18.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois
and the United States, without regard to conflicts of law
provisions thereof and without regard to the United Nations
Convention on contracts for the International Sales of Goods.
The sole jurisdiction and venue for actions related to the
subject matter hereof shall be Illinois state and U.S. federal
courts having within their jurisdiction the location of
Xylan's principal place of business. Both parties consent to
the jurisdiction of such courts and agree that process may be
served in the manner provided herein for giving of notices or
otherwise as allowed by Illinois state or U.S. federal law. In
any action or proceeding to enforce rights under this
Agreement, the prevailing party shall be entitled to recover
costs and reasonable attorneys' fees. The English language
version of this Agreement prevails when interpreting this
Agreement.
18.4 Entire Agreement. This Agreement, including Exhibits A through
E and all addenda attached hereto, which are hereby
incorporated by reference, represents the entire Agreement
between the parties relating to the subject matter and
supersedes all prior representations including discussions,
negotiations and agreements, whether written or oral. No
amendment to this Agreement shall be effective unless it is in
writing, dated subsequent hereto, refers explicitly to this
Agreement and is signed on behalf of Buyer and Xylan by their
duly authorized representatives. No terms or conditions on
Buyer's purchase order form or Xylan's order acknowledgment
form will be effective to modify or supplement this Agreement.
18.5 Waiver. No waiver will be implied from a party's conduct or
failure to enforce its rights thereunder. No waiver will be
effective unless in writing signed on behalf of the party
against whom the waiver is asserted.
18.6 Media Releases. Press releases and other like publicity
regarding this Agreement which mentions this Agreement or the
other party by name shall not be released without the prior
written consent of the other party, which consent shall not be
unreasonably withheld.
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18.7 Relationship of the Parties. The parties to this Agreement are
independent contractors. There is no relationship of agency,
partnership, joint venture, employment or franchise between
the parties. Neither party has the ability to bind the other
or to incur any obligation on its behalf. Xylan acknowledges
that work done by its subcontractors is deemed work done by
Xylan.
18.8 Headings. Heading and captions are for convenience only and
are not to be used in the interpretation of this Agreement.
18.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all
of which together will constitute one instrument.
18.10 Indemnification of Xylan. Except for warranty claims for which
Xylan is liable under Section 7 and indemnity claims covered
by Section 12, Buyer agrees to indemnify and hold Xylan
harmless against claims or damages (inclusive of costs and
attorneys' fees) made against Xylan as a result of negligence,
recklessness, misrepresentation, error or omission by Buyer or
its employees, agents or representatives, or failure to pay
required amounts (including taxes) due under this Agreement.
Buyer will be responsible for any warranties beyond the scope
of this Agreement which Buyer makes to its customers. Xylan
agrees to indemnify Buyer against claims or damages (inclusive
of costs and reasonable attorney's fees) made against Buyer as
a result of Xylan's negligence, recklessness,
misrepresentations, error or omission by Xylan or its
employees.
18.11 Arbitration. Any controversy or claim, whether based on
contract, tort, or other legal theory (including, but not
limited to, any claim of fraud or misrepresentation),arising
out of or related to this Agreement may be resolved by
arbitration pursuant to this paragraph and the then current
rules and supervision of the American Arbitration Association.
The arbitration shall be held in the headquarters city of the
party not initiating the claim before a single arbitrator who
is knowledgeable in business information and electronic data
processing systems. The arbitrator's decision and award shall
be final and binding and may be entered in any court having
jurisdiction thereof. The arbitrator shall not have the power
to award punitive or exemplary damages. Arbitration issues
shall be determined in accordance with the federal substantive
and procedural laws relating to arbitration; all other aspects
shall be interpreted in accordance with the laws of the State
of Illinois. Each party shall bear its own attorneys' fees
associated with the arbitration and other costs and expenses
of the arbitration shall be borne as provided by the rules of
the American Arbitration Association.
18.12 Quality. Xylan agrees to comply with the quality standards
outlined in Exhibit E hereto.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED
BY THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVES WITH EACH PARTY INTENDING TO
BE LEGALLY BOUND.
FOR BUYER FOR XYLAN
By: By: Yuri Pikover
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Signed /s/ Signed: /s/
Title: Title: Exec. Vice President, Business Development
Date: 4/1/99 Date: 3/18/99
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EXHIBIT A
PRODUCTS AND PRICING
1. PRODUCTS
The Products are private label versions of Xylan's products as contained in
Xylan's OEM Price List on the Effective Date.
Pricing to Buyer for private label versions of Xylan Products is as follows:
<TABLE>
<CAPTION>
Products Discount Off Xylan's Then-Current OEM List Price
<S> <C>
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
</TABLE>
Buyer may purchase the Products according to the discount schedule described
above. A copy of Xylan's current OEM Price List is attached hereto. Buyer has
the right under this Agreement to purchase the Products at the discount levels
stated herein or as otherwise mutually agreed upon by both parties in writing
pursuant to Section 17 hereof and amended to this Agreement.
2. NOTES TO PRICING
The discount schedule described above applies to all Products, including
demonstration equipment and spares.
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EXHIBIT B
STATEMENT OF WORK SCHEDULES
[***]
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EXHIBIT C
XYLAN'S END USER LICENSE
XYLAN CORPORATION
SOFTWARE LICENSE AGREEMENT
IMPORTANT
PLEASE READ THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT CAREFULLY
BEFORE OPENING THE PACKAGE.
BY OPENING THE PACKAGE CONTAINING THE PROGRAM DISKETTES, THE SOFTWARE THEREIN,
AND THE ACCOMPANYING USER DOCUMENTATION, YOU (THE "LICENSEE") ACCEPT AND AGREE
TO THE TERMS OF THIS LICENSE AGREEMENT. IF THE LICENSEE IS NOT WILLING TO BE
BOUND BY THE TERMS OF THIS LICENSE AGREEMENT, DO NOT OPEN THE PACKAGE. PLEASE
PROMPTLY RETURN THE PACKAGE IN UNOPENED FORM TO THE PLACE WHERE THE LICENSEE
OBTAINED IT FOR A FULL REFUND.
1. LICENSE GRANT. This is a license, not a sales agreement, between Licensee and
Xylan. Xylan hereby grants to Licensee, and Licensee accepts, a non-exclusive,
non-transferable license to use the program media and the computer software
contained therein in object-code-only form, and the accompanying user
documentation (collectively referred to as the "Licensed Files"), only as
authorized in this License Agreement. Licensee may, subject to the terms of this
License Agreement, use one copy of the software in tangible object code form
only, for physical loading into a single central processing unit (also referred
to as a management processor module, or MPM) of the Licensee's system. Licensee
agrees not to assign, sublicense, transfer, pledge, lease, rent, or share its
rights under this License Agreement. Licensee may retain the program media for
backup purposes with retention of Xylan's copyright and other proprietary
notices. Licensee shall not and shall not attempt to decompile, reverse engineer
or otherwise gain access to any source code for the Licensed Files. Except as
authorized under this paragraph, no copies of the Licensed Files or any portions
thereof may be made by Licensee.
2. XYLAN'S RIGHTS. Licensee acknowledges and agrees that the Licensed Files are
the sole property of Xylan and its licensors, protected by U.S. copyright law,
trademark law, and is licensed on a right to use basis. Licensee further
acknowledges and agrees that all rights, title, and interest in and to the
Licensed Files are and shall remain with Xylan and its licensors and that no
such right, license, or interest shall be asserted with respect to such
copyrights and trademarks and any related know-how, ideas, and programs. This
License Agreement does not convey to Licensee an interest in or to the Licensed
Files, but only a limited right to use revocable in accordance with the terms of
this License Agreement.
3. CONFIDENTIALITY. Xylan considers the Licensed Files to contain valuable trade
secrets of Xylan, the unauthorized disclosure of which could cause irreparable
harm to Xylan. Except as expressly set forth herein, Licensee agrees to use
reasonable efforts not to disclose the Licensed Files to any third parties and
not to use the Licensed Files other than for the purpose authorized by this
License Agreement. This confidentiality obligation shall continue after any
termination of this License Agreement.
4. INDEMNITY. Licensee agrees to indemnify, defend and hold Xylan harmless from
any claim, lawsuit, legal proceeding, settlement or judgment (including without
limitation Xylan's reasonable United States and local attorneys' and expert
witnesses' fees and costs) arising out of or in connection with the copying,
marketing, performance or other distribution of the Licensed Files.
5. LIMITED WARRANTY. Xylan warrants, for Licensee benefit alone, that the
program diskettes in which the computer software is embedded and the
documentation shall, for a period of Ninety (90) days from the date of
commencement of this License Agreement (referred to as the Warranty Period), be
free from material defects in material and workmanship under normal use. Xylan
further warrants, for Licensee benefit alone, that during the Warranty Period
the software shall operate under normal use substantially in accordance with the
specifications in the User's Guide. If during the Warranty Period, a defect in
the software appears, Licensee may return the Licensed Files to Xylan for either
replacement or, if so elected by Xylan, refund of amounts paid by Licensee under
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this License Agreement. EXCEPT FOR THE WARRANTIES SET FORTH ABOVE, THE LICENSED
FILES, AND THE SOFTWARE CONTAINED THEREIN, ARE LICENSED "AS IS" AND LICENSOR
DISCLAIMS ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING
(WITHOUT LIMITATION) ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
6. LIMITATION OF LIABILITY. Xylan's cumulative liability to Licensee or any
other party for any loss or damages resulting from any claims, demands, or
actions arising out of or relating to this License Agreement shall not exceed
the license fee paid to Xylan for the use of the Licensed Files. IN NO EVENT
SHALL XYLAN BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR
EXEMPLARY DAMAGES OR LOST PROFITS, EVEN IF XYLAN HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE LIMITATION OR
EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE
LIMITATION OR EXCLUSION MAY NOT APPLY TO LICENSEE.
7. EXPORT CONTROL. Licensee may not export or re-export the Licensed Files,
without complying with all United States export laws and regulations, including
but not limited to (i) obtaining prior authorization from the U.S. Department of
Commerce if a validated export license is required, and (ii) obtaining "written
assurances" from licensees, if required.
8. SUPPORT AND MAINTENANCE. Except as may be provided in a separate agreement
between Xylan and Licensee, if any, Xylan is under no obligation to maintain or
support the copies of the Licensed Files made and distributed hereunder and
Xylan has no obligation to furnish Licensee with any further assistance,
documentation or information of any nature or kind. Licensee is solely
responsible for the support and maintenance of all portions of any Licensed
Files.
9. TERM. This License Agreement is effective upon Licensee opening of this
package and shall continue until terminated. The Licensee may terminate this
License Agreement at any time by returning the Licensed Files and all copies
thereof and extracts therefrom to Xylan. Xylan may terminate this License
Agreement upon the breach by Licensee of any term hereof. Upon such termination
by Xylan, Licensee agrees to return to Xylan or destroy the Licensed Files and
all copies and portions thereof.
10. GOVERNING LAW. This License Agreement shall be construed and governed in
accordance with the laws of the State of California.
11. SEVERABILITY. Should any term of this License Agreement be declared void or
unenforceable by any court of competent jurisdiction, such declaration shall
have no effect on the remaining terms herein.
12. NO WAIVER. The failure of either party to enforce any rights granted
hereunder or to take action against the other party in the event of any breach
hereunder shall not be deemed a waiver by that party as to subsequent
enforcement of rights or subsequent actions in the event of future breaches.
13. NOTES TO UNITED STATES GOVERNMENT USERS. Software and documentation are
provided with restricted rights. Use, duplication or disclosure by the
government is subject to (i) restrictions set forth in GSA ADP Schedule Contract
with Xylan's reseller(s), or (ii) restrictions set forth in subparagraph (c) (1)
and (2) of 48 CFR 52.227-19, as applicable.
14. THIRD PARTY MATERIALS. Licensee is notified that the Licensed Files may
contain third party software and materials licensed to Xylan by certain
licensors ("Licensors"). LICENSORS MAKE NO WARRANTIES, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, AND LICENSOR AND ITS SUPPLIERS SPECIFICALLY DISCLAIM ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Licensors do not warrant that the third party software and materials will meet
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Licensee's requirements or that the operation of the software will be
uninterrupted or error-free. Licensors are third party beneficiaries to this
License Agreement will full rights of enforcement.
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EXHIBIT D
TRAINING, SERVICE, AND SUPPORT
This Exhibit D documents the maintenance and support available by XYLAN to
Buyer, and where applicable, to the end-users and Paradyne's service provider
partners, for the Products delivered under this Agreement.
I. PREMISES
1. LEVELS OF SUPPORT SERVICE
Support services are two tiered. Support provided by Buyer or
Buyer's Authorized Service Providers to its end-users is Level
I Support. Support provided by XYLAN to Buyer is Level II
Support.
2. CLASSIFICATION OF PROBLEM SEVERITY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Degree Diagnosis
- --------------------------------------------------------------------------------
<S> <C>
Severity 1 [***]
- --------------------------------------------------------------------------------
Severity 2 [***]
- --------------------------------------------------------------------------------
Severity 3 [***]
- --------------------------------------------------------------------------------
Severity 4 [***]
- --------------------------------------------------------------------------------
</TABLE>
II. LEVEL II SUPPORT PROCEDURE
XYLAN shall make commercially reasonable efforts to provide Level II
Support to Buyer according to the following procedures:
1. INITIAL RESPONSE
XYLAN will provide a one hour call back to Buyer's calls to the nearest
XYLAN Service Center, pursuant to the following chart:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SERVICE CENTERS NUMBERS TO CALL BUSINESS HOURS
- --------------------------------------------------------------------------------
<S> <C> <C>
XYLAN U.S. 1-800-XYLAN-96 (within the U.S.) 24 hours a day
1-818-878-4507 (for International
callers)
- --------------------------------------------------------------------------------
XYLAN EUROPE 31-23-556-100 8AM - 7PM (CET)
Monday thru Friday
(excluding local holidays)
- --------------------------------------------------------------------------------
</TABLE>
Severity l or 2 calls will be responded to within one hour on a 24 hours a day
and 7 days a week basis. Buyer may open Severity 3 or 4 cases by email:
[email protected] or XYLAN will allow Buyer 24 hours a day and 7 days a week
XYLAN web site (www) access to open Severity 3 or 4 cases.
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2. PROBLEM TRACKING
XYLAN will issue Buyer a case number for each new problem reported.
3. RESOLUTION
XYLAN will assist Buyer to ensure the customer receives prompt
resolution to XYLAN product issues. Xylan's escalation procedure
according to Problem Severity are outlined below. XYLAN will make the
designated escalation contacts available to Buyer in the event problems
are not being resolved in a satisfactory manner.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SEVERITY 1 SEVERITY 2 SEVERITY 3 SEVERITY 4
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mgr. Technical Support [***] [***] [***] [***]
- --------------------------------------------------------------------------------
VP Service & Support [***] [***] [***] [***]
- --------------------------------------------------------------------------------
VP Engineering [***] [***] [***] [***]
- --------------------------------------------------------------------------------
</TABLE>
Note: Severities 1 and 2 are based on 24 hour clock.
4. ON-SITE VISIT
If it is mutually agreed that a problem resolution would be
significantly facilitated by a XYLAN site visit, XYLAN will dispatch
the necessary technical personnel. Buyer will dispatch a technical
resource on-site to assist XYLAN. If the primary problem is the result
of a XYLAN product anomaly, there will be at no charge to Buyer. If the
problem is not the result of a XYLAN product anomaly, XYLAN at its sole
discretion may bill Buyer at the prevailing rates published in the
XYLAN Price List.
III. ON-GOING SUPPORT PROGRAM UNDER LEVEL II SUPPORT
1. TRAINING
XYLAN will provide Buyer certification training for [***] technical
support engineers [***] at Xylan's training facilities for each major
software release; provided, however, [***] of such training will be
charged to Buyer for any cancellation by Buyer within two weeks of such
scheduled training session. Buyer will bear the cost for travel and
expenses, if applicable.
2. SOFTWARE UPDATES AND NEW RELEASES
XYLAN will make available new Software Releases and Software Updates
(as defined in 7.6) upon Xylan's General Availability date. XYLAN will
provide FTP server access to the Buyer for the downloading of all
mentioned software and their associated release notes. XYLAN grants
Buyer the right to duplicate Software Releases and Software Updates to
Buyer's customers licensed to use the Software.
3. HARDWARE REPLACEMENT SERVICE PROGRAM
XYLAN shall make commercially reasonable efforts to provide Hardware
Replacement Service to Buyer according to the following procedures:
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Buyer will be able to request (from Xylan's Customer Support) an RMA
number via telephone, E-mail or facsimile. RMA number(s) should be
returned within one (1) working day of request. Buyer will return
defective parts to Xylan for repair and Xylan will ship repaired parts
to Buyer within ten (10) working days from receipt of parts at Xylan
(actual delivery of said parts to Buyer will depend upon destination
-i.e., customs requirements). Buyer will bear the cost of shipment to
Xylan and Xylan will bear the cost of shipment to Buyer or end user.
If the Xylan equipment is identified as DOA, Xylan will ship a
replacement during the same day that the DOA is reported. This same day
support will at the expense of Xylan, Buyer will arrange the return of
the defective Product to Xylan.
Note
Parts Repair Process ensures that the same serial numbered unit is
repaired and returned to Buyer (except for Advance Replacement Service
and in the case of "product beyond repair"). This service is sometimes
required due to import/export and government regulations.
IV. FEES AND DISCOUNT SCHEDULE FOR SUPPORT SERVICE
LEVEL II SUPPORT FEE
In return for information necessary to support Buyer's customers with
Buyer's basic and enhanced service offerings, Buyer agrees [***]
specifically for the servicing of Xylan Product.
Buyer and Xylan agree to review this Level II Support Fee (1) the later
of six (6) months from the Effective Date of this Agreement, or (2)
when sufficient run rate data is available and every six months
thereafter for the term of this Agreement, to determine whether, in
lieu of the fee described in the previous paragraph, Buyer should pay a
flat fee in a mutually agreed upon amount.
V. LEVEL I SUPPORT
In providing support services by Buyer or Buyer's Authorized Service Providers
to its end users, Buyers must satisfy the following requirements satisfactory to
XYLAN.
1. SERVICE REQUIREMENTS
Buyer must maintain its own Technical Support Center and/or Authorized
Service Provider for providing Level I Support, pre-sales and
post-sales support to its end users. In order to provide quality
service to its end-users, Buyer's Technical Support Center and/or
Authorized Service Providers must meet the following requirements:
a) Staffing a minimum of two designated technical personnel for
XYLAN products.
b) Personnel should have technical competency with XYLAN model
numbers, hardware architecture and configurations, software
features and functionality, software configuration, and
Xylan's OmniVision management software and console user
interface.
c) Personnel should have industry standards experience with
Ethernet, Token ring, ATM, FDDI, routers, bridges, and network
operating systems.
d) Buyer's service organization must own and be trained on the
use of relevant network trouble-shooting equipment including
protocol analyzers, cable testers, and portable PC for console
access.
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2. END-USER SUPPORT PROCEDURES
2.1 INITIAL RESPONSE
Buyer will provide one hour call back to customers during normal
business hours, at minimum, Monday through Friday 9 AM to 5 PM
local time, excluding local holidays.
2.2 PROBLEM TRACKING
Buyer shall have a data base problem tracking capability to assist
in providing all of the information necessary and available to
access and resolve Product problems.
2.3 RESOLUTION
Buyer will use Problem Severities consistent with XYLAN. Buyer
should make best efforts to report unresolved cases to XYLAN using
the following guidelines whenever possible:
- Severity 1 [***]
- Severity 2 [***]
- Severity 3 [***]
- Severity 4 [***]
Once the case is reported, the Buyer and XYLAN will work in good
faith to develop and execute a plan that will provide a timely and
satisfactory resolution. The Buyer still maintains responsibility
to provide the customer a technical contact, regular progress
updates, and equipment to collect data and perform problem
diagnosis.
2.4 ON-SITE VISITS
On-site assistance will be provided if the problem can no longer
be remotely diagnosed by the Buyer or XYLAN.
3. ON-GOING SUPPORT TO END-USERS AND AUTHORIZED SERVICE PROVIDERS
3.1 XYLAN TRAINING
Buyer will schedule personnel to attend XYLAN training, at XYLAN
training facilities, as prescribed by Buyer's Performance
Development (Training) Organization. The Buyer's training
organization will provide the training needed to support its
Technical Support Center or Authorized Service Providers.
3.2 WARRANTY
Buyer will provide Software Updates and Hardware exchanges
consistent with Xylan's Warranty service period as outlined in
this Agreement at no charge to customers.
3.3 SOFTWARE UPDATES AND NEW RELEASES
Buyer will provide Software Updates. Buyer will make new software
releases and release notes available to the end-user and
Authorized Service Providers as appropriate.
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3.4 SPARES AND SERVICE PERSONNEL
Buyer or its Authorized Service Provider will maintain sufficient
spares parts inventory and personnel to fulfill warranty
administration and any service contracts Intergrator maintains
with customer on XYLAN products.
4. RETURN MATERIAL PROCEDURES
Buyer shall return the failed part (freight, duties, and insurance prepaid)
to:
XYLAN Corporation
26707 W. Agoura Road
Calabasas, CA 91302
Attention: Customer Support Department
Package the product(s) to be returned in the same container in which the
replacement was received, using the same protective packing material. Place one
RMA label on each container. Write piece count on outside each container (i.e.,
1 of 2,2 of 2).
International returns, your commercial invoice must include the following
statement - "American goods being returned for repair/replacement". Return to be
prepaid by shipper to Los Angeles Airport and title transferred to our Customs
Broker in Los Angeles for clearance and delivery.
Customs Broker: Air Express Int'l (AEI)
8500 Osage Avenue
Los Angeles, CA 90045
(Tel: 310-216-6600)
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EXHIBIT E
QUALITY
X.0 QUALITY ASSURANCE
Buyer has a significant interest in the quality of the Product. Because
the Product has a useful life expectancy greater than the warranty
obligation period and because of the good will lost by malfunctioning
Products, even though they may be corrected at Seller's expense, it is
agreed by Buyer and Seller that without limiting or abridging Buyers
rights to inspect the Product prior to acceptance or Seller's
post-acceptance obligations provided for in the Agreement, if any, the
following provisions shall apply to ensure acceptable quality for
Products manufactured for Buyer under the terms & this Agreement:
X. 1 QUALITY CONTROL MONITORING & SOURCE INSPECTION
Buyer reserves the right, at any time during the term of this
agreement, with 48 hours prior notice and subject to product
availability, to place one or more personnel in Seller facilities to
carry out inspection and tests, process certifications, review of
quality data, and other functions Buyer may deem reasonably necessary
to maintain quality objectives.
Personnel authorized by Buyer shall be empowered to reject the material
intended for the delivery to Customers in the event that such material
fails to meet Xylan specifications. In the event that the
Representative ascertains that an item of Product is defective because
it fails to meet Xylan specifications, said Representative will advise
Seller's authorized personnel and such defect shall be remedied prior
to shipment. Rejected lots (or Products) will then be corrected and
re-submitted for re-inspection at Seller's expense.
Buyer may, at its option, implement a sampling inspection with lot
rejection in accordance with an appropriate sampling plan and
inspection procedure to be accomplished at Seller's facility. If any
inspection or test is made on Seller's premises, Seller shall, without
additional charge, provide all reasonable facilities and assistance for
the safety and convenience of Buyer's inspector subject to the security
and safety regulations existing at the facilities.
X.2 ACCEPTANCE TESTS
Acceptance test procedures for final manufacturing testing and for
product acceptance purposes will be mutually agreed upon by the Buyer
and Seller if applicable.
X.3 WORKMANSHIP STANDARDS
All Products shall be in compliance with the Buyer's workmanship
standards, IPC-A-610, as a minimum criteria of workmanship.
X.4 QUALITY CONTROL SYSTEM & ISO 9000 COMPLIANCE
Seller shall maintain the quality control system mutually agreed upon
at the Effective Date of this Agreement and as specified in the Xylan
specifications. Seller shall, with every reasonable and timely effort,
apply for and/or maintain ISO 9001 registration. Seller is expected to
use its reasonable best efforts to attain and maintain acceptable
ratings resulting from any future quality system assessments.
X.5 SELLER/BUYER CONTINUOUS IMPROVEMENT EFFORTS
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Buyer and Seller mutually agree to develop a continuous improvement
plan in an effort to reduce costs in both processes and Products that
will mutually benefit both parties in the areas off
a. Target costs
b. Cost reduction efforts, including both materials and processes
c. On time shipments as measured by customer request date and
scheduled ship date.
d. Repair data.
e. Cycle time reductions, including manufacturing, repair,
release processing spare pans delivery, and others.
f. Electronic Data Interchange (EDI).
X.6 NOTIFICATION OF QUALITY ISSUES
Xylan shall notify Buyer within 24 hours of catastrophic failures
affecting customer safety or performance of Product. These failures
include, but are not limited to, Product failures which greatly exceed
the normal failure rate of Product, or line down conditions at Seller
which may impact the timely shipment or quality of Product. Product
produced at Seller must demonstrate a confirmed DOA Defect rate of no
more than .4% per month.
X.7 CORRECTIVE ACTION FOR QUALITY ISSUES
Seller is expected to maintain a functioning and documented quality
system to provide timely and effective corrective action(s) regarding
quality issues. Upon request from Buyer, Seller is to determine the
root cause of quality defects, ensure that these defects are prevented
from shipping to customers, and provide effective corrective action to
prevent the recurrence of these, or similar, defects. Buyer reserves
the right to stop shipment of Buyer product from Seller facilities
until such actions deemed necessary to corrective the defect have been
completed.
X.8 INSPECTION AT DESIGNATED DELIVERY LOCATION
Within 30 days of the receipt of any Product at its designated delivery
location, Buyer may test such Product to confirm conformance to Xylan
specifications. Buyer shall be entitled to reject any product that
fails to conform to the Xylan specifications. Buyer must notify Seller
of any such rejection in writing within five (5) business days of
shipment by Seller.
Upon rejection, Buyer will notify Seller of such rejection and cause
for rejection and return the entire shipment or any portion, to Seller.
Seller accepts all cost of rejected lots, shipping charges back to
Seller and Buyer, any insurance costs, all risk of loss and for
rejected Products. If Seller does not receive such notice of any such
rejection from Buyer within five (5) business days after shipment of
Product, such Product shall be deemed accepted by Buyer for purposes of
this Exhibit of this Agreement. Any Products returned under this
Section of the agreement will be shipped by a carrier selected by
Seller, or Seller will be liable for freight charges at a rate
equivalent to Buyer's documented freight rates. If it is determined
that any Products returned by Buyer under this Section of this Exhibit
are conforming to the Xylan specification then (i) Seller shall utilize
such Products for Buyer's releases and Buyer shall, notwithstanding
anything to the contrary in this Section, pay for the expenses
associated with Buyers original return of such Products to Seller under
this Section. Notwithstanding the foregoing, damage to Products caused
by Buyer's Shipper shall not be considered a nonconformity to the Xylan
specification.
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Exhibit 10.24
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
DISTRIBUTOR AGREEMENT
THIS AGREEMENT, dated this 21st day of September, 1993 (the "Effective Date"),
is between TECH DATA CORPORATION, a Florida corporation ("Tech Data"), and AT&T
PARADYNE ("AT&T PARADYNE").
W I T N E S S E T H:
WHEREAS, Tech Data desires to purchase certain Products from AT&T
PARADYNE from time to time; and
WHEREAS, AT&T PARADYNE desires to sell certain Products to Tech Data in
accordance with the terms and conditions set forth in this Agreement; and
WHEREAS, AT&T PARADYNE desires to appoint Tech Data as its
non-exclusive distributor to market Products within the territory defined
below-,
NOW, THEREFORE, in consideration of the mutual promises herein
contained and other good and valuable consideration, Tech Data and AT&T PARADYNE
hereby agree as follows:
ARTICLE I. TERM OF AGREEMENT
1.1 Term of Agreement During the term of this Agreement AT&T PARADYNE will
provide to Tech Data the Products so forth in Purchase Orders (as
defined herein) in accordance with the terms and conditions set forth
in this Agreement. The term of this Agreement shall commence on the
Effective Date and, unless terminated by either party as set forth in
this Agreement shall remain in full force and effect for a term of one
(1) year, and will be automatically renewed for successive one (1) year
terms unless prior written notification of nonrenewal is received at
least sixty (60) days prior to the renewal date.
1.2 AT&T PARADYNE manufacturers, produces, and/or supplies microcomputer
products and desires to grant to Tech Data the right to sell and
distribute certain of those products, as hereinafter defined, upon the
terms and conditions set forth below. Tech Data is engaged in the sale
and distribution of microcomputer products and desires to have the
right to sell and distribute AT&T PARADYNE's products upon said terms
and conditions.
In consideration of the mutual covenants and agreements set forth
below, the parties hereto agree as follows:
1.3 Definitions. The following definitions shall apply to this Agreement.
(a) "Applicable Specification" shall mean the functional
performance, operational and compatibility characteristics of
a Product agreed upon in writing by the parties or, in the
absence of an agreement, as described in applicable
Documentation.
1.
<PAGE> 2
(b) "Documentation" shall mean user manuals, training
materials, product descriptions and specifications, technical
manuals, license agreements, supporting materials and other
printed information relating to the Products, whether
distributed in print, electronic, or video format, in effect
as of the date of the applicable Purchase Order and
incorporated therein by reference.
(c) "Products" shall mean, individually or collectively as
appropriate, hardware, licensed software, Documentation,
developed Products, supplies, accessories, and other
commodities related to any of the foregoing, provided or to be
provided by AT&T PARADYNE pursuant to this Agreement.
(d) "Standard Products" shall mean Products requiring no
changes, alterations, or additions, from those Products
customarily offered by AT&T PARADYNE, described in brochures
and by exhibits.
(e) "Customized Products" shall mean any Products AT&T
PARADYNE must purchase requiring AT&T PARADYNE to perform
changes, alterations, assembly, additions or special packaging
prior to shipping to Tech Data, as described in brochures and
by exhibits.
(f) "Territory" shall mean the United States of America and
its territories and possessions, and Canada.
(g) "Customers" of Tech Data shall include dealers, resellers,
value added resellers and other similar Customers, but shall
not include End Users unless specifically set forth in an
addendum to the Agreement.
(h) "End Users" shall mean final retail purchasers or
licensees who have acquired Products for their own use and not
for resale, remarketing or redistribution, unless specifically
set forth in a separate agreement.
(i) "Services" means any warranty, maintenance, advertising,
marketing or technical support and any other services
performed or to be performed by AT&T PARADYNE.
(j) "Retailer" shall mean any person or entity who sells any
Product to end-users.
(k) "Vendor Non-Affiliated Purchasers" shall mean any person
or entity that purchases the Products from AT&T PARADYNE for
sale to Retailers that is not affiliated with AT&T Corporation
or any AT&T subsidiary.
(l) "Return Price" for any unit of Product shall mean the
amount originally billed Tech Data for such unit less any
rebates or amounts with respect to such unit actually paid or
credited by AT&T PARADYNE to Tech Data, but shall not include
any deductions or offsets for cash, prepaid or early paid
discounts.
1.4 Appointment an Distributor. AT&T PARADYNE hereby grants to Tech Data
the non-exclusive right to distribute Products during the term of this
agreement within the Territory as herein defined. AT&T PARADYNE
reserves the right to appoint other authorized distributors Tech Data
will use its best efforts to promote sales of the Products within the
Territory.
<PAGE> 3
ARTICLE II. PURCHASE ORDERS
2.1 In the event that AT&T PARADYNE shall (i) sell any additional Product
not set forth on Exhibit A, or (ii) introduce a new version or
materially change the specifications or packaging of, or discontinue
any Product, AT&T PARADYNE shall use reasonable efforts to notify Tech
Data, not less than thirty (30) days in advance of such an event and,
in any event, at least as quickly as AT&T PARADYNE notifies any other
reseller.
2.2 Issuance and Acceptance of Purchase Orders. Tech Data may purchase and
AT&T PARADYNE shall sell to Tech Data, Products as described below:
(a) Tech Data may issue to AT&T PARADYNE one or more purchase
orders identifying the Products Tech Data desires to purchase
from AT&T PARADYNE. Each Purchase Order may include other
terms and conditions which are consistent with the terms and
conditions of this Agreement, or which are necessary to place
a Purchase Order, such as billing and shipping information,
required delivery dates, delivery locations, and the purchase
price or charges for Products, including any discounts or
adjustments for special marketing programs. Purchase orders
may be placed by Tech Data by fax or electronically
transferred.
(b) A Purchase Order shall be deemed accepted by AT&T PARADYNE
unless AT&T PARADYNE notifies Tech Data in writing within ten
(10) days after receiving the Purchase Order that AT&T
PARADYNE does not accept the Purchase Order.
(c) AT&T PARADYNE shall accept Purchase Orders from Tech Data
for additional Products which Tech Data is contractually
obligated to furnish to its Customers and does not have in its
inventory upon the termination of this Agreement; provided
Tech Data notifies AT&T PARADYNE of any and all such
transactions in writing within sixty (60) days after the
termination date.
(d) The agreement shall not obligate Tech Data to purchase any
Products or services except as specifically set forth in a
written purchase order.
2.3 Purchase Order Alterations or Cancellations. Fifteen (15) days prior to
shipment of Standard Products, AT&T PARADYNE shall accept an alteration
or cancellation to a Purchase Order in order to: (i) change a location
for delivery, (ii) modify the quantity or type of Products to be
delivered or (iii) correct typographical or clerical errors. Tech Data
may not alter or cancel any Purchase Order for Customized Products
after such time as the Products have been altered to a point where such
Products are no longer capable of resale by AT&T PARADYNE after
reasonable efforts.
2.4 At the request of Tech Data, AT&T PARADYNE shall consign to Tech Data a
reasonable number of demonstration units of the Product to aid Tech
Data and its sales staff in the support and promotion of the Product.
All units consigned will be returned to AT&T PARADYNE in good
condition, reasonable wear and tear excepted, when requested by AT&T
PARADYNE at any time eleven (11) months after delivery to Tech, Data.
<PAGE> 4
2.5 Product Shortages. AT&T PARADYNE agrees to maintain sufficient Product
inventory to permit it to fill Tech Data's orders as required herein.
If a shortage of any Product in AT&T PARADYNE's inventory exists in
spite of AT&T PARADYNE's good faith efforts, AT&T PARADYNE agrees to
allocate its available inventory of such Product to Tech Data in
proportion to Tech Data's percentage of all ATM customer orders for
such Product during the previous twelve (12) months.
ARTICLE III - DELIVERY AND
ACCEPTANCE OF PRODUCTS
3.1 Subsidiaries. AT&T PARADYNE understands and acknowledges that Tech Data
may obtain Products in accordance with this Agreement for the benefit
of subsidiaries of Tech Data. Upon prior approval from AT&T PARADYNE
subsidiaries of Tech Data shall be entitled to obtain Products directly
from AT&T PARADYNE pursuant to this Agreement.
3.2 Acceptance of Products. Tech Data shall, after a reasonable time to
inspect each shipment, accept each Product on the date (the "Acceptance
Date") when such Products and all necessary documentation are delivered
to Tech Data in accordance with the Purchase Order and the Product
specifications. Any Products not ordered or not otherwise in accordance
with the purchase order, such as mis-shipments, overshipments will be
returned to AT&T PARADYNE at AT&T PARADYNE's expense (including costs
of shipment) and shall promptly refund to Tech Data all monies paid in
respect to such Products. Tech Data shall not be required to accept
partial shipment unless Tech Data agrees prior to shipment.
Tech Data shall have the ability to return for credit products which
have boxes that are or become damaged. An offsetting purchase order
will be placed for all bad box returns. In addition, AT&T PARADYNE will
supply to Tech Data, at no charge, any and all missing material(s).
3.3 Defective Products. In the event any Products are received in a
defective condition or not in accordance with AT&T PARADYNE's published
specifications or the documentation relating to such Products, Tech Data
may return the Products for full credit. Products shall be deemed
defective if the Product, or any portion of the Product, fails to
operate properly on initial "burn in", boot, or use as applicable. Tech
Data shall have the right to return any such Products that are returned
to Tech Data from its Customers or End Users within sixty (60) days of
the Products' initial delivery date to the end-user. All freight charges
for returned Products will be paid by Tech Data or Tech Data's Customer.
3.4 Transportation of Products. AT&T PARADYNE shall deliver the Products to
Tech Data at the location shown and on the delivery date set forth in
the applicable Purchase Order or as otherwise agreed upon by the
parties. Charges for transportation of to Products shall be paid by AT&T
PARADYNE. AT&T PARADYNE shall use only those common carriers preapproved
by Tech Data or listed in Tech Data's published routing instructions,
unless prior written approval of Tech Data is received.
<PAGE> 5
3.5 Title and Risk of Loss. AT&T PARADYNE shall ship Product only pursuant
to Tech Data's published routing instructions or purchase orders
received by AT&T PARADYNE. Product shall be shipped F.O.B. Tech Data's
warehouse with title and risk of loss or damage to pass to Tech Data
upon shipment by AT&T PARADYNE to the warehouse designated on Tech
Data's purchase order. The foregoing notwithstanding, all
transportation, insurance and handling charges for any Products so
shipped shall be borne by AT&T PARADYNE.
3.6 Resale of Products by Tech Data. During the term of this Agreement, Tech
Data may market, promote, distribute and resell Products to Customers of
Tech Data, either directly or through its subsidiaries, in accordance
with the following terms and conditions:
(a) AT&T PARADYNE shall amend to Tech Data and each Customer
of Tech Data the same warranties and indemnifications, with
respect to Products purchased and resold hereunder as AT&T
PARADYNE extends to its end-user Customers. The term of
warranties and indemnities extended by AT&T PARADYNE to an End
User shall commence upon delivery of the Product to the End
User.
(b) AT&T PARADYNE shall support the Product and any efforts to
sell the Product by Tech Data, and provide sales literature,
advertising materials and reasonable training and support in
the sale and use of the Product to Tech Data's employees and
Customers, if requested by Tech Data. AT&T PARADYNE also
agrees to provide Tech Data telephone support representative
at no charge during AT&T PARADYNE's normal business hours.
AT&T PARADYNE agrees to provide Tech Data's customers
telephone representatives at no charge, Monday through Friday
9:00 am to 8:00 pm EST.
(c) AT&T PARADYNE shall provide [***] to Tech Data and the
Customers of Tech Data, sales training, marketing support,
advertising materials and technical training in connection
with the resale of Products as are currently offered or that
may be offered by AT&T PARADYNE. Tech Data reserves the right
to [***].
(d) As reasonably necessary and upon mutual agreement, Tech
Data will make its facilities available for, and will assist
AT&T PARADYNE in providing, Product training and support.
(e) Tech Data may advertise and promote the Product and/or
AT&T PARADYNE in a commercially reasonable manner and may use
AT&T PARADYNE's trademarks, service marks and trade names in
connection therewith; provided that, Tech Data shall submit
the advertisement or promotion to AT&T PARADYNE for review and
approval prior to its initial release, which approval shall
not be unreasonably withheld or delayed. Copies of any
proposed publication containing any such mark, name or logo
shall be submitted to AT&T PARADYNE for review and approval,
and Tech Data shall make reasonable commercial efforts to
obtain AT&T PARADYNE's approval at least thirty (30) days
prior to publication.
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(f) AT&T PARADYNE shall clearly mark each unit package with
the serial number, product description and machine readable
bar code (employing ISBN or other industry standard bar code)
approved in writing by Tech Data.
3.7 Inventory Adjustment. Notwithstanding anything else to the contrary in
this Agreement, at any time during the term of this Agreement Tech Data
may return to AT&T PARADYNE Products with an aggregate return price
equal to [***] of the total aggregate purchase price of Products
delivered to Tech Data during the year [***]. Tech Data shall obtain a
AT&T PARADYNE issued Return Equipment Authorization ("REA") number,
which shall not be unreasonably withheld, for all Product returned
under this Section 3.7, and shall accompany all such returns with an
order for Product in an amount equal to [***]. Upon receipt of such
Products, AT&T PARADYNE shall credit Tech Data with an amount equal to
[***]. To be eligible for such a return, Product must be in its
original, unopened package. All freight charges for returned Products
will be paid by Tech Data.
In addition, Tech Data shall have the right to return for full credit,
without limitation as to the dollar amount, all Products that become
obsolete or AT&T PARADYNE discontinues or are removed from AT&T
PARADYNE's current price list; provided Tech Data returns such Products
within ninety (90) days after Tech Data receives written notice that
such Products are obsolete, discontinued or are removed from AT&T
PARADYNE's price list.
3.8 Time of Performance. Time is hereby expressly made of the essence with
respect to each and every term and provision of this agreement, except
for delivery dates which are estimates only.
3.9 Quality Control. AT&T PARADYNE shall test and inspect Products prior to
shipment. AT&T PARADYNE's standard inspection records, and a report
setting forth product defect percentage rates are to be maintained by
AT&T PARADYNE and made available to Tech Data upon request with
reasonable notice or, at the option of Tech Data, on a quarterly basis.
ARTICLE IV. WARRANTIES,
INDEMNITIES AND LIABILITIES
4.1 Warranty. Tech Data may return any Product which it or any of it's
Customer's finds to be defective in workmanship or material for credit
in the amount of the Return Price of such Product. AT&T PARADYNE shall
indemnify and hold Tech Data, its subsidiaries, harmless from and
against all actions, claims, losses, damages, liabilities, awards,
costs and expenses (including a reasonable attorney's fee) resulting
from or arising out of any breach or claimed breach of the foregoing
warranties. All transportation charges for Product so returned shall be
borne by Tech Data.
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<PAGE> 7
AT&T PARADYNE hereby represents and warrants that the Products do and
will conform to all codes, laws or regulations of any governmental
agency. AT&T PARADYNE provides a warranty to end users who purchase the
Product. Such warranty is included in the Product package. Such
warranty is not in lieu of Tech Data's rights within Section 4.1 above,
and shall not be considered to be AT&T PARADYNE's warranty to Tech Data
or Tech Data's Retailers. SUCH WARRANTIES TO THE END USER ARE IN LIEU
OF ALL OTHER WARRANTIES TO THE END USER, EXPRESS OR IMPLIED, EITHER IN
FACT OR BY AN OPERATION OF LAW, STATUTORY OR OTHERWISE, INCLUDING
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR USE OR INTENDED PURPOSE.
AT&T PARADYNE NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME
FOR IT ANY OTHER LIABILITY IN CONNECTION WITH THE SALE, INSTALLATION OR
USE OF ITS PRODUCTS, NOR MAKES ANY WARRANTY WHATSOEVER FOR ANY
NON-STANDARD PRODUCT ORDERED BY TECH DATA HEREUNDER. IN NO EVENT WILL
AT&T PARADYNE HAVE ANY OBLIGATION OR LIABILITY FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, ANY LOSS OF
REVENUE, PROFIT OR BUSINESS) SUSTAINED BY TECH DATA OR THE COST OR
COVER ARISING FROM OR OTHERWISE RELATED TO THE PRODUCTS OR THIS
AGREEMENT. The foregoing limitation shall not limit AT&T PARADYNE's
obligation to defend and hold harmless Tech Data against certain third
party claims as provided herein.
In the event AT&T PARADYNE recalls any or all of the Products due to
defects, revisions, or upgrades, Tech Data shall provide reasonable
assistance in such recall; provided that, AT&T PARADYNE shall pay all
of Tech Data's expenses in connection with such.
4.2 Proprietary Rights Indemnification. AT&T PARADYNE hereby represents and
warrants that AT&T PARADYNE has all right, title, ownership interest
and/or marketing rights necessary to provide the Products to Tech Data,
and Products and their sale and use hereunder do not infringe upon any
copyright, patent, trade secret or other proprietary or intellectual
property right of any third party, and that there are no suits or
proceeding, pending or threatened alleging any such infringement. AT&T
PARADYNE shall indemnify and hold Tech Data, Tech Data's related and/or
subsidiary companies, Tech Data's Customers and End Users and their
respective successors, officers, directors, employees and agents
harmless from and against any and all actions, claims, losses, damages,
liabilities, awards, costs and expenses, including but not limited to
AT&T PARADYNE's manufacture, sale, offering for sale, distribution,
promotion or advertising, of the Products supplied under this Agreement
(including attorney's fees) which they or any of them incur or become
obligated to pay resulting from or arising out of any breach or claimed
breach of the foregoing warranty, or by reason of any acts that may be
committed suffered or permitted by AT&T PARADYNE. AT&T PARADYNE shall
defend and settle, at its expense, all suits or proceedings arising
therefrom. Tech Data shall inform AT&T PARADYNE of any such suit or
proceeding against Tech Data and shall have the right to participate in
the defense of any such suit or proceeding at Tech
<PAGE> 8
Data's expense and through counsel of Tech Data's choosing. In the
event an injunction is sought or obtained against the use of a Product
or in Tech Data's opinion is likely to be sought or obtained, AT&T
PARADYNE shall within ninety (90) days of receipt of notice, at its
option and expense, either (i) procure for Tech Data, its Customers and
Product End Users the right to continue to use the infringing Product
as set forth in this Agreement, or (ii) replace, to the extent Products
are available, or modify the Product to make its use non-infringing
while being capable of performing the same function without degradation
of performance. AT&T PARADYNE shall have no liability under this
Section for any infringement based on the use of any equipment or
software, if the equipment or software is used in a manner or with
equipment for which it was not reasonably intended, or if the equipment
or software is used in an infringing process. AT&T PARADYNE's
obligations hereunder shall survive termination of this Agreement.
4.3 Cross Indemnification. In the event any act or omission of either party
or its employees, servants, agents or representatives causes or results
in (i) loss, damage to or destruction of property of the other party or
third parties, and/or (ii) death or injury to persons including, but
not limited to, employees or invitees of either party, then such party
shall indemnify, defend and hold the other party harmless from and
against any and all claims, actions. damages, demands, liabilities,
costs and expenses, including reasonable attorneys' fees and expenses,
resulting therefrom. The indemnifying party shall pay or reimburse the
other party promptly for all such loss, damage, destruction, death or
injury.
4.4 Insurance.
(a) The parties shall be responsible for providing Workman's
Compensation insurance on its employees.
(b) Without in any way limiting AT&T PARADYNE's indemnification
obligations as set forth in this Agreement, AT&T PARADYNE shall
maintain Comprehensive General Liability (Bodily Injury and Property
Damage) Insurance in such amounts as is set forth on the attached
certificate of insurance, including the following supplementary
coverage:
(1) Personal Injury Liability with "employee" and
"contractual" exclusions deleted;
(2) Product and Completed Operations Liability;
(3) AT&T PARADYNE shall provide certificates of all
coverage to Tech Data naming Tech Data as additional
insured and requiring ten (10) days prior notice to
Tech Data before termination of any such insurance.
4.5 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PURSUANT TO THIS AGREEMENT FOR AMOUNTS REPRESENTING LOSS OF PROFITS,
LOSS OF BUSINESS OR INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF THE
OTHER PARTY.
<PAGE> 9
4.6 Unauthorized Representations. Tech Data shall have no authority to
alter or extend any of the warranties of AT&T PARADYNE expressly
contained or referred to in this Agreement without prior approval of
AT&T PARADYNE.
4.7 Continuing Availability of Parts. AT&T PARADYNE agrees to offer for
sale to Tech Data for the purpose of warranty or resale to its
Customers during the term of this Agreement for a period of five (5)
years after the expiration of this Agreement, functionally equivalent
maintenance, replacement and repair parts for all Products sold to Tech
Data.
4.8 Disclaimer of Warranties. AT&T PARADYNE has made expressed warranties
in this Agreement and in documentation, promotional and advertising
materials. EXCEPT AS SET FORTH HEREIN OR THEREIN, AT&T PARADYNE
DISCLAIMS ALL WARRANTIES WITH REGARD TO THE PRODUCTS.
ARTICLE V. PAYMENT TO AT&T PARADYNE
5.1 Changes, Prices and Fees for Products. The price and applicable
discount, if any, for the Product shall be as set forth in Exhibit A.
Tech Data shall not be bound to sell Product to its customers at any
prices suggested by AT&T PARADYNE.
5.2 Most Favored Pricing and Terms. The Discounts and Payment Terms for the
Products now or hereafter set forth on Exhibit A shall [***] of such
Product who purchases Product for resale. It is acknowledged by both
parties hereto that AT&T PARADYNE shall [***]. The offer may be with
specific regard to, though not limited to, Purchase Price of Product,
Payment Terms, inventory protection, allocation of available Products,
or availability of special funding for special projects or programs.
5.3 Price Increase. AT&T PARADYNE shall have the right to change the list
price of any Product upon giving thirty (30) days' prior written notice
to Tech Data. In the event that AT&T PARADYNE shall raise the list
price of a Product, [***].
5.4 Price Decrease. In the event AT&T PARADYNE reduces the price of any
Product or offers the Product at a lower price, including raising the
discount offered, to any other like Purchaser, AT&T PARADYNE shall
provide thirty (30) days prior written notice and [***]. AT&T will also
credit Tech Data for the difference between the invoice price charged
to Tech Data and the reduced price for each unit of Product held in
inventory by Tech Data's customers on the date the reduced price is
first offered by AT&T PARADYNE provided Tech Data's customers request
is received by AT&T PARADYNE within sixty (60) days from the time the
reduced price is first offered and is accompanied by reasonable
commercial documents.
5.5 Payment. Terms of payment for any order shall be net thirty (30) days;
except for Tech Data's initial order for any Product, for which payment
shall be due ninety (90) days from date of the applicable invoice and
Tech Data may return any of the initial order for credit
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<PAGE> 10
within ninety (90) days of delivery of the initial order to Tech Data.
AT&T PARADYNE shall invoice Tech Data no earlier than the applicable
shipping date for the Products covered by such invoice.
Notwithstanding any other provision in this Agreement to the contrary,
Tech Data shall not be deemed in default under this Agreement if it
withholds any payment to AT&T PARADYNE because of legitimate dispute
between the parties so long as the amount withheld is not greater than
the disputed amount.
5.6 Taxes. Tech Data's Purchase Price [***] that may be applicable to the
Products. When AT&T PARADYNE has the legal obligation to collect such
taxes, [***].
5.7 For each Product shipment to Tech Data, AT&T PARADYNE shall issue to
Tech Data an invoice showing Tech Data's order number and the Vendor
Product model number, description, price and any discount. At least
monthly AT&T PARADYNE shall provide Tech Data with a current statement
of account.
5.8 Tech Data shall provide to AT&T PARADYNE a monthly sales out report of
the total dollar volume and number of units of Products shipped by Tech
Data, sorted by zip code, within fifteen (15) days of the close of the
month.
5.9 Advertising Credit. AT&T PARADYNE agrees to cooperate with Tech Data in
advertising and promoting the Product and/or AT&T PARADYNE and hereby
grants Tech Data a [***] of invoice amounts for Product purchased by
Tech Data from AT&T PARADYNE to the extent that Tech Data uses the
[***]. Tech Data will provide a copy of AT&T PARADYNE's prior approval
and proof of performance for promotional programs, and Tech Data will
provide AT&T PARADYNE a copy of Tech Data's Co-op policy and
guidelines. AT&T PARADYNE may from time to time at its sole discretion
separately authorize Tech Data to conduct advertising and other
activities and may agree at that time to pay the costs thereof from
funds outside of the allowance granted in the preceding sentence.
Invoices rendered hereunder shall be paid by AT&T PARADYNE within
thirty (30) days of invoice date. In the event AT&T does not make such
payment within thirty (30) days after invoice date, Tech Data shall
provide AT&T PARADYNE with thirty (30) days notice of its intent to
deduct such amount from any amounts due AT&T PARADYNE hereunder. In the
event AT&T PARADYNE has not made such payment following the expiration
of such thirty (30) day notice, Tech Data shall have the right to
deduct such amount from any amounts due AT&T PARADYNE under this
Agreement.
5.10 Tech Data shall provide AT&T PARADYNE a ninety (90) day forecast of
anticipated sales on a monthly basis. Forecast shall not be considered
firm commitments on the part of Tech Data to purchase any Products.
ARTICLE VI. TERMINATION
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<PAGE> 11
6.1 Termination. Either party may terminate this Agreement upon (a) sixty
(60) days written notice to the other following any material breach or
omission by the other with respect to any term, representation,
warranty, condition or covenant hereof and (b) the failure of such
other party to cure such breach or omission prior to the expiration of
a sixty (60) day period.
6.2 For the purpose of this Agreement, a party shall be in default if (a)
it materially breaches a terms of this Agreement and such breach
continues for a period of thirty (30) business days after it has been
notified of the breach, or (b) it shall cease conducting business in
the normal course, become insolvent, make a general business assignment
for the benefit of its creditors, suffer or permit the appointment or a
receiver for its business or assets, or shall avail itself of or become
subject to any proceeding under the Federal Bankruptcy Act or any other
federal or state statue relating to insolvency or the protection of
rights of creditors.
6.3 Rights Upon Termination. Termination of any Purchase Order or this
Agreement shall not affect AT&T PARADYNE's right to be paid for
undisputed invoices for Products already shipped. The termination of
this Agreement shall not affect any of AT&T PARADYNE's warranties,
indemnifications or obligations relating to returns, credits or any
other matters set forth in this agreement that are to survive
termination in order to carry out their intended purpose, all of which
shall survive this Agreement. Upon termination of this Agreement, Tech
Data shall discontinue holding itself cut as a distributor of AT&T
PARADYNE's Products. The expiration of the term of this Agreement shall
not affect the obligations of either party to the other party pursuant
to any Purchase Order previously forwarded to AT&T PARADYNE.
6.4 Repurchase of Products Upon Termination. Tech Data may return any
Product in its inventory to AT&T PARADYNE for credit against
outstanding invoices, or for cash refund if there are no invoices then
outstanding, within sixty (60) days following the termination of this
Agreement. In such event, AT&T PARADYNE shall issue a Return Equipment
Authorization (REA) number to Tech Data for all such Products. Any
credit or refund due Tech Data for returned product shall be equal to
the purchase price of the Product, less any discounts or credits
previously received, but shall not include any deduction or offset for
prepaid or early pay discounts. Such returns shall not reduce or offset
any co-op payments or obligations owed to Tech Data
ARTICLE VII. MISCELLANEOUS
7.1 Binding Nature, Assignment, and Subcontracting. This Agreement shall be
binding on the parties and their respective successors and assigns, but
neither party shall have the power to assign this Agreement without the
prior written consent of the other party.
7.2 Counterparts. This Agreement may be executed in several counterparts,
all of which taken together shall constitute one single agreement
between the parties.
<PAGE> 12
7.3 Headings. The Article and Section headings used in this Agreement are
for reference and convenience only and shall not enter into the
interpretation hereof.
7.4 Relationship of Parties. Tech Data is performing pursuant to this
Agreement only as an independent contractor. Nothing set forth in this
Agreement shall be construed to create the relationship of principal
and agent between Tech Data and AT&T PARADYNE. Neither party shall act
or represent itself, directly or by implication, as an agent of the
other party.
7.5 Confidentiality. Each party acknowledges that in the course of
performance of its obligations pursuant to this Agreement, it may
obtain certain confidential and/or proprietary information. Each party
hereby agrees that all such information communicated to it by the other
party, its subsidiaries, or Customers, whether before or after the
effective date, shall be and was received in strict confidence, shall
be used only for purposes of this Agreement, and shall not be disclosed
without the prior written consent of the other party, except as may be
necessary by reason of legal, accounting or regulatory requirements
beyond either party's reasonable control. The provisions of this
Section shall survive the term or termination of this Agreement for any
reason.
7.6 Arbitration. Any disputes arising under this Agreement shall be
submitted to arbitration in accordance with such rules as the parties
jointly agree. If the parties are unable to agree on arbitration
procedures, arbitration shall be conducted in Pinellas County, Florida
in accordance with the rules of the American Arbitration Association.
Any such award shall be final and binding upon both parties.
7.7 Notices. Wherever one party is required or permitted to give notice to
the other pursuant to this Agreement, such notice shall be deemed given
when delivered in hand, by telex or cable, or when mailed by registered
or certified mad, return receipt requested, postage prepaid, and
addressed as follows:
In the case of AT&T PARADYNE: In the Case of Tech Data:
---------------------------- ------------------------
AT&T Paradyne Tech Data Corporation
8545 126th Avenue North 5350 Tech Data Drive
Largo, FL 34649-2826 Clearwater, Fl 34620
Attn: Vice President and General Attn: Jennifer M. Dougan
Manager of Personal Director of Marketing Operations
Communications Technology cc: Debi A. Schwatka
cc: Corporate Secretary Contracts Administrator
Either party may from time to time change its address for notification
purposes by giving the other party written notice of the new address
and the date upon which it will become effective.
7.8 Force Majeure. In the event that performance by a party under this
Agreement is precluded or adversely materially affected because of the
occurrence of an event,
<PAGE> 13
unforeseen development, or contingency beyond the control of such
party, the rights and obligations of such party shall be governed by
this provision.
For the purpose of this Agreement, an event, an unforeseen development,
or contingency beyond the control of the party shall include, but shall
not be limited to, the following: war, declared or undeclared,
revolution, insurrection, counter revolution, isolated instances of
violence, labor or material shortages, fire, flood, storm, tempest,
riots, civil commotion, acts of God including (but not limited to)
lightening, severe weather, earthquakes or other acts of nature, acts
of public enemy, prohibition of import or export of goods covered
hereby, governmental orders, regulations, restrictions, and all other
similar causes.
Each party shall be excused from any failure to perform any obligation,
except for the payment of uncontested invoices by Tech Data, hereunder
to the extent such failure is caused by the foregoing causes. Any
suspension of the performance by reason of this provision shall be
limited to the period during which the cause or the related effect of
failure exists, and such suspension shall not affect the running of the
time period provided for in this Agreement.
(a) A party whose performance is prevented, restricted or
interfered with by reason of a Force Majeure condition shall
be excused from such performance to the extent of such Force
Majeure condition so long as such party provides the other
party with prompt written notice describing the Force Majeure
condition immediately continues performance whenever and to
the extent such causes are removed.
(b) If, due to a Force Majeure condition, the scheduled time
of delivery or performance is or will be delayed for more than
ninety (90) days after the scheduled date, the party not
relying upon the Force Majeure condition may terminate,
without liability to the other party, any Purchase Order or
portion thereof covering the delayed Products.
7.9 Return Material Authorization Numbers. In the event any provision of
this Agreement call/allow for Tech Data to return Product to AT&T
PARADYNE as described here, Tech Data will obtain an Return Equipment
Authorization (REA) number from AT&T which will be issued within five
(5) working days of Tech Data's request; however, if the REA is not
received within five (5) business days, AT&T PARADYNE shall accept
returned Products absent an REA. The net purchase price, minus any
adjustments of such Products returned to AT&T PARADYNE shall be
credited to Tech Data's account.
7.10 Credits to Tech Data. In the event any provisions of this Agreement or
any other agreement between Tech Data and AT&T PARADYNE require that
AT&T PARADYNE grant credits to Tech Data's account, and such credits
are not received within thirty (30) days then, all such credits shall
become effective immediately upon notice to AT&T PARADYNE. In such
event, Tech Data shall be entitled to deduct any such credits from the
red monies owed to AT&T PARADYNE. In the event credits exceed any
balances owed by Tech Data to AT&T PARADYNE, then AT&T PARADYNE shall
upon receipt of Tech Data's request accompanied by valid supporting
documentation from Tech Data,
<PAGE> 14
pay Tech Data the amount of such credit within thirty (30) days of
AT&T's receipt of such request.
7.11 Severability. If, but only to the extent that, any provision of this
Agreement is declared or found to be illegal, unenforceable or void,
then both parties shall be relieved of all obligations arising under
such provision, it being the intent and agreement of the parties that
this Agreement shall be deemed amended by modifying such provision, to
the extent necessary to make it legal and enforceable while preserving
its intent.
7.12 Waiver. A waiver by either of the parties of any covenants, conditions
or agreements to be performed by the other or any breach thereof shall
not be construed to be a waiver of any succeeding breach thereof or of
any other covenant, condition or agreement herein contained.
7.13 Remedies. All remedies set forth in this Agreement shall be cumulative
and in addition to and not in lieu of any other remedies available to
either party at law, in equity or otherwise, and may be enforced
concurrently or from time to time.
7.14 Survival of Terms. Termination or expiration of this Agreement for any
reason shall not release either party from any liabilities or
obligations set forth in this Agreement which (i) the parties have
expressly agreed shall survive any such termination or expiration, or
(ii) remain to be performed or by their nature would be intended to be
applicable following any such termination or expiration.
7.15 Nonexclusive Market and Purchase Rights. It is expressly understood and
agreed that this Agreement does not grant to AT&T PARADYNE or Tech Data
an exclusive right to purchase or sell Products and shall not prevent
either party from developing or acquiring other Vendors or Customers or
competing Products.
7.16 Entire Agreement. This Agreement, including any Exhibits and documents
referred to in this Agreement or attached hereto, constitutes the
entire and exclusive statement of Agreement between the parties with
respect to its subject matter and there are no oral or written
representations, understandings or agreements relating to this
Agreement which are not fully expressed herein.
7.17 Governing Law. This Agreement shall have Florida as its situs and shall
be governed by and construed in accordance with the laws of the State
of Florida.
7.18 Software Licenses. Whenever the Products described in this Agreement
shall include software licenses, AT&T PARADYNE hereby grants to Tech
Data a nonexclusive license to market, demonstrate and distribute the
software to Customers of Tech Data. Tech Data agrees to comply with
AT&T PARADYNE's reasonable software license agreements, and agrees to
use reasonable efforts to protect AT&T PARADYNE's software, including
using reasonable efforts to avoid allowing Customers, individuals, or
employees to make any unauthorized copies of AT&T PARADYNE's licensed
software; to modify, disassemble or decompile any software; to remove,
obscure or after any notice
<PAGE> 15
of patent, trademark, copyright or trade name; or authorize any person
to do anything that Tech Data is prohibited from doing under this
Agreement. Provided, however, AT&T PARADYNE shall provide Tech Data
with copies of appropriate software and documentation, at no charge,
for the purpose of effectively demonstrating equipment to Customers.
This demonstration software shall be updated as appropriate to insure
that current software is available for sales demonstration. Tech Data
acknowledges that no title or ownership of the proprietary rights to
any software is transferred by virtue of this Agreement. Tech Data will
use reasonable efforts to protect AT&T PARADYNE's rights under this
section but Tech Data is not authorized and shall not be required to
instigate legal action on behalf of AT&T PARADYNE or its suppliers
against third parties for infringement. Tech Data will notify AT&T
PARADYNE of any infringement of which it has actual knowledge.
7.19 International Business. AT&T PARADYNE acknowledges that Tech Data may
desire to obtain Products or Systems for use in countries outside the
United States and its territories. The parties acknowledge that in such
case it may be necessary to order into additional agreements between
AT&T PARADYNE and Tech Data and/or the respective subsidiaries, agents,
distributors or subsidiaries authorized to conduct business in such
countries or to negotiate further terms and conditions to provide for
such right. The parties intend that any further agreements or terms and
conditions will be consistent with and based upon the applicable terms
and conditions of this Agreement, subject, however, to requirements of
local law and local business practice. All Products obtained pursuant
to this Section shall be deemed for purposes of calculating accumulated
purchases and any discounts set forth in this Agreement, to have been
obtained pursuant to this Agreement.
7.20 Compliance with U.S. Export Regulations and Other Laws. Tech Data shall
comply with the rule and regulation under the U.S. Export
Administration Act, the U.S. Anti-Boycott provisions, and the U.S.
Foreign Corrupt Practices Act, as well as all of the applicable U.S.
federal, state and municipal statues, rules and regulations.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
signed and delivered by its duly authorized officer or representative as of the
Effective Date.
AT&T PARADYNE TECH DATA CORPORATION
By: /s/ Jean Claude Vrignaud By: /s/ Peggy K Caldwell
Printed Name: Jean Claude Vrignaud Printed Name: PEGGY K CALDWELL
Title: Vice President and General Title: Senior Vice President
Manager Marketing
Personal Communications
Technology
Date: Date: 4/29/93
<PAGE> 16
ATTACHMENT A
TECH DATA/AT&T PARADYNE
PRICE LIST
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DATAPORT LIST PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
[***] [***] [***]
- --------------------------------------------------------------------------------
</TABLE>
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1.
<PAGE> 17
AT&T
LAUNCH PLAN
[***]
OBJECTIVES
[***]
INTERNAL ACTIVITIES
[***]
EXTERNAL ACTIVITIES
[***]
DEALER INCENTIVE - [***]
[***]
JUST THE FAX - [***]
[***]
ON-HOLD MESSAGE - [***]
[***]
TECH DATA CATALOG - [***]
[***]
COST SUMMARY
Internal Sales Training [***]
Portability Promotion [***]
External Direct Mail [***]
Dealer Incentive [***]
Just The Fax [***]
On-Hold Message [***]
Tech Data Catalog [***]
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Exhibit 10.25
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
OEM AGREEMENT
# LGSC103DS
THIS AGREEMENT IS MADE AND ENTERED INTO BY PREMISYS COMMUNICATIONS, INC. AND ITS
PARENT PREMISYS COMMUNICATIONS HOLDINGS, INC., HAVING THEIR PRINCIPAL PLACE OF
BUSINESS AT 1032 ELWELL COURT, PALO ALTO, CALIFORNIA, 94303, A CALIFORNIA
CORPORATION, HEREINAFTER COLLECTIVELY REFERRED TO AS, "SELLER", AND AT&T
PARADYNE CORPORATION, A DELAWARE CORPORATION, HAVING ITS PRINCIPAL PLACE OF
BUSINESS AT 8545 126TH AVENUE NORTH, P.O. BOX 2826, LARGO, FLORIDA 34649-2826,
HEREINAFTER REFERRED TO AS "BUYER".
WHEREAS, Buyer desires to purchase from Seller certain Products as defined
hereinafter.
WHEREAS, Seller desires to supply Buyer with such Products,
The above parties therefore agree that the following mutual promises and
covenants shall govern the sale by Seller, and the purchase by Buyer, of such
Products.
01.0. DEFINITIONS
01.1. EFFECTIVE DATE
The "Effective Date" of this Agreement shall be the date of execution.
01.2. TERM OF AGREEMENT
The initial term of this Agreement shall commence upon the Effective
Date of this Agreement by Seller and Buyer and shall terminate FIVE (50) years
after the Acceptance Date, unless sooner terminated as hereinafter provided.
01.3. PRODUCT
"Product" or "Products" shall mean the Seller's Channel Bank product
line as set forth in Exhibit A, including all associated hardware, software,
firmware, documentation and any enhancements or modifications thereof. This
shall include "New Products" that have been mutually agreed to between the
parties for inclusion into this Agreement.
01.4. RELEASE
"Release" shall mean Buyer's printed, written or Electronic Data
Interchange (EDI) order to Seller specifying Product shipment, quantities and
Buyer's shipment dates.
01.5. SPECIFICATIONS
1.
<PAGE> 2
"Specifications" shall mean those purchase specifications
(#351-0047-0031) for the Product as now set forth in Exhibit B and as modified
from time to time in accordance with this Agreement.
01.6. EPIDEMIC
"Epidemic" shall mean the occurrence of one or more of the following
events:
a. Products that are dead on arrivals (DOA's) exceeding the
greater of three (3) percent of the Products delivered to Buyer or Buyer's
customer within a one month period.
b. Four (4) percent or more of any consecutive one hundred
Products delivered to Buyer or Buyer's customer that are rejected for defective
materials or workmanship.
c. Field repair reports indicate a non conformance to the
Specifications for the same defect of four (4) percent or more of the installed
Product base.
d. Reliability plots of field data for two (2) consecutive
months indicate that Products have an actual mean time between failure (MTBF)
less than eighty percent (80%) of the MTBF specified at one hundred and one
thousand (101,000) hours.
01.7. NEW PRODUCT
"New Product" shall mean any of Seller's products distributed after
execution of this Agreement, that would (i) replace or obsolete existing Product
or (ii) include all existing functions of the Products plus any Enhancements or
(iii) create a more favorable price/performance ratio than the Products.
Further, New Product shall include any new, jointly developed with Buyer or
existing models that offer new features, options or other new technology not
previously offered on existing Products but would otherwise not be offered to
Buyer under the existing Product specifications.
01.8. DELIVERY SCHEDULE
"Delivery Schedule" shall mean the mutually agreed upon date(s) of
shipment of Product to Buyer's customer. This date, that Product is to ship to
Buyer's designated customers, shall also be referred to as the "Scheduled Ship
Date".
01.9. ENHANCEMENT
"Enhancements" shall mean minor modifications or additions to the
Products which shall not materially alter its architecture or fundamental
functionality. Enhancements include substantial cost reductions of Products, or
portions of the Products.
01.10. SOFTWARE
2.
<PAGE> 3
"Software" shall mean any binary product in the form of object code,
whether residing on media loadable into the Products or in the Products as
firmware, and all documentation related to its use.
01.11. SOFTWARE BUG FIX
A "Software Bug Fix" shall mean any Software related defect that has
been fixed in a later revision of software.
01.12. SOFTWARE MAINTENANCE RELEASE
A "Software Maintenance Release" shall mean any Software that has been
revised by including one or more Software Bug Fixes into the base Software.
01.13. SOFTWARE FEATURE RELEASE
A "Software Feature Release" shall mean any Software that has been
revised to include new features or functionally.
01.14. ACCEPTANCE DATE
The "Acceptance Date" of the Product shall mean the date in which the
Buyer agrees that the Product has successfully passes the Buyer's internal
system tests and field beta tests and the product can be introduced into the
Buyer's controlled introduction process.
02.0. PURCHASE AND SALE OF PRODUCTS
02.1. PURCHASE AND SALE
Seller agrees to manufacture the Products released hereunder by Buyer
in accordance with the Specifications and to sell such Products, including any
Enhancements, to Buyer, and Buyer agrees to purchase from Seller the Products on
the terms and conditions and at the prices as hereinafter provided.
02.1.1 NO RESALE RESTRICTIONS
Except as provided herein, nothing contained herein shall be deemed in
any way restrict the rights of Buyer with respect to the resale of the Products
purchased hereunder.
02.2. EXPORTATION
Buyer agrees not to export the Products, or any systems containing the
Products, or any technical data relating to the Products without first obtaining
licenses or any other approvals required by the United States Department of
Commerce or other United States governmental agencies. Buyer agrees not to
export to any prohibited countries listed under the United States Export
Administration Act of 1979 as amended and updated from time to time and the
regulations promulgated thereunder.
3.
<PAGE> 4
02.3. MARKET RIGHTS
02.3.1. WORLDWIDE MARKET RIGHTS
Both Seller and Buyer intend that Buyer and the Buyer's distributors
shall be a primary distribution channel for the Products to end-user customers
for both the domestic and international markets. The Buyer shall have worldwide
distribution rights to sell the Products.
Seller shall assist Buyer in obtaining type approvals and homologation
for Buyer to distribute Products worldwide. Homologation schedules and
distribution of homologation costs are to be mutually agreed upon between the
Buyer and Seller. Seller further agrees where applicable to list Buyer's OEM
name on certificates already earned, where possible.
With respect to non domestic market rights Seller and Buyer agree to
the following:
a. On ore before the effective date of this Agreement, Buyer
will provide to Seller a confidential list (Buyer's list) of those
countries in which Buyer will support sales of the Products through
Buyer's direct sales operations or its in-country distributors. The
Buyer's list will also indicate the names of the distributors that
Buyer intends to use for resale of the Products in each country. Seller
will review the Buyer's list and within ten (10) days after receipt of
such list: i.) Seller shall provide to the Buyer a list (Seller's list)
that specifies any areas of potential conflicts or problems with the
Buyer's list and will specify the names of the distributors within the
countries on the Buyer's list that the Seller is currently in
negotiation with, ii.) Seller further agrees that it will not enter
into any new discussions to add other in-country distributors to the
countries on the Buyer's list for at least six (6) months after the
Effective Date without Buyer's written consent. After Seller has
received Buyer's list and returned to the Buyer the Seller's list, the
Buyer agrees to grant Seller forty five (45) day in which to close on
any distribution agreements that the Seller may have in process.
b. Any time within one year after the Effective Date Buyer may
add countries to the Buyer's list as Buyer requires. The same
guidelines as outlined in item a. of this Section will be used for each
country, with the six month time period starting after Seller receives
Buyer's written request to add the countries to the Buyer's list.
c. Beginning one year after the Effective Date any new
countries added to the Buyer's list, per item a. and b. above, will be
subject to a four month rather than a six month window.
d. Buyer and Seller agree to review at least semi-annually
Buyer's sales performance in each country where it is selling the
Products. If minimal performance objectives are not being met in any
country, Buyer and Seller will implement mutually agreeable programs to
improve sales performance in those countries.
4.
<PAGE> 5
e. Notwithstanding paragraphs a. through d. above, Seller at
its option may sell directly to carriers and service providers, and
OEMs who may sell to these carriers and service providers. However,
Seller agrees to inform Buyer, whenever practical of any opportunity
for sales of Product in those international countries where Buyer has
direct sales channels, except when Seller is unable to do so due to
business conditions including, but not limited to, non-disclosure
agreements, RFPs directed to Seller, and opportunities brought to
Seller by its other partners.
If Buyer wishes to pursue an opportunity brought to Buyer by Seller,
Buyer will provide to Seller a plan to pursue the opportunity in a time
frame in accordance with the following applicable situation:
1) Pursuit of an opportunity for which there is no
pressing deadline from an external entity: Buyer will submit
to Seller a plan within 60 days.
2) Pursuit of an opportunity which is constrained by
a deadline imposed by an external entity. Buyer must submit a
plan to Seller within a time period as required to meet
Seller's needs. Seller shall make every reasonable effort to
maximize the amount of time that the Buyer has to respond.
If rejected by the Seller, Seller will inform Buyer
of the reasons for rejection within four (4) business days and
conversely Buyer has four days to remedy reasons for
rejection, if practical. If accepted, Seller will assist Buyer
in Buyer's plan to pursue that opportunity. Furthermore,
Seller will not pursue direct sales to the identified customer
unless such customer indicates that its does not wish to do
business with Buyer.
In those cases where Buyer has proposed the Product
into an account, and that account subsequently contacts Seller
directly, Seller will inform Buyer as soon as practicable. In
addition, Seller will use all reasonable efforts to maintain
sales of Product through Buyer. If the account informs Seller
that it does not want to purchase from Buyer, Seller may
pursue that business directly. In such cases, Seller will
provide compensation to Buyer in the form of a commission on
revenue for all Products sold to that customer for a 12 month
period. Such commission will be based on the discount that
Seller offers to that customer according to the following
schedule:
<TABLE>
<CAPTION>
Seller's Discount to Purchaser Buyer's Commission
<S> <C>
0 to 15% [***]
15 to 20% [***]
21 to 25% [***]
26 to 30% [***]
31 to 35% [***]
36 to 40% [***]
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
41% or more [***]
</TABLE>
All such commission will be in the form of a credit
which Buyer may apply up to 50% of the purchase price of any
future purchases of Products.
In addition, any U.S.-based reseller with which
Seller may have an agreement is not precluded from providing
Product to any of its international customers.
f. Seller agrees to support Buyer's international sales
efforts for the Products without preferential treatment to other
resellers.
With respect to domestic (US) market rights and obligations, Buyer and Seller
agree to the following:
g. For a period of twelve months from the general availability
of the Products to the Buyer's customers ("General Availability
Date"), Seller agrees to limit to twenty (20) the number of
distributors authorized by Seller to sell its products. These
distributors can be either stocking or non-stocking distributors
classified as "VADs" (Distributors) and resellers (exclusive of
OEMs).
h. The limit of twenty (20) distributors in (a) does not apply
to OEMs, telcos, Inter-Exchange Carrier's or other providers or
resellers of telecommunications services. It also does not apply
to wholesale distributors which primarily sell to such
telecommunications service providers. For a period of twelve
months from General Availability Date, such wholesale distributors
shall be limited to four (4) and shall be reviewed with Buyer.
Specific wholesale distributors may change from time to time,
although the number shall be limited to four.
i. If Buyer wishes to pursue an opportunity brought to Buyer
by Seller, Buyer will provide to Seller a plan to pursue the
opportunity in a time frame in accordance with the following
applicable situation:
1) Pursuit of an opportunity for which there is no
pressing deadline from an external entity: Buyer will submit
to Seller a plan within 60 days.
2) Pursuit of an opportunity which is constrained y a
deadline imposed by an external entity: Buyer must submit a
plan to Seller within a time period as required to meet
Seller's needs. Seller shall make every reasonable effort to
maximize the amount of time that the Buyer has to respond. If
rejected by the Seller, Seller will inform Buyer of the
reasons for rejection within four (4) business days and
conversely Buyer has four (4) days to respond, if practicable.
j. Seller agrees to review Seller's present distributors and
future distributors before authorizing distribution or sale of its
Products with the Buyer in order to minimize sales channel
conflict and sales expense for both parties. The intent of these
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6.
<PAGE> 7
reviews is to assure Seller that its desired market coverage is
being met and to assure Buyer that its sales penetration is
maximized.
k. Seller agrees to maintain a minimum differential of 19%,
referenced to Seller's published list price, between the most
favorable VAD or Distributor (not OEM's) contract pricing and that
of the Buyer. In the event of an exception to this for specific
distributor sales opportunities, the Seller shall notify the Buyer
and gain the Buyer's agreement as to the special pricing for that
opportunity.
l. In those cases where Buyer has proposed the Product into an
account, and that account subsequently contacts Seller directly,
Seller will inform Buyer as soon as practicable. In addition,
Seller will use all reasonable efforts to maintain sales of
Product through Buyer. If the account informs Seller that it will
not purchase from Buyer, Buyer shall inform Seller and Seller with
Buyer's approval may pursue that business directly. In such cases,
Seller will provide compensation to Buyer in the form of a
commission on net revenue on all Product sold to that customer for
a 12 month period. Such commission will be based on the discount
that Seller offers to that customer according to the following
schedule:
<TABLE>
<CAPTION>
Seller's Discount to Purchaser Buyer's Commission
<S> <C>
0 to 15% [***]
15 to 20% [***]
21 to 25% [***]
26 to 30% [***]
31 to 35% [***]
36 to 40% [***]
41% or more [***]
</TABLE>
All such commission will be in the form of a credit
which Buyer may apply up to 50% of the purchase price of any
future purchases of Products.
02.3.2. OTHER MARKET RIGHTS
Seller will agree not to enter into any technology transfers,
joint development efforts, manufacturing rights, or distribution agreements for
Products with the following: Codex, Racal-Milgo, N.E.T., Timeplex, Newbridge,
Stratacom, G.D.C., or Gandalf. Buyer and Seller may from time to time add
companies to this list by mutual agreement.
Buyer may provide Seller with a list of it's customers (not to
exceed 1,600) and Seller agrees that it will not pursue direct sales with said
customers. This list may be updated from time to time. Seller agrees that if its
direct sales force attempts to sell Products to customers of Buyer, then Seller
at the request of Buyer will support Buyer in the sale, unless that customer has
stated that it only buys product directly from the manufacturer or will not
purchase Products from the Buyer. Seller in these cases will not show
preferential financial consideration to any of the Sellers
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<PAGE> 8
distribution channels in competitive sales situations. In the event that Seller
does sell under this paragraph, the commission schedule applicable to domestic
sales in sub paragraph 1. shall apply.
02.3.3. RETENTION OF MARKET RIGHTS
In order to retain the preferential market rights specified in
paragraphs 2.3.1. a-d with respect to the international rights, paragraphs
2.3.1. g-j with respect to domestic rights and paragraph 2.3.2 (hereinafter
collectively called "Preferential Market Rights"), Buyer and Seller agree to the
following:
a. From the Effective Date of this Agreement the Buyer agrees to
attempt to achieve purchase objectives of Products of six hundred (600) units by
September 1, 1993, purchases of an additional seven hundred (700) units by March
1, 1994, purchases of an additional one thousand (1,000) units by September 1,
1994, and an additional one thousand four hundred and fifty (1,450) units by
March 1, 1995.
b. Buyer and Seller will review Seller's purchase performance on
said dates. Buyer's Preferential Marketing Rights may thereafter terminate, at
the election of Seller after thirty days written notice, if Buyer failed to meet
the purchase objectives unless Seller was unable to meet Buyer's requested
deliveries during such period, if such requests were consistent with the
forecast provided under section 03.3. The above state performance objectives and
remedies apply solely to the Preferential Marketing Rights and shall in no way
be construed to affect Buyer's other rights under this Agreement or any other
terms and conditions of this Agreement.
c. On or before March 1, 1995, Buyer and Seller shall in good
faith meet and negotiate the six month purchase targets for the remainder of the
term of this Agreement. Absent reaching agreement the Preferential Marketing
Rights shall terminate on March 1, 1995, unless Buyer has offered to attempt to
purchase at least in the aggregate the same number of units purchased during the
prior six months and thereafter such Preferential Marketing Rights shall
terminate.
03.0. ORDERING OR PRODUCTS
03.1. USE OF RELEASES
Buyer shall issue Releases via Buyer's purchase orders, or
customer drop ship orders confirmed in writing and/or via Electronic Data
Interchange (EDI), specifying Buyer's part numbers and/or model numbers,
quantities, prices, destination and Delivery Schedule(s) for the Products
furnished under this Agreement. Releases for Products which are the subject of
this Agreement will be considered released under the provisions of this
Agreement unless otherwise specified in writing. This Agreement will take
precedence over any preprinted terms of Buyer's Releases in the event there are
conflicting or additional terms and conditions.
Seller shall have EDI available, in a format compatible with
Buyer's current software, within six (6) months of the Effective Date of this
Agreement.
8.
<PAGE> 9
Seller shall drop ship Releases and logistics spare parts at
Buyer's request to Buyer or Buyer's customer at locations specified by Releases
as defined, above. Seller shall utilize freight carriers designated by Buyer in
Buyer's Corporate Routing Guide, a copy of which is attached hereto as Exhibit
C, unless otherwise specified on Buyer's Release.
0.3.2. RELEASE ACKNOWLEDGMENT
Seller shall acknowledge to Buyer each Release within 24 hours
where possible, but no more than 48 hours of Seller's receipt of same. Such
acknowledgment shall constitute acceptance of the Release, and Seller will at
the same time confirm the Scheduled Ship Date.
03.3. FORECAST
Buyer will provide a rolling monthly forecast of Buyer's demand
for the Product with visibility for the next six (6) months. The quantity of
Products forecast for the first month of a given forecast will be no more than
one hundred twenty percent (120%) of the Products forecast for the second month
of the immediately prior forecast. This shall hold true for any ninety (90) day
period of the then current monthly rolling forecast. The forecast given for any
period beyond this ninety (90) day window may be increase by any amount.
This forecast will be for planning purposes only.
03.4. RELEASE RESCHEDULE BY BUYER
Buyer has the right to reschedule any Release up to an including
twenty one (21) calendar days before a Release's Scheduled Ship Date. Buyer may
reschedule any Release one (1) time without surcharge within twenty one (21)
calendar days of the Release's Schedule Ship Date. Buyer may reschedule the same
Release additional times upon payment of two (2) percent of the Buyer's purchase
price of such Release or five hundred dollars ($500.00), whichever is less, for
each time the Buyer makes such additional reschedulings. All rescheduled ship
date under this Section shall be no more than thirty (30) days after the then
current ship date for the Release.
Notwithstanding the above, Buyer may reschedule in any manner 100%
of any Release under this Agreement without surcharge or penalty in the event of
Seller's delay in delivery of production quantities of the products ordered in
conformity with this Agreement.
03.5. RELEASE RESCHEDULE BY SELLER
At no time can the Seller reschedule any of the Buyer's Releases
that were previously committed and assigned Scheduled Ship Dates by the Seller
without the express advance authorization of the Buyer. This advance notice of
the Seller's potential rescheduling of the Buyer's Release must be provided to
the Buyer, with all reasonable effort, five (5) business days before the
Release's Scheduled Ship Date.
03.6. RELEASE INCREASE AND RELEASE DECREASE
Notwithstanding anything else in this Agreement to the contrary,
Buyer may, up to and including twenty (21) business days before a Scheduled
Shipment Date, without surcharge or
9.
<PAGE> 10
penalty, increase or decrease the quantity of Products previously ordered for
such shipment. If Buyer increases a Release within twenty (21) business days
before Scheduled Shipment Date for that Release, Seller shall use reasonable
commercial efforts to meet such increased Release. Buyer and Seller shall
negotiate in good faith any associated expediting fees, provided Seller provides
documented evidence of such charges which are agreed to and accepted by Buyer.
03.7. CANCELLATION
Buyer may cancel a Release up to and including twenty one (21)
calendar day before the scheduled ship date without surcharge. Releases
cancelled within twenty one (21) calendar days of the Scheduled Ship Date will
be subject to a [***] percent cancellation charge. This cancellation charge
shall not exceed [***] ($[***]) for any one (1) Release. A Release shall not be
considered to be cancelled where it is immediately replaced by another identical
Release.
Cancellation charges are expressed as a percentage of the Buyer's
purchase price of a Release which would have been applicable had it not been
canceled. Payment of the applicable cancellation charges shall be invoiced by
Seller and paid by Buyer within thirty (30) calendar days of its receipt of such
invoice.
03.8. PRODUCT SHIPMENT AND DELIVERY
03.8.1. EQUIPMENT PACKAGING
Seller shall package Products for shipment in conformance with the
specifications as contained in Exhibit D and will utilize only Electro-Static
Discharge (ESD) protective packaging.
All logistics spares shall be packaged in reusable containers
capable of withstanding shipment to multiple destinations and packaged at the
Field Replacement Unit level (FRU). The outer package will be marked with the
Buyer's model or part number, serial number (if applicable), manufacturing date
and the description of the part ordered.
All Product chassis will be labeled with the Buyer's part number,
model number, serial number and manufacturing date.
All Products will be labeled on the outside of the box with the
Buyer's part number, unit model number, serial number and manufacturing date.
The shipping label and packing slips will state, at a minimum, the
customer's name and telephone number, street address, city, state, zip code,
Buyer's Release number, Buyer's customer purchase order number (if supplied),
and the number of each box of a total box count.
03.8.2. DELIVERY
Until such time as Releases issued and accepted require shipment
in a given month of Products aggregating more than one hundred ten percent
(110%) of the then current forecast
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quantity (pursuant to Section 03.3 above) for that month all shipments will be
made within twenty one (21) calendar days after receipt of Buyer's Release by
Seller, unless a later date is specified on the Release. Otherwise, Seller shall
use reasonable commercial efforts to deliver Products in accordance with the
Delivery Schedules set forth in any Release issued and accepted in conformity
with this Agreement. Seller shall ship to the locations designated by Buyer.
Seller will provide proof of delivery for all shipments to Buyer's customers, if
requested by Buyer. Seller will drop ship Product to Buyer's customers. Seller
will not ship any of the Buyer's Release short any parts on the Release without
the approval of Buyer.
03.8.3. F.O.B. POINT
Shipments of Product shall be F.O.B. Seller's manufacturing
facility in the domestic United States. Freight charges for shipments of Product
will be billed third party to Buyer's freight account unless otherwise specified
on the Release. Seller will comply with all shipping instructions specified in
the Buyer's Routing Guide. Title to shipped Products and risk of loss passes to
Buyer upon delivery of the Product to Buyer, Buyer's Customer, Buyer's Agent, or
designated common carrier at the F.O.B. point specified above. Insurance
coverage on all shipments will be the responsibility of the Buyer.
Seller will bear the cost of transportation for non-conforming,
and defective in warranty material.
03.9. SHIPMENT ACKNOWLEDGMENT
Seller will provide Buyer with a shipment acknowledgment form
within twenty four (24) hours of the shipment to the Buyer's customer. Buyer
will include at a minimum, the serial number of the unit, the date shipped, the
part number and quantity shipped, the carrier name, and the waybill number on
the shipment acknowledgment form.
04.0. PRICES
Buyer and Seller agree that the Seller's list prices, Buyer's
purchase prices and discount levels for the Products are as set forth in Exhibit
A for the term of this Agreement unless changed and amended as mutually agreed
by the parties. The parties agree that it is in their mutual interest to meet
semi-annually to review market position, market pricing, competition, pricing
structures, manufacturing costs, product improvements and sales plans to
determine ways to increase market shares and reduce costs. Based on the above
semi-annual meeting the then current pricing and discount structures will be
established. Mutually agreed upon recommendations will be set forth for the
relevant party to pursue to enhance market position, reduced costs, increased
sale efficiency or gain additional market share. Both parties agree to
establish, on or before three months after the Effective Date of this Agreement,
the appropriate measurements and to share the cost information with one another
in an effort to establish a baseline for these evaluations. The parties will
make every reasonable effort to reduce cost in their respective areas, as a
goal, by seven (7) percent per year.
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Should any recommendation result in a cost savings to either
party, the parties agree to share in these benefits. Information regarding the
savings or cost reductions will be shared between the parties. Resulting savings
will be allocated between the parties semi-annually on a [***] percent ([***]%)
- - [***] percent ([***]%) basis. The party responsible for implementing the
saving will receive [***] percent ([***]%), and the other party will receive
[***] percent ([***]%) of the resulting saving.
Prices are exclusive of all sales, use, property, and the like
taxes. Any such tax Seller may be required to collect or pay upon the sale or
delivery of the Product shall be paid or collected by the Buyer and such sums
shall be promptly due and payable to Seller by Buyer under the payment terms of
the Agreement; however, Seller agrees to accept valid tax exemption documents in
lieu of payment where applicable.
04.1. TERMS OF PAYMENT
Seller shall render and date its invoice and shipment
acknowledgment form for any Products it shall deliver hereunder to Buyer or
Buyer's customer concurrent with the shipment of such Product. Terms of payment
are net thirty (30) days from the date of invoice. Incorrect invoices will be
returned unpaid for correction, with every reasonable effort, within seventy-two
(72) hour of receipt.
0.4.2. TAXES
Buyer shall bear all applicable federal, state, municipal, and
other government taxes (such as sales, use or similar taxes) and all personal
property taxes assessable on the Products after delivery to the carrier by
Seller unless Buyer provides Seller with a proper tax exempt certificate. Custom
duties and brokerage fees incurred due to a shipment to Buyer's customer shall
be borne by Buyer.
04.3. CASH ADVANCE
Buyer agrees to provide Seller certain cash advances in accordance
with Exhibit G. The amounts reflected in Exhibit G represent the parties' best
estimate of shipments to occur during the period specified; in the event actual
shipments vary from those set forth in Exhibit G, the amounts will be adjusted
accordingly. In addition, if the Agreement terminates before the Net Balance on
Account (as set forth in Exhibit G) reaches zero, Seller will remit to Buyer any
such outstanding balance within thirty (30) days of the effective date of
termination.
05.0. WARRANTY AND LIMIT OF LIABILITY
05.1. WARRANTY PERIOD
Seller warrants that the Products will conform to the applicable
Specifications set forth in Exhibit B and will be free from defects in materials
and workmanship under normal use for a period of sixty (60) months after
shipment from Seller's plant. Buyer's inspection, approval,
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acceptance, use of or payment for all or any such Product shall be deemed not to
constitute a waiver of any warranty or of any term or condition hereof.
05.2. BREACH
In the event of a breach of warranty, Buyer shall provide Seller
with the opportunity to inspect and test product claimed to be defective on
Buyer's premises, or if Seller deems it necessary, at Seller's factory.
Corrective action required on the part of Seller is contingent upon Seller's
examination disclosing that claimed defects have not been caused by misuse,
abuse, neglect, unauthorized alteration or modification, improper installation
or mishandling. The liability of Seller is limited, at the option of Seller, to
either (1) repair of the defective Product or (2) the replacement by Seller at
its cost of the defective Product, or (3) refund of the purchase price of the
defective Product, in the event that the previously stated remedies are not
reasonably available. Whenever the preceding remedies are not practicable, Buyer
may, at its option, remedy any defect in the Product using available parts and
other resources to accomplish such repair or replacement. Buyer's actions under
such condition will be considered to be "authorized" by Seller so that warranty
and the correction of further deficiencies will not be affected. Unless
otherwise agreed to in writing, Seller will bear all costs associated with
correction of the Product, including Buyer's labor, incurred to identify,
remove, package, ship, reinstall and test the replacement for the defective
Product up to a maximum of two (2) times the Buyer's total purchase price of the
defective Product. All transportation and insurance costs, whether incurred by
Buyer or Seller are Seller's responsibility. In the event that Seller can
demonstrate to Buyer's satisfaction that Buyer's claim of breach of warranty is
invalid, e.g., the claimed defect cannot be duplicated or was caused by Buyer's
actions (except as provided above), or that the Product was incorrectly
diagnosed as defective by Buyer, then the above remedies do not apply to the
respective Product which Buyer claimed to be defective. Other remedies and
obligations pertaining to other equipment/Product are unaffected.
05.3. WARRANTY RESPONSE TIME
Buyer, if practicable, shall use its spare parts inventory to
effect immediate replacement of the defective item(s) and return the defective
item(s) to Seller for repair/replacement. Seller will effect the
repair/replacement and return the item(s) to Buyer within fifteen (15) days
after receipt of the defective item(s); however, Seller will respond to
emergency situations by immediately shipping Product on hand within twenty four
(24) hours.
05.4. WARRANTY LIMITATION
THE ABOVE WARRANTIES COVERING THE PRODUCTS DO NOT INCLUDE AND
SELLER DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. THE PROVISIONS OF THIS CONTRACT ARE SELLER'S SOLE OBLIGATIONS, AND
BUYER'S EXCLUSIVE REMEDIES, FOR BREACH OF ANY WARRANTY, EXCEPT FOR THE
PROVISIONS OF THE PARAGRAPH ENTITLED "EPIDEMIC". UNDER NO CIRCUMSTANCES SHALL
SELLER BE LIABLE IN ANY WAY TO BUYER FOR INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING BUT NOT LIMITED TO, ANY LOSS OF BUSINESS OR PROFITS,
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WHETHER OR NOT FORESEEABLE AND WHETHER OR NOT BASED ON BREACH OF WARRANTY, IN
CONNECTION WITH THE SALE OF PRODUCTS.
05.5. WARRANTY EXCLUSIVITY
The warranties of Seller contained herein extend solely to Buyer
and shall only be enforceable by Buyer. Seller makes no warranty to any persons
other than Buyer.
06.0. QUALITY ASSURANCE
Notwithstanding the post-acceptance obligations of Seller, Buyer
has a significant interest in the quality of the Product. Because the Product
has a useful life expectancy greater than the warranty obligation period and
because of the goodwill lost by malfunctioning Products even though they may be
corrected at Seller's expense, it is agreed by Buyer and Seller that without
limiting or abridging Buyer's rights to inspect the Product prior to acceptance
or Seller's post-acceptance obligations, the following provisions shall apply to
ensure acceptable quality for Products manufactured for Buyer under the terms of
this Agreement:
06.1. QUALITY CONTROL MONITORING
At any and all reasonable times during the term of this Agreement,
provided Buyer has notified Seller at least two (2) days in advance, Buyer's
representatives shall have access to Seller's facilities to monitor its quality
control system.
06.2. QUALITY CONTROL MAINTENANCE
Seller shall maintain the quality control system mutually agreed
upon at the Effective Date and as specified in the Specifications. Changes to
such documents must be submitted to Buyer.
06.3. ACCEPTANCE TESTS
Acceptance test procedures for final manufacturing testing are as
set forth in Exhibit E of this contract.
06.4. SOURCE INSPECTION
All Products shall be subject to inspection and test by Buyer at
Seller's facility if Buyer so desires. Buyer may, at its option, implement a
sampling inspection with lot rejection in accordance with an appropriate
sampling plan and inspection procedure to be accomplished at Seller's facility.
If any inspection or test is made on Seller's premises, Seller shall, without
additional charge, provide all reasonable facilities and assistance for the
safety and convenience of Buyer's inspector subject to the security and safety
regulations existing at the facilities.
06.5. WORKMANSHIP STANDARDS
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<PAGE> 15
All Products shall be in compliance to the Buyer workmanship
standards, IPC 610, as a minimum criteria of workmanship.
06.6. ISO 9000 COMPLIANCE
Seller shall, with every reasonable effort, apply for ISO 9001
registration by October 30, 1993 and be registered by March 30, 1994.
06.7. SELLER/BUYER CONTINUOUS IMPROVEMENT EFFORTS
Buyer and Seller mutually agree to develop continuous improvement
task teams in an effort to reduce costs in both processes and Products that will
mutually benefit both parties in the areas of:
a. Target Costs
b. Cost Reduction Efforts, including both materials and processes
c. On Time Shipments as measured by Customer Request Date and
Scheduled Ship Date.
d. Repair Data, including DOA's, Infant mortality and Root Cause
Analysis.
e. Cycle Time Reductions, including Manufacturing, Repair, Release
Processing Spare Parts Delivery and Others.
f. Electronic Data Interchange (EDI).
07.0. INSPECTION
07.1. INSPECTION AT DESIGNATED DELIVERY LOCATION
Within thirty (30) days of the receipt of any Product at its
designated delivery location, Buyer may submit such Product to the criteria as
set forth in the Specification, Section 4.2, entitled "Acceptance Testing",
attached hereto and made a part of this Agreement. Buyer shall be entitled to
reject any product that fails to conform to the Purchase Specifications. Notice
of any such rejection shall be issued within five (5) business days by Buyer to
Seller.
Upon rejection, Buyer will notify Seller of such rejection and
cause for rejection and return the entire shipment or any portion, to Seller.
Seller accepts all cost of rejected lots, including but not limited to shipping
charges back to Buyer, any insurance costs, and all risk of loss (F.O.B.
Destination) for rejected Products. If Seller does not receive such notice of
any such rejection from Buyer within thirty (30) calendar days after shipment of
Product, such Product shall be deemed accepted by Buyer for purposes of this
Section 7. Any Products returned under this Section 7 will be shipped by a
carrier selected by Seller, or Seller will be liable for freight charges at a
rate equivalent to Buyer's documented freight rates. If it is determined that
any Products returned by Buyer under this Section 7 are conforming to the
Specification then (i) Seller shall utilize such Products for Buyer's releases
and Buyer shall, notwithstanding anything to the contrary in this Section 7, pay
for the expenses associated with Buyer's original return of such Products to
Seller under this Section 7.
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Notwithstanding the foregoing, damage to Products caused by
Buyer's Shipper shall not be considered a nonconformity to the Specification.
07.2. INSPECTION AT SELLER'S LOCATION
Buyer may, at its option, inspect the Product at Seller's facility
prior to shipment. Buyer's inspection shall be done by its designated
representative (hereinafter referred to as "Representative") who will be
permitted by Seller to witness the Acceptance Test of Product purchased by Buyer
hereunder. In the event that the Representative ascertains that an item of
Product is defective, said Representative will advise Seller's authorized
personnel and such defect shall be remedied prior to shipment. Rejected lots (or
Products) will then be corrected and re-submitted for re-inspection at Seller's
expense. All Products shall be subject to inspection and test by Buyer at
Seller's facility if Buyer so desires. Buyer may, at its option, implement a
sampling inspection with lot rejection in accordance with an appropriate
sampling plan and inspection procedure to be accomplished at the Seller's
facility. If any inspection or test is made on Seller's premises, Seller shall
without additional charge, provide all reasonable facilities and assistance for
the safety and convenience of Buyer's inspectors subject to the security and
safety regulations existing at the facility. Seller shall take the
responsibility to coordinate all source inspection schedules to allow Seller to
meet the Scheduled Ship Dates committed by Seller to Buyer.
07.3. QUALITY LEVEL REQUIREMENTS
Seller shall maintain the quality levels specified in the
Specifications. Seller shall be responsible for any and all reasonable
inspection costs resulting from Seller being disqualified from the surveillance
plan as set forth in the Specifications after the first six (6) months from the
initial shipment of the Products under this Agreement. The first six (6) months
will be the quality history and data collection period.
07.4. FIRST INSTALL SUPPORT
Seller will provide, at Buyer's request, at locations selected by
Buyer and at no cost to Buyer, technically competent personnel and any
necessary spare parts to assist in the identification and resolution of any
performance problems which jeopardize the progress of the first four (4)
installations of the Product in the continental United States. Seller will also
provide, at Buyer's request, any performance information available which could
assist Buyer in an evaluation of Product performance.
08.0. SELLER'S LEGAL AUTHORITY
Seller represents and warrants that it presently has and will
retain the unencumbered legal authority to convey to Buyer the title, rights
and licenses to the Products, and that the performance by Seller of its
obligations hereunder is not and will not be in violation of the rights of any
third party. The foregoing representation and warranty does not apply to the
infringement by the Products of proprietary rights, for which Section 16.7.
below sets forth the exclusive remedy.
09.0. COMPLIANCE TO STANDARDS
09.1. SELLER'S CERTIFICATION REQUIREMENTS
Seller agrees, at its expense and a mutually agreeable schedule,
to obtain the applicable approvals and certifications of FCC, UL, CSA, BSI,
BABT, DOC and VDE, and other safety and emission standards as listed in the
Purchase Specifications # 351-0047-0031, for equipment supplied by Seller.
Sellers shall obtain such approvals and certifications prior to
the shipment of any Products requiring such approvals. If Seller cannot meet
his requirement, Seller shall so advise Buyer in writing. Buyer, at its option,
may grant limited waivers to receive such non-compliant Product. Seller agrees
to assure that all Product shipment made to countries outside of the
Continental United States will be certified and approved to the appropriate
levels as required by said countries. All cable purchased under this Agreement
must meet the applicable UL and CSA requirements.
09.2. BUYERS CERTIFICATION REQUIREMENTS
Buyer shall be responsible for obtaining all required approvals
and certifications for its product incorporating Seller's Product, at its
expense. Seller agrees to consult with Buyer in connection with Buyer's
applications for such approvals and certifications and to provide testing, data,
and documentation in connection therewith.
09.3. BUYERS REMEDY FOR NON-COMPLIANCE
If Seller ships Product to Buyer or Buyer's customer in violation
of Section 09.1 above then Buyer may, at its option, (1) terminate this contract
in its entirety, (2) terminate its obligations within the contract for the
Product or Products not in compliance (including terminating any outstanding
Releases for such Products) without liability or consequence and without
affecting any other Products that may be a part of this contract, (3) waive any
or all of these compliance requirements for any Release of such Product(s)
without waiving the requirement for full compliance of all other Products
shipped if applicable, such waiver to be in accordance with Section 16.14.,
"WAIVER", (4) hold the Seller responsible for the reimbursement of all costs
incurred by the Buyer or Buyer's customer, to include but not be limited to
penalties, agency fees and shipping charges, for such non-compliant product.
10.0. PRODUCT CHANGES
10.1. PRODUCT CHANGES BY BUYER
In the event that a change to the Specifications or a modification
to the Products is requested by Buyer:
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a. Buyer shall advise Seller of the requested change.
b. Seller, after reviewing the requested change, shall within the
time periods specified in Section 7.0 of the Specification advise Buyer of the
costs and length of time to effect such change. The lead time into production
and the per unit price change, if any. Seller shall not implement such change
without Buyer's prior written consent. Seller is under no obligation to make any
changes requested by Buyer without Seller's agreement.
Seller shall not implement such change without producing required
engineering change requests in accordance with Section 7.0 of the
Specifications.
In the event Seller's quote time to effect the requested change
and the lead time into production is not acceptable to Buyer based on Buyer's
good faith analysis of its market requirements, Buyer will so notify Seller. At
Buyer's request, the parties will negotiate in good faith a mutually acceptable
development and production schedule and Seller will provide Buyer a revised
non-reimbursable engineering ("NRE") cost and per unit price change estimate
within sixty (60) days of such request. Buyer will then have thirty (30) days to
elect to have Seller implement such modification at Buyer's expense. In the
event Seller wishes to provide the modification to its third party customers,
Seller and Buyer will negotiate, prior to delivery of the modification to any
such customer, a reasonable schedule for reimbursing Buyer for its payments of
NRE costs.
If Seller is unwilling or unable to undertake the requested
modification project, it will promptly inform Buyer, and Buyer will have the
option, exercisable within sixty (60) days of Seller's notification, to
undertake the modification project itself. If Buyer exercises such option,
Seller will promptly provide Buyer such Manufacturing Information reasonably
required to product a Modified Product (as defined below), and will grant Buyer
a non-exclusive, non-transferable license (i) to use, copy and modify the
applicable Manufacturing Information to product the Modified Product, and (ii)
subject to agreement on appropriate license and/or royalty fees to be paid to
Seller (to be negotiated in good faith by the parties), to use and distribute
the Modified Product Developed by Buyer in accordance with the terms of this
Agreement.
Notwithstanding the foregoing, the obligations of Seller under the
preceding paragraph are conditional upon Buyer's ability to secure such
manufacturing licenses or other proprietary rights of third parties, if any, as
may be required to undertake any modifications or produce or distribute Modified
Products. Seller agrees to provide reasonable assistance to Buyer to secure such
rights. Moreover, Seller's obligations under this Section shall not apply to any
requested modification to the extent Seller's compliance with the provisions of
this Section would breach Seller's obligations to a third party.
For the purposes of this Section, "Modified Product" shall mean a
Product (such as a voice card, WAN card or other separately identified product)
which is the subject of the modification and in which the modification is
incorporated.
10.2. NEW PRODUCT DEVELOPED BY SELLER
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If Seller develops a New Product, Seller shall notify Buyer in
writing at least thirty (30) days prior to the time of the initial public
announcement of such New Product, unless other terms are mutually agreed upon,
in advance and in writing, by the parties. At the time of such written notice,
Seller shall also provide to Buyer the available specifications, description,
and technical data necessary to evaluate the New Product. Further, Seller shall
notify Buyer when a working model of the New Product is available for an
engineering evaluation. Buyer reserves the right to replace an existing Product
with the New Product for all future Releases at the time the New Product is
offered commercially and at a price which is mutually agreeable.
10.3. PRODUCT CHANGES BY SELLER
Seller shall not change the Specifications or make any engineering
changes to the Products affecting form, fit, function, backward compatibility,
or spare parts without Buyer's prior written approval. Buyer will approve or
disapprove any such change within the time periods as specified in Section 7.0
of the Specification. If the Buyer's disapproval is not given within such time
periods of receipt of such notice, Seller shall be authorized to make the
necessary change, unless otherwise mutually agreed to by the parties. However,
Seller may change the Specifications or Products without Buyer's prior written
approval if such changes are for reasons of Product safety, certification
compliance or to avoid or eliminate any actual or alleged infringement or
potential infringement by the Product of any patent or copyright. Seller will
provide Buyer all necessary documentation concerning any change by Seller, as
outlined in Section 7.0 of the Specification, at least 30 days prior to the
first shipment of changed Product.
10.4. PRODUCT DISCONTINUANCE
Seller agrees to notify Buyer at least fifteen (15) months prior
to the discontinuance of any Products listed in Exhibit A of this Agreement
provided Buyer agrees to reasonably cooperate with Seller to shorten this notice
period. New Products that are introduced to replace a discontinued Product will
be functionally equivalent or better than the Products being replaced, and the
terms and conditions in section 10.0. of this Agreement related to functional
equivalence will apply to all proposed New Products.
10.5. PRODUCT COLOR AND LOGO
Seller will paint, logo and label the Product to the
specifications provided by the Buyer, which include the Buyer's Paint/Finish and
Color, Corporate Logo Guidelines, and Corporate Product Marking Specifications.
Seller agrees to complete this task, with every reasonable effort, 90 days after
a written request has been received from the Buyer. All non-recurring expenses
will be the responsibility of the Seller. If this Agreement is terminated prior
to the Buyer purchasing one thousand (1000) Products than the Buyer will
reimburse the Seller for all reasonable non-recurring expenses.
11.0. MARKETING LITERATURE/MANUALS
11.1. SALES KITS/LITERATURE
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Sample sales literature, specification sheets and other materials
of an inexpensive nature will be provided free of charge as these materials
become available. Seller shall, at the time of execution of this agreement,
provide Buyer an initial quantity of one thousand five hundred (1500) marketing
brochures. Costlier items such as point of purchase kits, merchandising kits,
demonstration programs, etc., will be provided free of charge in single
quantities or in quantities deemed reasonable by the Seller. Additional
quantities of such items as previously stated will be offered by Seller to Buyer
at Seller's cost.
11.2. MANUAL UPDATES
Seller shall provide, in electronic format where possible, Buyer
with timely updates for manuals designated as deliverable with the Product and
those necessary for Product support.
11.3. MANUAL DEVELOPMENT
Seller and Buyer agree to jointly develop a marketing guide for
this Product. This marketing guide should be completed three (3) months after
this agreement has been executed. Buyer agrees to bear the costs of the
production and duplication for this document.
12.0. SELLER'S COPYRIGHTED MATERIALS
Seller agrees to grant and hereby grants to Buyer a worldwide,
paid-up right to reproduce and distribute any copyrightable materials owned by
Seller that Seller makes generally commercially available to end-users of the
Products. Such materials shall include, but not be limited to, end-user
documentation, software and firmware fixes and maintenance releases (provided
that Buyer may only distribute such updates to end-users of the Products solely
for use with the Products), marketing materials, and technical bulletins. The
Buyer's name and trademarks can be used on such material. The Seller's name and
trademarks can be used on such material provided that each item of such material
shall contain trademark notices as may be reasonably requested by Seller to
protect Seller's trademark rights. Each item of such material shall the
statutory copyright notices.
13.0. CUSTOMER SERVICE SUPPORT
13.1. INITIAL DOCUMENTS
Upon the execution of this Agreement, if not previously furnished,
or as soon thereafter as possible, but in no event later than sixty (60) days
prior to the schedule delivery of the first production unit, the Seller shall
furnish, at Buyer's option, and if generally commercially available from Seller,
the following:
13.1.1. SELLER TECHNICAL MANUALS
One reproducible copy of the Seller technical manuals.
13.1.2. LINE ART AND ILLUSTRATIONS
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Reproducible (quality black on white first generation printed
copy) full sized copy of all line art and illustrations.
13.1.3. PARTS LIST
Parts breakdown within each Technical Manual. The parts breakdown
will list the part numbers of the typical field replaceable assemblies, to
include, but not be limited to, printed circuit board assemblies, power
supplies, and socket mounted chips.
13.2. DOCUMENT UPDATES
During the term of this Agreement, Seller shall provide the
following to Buyer Customer Service, if generally available from Seller:
13.2.1. TECH BULLETINS/SERVICE AIDS
A copy of Seller generated technical bulletins, subsystem service
aids and other instructions to the field covering problems, changes in
maintenance practices, parts, tools, etc.
13.2.2. DATA PACKAGE
For each Product model the applicable current data package shall
include, but is not limited to, flyers, boilerplates technical specification
lists, and other pertinent documentation intended for use by the Buyer's
customer or support personnel.
13.2.3. SPECIFICATION CHANGE REPORTS
Provide Buyer with copies of any changes of the Specifications of
the Product or any part, or any changes in the documentation or publications
itself. Such reports must be submitted within 30 days of publication by Seller.
13.2.4. SERVICE LITERATURE
Service literature shall consist of, but is not limited to,
troubleshooting guides, test data, service bulletins, training guides, other
media training tools (videos, computer based training software, course
development tools and information, self-study guides, etc.), application notes,
part numbers, and catalogs and will be made available to Buyer at Seller's cost.
Buyer may copy these materials for providing maintenance to its own customers
(in accordance with Section 12.0.).
13.3. TRAINING
13.3.1. INITIAL TRAINING
Seller shall provide free of charge, at a mutually agreed upon
time, training at Buyer's Customer Service Headquarters in Largo, Florida in the
selling, marketing, operation, installation, maintenance and board level
diagnosis, if board level diagnosis is applicable, of Product for the Buyer's
personnel. Training will be of a level and of such depth that qualified Buyer's
personnel
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so trained can, in turn, train other qualified Buyer's personnel. This training
shall be jointly developed and reviewed for acceptance by the Buyer. Such
training shall include the following courses and materials offered at no charge:
a. Three (3) training sessions for up to twelve (12) of Buyer's
Customer Service employees which may be recorded in audio or video by the Buyer
for its later use in training employees and any third party support as approved
by Seller.
b. Two (2) training sessions for up to a total of twenty-five (25)
of Buyer's Sales, Marketing and/or System Engineering personnel. This training
shall consist of sufficient information to properly sell and market the Products
and should include subject matter concerning the following items: new or
enhanced applications, new or enhanced feature/functionality, and competitive
market information.
c. All manuals and other course materials will be provided free of
charge for such training courses. Buyer may copy such materials in accordance
with Section 12.0. of this agreement.
13.3.2. NEW OR IMPROVED PRODUCT TRAINING
If additional or New Products (as defined in 1.7.) are added to
this Agreement or improvements or Enhancements are made by Seller to Products
purchased by Buyer then as mutually agreed to by the parties Seller shall
provide training in accordance with Section 13.3.1.
13.3.3. SUPPLEMENTAL TRAINING
Supplemental training will be provided at times and locations
mutually agreeable to both parties at Seller's then-current most favorable
charges for training.
If the training is to be performed in Seller's facilities, Seller
shall furnish all necessary course material required for such training. Buyer
shall bear the cost of travel and living expenses of its personnel.
If training is to be performed at other than Seller's facilities,
Buyer shall reimburse Seller for reasonable travel expenses incurred by Seller's
personnel to the extent that such expenses arise directly from training being
performed at other than Seller's facilities. In such cases Buyer shall provide
adequate training facilities and training equipment. Seller will provide all
appropriate training materials as specified in Section 13.3.1.
13.4. SUPPORT
Seller shall, at all times, have available to Buyer qualified
System Engineering and/or Customer Service Engineering support and personnel to
provide telephone assistance in resolving field installation, configuration, and
maintenance problems encountered by Buyer. If Seller is unable to solve Buyer's
problems via telephone, Seller shall, at Buyer's expense and within twenty-four
(24) hours after notice from Buyer, supply technical personnel competent to
resolve the problem at Buyer's designated location at Seller's then prevailing
rate per day, plus travel, living, and incidental expenses, (excluding First
Install Support Section 7.4). However, to the extent that the problems
encountered by Buyer are due to "Epidemics" as defined in Section 1.6,
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Seller shall provide personnel, if necessary, at a representative site until the
problems are resolved, without charge to Buyer.
13.5. SPARE PARTS
13.5.1. SPARE PARTS DELIVERY
Subject to the provisions of Section 13.5.2. below, Seller shall
use best efforts to ship spare parts in accordance with Buyer's schedules;
provided, however, such schedules allow Seller at least the following
lead-times, after receipt of Buyer's Releases, to ship the parts Release(s):
TYPE OF RELEASE LEAD-TIME FOR SHIPMENT (ARO)
Emergency Releases 24 HOURS
Initial Provisioning 90 Calendar Days
Replenishment Releases 21 Calendar Days (if forecasted)
90 Calendar Days (if unforecasted)
Buyer requests for shipments sooner than the lead-time set forth above are
subject to Seller's agreement.
13.5.2. LIST OF SPARE PARTS AND SUPPLIERS
Seller will provide Buyer with a list of those Seller's vendors
who are suppliers to Seller of spare parts for Products. Seller will also
provide Buyer with a recommended spare parts list. Such lists will be provided
to Buyer within thirty (30) days after execution of this Agreement.
13.5.3. SPARE PARTS AVAILABILITY WARRANTY
Seller shall stock sufficient quantities of spare units and spare
parts to insure twenty-four (24) hour response time. Seller will ship such
emergency Releases to the location identified by Buyer. Buyer will pay for any
shipping and handling charges.
13.6. REPAIR AND REFURBISHMENT SERVICES
13.6.1. REPAIR COST PRICE WARRANTY
Seller warrants that the prices charged and/or discounts granted
for the sale and repair of Products and spare parts will not be any less
favorable than prices charged and/or discounts granted by Seller to any Seller's
authorized wholesale distributors who purchase similar value of spare parts
under similar terms and conditions. This section shall survive the termination
of this agreement until Seller is no longer obligated to provide support under
Section 13.6.3.
13.6.2. REPAIR/REFURBISHMENT SERVICES BY SELLER
Seller shall provide repair and refurbishment services for
Products listed under Exhibit A which are no longer under warranty. For Products
manufactured by Seller within three (3)
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years of the date such repair or refurbishment is requested, prices for such out
of warranty repair and refurbishment shall not exceed twenty percent (20%) of
the then current Buyer's purchase prices. For Products returned for repair and
refurbishment under this section for which no defect is found, a charge not to
exceed seven percent (7%) of the then current Buyer's purchase price or fifty
(50) US dollars, whichever is greater, will be assessed for test and handling.
Products shall be returned to Seller freight prepaid. Seller shall complete
authorized services and reship to Buyer freight prepaid within fifteen (15) days
after receipt of the Products and authorization from Buyer. Seller warrants that
any out of warranty Products repaired and/or refurbished by Seller will be in
conformance with the Specifications and free from defects in material and
workmanship for a period, from date of shipment to Buyer, of 12 months.
Seller agrees to provide information and training to Buyer that
will allow Buyer to establish and maintain an authorized pass/fail test for the
Products. Seller further agrees to provide Buyer, if necessary, any special
materials, piece parts or test equipment required for this pass/fail test at
Seller's current cost for such items.
13.6.3. REPAIR PERIOD
Seller agrees to repair a particular type of Product for a period
of at least five (5) years following delivery of the last unit of such Product
delivered under this Agreement. Seller agrees to provide and maintain an
adequate stock of parts peculiar to the Product during this time period.
Further, Seller will provide Buyer a last buy opportunity on any components or
sub-assemblies to be discontinued or no longer available.
13.6.4. REPAIR/REFURBISHMENT SERVICES BY BUYER
Buyer shall have the right to perform repair and refurbishment of
the Product. Seller shall, not later than thirty (30) days after Buyer's written
request, provide Buyer with a reproducible copy of all normal Product
documentation and manuals necessary for Buyer to repair/refurbish and test the
Products, and shall throughout the term of this Agreement furnish reproducible
copies of any changes to such information. In the event that
repair/refurbishment of the Products require use of special material, tools,
fixtures, jigs, apparatus or parts of Seller's design, Buyer shall have the
right to purchase such items from Seller or its suppliers.
This information shall be treated as proprietary.
14.0. REMEDIES
14.1. TERMINATION
14.1.1. INSOLVENCY
If either party ceases doing business as a going concern, becomes
insolvent, suffers or permits the appointment of a receiver for its business or
assets or shall avail itself of, or become subject to, any proceeding under the
Federal Bankruptcy Code of 1978, (as amended), or any statute of any state
relating to insolvency or the protection of the rights of creditors, then (at
option of the other party) this Agreement shall terminate and be of no further
force and effect.
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14.1.2. FOR BREACH
Either party may terminate this Agreement if the other party is in
material breach and has failed to cure such breach within forty-five (45) days
after receipt of written notice thereof. Amounts withheld from Seller for reason
of valid dispute shall be excluded.
14.2. MANUFACTURING RIGHTS
A perpetual, royalty free, license to manufacture the Products
listed in Exhibit A shall be granted to Buyer under the following conditions:
a. [***].
If more than thirty percent of the voting stock of Seller shall be under the
control of a competitor of Buyer, Buyer shall have, upon such occurrence, an
immediate right and license to manufacture the Products subject to a reasonable
license fee, to be agreed upon by the parties. Absent such agreement, the
determination of such fee shall be subject to arbitration under Section 16.19.
Buyer will have the right to withdraw the Manufacturing Information contained in
the escrow account for manufacturing the Products.
Notwithstanding the foregoing, the obligations of Seller under the
preceding sentence are conditional upon Buyer's ability to secure such
manufacturing licenses or other proprietary rights of third parties, if any, as
may be required to manufacture such Product. Seller agrees to provide reasonable
assistance to Buyer to secure such rights including the assignment of its rights
under such licenses.
Furthermore Seller will grant to Buyer the license to manufacture
the Products listed in Exhibit A under the following conditions: (1) Seller is
in material breach of this Agreement and such breach in not cured within the
time period specified in Section 14.1.2.; and (2) Buyer is not currently
manufacturing the Products, listed in Exhibit A, under a different agreement
with the Seller. The parties agree that the following will apply:
a. The Seller shall retain all the intellectual property rights to
the Products.
b. Seller shall maintain full Product revenue recognition for the
Products during this period. The transfer pricing guidelines between the parties
shall be as follows:
1. The Buyer's Manufacturing Costs shall consist of materials,
labor, overhead and a fifteen (15) percent profit margin for
each Product manufactured.
2. The Transfer Price shall be the price as stated in Exhibit
A, under the heading "AT&T Purchase".
3. The Seller's Current Manufacturing Cost shall be that price
which is being paid by the Seller to its current subcontract
manufacturer.
- --------------------------
* Confidential Treatment Requested
24.
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4. If the Buyer's Manufacturing Costs are less than the
current Transfer Price but greater than the Seller's Current
Manufacturing Cost then the Buyer will sell the Product to the
Seller at the Buyer's Manufacturing Costs, and the Seller will
in turn sell the Product back to the Buyer at a price which is
the higher of (1) the Transfer Price or (2) one hundred six
(106) percent of the Buyer's Manufacturing Costs.
5. If the Buyer's Manufacturing Costs are greater than the
Seller's Current Manufacturing Cost and is greater than or
equal to the Transfer Price then the Buyer will sell the
Product to the Seller at the Buyer's Manufacturing Costs, and
the Seller will in turn sell the Product back to the Buyer at
a price not to exceed one hundred six (106) percent of the
Buyer's Manufacturing Cost.
6. If the Buyer's Manufacturing Costs are less than or equal
to the Seller's Current Manufacturing Cost then the Buyer will
sell the Product to the Seller at the Seller's Current
Manufacturing Cost, and the Seller will in turn sell the
Product back to the Buyer at the Transfer Price.
7. Both parties agree to share cost data sufficient to
evaluate adherence to the above requirements.
c. Where the Seller is able to cure the material breach outside of
the time periods specified in Section 14.1.2. and has proven to the Buyer that
the material breach has been cured, the Seller will be granted the option to
discontinue the Buyer's right to manufacture the Products under the following
conditions:
1. The Seller must reimburse the Buyer for all customary and
reasonable costs incurred in the start up phases of the Buyer
manufacturing processes; and
2. Seller cannot discontinue the Buyer's right to manufacture
until one (1) year has expired after the Buyer has begun
manufacture of Products.
14.3 ESCROW
Seller certifies it will deposit all Manufacturing Information,
including the items listed in Exhibit F, for Buyer to manufacture the Products
listed in Exhibit A, with an escrow agent within forty five (45) days of signing
this Agreement. The escrow account will be updated on a monthly basis or as
appropriate, but no less than every three (3) months, to insure that all
technical information remains current.
A mutually acceptable escrowee is to be selected within forty-five
(45) days of the effective date of this Agreement. Seller and the escrowee agree
to maintain materials in escrow. Seller agrees to initiate the immediate release
of all materials in escrow upon receipt of request from Buyer under the
existence of the conditions for release specified in Section 14.2., of this
Agreement entitled "Manufacturing Rights".
14.4. EPIDEMIC
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If an Epidemic shall occur at any time prior to the expiration of
this Agreement, then Seller shall, as mutually agreed to by the parties, do the
following at Seller's expense:
a. Forthwith investigate the same and determine its cause;
b. Supply on-site technical support and all necessary parts to
repair or replace Product known to be affected by the Epidemic;
c. Permit Buyer to return all known defective Product of the same
model designation and all effected spare parts not field repaired or replaced
which were affected by the Epidemic to Seller's factory for either repair or
replacement at no charge to Buyer (and Seller shall pay all shipment costs both
to and from Seller's factory);
d. Ensure that the appropriate quality controls and other measures
are taken so that all Product of similar type supplied subsequent to the date of
such an Epidemic shall not have the problems which caused the Epidemic.
15.0. FORCE MAJEURE
Neither party hereto shall be deemed to be in default of any
failure in performance of this Agreement, resulting from acts beyond the control
of such party but only during the time period that such Force Majeure event is
in affect. For the purposes of this Agreement, such acts shall include but not
be limited to, Acts of God, civil or military authority, civil disturbances,
war, strikes, fires, other catastrophes, or other "force majeure" events beyond
the parties control. The party whose performance is affected by a force majeure
event must provide to the other party a written notice of a force majeure event
within two (2) days after the force majeure event occurs. If the force majeure
condition precludes performance for more than forty five (45) days, then the
other party may elect to terminate this Agreement without additional liability
to either party.
16.0. GENERAL
16.1. RENEWAL
This Agreement may be renewed, as mutually agreed to by the
parties, for successive one (1) year periods after the expiration of the initial
term. Notice of renewal must be in writing and submitted to the other party at
least sixty (60) days prior to the end of the initial term or any renewal term,
provided that prior to the commencement date of a renewal term the parties shall
have agreed to the purchase price and purchase commitments applicable to such
renewal term.
16.2. SUCCESSORS AND ASSIGNS
Except as otherwise provided in this section, the rights and
duties of Buyer and Seller hereunder are personal to them and are not assignable
or delegable; any assignment or attempted assignment of rights or delegation of
duties shall be void except for the assignment of receivables for financial
reasons. Either party may assign this Agreement to a parent, subsidiary, or
affiliated entity or to another entity in connection with the sale or transfer
of substantially all of its business assets provided the non-assigning party is
notified promptly of such assignment and such assignee undertakes in writing to
assume the obligations of this Agreement.
16.3. MOST FAVORED CUSTOMER
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Notwithstanding any other provisions of this Agreement, all of the
prices, warranties, and terms granted by Seller to Buyer hereunder are hereby
warranted by Seller to be comparable to, or more favorable to Buyer than the
equivalent prices, warranties, and terms that have been offered by Seller to any
other Customer during the period from the effective date of this Agreement to
its termination. If at any time during this period, Seller shall have contracted
with any other Customer for the identical or substantially similar Product as
listed in Exhibit A hereto, on a basis that provides prices, warranties or terms
to that customer more favorable than those provided to Buyer hereunder, then:
Seller shall within thirty (30) days after the effective date of such other
contract 1) notify Buyer in writing of such fact, explaining the more favorable
basis in detail and 2) regardless of whether such notice is sent by Seller or
received by Buyer, this Agreement shall be deemed to be automatically amended,
effective retroactively to the effective date of such other contract, to offer
the same prices, warranties, or terms to the Buyer. The provision of this clause
shall survive the closing and termination of this Agreement.
16.4. INDEMNITY
Seller agrees that it will indemnify and hold harmless Buyer
against and from any and all claims, damages, and liability, including expenses
and reasonable attorneys' fees, suffered by Buyer resulting from personal injury
and/or tangible property damage to third parties, including without limitation,
Buyer's employees, caused by the failure of the Products to conform to
Specifications or defects in materials and workmanship of the Products, or the
negligent acts of Seller, arising out of the performance under this Agreement or
Seller's breach of this Agreement; provided, however, that this obligation shall
not cover any damage to the Products themselves. Buyer agrees that it will
indemnify and hold harmless Seller against and from any and all claims, damages
and liability, including expenses and reasonable attorneys' fees, suffered by
Seller resulting from personal injury and/or tangible property damage to third
parties, including without limitation Seller's employees, caused by defects in
components supplied by Buyer and incorporated into the Products, or the acts of
Buyer or buyer's breach of this Agreement provided that such defects in such
components do not result from defects in the Products. In the event any claim
covered by this indemnity is asserted against either party, the other party
shall provide reasonable cooperation and assistance in the defense thereof and
the other party will grant the indemnifying party control over the defense of
any action.
16.5. TRADEMARKS AND TRADENAMES
Buyer may use Seller's trade name, trademarks and product names
only in connection with Buyer's distribution of the Products and in a format and
style approved by Seller. Buyer will use such trademark notices as may be
reasonably requested by Seller to protect Seller's trademark rights.
16.6. PROPRIETARY INFORMATION
Certain data or information disclosed by the Seller may be
proprietary in nature and must be so marked or identified ("Proprietary
Information") or if provided orally or visually the aforementioned information
must be claimed as such and provided to the other party in writing, within
thirty (30) calendar days of the date of disclosure. Buyer agrees to take all
reasonable
27.
<PAGE> 28
measures to protect Proprietary Information and, without limiting the foregoing,
agrees to exert at least the same effort to prevent disclosure of such
Proprietary Information as it would its' own proprietary information and to not
disclose any part thereof without the Seller's written consent (such consent not
be unreasonably withheld). Notwithstanding any provisions herein concerning
non-disclosure of the Proprietary Information, Buyer shall have no obligations
hereunder for any such information which Buyer can document 1) is already known
to Buyer at the time Seller disclosed such Proprietary Information to Buyer, 2)
is or becomes known to the general public through publications, inspection of
Product or otherwise and through no wrongful act of Buyer, 3) is received from a
third party without that party's breach of disclosure restriction and without
breach of this Agreement, 4) is shown to have been independently developed by
Buyer, 5) is disclosed to a third party by Seller without a similar restriction
on the third party's rights, or 6) is approved for release or use by written
authorization of Seller. The obligations of this section shall survive
termination of this Agreement for a period of two (2) years. Seller retains
exclusively for itself all proprietary rights in and to all designs, engineering
details, and other data pertaining to all Products.
16.7. PATENT/COPYRIGHT INFRINGEMENT INDEMNIFICATION
Seller is unaware of any claim, either threatened or impending,
that the Products infringe any patent, trademark or copyright. Seller agrees to
indemnify and hold harmless Buyer from and against all damages, liability and
cost suffered or incurred as a result of any claim that any Products furnished
pursuant to this Agreement constitutes an infringement of any patent, trademark
or copyright provided that Buyer gives Seller reasonable notice of any such
claims. Said indemnification shall extend only to damages assessed against or
costs incurred by Buyer as the result of a judgment rendered by a court of last
resort or a court of lower jurisdiction from which no appeal has been taken
holding that any Product, spare parts and documentation furnished pursuant to
this Agreement constitutes an infringement of any patent, trademark or
copyright, or to any settlement of such claim consented to in writing by Seller.
Buyer shall not be entitled to recover from Seller any loss of profits suffered
by Buyer as a result of such infringement or alleged infringement.
At the request and expense of Seller, Buyer shall assist and
cooperate with Seller in defending against any such alleged infringement. It is
agreed that Seller shall undertake the sole and complete defense of any such
claim of infringement through counsel of its own choice and at its expense. In
case any Product is held to constitute an infringement in such suit or
proceeding and the use of said Product is enjoined, Seller shall, at its own
expense and option, either (a) procure for Buyer the right to continue using
such Product, (b) modify said Product so as to render it non-infringing, or (c)
accept the return of said Product and refund the purchase price. The provisions
of this Section shall not apply with respect to any claim of patent, trademark,
or copyright infringement based solely on the components added to the Products
by Buyer. Further the provisions of this Section shall not apply if the
infringement arises out of a modification of said Products after delivery by
Seller. The rights granted to Buyer under this section 16.7. are Buyer's sole
and exclusive remedy for any alleged infringement of any proprietary rights of
any kind.
16.8. INDEPENDENT CONTRACTOR
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It is understood and agreed that nothing stated in the Agreement
shall be construed as creating the relationship of employer and employee or
principal and agent between the parties hereto. Buyer and Seller shall be deemed
independent contractors at all times with respect to their performance and
neither shall have the right or authority to assume or create any obligation,
express or implied, on behalf of the other except as may be otherwise provided
herein. Neither Buyer nor Seller will use any words, perform any act, or make
any statement, written or oral, which would imply or indicate, or tend to imply
or indicate, that it or its business is an agent or representative of the other
party; an agency, division, subsidiary, or branch of the other; or that one, in
any manner, either directly or indirectly, owns, controls, maintains, or
operates the other or its business. Neither party is in any manner responsible
or liable for the other's obligations; nor does any relationship exist between
Seller and Buyer, other than that of independent contractor.
16.9. GOVERNING LAW
This Agreement shall be governed by and construed according to the
laws of the State of Florida.
16.10. SEVERABILITY
If any provisions of the Agreement shall be held invalid, illegal
or unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
16.11. NOTICES
Every notice or other communication required or contemplated by
this Agreement by either party shall be delivered by (a) personal delivery, (b)
certified or registered mail (postage prepaid, return receipt requested), or (c)
"tested telecopy" (a telecopy for which the proper answer back has been
received) addressed to the parties for whom intended at the following address:
If to Seller, at the following address:
Premisys Communications, Inc.
1032 Elwell Court
Suite 111
Palo Alto, California 94303
Attn: Robert Dilfer
Telecopy Number: (415) 940-7713
If to Buyer, at the following address:
AT&T Paradyne
8545 126th Avenue North
P.O. Box 2826
Largo, Florida 34649-2826
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Attn: Subcontracts Manager
Telecopy Number: (813) 530-2623
or at such other address as the intended recipient previously shall have
designated by written notice to the other party. Notice by mail shall be
effective on the date it is officially recorded as delivered to the intended
recipient by return receipt or equivalent. All notices and other communication
required or contemplated by this Agreement delivered in person or sent by
"tested" telecopy shall be deemed to have been delivered to and received by the
addressee and shall be effective on the date of the personal delivery or on the
date sent, respectively. Notice not given in writing shall be effective only if
acknowledged in writing by a duly authorized representative of the party to whom
it was given.
16.12. ENTIRE AGREEMENT
This Agreement, including any exhibits attached hereto,
constitutes the entire Agreement and supersedes all prior communications,
representations, agreements, understandings, either verbal or written, between
the parties with respect to the subject matter hereof. This Agreement may not be
altered, modified, amended or otherwise changed except by supplemental written
agreement signed by duly authorized officers of both parties.
16.13. AUTHORITY TO COMMIT
Buyer and Seller each represent and warrant that the
representatives executing this Agreement are duly authorized and empowered to
sign on their behalf.
16.14. WAIVER
A waiver by either party of any default of the other party shall
not be deemed to be a continuing waiver or a waiver of any other default or of
any other provision of this Agreement, but shall apply solely to the instance to
which the waiver is directed.
16.15. PRIVACY
Neither Buyer nor Seller shall, without first obtaining the other
party's written authorization, in any manner disclose the terms and conditions
of this Agreement; (except as may be necessary to perform in accordance with the
terms of this Agreement or as required by law), or any information in any way
related to this Agreement, or any Release or the business of the other party.
16.16 SURVIVING PROVISIONS
The rights and obligations of Buyer and Seller arising under the
Sections 5.0., 13.6.3., 16.4., 16.5., 16.6., and 16.7. shall survive the
termination of this Agreement for a period of three (3) years unless otherwise
stipulated elsewhere.
16.17. ORDER OF PRECEDENCE
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If acknowledgments and invoices are issued on Seller's standard
forms containing printed terms and conditions therein, then such printed terms
and conditions shall be of no force and effect. The terms and conditions of this
Agreement shall take precedence over Buyer's Releases terms and conditions. The
Specifications and other such documents made as part of this Agreement shall
take precedence over any other such documents not attached or referenced within
this Agreement.
16.18. HEADINGS NOT CONTROLLING
Headings used in this contract are for reference only and shall
not be deemed a part of this contract.
16.19. ARBITRATION
Except as provided herein, any controversy or claim arising out of
or related to this Agreement, or the breach hereof, will be settled by
arbitration before a panel of one arbitrator in ORLANDO, FLORIDA, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator will have knowledge of and
experience with the telecommunications industry. The arbitration hearing will
commence within ninety (90) days after appointment of the arbitrator. Unless the
arbitrator finds that exceptional circumstances justify delay, the hearing will
be completed and an award will be rendered in writing within ninety (90) days
after the commencement of the hearing. The arbitrator shall include in the award
the prevailing party's costs of arbitration and reasonable fees of attorneys,
accountants and other professionals connected with the arbitration.
Seller or Buyer will not be required to arbitrate any dispute
relating to actual or threatened unauthorized use or disclosure of its
confidential information or violation of its proprietary rights in the Products,
jointly or individually developed products or enhancements thereto, or their
designs.
16.20. FEES
In any suit or arbitration to enforce this agreement, the
prevailing party will have the right to recover its costs and reasonable fees of
attorney, accountants, and other professionals.
17.0. ADDITIONAL AGREEMENTS
It is the intent of both the Buyer and the Seller to review as
required the need to amend this agreement or to enter into new agreements for
the mutual benefit of the parties.
Buyer and Seller agree to meet at least every six (6) months to
review market conditions and business opportunities that may require new
agreements to increase sales, market share and/or market position. Such
agreements may include, but are not limited to bi-lateral technology transfer,
joint development of new products, or enhancements to existing Products.
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Should these meeting identify a market opportunity for either
party, Buyer and Seller agree to enter into "Good Faith" negotiations toward an
Agreement that benefits both parties.
18.0. MANUFACTURING
Buyer shall have the right to become a primary manufacturing
source for the Seller's Products and New Products, at the Buyer's or any of it
affiliate's manufacturing locations, if it can meet or beat the material terms
and conditions of Seller's then current primary manufacturing source. All bids
shall be fairly reviewed by the Seller for meeting product manufacturing and
quality standards that the Seller would propose to any other sub-contract
manufacture. Seller agrees to share all manufacturing cost data for the Products
with the Buyer and to actively pursue the exchange of the manufacturing
information required for the Buyer to submit such a bid. If the bid to
manufacture the Products is rejected by Seller, Seller will within ten (10) days
of such rejection submit to the Buyer a memorandum detailing the reason why the
bid was rejected.
If during the term of this Agreement Buyer elects to manufacture
the Products for its customers at its facilities or any affiliated facility,
then Buyer shall have such right provided the transfer price to Seller is no
greater than the aggregate of the costs Seller would have otherwise incurred if
manufacturing had been done by its then existing supplier, assembly was done by
the Seller (including freight, duty, testing, inspection) and any other costs
that Seller would have otherwise incurred.
For any products or enhanced products jointly developed by the
parties pursuant to Section 17.0., both parties will have the rights to
manufacture and market (such marketing rights subject to limitations contained
in this agreement) such products. If Buyer develops enhanced products it shall
have the right to manufacture and sell such products subject to a reasonable
royalty for any incorporated Seller proprietary technology.
19.0. SOFTWARE
19.1. SOFTWARE LICENSE
Buyer acknowledges and agrees that the Products contain software
and firmware (the "Software") that is not sold to Buyer. Seller hereby grants
Buyer and Buyer's authorized distributors a license to reproduce and distribute
the Software to and sublicense end-users of the Product to use the Software
solely in connection with the Products.
The Buyer shall sublicense the Software under a license agreement
with the Buyer's end user customer that contains substantially the same
provisions as are contained herein and Buyer will ensure that its distributors
also comply with this requirement.
19.2. SOFTWARE AVAILABILITY
All software will be made available to the Buyer in both a hard
coded (firmware EPROM, etc.) and a soft coded copy (diskette, tape, etc.) as
deemed necessary by the Buyer for the particular application.
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19.3 SOFTWARE WARRANTY
Seller agrees that the Software shall be warranted to the same
terms and conditions as specified for the Products.
19.4 SOFTWARE MODIFICATIONS
Seller agrees to provide Buyer with two (2) master copies of all
requested Software Bug Fixes, Software Maintenance Releases and the associated
documentation at no charge for the term of this Agreement. All Software Feature
Releases will be provided to the Buyer at a cost mutually agreed to by the
parties and in accordance with Section 16.3 of this Agreement. If Software Bug
Fixes are incorporated into the Software Feature Releases and not made available
as a Software Maintenance Release then the Software Feature Release will be
provided, as requested, to the Buyer at no charge.
All Software Bug Fixes and Software Maintenance Releases will be
made available to the Buyer on the day that it is generally available. All
Software Feature Releases will be available to the Buyer as required by the
Buyer. All technical documentation for a Software Feature Release will be
available to the Buyer in a camera ready state thirty (30) days prior to the
general availability of such release.
19.5. SOFTWARE SUPPORT
Seller agrees to provide support services to the Buyer for the
Software in accordance with the support provisions as defined for the Products
of this Agreement. Seller further agrees to coordinate the prioritization of all
Software problems as reported by the Buyer into the follow on releases based
upon the priorities reviewed with the Buyer. The Seller will issue monthly
reports to the Buyer covering status of the Software problems, current time
frames for repair, current development testing and results. Software for which
new versions have been issued will continued to receive support for two (2)
years post issuance of versions by Seller.
Seller agrees to provide a single point of contact within their
development organizations for consultation, defining unique features,
establishing priorities for unique features, new Software Feature Releases
information, establishing priorities, status and results for Software Bug Fixes.
Seller agrees to provide support service response times for
Buyer's Software reported problems, proposed changes and Enhancements (also
referred to by Buyer as Modifications Requests (MR)) as specified in the
Specification.
20.0. SIGNATURE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date(s) set forth below.
AT&T PARADYNE CORPORATION
33.
<PAGE> 34
BY: /s/ J. P. Hectus
TITLE: Sr. V.P., CEO and Treasurer
DATE: 12/4/92
PREMISYS COMMUNICATIONS, INC.
BY: /s/ Raymond Lin
TITLE: President / CEO
DATE: 12/4/92
PREMISYS COMMUNICATIONS HOLDINGS, INC.
BY: /s/ Raymond Lin
TITLE: President / CEO
DATE: 12/4/92
34.
<PAGE> 35
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 1
PAGE 1 OF 4
DATE: 7/8/93
PREMISYS COMMUNICATIONS, INC.
1032 ELWELL COURT
PALO ALTO, CALIFORNIA 94303
Agreement number LGSC103DS, dated and signed, December 24, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit A, Product Model Numbers/Descriptions/List Prices/Discount Levels,
is hereby deleted in its entirety and replaced by a new Product Model
Numbers/Descriptions/List Prices/Discount Levels, Exhibit A, revision 1, dated
7/8/93, attached hereto and made a part hereof.
2.0 All other term and conditions of the above stated Agreement remain
unchanged.
This Amendment shall be effective for all Releases received by Premisys for AT&T
Paradyne on or after August 1, 1993.
ACCEPTED: July 16, 1993 ACCEPTED: July 19, 1993
AT&T Paradyne Premisys Communications, Inc.
By: /s/ James L. Slattery By: /s/ Raymond Lin
Title: Sr. Vice President, Secretary & Title: President / CEO
General Counsel
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTION
AMENDMENT NUMBER 1 - LGSC103DS
1 - 07/08/93
<PAGE> 36
COMPANY CONFIDENTIAL INTERNAL USE ONLY
PREMISYS COMMUNICATIONS, INC.
IMACS/800
PRICE LIST EFFECTIVE AUGUST 1, 1993
<TABLE>
<CAPTION>
U.S.
LIST AT&T AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE DISCOUNT
<S> <C> <C> <C> <C> <C>
Common Equipment:
8901 25801 AC power supply [***] [***] [***]
8902 25802 DC power supply [***] [***] [***]
8903 25803 -48V DC converter [***] [***] [***]
8904 25804 -48V Ringing generator [***] [***] [***]
8918 25800 Universal enclosure with installation kit [***] [***] [***]
8920 25816 Interface card with 2,400 baud modem [***] [***] [***]
8800 25806 CPU control card with 2 T1/E1 bus-connect [***] [***] [***]
(non-redundant) [***] [***] [***]
8804 CPU control card with 4 T1/E1 bus-connect [***] [***] [***]
(redundant-capable) [***] [***] [***]
8801 25807 CPU control card with cross-connect [***] [***] [***]
(redundant-capable) [***] [***] [***]
T1/E1 WAN Cards:
8000 25811 Single T1/E1 line interface [***] [***] [***]
8010 25812 Dual T1/E1 line interfaces [***] [***] [***]
8014 Dual T1/E1 line interfaces with 1 x 3 relays [***] [***] [***]
811 25814 DSX/CEPT plug-in module [***] [***] [***]
812 25815 CSU plug-in module [***] [***] [***]
Voice Cards:
8108 25819 8-port, 2-wire E&M/TO [***] [***] [***]
8118 25821 8-port, 4-wire E&M/TO [***] [***] [***]
8119 8-port, 4-wire E&M/TO - Extended Range [***] [***] [***]
8128 25823 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 900 Ohm [***] [***] [***]
8129 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 Ohm [***] [***] [***]
8138 25826 8-port, 2-wire FXO/FXODN/MRD/DPT - 900 Ohm [***] [***] [***]
8139 8-port, 2-wire FXO/FXODN/MRD/DPT - 600 Ohm [***] [***] [***]
Data Cards:
8202 25826 2-port RS-530/V.35 super-rate data [***] [***] [***]
8212 25827 2-port V.35 super-rate data [***] [***] [***]
8215 4-port RS-530/V.35 super-rate data [***] [***] [***]
8220 25828 10-port RS-232C sub-rate data [***] [***] [***]
8248 5-port OCU-DP [***] [***] [***]
8249 25829 2-port OCU-DP with error correction [***] [***] [***]
8254 25883 4-port DSO-DP/G.703 co/contra directional [***] [***] [***]
Other Cards:
8401 25830 External alarm card [***] [***] [***]
</TABLE>
* Confidential Treatment Requested
2.
<PAGE> 37
<TABLE>
<CAPTION>
U.S.
LIST AT&T AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE DISCOUNT
<S> <C> <C> <C> <C> <C>
Cables and Accessories: [***] [***] [***]
1106 RJ48 to 2 BNC Adapter (for E1) [***] [***] [***]
1114X 25881 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [***] [***] [***]
1114M 25882 5-ft RJ48M to DB25M Straight-Thru Cable (for SRU) [***] [***] [***]
1121 25888 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [***] [***] [***]
1161 25880 50-Pin to 8 RJ48 Adapter (for T1) [***] [***] [***]
1203X 25858 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [***] [***] [***]
1203M 25885 5-ft DB25M to V.35M Straight-Thru Cable (for V.35 HSU) [***] [***] [***]
1204X 25858 5-ft DB25M to RS530M Cross-Over Cable (for RS530M HSU) [***] [***] [***]
1204M 25857 5-ft DB25M to RS530M Straight-Thru Cable (for RS530M HSU) [***] [***] [***]
1207 25863 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [***] [***] [***]
1208 25860 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [***] [***] [***]
1208 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [***] [***] [***]
1210 25861 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple Uses) [***] [***] [***]
1212X 25883 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [***] [***] [***]
1212M 25882 5-ft DB25M to RS449M Straight-Thru Cable (for RS449 HSU) [***] [***] [***]
1215X 25885 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [***] [***] [***]
1215M 25864 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [***] [***] [***]
1216F 25852 15-ft RJ48M to DB25F Straight-Thru Cable (for VT100) [***] [***] [***]
1216M 25851 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [***] [***] [***]
1217 25854 25-ft RJ11M to RJ11M Cable (for Modem) [***] [***] [***]
1220 25877 25-ft 50-Pin Male to Female Amp/Champ Extension Cable [***] [***] [***]
1221 25878 25-ft DB25M to DB25F Extension Cable (for RS232 operation) [***] [***] [***]
1222 25875 25-ft DB25M to DB25F Extension Cable (for RS530 operation) [***] [***] [***]
1224 25874 25-ft DB25M to DB25F Extension Cable (for V.35 operation) [***] [***] [***]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1231 25853 25-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1232 25873 50-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1233 25872 100-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1239 Y Adapter for WAN Card Redundancy (Bus Connect Systems) [***] [***] [***]
1240 5-inch DB25M to DB25F RS530 Adapter Cables [***] [***] [***]
1251 25869 RS-530 to V.35 Personality Module [***] [***] [***]
1252 25870 RS-530 to RS-232 Personality Module [***] [***] [***]
1255 25871 RS232/RS-232 DB25 Female-to-Female Gender Changer [***] [***] [***]
1257 25885 V.35 M34 Female-to-Female Gender Changer [***] [***] [***]
1258 25888 RS449 DB37 Female-to-Female Gender Changer [***] [***] [***]
1263X 5-ft DB28M to V.35M (M34) Cross-Over Cable (for 4-port HSU) [***] [***] [***]
1263M 5-ft DB28M to V.35M (M34) Straight-Thru Cable (for 4-port HSU) [***] [***] [***]
1264X 5-ft DB28M to RS530M (DB25) Cross-Over Cable (for 4-port HSU) [***] [***] [***]
1264M 5-ft DB28M to RS530M (DB25) Straight-Thru Cable (for 4-port HSU) [***] [***] [***]
1265X 5-ft DB28M to RS449M (DB37) Cross-Over Cable (for 4-port HSU) [***] [***] [***]
1285M 5-ft DB28M to RS449M (DB37) Straight-Thru Cable (for 4-port HSU) [***] [***] [***]
1288 25-ft DB28M to DB28F Extension Cable (for V.35 operation) [***] [***] [***]
1289 25-ft DB28M to DB28F Extension Cable (for RS530/RS449 operation) [***] [***] [***]
1604 25888 M88 Block with 2 Female 50-Pin Amp/Champ Connectors [***] [***] [***]
1609 25887 Type 1 Dual Tap Adapter with 2 RJ48X Jacks (for T1) [***] [***] [***]
</TABLE>
* Confidential Treatment Requested
3.
<PAGE> 38
<TABLE>
<CAPTION>
U.S.
LIST AT&T AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE DISCOUNT
<S> <C> <C> <C> <C> <C>
Factory Upgrades:
6001 Model 8800 CPU to Model 8804 CPU [***] [***] [***]
6002 Model 8800 CPU to Model 8801 CPU [***] [***] [***]
6003 Model 8804 CPU to Model 8801 CPU [***] [***] [***]
</TABLE>
- --------------------------
* Confidential Treatment Requested
4.
<PAGE> 39
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 2
PAGE 1 OF 5
DATE: 3/17/94
PREMISYS COMMUNICATIONS, INC.
1032 ELWELL COURT
PALO ALTO, CALIFORNIA 94303
Agreement number LGSC103DS, dated and signed, December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit A, Product Model Numbers/Descriptions/List Prices/Discount Levels,
dated 7/8/93, is hereby deleted in its entirety and replaced by a new Product
Model Numbers/Descriptions/List Prices/Discount Levels, Exhibit A, dated
3/17/94, attached hereto and made a part hereof.
2.0 All other term and conditions of the above stated Agreement remain
unchanged.
This Amendment shall be effective for all Releases received by Premisys for AT&T
Paradyne on or after March 15, 1994.
ACCEPTED: March 30, 1994 ACCEPTED: March 30, 1994
AT&T Paradyne Premisys Communications, Inc.
By: /s/ Mike Kazban By: /s/ Robert M. Lefkowits
Title: Product Manager Title: V.P. of Marketing
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTION
AMENDMENT NUMBER 2 - LGSC103DS
1 - 3/17/94
<PAGE> 40
COMPANY CONFIDENTIAL
PREMISYS COMMUNICATIONS, INC.
IMACS
PRICE LIST EFFECTIVE MARCH 15, 1994
<TABLE>
<CAPTION>
U.S.
LIST AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
Common Equipment:
8901 25801 AC power supply [***] [***]
8902 25802 DC power supply [***] [***]
8903 25803 -48V DC converter [***] [***]
8904 25804 -48V Ringing generator [***] [***]
8916 IMACS/600 Universal enclosure with installation kit [***] [***]
(cover not included)*
8918 25800 IMACS/800 Universal enclosure with installation kit [***] [***]
8920 25816 Interface card with 2,400 baud modem [***] [***]
8800 25806 CPU control card with 2T1/E1 bus-connect (non [***] [***]
redundant)
8801 25807 CPU control card with cross-connect (redundant-capable) [***] [***]
8804 CPU control card with 4 T1/E1 bus-connect (redundant- [***] [***]
capable)
T1/E1 WAN Cards:
8000 25811 Single T1/E1 line interface [***] [***]
8010 25812 Dual T1/E1 line interfaces [***] [***]
8014 Dual T1/E1 line interfaces with 1 x 3 relays [***] [***]
811 25814 DSX/CEPT plug-in module [***] [***]
812 25815 CSU plug-in module [***] [***]
Voice Cards:
8108 25815 8-port, 2-wire E&M/TO [***] [***]
8118 25821 8-port, 4-wire E&M/TO [***] [***]
8119 8-port, 4-wire E&M/TO - Extended Range [***] [***]
8128 25823 8-port, 2-wire FXS/FXSON/PLAR/DPO - 900 ohm [***] [***]
8129 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 ohm [***] [***]
8138 25825 8-port, 2 wire FXO/FXODN/MRD/DPT - 900 ohm [***] [***]
8139 8-port, 2-wire FXO/FXODN/MRD/DPT - 600 ohm [***] [***]
Data Cards:
8202 25826 2-port RS-530/V.35 super-rate data [***] [***]
8212 25827 2-port V.35 super-rate data [***] [***]
8213 2-port RS-530/RS-368/V.25bls super-rate data* [***] [***]
8215 4-port RS-530/V.35 super-rate data [***] [***]
8220 25828 10-port RS-232C sub-rate data [***] [***]
8224 4-port RS-232C sub-rate data* [***] [***]
8230 8-port subrate FRAD card* [***] [***]
8248 5-port OCU-DP [***] [***]
845 5-port OCU-DP child card* [***] [***]
8249 25829 2-port OCU-DP with error correction [***] [***]
8254 25883 4-port DSO-DP/G.703 co/comtra directional [***] [***]
Server Cards:
8840A ISDN PRI server card - 1 D channel* [***] [***]
8840B ISDN PRI server card - 2 D channels* [***] [***]
8840C ISDN PRI server card - 8 D channels* [***] [***]
Other Cards:
8401 25830 External alarm card [***] [***]
Network Management Software:
7002B PremLink Network Management (base license)* [***] [***]
7002U PremLink Network Management (additional user workstation) [***] [***]
* - consult factory for delivery lead times
</TABLE>
* Confidential Treatment Requested
2.
<PAGE> 41
<TABLE>
US
LIST AT&T
MODEL NUMBER PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
Cables and Accessories: [***] [***]
1106 RJ48 to 2 BNC Adapter (for E1) [***] [***]
1114F 25882 5-ft RJ48M to DB2SF Straight-Thru Cable (for SRU) [***] [***]
1114M 25882 5-ft RJ48M to DB2SM Straight-Thru Cable (for SRU) [***] [***]
1114X 25881 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [***] [***]
1118 25-ft RJ48M to RJ48M Silver-Satin Cable (for OCU-DP) [***] [***]
1121 25866 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [***] [***]
1181 25880 50-Pin to 8 RJ48 Adapter (for T1) [***] [***]
1201F 15-ft DB9 to DB2SF Straight Thru [***] [***]
1201M 15-ft DB9 to DB25M Straight Thru [***] [***]
1203F 25855 5-ft DB25M to V.3SF Straight-Thru Cable (for V.35 HSU) [***] [***]
1203M 25855 5-ft DB25M to V.35M Straight-Thru Cable (for V.35 HSU) [***] [***]
1203X 25856 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [***] [***]
1204F 25857 5-ft DB25M to RS59OF Straight-Thru Cable (for RS530 HSU) [***] [***]
1204M 25857 5-ft DB25M to RS53OM Straight-Thru Cable (for RS530 HSU) [***] [***]
1204X 25858 5-ft DB25M to RS53OM Cross-Over Cable (for RS530 HSU) [***] [***]
1207 25859 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [***] [***]
1208 25860 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [***] [***]
1209 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [***] [***]
1210 25861 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple Uses) [***] [***]
1212F 25862 5-ft DB25M to RS449F Straight-Thru Cable (for RS449 HSU) [***] [***]
1212M 25862 5-ft DB25M to RS449M Straight-Thru Cable (for RS449 HSU) [***] [***]
1212X 25863 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [***] [***]
1215M 25864 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [***] [***]
1215X 25865 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [***] [***]
1216F 25852 15-ft RJ48M to DB2SF Straight-Thru Cable (for VT100) [***] [***]
1216M 25851 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [***] [***]
1217 25854 25-ft RJ11M to RJ11M Cable (for Modem) [***] [***]
1220 25877 25-ft 50-Pin Male to Female Amp/Champ Extension Cable [***] [***]
1221 25876 25-ft DB25M to DB25F Extension Cable (for RS232 operation) [***] [***]
1222 25875 25-ft DB25M to DB25F Extension Cable (for RS530 operation) [***] [***]
1224 25874 25-ft DB25M to DB25F Extension Cable (for V.35 operation) [***] [***]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1231 25853 25-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1232 25873 50-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1233 25872 100-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1239 Y Adapter for WAN Card Redundancy (Bus Connect Systems) [***] [***]
1240 5-inch DB26M to DB25F RS530 Adapter Cables [***] [***]
1251 25869 RS-530 to V.3S Personality Module [***] [***]
1252 25870 RS-530 to RS-232 Personality Module [***] [***]
1253 25871 RS232/RS530 DB25 Female-to-Female Gender Changer [***] [***]
1257 25885 V.35 M34 Female-to-Female Gender Changer [***] [***]
1258 25886 RS449 DB37 Female-to-Female Gender Changer [***] [***]
1263F 5-ft DB26M to V.35F (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263M 5-ft DB36M to V.35M (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263X 5-ft DB26M to V.3SM (M34) Cross-Over Cable (for DB26 HSUs) [***] [***]
1264F 5-ft DB26M to RS53OF (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264M 5-ft DB26M to RS53OM (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264X 5-ft DB26M to RS53OM (DB25) Cross-Over Cable (for DB26 HSUs) [***] [***]
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265X 5-ft DB26M to RS449M (DB37) Cross-Over Cable (for DB26 HSUs) [***] [***]
1268 25-ft DB26M to DB26F Extension Cable (for V.35 operation) [***] [***]
1269 25-ft DB26M to DB26F Extension Cable (for RS53O/RS449 [***] [***]
operation)
1504 25868 M66 Block with 2 Female 50-Pin Amp/Champ Connectors [***] [***]
Reference Manuals:
1901 IMACS/800 Reference Guide
1902 PremLink Reference Guide
1903 Cable and Equipment Guide
1904 IMACS/600 Reference Guide
</TABLE>
NOTE: Cables, accessories, and manuals are not subject to discount.
* Confidential Treatment Requested.
3.
<PAGE> 42
<TABLE>
U.S.
LIST AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
Advanced Replacement Upgrades: [***] [***]
CPU Cards
5001AR 25889 Model 8800 CPU to Model 8804 CPU [***] [***]
6002AR 25890 Model 8800 CPU to Model 8801 CPU [***] [***]
6003AR 25891 Model 8804 CPU to Model 8801 CPU [***] [***]
CPU Cards
9001AR 20111 8800 CPU card firmware upgrade to latest version [***] [***]
9002AR 20112 8801 CPU card firmware upgrade to latest version [***] [***]
9003AR 8804 CPU card firmware upgrade to latest version [***] [***]
Data Cards
8202AR 20104 2-port RS-530/V.35 super-rate data [***] [***]
8212AR 20105 2-port V.35 super-rate data [***] [***]
8213AR 2-port RS-530/RS-366/V.25bis super-rate data [***] [***]
8215AR 20106 4-port RS-530/V.35 super-rate data [***] [***]
8220AR 20107 10-port RS-232C sub-rate data [***] [***]
8224AR 4-port RS-232C sub-rate data [***] [***]
8230AR 20107 8-port subrate FRAD card [***] [***]
8248AR 20108 5-port OCU-DP [***] [***]
8249AR 20109 2-port OCU-DP with error correction [***] [***]
8254AR 20110 4-port DSO-DP/G.703 co/contra directional [***] [***]
Terms and conditions on advanced replacement upgrades:
User must order an advanced replacement upgrade from Premisys.
Advanced replacement board will be sent, with return label for old board.
Old board must be returned freight pre-paid to Premisys within 21 days of receipt of replacement board.
If old board is not received within 21 days, user will be billed for the list price of the board.
Upgraded boards retain the warranty period of the original board.
Factory Upgrades:
CPU Cards
6001FG Model 8800 CPU to Model 8804 CPU [***] [***]
6002FG Model 8800 CPU to Model 8801 CPU [***] [***]
6003FG Model 8804 CPU to Model 8801 CPU [***] [***]
CPU Cards
9001FG CPU card firmware upgrade to latest version [***] [***]
Data Cards:
8202FG 2-port RS-530/V.35 super-rate data [***] [***]
8212FG 2-port V.35 super-rate data [***] [***]
8213FG 2-port RS-530/RS-366/V.25bis super-rate data [***] [***]
8215FG 4-port Rs-530/V.35 super-rate data [***] [***]
8220FG 10-port RS-232C sub-rate data [***] [***]
8224FG 4-port RS-232C sub-rate data [***] [***]
8230FG 8-port subrate FRAD data [***] [***]
8248FG 5-port OCU-DP [***] [***]
8249FG 2-port OCU-DP with error correction [***] [***]
8254FG 4-port DSO-DP/G.703 co/contra directional [***] [***]
Terms and conditions on factory upgrades:
User must obtain an RA number from Premisys before returning board for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via standard ground freight within 21 days of receipt.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
</TABLE>
* Confidential Treatment Requested
4.
<PAGE> 43
<TABLE>
<CAPTION> U.S.
LIST AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
EEPROM Upgrade [***] [***]
CPU Cards
9001EP CPU card firmware upgrade to latest version [***] [***]
Data Cards:
8202EP 2-port RS-530/V.35 super-rate data [***] [***]
8212EP 2-port V.35 super-rate data [***] [***]
8213EP 2-port RS-530/RS-366/V.25bls super-rate data [***] [***]
8215EP 4-port RS-350/V.35 super-rate data [***] [***]
8220EP 10-port RS-232C sub-rate data [***] [***]
8224EP 4-port RS-232C sub-rate data [***] [***]
8230EP 8-port sub-rate FRAD card [***] [***]
8248EP 5-port OCU-DP [***] [***]
8249EP 2-port OCU-DP with error correction [***] [***]
8254EP 4-port DSO-DP/G703 co/contra directional [***] [***]
</TABLE>
- --------------------------
Terms and conditions on EEPROM upgrades:
A non-discountable handling fee of $750 will be added to each order for EEPROM
upgrades.
EEPROM upgrades are available only to authorized Premisys service
organizations.
Improper installation of EEPROM(s) may void the Premisys warranty.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
* Confidential Treatment Requested
5.
<PAGE> 44
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 3
PAGE 1 OF 1
DATE: 5/24/94
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS, dated and signed, December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit B, the purchase specification (Specification), AT&T Paradyne part
number 351-0047-0031, revision A, is hereby deleted in its entirety and replaced
with, revision B, attached hereto and made apart hereof.
2.0 All other term and conditions of the above stated Agreement remains
unchanged.
This Amendment shall be effective upon the parties' acceptance of the same, as
signed and dated below.
ACCEPTED: June 20, 1994 ACCEPTED: July 8, 1994
AT&T Paradyne Premisys Communications, Inc.
By: /s/ By: /s/
Title: Title: V.P.
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTION
AMENDMENT NUMBER 3 - LGSC103DS
1 - 5/24/94
<PAGE> 45
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 4
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS, dated and signed December 4, 1992 by and between
Premisys Communications Inc. and AT&T Paradyne Corporation is hereby amended as
follows. In the event there are conflicts in the terms of this Amendment and the
OEM Agreement, the terms of the Amendment will apply.
1.0 BASE PRICES
1.1 For Product shipped under this amendment, AT&T PDN will pay Base Prices
per attachment "B", which will average an additional [***] off the
current Price List as of January 1, 1995. Such Base Pricing in
Attachment B will be decreased an additional [***] and an additional
[***] in 1997.
1.2 The new Base Prices and discounts will become effective on the date the
contract amendment is signed and will be applied to all unshipped
orders as well as future orders. Discount levels will reflect date of
order receipt. In such cases where special pricing has been agreed upon
between Premisys and AT&T PDN in response to special bids, present or
future, the discount structure will reflect the lower of the special
pricing or the discounts under the terms of this amendment.
1.3 Pricing and discounts under this amendment are warranted by Premisys to
be comparable to or more favorable to AT&T PDN than equivalent prices,
warranties and terms offered by Premysis to any other customer for the
term of this amendment.
2.0 DISCOUNT STRUCTURE
2.1. AT&T PDN will be granted additional price discounts off of the Base
Price according to the discount tables below.
a. Product discounts will depend upon AT&T PDN's shipment volumes and
will include current Products as listed in the then-current
Attachment B and any "new" Products which AT&T PDN might choose to
ship in the future (exclusive of Product(s) which might be
developed through any joint development efforts). Shipments will
be valued at the prices actually paid by AT&T PDN during the same
period.
- --------------------------
* Confidential Treatment Requested
AMENDMENT NUMBER 3 - LGSC103DS
USE PURSUANT TO PROPRIETARY DOCUMENT PROCEDURE
1
<PAGE> 46
AGREEMENT NUMBER LSC103DS
AMENDMENT NUMBER 4
CALENDAR YEAR 1995
Shipment Volume Discount
($million)
[***] [***]%
[***] [***]%
[***] [***]%
[***] [***]%
CALENDAR YEAR 1996
Shipment Volume Discount
($million)
[***] [***]%
[***] [***]%
[***] [***]%
[***] [***]%
CALENDAR YEAR 1997
Shipment Volume Discount
($million)
[***] [***]%
[***] [***]%
[***] [***]%
[***] [***]%
3.0 ECLIPSE PRODUCT DEVELOPMENT
AT&T PDN within 60 days of execution of this amendment will cease its
current development of the Eclipse Product as defined by the Eclipse
Architecture Specification Draft Issue 1.0, dated October 21, 1994, and
the Eclipse Release One System Requirements Specification Draft Issue
1, dated February 13, 1995. This decision will be represented by an
internal announcement, which will be provided under confidentiality to
Premisys. This does not preclude any future developments from using the
technology and know-how gained from the Eclipse Product development
effort.
4.0 DISTRIBUTION AGREEMENT
4.1 Distribution to AT&T entities - It Is agreed that AT&T PDN will have
sole marketing and sales rights to all AT&T entities. If Premisys knows
or has reason to know that AT&T or any AT&T entity (to include Business
Units, divisions or majority-owned subsidiaries) is
- --------------------------
* Confidential Treatment Requested
Amendment Number 3 - LGSC103DS
Use Pursuant to Propriety Document Procedure
2
<PAGE> 47
AGREEMENT NUMBER LSC103DS
AMENDMENT NUMBER 4
the end-user customer or is in the distribution chain of any sale by
Premisys' Distributors or OEMs, then Premisys will provide no other
than standard Product support or pricing in support of such sale.
4.2 In the event that AT&T has the ability to enter international markets
based on its local manufacturing capabilities or content and where
Premisys has no current form of distribution, AT&T Paradyne will be
able to request and, upon agreement of mutually agreed to objectives,
be granted an exclusive marketing and sales rights in that country.
Buyer and Seller will establish mutually agreeable performance
objectives for each country in which it is selling Products and will
review at least semi-annually Buyer's sales performance in those
countries. If minimal performance objectives are not being met in any
country, Buyer and Seller will implement mutually agreeable programs to
improve sales performance in those countries. In the event that AT&T
Paradyne does not meet performance objectives agreed upon, such
exclusive marketing rights will be forfeited. Upon forfeiting such
exclusive marketing and sales rights, AT&T PDN will immediately be
granted nonexclusive marketing and sales rights for those same
countries.
4.3 Except for the provisions of this amendment upon execution of this
amendment Premisys will not be limited in any fashion in having
relationships with other companies.
4.4 It is the intent of AT&T PDN to more fully utilize Premisys and their
partners as a distribution vehicle for products developed and/or
bundled with other Premisys Products and Technologies. These
developments may include, but not be limited to CAP and related
Transmission Products, [MU] Law modem Products and other complementary
Network Access Products. This relationship will be developed and
defined under a separate Distribution Agreement.
5.0 JOINT DEVELOPMENT
5.1 AT&T PDN will develop and submit to Premisys a Technology Plan which
will be updated quarterly. The Technology Plan will include AT&T PDN's
plans for integrating technologies and features into the Premisys
Product platform as well as any other plans for joint development
activities. Such planned technologies and features to be integrated
will be reasonably achievable and will be in support of AT&T Paradyne's
then-current Technology Roadmap. Premisys agrees to implement the
Technology Plan of which an implementation schedule will be mutually
agreed upon. Such implementation schedule will reflect commercially
reasonable project start dates and completion dates which will be
incorporated into a documented project plan and the Premisys Master
Release Plan. In the event AT&T PDN wishes to undertake additional
integration or joint development efforts not included in the Technology
plan, AT&T PDN and Premisys will negotiate such projects in good faith.
5.2 The terms of the current joint Development Agreement LGSC104DS, dated
September 30, 1993, and as amended from time to time, will remain in
effect.
Amendment Number 3 - LGSC103DS
Use Pursuant to Propriety Document Procedure
3
<PAGE> 48
AGREEMENT NUMBER LSC103DS
AMENDMENT NUMBER 4
6.0 TRAINING AND SUPPORT
Premisys agrees to provide training and support to AT&T Tier 4 Support
group. Such training and support will consist of one Tier 4 training
class as soon as practicable, one Tier four training class by end of
1995, and one Tier 4 class for each major release. Classes will be held
at a location of AT&T PDN's choosing and will include all training
materials. Training and materials will be adequate to ensure that AT&T
PDN has the ability to be self-sustaining in internal training and Tier
4 support.
7.0 GENERAL
7.1 The term of this amendment and OEM Agreement LGSC103DS will, be five
years from the execution of this amendment with an option to extend the
agreement an additional two years at AT&T Paradyne's sole discretion.
Pricing for the fourth and fifth years of this agreement period will be
negotiated in good faith prior to December 31, 1997.
7.2 This terms of this amendment are confidential except for any
disclosures which might be necessary to meet the minimum disclosure
requirements of the SEC.
7.3 Within 30 days of the execution of this amendment, AT&T PDN and
Premisys will issue a mutually agreed-to news release describing its
key elements.
This amendment shall be effective upon the parties' acceptance of the same, as
signed and dated below.
ACCEPTED: March 20, 1995 ACCEPTED: April 1, 1995
AT&T Paradyne Premisys Communications, Inc.
By: /s/ By: /s/
Title: V.P. & GM Access Products Title: CFO
Amendment Number 3 - LGSC103DS
Use Pursuant to Propriety Document Procedure
4
<PAGE> 49
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 5
PAGE 1 OF 4
DATE: 03/15/95
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Seller agrees to repair free of charge all, defective returned circuit card
assemblies (CCA's), to the latest engineering change order (ECO) of the printed
wiring board (PWB) (minor hardware Enhancements) and the latest Software
Maintenance Release of any Software that may reside on the CCA. Seller further
agrees that if any hardware defect is a class A(x) or any Software defect is a
class one (1) or two (2) severity code a defined in the Specification of this
Agreement and requires a new PWB, the new PWB totally populated to produce the
new CCA shall be provided to Buyer free of charge as replacement for the CCA's
as returned to Seller by Buyer.
For Enhancements to CCA's, Enhancement is further defined as class B(x)
and D defects for hardware and Severity code three (3) and four (4) for
Software, as defined in the Specification, and release to release Software
Enhancements, Seller agrees to upgrade the CCA's to the current shippable
revision, including all Enhancements, to the CCA for the following costs:
SOFTWARE AND MINOR HARDWARE ENHANCEMENTS
User Data Modules [***]
25826 - 8202
25827 - 8212
25895 - 8215
20121 - 8213
25828 - 8220
25829 - 8249
20122 - 845
25833 - 8245
25896 - 8248
25830 - 8401
20123 - 8230
User Voice Modules [***]
25819 - 8108
25821 - 8118
25823 - 8128
25825 - 8138
25894 - 8119
25892 - 8129
25893 - 8139
CPU's [***]
25806 - 8800
25807 - 8801
25888 - 8804
WAN's [***]
25811 - 8000
25812 - 8010
25814 - 811
25887 - 811B
25815 - 812
25813 - 8014
- ---------------------------
* Confidential Treatment Requested
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 4 - LGSC103DS
3 -03/15/95
<PAGE> 50
Server Cards [***]
20124 - 8840A
20125 - 8840B
20126 - 8840C
Common Equipment [***]
25801 - 8901
25802 - 8902
25803 - 8903
25804 - 8904
25816 - 8920
NO TROUBLE FOUND (NTF) [***]
HARDWARE ENHANCEMENT (Applies only where PWB's have under gone an artwork turn.)
User Data Modules [***]
25826 - 8202
25827 - 8212
25895 - 8215
20121 - 8213
25828 - 8220
25829 - 8249
20122 - 845
25883 - 8245
25896 - 8248
25830 - 8401
20123 - 8230
User Voice Modules [***]
25819 - 8108
25821 - 8118
25823 - 8128
25825 - 8138
25894 - 8119
25892 - 8129
25893 - 8139
CPU's
25806 - 8800 [***]
25807 - 8801 [***]
25888 - 8804 [***]
WAN's [***]
25811 - 8000
25812 - 8010
25814 - 811
25887 - 811B
25815 - 812
25813 - 8014
Server Cards [***]
20124 - 8840A
20125 - 8840B
20126 - 8840C
Common [***]
25801 - 8901
25802 - 8902
25803 - 8903
25804 - 8904
25816 - 8920
2.0 All other term and conditions of the above stated Agreement remain
unchanged.
AT&T Paradyne Premisys Communications, Inc.
* Confidential Treatment Requested
By: /s/ By: /s/
Title: V.P. & GM Access Products Title: CFO
Date: 3/20/95 Date: 4/1/95
- ---------------------------
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 4 - LGSC103DS
3 -03/15/95
<PAGE> 51
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 6
PAGE 1 OF 1
DATE: 03/15/95
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit A, IMACS PRICING LIST, dated 03/17/94, is hereby deleted in its
entirety and replaced by a new IMACS PRICING List, Exhibit A, dated
March 06, 1995, attached hereto and made a part hereof.
2.0 All other terms and conditions of the above stated Agreement remain
unchanged.
3.0 This IMACS PRICING LIST, with stated AT&T pricing, will be the basis
for which all dollar volume discounts, as referenced and detailed in
Amendment #4, will, be applied against to calculate new AT&T pricing as
said discounts go into effect.
This amendment for new pricing shall be effective as of March 07, 1995 for all
current orders as of that date.
AT&T PARADYNE PREMISYS COMMUNICATIONS, INC.
By: By:
Title: V.P. & GM Access Products Title: CFO
Date: 3/20/95 Date: 4/1/95
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 4 - LGSC103DS
3 -03/15/95
<PAGE> 52
COMPANY CONFIDENTIAL ATTACHMENT B
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
EFFECTIVE MARCH 6, 1995
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Common Equipment: [***] [***]
8901 AC power supply [***] [***]
8902 48V DC power supply [***] [***]
8903 48V DC converter [***] [***]
8904 48V Ringing generator [***] [***]
8907 24V DC power supply** [***] [***]
8916 IMACS/600 universal enclosure with installation kit (cover not included) [***] [***]
8918 IMACS/800 universal enclosure with installation kit [***] [***]
8919 IMACS/900 universal enclosure with installation kit **(2) [***] [***]
8920 8 T1/E1 interface card with 2,400 baud modem - 32Kb NVRAM [***] [***]
8922 8 T1/E1 interface card with 2,400 baud modem - 128Kb NVRAM **(2) [***] [***]
922 2-port external synchronization module for 8922 **(2) [***] [***]
8925 2 T1 interface card without modem [***] [***]
8926 2 T1 interface card with modem **(1) [***] [***]
8927 2 E1 interface card without modem **(1) [***] [***]
CPU Control Cards:
NOTE: Firmware version must be specified for the following CPU control cards.
See IMACS Firmware Options on page 2.
8800 CPU control card with 2 T1/E1 bus-connect (non-redundant) - 256 K [***] [***]
8801 CPU control card with cross-connect (redundant-capable) - 256 K [***] [***]
8802 CPU control card with cross-connect (redundant-capable) - 512 K **(2) [***] [***]
8804 CPU control card with 4 T1/E1 bus-connect (redundant-capable) - 256 K [***] [***]
8805 CPU control card with 4 T1/E1 bus-connect (redundant-capable) - 512 K **(2) [***] [***]
T1/E1 WAN Cards:
8000 Single T1/E1 line interface [***] [***]
8010 Dual T1/E1 line interfaces [***] [***]
8014 Dual T1/E1 line interfaces with 1 x 3 relays [***] [***]
811 DSX/CEPT plug-in module [***] [***]
812 CSU plug-in module [***] [***]
Voice Cards:
8108 8-port, 2-wire E&M/TO [***] [***]
8115 4-port, 4-wire E&M/TO - Extended Range **(1) [***] [***]
8118 8-port, 4-wire E&M/TO [***] [***]
8119 8-port, 4-wire E&M/TO - Extended Range [***] [***]
8124 4-port, 2-wire FXS/FXSDN/PLAR/DPO - 900 Ohm**(1) [***] [***]
8125 4-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 Ohm**(1) [***] [***]
8128 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 900 Ohm [***] [***]
8129 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 Ohm [***] [***]
8134 4-port, 2-wire FXO/FXODN/MRD/DPT - 900 Ohm**(1) [***] [***]
8135 4-port, 2-wire FXO/FXODN/MRD/DPT - 600 Ohm**(1) [***] [***]
8138 8-port, 2-wire FXO/FXODN/MRD/DPT - 900 Ohm [***] [***]
8139 8-port, 2-wire FXO/FXODN/MRD/DPT - 600 Ohm [***] [***]
** consult factory for delivery lead times [***] [***]
(1) requires version 3.2 or higher host firmware [***] [***]
(2) requires version 4.0 or higher host firmware [***] [***]
</TABLE>
*Confidential Treatment Requested
2.
<PAGE> 53
COMPANY CONFIDENTIAL ATTACHMENT B
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
EFFECTIVE MARCH 6, 1995
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Data Cards
8202 2-port RS-530/V.35 super-rate data [***] [***]
8212 2-port V.35 super-rate data [***] [***]
8213 2-port RS-530/RS-366/V.25bis super-rate data [***] [***]
8215 4-port RS-530/V.35 super-rate data [***] [***]
8220 10-port RS-232C sub-rate data [***] [***]
8228 8-port sub-rate B7R IP concentrator card (1) [***] [***]
8230 8-port subrate FRAD card [***] [***]
8248 5-port OCU-DP [***] [***]
8247 5-port OCU-DP (expandable) ** (1) [***] [***]
845 5-port OCU-DP child card [***] [***]
8249 2-port OCU-DP with error correction [***] [***]
8254 4-port DSO-DP/G.703 co/contra directional [***] [***]
8260 8-port 2-wire (2B1Q) ISDN BRI card (1) [***] [***]
8261 8-port 2-wire (2B1Q) ISDN BRI card (2), span power [***] [***]
Server Cards: [***] [***]
8810 Frame relay server (68 ports, 16 MB RAM, with accelerator) ** (2) [***] [***]
8811 Frame relay server (36 ports, 4 MB RAM, no accelerator) ** (2) [***] [***]
8820 IP concentrator (128 ports, 8 MB RAM, no accelerator) ** (2) [***] [***]
8840A ISDN PRI server card - 1 D channel [***] [***]
8840B ISDN PRI server card - 2 D channels [***] [***]
8840C ISDN PRI server card - 8 D channels [***] [***]
8870 ADPCM Server (3) [***] [***]
8880 4 channel inverse mux server with BONDING modes 0 and 1 software ** (1) [***] [***]
Other Cards:
8401 External alarm card [***] [***]
IMACS Firmware Options:
6000-30 Version 3.0 host firmware with Reference Manual [***] [***]
6000-32 Version 3.2 host firmware without TCP/IP/SNMP with Reference Manual [***] [***]
6000-32T Version 3.2 host firmware with TCP/IP/SNMP with Reference Manual [***] [***]
6000-33 Version 3.3 host firmware without TCP/IP/SNMP with Reference Manual ** [***] [***]
6000-33T Version 3.3 host firmware with TCP/IP/SNMP with Reference Manual ** [***] [***]
6000-40 Version 4.0 host firmware without TCP/IP/SNMP with Reference Manual ** (4) [***] [***]
6000-40T Version 4.0 host firmware with TCP/IP/SNMP with Reference Manual ** (4) [***] [***]
** consult factory for delivery lead times
(1) requires version 3.2 or higher host firmware
(2) requires version 4.0 or higher host firmware
(3) requires 8801 Rev B1 CPU when used with 3.X host firmware; requires
8802 or 8805 CPU when used with 4.0 host firmware
(4) requires 8922 interface card and either 8802 or 8805 CPU card
PremLink 2.0 Software:
7100-20 PremLink Version 2.0 - Single CPU license for Sun Solaris 1.x [***] [***]
</TABLE>
* Confidential Treatment Requested
3.
<PAGE> 54
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Cables and Accessories
NOTE: Cables and accessories are not subject to discount.
1106 RJ48 to 2 BNC Adapter (for E1) [***] [***]
1114F 5-ft RJ48M to DB25F Straight-Thru Cable (for SRU) [***] [***]
1114M 5-ft RJ48M to DB25M Straight-Thru Cable (for SRU) [***] [***]
1114X 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [***] [***]
1114CX 5-ft RJ48M to DB25M External Clock Cable (for SRU) [***] [***]
1118 25-ft RJ48M to RJ48M Silver-Satin Cable (for OCU-DP) [***] [***]
1121 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [***] [***]
1181 50-Pin to 8 RJ48 Adapter (for T1) [***] [***]
1201F 15-ft D89 to DB25F Straight Thru [***] [***]
1201M 15-ft DB9 to DB25M Straight Thru [***] [***]
1203F 5-ft DB25M to V.35F Straight-Thru Cable (for V.35 HSU) [***] [***]
1203M 5-ft DB25M to V.35M Straight-Thru Cable (for V.35 HSU) [***] [***]
1203X 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [***] [***]
1204F 5-ft DB25M to RS530F Straight-Thru Cable (for RS530 HSU) [***] [***]
1204M 5-ft DB25M to RS530M Straight-Thru Cable (for RS530 HSU) [***] [***]
1204X 5-ft DB25M to RS530M Cross-Over Cable (for RS530 HSU) [***] [***]
1206F 5-ft DB15M to DB25F Straight-Thru Cable (for RS366 HSU Ports) [***] [***]
1207 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [***] [***]
1208 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [***] [***]
1209 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [***] [***]
1210 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple Uses) [***] [***]
1212F 5-ft DB25M to RS449F Straight-Thru Cable (for RS449 HSU) [***] [***]
1212M 5-ft DB25M to RS449M Straight-Thru Cable (for RS449 HSU) [***] [***]
1212X 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [***] [***]
1213 5-ft 50-Pin Male Amphenol Cable to 2 RJ-48F Cable (for 8 T1 [***] [***]
Interface Card) [***] [***]
1215M 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [***] [***]
1215X 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [***] [***]
1216F 15-ft RJ48M to DB25F Straight-Thru Cable (for VT100) [***] [***]
1216M 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [***] [***]
1217 25-ft RJ11M to RJ11M Cable (for Modem) [***] [***]
1220 25-ft 50-Pin Male to Female Amp/Champ Extension Cable [***] [***]
1221 25-ft DB25M to DB25F Extension Cable (for RS232 operation) [***] [***]
1222 25-ft DB25M to DB25F Extension Cable (for RS530 operation) [***] [***]
1224 25-ft DB25M to DB25F Extension Cable (for V.35 operation) [***] [***]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1231 25-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1232 50-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1233 100-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1239 Y Adapter for WAN Card Redundancy (Bus Connect Systems) [***] [***]
1240 5-inch DB26M to DB25F RS530 Adapter Cables [***] [***]
</TABLE>
* Confidential Treatment Requested
4.
<PAGE> 55
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Cables and Accessories (continued):
NOTE: Cables and accessories are not subject to discount.
1251 RS-530 to V.35 Personality Module [***] [***]
1252 RS-530 to RS-232 Personality Module [***] [***]
1255 RS232/RS530 DB25 Female-to-Female Gender Changer [***] [***]
1257 V.35 M34 Female-to-Female Gender Changer [***] [***]
1258 RS449 DB37 Female-to-Female Gender Changer [***] [***]
1263F 5-ft DB26M to V.35F (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263M 5-ft DB26M to V.35M (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263X 5-ft DB26M to V.35M (M34) Cross-Over Cable (for DB26 HSUs) [***] [***]
1264F 5-ft DB26M to RS530F (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264M 5-ft DB26M to RS530M (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264X 5-ft DB26M to RS530M (DB25) Cross-Over Cable (for DB26 HSUs) [***] [***]
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265X 5-ft DB26M to RS449M (DB37) Cross-Over Cable (for DB26 HSUs) [***] [***]
1268 25-ft DB26M to DB28F Extension Cable (for V.35 operation) [***] [***]
1269 25-ft DB26M to DB28F Extension Cable (for RS530/RS449 operation) [***] [***]
1504 M66 Block with 2 Female 50-Pin Amp/Champ Connectors [***] [***]
Reference Manuals:
- -----------------
NOTE: Manuals are not subject to discount.
1901 IMACS Reference Guide [***] [***]
1902 PremLink Reference Guide [***] [***]
1903 cable and Equipment Guide [***] [***]
</TABLE>
*Confidential Treatment Requested
5.
<PAGE> 56
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Advanced Replacement Upgrades:
CPU Cards
3001AR Model 8800 CPU to Model 8804 CPU [***] [***]
3002AR Model 8800 CPU to Model 8801 CPU [***] [***]
3003AR Model 8804 CPU to Model 8801 CPU [***] [***]
3100AR Add TCP/IP/SNMP firmware to any CPU card [***] [***]
Advanced Replacement Enhancements:
3010AR Firmware enhancement to any card [***] [***]
3020AR Any other enhancement to any module [***] [***]
Terms and conditions on advanced replacements:
User must order an advanced replacement upgrade from Premisys.
Advanced replacement board will be sent, with return label for old board.
Old board must be returned freight pre-paid to Premisys within 21 days of
receipt of replacement board.
If old board is not received within 21 days, user will be billed for the list
price of the board.
Replaced board retains the warranty period of the original board.
Return-to-Factory Upgrades:
CPU Cards:
3001FG Model 8800 CPU to Model 8804 CPU [***] [***]
3002FG Model 8800 CPU to Model 8801 CPU [***] [***]
3003FG Model 8804 CPU to Model 8801 CPU [***] [***]
3100FG Add TCP/IP/SNMP firmware to any CPU card [***] [***]
Return-to-Factory Enhancements:
3010FG Firmware enhancement to any card [***] [***]
3020FG Any other enhancement to any module [***] [***]
Terms and conditions on return-to-factory enhancements and upgrades:
User must obtain an RA number from Premisys before returning board for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via 2nd day air freight within 21 days
of receipt.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
EEPROM Upgrades:
3010EP Firmware upgrade to any CPU card [***] [***]
3020EP Firmware upgrade to any other card [***] [***]
Terms and conditions on EEPROM upgrades:
User is responsible for proper handling of EEPROMS and circuit boards.
Improper handling by user may result in voiding of warranty.
</TABLE>
* Confidential Treatment Requested
6.
<PAGE> 57
[PARADYNE LOGO]
AGREEMENT NUMBER GSC103DS
AMENDMENT NUMBER 7
PAGE 1 OF 1
DATE 12/02/96
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DRIVE
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and Paradyne Corporation will be amended as
follows:
1.0 Exhibit A, IMACS PRICING LIST, dated 03/08/95, is hereby deleted in its
entirety and replaced by a new IMACS PRICING List, Exhibit A, dated
11/14/96, attached hereto and made a part hereof.
2.0 This IMACS PRICING LIST, with stated Paradyne Corporation Pricing, will
be the basis for which all dollar volume discounts, as referenced and
detailed in Amendment #4, will be applied against to calculate new
Paradyne pricing as said discounts go into effect.
3.0 The Price of all packages are the sum of the parts unless noted
otherwise in the attached Pricing List.
4.0 All other terms and conditions of the above stated Agreement remain
unchanged.
This amendment for new pricing shall be effective as of January 1, 1996 for all
orders current as of that date.
PARADYNE CORPORATION PREMISYS COMMUNICATIONS, INC.
By: /s/ Andrew May By: /s/
Title: President & COO Title: V.P. Controller
Date: 1/3/97 Date: 1/17/97
PARADYNE CORPORATION - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 7 - LGSC103DS
1 - 12/02/96
<PAGE> 58
Premisys Communications, Inc.
IMACS Pricing
For Paradyne
<TABLE>
<CAPTION>
Prod
number Description ATT Price
- ----------- ----------- ----------
<S> <C> <C>
8901 AC power supply [ ** ]x
8902 -48V DC power supply [ ** ]x
890220 -48V DC power supply - support OOS @ 39V [ ** ]x
8903 -48V DC converter (115 VAC input) [ ** ]x
8905 -48V DC Converter (115 - 240 VAC input) [ ** ]x
8904 -48V Ringing generator [ ** ]x
8906 -48V RINGING GENERATOR [ ** ]x
8907 24V DC power supply [ ** ]x
8916 IMACS/600 universal enclosure [ ** ]x
891620 IMACS/600 UNIVERSAL ENCLOSURE [ ** ]x
8918 IMACS/800 universal enclosure [ ** ]x
891820 IMACS/800 universal enclosure w/ instal
kit, dual feed pwr supply [ ** ]x
8919 IMACS/900 UNIVERSAL ENCLOSURE **(2) [ ** ]x
8920 8 T1/E1 interface card with 2,400 baud
modem - 32 Kb NVRAM [ ** ]x
8923### 8 T1/E1 interface card with 2,400 baud
modem - 128 Kb NVRAM (4) [ ** ]x
892320### 8 T1/E1 interface card with 2,400 baud
modem - 128 Kb NVRAM (4) [ ** ]x
8921 8 T1/E1 interface card w/out modem -
32 Kb NVRAM [ ** ]x
892120 8 T1/E1 interface card without modem -
32 Kb NVRAM [ ** ]x
892220 8 T1/E1 interface card without modem -
128Kb NVRAM with ext sync module for
framed T1/E1 (2) [ ** ]x
892221 8 T1/E1 interface card without modem -
128Kb NVRAM with ext sync module for
unframed T1/E1**(2) [ ** ]x
8925 2 T1 interface card without modem [ ** ]x
8926 2 T1 interface card with modem (1) [ ** ]x
8927 2 E1 interface card without modem(1) [ ** ]x
1183 E1 Distribution Panel (8 E1s) [ ** ]x
1184 Distribution Panel [ ** ]
</TABLE>
x indicates agreement on the price
NOTE: items in red italic are New products.
* Confidential Treatment Requested.
24
<PAGE> 59
<TABLE>
<S> <C> <C>
8800 CPU control card with 2 T1/E1 bus-connect
(non-redundant) - 256K [ ** ]x
880020 CPU control card with 2 T1/E1 bus-connect
(non-redundant) - 256K [ ** ]x
8801 CPU control card with 8 T1/E1
cross-connect (redundant-capable) - 256K [ ** ]x
880120 CPU control card with 8 T1/E1
cross-connect (redundant-capable) - 256 K [ ** ]x
8802# CPU control card with 8 T1/E1
cross-connect (redundant-capable) -
512 K (4) [ ** ]x
880220# CPU control card with 8 T1/E1
cross-connect (redundant-capable)-
512 K (4) [ ** ]x
8804 CPU control card with 4 T1/E1
bus-connect (redundant-capable) - 256 K [ ** ]x
880420 CPU control card with 4 T1/E1 bus-connect
(redundant-capable) - 256 K [ ** ]x
60342 Version 3.4.2 host firmware [ ** ]x
60343 Version 3.4.3 host firmware [ ** ]x
60344 Version 3.44 host firmware [ ** ]x
60400 Version 4.0.0 host firmware (5) [ ** ]x
60410 Version 4.1.0 host firmware (5) [ ** ]x
60420 Version 4.2.0 host firmware (5) [ ** ]x
60430 Version 4.3.0 host firmware (5) [ ** ]x
60440 Version 4.4.0 host firmware (5) [ ** ]x
60450 Version 4.5.0 host firmware (5) [ ** ]x
60101 TCP/IP/SNMP host code option [ ** ]x
60102 TR08 host code option [ ** ]x
8000 Single T1/E1 WAN [ ** ]x
800020 Single T1/E1 WAN [ ** ]x
8010 Dual T1/E1 WAN [ ** ]x
801020 Dual T1/E1 WAN [ ** ]x
801120 Universal Dual T1/E1 WAN** [ ** ]x
8014 Dual T1/E1WAN with 1 x 3 relays [ ** ]x
801420 Dual T1/E1WAN with 1 x 3 relays [ ** ]x
811 DSX/CEPT plug-in module [ ** ]x
81120 DSX/CEPT plug-in module [ ** ]x
812 CSU plug-in module [ ** ]x
81220 CSU plug-in module [ ** ]x
82020 1168 kbps HDSL plug-in mod for Uni
WAN 8011 [ ** ]x
8108 8-port, 2-wire E&M [ ** ]x
8115 4-port, 4-wire E&M - Extended
</TABLE>
* Confidential Treatment Requested.
25
<PAGE> 60
<TABLE>
<S> <C> <C>
Range (6) [ ** ]x
8119 8-port, 4-wire E&M - Extended Range [ ** ]x
8124 4-port, 2-wire FXS - 900 Ohm (1) [ ** ]x
8125 4-port, 2-wire FXS - 600 Ohm (1) [ ** ]x
8128 8-port, 2-wire FXS - 900 Ohm [ ** ]x
8129 8-port, 2-wire FXS - 600 Ohm [ ** ]x
8134 4-port, 2-wire FXO - 900 Ohm (1) [ ** ]x
8135 4-port, 2-wire FXO - 600 Ohm (1) [ ** ]x
8138 8-port, 2-wire FXO - 900 Ohm [ ** ]x
8139 8-port, 2-wire FXO - 600 Ohm [ ** ]x
8149 6 Port 16 KHz FXS Coin Card - 600 Ohm (2) [ ** ]x
8159 6 Port 16 KHz FXO Coin Card - 600 Ohm (2) [ ** ]x
8202 2-port HSU w/ RS-530/V.35 i/f [ ** ]x
8212 2-port HSU w/ V.35 i/f [ ** ]x
8213 2-port HSU w/ RS-530/RS-366/V.25bis i/f [ ** ]x
8215 4-port HSU w/ RS-530/V.35 i/f [ ** ]x
821520 4-port HSU w/ RS-530/V.35 i/f [ ** ]x
8220 10-port SRU w/ RS-232C/V.24 i/f [ ** ]x
8228 8-port sub-rate B7R IP concentrato
card (1) [ ** ]x
8230 8-port subrate FRAD card [ ** ]x
8231 8-port subrate FRAD card (HDLC only) [ ** ]x
8247 5-port OCU-DP (expandable) (6) [ ** ]x
845 5-port OCU-DP child card (6) [ ** ]x
8249 2-port OCU-DP with error correction [ ** ]x
8254 4-port DSO-DP/G.703 co/contra directional [ ** ]x
8260 8-port BRI U i/f card (1) [ ** ]x
826020 8-PORT BRI U I/F CARD (1) [ ** ]x
8261 8-port BRI U i/f card, with sealing
current (1) [ ** ]x
826120 8-PORT BRI U I/F CARD, WITH SEALING
CURRENT (1) [ ** ]x
8811 ACS-68 server (3) [ ** ]x
881120 ACS-68 server (3) [ ** ]x
8813 ACS-68 SERVER WITH EXP-64 MODULE (3) [ ** ]x
881320 ACS-68 server with Exp-64 module (3) [ ** ]x
8871 ADPCM Server [ ** ]x
887120 ADPCM Server [ ** ]x
8880 4 channel inverse mux server with
BONDING modes 0 and 1 software (1) [ ** ]x
8840A ISDN PRI server card - 1 D
</TABLE>
* Confidential Treatment Requested.
26
<PAGE> 61
<TABLE>
<S> <C> <C>
channel [ ** ]x
8840B ISDN PRI server card - 2 D channels [ ** ]x
8840C ISDN PRI server card - 8 D channels [ ** ]x
62100 Frame relay server software for AC
card (3) [ ** ]x
8401 External alarm card [ ** ]x
840120 External alarm card [ ** ]x
8402 External alarm card - 3 ports and power
fail alarm [ ** ]x
840220 External alarm card - 3 ports and
power fail alarm [ ** ]x
1500 External Sync Panel [ ** ]x
2001 Blank Card Filler Panel [ ** ]x
<CAPTION>
Notes
-----
<S> <C> <C>
** Consult factory for delivery lead times
# formerly 8801b
## formerly 8805
### formerly 8920b
(1) Requires version 3.2 or higher
(2) Requires version 4.0 or higher
(3) Requires version 4.1 or higher
(4) Required for Host 4.0 of higher
(5) Requires 8923 or 8922 and 8802
(6) Requires Host 3.4.1 or higher
(7) 8811 or higher ACS
Front panel types
Std = standard molded face plate
M/E = metal face plate with ejec
1106 RJ48 to 2 BNC Adapter (for E1) [ ** ]x
1114F 5-ft RJ48M to DB25F Straight-Thru
Cable (for SRU) [ ** ]x
1114M 5-ft RJ48M to DB25M Straight-Thru
Cable (for SRU) [ ** ]x
1114X 5-ft RJ48M to DB25M Cross-Over Cable
(for SRU) [ ** ]x
1114CX 5-ft RJ48M to DB25M External Clock Cable
(for SRU) [ ** ]x
1118 25-ft RJ48M to RJ48M Silver-Satin Cable
(for OCU-DP) [ ** ]x
1121 50-Pin to 2 RJ48 Adapter with Test Jacks
(for T1) [ ** ]x
1181 50-Pin to 8 RJ48 Adapter (for T1) [ ** ]x
1201F 15-ft DB9M to DB25F Straight Thru (for
Interface) [ ** ]x
1201M 15-ft DB9M to DB25M Straight Thru (for
Interface) [ ** ]x
1202F 15-ft DB9F to DB25F Straight Thru
(for Interface) [ ** ]x
1202M 15-ft DB9F to DB25M Straight
</TABLE>
* Confidential Treatment Requested.
27
<PAGE> 62
<TABLE>
<S> <C> <C>
Thru (for Interface) [ ** ]x
1203F 5-ft DB25M to V.35F Straight-Thru Cable
(for V.35 HSU) [ ** ]x
1203M 5-ft DB25M to V.35M Straight-Thru Cable
(for V.35 HSU) [ ** ]x
1203X 5-ft DB25M to V.35M Cross-Over Cable
(for V.35 HSU) [ ** ]x
1204F 5-ft DB25M to RS530F Straight-Thru Cable
(for RS530 HSU) [ ** ]x
1204M 5-ft DB25M to RS530M Straight-Thru Cable
(for RS530 HSU) [ ** ]x
1204X 5-ft DB25M to RS530M Cross-Over Cable
(for RS530 HSU) [ ** ]x
1206F 5-ft DB15M to DB25F Straight-Thru Cable
(for RS366 HSU Ports) [ ** ]x
1207 6-ft 3-to-4 50-Pin E&M Cable (All Male
Connectors) [ ** ]x
1208 6-ft 3-to-1 50-Pin FXS Cable (All Male
Connectors) [ ** ]x
1209 6-ft 3-to-1 50-Pin TO Cable (All Male
Connectors) [ ** ]x
1210 5-ft 50-Pin Male to Male Amphenol Cable
(for Multiple Uses) [ ** ]x
1212F 5-ft DB25M to RS449F Straight-Thru Cable
(for RS449 HSU) [ ** ]x
1212M 5-ft DB25M to RS449M Straight-Thru Cable
(for RS449 HSU) [ ** ]x
1212X 5-ft DB25M to RS449M Cross-Over Cable
(for RS449 HSU) [ ** ]x
1213 5-ft 50-Pin Male Amphenol Cable to 2
RJ-48F Cable (for 8 T1 Interface Card) [ ** ]x
1215M 5-ft RJ48M to DB15M Straight-Thru Cable
(for CSU) [ ** ]x
1215X 5-ft RJ48M to DB15F Cross-Over Cable
(for PBX) [ ** ]x
1216F 15-ft RJ48M to DB25F Straight-Thru Cable
(for VT100) [ ** ]x
1216M 15-ft RJ48M to DB25M Straight-Thru
Cable (for VT100) [ ** ]x
1217 25-ft RJ11M to RJ11M Cable (for Modem) [ ** ]x
1220 25-ft 50-Pin Male to Female Amp/Champ
Extension Cable [ ** ]x
1221 25-ft DB25M to DB25F Extension Cable
(for RS232 operation) [ ** ]x
1222 25-ft DB25M to DB25F Extension Cable
(for RS530 operation) [ ** ]x
1224 25-ft DB25M to DB25F Extension Cable
(for V.35 operation) [ ** ]x
1230 1-ft RJ48M to RJ48M Shielded Cable
(for T1) [ ** ]x
</TABLE>
* Confidential Treatment Requested
28
<PAGE> 63
<TABLE>
<S> <C> <C>
1231 25-ft RJ48M to RJ48M Shielded
Cable (for T1) [ ** ]x
1232 50-ft RJ48M to RJ48M Shielded Cable
(for T1) [ ** ]x
1233 100-ft RJ48M to RJ48M Shielded Cable
(for T1) [ ** ]x
1239 Y Adapter for WAN Card Redundancy (Bus
Connect Systems) [ ** ]x
1240 5-inch DB26M to DB25F RS530 Adapter Cables[ ** ]x
1251 RS-530 to V.35 Personality Module [ ** ]x
1252 RS-530 to RS-232 Personality Module [ ** ]x
1255 RS232/RS530 DB25 Female-to-Female Gender
Changer [ ** ]x
1257 V.35 M34 Female-to-Female Gender Changer [ ** ]x
1258 RS449 DB37 Female-to-Female Gender
Changer [ ** ]x
1263F 5-ft DB26M to V.35F (M34) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1263M 5-ft DB26M to V.35M (M34) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1263X 5-ft DB26M to V.35M (M34) Cross-Over
Cable (for DB26 HSUs) [ ** ]x
1264F 5-ft DB26M to RS530F (DB25) Straight-Thru
Cable (for DB26 HSUs) [ ** ]
1264M 5-ft DB26M to RS530M (DB25) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1264X 5-ft DB26M to RS530M (DB25) Cross-Over
Cable (for DB26 HSUs) [ ** ]x
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1265X 5-ft DB26M to RS449M (DB37) Cross-Over
Cable (for DB26 HSUs) [ ** ]x
1268 25-ft DB26M to DB26F Extension Cable
(for V.35 operation) [ ** ]x
1269 25-ft DB26M to DB26F Extension Cable
(for RS530/RS449 operation) [ ** ]x
1504 M66 Block with 2 Female 50-Pin Amp/Champ
Connectors [ ** ]x
</TABLE>
* Confidential Treatment Requested.
29
<PAGE> 64
<TABLE>
<S> <C> <C> <C>
1901 IMACS Reference Guide [ ** ]x
1902 EMS Reference Guide [ ** ]x
1903 Cable and Equipment Guide [ ** ]x
1904 TCP/IP Manual [ ** ]x
3001AR Model 8800 CPU to Model 8804 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3002AR Model 8800 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3003AR Model 8804 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3100AR Add TCP/IP/SNMP firmware to any CPU card [ ** ]x
3010AR Firmware enhancement to any card [ ** ]x
3020AR Any other enhancement to any module [ ** ]x
Terms and conditions on advance replacements:
User must order advanced replacement product from Premisys
Advanced replacement board will be sent with return label for old
board
Old board must be returned freight pre-paid to Premisys within 21
days of receipt of replacement board
If old board is not received within 21 days, the user will be
billed for the list price of the board
Replaced board retains the warranty period of the original board
</TABLE>
<TABLE>
<S> <C> <C> <C>
3001FG Model 8800 CPU to Model 8804 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3002FG Model 8800 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3003FG Model 8804 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3100FG Add TCP/IP/SNMP firmware to any CPU card [ ** ]x
3010FG Firmware enhancement to any card [ ** ]x
3020FG Any other enhancement to any module [ ** ]x
Terms and conditions on return-to-factory enhancements and
upgrades:
User must obtain an RA number from Premisys before returning board
for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via 2nd day air freight
within 21 days of receipt.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
</TABLE>
<TABLE>
<S> <C> <C>
3010EP Firmware upgrade to any CPU card [ ** ]x
3020EP Firmware upgrade to any other card [ ** ]x
</TABLE>
Terms and conditions on EPROM upgrades:
* Confidential Treatment Requested.
30
<PAGE> 65
User is responsible for proper handling of EPROM's and circuit
boards.
Improper handling by user may result in voiding of warranty.
<TABLE>
<S> <C> <C>
1920 Corporate Brochure [ ** ]x
1921 Corporate Cover Folder [ ** ]x
1922 IMACS Data Sheet [ ** ]x
1923 ATM Data Sheet [ ** ]x
1924 Frame Relay Data Sheet [ ** ]x
1925 ISDN BRX Data Sheet [ ** ]x
1926 Assembly of collateral into folder [ ** ]x
1927 Complete set of collateral (1920, 1921,
1922, 1923, 1924, 1925, 1926) [ ** ]xx
</TABLE>
PACKAGE PRICING
The packages listed below are not a sum of the parts and are being included
in this agreement.
All other packages are a sum of the parts and will not be listed
individually on this agreement.
<TABLE>
<S> <C> <C>
UN 2525-TW1 1 LOW COST TIME WARNER PACKAGE [ ** ]x
GA 8916 1 AAC FRONT LOADING ENCLOSURE [ ** ]
GA 8800 1 BUS CONNECT CPU-NON REDUNDANT [ ** ]
GA 8000 1 SINGLE T1/E1 (WAN) [ ** ]
GA 811 1 DSX/CEPT PLUG IN MODULE [ ** ]
GA 8925 1 2 T1 Interface Card w/o modem [ ** ]
UN 2525-TWA 1 AC POWER PACKAGE FOR TIME WARNER [ ** ]x
GA 8901 1 AC POWER SUPPLY (110/220) [ ** ]
GA 8903 1 INTERNAL AC-DC CONVERTER [ ** ]
GA 8904 1 48V RINGING GENERATOR [ ** ]
UN 2525-TWD 1 DC POWER PACKAGE FOR TIME WARNER [ ** ]x
GA 8902 1 DC POWER SUPPLY (-48) [ ** ]
GA 8904 1 48V RINGING GENERATOR [ ** ]
UN 2525-41U 1 RELEASE 4.1 UPGRADE PACKAGE [ ** ]x
NR 880220/ 1 CPU Xcon 512K RAM w/4.1 FW-Metal [ ** ]
60410
NR 892320 1 128K NV RAM Interface
w/Modem-Metal [ ** ]
GA 61000 1 TCP/IP SNMP SW OPTION [ ** ]
UN 2525-FRU 1 FRAME RELAY UPGRADE PACKAGE [ ** ]x
NR 880220/ 1 CPU Xcon 512K RAM w/4.1 FW-Metal [ ** ]
60410
NR 892320 1 128K NV RAM Interface
w/Modem-Metal [ ** ]
UN 881120/ 1 Frame Relay Server/ACS-68
62100 Server [ ** ]
UN 60101 1 Frame Relay Software [ ** ]
</TABLE>
* Confidential Treatment Requested.
31
<PAGE> 66
[PARADYNE LOGO]
AGREEMENT NUMBER GSC103DS
AMENDMENT NUMBER 8
PAGE 1 OF 1
DATE 12/02/96
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DRIVE
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and Paradyne Corporation will be amended as
follows:
1.0 Notwithstanding the provisions of Paragraph 4.1 of Amendment Number 4
of this Agreement, it is agreed that Premisys will be allowed to accept
orders from BCS Division of Lucent Technologies (BCS) for the purpose
of repair and upgrade of Field returns alone and for no other
purpose(s). Premisys may accept such orders directly from BCS and shall
bill BCS directly for services provided pursuant to those orders.
2.0 It is further agreed that the pricing charged BCS for such repair and
upgrades shall be the same as that charged to Paradyne under Amendment
Number 5 of this Agreement.
3.0 All other terms and conditions of the above stated Agreement remain
unchanged.
PARADYNE CORPORATION PREMISYS COMMUNICATIONS, INC.
By: /s/ Andrew May By:
Title: President & COO Title: V.P. Controller
Date: 1/3/97 Date: 1/17/97
PARADYNE CORPORATION - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 7 - LGSC103DS
1 - 12/02/96
<PAGE> 67
[PARADYNE LOGO]
AGREEMENT NUMBER GSC103DS
AMENDMENT NUMBER 9
PAGE 1 OF 1
DATE 05/13/97
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DRIVE
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and Paradyne Corporation will be amended as
follows:
1.0 Exhibit A, IMACS PRICING LIST, dated 11/14/96, is hereby deleted in its
entirety and replaced by a new IMACS PRICING List, Exhibit A, dated
1/1/97 (printed 3/28/97), which shall be attached hereto and made a
part hereof.
2.0 This IMACS PRICING LIST, with stated Paradyne Corporation Pricing, will
be the basis for which all dollar volume discounts, as referenced and
detailed in Amendment #4, will be applied against to calculate new
Paradyne pricing as said discounts go into effect.
3.0 The Price of all packages are the sum of the parts unless noted
otherwise in the attached Pricing List.
4.0 All other terms and conditions of the above stated Agreement remain
unchanged.
This amendment for new pricing shall be effective as of January 1, 1997 for all
orders current as of that date.
PARADYNE CORPORATION PREMISYS COMMUNICATIONS, INC.
By: /s/ Andrew May By: /s/
Title: President & CEO Title: V.P. Controller
Date: 6/27/97 Date: 6/3/97
PARADYNE CORPORATION - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 9 - LGSC103DS
1 - 5/13/97
<PAGE> 68
PREMISYS COMMUNICATION, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- -------------------------------------------------------------------------------
<S> <C> <C>
8901 AC power supply [**]
8902 (48V DC power supply) [**]
890220 (48V DC power supply - support OOS @ 39V) [**]
890250 SSTE '-48V DC power supply - support OOS @ 39V [**]
8903 (48V DC converter (115 VAC input)) [**]
8905 (48V DC Converter (115 - 240 VAC input)) [**]
8904 (48V Ringing generator) [**]
8906 (48V Ringing generator) [**]
8907 24V DC power supply [**]
8916 IMACS/600 universal enclosure [**]
891620 IMACS/600 universal enclosure [**]
8918 IMACS/800 universal enclosure [**]
891820 IMACS/800 universal enclosure w/ install kit, dual
feed pwr supply [**]
891822 IMACS/800 universal enclosure w/ install kit, dual
feed pwr supply, NEBS [**]
891850 SSTE IMACS/800 universal enclosure w/ install kit,
dual feed pwr supply [**]
8919 IMACS/900 universal enclosure **(2) [**]
8920 8 T1/E1 interface card with 2,400 baud modem - 32
Kb NVRAM [**]
892020 8 T1/E1 interface card with 2,400 baud modem - 32
Kb NVRAM metal [**]
8923### 8 T1/E1 interface card with 2,400 baud modem - 128
Kb NVRAM (4) [**]
892320### 8 T1/E1 interface card with 2,400 baud modem - 128
Kb NVRAM (4) [**]
8921 8 T1/E1 interface card w/out modem - 32 Kb NVRAM [**]
892120 8 T1/E1 interface card without modem - 32 Kb NVRAM [**]
892220 8 T1/E1 interface card without modem - 128Kb NVRAM
with ext sync module for framed T1/E1 (2) [**]
892250 SSTE 8 T1/E1 interface card without modem - 128Kb
NVRAM with ext sync module for framed T1/E1 (2) [**]
892221 8 T1/E1 interface card without modem - 128Kb NVRAM
with ext sync module for unframed T1/E1**(2) [**]
8925 2 T1 interface card without modem [**]
8926 2 T1 interface card with modem (1) [**]
8927 2 E1 interface card without modem(1) [**]
1183 E1 Distribution Panel (8 E1s) [**]
1184 Distribution Panel [**]
8800 CPU control card with 2 T1/E1 bus-connect (non-
redundant) - 256K [**]
880020 CPU control card with 2 T1/E1 bus-connect (non-
redundant) - 256K [**]
8801 CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 256 K [**]
880120 CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 256 K [**]
8802# CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
880220# CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
880221 CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
880250 SSTE CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
8804 CPU control card with 4 T1/E1 bus-connect
(redundant-capable) - 256 K [**]
880420 CPU control card with 4 T1/E1 bus-connect
(redundant-capable) - 256 K [**]
60342 Version 3.4.2 host firmware [**]
60343 Version 3.4.3 host firmware [**]
60344 Version 3.44 host firmware [**]
60400 Version 4.0.0 host firmware (5) [**]
60410 Version 4.1.0 host firmware (5) [**]
</TABLE>
* Confidential Treatment Requested
Page 1
<PAGE> 69
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
60420 Version 4.2.0 host firmware (5) [**]
60430 Version 4.3.0 host firmware (5) [**]
60440 Version 4.4.0 host firmware (5) [**]
60450 Version 4.5.0 host firmware (5) [**]
60101 TCP/IP/SNMP host code option [**]
60102 TR08 host code option [**]
63100 MCC Firmware [**]
8000 Single T1/E1 WAN [**]
800020 Single T1/E1 WAN [**]
8010 Dual T1/E1 WAN [**]
801020 Dual T1/E1 WAN [**]
801050 SSTE Dual T1/E1 WAN [**]
801120 Universal Dual T1/E1 WAN** [**]
8014 Dual T1/E1WAN with 1 x 3 relays [**]
801420 Dual T1/E1WAN with 1 x 3 relays [**]
811 DSX/CEPT plug-in module [**]
81120 DSX/CEPT plug-in module [**]
81150 SSTE DSX/CEPT plug-in module [**]
812 CSU plug-in module [**]
81220 CSU plug-in module [**]
82020 1168 kbps HDSL plug-in mod for Univ WAN 8011 [**]
8108 8-port, 2-wire E&M [**]
8119 8-port, 4-wire E&M - Extended Range [**]
811920 8-port, 4-wire E&M - Extended Range metal [**]
8128 8-port, 2-wire FXS - 900 Ohm [**]
8129 8-port, 2-wire FXS - 600 Ohm [**]
8138 8-port, 2-wire FXO - 900 Ohm [**]
8139 8-port, 2-wire FXO - 600 Ohm [**]
8149 6 Port 16 KHz FXS Coin Card - 600 Ohm (2) [**]
8159 6 Port 16 KHz FXO Coin Card - 600 Ohm (2) [**]
8202 2-port HSU w/ RS-530/V.35 i/f [**]
8212 2-port HSU w/ V.35 i/f [**]
8213 2-port HSU w/ RS-530/RS-366/V.25bis i/f [**]
8215 4-port HSU w/ RS-530/V.35 i/f [**]
821520 4-port HSU w/ RS-530/V.35 i/f [**]
821550 SSTE 4-port HSU w/ RS-530/V.35 i/f [**]
8220 10-port SRU w/ RS-232C/V.24 i/f [**]
8228 8-port sub-rate B7R IP concentrator card (1) [**]
8230 8-port subrate FRAD card [**]
8231 8-port subrate FRAD card (HDLC only) [**]
8247 5-port OCU-DP (expandable) (6) [**]
845 5-port OCU-DP child card (6) [**]
8249 2-port OCU-DP with error correction [**]
8254 4-port DSO-DP/G.703 co/contra directional [**]
8260 8-port BRI U i/f card (1) [**]
826020 8-port BRI U i/f card (1) [**]
8261 8-port BRI U i/f card, with sealing current (1) [**]
826120 8-port BRI U i/f card, with sealing current (1) [**]
8811 ACS-68 server (3) [**]
881120 ACS-68 server (3) [**]
8813 ACS-68 server with Exp-64 module (3) [**]
881320 ACS-68 server with Exp-64 module (3) [**]
8871 ADPCM Server [**]
887120 ADPCM Server [**]
8880 4 channel inverse mux server with BONDING modes
0 and 1 software(1) [**]
8840A ISDN PRI server card - 1 D channel [**]
8840B ISDN PRI server card - 2 D channels [**]
8840C ISDN PRI server card - 8 D channels [**]
62100 Frame relay server software for ACS card (3) [**]
8401 External alarm card [**]
840120 External alarm card [**]
8402 External alarm card - 3 ports and power fail alarm [**]
</TABLE>
* Confidential Treatment Requested
Page 2
<PAGE> 70
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
840220 External alarm card - 3 ports and power fail alarm [**]
840250 SSTE External alarm card - 3 ports and power fail
alarm [**]
1500 External Sync Panel [**]
150050 SSTE External Sync Panel [**]
2001 Blank Card Filler Panel [**]
Notes
** Consult factory for delivery lead times [**]
# formerly 8801b [**]
## formerly 8805 [**]
### formerly 8920b [**]
(1) Requires version 3.2 or higher [**]
(2) Requires version 4.0 or higher [**]
(3) Requires version 4.1 or higher [**]
(4) Required for Host 4.0 or higher [**]
(5) Requires 8923 or 8922 and 8802 [**]
(6) Requires Host 3.4.1 or higher [**]
(7) 8811 or higher ACS [**]
Front panel types [**]
Std = standard molded face plate [**]
M/E = metal face plate with ejec [**]
1106 RJ48 to 2 BNC Adapter (for E1) [**]
1114F 5-ft RJ48M to DB25F Straight-Thru Cable (for SRU) [**]
1114M 5-ft RJ48M to DB25M Straight-Thru Cable (for SRU) [**]
1114X 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [**]
1114CX 5-ft RJ48M to DB25M External Clock Cable (for SRU) [**]
1118 25-ft RJ48M to RJ48M Silver-Satin Cable (for OCU-DP) [**]
1121 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [**]
1181 50-Pin to 8 RJ48 Adapter (for T1) [**]
1201F 15-ft DB9M to DB25F Straight Thru (for Interface) [**]
1201M 15-ft DB9M to DB25M Straight Thru (for Interface) [**]
1202F 15-ft DB9F to DB25F Straight Thru (for Interface) [**]
1202M 15-ft DB9F to DB25M Straight Thru (for Interface) [**]
1203F 5-ft DB25M to V.35F Straight-Thru Cable (for V.35
HSU) [**]
1203M 5-ft DB25M to V.35M Straight-Thru Cable (for V.35
HSU) [**]
1203X 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [**]
1204F 5-ft DB25M to RS530F Straight-Thru Cable (for RS530
HSU) [**]
1204M 5-ft DB25M to RS530M Straight-Thru Cable (for RS530
HSU) [**]
1204X 5-ft DB25M to RS530M Cross-Over Cable (for RS530 HSU) [**]
1206F 5-ft DB15M to DB25F Straight-Thru Cable (for RS366
HSU Ports) [**]
1207 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [**]
1208 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [**]
1209 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [**]
1210 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple
Uses) [**]
1212F 5-ft DB25M to RS449F Straight-Thru Cable (for RS449
HSU) [**]
1212M 5-ft DB25M to RS449M Straight-Thru Cable (for RS449
HSU) [**]
1212X 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [**]
1213 5-ft 50-pin Male Amphenol Cable to 2 RJ-48F Cable
(for 8 T1 interface) [**]
1215M 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [**]
1215X 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [**]
1216F 15-ft RJ48M to DB25F Straight-Thru Cable (for VT100) [**]
1216M 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [**]
1217 25-ft RJ11M to RJ11M Cable (for Modem) [**]
1220 25-ft 50-Pin Male to Female Amp/Champ Extension
Cable [**]
1221 25-ft DB25M to DB25F Extension Cable (for RS232
operation) [**]
1222 25-ft DB25M to DB25F Extension Cable (for RS530
operation) [**]
1224 25-ft DB25M to DB25F Extension Cable (for V.35
operation) [**]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
</TABLE>
* Confidential Treatment Requested
Page 3
<PAGE> 71
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
1231 25-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
1232 50-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
1233 100-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
1239 Y Adapter for WAN Card Redundancy (Bus Connect
Systems) [**]
1240 5-inch DB26M to DB25F RS530 Adapter Cables [**]
1251 RS-530 to V.35 Personality Module [**]
1252 RS-530 to RS-232 Personality Module [**]
1255 RS232/RS530 DB25 Female-to-Female Gender Changer [**]
1257 V.35 M34 Female-to-Female Gender Changer [**]
1258 RS449 DB37 Female-to-Female Gender Changer [**]
1261F 5-ft DB25(M) to M34(F) Straight-Thru Cable V.35
cable [**]
1261M 5-ft DB25(M) to M34(M) Straight-Thru Cable V.35
cable [**]
1263F 5-ft DB26M to V.35F (M34) Straight-Thru Cable (for
DB26 HSUs) [**]
1263M 5-ft DB26M to V.35M (M34) Straight-Thru Cable (for
DB26 HSUs) [**]
1263X 5-ft DB26M to V.35M (M34) Cross-Over Cable (for
DB26 HSUs) [**]
1264F 5-ft DB26M to RS530F (DB25) Straight-Thru Cable
(for DB26 HSUs) [**]
1264M 5-ft DB26M to RS530M (DB25) Straight-Thru Cable
(for DB26 HSUs) [**]
1264X 5-ft DB26M to RS530M (DB25) Cross-Over Cable (for
DB26 HSUs) [**]
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru Cable
(for DB26 HSUs) [**]
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru Cable
(for DB26 HSUs) [**]
1265X 5-ft DB26M to RS449M (DB37) Cross-Over Cable (for
DB26 HSUs) [**]
1268 25-ft DB26M to DB26F Extension Cable (for V.35
operation) [**]
1269 25-ft DB26M to DB26F Extension Cable (for RS530/
RS449 operation) [**]
1504 M66 Block with 2 Female 50-Pin Amp/Champ Connectors [**]
1901 IMACS Reference Guide [**]
1902 EMS Reference Guide [**]
1903 Cable and Equipment Guide [**]
1904 TCP/IP Manual [**]
3001AR Model 8800 CPU to Model 8804 CPU [**]
3002AR Model 8800 CPU to Model 8801 CPU [**]
3003AR Model 8804 CPU to Model 8801 CPU [**]
3100AR Add TCP/IP/SNMP firmware to any CPU card [**]
3010AR Firmware enhancement to any card [**]
3020AR Any other enhancement to any module [**]
</TABLE>
Terms and conditions on advanced replacements:
User must order an advanced replacement upgrade
from Premisys.
Advanced replacement board will be sent with return
label for old board.
Old board must be returned freight pre-paid to
Premisys within 21 days of receipt of replacement
board.
If old board is not received within 21 days, the user
will be billed for the list price of the board
Replaced board retains the warranty period of the
original board.
<TABLE>
<S> <C> <C>
3001FG Model 8800 CPU to Model 8804 CPU [**]
3002FG Model 8800 CPU to Model 8801 CPU [**]
3003FG Model 8804 CPU to Model 8801 CPU [**]
3100FG Add TCP/IP/SNMP firmware to any CPU card [**]
3010FG Firmware enhancement to any card [**]
3020FG Any other enhancement to any module [**]
</TABLE>
Terms and conditions on return-to factory
enhancements and upgrades.
User must obtain an RA number from Premisys before
returning board for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via 2nd day air
freight within 21 days of receipt.
Upgraded boards retain the warranty period of the
original board.
Advanced replacement is not included in upgrade price.
* Confidential Treatment Requested
<TABLE>
<S> <C> <C>
3010EP Firmware upgrade to any CPU card [**]
3020EP Firmware upgrade to any other card [**]
</TABLE>
* Confidential Treatment Requested
Page 4
<PAGE> 72
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
Terms and conditions on EPROM upgrades.
User is responsible for proper handling of EPROM's
and circuit boards.
Improper handling by user may result in voiding of
warranty.
1920 Corporate Brochure [**]
1921 Corporate Cover Folder [**]
1922 IMACS Data Sheet [**]
1923 ATM Data Sheet [**]
1924 Frame Relay Data Sheet [**]
1925 ISDN BRX Data Sheet [**]
1926 Assembly of collateral into folder [**]
1927 Complete set of collateral (1920, 1921, 1922,
1923, 1924, 1925, 1926) [**]
</TABLE>
PACKAGE PRICING
The packages listed below are not a sum of the parts and are being included in
this agreement.
All other packages are a sum of the parts and will not be listed individually on
this agreement.
The pricing on these packages is good thru December 31, 1997
<TABLE>
<S> <C> <C>
2525-TWA AC POWER PACKAGE FOR TIME WARNER [**]
8901 AC POWER SUPPLY (110/220) [**]
8903 INTERNAL AC-DC CONVERTER [**]
8904 48V RINGING GENERATOR [**]
2525-TWD DC POWER PACKAGE FOR TIME WARNER [**]
8902 DC POWER SUPPLY (-48) [**]
8904 48V RINGING GENERATOR [**]
2525-41U RELEASE 4.1 UPGRADE PACKAGE [**]
880220/60410 CPU Xcon 512K RAM w/4.1 FW-Metal [**]
892320 128K NV RAM Interface w/Modem-Metal [**]
60101 TCP/IP SNMP SW OPTION [**]
2525-FRU FRAME RELAY UPGRADE PACKAGE [**]
880220/60410 CPU Xcon 512K RAM w/4.1 FW-Metal [**]
892320 128K NV RAM Interface w/Modem-Metal [**]
881120/62100 Frame Relay Server/ACS-68 Server [**]
60101 TCP/IP SNMP SW OPTION [**]
</TABLE>
* Confidential Treatment Requested
Page 5
