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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 4, 1998
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Data Systems & Software Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-19771 22-2786081
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(State or other jurisdiction of Commission File Number (I.R.S. Employer
incorporation or organization) Identification Number)
200 Route 17, Mahwah, NJ 07430-1296
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(Address of principal executive offices) (zip code)
(201) 529-2026
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(Registrant's telephone number including area code)
None
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(Former name, former address and former fiscal year,
if changed since last report)
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Item 5. Other Events
On February 4, 1998, the Registrant completed a transaction with Lucent
Technologies, Inc. ("Lucent") pursuant to which the Registrant (i) purchased
certain assets from Lucent that were previously utilized by Lucent's
Utilities Solutions Strategic Business Unit, and (ii) licensed from Lucent
certain intellectual property, including technical information, software and
certain rights relating to a pending patent, associated with Lucent's
Customer Connection for Utilities product ("CCU"). In consideration for the
sale of the assets and the licensing of the technology, Lucent received
$1,225,000 and shares of common stock representing 5% of the issued and
outstanding common stock of the Registrant's Comverge Technologies, Inc.
subsidiary ("Converge"). Pursuant to an agreement between Lucent and a
diversified energy services company, the shares of Comverge issued to Lucent
in connection with the transaction were transferred by Lucent to such company.
Lucent's Utility Solutions Strategic Business Unit had developed and
marketed the CCU system, a two-way communications solution for the utility
industry. Comverge plans to continue to market the CCU to utilities, in
addition to energy service companies and telecommunications service providers
serving the utility industry. The CCU includes an interface that stores
information from meters and other appliances at the customer premises,
facilitating remote meter reading and other automated utility functions.
The CCU also supports electric and gas meter reading as well as energy
management, real-time pricing and environmental monitoring.
Five employees involved in the development of the CCU will follow their
work and join Comverge, including Frank Magnotti, previously the General
Manager of Lucent's Utility Solutions Strategic Business Unit who now serves
as President of Comverge.
It is contemplated that Comverge's operations will be combined with those
of PowerCom Control Systems, a division of the Registrant's Decision Systems
Israel Limited subsidiary ("Decision"), which has developed and is currently
marketing its Electric Power Supply Management (EPSM) system. Such
transaction may be subject to the approval of the shareholders of Decision,
which is listed on the Tel Aviv Stock Exchange.
Item 7. Exhibits
(a) Exhibits
99.1. License Agreement dated as of January 9, 1998, between Lucent
Technologies Inc. and the Company
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99.2. Bill of Sale dated as of January 9, 1998, by and from Lucent
Technologies Inc. to the Company
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* Filed herewith
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SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATA SYSTEMS & SOFTWARE INC.
Date: February 17, 1998 /s/ George Morgenstern
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George Morgenstern
Chairman, President and Chief Executive
Officer
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EXHIBIT 99.1
LICENSE AGREEMENT
This License Agreement ("Agreement") is entered into and is effective on
January 9, 1998 ("EFFECTIVE DATE") between the following Parties: LUCENT
TECHNOLOGIES INC., a Delaware corporation ("LUCENT"), having an office at 600
Mountain Avenue, Murray Hill, New Jersey 07974, and DATA SYSTEMS & SOFTWARE
INC., a Delaware corporation ("LICENSEE"), having an office at 200 Route 17,
Mahwah, New Jersey 07430, and being authorized to do business in the State of
New York.
WHEREAS, LUCENT has been in the business of developing and marketing a
two-way communication system for utilities initially known as the Integrated
Broadband Utility Solution ("IBUS") and more recently also known as the
Lucent Customer Connection for Utilities ("LCCU") ("BUSINESS"), which
BUSINESS has been associated with LUCENT's Utility Solutions Strategic
Business Unit;
WHEREAS, LUCENT no longer wishes to pursue the BUSINESS;
WHEREAS, LUCENT desires to sell, transfer and convey to LICENSEE, and
LICENSEE wishes to purchase and accept from LUCENT, assets utilized by LUCENT
in connection with the BUSINESS;
WHEREAS, pursuant to a Bill of Sale as of the date hereof ("BILL OF
SALE"), LUCENT has sold, conveyed and transferred to LICENSEE the "LCCU
ASSETS" (as defined in the BILL OF SALE);
WHEREAS, LICENSEE also desires to obtain licenses and rights to the
intellectual property developed, utilized and/or associated with the BUSINESS
and the LCCU ASSETS from LUCENT, for the development and manufacture by
LICENSEE of products and services for use, lease and sale in the "FIELD OF
USE" (as defined below);
NOW THEREFORE the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. As used in this Agreement, and except as otherwise
defined in the recitals set forth above, each of the following defined terms
shall have the meaning set forth for such term in this Section 1.01:
ADAPTATION means any derivative work based on LICENSED SOFTWARE,
including (i) any work incorporating any of LICENSED SOFTWARE directly, (ii)
any work incorporating any computer program from LICENSED SOFTWARE rewritten
in a different computer language or converted to operate on a different type
of CPU, (iii) any work utilizing a method or concept from LICENSED SOFTWARE
that LICENSEE is obligated to keep in confidence hereunder, or (iv) any work
otherwise covered by any of LUCENT's intellectual property rights in LICENSED
SOFTWARE.
BUSINESS INFORMATION means customer and pricing information, and other
non-technical information pertaining to business planning, that is
proprietary to LUCENT, and is marked as such, that was created in the course
of the BUSINESS specifically for the BUSINESS and includes but is not limited
to such information that has been delivered to LICENSEE prior to EFFECTIVE
DATE.
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CPU means central processing unit.
CUSTOMER SOFTWARE means (i) object and source code computer programs or
code included in, or based on, LICENSED SOFTWARE or an ADAPTATION and (ii)
documentation listed in the Schedule for LICENSED SOFTWARE and any other
documentation included in or based on LICENSED SOFTWARE or an ADAPTATION.
FIELD OF USE means the field of two-way communications for providing
and/or managing utility information. Excluded from FIELD OF USE is any
dial-up system using a feature of a LUCENT digital electronic switching
system.
LICENSED PRODUCT means any product or software which incorporates or is
based on or derived from all or any part of any of the LICENSED SOFTWARE,
TECHNICAL INFORMATION, or LUCENT's PATENT.
LICENSED SOFTWARE means all or any portion of the software, other
information and documentation listed in the attached Appendix A.
LUCENT's PATENT or PATENT means all patents owned by LUCENT issuing on
the patent application (or any continuations thereof) listed below, as well
as all foreign patents and patent applications (i) which claim priority from
one or more of such patent applications or (ii) which are not filed under the
Paris Convention and have a common specification with one or more such patent
applications.
1. Application serial number 08/826,630, filed April 3, 1997 (Inventor:
Thomas L. Carter)
SUBSIDIARY of a company means 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
controlled by such company either directly or indirectly; or (ii) which does
not have outstanding 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 other legal entity shall
be deemed to be a SUBSIDIARY of such company only as long as such control or
ownership and control exists.
TECHNICAL INFORMATION means information and documentation relating to
the design, manufacture and operation of utility communications systems
listed in Appendix B.
TERRITORY means worldwide.
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ARTICLE II
TRANSFER AND USE OF TECHNICAL INFORMATION
2.01 Furnishing of Information.
(a) Upon the EFFECTIVE DATE, LUCENT shall provide LICENSEE with
TECHNICAL INFORMATION at LUCENT's facility located at 67 Whippany Road,
Whippany, NJ, together with an index of such TECHNICAL INFORMATION reasonably
sufficient to allow LICENSEE to identify each portion of the TECHNICAL
INFORMATION. LUCENT represents that TECHNICAL INFORMATION includes all the
information, documentation and data identified in Appendix B, TECHNICAL
INFORMATION, which is a part of this Agreement. For ninety (90) days
following the EFFECTIVE DATE, LICENSEE shall have the right to request
delivery of any items of TECHNICAL INFORMATION it believes LUCENT may have
failed to deliver. In response to such requests, LUCENT shall make
reasonable efforts to find such items and, if they are found, shall promptly
deliver them to LICENSEE at no cost. LUCENT shall have no obligation to
search for any such undelivered items of TECHNICAL INFORMATION except as
specified herein.
(b) LICENSEE acknowledges that LUCENT has delivered certain of the
TECHNICAL INFORMATION to LICENSEE prior to the EFFECTIVE DATE, and agrees
that any and all such previously furnished TECHNICAL INFORMATION shall be
deemed to have been delivered hereunder as of the EFFECTIVE DATE.
(c) LICENSEE is in possession of BUSINESS INFORMATION. LICENSEE shall
protect BUSINESS INFORMATION from disclosure to third parties with at least
the same degree of care it exercises in the protection of its own proprietary
information, and in no case with less than a reasonable degree of care. Upon
termination of this Agreement, LICENSEE shall promptly return to LUCENT or
destroy all copies of BUSINESS INFORMATION in its possession. LUCENT hereby
grants to LICENSEE a nonexclusive, personal, and non-transferable,
royalty-free license to use BUSINESS INFORMATION for LICENSEE's internal
purposes for conducting the BUSINESS. LUCENT shall not be obligated to
provide to LICENSEE any information that is subject to a non-disclosure
agreement between LUCENT and any third party, unless LICENSEE provides LUCENT
with such third party's written permission allowing LUCENT to disclose such
information to LICENSEE without liability under any applicable non-disclosure
agreement or otherwise. If such information inadvertently comes to be in the
possession of LICENSEE or is otherwise disclosed inadvertently to LICENSEE,
LICENSEE, upon becoming aware of such, shall notify LUCENT and shall refrain
from using or further disclosing any and all such information until it
obtains and provides LUCENT with the third party's permission forgiving
and/or allowing the disclosure. LICENSEE shall provide LUCENT with access to
all BUSINESS INFORMATION upon reasonable notice and LICENSEE agrees to
maintain all BUSINESS INFORMATION in accordance with LUCENT's document
retention policy.
2.02 Grant.
(a) LUCENT grants to LICENSEE and to LICENSEE'S SUBSIDIARIES a
nonexclusive, personal, non-transferable, royalty-free right to use TECHNICAL
INFORMATION for the creation, development, manufacture, production,
distribution, sale or lease of LICENSED PRODUCTS in the FIELD OF USE and in
the TERRITORY.
(b) LUCENT grants to LICENSEE a personal and nonexclusive right, as an
attribute of the right granted in Section 2.02(a), to disclose to any supplier
or prospective supplier in the TERRITORY only those portions of the TECHNICAL
INFORMATION which are necessary for the procurement by LICENSEE of
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parts or components of LICENSED PRODUCTS.
(c) LUCENT recognizes that LICENSEE may wish to enter into
co-development agreements, with certain of its own customers which are
utility companies or utility suppliers, for customizing or modifying the
LCCU. As a further attribute of the right granted in Section 2.02(a), LUCENT
grants to LICENSEE a personal and nonexclusive right to disclose to any such
customer only those portions of the TECHNICAL INFORMATION which are necessary
for such co-development activity.
(d) LICENSEE agrees that it will not make any part of the TECHNICAL
INFORMATION available to any such supplier or prospective supplier or
customer except on the agreement in writing (of which a copy will be
furnished to LUCENT promptly upon its request) of each such supplier or
prospective supplier or customer (1) that it accepts as its own LICENSEE's
commitments under Section 9.04, U.S. Export Control, and the confidentiality
obligations of Section 9.03, Confidentiality, (2) that if a supplier or
prospective supplier, it will use all information received from LICENSEE only
for the purpose of supplying to LICENSEE items of the type to be procured by
LICENSEE pursuant to Section 2.02(b), (3) that if a customer, it will use all
information received from LICENSEE only for its personal use in conducting
co-development activities pursuant to Section 2.02(c), and (4) that it will
promptly return or destroy each and every part of such information as
directed by LICENSEE. The rights granted herein to any such third party
shall terminate upon the termination of LICENSEE'S rights under Section
2.02(a).
2.03 LICENSEE's Duties With Respect to TECHNICAL INFORMATION. LICENSEE
agrees that:
(a) LICENSEE will not use any TECHNICAL INFORMATION except as
authorized herein; and
LICENSEE will not, without LUCENT's express written permission, make or
have made, or permit to be made, more copies of any of the furnished
TECHNICAL INFORMATION than LICENSEE determines in its commercially reasonable
judgment are necessary or desirable for its purposes and the conduct of the
BUSINESS, and that each item of TECHNICAL INFORMATION which is provided in
the form received from LUCENT shall contain the same proprietary notices or
legends which appear on the furnished TECHNICAL INFORMATION as provided by
LUCENT.
(c) Upon any termination under Article VII hereof of the rights and
licenses granted under this Article II, LICENSEE shall, as directed by
LUCENT, promptly destroy or deliver to LUCENT all TECHNICAL INFORMATION then
under LICENSEE's control, including all TECHNICAL INFORMATION sub-licensed or
otherwise disclosed or delivered by LICENSEE.
2.04 LUCENT's Right and Duties With Respect to TECHNICAL INFORMATION.
LUCENT agrees for itself and its SUBSIDIARIES that for a period of five (5)
years from the EFFECTIVE DATE, (a) none of LUCENT or its SUBSIDIARIES will
license, sell, transfer, assign, lease or otherwise grant any rights in or to
the TECHNICAL INFORMATION in the field of communications for utility and
energy-providing companies in the FIELD OF USE to any third parties, or (b)
use, sell, lease, or license TECHNICAL INFORMATION for the benefit of LUCENT,
its SUBSIDIARIES, or any third parties in the field of communications for
utility and energy-providing companies in the FIELD OF USE; provided,
however, that LICENSEE offers LICENSED PRODUCT for commercial sale within
three (3) years of the EFFECTIVE DATE. If LICENSEE has not offered LICENSED
PRODUCT or LICENSED SOFTWARE for such sale within three (3) years after the
EFFECTIVE DATE, LUCENT shall have the right to grant nonexclusive licenses
for TECHNICAL INFORMATION to third parties and to use, sell, lease, or
license TECHNICAL INFORMATION for any purpose in the field of communications
for utility and energy-providing companies in the FIELD OF USE. For
clarification, LUCENT retains the rights to use, sell, lease,
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license, transfer, assign, and otherwise grant rights in or to TECHNICAL
INFORMATION in all areas outside the field of communications for utility and
energy-providing companies in the FIELD OF USE.
ARTICLE III
LICENSED SOFTWARE
3.01 Furnishing of LICENSED SOFTWARE. Within ten (10) working days of
the EFFECTIVE DATE, LUCENT shall provide LICENSEE with LICENSED SOFTWARE at
LUCENT's facility located at 67 Whippany Road, Whippany, NJ, together with an
index of all of the contents of any computer disks or other medium of
expression on which the LICENSED SOFTWARE is delivered to LICENSEE. LUCENT
represents that LICENSED SOFTWARE includes all of the source and object code
and computer programs identified in Appendix A, LICENSED SOFTWARE, which is a
part of this Agreement. For ninety (90) days following EFFECTIVE DATE,
LICENSEE shall have the right to request delivery of any LICENSED SOFTWARE it
believes LUCENT may have failed to deliver. In response to such requests,
LUCENT shall make reasonable efforts to find such LICENSED SOFTWARE and, if
it is found, shall promptly deliver it to LICENSEE at no cost. LUCENT shall
have no obligation to search for any such undelivered LICENSED SOFTWARE
except as specified herein.
3.02 Grant.
(a) LUCENT grants to LICENSEE and its SUBSIDIARIES a personal,
royalty-free, nonexclusive and non-transferable right to use LICENSED
SOFTWARE in the FIELD OF USE and in the TERRITORY in accordance with the
provisions of this Agreement.
(b) The right to use includes the right to develop, make copies of and
furnish CUSTOMER SOFTWARE in accordance with the provisions of this Agreement.
(c) The right to use includes the right to modify, copy, display,
distribute and prepare ADAPTATIONS based on LICENSED SOFTWARE and to furnish,
distribute and sublicense such LICENSED SOFTWARE and ADAPTATIONS to
SUBLICENSEES anywhere in the world (subject to any such SUBLICENSEE'S
satisfying the same requirements as LICENSEE hereunder with respect to
LICENSED SOFTWARE, such requirements including, but not limited to, the
confidentiality provisions of U.S. and foreign government export requirements
and Sections 9.03 and 9.04 respectively). LICENSEE agrees to use and
otherwise treat ADAPTATIONS the same as LICENSED SOFTWARE hereunder.
(d) No ownership interest in LICENSED SOFTWARE is transferred to
LICENSEE hereunder.
(e) When LICENSEE makes copies of LICENSED SOFTWARE as authorized
hereinabove, LICENSEE shall include in all such copies any copyright or
proprietary notices appearing on or in the LICENSED SOFTWARE being copied.
LICENSEE shall bind any and all of its third party sublicensees to include
said notices when making copies of LICENSED SOFTWARE.
(f) Upon any termination under Article VII hereof of the rights and
licenses granted under this Article III, LICENSEE shall, as directed by
LUCENT, promptly destroy or deliver to LUCENT all LICENSED SOFTWARE then
under LICENSEE's control, including all LICENSED SOFTWARE sub-licensed by
LICENSEE.
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3.03 CUSTOMER SOFTWARE.
(a) LUCENT, as an attribute to and not in limitation of the rights
granted in Section 3.01, hereby grants to LICENSEE and its SUBSIDIARIES a
personal, non-transferable, and nonexclusive right within the FIELD OF USE to
develop CUSTOMER SOFTWARE, make copies of CUSTOMER SOFTWARE and furnish such
copies to customers anywhere in the world (subject to LICENSEE satisfying
applicable U.S. Government and foreign government export requirements) for
use on customers' CPUs for such customers' own use, and for adaptation and
modification, including improvement, upgrading, and customization, by such
customers for their own use, in the FIELD OF USE, provided that LICENSEE or
its SUBSIDIARY as the case may be, obtains agreement in writing from such a
customer, before or at the time of furnishing each copy of CUSTOMER SOFTWARE,
that:
(1) only a personal, non-transferable and nonexclusive right to use such
copy of CUSTOMER SOFTWARE is granted to such customer;
(2) no ownership interest in CUSTOMER SOFTWARE is transferred to such
customer;
(3) such customer will not copy CUSTOMER SOFTWARE except as necessary to
use such CUSTOMER SOFTWARE and for backup and archive purposes in
connection with such use;
(4) if a customer's right-to-use is terminated for any reason, such
customer will either destroy or return all copies of CUSTOMER SOFTWARE in
its possession;
(5) such customer will not transfer CUSTOMER SOFTWARE to any other party
except as authorized by LICENSEE;
(6) such customer will not export or re-export CUSTOMER SOFTWARE without
appropriate United States and/or foreign government licenses;
(7) such customer will not reverse compile or disassemble CUSTOMER
SOFTWARE except that in Member States of European Economic Community such
acts shall be permitted solely to the extent permitted by Article 6 of the
Council of Directive of 14, May 1991 on the legal protection of computer
programs; and
(8) LUCENT does not warrant CUSTOMER SOFTWARE, does not assume any
liability regarding CUSTOMER SOFTWARE and does not undertake to furnish any
support or information regarding CUSTOMER SOFTWARE.
(b) LICENSEE shall use its good faith, commercially reasonable efforts to
enforce the agreements with customers as specified in this Section 3.03.
(c) Each portion of CUSTOMER SOFTWARE shall include an appropriate
LUCENT copyright notice as provided by LUCENT. Such copyright notice may be
the copyright notice or notices appearing in or on the corresponding portions
of LICENSED SOFTWARE or, if LICENSEE makes copyrightable changes in
developing CUSTOMER SOFTWARE, LICENSEE's copyright notice together with
LUCENT's copyright notice. The LUCENT copyright notice may be the following,
in which the blanks are to be filled in to indicate the appropriate
publication date, "Copr." may be substituted for "Copyright", and the symbol
"(c)" may be substituted for "-C-":
Copyright -C- 19_ _ Lucent Technologies Inc.
All Rights Reserved
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3.04 LUCENT's Rights and Duties With Respect to LICENSED SOFTWARE. LUCENT
agrees for itself and its SUBSIDIARIES that for a period of five (5) years from
the EFFECTIVE DATE, (a) none of LUCENT or any of its affiliates or SUBSIDIARIES
will license, sell, transfer, assign, lease or otherwise grant any rights in or
to the LICENSED SOFTWARE in the field of communications for utility and
energy-providing companies in the FIELD OF USE to any third parties, or (b) use,
copy, modify, distribute, or prepare derivative works of LICENSED SOFTWARE for
the benefit of LUCENT, any of its SUBSIDIARIES, or any third parties in the
field of communications for utility and energy-providing companies in the FIELD
OF USE; provided however, that LICENSEE offers LICENSED PRODUCTS for commercial
sale within three (3) years of EFFECTIVE DATE. If LICENSEE has not offered
LICENSED PRODUCTS for commercial sale within said three years, LUCENT shall have
the right to grant nonexclusive licenses to third parties and to use, sell,
copy, modify, distribute, and prepare derivative works of LICENSED SOFTWARE for
its own commercial and internal business purposes in the field of communications
for utility and energy-providing companies in the FIELD OF USE. For
clarification, LUCENT retains the right to use, sell, copy, transfer, assign,
modify, distribute and prepare derivative works of LICENSED SOFTWARE in all
areas outside the field of communications for utility and energy-providing
companies in the FIELD OF USE.
ARTICLE IV
GRANT OF PATENT LICENSE
4.01 Grant. LUCENT grants to LICENSEE and its SUBSIDIARIES under
LUCENT's PATENT a personal, nonexclusive and non-transferable license to
make, have made, use, lease, sell, offer for sale and import LICENSED
PRODUCTS to be used and sold and marketed only in the FIELD OF USE. The
rights to lease and sell that are granted hereunder include the right to use
agents to lease and sell LICENSED PRODUCTS to customers in the FIELD OF USE.
The right to use that is granted hereunder includes the right to have
LICENSED PRODUCTS used by third parties, under contract with LICENSEE, solely
for purposes of testing, development, and evaluation.
4.02 Duration. All patent licenses granted in this Article IV shall
continue for the shorter of the entire unexpired term of such patents or for
as much of such term as LUCENT has the right to grant, provided that this
Agreement has not been terminated pursuant to Article VII.
4.03 Scope. The license granted in this Article IV is not to be
construed as consent by LUCENT to any act which may be performed by LICENSEE,
except as expressly provided herein.
4.04 LUCENT's Rights and Duties With Respect to PATENT.
(a) LUCENT agrees for itself and its SUBSIDIARIES that for a period of
five (5) years from the EFFECTIVE DATE (i) LUCENT and its SUBSIDIARIES will
not grant any rights or licenses under LUCENT'S PATENT in the field of
communications for utility and energy-providing companies in the FIELD OF USE
to any third parties, (ii) LUCENT and its SUBSIDIARIES will not exercise any
rights to make, have made, use, sell, offer for sale or import products under
LUCENT'S PATENT in the field of communications for utility and
energy-providing companies in the FIELD OF USE, and (iii) if LUCENT assigns,
transfers, conveys or otherwise alienates its rights under LUCENT'S PATENT to
a third party, such third party shall agree that the provisions of this
Section 4.04(a) shall apply to such third party; provided however, that
LICENSEE offers LICENSED PRODUCTS for commercial sale within three (3) years
of the EFFECTIVE DATE. If that LICENSEE has not offered LICENSED PRODUCTS
for commercial sale within three (3) years of the EFFECTIVE DATE, then
LUCENT's obligations under provisions (i), (ii) and (iii) of this Section
4.04(a) shall terminate.
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(b) LUCENT retains all rights in LUCENT PATENT including the rights to
make, have made, use, sell, offer for sale, and import products and to grant
licenses to third parties therefore, in all areas and applications outside
the field of communications for utility and energy-providing companies in the
FIELD OF USE.
(c) Nothing in this Agreement shall preclude LUCENT from making, using,
or selling any integrated circuits incorporating radio-frequency transceiver
technology or incorporating any invention claimed in the LUCENT PATENT.
(d) LUCENT shall prosecute and maintain the LUCENT PATENT at its own
cost and expense, and shall, in its sole discretion, perform all acts
pertaining to filing, prosecuting, maintaining, and abandoning patent
applications in patent offices of the United States and foreign countries (if
any), and providing for the issuance and maintenance of United States and
foreign patents (if any).
(e) Nothing in this Agreement shall preclude LUCENT from honoring any
of its patent licenses to third parties or any of its obligations to grant
such licenses, if such licenses or obligations exist on EFFECTIVE DATE, nor
shall anything herein preclude LUCENT from renewing such licenses or
obligations.
ARTICLE V
TECHNOLOGY SUPPORT
5.01 Permission for Discussions. LICENSEE recognizes Frank Magnotti,
Michael Guyre, Ronald Pasquarelli, John Rossi and Lori Sobczak, all presently
or most recently employed by LUCENT and assigned to the Utility Solutions
Strategic Business Unit as of March 31, 1997, each as having substantial
knowledge with respect to the application of TECHNICAL INFORMATION and
LICENSED SOFTWARE in the FIELD OF USE and with respect to the market for
LICENSED PRODUCTS and potential customers for LICENSEE and its SUBSIDIARIES,
affiliates and sublicensees. LICENSEE has also expressed an interest in
offering employment to other LUCENT employees who have working knowledge and
skills related to TECHNICAL INFORMATION and LICENSED SOFTWARE. LUCENT hereby
grants LICENSEE express permission to contact the above-named employees, any
consultants engaged by LUCENT, and any other current LUCENT employees
previously assigned to the Utility Solutions Strategic Business Unit who
LICENSEE has reason to believe have the aforesaid knowledge or related
skills, and to solicit for employment or other engagement such consultants
for the benefit of LICENSEE and any of its SUBSIDIARIES or affiliates. Said
permission extends only through December 30, 1997.
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5.02 Services of Named Individual.
(a) With respect to John Rossi and not in limitation of the provisions
of Section 5.01 above, LUCENT will permit LICENSEE to contract for the
services of John Rossi through its wholly-owned subsidiary, Lucent
Technologies Services Co. ("Services Co.") for a period of time not to exceed
twenty (20) months from EFFECTIVE DATE, provided that: (1) LICENSEE will be
responsible for Mr. Rossi's fully loaded billing rate with general and
administrative expenses including but not limited to salary, performance
awards, health, insurance, disability, workers' compensation, vacation,
retirement and savings plan benefits, will be responsible for all adjustments
and/or increases to same over the entire period of time LICENSEE remains
contracted with Services Co. for Mr. Rossi's services, and will, beginning on
EFFECTIVE DATE, make monthly payments to Services Co. in an agreed upon
amount sufficient to cover said billing rate and benefits (see paragraph (b)
below); (2) LICENSEE will be responsible for any and all travel/living and/or
educational expenses incurred by Mr. Rossi at or for LICENSEE's direction,
request or benefit; (3) at any time within said 20-month period, LICENSEE
will provide at least sixty (60) days written notice prior to terminating its
contract for Mr. Rossi's services or otherwise terminating or eliminating the
need for Mr. Rossi's services to both Services Co. and John Rossi and will
continue to be responsible for Mr. Rossi's salary, benefits and
aforementioned expenses during said notice period; except that LICENSEE will
not terminate its contract with Services Co. for John Rossi's services prior
to the expiration of said twenty (20) month period in the event that Mr.
Rossi becomes disabled during such period; and (4) LICENSEE will, as a
condition to purchasing the use of Mr. Rossi's services, require Mr. Rossi to
sign an agreement with Services Co. to the effect that during the time that
Mr. Rossi provides services to LICENSEE through Services Co., he will abide
by and adhere to the code of conduct and standard of integrity prescribed by
the Lucent Technologies Business Guideposts booklet and the policies and
guidelines of Services Co., that he will retire or resign from LUCENT on or
before the expiration of the said 20-month period, and that should LICENSEE
provide him with the notice in (a)(3) above, Mr. Rossi (i) will either find
another job within LUCENT within the 60-day period or resign or retire from
LUCENT effective on the date he accepts other full time employment with a
non-LUCENT company or no later than the 61st day after he received said
notice, whichever occurs first and (ii) will forego and knowingly and
voluntarily waive any and all rights he might otherwise be entitled to from
LUCENT and Services Co. including, but not limited to termination pay,
severance treatment, surplus or force management status and relocation
expense reimbursement.
(b) During and through the term of any contract with Services Co. for
the services of John Rossi, LICENSEE agrees to pay LUCENT as follows:
Beginning on EFFECTIVE DATE for the period from December 1, 1997 through
November 30, 1998, the sum of $16,900 per month plus any and all travel and
living and/or educational expenses incurred by LUCENT with respect to John
Rossi; and beginning on December 1 1998 through July 1999, the sum of $17,800
per month plus any and all travel and living and/or educational expenses
incurred by LUCENT with respect to John Rossi.
(c) Nothing herein is a commitment or guarantee by LUCENT or Services
Co. as to the availability or continued availability of John Rossi to work
for or provide services to LICENSEE and his unavailability shall not be a
breach of this Agreement. Should Mr. Rossi become unavailable after having
begun to provide contracted for services to LICENSEE, any prepaid but
unearned billing rate payments made to Services Co. by LICENSEE shall be
returned to LICENSEE to the extent Services Co. has not incurred the
corresponding expense; provided that if the reason for Mr. Rossi's
unavailability is due to short or long term disability, LICENSEE shall
continue for the remainder of the unexpired term of its agreement with
Services Co. to be responsible for Mr. Rossi's billing rate with general and
administrative expenses to the same extent that Services Co. would otherwise
be responsible.
(d) Nothing herein is a warranty by LUCENT or Services Co. as to the
quality of services provided or to be provided by John Rossi. Any failure in
performance or failure to perform by John
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Rossi whether negligent or otherwise, including failure in quality, shall not be
a breach of this Agreement nor shall LUCENT or Services Co. be held responsible
for any such failure.
(e) Any notice required under this Section 5.02 shall be sufficiently
given when sent by certified mail or facsimile addressed to:
Lucent Technologies Services Co. Inc. John Rossi
Address: P. O. Box 26090 Address: 1 Sterling Avenue
Greensboro, NC 27420 Mendham, NJ 07945
Attn: Don Stringfellow, HR Manager
Facsimile: (910) 279-5734 Fax: (973) 543-6481
(f) Payments by LICENSEE shall be made within thirty days from date
of invoice to Services Co. in U.S. dollars at the address specified in this
Section 5.02(e). Alternatively, payments to Services Co. may be made by bank
wire transfers in U.S. dollars to Services Co.'s account, Nationsbank Account
No. 3750381377 and ABA # 111000012. Changes in such address or account may
be specified by Services Co. by giving written notice. Payments which are
more than 60 days delinquent or overdue are subject to a late payment charge
of one and one-half percent (1.5%) per month or portion thereof, or the
maximum amount allowed by law.
(g) The terms and provisions of this Section 5.02 shall control and
take precedence over any conflicting terms stated in LICENSEE's agreement
with Services Co. regarding John Rossi unless the parties otherwise clearly
and expressly agree in writing.
5.03 Technology Transfer Assistance. In addition, LUCENT agrees that,
for a period of thirty (30) days beginning on the date of delivery of
LICENSED SOFTWARE, but excluding LUCENT's recognized holidays, it will
provide LICENSEE with technology transfer assistance by making available one
person, selected in LUCENT's sole discretion, who has substantial knowledge
with respect to LICENSED SOFTWARE and its application in the FIELD OF USE.
Said person will be available to assist LICENSEE for a combined total of 160
work hours between the hours of 8 o'clock a.m. and 5 o'clock p.m. site local
time, Monday through Friday, excluding LUCENT's holidays, unless otherwise
agreed by LUCENT. Said person will be provided at the site and location
requested by LICENSEE, provided that if any selected site or location
requires the person to travel more than 100 miles from Whippany, New Jersey,
LICENSEE shall be responsible for all associated and documented travel and
living expenses, including but not limited to lodging, air, cab and other
transit fare, mileage reimbursement for use of personal car at a rate of at
least $.30 per mile, parking fees and meal fare while on travel.
5.04 Access To Facilities. Each Party to this Agreement shall provide
the other with such access to its facilities as is reasonably required in
connection with the performance of their respective obligations under this
Agreement. No charge shall be made for such access. Each Party shall be
responsible for implementing appropriate safeguards for the security of its
proprietary and otherwise confidential information, and each Party shall
exercise ordinary care for the safety of the other's employee personnel while
on or in said Party's premises or property. Neither Party shall require
releases or waivers of any personal rights from the employees or
representatives of the other in connection with visits to its premises, nor
shall the Party plead such releases or waivers in any action or proceeding.
Employees and agents of each Party shall, while on the premises of the other,
comply with all plant and premises rules of which they are made aware.
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ARTICLE VI
CONSIDERATION AND PAYMENT
6.01 Consideration and Payment. LICENSEE shall pay to LUCENT, at the
time of execution of this Agreement by both Parties, the sum of ONE MILLION
TWO HUNDRED AND TWENTY-FIVE THOUSAND UNITED STATES DOLLARS (U.S.
$1,225,000.00) by certified check or by wire transfer. Except as
contemplated by this Agreement, no portion of said payment shall be
refundable to LICENSEE. LICENSEE and LUCENT shall, also as consideration for
this License Agreement, execute a Bill of Sale for LCCU Assets to be sold and
transferred to LICENSEE at the time of execution of this Agreement. Prior to
execution of this Agreement, Public Service Electric & Gas Company ("PSE&G"),
a public utility having its principal office in Newark, New Jersey, shall
deliver to LUCENT and LICENSEE its written consent for the execution of this
Agreement by LUCENT and the performance by the Parties of the transactions
provided for herein. PSE&G is providing its consent and release to LUCENT
because of a contractual relationship between them whereby PSE&G was LUCENT's
development partner for development of a two-way communication system for
utilities. PSE&G is not a party to this Agreement and is not transferring,
licensing or selling any thing of value to LICENSEE under this Agreement.
Upon the execution of this Agreement, the referenced contract between LUCENT
and PSE&G will terminate as previously agreed by them in a written supplement
to their contract said supplement dated May 7, 1997.
ARTICLE VII
TERMINATION
7.01 Breach. In the event of a material breach of this Agreement by
LICENSEE, LUCENT may, in addition to any other remedies that it may have, at
any time, terminate all licenses and rights granted by it hereunder by
providing LICENSEE with not less than three (3) months prior written notice
specifying such breach, unless within such three (3) month period all
material breaches specified in such notice shall have been remedied in all
material respects.
7.02 Voluntary Termination. By not less than six (6) months prior
written notice to LUCENT, LICENSEE may voluntarily terminate all or a
specified portion of the licenses and rights granted to it hereunder. Such
notice shall specify the effective date of such termination and shall not in
any way affect or relieve LICENSEE from the provisions of Article VI
hereinabove.
7.03 Effect of Termination. Subject to Section 7.04 below, upon
termination of this Agreement pursuant to Sections 7.01 or 7.02, LICENSEE and
its SUBSIDIARIES and affiliates shall discontinue their use of the TECHNICAL
INFORMATION, BUSINESS INFORMATION, LUCENT PATENT and LICENSED SOFTWARE,
except for purposes of completing and delivering to their respective
customers full performance of any obligations of LICENSEE, its SUBSIDIARIES
or affiliates to any of their respective and then-current customers pursuant
to an outstanding contract which has not been completed as of the date of
termination.
7.04 Survival. Termination of licenses and rights of LICENSEE under
the provisions of this Article VII shall not affect the licenses, rights and
obligations of LICENSEE or of any purchaser of LICENSED PRODUCTS, services or
CUSTOMER SOFTWARE with respect to any LICENSED PRODUCT or CUSTOMER SOFTWARE
(whether or not incorporating any ADAPTATIONS or TECHNICAL INFORMATION) made
prior to such termination nor shall such termination affect the rights and
provisions contained in Article VI hereof.
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.01 Representations and Warranties of LUCENT. LUCENT hereby represents
and warrants to LICENSEE that:
(a) LUCENT has the full right, power and authority to execute, deliver
and perform its obligations under this Agreement, and that such execution,
delivery and performance does not and will not violate the terms of any
agreement, document, instrument or understanding to which LUCENT is a party
or by which it is bound;
(b) this Agreement constitutes the binding agreement of LUCENT and is
enforceable against LUCENT in accordance with its terms;
(c) LUCENT has full and marketable title to the TECHNICAL INFORMATION,
the LICENSED SOFTWARE, the LUCENT PATENT and all other rights granted to
LICENSEE hereunder, free and clear of any liens, claims, encumbrances or
other restrictions on or reservations of title or interest, except that
TECHNICAL INFORMATION, LICENSED SOFTWARE, and LUCENT PATENT may be subject to
existing license agreements with third parties, and except that LUCENT
reserves the right to enter into further agreements to license TECHNICAL
INFORMATION, LICENSED SOFTWARE, and LUCENT PATENT to third parties, subject
to the restrictions of Paragraphs 2.04, 3.04, and 4.04 hereof.
Notwithstanding any other provision in this Agreement, LUCENT is not required
to sublicense or deliver to LICENSEE any source or object code in violation
of LUCENT's obligations to a licensor of such code, nor is LUCENT required to
procure any licenses or use rights for LICENSEE's benefit from any third
party;
(d) For purposes of this paragraph, "the knowledge of LUCENT" means the
direct, personal knowledge of those individuals who constituted the
management of LUCENT's Utility Solutions Strategic Business Unit. LUCENT
represents that it has disclosed to LICENSEE, in writing, those patents of
third parties, in the knowledge of LUCENT, that describe technology related
to the LCCU sufficiently closely that consideration for possible licensing
may be warranted. This representation relates only to manufacture and use of
the LCCU as described in the technical specification included in the
TECHNICAL INFORMATION, and does not relate to any modification or combination
not described in the TECHNICAL INFORMATION; and
(e) LUCENT has not withheld any TECHNICAL INFORMATION or LICENSED
SOFTWARE necessary for operation of the BUSINESS. If any licenses under
LUCENT patents, other than PATENT (rights to which have been expressly
granted herein), are reasonably necessary for the operation of the BUSINESS,
LUCENT agrees to enter into good faith negotiations for the granting of such
licenses on reasonable commercial terms.
8.02 Representations and Warranties of LICENSEE. LICENSEE hereby
represents and warrants to LUCENT that:
(a) LICENSEE has the full right, power and authority to execute,
deliver and perform its obligations under this Agreement, and that such
execution, delivery and performance does not and will not violate the terms
of any agreement, document, instrument or understanding to which LICENSEE is
a party or by which it is bound; and
(b) this Agreement constitutes the binding agreement of LICENSEE and is
enforceable against LICENSEE in accordance with its terms.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01 Disclaimer.
(a) EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, LUCENT AND ITS
SUBSIDIARIES MAKE NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESSLY OR
IMPLIEDLY, INCLUDING REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, NEITHER LUCENT AND ITS SUBSIDIARIES NOR PSE&G NOR ITS
SUBSIDIARIES SHALL BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR FOR LOST PROFITS, SAVINGS, OR REVENUES OF ANY KIND
WHETHER OR NOT EITHER OF THEM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGE AND IN NO EVENT SHALL LUCENT OR PSE&G BE LIABLE TO LICENSEE FOR MORE
THAN THE CASH CONSIDERATION RECEIVED BY LUCENT HEREUNDER. THIS PROVISION
SHALL SURVIVE FAILURE OF ANY OTHER REMEDY OR PROVISION OF THIS AGREEMENT.
(b) EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, LUCENT AND
ITS SUBSIDIARIES MAKE NO REPRESENTATION OR WARRANTY THAT THE USE OF THE
TECHNICAL INFORMATION OR LICENSED SOFTWARE WILL NOT INFRINGE PATENTS OR OTHER
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. LUCENT AND ITS SUBSIDIARIES
WILL NOT BE HELD TO ANY LIABILITY UNDER ANY CLAIM BROUGHT BY LICENSEE OR ANY
THIRD PARTY ON ACCOUNT OF, OR ARISING FROM, USE OF THE TECHNICAL INFORMATION
OR LICENSED SOFTWARE.
9.02 Indemnity. LICENSEE agrees to indemnify and save LUCENT and PSE&G
and their respective SUBSIDIARIES harmless from any claims or demands,
including but not limited to those for personal injury, property damage, or
breach of warranty or contract (including reasonable expenses of litigation
and settlement of such claims), by third parties to the extent that such
claims arise out of or in connection with the furnishing or use of any
TECHNICAL INFORMATION, BUSINESS INFORMATION or LICENSED SOFTWARE hereunder or
arise out of or relate to LICENSED PRODUCTS, ADAPTATIONS OR CUSTOMER
SOFTWARE. LUCENT will give LICENSEE prompt notification of any such claim or
suit and will cooperate in the defense or settlement thereof.
9.03 Confidentiality.
(a) LICENSEE agrees to hold, and to cause each of its SUBSIDIARIES,
and sublicensees to hold, all parts of the BUSINESS INFORMATION, TECHNICAL
INFORMATION and source code for LICENSED SOFTWARE in confidence, and not to
use it for any purpose outside of the FIELD OF USE. LICENSEE further agrees
that it shall not, nor shall it permit any of its SUBSIDIARIES, or
sublicensees to make any disclosure of BUSINESS INFORMATION, TECHNICAL
INFORMATION or LICENSED SOFTWARE (including methods or concepts utilized
therein) to anyone, except those, including LICENSEE's employees,
consultants, advisors and such others, to whom such disclosure is necessary
or advisable, in LICENSEE's commercially reasonable judgment, for the use for
which rights are granted hereunder. LICENSEE shall appropriately notify or
cause to be notified all employees and consultants to
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whom any such disclosure is made that such disclosure is made in confidence and
shall be kept in confidence by them.
(b) LICENSEE's obligations under this Section 9.03 shall not apply to
any TECHNICAL INFORMATION or LICENSED SOFTWARE (including any method or
concept utilized therein) that:
(i) is or becomes available without restriction to the general public
through no fault of LICENSEE or its employees;
(ii) was rightfully in LICENSEE's or any of its SUBSIDIARIES or affiliates
possession without limitation on disclosure before disclosure hereunder to
LICENSEE;
(iii) is rightfully disclosed to LICENSEE by a third party without lawful
restrictions on disclosure;
(iv) is independently developed by LICENSEE;
(v) is free of such restriction according to a written agreement signed by
LUCENT; or
(vi) is required to be disclosed by LICENSEE or any of its SUBSIDIARIES,
affiliates or sublicensees by any governmental authority or court of
competent jurisdiction, provided that in such event LICENSEE shall use its
good faith efforts to provide LUCENT with sufficient written notice of such
compelled disclosure in order to afford LUCENT the opportunity to seek
protective orders or other remedial action at LUCENT'S sole cost and
expense.
(c) LICENSEE shall not furnish TECHNICAL INFORMATION or LICENSED
SOFTWARE in source code or object code format to the United States Government.
9.04 U.S. Export Control. LICENSEE hereby assures LUCENT that it will
not without a license or license exception authorized by the Bureau of Export
Administration of the U.S. Department of Commerce, Washington, DC 20230,
United States of America, if required,
(a) export or release any information or software (including source
code) obtained pursuant to this Agreement to a national of Country Groups D:1
or E:2 (15 C.F.R. Part 740, Supp. 1), Iran, Iraq, Sudan, or Syria;
(b) export to Country Groups D:1 or E:2, or to Iran, Iraq, Sudan, or
Syria, the direct product (including processes and services) of such
information or software; or
(c) if the direct product of the information is a complete plant or any
major component of a plant, export to Country Groups D:1 or E:2. or to Iran,
Iraq, Sudan, or Syria, the direct product of the plant or major component.
This assurance will be honored even after any termination date of this
Agreement. LICENSEE further agrees that it will not use, distribute,
transfer or transmit LICENSED PRODUCTS, LICENSED SOFTWARE or TECHNICAL
INFORMATION (even if incorporated into other products) except in compliance
with U.S. export regulations. If requested by LUCENT, LICENSEE also agrees
to sign written assurances and other export-related documents as may be
required for LUCENT to comply with U.S. export regulations.
9.05 No Agency. All work performed by one Party under this Agreement
shall be performed as an
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independent contractor and not as an agent of the other and no persons
furnished by the performing Party shall be considered the employees or agents
of the other. The performing Party shall be responsible for its employees'
compliance with all laws, rules and regulations while performing under this
Agreement and shall indemnify the other Party from any and all damages,
losses, fines or penalties resulting from such failure of such employees to
so comply.
9.06 Nothing Construed. Except as expressly provided in this
Agreement, neither the execution of this Agreement nor anything in it or in
any information or materials provided by either Party shall be construed as:
(a) conferring by implication, estoppel or otherwise, any right or
license upon LICENSEE or its SUBSIDIARIES to include in advertising,
packaging, publicity, press releases or other commercial activities related
to any LICENSED PRODUCT, or this Agreement any reference to LUCENT or AT&T
Corp. (or any of their SUBSIDIARIES), their trade names, trademarks or
service marks without first obtaining the prior written consent of LUCENT
through its Government Solutions Media Relations Manager, Linda Edgerton, or
her designee, provided that LICENSEE and its SUBSIDIARIES may provide factual
information in response to inquiries from prospective customers and others
regarding the source and ownership of TECHNICAL INFORMATION, LICENSED
SOFTWARE and LUCENT PATENT without such prior consent; or
(b) except as set forth above, providing LICENSEE any right to extend
directly or indirectly any warranty or representation in the name of LUCENT
or to purport to bind LUCENT in any way; or
(c) except as provided in this Agreement or in the Bill of Sale, an
obligation upon LUCENT or any of its SUBSIDIARIES to furnish any person,
including LICENSEE, any assistance of any kind whatsoever, any information
other than that expressly provided in the Agreement or to revise, supplement
or elaborate upon any information or materials provided by LUCENT; or
(d) a grant to LICENSEE to sell, lease, sublicense or otherwise
transfer or dispose of LICENSED SOFTWARE, in whole or in part, except as
provided in this Agreement; or
(e) providing or implying any arrangement or understanding that LUCENT
or its subsidiaries, successors or assigns will make any purchase, lease,
examination or test or give any approval.
9.07 Severability. If any portion of this Agreement is found to be
invalid or unenforceable, the Parties agree that the remaining portions shall
remain in effect. The Parties further agree that in the event such invalid
or unenforceable portion is an essential part of this Agreement, they will
immediately begin negotiations for replacement of such invalid or
unenforceable portion. The Parties agree, by way of example and not of
limitation, that Section 9.14 [Choice of Law] is an essential part of this
Agreement.
9.08 Survival of Obligations. The Parties' rights and obligations,
which, by their nature, would continue beyond the termination or cancellation
of this Agreement, shall survive termination or cancellation hereof.
9.09 Nonassignability. The Parties hereto have entered into this
Agreement in contemplation of personal performance, each by the other, and
intend that the licenses and rights granted hereunder to a Party not be
extended to entities other than such Party's SUBSIDIARIES, through purchase
and sale or otherwise, without the other Party's express written consent.
Notwithstanding the foregoing, all of the right, title and
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interest in this Agreement and any licenses and rights granted to a Party
hereunder may be assigned to any other entity which, as a result of a sale
and purchase of substantially all of the assets of the business of such Party
that is the subject matter of this Agreement ("Relevant Business") or as a
result of any business restructuring, reorganization, merger or acquisition
of a Party to this Agreement, has become a direct or indirect successor to
Relevant Business; provided however that such successor expressly agrees in
writing to accept and to be fully bound by all of the assignor Party's
obligations and duties under this Agreement; but neither this Agreement nor
any rights or obligations hereunder shall be otherwise assignable or
transferable (in insolvency proceedings or otherwise) by either Party without
the express written consent of the other Party. Prior written notice of any
assignment under this section 9.09 must be given by the assignor Party to the
other Party hereunder. Such notice shall include the effective date of any
such assignment and the identification and address of the assignee entity.
Notwithstanding any assignment hereunder, the assignor Party shall remain
primarily obligated under this Agreement, unless the other Party otherwise
agrees in writing.
9.10 No Waiver. If either Party fails to enforce any right or remedy
available to it under this Agreement, that failure will not be construed to
be a waiver of the right or remedy with respect to any other breach or
failure by the other Party.
9.11 Addresses. Except as otherwise provided herein, any notice or
other communication hereunder shall be sufficiently given to LICENSEE when
sent by certified mail addressed to LICENSEE's office specified above, or to
LUCENT when sent by certified mail addressed to Contract Administrator,
Intellectual Property Division, Lucent Technologies Inc., 2333 Ponce de Leon
Boulevard -Suite 511, Coral Gables, Florida 33134. Changes in such addresses
may be effected by giving written notice to the other Party.
9.12 Taxes. LICENSEE 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 LICENSEE 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, LICENSEE
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.
9.13 Audit Assistance. The parties acknowledge that LICENSEE has
informed LUCENT that LICENSEE will be required under applicable rules and
regulations of the Securities and Exchange Commission ("SEC") to file (i)
statements of direct revenues and direct costs for each of the years ended
December 31, 1995 and December 31, 1996, and for the period beginning January
1, 1997 and ending the EFFECTIVE DATE, and (ii) statements of specific assets
including accounts receivable, inventory and capitalized software at December
31, 1995, December 31, 1996 and the EFFECTIVE DATE, such statements to be
prepared in accordance with generally accepted accounting principles ("GAAP")
and accompanied by the report of independent certified public accountants.
The parties acknowledge that LICENSEE has informed LUCENT that such
statements must be filed with the SEC within 75 days of the EFFECTIVE DATE.
LUCENT agrees (i) to prepare such statements for audit by Coopers & Lybrand,
auditors for LUCENT ("Coopers"), as soon as practicable and no later than 30
days after the EFFECTIVE DATE, and (ii) to provide the usual and customary
access and support (including, without limitation, access to original
documentation, execution of confirmation requests and provision of management
representation letters) necessary to allow Coopers to complete its audit of
such statements in a timely manner in accordance with
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generally accepted auditing standards. LICENSEE shall pay for all fees and
disbursements of Coopers related to the audit of the financial statements
referenced above in accordance with a budget to be prepared by Coopers and
presented to LICENSEE and LUCENT.
LICENSEE acknowledges that the services of certain former employees of
LUCENT now employed by General Dynamics Advanced Technology Systems, Inc.
("GD") may be necessary in connection with the preparation of the financial
statements and the completion of the audit and that such former employees are
available to LUCENT at rates previously agreed upon between LUCENT and GD.
LICENSEE agrees to reimburse LUCENT for all out-of-pocket costs and expenses
incurred by LUCENT in connection with work performed by GD employees related
to the preparation of the financial statements and the completion of the
audit.
9.14 Choice of Law. The Parties are familiar with the principles of
New York commercial law, and desire and agree that the laws of New York,
exclusive of its conflicts of laws provisions, shall apply in any dispute or
interpretation arising with respect to this Agreement.
9.15 Integration; Counterparts. 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. This Agreement shall
prevail in the event of any conflicting terms or legends which may appear in
any information provided by LUCENT or LICENSEE or in any such other documents
or materials exchanged hereunder. This Agreement includes and incorporates
by reference the attachments hereto designated as Appendices A and B and the
BILL OF SALE. This Agreement may be executed in multiple counterparts, each
of which when taken together shall constitute one and the same agreement.
9.16 Dispute Resolution.
(a) If a dispute arises out of or relates to this Agreement, or the
breach, termination or validity thereof, the Parties agree to attempt to
resolve any such dispute themselves by escalating the dispute to the
executive levels of their respective companies. Unless otherwise mutually
agreed by the Parties, if the dispute is not resolved by the Parties within
twenty-five (25) days of either party's written demand for escalation of such
dispute, the Parties agree to submit the dispute to a sole mediator selected
by the Parties or, at any time at the option of a Party, to mediation by the
American Arbitration Association ("AAA"). If not thus resolved, it shall be
referred to a sole arbitrator selected by the Parties within thirty (30) days
of the mediation, or in the absence of such selection, to AAA arbitration
which shall be governed by the United States Arbitration Act.
(b) Any award made (i) shall be a bare award limited to a holding for
or against a Party and affording such remedy as is deemed equitable, just and
within the scope of the Agreement, (ii) shall be final and binding on the
Parties; (iii) shall be without findings as to issues (including but not
limited to patent validity and/or infringement) or a statement of the
reasoning on which the award rests; (iv) may in appropriate circumstances
(other than patent disputes) include injunctive relief, (v) shall be made
within four (4) months of the appointment of the arbitrator; and (vi) may be
entered in any court of competent jurisdiction.
(c) The requirement for mediation and arbitration shall not be deemed a
waiver of any right of termination under this Agreement and the arbitrator is
not empowered to act or make any award other than based solely on the rights
and obligations of the Parties prior to any such termination.
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(d) The arbitrator shall determine issues of arbitrability but may not
limit, expand or otherwise modify the terms of the Agreement.
(e) The place of mediation and arbitration shall be New York City.
(f) Each Party shall bear its own expenses but those related to the
compensation and expenses of the mediator and arbitrator shall be borne
equally.
(g) A request by a Party to a court for interim measures shall not be
deemed a waiver of the obligation to mediate and arbitrate.
(h) The arbitrator shall not have authority to award punitive or other
damages in excess of compensatory damages and each Party irrevocably waives
any claim thereto.
(i) The Parties, their representatives, other participants and the
mediator and arbitrator shall hold the existence, content and result of
mediation and arbitration in confidence.
IN WITNESS WHEREOF, each of the Parties has caused this License
Agreement to be executed in duplicate originals by its duly authorized
representatives on the respective dates entered below.
LUCENT TECHNOLOGIES INC.
By: /s/ M.R. Greene
------------------------------------------------------------
M. R. Greene, Vice-President, Intellectual Property
DATA SYSTEMS & SOFTWARE INC.
By: /s/ David Weldler
------------------------------------------------------------
Title: Vice President
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APPENDIX A
LICENSED SOFTWARE
The software, including, without limitation, all object and source code,
and related documentation, included on the Lucent Technologies Utilities
Solutions Data Package CD-ROM delivered by LICENSOR to LICENSEE (the "Data
Package").
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APPENDIX B
DESCRIPTION OF TECHNICAL INFORMATION
The technical information included or otherwise referenced in the Data
Package.
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EXHIBIT 99.2
BILL OF SALE
THIS BILL OF SALE is made as of January 9, 1998 by and from Lucent
Technologies Inc., a Delaware corporation ("Transferor") having offices at
600 Mountain Avenue, Murray Hill, New Jersey 07974, to and in favor of Data
Systems & Software Inc., a Delaware corporation ("Transferee"), having
offices located at 200 Route 17, Mahwah, New Jersey 07430.
WHEREAS, Transferor desires to sell, transfer and convey to Transferee, and
Transferee desires to purchase and accept from Transferor, all of the LCCU
Assets (as defined below);
NOW, THEREFORE, in consideration of good and valuable consideration receipt of
which is hereby acknowledged, the License Agreement, and the mutual promises set
forth herein, the parties hereby agree as follows:
1. Definitions. As used herein the following terms shall have the
following meanings:
"Business" shall mean the business previously conducted by the
Transferor's Utility Solutions Strategic Business Unit for the
development and marketing of the two-way communication system for
utilities known as the Lucent Customer Connection for Utilities
("LCCU").
"Excluded Assets" shall mean the following assets: (i) real property;
(ii) intellectual property and business rights covered by the License
Agreement; and (iii) furniture and fixtures.
"LCCU Assets" shall mean all the assets on Schedule I hereto.
"License Agreement" shall mean the License Agreement dated as of the
date hereof by and between Transferor and Transferee.
2. Sale of the LCCU Assets. Transferor does hereby sell, grant, bargain,
assign, transfer and convey to the Transferee all right, title and
ownership interest in and to the LCCU Assets.
3. Representations and Warranties of Transferor.
(a) Transferor has the power and authority to enter into this Bill of
Sale, to perform its obligations thereunder and to consummate the
transactions contemplated thereby.
(b) The execution by Transferor of this Bill of Sale and the
performance by Transferor of its obligations thereunder have been duly
authorized by all necessary corporate action on the part of
Transferor.
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(c) The Bill of Sale constitutes the valid and legally binding
obligation of Transferor, enforceable against Transferor in accordance
with its terms.
(d) Transferor warrants that the LCCU Assets are in good operating
condition in light of their respective ages and free of any defects
except those resulting from normal wear and operation. Transferor
further warrants that it has good and marketable title to all the LCCU
Assets free of all liens, claims, security interests, past due unpaid
taxes or other charges or other encumbrances of any kind except
Permitted Encumbrances as set forth on Schedule 2 hereof. The
warranties contained herein shall survive for a period of 12 months
from the date of execution of this Bill of Sale. THE TRANSFEROR
HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO SUCH PROPERTY. IN NO
EVENT SHALL TRANSFEREE BE ENTITLED TO RECOVER INDIRECT, SPECIAL,
CONSEQUENTIAL OR INCIDENTAL DAMAGES FROM LUCENT AS A RESULT OF A
BREACH HEREOF AND TRANSFEROR'S AGGREGATE LIABILITY FOR ALL WARRANTY
CLAIMS SHALL NOT EXCEED $100,000.00 IN VALUE.
(e) To the knowledge of Transferor, the LCCU Assets are all the
tangible assets (except for the Excluded Assets), which are owned or
held by Transferor, which were used or held for use by Transferor
exclusively in connection with the Business, and which are necessary
for operation of Business. For purposes of this Bill of Sale, the
term "knowledge of Transferor shall have the same meaning as
"knowledge of LUCENT" as defined in Section 8.01 of the License
Agreement.
4. Representations and Warranties of Transferee.
(a) Transferee has the power and authority to enter into this Bill of
Sale, to perform its obligations thereunder and to consummate the
transactions contemplated thereby.
(b) The execution by Transferee of this Bill of Sale and the
performance by Transferee of its obligations thereunder have been duly
authorized by all necessary corporate action on the part of
Transferee.
(c) The Bill of Sale constitutes the valid and legally binding
obligation of Transferee, enforceable against Transferee in accordance
with its terms.
5. No Assumption of Liabilities. Transferee will not assume, or be
responsible for any liabilities of Transferor of any kind, related to the
Business or otherwise incurred prior to the date hereof, and Transferor shall
indemnify and hold the Transferee harmless from any such losses, expenses, costs
or liabilities which may be incurred by Transferee as a result of such
liabilities. Notwithstanding the foregoing, Transferee shall be responsible for
any and all liabilities incurred by Transferor as a result of actions of
persons, including employees of Transferee, acting on behalf of Transferee and
Transferee shall indemnify and hold the
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Transferor harmless from any such losses, expenses, costs or liabilities which
may be incurred by Transferor as a result of such liabilities.
6. Bulk Sales Law. Transferee hereby waives compliance by Transferor
with the requirements and provisions of any "bulk-transfer" laws of any
jurisdiction that may otherwise be applicable with respect to the sale of any
or all of the Assets to Transferee.
7. Taxes. Transferee agrees to pay all applicable sales, transfer,
excise, value added, use or other similar taxes and all recording and filing
fees, whether levied on Transferor or Transferee, that are payable by reason of
the sales, transfers, leases, rentals, licenses, and assignments contemplated
hereby, except for Transferor's income and capital gains taxes or franchise or
other taxes based on Transferor's income.
8. Delivery. All LCCU Assets shall be delivered to Transferee at a
single location at Transferor's facility at 67 Whippany Road, Whippany, New
Jersey. Such location shall be equipped with a loading dock accessible to
Transferee or its agents. Transferor shall at no additional charge pack Assets
in accordance with its standard practices for domestic shipment. Transferor
will invoice Transferee for adherence to any packing instructions from
Transferee which cause Transferor to pack LCCU Assets in other than its normal
manner for domestic shipments. Title and risk of loss shall pass to Transferee
upon delivery of LCCU Assets into the possession of Transferee, its employee,
agent or carrier at Transferor's said offices in Whippany, New Jersey.
Transferee shall arrange and be responsible for any and all transportation,
carrier or shipping costs related to the transfer of the LCCU Assets from
Transferor's said Whippany, New Jersey location.
9. Successors and Assigns. This Bill of Sale shall inure to the benefit
of and be binding upon the Transferor and the Transferee and their respective
successors and assigns.
10. Further Assurances. Transferor and Transferee agree to perform all
such additional actions and execute, acknowledge and deliver all such
assignments, transfers, consents and other instruments as shall be necessary or
desirable to effectuate the transactions contemplated herein.
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11. License Agreement. This Bill of Sale is subject to and conditioned
upon execution of the License Agreement.
IN WITNESS WHEREOF, the Transferor has caused this Bill of Sale to be duly
executed on its behalf by its duly authorized officers as of the day and year
first written above.
LUCENT TECHNOLOGIES INC.
By: /s/ Thomas N. John
------------------------
Printed Name: Thomas N. John
Title: Vice President, Business Operations
Accepted and Agreed:
DATA SYSTEMS & SOFTWARE INC.
By: /s/ David Weldler
-----------------------
Printed Name: David Weldler
Title: Vice President
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