Joint Design Center Operating Agreement - Lucent Technologies Inc. and Agere Systems Inc.
<PAGE> 1
EXECUTION COPY
JOINT DESIGN CENTER OPERATING AGREEMENT
BY AND BETWEEN
LUCENT TECHNOLOGIES INC.
AND
AGERE SYSTEMS INC.
RELATING TO MICRO ELECTRO MECHANICAL SYSTEMS
<PAGE> 2
JOINT DESIGN CENTER OPERATING AGREEMENT
TABLE OF CONTENTS
ARTICLE 1.0 DEFINITIONS
ARTICLE 2.0 OBJECTIVE OF THE AGREEMENT
ARTICLE 3.0 TERM OF THE AGREEMENT
ARTICLE 4.0 FUNDING AND INTELLECTUAL PROPERTY RIGHTS
ARTICLE 5.0 JDC OPTICAL MEMS TECHNOLOGY PLATFORM
ARTICLE 6.0 PRODUCT DEVELOPMENT AND MANAGEMENT
ARTICLE 7.0 STRUCTURE AND STAFFING OF THE JDC
ARTICLE 8.0 GOVERNANCE OF THE JDC
ARTICLE 9.0 JDC OPERATIONS, LOCATION & SFRL
ARTICLE 10.0 FURNISHING AND USE OF INFORMATION
ARTICLE 11.0 NOTHING CONSTRUED
ARTICLE 12.0 COMPLIANCE WITH RULES AND REGULATIONS, AND INDEMNIFICATION
ARTICLE 13.0 NONSOLICITATION
ARTICLE 14.0 SURVIVAL
ARTICLE 15.0 TERMINATION
ARTICLE 16.0 NO WARRANTY, DISCLAIMER AND LIMITATION OF LIABILITY
ARTICLE 17.0 EXPORT CONTROL
ARTICLE 18.0 PUBLICITY
-i-
<PAGE> 3
ARTICLE 19.0 TRADEMARKS AND TRADENAMES
ARTICLE 20.0 NOTICES
ARTICLE 21.0 MISCELLANEOUS PROVISIONS
ARTICLE 22.0 DISPUTE RESOLUTION
APPENDIX A LUCENT BACKGROUND TECHNOLOGY
APPENDIX B AGERE BACKGROUND TECHNOLOGY
APPENDIX C OPTICAL MEMS TECHNOLOGY PLATFORM
APPENDIX D MEMS PATENTS
APPENDIX E MEMS TECHNICAL INFORMATION
APPENDIX F POTENTIAL JDC ASSIGNEES - LUCENT
APPENDIX G POTENTIAL JDC ASSIGNEES - AGERE
APPENDIX H JDC 2001 ESTIMATED OPERATING BUDGET
APPENDIX I MEMS EQUIPMENT
APPENDIX J PROJECT LETTER(S)
-ii-
<PAGE> 4
JOINT DESIGN CENTER OPERATING AGREEMENT
THIS JOINT DESIGN CENTER OPERATING AGREEMENT, effective as of February 1, 2001
("Effective Date"), is made by and between Lucent Technologies Inc., a Delaware
corporation having offices at 600 Mountain Avenue, Murray Hill, New Jersey 07974
("Lucent") and Agere Systems Inc., a Delaware corporation having offices located
at 555 Union Boulevard, Allentown, Pennsylvania 18109 ("Agere").
RECITALS
A. WHEREAS, the Board of Directors of Lucent has determined that it is
in the best interests of Lucent and its stockholders to separate Lucent's
existing businesses into two independent entities;
B. WHEREAS, Lucent is currently engaged in a research and develop
program directed to Micro Electro Mechanical Systems ("MEMS"). Such MEMS
research and development activities resulting in Lucent possessing certain
expertise in MEMS device design, packaging, assembly, reliability and switch
module design, and Agere possessing certain expertise in MEMS device design and
manufacturing processes;
C. WHEREAS, Lucent and Agere desire to cooperate in the joint
development of optical MEMS technology which can be incorporated into products
that Lucent and Agere will either jointly or independently develop and market,
including certain products that Agere may distribute exclusively to Lucent for a
specific period of time; and
D. WHEREAS, such cooperative activity will enable Lucent and Agere to
independently offer a broader range of products in a shorter time period than if
each had proceeded without the assistance of the other.
NOW, THEREFORE, in consideration of the promises herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties, intending to be legally bound, agree as follows:
ARTICLE 1.0 - DEFINITIONS
For the purposes of this Agreement, in addition to the words and phrases that
are defined throughout the body of this Agreement, the following words and
phrases in initial capital letters will have the following meanings:
-1-
<PAGE> 5
1.1 "Agere Competitor" means any person or entity that competes with
Agere in the provision of telecommunications components including the provision
of semiconductor devices and optical devices.
1.2 "Agere Information" means informative material and technical
information, but not MEMS Technical Information, owned (in accordance with the
Intellectual Property Agreements) by Agere or any of its Subsidiaries and
brought into the JDC by Agere during the Term of this Agreement. Such
information includes any communication between Lucent and Agere which originally
is not in written or other tangible form, but is subsequently summarized by
Agere in a writing delivered to Lucent within thirty (30) days of the original
communication.
1.3 "Agere JDC Assignee(s)" means the Agere employees, agents or
Contractors assigned by Agere to support the JDC in accordance with this
Agreement.
1.4 "Agere Patents" means every patent (including utility models, but
excluding design patents and design registrations) which is an Agere Guardian
Patent as such term is defined in the Patent and Technology License Agreement.
1.5 "Agere Supply Agreement" means the Microelectronics Product
Purchase Agreement by and between the Parties executed on or about the date
hereof, as described in the Separation and Distribution Agreement, detailing the
supply of products, including MEMS Products, by Agere to Lucent.
1.6 "Background Technology" means all technology and all associated
intellectual property owned by a Party, including know-how, copyright, trade
secret, and other proprietary rights, other than Agere Patents and Lucent
Patents, brought by a Party into the JDC for use in the JDC and necessary for
use in developing Foreground Technology, including but not limited to the
technology identified in Appendix A as Lucent Background Technology and that
identified in Appendix B as Agere Background Technology. Notwithstanding the
foregoing, a Party's Background Technology hereunder shall not include any
underlying technology of such Party used to manufacture a design being brought
by such Party as Background Technology.
1.7 "Contractors" means personnel who are not employees of a Party but
are engaged by one Party consistent with the terms of this Agreement and with
the consent of the other Party to perform work in the JDC.
1.8 "Executive Board" means those individuals collectively directing
and providing oversight for the JDC. Initially, as of the Effective Date, the
Executive Board shall be comprised of, for Lucent, Mr. Rodney C. Alferness, Mr.
Gary P. Austin and Ms. Cherry A. Murray, and for Agere, Mr. Dennis M. Hill, Mr.
Thomas L. Koch and Mr. Raymond R. Nering.
1.9 "Foreground Technology" means any intellectual property (other than
Agere Patents and Lucent Patents), information, document, apparatus, method,
product, design, material, process, software, system, manufacturing technique or
other result developed by JDC Assignees in accordance with this Agreement.
Notwithstanding the foregoing, Foreground Technology will
-2-
<PAGE> 6
not include any Background Technology or any information developed in accordance
with Section 6.2(c)(ii) of this Agreement.
1.10 "General Availability" means the M-code date together with the
minimum volume level associated therewith as established for a particular MEMS
Product under a Project Letter.
1.11 "Information" means either Lucent Information or Agere Information
or both as the context so indicates.
1.12 "Intellectual Property Agreements" means the Patent Assignment,
Technology Assignment and Joint Ownership Agreement, and Patent and Technology
License Agreement, collectively.
1.13 "JDC" shall have the meaning specified in Section 2.1 herein.
1.14 "JDC Assignee(s)" means the Lucent JDC Assignees and the Agere JDC
Assignees, collectively.
1.15 "JDC Deliverable(s)" means any information, document, apparatus,
method, product, design, material, process, software, system, manufacturing
technique or other result developed within the JDC, under a Work Project or
provided as an output of the JDC in accordance with this Agreement. JDC
Deliverable will not include patents of any kind.
1.16 Joint Information" means any Foreground Technology, technical
information, method, apparatus, product, manufacturing technique, software,
design tools, documentation and any related information which is developed by
JDC Assignees in accordance with this Agreement. All Joint Information shall be
jointly owned (subject to the restrictions herein) between Lucent and Agere with
Lucent holding an undivided one-half (1/2) interest and Agere holding an
undivided one-half (1/2) interest. For the purposes of this Agreement, Joint
Information shall not include any information developed by a Party in accordance
with Section 6.2(c)(ii) hereto.
1.17 "Joint Invention" means any invention made by one or more of
Lucent's JDC Assignees or Technical Board members jointly with one or more of
Agere's JDC Assignees or Technical Board members while performing work
hereunder, which invention is first conceived or first actually reduced to
practice during performance under this Agreement, such inventions to be jointly
owned between Lucent and Agere with Lucent holding an undivided one-half (1/2)
interest and Agere holding an undivided one-half (1/2) interest.
1.18 "Joint MEMS Products" means any product jointly developed by the
Parties hereunder in accordance with Article 6.0.
1.19 "Joint Patents" means all patents of any type which issue from any
application filed with respect to any Joint Invention.
-3-
<PAGE> 7
1.20 "Lease Agreement" means the Divestiture Lease Agreement, dated as
of February 1, 2001, between Lucent, as landlord, and Agere, as tenant,
governing the use of space located at 600 Mountain Ave., Murray Hill, NJ 07974
including, but not limited to, the SFRL.
1.21 "Lucent Information" means informative material and technical
information, but not MEMS Technical Information, owned (in accordance with the
Intellectual Property Agreements) by Lucent or any of its Subsidiaries and
brought into the JDC by Lucent during the Term of this Agreement. Such
information includes any communication between Lucent and Agere which originally
is not in written or other tangible form, but is subsequently summarized by
Lucent in a writing delivered to Agere within thirty (30) days of the original
communication.
1.22 "Lucent JDC Assignee(s)" means the Lucent employees, agents or
Contractors assigned by Lucent to support the JDC in accordance with this
Agreement.
1.23 "Lucent Competitor" means any person or entity that competes with
Lucent in the provision of telecommunications systems, services, and equipment,
including the provision of software and optical communications systems.
1.24 "Lucent Patents" means every patent (including utility models, but
excluding design patents and design registrations) which is a GRL Patent as such
term is defined in the Patent and Technology License Agreement.
1.25 "MEMS" has the meaning assigned in Recital B hereof.
1.26 "MEMS Equipment" means the MEMS processing equipment, owned by
Agere as of the Effective Date and currently located in the SRFL, as set forth
in Appendix I hereto. The Parties agree upon the addition of any Agere-owned
MEMS processing equipment to the SFRL after the Effective Date hereof, Appendix
I shall be understood to be automatically amended to include such additional
MEMS processing equipment.
1.27 "MEMS Large Fabric Array(s)" means a MEMS switching fabric having
an array size larger than 64 x 64.
1.28 "MEMS Patents" means the issued patents, pending patent
applications and docketed invention submissions as specifically listed on
Appendix D of this Agreement. In accordance with the Patent Assignment and the
Patent and Technology License Agreement, the Parties have transferred or
licensed certain rights with respect to such MEMS Patents.
1.29 "MEMS Product(s)" means any product incorporating MEMS including,
but not limited to, MEMS Small Fabric Arrays, MEMS Large Fabric Arrays, add drop
multiplexers, dynamic gain equalizing filters (DGEF), variable optical
attenuators (single and arrays), and Optical Switch Modules.
1.30 "MEMS Small Fabric Array(s)" means a MEMS switching fabric having
an array size 64 x 64 or smaller.
-4-
<PAGE> 8
1.31 "MEMS Technical Information" means the information jointly owned
(pursuant to the Technology Assignment and Joint Ownership Agreement) by the
Parties having primary application to optical MEMS as specifically identified in
Appendix E.
1.32 "MEMS Technology" means technology related to Micro Electro
Mechanical Systems developed, modified and/or enhanced in accordance with this
Agreement including, but not limited to, the Joint Information, MEMS Technical
Information and Foreground Technology.
1.33 "Optical MEMS Technology Platform" means the technology platform
set forth in Appendix C hereto and any modification thereto in accordance with
Article 5.0 hereto.
1.34 "Optical Switch Module (OSM)" means a switching device
incorporating at least one MEMS Small Fabric Array or MEMS Large Fabric Array.
1.35 "Party" means either Lucent Technologies Inc. or Agere Systems
Inc. as the context so indicates and when used in the plural it shall mean both
such entities.
1.36 "Patent Assignment" means the two (2) patent assignment agreements
described in the Separation and Distribution Agreement detailing the assignment
of certain patent assets from Lucent to certain Subsidiaries of Agere in
connection with the separation of Agere from Lucent.
1.37 "Patent and Technology License Agreement" means the patent and
technology license agreement executed on or about the date hereof, as described
in the Separation and Distribution Agreement, detailing the licensing of certain
patent and technology assets between Agere and Lucent in connection with the
separation of Agere from Lucent.
1.38 "Project Letter" means the separate document to be issued pursuant
to this Agreement for each Joint MEMS Product development in accordance with
Article 6.0, which shall be executed by representatives of Lucent and Agere, and
which shall describe in detail the obligations, responsibilities, and mutual
agreement of Lucent and Agere in connection with the joint development of the
particular Joint MEMS Product. Unless otherwise mutually agreed by the Parties,
each Project Letter shall contain, at a minimum, the elements of information set
forth in Section 6.3 of this Agreement.
1.39 "Separation and Distribution Agreement" means the Separation and
Distribution Agreement executed by the Parties on or about the date hereof.
1.40 "Silicon Fabrication Research Line (SFRL)" means the silicon
fabrication facility located and operated in Lucent's facility at 600 Mountain
Ave., Murray Hill, New Jersey.
1.41 "Special Compensation Plan" means an optional compensation plan
which may be established by the Parties in accordance with Section 7.6 of this
Agreement.
-5-
<PAGE> 9
1.42 "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.
1.43 "Supply Failure" means any breach of or performance failure by
Agere of the Supply Agreement.
1.44 "Technical Board" means those individuals collectively directing
and providing technical oversight for the JDC. Initially, as of the Effective
Date, the Technical Board shall be comprised of, for Lucent, David Bishop, John
Gates and Randy Giles, and for Agere, Tseng-Chung Lee, Om Nalamasu and Khanh C.
Nguyen. Each Party may change any of their respective three (3) appointed
Technical Board members at their discretion and shall provide the other Party
with written notice indicating the name of the replacement Technical Board
member.
1.45 "Technology Assignment and Joint Ownership Agreement" means the
agreement by and between the Parties executed on or about the date hereof, as
described in the Separation and Distribution Agreement, detailing the assignment
of certain technology assets between Agere and Lucent in connection with the
separation of Agere from Lucent.
1.46 "Term" shall have the meaning specified in Section 3.1.
1.47 "Work Project(s)" mean specific programs of work reviewed and
approved by the Technical Board in accordance with Article 5.0 of this Agreement
or specified in a Project Letter.
ARTICLE 2.0 - OBJECTIVE OF THE AGREEMENT
2.1 The objective of this Agreement is to create a MEMS Joint Design
Center ("JDC") which will be jointly staffed, funded, and managed by Lucent and
Agere for their mutual benefit. The JDC will not be a separate legal entity.
2.2 The Parties will operate the JDC as a design center for the purpose
of designing MEMS Products and developing the MEMS Technology. In accordance
with this Agreement and the Agere Supply Agreement, MEMS Products may be
supplied by Agere to Lucent.
ARTICLE 3.0 - TERM OF THE AGREEMENT
-6-
<PAGE> 10
3.1 The initial term of this Agreement will be three (3) years
commencing on the Effective Date and expiring on January 31, 2004 (hereinafter
the "Term") unless earlier terminated in accordance with the provisions hereof.
ARTICLE 4.0 - FUNDING AND INTELLECTUAL PROPERTY RIGHTS
4.1 Funding
(a) The Parties agree to respectively allocate funding to the JDC in
the first year of the Term of this Agreement in accordance with the estimated
2001 operating budget as set forth in Appendix H hereto. In particular, as set
forth in Appendix H, Agere and Lucent shall allocate certain funding to the
joint activities set forth in Article 5.0 of this Agreement. The balance of the
allocated funding set forth in Appendix H shall be committed, if at all, by the
Parties pursuant to individual Project Letter(s) in accordance with Article 6.0
of this Agreement.
(b) Because the JDC will not be a separate legal entity, it will be run
as a cost center in accordance with this Agreement, and therefore, will not have
any profits or losses nor will it be permitted to incur any debts or have any
external financing to meet its operating requirements.
(c) Within thirty (30) days after the Effective Date of this Agreement,
Lucent and Agere will agree upon a detailed long-term overall operations plan
("Overall Operations Plan"), establishing qualitative and quantitative
parameters for the operation of the JDC. This Overall Operations Plan will be
used by the Executive Board in operating the JDC. The Overall Operations Plan
will be updated annually and will be approved at least sixty (60) days prior to
the beginning of the next operating year for the JDC.
(d) Unless otherwise provided herein or as otherwise agreed to by the
Parties, the yearly funding of the costs and expenses associated with the JDC
activities set forth in Article 5.0 will be shared in approximately the same
proportions between Lucent and Agere as set forth in Appendix H. To that end,
the Parties expect that their year-over-year funding of the JDC shall continue
at least at the levels specified in Appendix H. The respective budgets of the
Parties for operating the JDC will be reviewed by the Executive Board to ensure
sufficient and equitable levels of support by the Parties.
(e) In the event the JDC requires any additional and/or extraordinary
expenditure of funds, a request for such additional funding will be communicated
in writing by the Executive Board to the Parties.
(f) Each Party will bear their own legal and related costs and expenses
associated with establishing the JDC, except with respect to any extraordinary
costs and expenses associated with obtaining the approval, if any, of the United
States Government to operate the JDC, which costs and expenses will be shared
equally by the Parties provided there is mutual agreement to seek such approval.
-7-
<PAGE> 11
4.2 MEMS Technical Information, Background Technology and Foreground
Technology
(a) MEMS Technical Information. In accordance with the Technology
Assignment and Joint Ownership Agreement, the Parties jointly own the MEMS
Technical Information. The Parties agree to be further bound by the restrictions
herein with respect to such MEMS Technical Information.
(b) Background Technology.
(i) Each Party will make its Background Technology available to
the JDC in accordance with the mutually approved JDC Optical MEMS JDC Technology
Platform described in Article 5.0.
(ii) Each Party will retain all right, title, and interest in its
Background Technology.
(iii) Each Party grants to the other Party, a perpetual,
nonexclusive, nontransferable, royalty-free license under its Background
Technology, without the right to sublicense (except for sublicenses to a Party's
Subsidiaries and to third parties as provided in this Agreement) and without any
accounting for profits, to make, have made, use, sell, offer to sell, import or
lease MEMS Products and to develop JDC Deliverables in accordance with this
Agreement. The right to use a Party's Background Technology includes the right
to communicate (subject to confidentiality provisions as least as restrictive as
those in Article 10.0) portions of, and grant nonexclusive sublicenses to (of
the same scope as the licenses granted to such Party except for the granting of
any further sublicenses), such Background Technology to third parties. The
license under Background Technology in accordance with this Section includes the
right to reproduce and make derivative works of Background Technology to the
extent necessary for such other Party to make, have made, use, sell, offer to
sell, import or lease MEMS Products and to develop JDC Deliverables in
accordance with this Agreement. Nothing in this Section shall expand any of the
patent licenses set forth herein.
(iv) Each Party may bring any additional technology, owned by such
Party, into the JDC which may be useful or expeditious to meeting the JDC's
objectives, and such additional technology will be treated and licensed in the
same manner and to the same extent as for Background Technology unless the
Parties mutually agree in writing as to the different treatment of such
additional technology hereunder prior to such additional technology being
introduced into the JDC by the Party owning such additional technology.
(c) Foreground Technology. Subject to the restrictions set forth in
this Agreement, all Foreground Technology shall be jointly owned by the Parties
without an obligation to account to the other Party.
-8-
<PAGE> 12
4.3 MEMS Patents. In accordance with the Patent Assignment and the
Patent and Technology License Agreement, the Parties have transferred or
licensed certain rights with respect to the MEMS Patents.
4.4 Patent Rights and Licenses under Agere Patents and Lucent Patents
(a) The Parties hereto agree that the licenses necessary hereunder with
respect to Agere Patents and Lucent Patents shall be as set forth in the Patent
and Technology License Agreement.
(b) No Other Licenses. Neither Lucent nor Agere or any of their
Subsidiaries grants any license rights by implication, estoppel or otherwise,
other than the licenses herein expressly granted or in the Intellectual Property
Agreements.
4.5 Joint Information And Sole Inventions.
(a) Joint Information. The Parties will jointly own the Joint
Information without any accounting to the other Party, subject to the
restrictions set forth in this Agreement. All Joint Information hereunder,
except publicly known information, will be in written or other tangible form,
marked "Lucent Technologies-Agere Proprietary" and will be maintained
confidential by both Parties in accordance with Article 10.0, except as
otherwise provided herein.
(b) Publication Release. It is contemplated that the joint results of
the JDC (e.g., Joint Information) created under Article 5.0 will be jointly
released or published to third parties, however, the Parties each separately
reserve the right to release or publish such joint results. To that end, the
Parties agree that any release or publication related to the JDC (and results
therefrom) with respect to Article 5.0 shall be subject to the following: (i)
the Executive Board and Technical Board shall be furnished with a copy of any
proposed release or publication within a reasonable time period in advance of
submission of such material for release or publication; and (ii) the Executive
Board and Technical Board shall review such release or publication and may
require the removal of any Lucent Confidential Information, Agere Confidential
Information, Joint Information or any other information furnished or created
hereunder by a Party that may be included therein, and may request a delay of
such publication to permit for the filing of patent application(s). The Parties
agree that proper acknowledgement will be made for the contributions of each
Party with respect to any release or publication hereunder.
(c) Invention Disclosures. All invention disclosures, to be treated as
confidential information by the Parties in accordance with Article 10.0, of JDC
Assignees arising under the activities governed by Article 5.0 of this Agreement
and Project Letter(s) shall be reviewed by the Technical Board prior to
submission of such disclosure to the respective patent legal organizations of
the Parties.
(d) Sole Inventions. Subject to Section 4.5(c), either Party may file
patent applications for inventions conceived or made by its JDC Assignees during
the term of this Agreement, which
-9-
<PAGE> 13
inventions are not made jointly with JDC Assignees of the other Party, but
neither Party will be required to file such patent applications, secure any
patent or maintain any patent.
4.6 Joint Patents.
(a) Joint Patents will be jointly owned by the Parties. The Parties
will cooperate to handle prosecution and administration of the Joint Patents and
share all associated expenses equally as further set forth below.
(b) Duty to Cooperate. Both Parties agree that they will sign all
papers and do all acts (and in the case of Lucent, have Lucent JDC Assignees
sign all papers and do all acts, and in the case of Agere, have Agere JDC
Assignees sign all papers and do all acts) which may be necessary, desirable or
convenient to enable filing and prosecuting of all applications for patents on
inventions arising from work under this Agreement and to enable maintenance of
patents granted thereon. The Parties also agree to acquire from their respective
JDC Assignees who perform work in furtherance of this Agreement, such
assignments, rights and covenants as are necessary to assure that each Party
shall receive any and all licenses and rights it is entitled to acquire
hereunder.
(c) Assignment of Interest. Notwithstanding each Party's undivided
one-half (1/2) ownership interest in Joint Patents, during the Term of this
Agreement a Party shall not assign its entire interest, or any portion thereof,
in any Joint Patent to any third party (other than to a Party's Subsidiaries)
without the express written consent of the other Party. If any attempt is made
by one Party to assign its interest in any Joint Patent without the other
Party's consent, all of the one Party's interest in that Joint Patent which such
one Party attempts to assign shall automatically be extinguished, and the other
Party shall have sole ownership in that Joint Patent subject to the one Party
retaining the rights under such Joint Patent as set forth in Section 4.6(d).
(d) Rights of each Party under Joint Patents. Lucent and Agere shall
each have, under Joint Patents, the rights to make, have made, use, lease, offer
to sell, sell and import any products and services of their respective
businesses in which they are now or hereafter engaged. Such rights shall also
extend to Subsidiaries of Lucent and Agere.
(e) Patent prosecution and maintenance of Joint Patents. (i) The
Parties agree that all patent prosecution and maintenance decisions, both in the
United States and in foreign counties, shall be made jointly by the Parties,
after consultation. All expenses for prosecuting each Joint Patent and for issue
and maintenance of each Joint Patent shall be equally borne by the Parties. As
mutually agreed by the Parties, one Party shall retain primary responsibility
for prosecuting each patent application which is a Joint Patent hereunder. At a
Party's request, the other Party shall furnish any assistance that may be
necessary during the prosecution of such patent application.
(ii) In the case of a Joint Patent which is filed in a country
which requires the payment of taxes or annuities on a pending patent application
or on an issued patent, the Parties shall equally share in the payment of such
taxes and annuities for all Joint Patents.
-10-
<PAGE> 14
(iii) The responsible prosecuting Party (pursuant to Section
4.6(e)(i) above) will pay all prosecution expenses, taxes and annuities
associated with any Joint Patent, and within sixty (60) days from receiving
evidence of such payment, the other Party will reimburse such responsible Party
for fifty percent (50%) of such expenses, taxes and annuities.
(iv) Neither Party will be required, however, to incur any costs,
such as patent application costs, to which it has not agreed. If, after the
Parties meet and discuss matters relating to obtaining patent protection for
Joint Inventions, one Party does not want to pursue filing a patent application
on any Joint Inventions in any country, the other Party may independently pursue
patent protection of such Joint Invention in such country on behalf of that
Party only at that Party's sole expense. The Party who so pursues patent
protection in such country will be the sole owner of any resulting issued patent
in such country and will be entitled to all revenues derived by such Party
relating to the resulting issued patent, provided, however, that the other Party
will have a worldwide, perpetual, nontransferable, nonexclusive, royalty-free
license to make, have made, use, sell, offer to sell, import or lease products
or services of such other Party's businesses. In the event that one Party elects
not to continue prosecution of any pending patent application which is a Joint
Patent, or not to pay any tax or annuity due on a Joint Patent, such one Party
will offer to the other Party (and will effect an assignment if such offer is
accepted) a fee-free assignment of the one Party's one-half (1/2) interest in
such application or Joint Patent, subject to the transferring Party retaining a
non-exclusive, irrevocable, and fully transferable license under such
application or Joint Patent to make, have made, use, lease, offer to sell, sell,
and import any or all products and services of any type or kind.
(v) Neither Party may, without the express written consent of the
other Party, disclaim or dedicate any Joint Patent, or file for reissue or
reexamination, or undertake any other procedure or perform any act which may
affect the scope or validity of any of the Joint Patents, other than as required
in the course of normal prosecution under 4.6(e). The foregoing limitation on
filing for reissue or reexamination shall not, however, apply in the event that
one Party has instituted litigation with respect to one or more Joint Patents,
and the other Party has no litigation pending with respect to such one or more
Joint Patents.
(f) Licensing of Joint Patents to Third Parties. (i) Each Party shall
have the right to grant nonexclusive, personal, non-assignable licenses under
Joint Patents to any third party anywhere in the world. Each Party hereby
consents to the grant of such licenses by the other Party, and gives such
consent to the extent that such consent is necessary to effectuate the licenses
granted, and consents to the retaining by the licensing Party of all revenues,
royalties and benefits received for such licenses without accounting therefor to
the non-licensing Party.
(g) Enforcement of Joint Patents. (i) Subject to the provisions of this
Section, each Party shall have the right to bring any litigation against any
third party under any Joint Patent, without the consent of the other Party. The
other Party hereby consents to be joined as a party to the litigation, if
required.
(ii) Each Party shall notify the other, in writing, at least
thirty (30) days prior to institution of any litigation involving one or more
Joint Patents. The Parties agree to negotiate
-11-
<PAGE> 15
with each other, in good faith, in the event that either Party determines that
the institution of litigation is not in its best interests, and that there is a
preferable alternative available that would satisfy the interests of both
Parties. Following the giving of such notice, the Party receiving the notice
shall not (A) for the initial period of three (3) months following such
notification, and (B) during the course of the litigation and until its
conclusion by settlement or execution of judgment, license or attempt to license
any such Joint Patent to the third party identified in the notice or the third
party that is the subject of the litigation.
(iii) Unless otherwise agreed by the Parties, the Party initiating
any litigation involving any Joint Patent (A) shall promptly notify the other
Party of the initiation of such litigation, (B) shall have sole control of the
litigation, (C) shall incur all expenses and costs (including reasonable
expenses associated with requested participation of the joined other Party as
co-owner), and (D) shall retain any and all amounts recovered as a result of
such litigation without accounting therefor to the other Party.
(iv) Each Party shall promptly notify the other Party in the event
that any third party asserts by lawsuit, license discussions or otherwise any
invalidity claims as to any Joint Patent.
4.7 Covenant Not to License.
(a) Unless otherwise provided in this Agreement (e.g., Section
6.2(c)(ii)), or a Project Letter, or mutually agreed upon in writing, during the
Term of this Agreement and for a period of six (6) months after the expiration
of or any termination of this Agreement, Agere shall not have any right to
license, and will not license, the Joint Information, Foreground Technology,
MEMS Technical Information and/or the results from a JDC Deliverable to any
Lucent Competitor, provided, however, that Agere shall not be precluded from
manufacturing (or having made for Agere's own use and resale) and selling Agere
products or services which include Joint Information, Joint Patents, Foreground
Technology, MEMS Technical Information and/or the results from a JDC
Deliverable.
(b) Unless otherwise provided in this Agreement (e.g., Section
6.2(c)(ii)), or a Project Letter or mutually agreed upon in writing, during the
Term of this Agreement, Lucent shall not have any right to license, and will not
license, the Joint Information, Foreground Technology, MEMS Technical
Information and/or the results from a JDC Deliverable to any Agere Competitor,
provided, however, that Lucent shall not be precluded from manufacturing and
selling Lucent products or services which include Joint Information, Foreground
Technology, MEMS Technical Information and/or the results from a JDC Deliverable
or having such products or services made (or having any components or subsystems
made for use in such products or services) by any third party or having such
products or services made (or having any components or subsystems made for use
in such products or services) in the event of a Supply Failure (subject to the
terms of the Agere Supply Agreement). In addition, for a period of six (6)
months following the expiration or termination of this Agreement, Lucent shall
be restricted from licensing an Agere Competitor under such Joint Information,
Foreground Technology, MEMS Technical Information and/or the results from a JDC
Deliverable except to have a MEMS Product developed and/or manufactured by any
third party where for a period of six (6)
-12-
<PAGE> 16
months, as measured from the relevant third party's equivalent of General
Availability as defined hereunder, such third party shall be restricted to
supplying only Lucent with the relevant MEMS Product but only for such six month
period.
4.8 Sublicenses to Subsidiaries.
The grant of each license hereunder includes the right to grant sublicenses
within the scope of such license (but not the right to grant further
sublicenses) to a Party's Subsidiaries for so long as they remain its
Subsidiaries. Any and all licenses or sublicenses granted to Subsidiaries
pursuant to this Agreement may be made effective retroactively, but not prior to
the Effective Date hereof, nor prior to the sublicensee's becoming a Subsidiary
of such Party.
ARTICLE 5.0 - JDC OPTICAL MEMS TECHNOLOGY PLATFORM
5.1 One focus of the JDC is the joint research and advancement of the
Optical MEMS Technology Platform (hereinafter, for convenience, "the Technology
Platform").
5.2 Overall Technology Plan. All joint activities undertaken by the JDC
will be in accordance with the approved Technology Platform jointly developed
and agreed to by the Parties. An overall technical plan ("Overall Technical
Plan") consistent with the Technology Platform for the JDC will be prepared by
the Technical Board. Such Overall Technical Plan will be prepared, presented to
and agreed to by the Executive Board within thirty (30) days after the Effective
Date of this Agreement. All changes to the Technology Platform and Overall
Technical Plan shall be approved by the Executive Board.
5.3 Periodic Reviews. The Technical Board will meet at least on a
quarterly basis to discuss potential and existing Work Projects and JDC
Deliverables directed to the Technology Platform and modifications to the
Overall Technical Plan or Technology Platform. Written proposals for Work
Projects consistent with the Overall Technical Plan will be submitted by the JDC
Assignees to the Technical Board for approval. Such proposals shall be submitted
for potential Work Projects to the Technical Board thirty (30) days in advance
of any scheduled Technical Board meeting. Such written proposals shall (a)
provide a description of the work to be performed in sufficient detail to
determine whether to establish a Work Project; (b) provide a detailed budget
required to complete the Work Project including staffing requirements,
equipment, overhead allocations and the like; (c) identify a lead JDC Assignee
for the Work Project; (d) specify a time period of performance together with a
preliminary set of identified JDC Deliverables and completion date; and (e) any
other information deemed relevant by the submitter of such proposal for approval
purposes.
5.4 Joint Information. The Parties agree that any technical
information, method, apparatus, product, manufacturing technique, software,
design tools, documentation and any related information which is developed by
JDC Assignees in accordance with Work Projects, JDC
-13-
<PAGE> 17
Deliverables or any other output of the JDC directed to the Technology Platform
in accordance with this Article 5.0 shall be Joint Information.
ARTICLE 6.0 - PRODUCT DEVELOPMENT AND MANAGEMENT
6.1 In addition to the Technology Platform activities hereunder,
another focus of the JDC is the joint development of optical MEMS Products.
6.2 MEMS Product Development Decision Process.
(a) All development of optical MEMS Products under the JDC shall be
approved by the Executive Board in accordance with this Section.
(b) Written proposals for Work Projects directed to the development of
a particular optical MEMS Product may be submitted jointly by the Parties or
individually by a Party. In recognition of the critical resources required to
effectively operate the JDC, each Party agrees to keep such individual Party
submissions to a minimum level per calendar year. All such proposals for
potential Work Projects shall be submitted to the Executive Board thirty (30)
days in advance of any scheduled Executive Board meeting or at such other
mutually agreeable times. Such written proposals shall (a) provide a description
of the optical MEMS Product and work to be performed in sufficient detail to
determine whether to establish a Work Project; (b) provide a detailed budget
required to complete the Work Project including staffing requirements,
equipment, overhead allocations and the like; (c) identify a lead JDC Assignee
for the Work Project; (d) specify a time period of performance together with a
preliminary set of identified JDC Deliverables and completion date; and (e) any
other information deemed relevant by the submitter of such proposal for approval
purposes.
(c) (i) The Executive Board shall review each optical MEMS Product
development submission and determine whether joint development between the
Parties of the particular optical MEMS Product is desirable. If joint
development is approved in writing by the Executive Board, a separate Project
Letter shall be agreed to in writing by the Parties with respect to the
particular joint development in accordance with Section 6.3 below. If a Project
Letter is not executed by the Parties within ninety (90) days (or any extensions
thereto as mutually agreed by the Parties) of the date of the Executive Board's
written approval, each Party is free to pursue independent development of the
relevant MEMS Product outside of the JDC in accordance with Section 6.2(c)(ii),
as appropriate. After execution of the Project Letter between the Parties, the
particular optical MEMS Product shall be deemed a Joint MEMS Product in
accordance with the terms of this Agreement.
(ii) If joint development is not approved, the Party interested in
pursuing the development of the particular optical MEMS Product may do so on an
independent basis outside the constructs of the JDC provided that such activity
does not materially adversely impact such Party's JDC Assignees ability to
execute on JDC activities. Any intellectual property created under such Party
independent development shall vest solely in such Party. Independent product
-14-
<PAGE> 18
development by Lucent and Agere in accordance with this Section shall be subject
to the following:
(A) With respect to any independent product development
undertaken by a Party hereunder, such Party shall be free to
develop and manufacture such optical MEMS Product for itself
or develop such optical MEMS Product with any third party and
have such optical MEMS Product manufactured by a third party
and exercise all rights and licenses, including the granting
of licenses and/or sublicenses to any third parties consistent
with this Agreement, hereunder to the extent necessary for
such Party to develop and manufacture or have such optical
MEMS Product developed and manufactured by any third party. In
the event such Party elects to develop the optical MEMS
Product with a third party and has granted licenses and/or
sublicenses to any third party to enable such development and
manufacture, such Party agrees that for a period of six (6)
months (or some other period as mutually agreed to by the
Parties), as measured from the relevant third party's
equivalent of General Availability as defined hereunder, such
third party shall be restricted to supplying only such Party
with the relevant optical MEMS Product. After the expiration
of such time period of exclusive supply to such Party, the
third party may be fully licensed, at such Party's discretion,
in accordance with the rights and licenses hereunder to make
and sell the particular optical MEMS Product (including any
derivative or improvement thereof) on the commercial market to
any and all customers.
(B) Notwithstanding the foregoing, with respect to independent
product development undertaken by Lucent under this Section
6.2(c)(ii), in no event shall any third party engaged by
Lucent under Section 6.2(c)(ii) have access to the SFRL during
the Term of this Agreement with respect to such development
activity between Lucent and such third party unless previously
approved by Agere.
(d) Notwithstanding the above approval process, the Parties agree to
continue or enter into good faith negotiations after the Effective Date with
respect to specific Project Letters as set forth in Appendix J hereto.
6.3 Project Letters.
(a) In accordance with this Agreement, Lucent and Agere presently
contemplate the future execution by them of one or more written Project Letters
directed to the development of Joint MEMS Products. All transactions between
Lucent and Agere which relate to a Project Letter shall be covered by such
Project Letter and the terms of this Agreement.
-15-
<PAGE> 19
(b) Each duly executed Project Letter shall be deemed, upon its
execution, to include the terms of this Agreement. If the Project Letter
conflicts with the terms and conditions of this agreement, the terms and
conditions of the Project Letter shall control.
(c) Lucent and Agere agree that each Project Letter, at a minimum,
shall specify the information outlined below:
(i) A reference to this Agreement as "Lucent / Agere Joint
Design Center Operating Agreement, Effective February 1,
2001" and that such Project Letter is governed by such
Agreement;
(ii) The effective date of the Project Letter and the
contemplated term of the Project Letter;
(iii) A detailed description of the Joint MEMS Product and Work
Project(s) in terms of the scope of work for development
services to be performed, including a description of any
information, product and material that may be delivered
pursuant to specified JDC Deliverables;
(iv) A statement defining all JDC Deliverables, milestones and
their associated due dates. In accordance with the work
performed under this Agreement, the Parties shall develop
endpoint specifications for all Joint MEMS Products
detailing performance, quality and other material criteria
related thereto (collectively "End Point Specifications").
Such Endpoint Specifications shall be mutually agreed upon
and thereafter be used with respect to delivering and
acceptance of Joint MEMS Products in accordance with the
Supply Agreement.
(v) A statement that the Parties agree that any purchases of the
relevant Joint MEMS Product(s) by Lucent from Agere shall be
governed by terms set forth in the Supply Agreement
including any additional supply terms that may be specified
in the subject Project Letter. For example, a statement
defining any exclusivity periods between the Parties with
respect to supply and/or other material terms necessary for
the Supply Agreement;
(vi) A statement specifying the funding commitment (in U.S.
dollars) of each Party for completing the development of the
Joint MEMS Product(s). Such funding commitment to specify
with particularity each Party's funding associated with such
Party's JDC funding allocation in accordance with Section
4.1 hereunder and any additional funds committed by such
Party to the particular development;
(vii) The name, address, telephone and facsimile number of
Lucent's and Agere's representatives assigned to administer
the Work Project(s) and interface with the Executive Board
and/or Technical Board;
-16-
<PAGE> 20
(viii) The responsibility and period for delivery of the JDC
Deliverables within which the Parties shall accept or reject
the JDC Deliverables. The Parties agree that such period
will vary according to the needs of a particular Work
Project, but shall be kept as short as reasonably possible;
(ix) A statement defining the commencement and completion dates
of the Work Project(s) period; and
(x) Signatures of representatives authorized by Lucent and Agere
to execute the Project Letter.
6.4 Work Project Management
(a) The responsibilities of the JDC Assignees identified by the Parties
to administer the various Work Projects in accordance with executed Project
Letters shall include:
(i) Monitoring all Work Project activities, including processing
of information and other administrative details;
(ii) Taking the necessary action to achieve the milestone
objectives in accordance with the scheduled completion dates
in the Project Letters, including assigning identified
problems to responsible JDC Assignees for resolution;
(iii) Providing information to the Executive Board and/or
Technical Board for reviewing and approving any interim
reports for the Work Projects;
(iv) Providing information to the Executive Board and/or
Technical Board in the event that changes to the Work
Project(s) are required; and
(v) Preparing the format and reviewing and approving any final
reports of the Work Project(s) as may be described in the
relevant Project Letter or requested by the Executive Board
and/or Technical Board.
ARTICLE 7.0 - STRUCTURE AND STAFFING OF THE JDC
7.1 The JDC will be operated for the mutual benefit of Lucent and
Agere. The JDC will focus primarily on optical MEMS development activities in
accordance with this Agreement. Notwithstanding the foregoing, the Parties
recognize that the SFRL has other non-MEMS capabilities and may be used by Agere
for such non-MEMS related work on a reasonable basis, such basis not to
materially adversely impact the objectives of the JDC or performance of the
Parties hereunder.
7.2 JDC Assignees.
-17-
<PAGE> 21
(i) Unless otherwise agreed by the Parties and compensated accordingly,
Lucent and Agere will assign personnel to the JDC in overall comparable numbers
to the headcount levels as set forth in Appendix F and Appendix G, respectively.
Lucent shall make reasonable efforts to have the Lucent personnel identified in
Appendix F assigned as JDC Assignees but in no way guarantees the participation
of any of such identified (or any other) personnel in the JDC. Agere shall make
reasonable efforts to have the Agere personnel identified in Appendix G assigned
as JDC Assignees but in no way guarantees the participation of any of such
identified (or any other) personnel in the JDC. Failure by either Party to have
any specific employees assigned to the JDC shall not be considered a breach of
this Agreement in any way whatsoever.
(ii) The Parties recognize that the full (i.e., 100%) dedication of any
one JDC Assignee may not be possible, required, or in the best interest of such
JDC Assignee. As such, no JDC Assignee shall be required to work solely on JDC
activities but the individual JDC Assignee will use reasonable efforts to ensure
that JDC activities are not materially adversely impacted by participation in
other activities. The Parties agree to attempt to minimize the overall turnover
in the number of personnel each designates for assignment as JDC Assignees and
shall keep accurate records of the respective JDC Assignees of each Party during
the Term of this Agreement.
7.3 No JDC Employees. Any employees assigned to the JDC will be solely
the employee of his or her assigning Party, and the other Party will not be
considered to be a joint employer of such employee. There will be no employees
of the JDC because it is not a separate legal entity.
7.4 Wages and Benefits. Wages and benefits for each JDC Assignee will
be provided by the Party employing such JDC Assignee.
7.5 JDC Assignee Changes. Each Party will review with the other Party,
in advance, personnel changes, reassignments, or relocation applicable to the
JDC. It is anticipated by both Parties that certain key JDC Assignees will serve
for the initial term of the Agreement, unless the individual JDC Assignee opts
to unilaterally terminate his or her assignment to the JDC. The Parties expect
that personnel assignments to the JDC by the Parties will be for the initial
Term of this Agreement, but with the understanding that either Party will have
the option to provide for natural opportunities for shifting people out of the
JDC and back to other positions or growth positions. Criteria will be
established by the Executive Board for the termination of assignments of
personnel to the JDC based on non-performance.
7.6 Special Compensation Plan. If desirable, and mutually approved by
the Parties, the Parties agree to establish the Special Compensation Plan. This
optional compensation plan will include an opportunity for JDC Assignees to
receive an additional bonus to be paid by the JDC Assignee's employer, over and
above any bonus or other compensation paid by the JDC Assignee's employer in
accordance with such employer's standard employee compensation plan, in the
event the JDC meets or exceeds its objectives, as determined and agreed to by
the Parties on an annual basis while this Agreement is in effect. If so
established, each JDC Assignee will participate in the Special Compensation
Plan. The Special Compensation Plan will be structured to incent the personnel
of the JDC to provide JDC Deliverables and/or MEMS Products at a
-18-
<PAGE> 22
superior cost, quality, and schedule. The funding of the Special Compensation
Plan shall be mutually agreed to in writing by the Parties at the time of the
Plan's establishment. The Executive Board shall be responsible for
administration and approving all distributions of funds to JDC Assignees in
accordance with the Special Compensation Plan.
ARTICLE 8.0 - GOVERNANCE OF THE JDC
8.1 Executive Board Governs. The JDC will be governed by the Executive
Board. The following matters will require approval by the Executive Board, in
addition to any other matters required to be approved by the Executive Board by
other terms of this Agreement:
(i) Approval or amendment of the Technology Platform, Overall
Operations Plan or any Project Letter.
(ii) Any contract or commitment made by a Party for purposes of the
JDC which is not included in the approved Overall Operations Plan which
obligates an expenditure in excess of two hundred fifty thousand dollars
($250,000) individually or in the aggregate.
(iii) Adoption and amendment of personnel policies, manuals and the
Special Compensation Plan for JDC Assignees.
(iv) Selection of locations for the JDC's operations or expansion,
relocation or significant reduction of any JDC facility including the SFRL.
(v) Any significant action or transaction not in the ordinary
course of operation of the JDC.
(vi) Appointment of new members to the Technical Board, and
designation of the duties and authority of such Technical Board members.
(vii) Approval of the Overall Technical Plan and any modifications
thereto.
8.2 Executive Board Meetings. Meetings of the Executive Board will be
held monthly for the first year of this Agreement and thereafter as mutually
agreed. The Executive Board meetings may be conducted on either a face-to-face
basis or via video or telephone conference call, whichever is mutually agreed to
by the Parties at least ten (10) business days in advance of the scheduled
meeting. Special meetings may be called by any two members of the Executive
Board, one (1) from each Party, upon at least (i) ten (10) business days prior
notice for a face-to-face meeting or (ii) seventy-two (72) hours prior notice
for a telephonic or video conference meeting. The Executive Board may also act
without a meeting upon the unanimous written consent of all the Board members.
8.3 Quorum and Majority Vote. A quorum of the Executive Board will
consist of at least four (4) members, including at least two (2)
-19-
<PAGE> 23
members representing Agere and at least two (2) members representing Lucent. No
action may be taken at any meeting of the Executive Board in the absence of a
quorum. All actions of Executive Board and/or Technical Board shall require a
majority agreement. All actions and approvals will be reduced to writing and
distributed to the Parties.
8.4 In the event all of the members representing one of the Parties
fail to attend a meeting duly noticed and called, the members in attendance at
the next duly noticed and called meeting, which may be a special meeting called
as provided in Section 8.2, may take action regardless of whether a quorum is
present.
8.5 Deadlock. All deadlocks of the Executive Board and/or Technical
Board with respect to any issue, act, approval or other action necessary
hereunder shall be resolved in accordance with Article 22.0.
ARTICLE 9.0 - JDC OPERATIONS, LOCATION & SFRL
9.1 JDC Location. As of the Effective Date, the JDC will be physically
located initially at a site in the Murray Hill, New Jersey area. The Parties may
move the physical location of the JDC by mutual consent.
9.2 JDC Operations. The day-to-day operation of the JDC will be
directed by the Technical Board as supported by the Executive Board.
9.3 Common Services. Except for the provision of Landlord Services
(under and as defined in the Lease Agreement) with respect to which Agere shall
pay additional rent to Lucent as required therein, Lucent and Agere will work
together to define the most efficient ways to provide common support services to
the JDC at mutually agreed to costs. Common support services will be benchmarked
periodically against competitors and industry benchmarks to determine their
current competitiveness and will be reviewed with the Executive Board. Common
support services that are available from outside sources at competitive prices
may be obtained from such sources unless precluded by written policies of either
Party. Common support services that are not available from outside sources will
be included as a common expense and all expenses of the JDC are to be shared
between the Parties unless otherwise agreed to in writing (subject to the terms
of the Lease Agreement).
9.4 Facilities. The Parties, by mutual agreement and in accordance with
the Lease Agreement, will utilize the building, facilities, and infrastructure
and will manage the operations which support the JDC with sufficient capacity to
meet the objectives of the JDC. Each Party shall provide these assets as part of
that Party's financial commitments to the JDC as determined in Section 4.1.
Notwithstanding the foregoing, pursuant to the Lease Agreement, Lucent shall
retain any and all management control over the space leased under the Lease
Agreement.
9.5 SFRL Location and Equipment Purchase Option.
-20-
<PAGE> 24
(i) Unless otherwise mutually agreed by the Parties and subject to the
Lease Agreement, the SFRL shall remain at its current location in Murray Hill,
New Jersey and Agere shall be responsible for the day-to-day operation and
staffing of the SFRL. Each Party shall have equal access to the SFRL for
carrying out the JDC activities hereunder.
(ii) In the event Agere desires to remove a particular piece of MEMS
Equipment during the Term of this Agreement or upon expiration of this Agreement
or upon Agere's abandonment of the SFRL, Agere shall provide Lucent with written
notice of Agere's intent on removing such MEMS Equipment, such notice to be
provided three (3) months in advance of removal, and Lucent shall have an option
to purchase such MEMS Equipment prior to removal from SFRL at a purchase price
to be determined by Agere. Such purchase price to be determined taking into
account factors including, but not limited to, replacement costs, removal costs
and/or installation costs. If Lucent exercises the option to purchase the MEMS
Equipment, Lucent shall remit payment to Agere within a period to be mutually
agreed upon between the Parties.
9.6 Lucent-Owned Flip Chip Bonder
Lucent agrees that Agere shall have access to a certain Lucent-owned
flip-chip bonder apparatus, i.e., M8 alignment system from RD Automation,
currently located in Lucent's Murray Hill facility but external to the SFRL,
solely with respect to performance of the joint activities of the Parties under
Section 5.0 and Section 6.0 of this Agreement. In addition, Lucent expects to
install a M10 alignment system from RD Automation as a replacement to the
existing M8 alignment system in calendar 2001. If so replaced, Agere shall have
access to the M10 alignment system solely with respect to performance of the
joint activities of the Parties under Section 5.0 and Section 6.0 of this
Agreement. Access, under this Section, to this Lucent flip-chip bonder apparatus
shall be considered as part of Lucent's financial commitments to the JDC as
determined in Section 4.1. Notwithstanding the foregoing, the Parties recognize
that such apparatus has other non-JDC capabilities and may be used by Lucent for
such non-JDC related work on a reasonable basis, such basis not to materially
adversely impact the objectives of the JDC or performance of the Parties
hereunder.
9.7 The Parties agree that any inconsistencies or conflicts arising
between the Lease Agreement and this Agreement with respect to the leased space
under the Lease Agreement, the payment of rent and additional rent, or
facilities issues associated with the JDC and/or the SFRL are to be resolved in
favor of the Lease Agreement.
ARTICLE 10.0 - FURNISHING AND USE OF INFORMATION
10.1 Furnishing of Information to Agere.
Lucent will, during the Term of this Agreement, as mutually agreed upon by
Lucent and Agere, furnish Lucent Information to Agere. With the delivery of such
Lucent Information, Agere will also be furnished a list which identifies the
Lucent Information delivered. The first such list shall include the Lucent
Background Technology as set forth in Appendix A and may be revised
-21-
<PAGE> 25
from time to time by mutual agreement of the Parties hereto. Lucent and Agere
will promptly notify each other of any inaccuracies believed present in such
list or any amendments thereto. All Information specified on such list or
amended list will be deemed to be a part of Lucent Information with the
following qualification: if, within thirty (30) days after receipt of the list
or any amended list, Agere gives Lucent written notice specifying particular
information identified therein which was not actually received, such specified
information will be deemed deleted from the list or amended list until such
Information is actually received by Agere.
10.2 Furnishing of Information to Lucent.
Agere will, during the Term of this Agreement, as mutually agreed upon by Agere
and Lucent, furnish Agere Information to Lucent. With the delivery of such Agere
Information, Lucent will also be furnished a list which identifies Agere
Information delivered. The first such list shall include the Agere Background
Technology as set forth in Appendix B and may be revised from time to time by
mutual agreement of the Parties hereto. Agere and Lucent will promptly notify
each other of any inaccuracies believed present in such list or amendments
thereto. All Information specified on such list or amended list will be deemed
to be a part of Agere Information with the following qualification: if, within
thirty (30) days after receipt of such list or any amended list, Lucent gives
Agere written notice specifying particular information identified therein which
was not actually received, such specified information will be deemed deleted
from the list or amended list until such Information is actually received by
Lucent.
10.3 Agere and Lucent agree:
(a) except as otherwise provided herein, that Agere will hold all
Lucent Information, MEMS Technical Information and Joint Information and Lucent
will hold all Agere Information, MEMS Technical Information and Joint
Information in confidence, if it is in writing or other tangible form and
clearly marked as proprietary or confidential when disclosed to the receiving
Party or, if not in tangible form, only if summarized in a writing so marked and
delivered to the receiving Party within thirty (30) days of such disclosure, for
a period of five (5) years after the date of disclosure, and neither Party will
make any disclosure of any or all of such other Party's Information to anyone,
except to its JDC Assignees, employees, agents or Contractors who have a need to
know and to any others to whom such disclosure may be expressly authorized
hereunder and is necessary to implement the use authorized hereunder, and that
each Party will appropriately notify each person to whom any such disclosure is
made that such disclosure is made in confidence and will be kept in confidence
by such person; provided that neither Party will have any confidentiality
obligations with respect to any portions of Lucent Information, Agere
Information, MEMS Technical Information or Joint Information, if any, (a) which
were previously known to the receiving Party free of any obligations to keep
confidential; or (b) which have become generally known to the public, provided
that such public knowledge was not the result of any act attributable to the
receiving Party; or (c) which the disclosing Party otherwise explicitly agrees
in writing need not be kept confidential; or (d) which is rightfully received
from a third party without any obligations regarding confidentiality; or (e)
which is independently developed by the receiving Party; or (f) which is
requested pursuant to a judicial or governmental request, requirement or order
under law, provided that the receiving Party
-22-
<PAGE> 26
provides the disclosing Party with sufficient prior notice in order to contest
such request, requirement or order or seek protective measures.
(b) that the receiving Party will not, without the disclosing Party's
express written permission, make or have made, or permit to be made, more copies
of any of the furnished Lucent Information or Agere Information than are
necessary for its use hereunder, or associated with subsequent design,
manufacturing or marketing efforts contemplated hereunder, and that each such
copy shall contain the same proprietary notices or legends which appear on the
furnished Lucent Information or Agere Information being copied;
(c) that all Lucent Information will remain the property of Lucent, and
upon termination of this Agreement, Agere will, at Lucent's written request,
immediately cease all use of Lucent Information and will, as directed by Lucent,
promptly destroy or deliver to Lucent each and every part specified by Lucent of
Lucent Information then under Agere's or its Subsidiaries' control, except for
that Information specifically needed for support of MEMS Products and for
utilization of the Joint Information; and
(d) that all Agere Information will remain the property of Agere, and
upon termination of this Agreement Lucent will, at Agere's written request,
immediately cease all use of Agere Information, and will, as directed by Agere,
promptly destroy or deliver to Agere each and every part specified by Agere of
Agere Information then under Lucent's or its Subsidiaries' control, except for
that Information specifically needed for support of MEMS Products and for
utilization of the Joint Information.
10.4 Neither Party will be liable for the inadvertent or accidental
disclosure of MEMS Technical Information, Joint Information or Information
received from the other Party under this Agreement, provided such disclosure
occurs despite the exercise of a reasonable degree of care which is at least as
great as the care such Party normally takes to preserve its own proprietary
information of a similar nature; and provided further, however, that the Party
permitting any material unauthorized disclosure will use its best efforts to
stop any material unauthorized disclosure or use and to mitigate any damage
caused thereby.
10.5 This Agreement will prevail in the event of any conflicting terms
or legends which may appear on Lucent Information, Agere Information, MEMS
Technical Information, Joint Information or on any other information exchanged
hereunder.
10.6 Lucent believes that the Lucent Information is true and accurate,
and Agere believes that the Agere Information is true and accurate, but neither
Lucent nor Agere nor their respective Subsidiaries will be held to any liability
for errors or omissions therein.
ARTICLE 11.0 - NOTHING CONSTRUED
11.1 Except as otherwise provided herein, in a Project Letter, or in
the Agere Supply Agreement, neither the execution of this Agreement nor anything
in it or in any Lucent
-23-
<PAGE> 27
Information, Agere Information, MEMS Technical Information, or Joint Information
will be construed as providing or implying any arrangement or understanding that
either Party or its Subsidiaries will make any purchase from the other Party or
its Subsidiaries.
11.2 Nothing in this Agreement shall be deemed or construed by the
Parties or any third party as creating the relationship of principal and agent,
partnership or joint venture between the Parties, it being understood and agreed
that no provision contained herein, and no act of the Parties, shall be deemed
to create any relationship between the Parties other than the relationship of
independent contractor.
ARTICLE 12.0 - COMPLIANCE WITH RULES AND REGULATIONS AND INDEMNIFICATION
12.1 Agere's personnel will, while on any location of Lucent in
connection with the work undertaken under this Agreement, comply with Lucent's
rules and regulations with regard to safety and security. Lucent will inform
such personnel of such rules and regulations. Agere will have full control over
such personnel and will be entirely responsible for their complying with
Lucent's rules and regulations. Agere agrees to indemnify and save Lucent
harmless from any claims or demands, including the costs, expenses and
reasonable attorneys' fees incurred on account thereof, that may be made by (i)
anyone for injuries to persons or damage to property to the extent they result
from the willful misconduct or negligence of Agere's personnel; or (ii) Agere's
personnel based on Worker's Compensation or any other employment related claims
to the extent such claims are based on acts of Agere. Agere agrees to defend
Lucent, at Lucent's request, against any such claim or demand.
12.2 Lucent's personnel will, while on any location of Agere in
connection with the work undertaken under this Agreement, comply with Agere's
rules and regulations with regard to safety and security. Agere will inform such
personnel of such rules and regulations. Lucent will have full control over such
personnel and will be entirely responsible for their complying with Agere's
rules and regulations. Lucent agrees to indemnify and save Agere harmless from
any claims or demands, including the costs, expenses and reasonable attorneys'
fees incurred on account thereof, that may be made by (i) anyone for injuries to
persons or damage to property to the extent they result from the willful
misconduct or negligence of Lucent's personnel; or (ii) Lucent's personnel based
on Worker's Compensation or any other employment related claims to the extent
such claims are based on acts of Lucent. Lucent agrees to defend Agere, at
Agere's request, against any such claim or demand.
12.3 Subject to Sections 12.1 and 12.2, each Party will be responsible
for its own expenses incurred by it and its employees hereunder, including, but
not limited to, travel, lodging, entertainment, employees' salary, wages or
other compensation, together with each Party's respective federal, state,
municipal or other taxes. Neither Party shall incur or assume any expense on
behalf of the other Party without prior written consent from the Party to be
charged.
-24-
<PAGE> 28
12.4 Lucent and Agere will, at all times, retain the administrative
supervision of their respective personnel.
ARTICLE 13.0 - NONSOLICITATION
13.1 Throughout the Term of this Agreement and for a period of six (6)
months or any period that may be specified in the Separation and Distribution
Agreement, whichever is longer, after the expiration or termination of this
Agreement, the Parties agree that neither Party will knowingly solicit any JDC
Assignees of the other Party engaged in work at the JDC, unless such JDC
Assignees have previously terminated their employment with the Party for a
period of nine (9) months. The term "solicit" does not include advertisements,
generalized employment searches, and internal job posting systems that are not
specifically directed to employees of the other Party.
ARTICLE 14.0 - SURVIVAL
14.1 Those obligations of Agere and Lucent under this Agreement which
of their very nature should survive in order to protect the various interests of
the Parties will survive and continue after any termination under this
Agreement.
ARTICLE 15.0 - TERMINATION
15.1 This Agreement may be terminated prior to expiration of the Term
or any extensions thereof by: (i) written consent of both Parties, or (ii)
termination in accordance with this Article 15.0.
15.2 For Convenience. Either Party may terminate this Agreement for
convenience upon ninety (90) days written notice to the other Party. By way of
example but not limitation, in the event one Party undergoes a change a control
(as defined in the Intellectual Property Agreement) the other Party not
experiencing such change in control may terminate this Agreement for
convenience.
15.3 Agere Breach. If Agere fails to fulfill one or more of its
material obligations under this Agreement, Lucent may, upon its election and in
addition to any other remedies that it may have, at any time terminate this
Agreement by not less than sixty (60) days written notice to Agere specifying
any such breach, unless within the period of such notice all breaches specified
therein have been remedied to the non-breaching Party's reasonable satisfaction.
If the breach is not one which is capable of being cured within sixty (60) days
and the breaching Party has commenced to cure and remedy the breach within such
time and continues to do so diligently and in good faith, then the breaching
Party shall be granted an extension for a reasonable period of time at the
discretion of the non-breaching Party.
-25-
<PAGE> 29
15.4 Lucent Breach. If Lucent fails to fulfill one or more of its
material obligations under this Agreement, Agere may, upon its election and in
addition to any other remedies that it may have, at any time terminate this
Agreement by not less than sixty (60) days written notice to Lucent specifying
any such breach, unless within the period of such notice all breaches specified
therein have been remedied to the non-breaching Party's reasonable satisfaction.
If the breach is not one which is capable of being cured within sixty (60) days
and the breaching Party has commenced to cure and remedy the breach within such
time and continues to do so diligently and in good faith, then the breaching
Party shall be granted an extension for a reasonable period of time at the
discretion of the non-breaching Party.
15.5 Termination will not excuse either Party from any obligations
incurred hereunder prior to the date of termination. For example, the Parties
agrees that in the event of any termination hereunder, all existing but
uncompleted Work Projects directed to approved Joint MEMS Product development
(pursuant to Article 6.0) will continue until completion or ninety (90) days
from the date of the termination notice, whichever is earlier. In addition, with
respect to completed Joint MEMS Product development, Agere agrees to supply such
Joint MEMS Products in accordance with Lucent's requirements until such time
that Lucent has established a qualified alternate source of such Joint MEMS
Products but in no event for a period longer than twelve (12) months from the
date of the termination notice.
15.6 Any termination under this Agreement shall not affect the rights,
duties, or obligations of the Parties under any other agreement existing between
the Parties at the time of such termination.
15.7 Upon expiration or termination of this Agreement, each Party will
immediately return all proprietary Information originated and owned solely by
the other Party, except for that which is necessary for support of MEMS Products
or for utilization of the Joint Information.
15.8 Any termination of licenses and rights of a Party under the
provisions of this Article shall not affect that Party's licenses, rights and
obligations with respect to any products or services sold prior to such
termination and shall not affect the rights of any third party to whom such
product or service was sold or transferred prior to such termination. In
addition, in the event of a termination for material breach, the rights and
licenses granted to the non-breaching Party hereunder shall survive and continue
after any termination of this Agreement. Except for termination for material
breach, the Parties shall retain all rights and licenses hereunder in the event
of any termination of this Agreement.
ARTICLE 16.0 - NO WARRANTY, DISCLAIMER AND LIMITATION OF LIABILITY
16.1 FOR THE PURPOSES OF THE JDC, LUCENT AND ITS SUBSIDIARIES MAKE NO
REPRESENTATIONS OR WARRANTIES, EXPRESSLY OR IMPLIEDLY. BY WAY OF EXAMPLE BUT NOT
OF LIMITATION, LUCENT AND ITS SUBSIDIARIES MAKE NO REPRESENTATIONS OR WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF
LUCENT'S INFORMATION OR JOINT INFORMATION OR ANY OTHER INFORMATION
-26-
<PAGE> 30
HEREUNDER WILL NOT INFRINGE ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT.
LUCENT AND ITS SUBSIDIARIES SHALL NOT BE HELD TO ANY LIABILITY WITH RESPECT TO
ANY CLAIM BY AGERE OR ANY THIRD PARTY ON ACCOUNT OF, OR ARISING FROM, THE USE OF
LUCENT'S INFORMATION OR JOINT INFORMATION OR ANY OTHER INFORMATION HEREUNDER.
16.2 FOR THE PURPOSES OF THE JDC, AGERE AND ITS SUBSIDIARIES MAKE NO
REPRESENTATIONS OR WARRANTIES, EXPRESSLY OR IMPLIEDLY. BY WAY OF EXAMPLE BUT NOT
OF LIMITATION, AGERE AND ITS SUBSIDIARIES MAKE NO REPRESENTATIONS OR WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF
AGERE'S INFORMATION OR JOINT INFORMATION OR ANY OTHER INFORMATION HEREUNDER WILL
NOT INFRINGE ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT. AGERE AND ITS
SUBSIDIARIES SHALL NOT BE HELD TO ANY LIABILITY WITH RESPECT TO ANY CLAIM BY
LUCENT OR ANY THIRD PARTY ON ACCOUNT OF, OR ARISING FROM, THE USE OF AGERE'S
INFORMATION OR JOINT INFORMATION OR ANY OTHER INFORMATION HEREUNDER.
16.3 NEITHER PARTY SHALL BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR
CONSEQUENTIAL LOSS OR DAMAGE, INCLUDING LOST PROFITS OR LOST REVENUE ARISING OUT
OF THIS AGREEMENT, WHETHER ARISING OUT OF BREACH OF WARRANTY, BREACH OF
CONTRACT, NEGLIGENCE, STRICT TORT LIABILITY OR OTHERWISE.
ARTICLE 17.0 - EXPORT CONTROL
17.1 Each Party hereby assures the other 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, D.C. 20230, United States of
America, if required:
(i) 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, Serbia, Sudan, or Syria; or
(ii) export to Country Groups D:1 or E:2, or to Iran, Iraq,
Serbia, Sudan, or Syria, the direct product (including
processes and services) of the information or software; or
(iii) 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, Serbia, Sudan, or Syria, the
direct product of the plant or major component.
-27-
<PAGE> 31
This assurance will be honored even after the expiration or termination of this
Agreement.
ARTICLE 18.0 - PUBLICITY
18.1 The terms, but not the existence, of this Agreement shall be treated as
confidential information by the Parties, and neither Party shall disclose such
terms to any third party without the prior written consent of the other Party;
provided however, that each Party may represent to third parties that such Party
is licensed for the products and patents as provided by this Agreement. This
Section 18.1 shall not prevent a Party from making disclosures reasonably
required by law or as required by a stock exchange, provided that the disclosing
Party takes all reasonable steps to minimize such disclosure and provides prior
written notice to the other Party of any such intended disclosure.
18.2 Each Party will submit to the other all proposed advertising and publicity
material relating to the disclosure of this Agreement or the activities
undertaken in the JDC.
ARTICLE 19.0 - TRADEMARKS AND TRADENAMES
19.1 Nothing in this Agreement shall be construed as conferring upon either
Party or its Subsidiaries any right to include in advertising, packaging or
other commercial activities related to any product or service, any reference to
the other Party (or any of its Subsidiaries), its trade names, trademarks or
service marks in a manner which would be likely to cause confusion or to
indicate that such product or service is in any way certified by the other Party
hereto or its Subsidiaries.
ARTICLE 20.0 - NOTICES
20.1 All notices required or permitted under this Agreement shall be in writing
and shall be deemed given: (i) when delivered personally; (ii) when sent by
confirmed telex or facsimile; (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (iv)
one (1) day after deposit with a commercial overnight carrier, with written
verification of receipt. All communications will be sent to the addresses set
forth below. Either Party may change its address by giving notice pursuant to
this section.
20.2 In addition, the Parties have specifically assigned the following persons
for technical matters relating to this Agreement. Also, the following named
persons shall be the persons authorized for furnishing and receiving Information
pursuant to this Agreement. Either Party may, by written notice to the other
Party, substitute another person for the person herein named.
For Lucent: Technical Matters: David Bishop
Lucent Technologies Inc.
600 Mountain Ave.
Murray Hill, NJ 07974
-28-
<PAGE> 32
Real Estate Matters: Lucent Technologies Inc.
475 South St.
Morristown, NJ 07967
Attn: Contract Administrator
With copy to: Corporate Counsel - Real Estate
Lucent Technologies Inc.
475 South St.
Morristown, NJ 07967
All Other Matters: Josephine Yuen
Lucent Technologies Inc.
600 Mountain Ave.
Murray Hill, NJ 07974
With a copy to: Cherry Murray
Lucent Technologies Inc.
600 Mountain Ave.
Murray Hill, NJ 07974
Contract Administration
Intellectual Property Business
Lucent Technologies Inc.
184 Liberty Corner Road
Liberty Corner, NJ 07938
For Agere: Technical Matters: Tom Koch
Agere Systems Inc.
9999 Hamilton Blvd.
Breinigsville, PA 18031
Real Estate Matters: Agere Systems Inc.
555 Union Blvd.
Allentown, PA 18109
Attn: Director - Worldwide
Facilities
With copy to: Corporate Counsel - Real Estate
Agere Systems Inc.
555 Union Blvd.
Allentown, PA 18109
All Other Matters: Ray Nering
Agere Systems Inc.
-29-
<PAGE> 33
9999 Hamilton Blvd.
Breinigsville, PA 18031
With a copy to: Gerard deBlasi
Agere Systems Inc.
Law Department
2 Oak Way
Berkeley Heights, NJ 07922
ARTICLE 21.0 - MISCELLANEOUS PROVISIONS
21.1 Integration. The terms and conditions contained in this Agreement and its
attachments supersede all prior oral or written understandings between the
Parties and together with the Intellectual Property Agreements, Project Letters,
the Overall Operations Plan, and the Overall Technical Plan, and any subsequent
plans approved by the Executive Board, will constitute the entire Agreement
between the Parties with respect to the subject matter of this Agreement.
Neither of the Parties will be bound by any warranties, understandings or
representations with respect to the subject matter hereof other than as
expressly provided herein. This Agreement will not be modified or amended except
by a writing signed by Lucent and Agere.
21.2 Nonassignability.
(a) The Parties hereto have entered into this Agreement in contemplation of
personal performance, each by the other, and intend that the rights granted
hereunder to a Party and such Party' obligations not be extended to entities
other than such Party's Subsidiaries without the other Party's express prior
written consent.
(b) Notwithstanding the foregoing, each Party's rights, title, interest and
obligations under this Agreement, and any rights granted to each Party hereunder
may be assigned only to any direct or indirect successor to the business of such
Party as the result of any internal reorganization, which successor shall
thereafter be deemed substituted for such Party as the Party hereof, effective
upon such assignment; 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.
(c) Notwithstanding the foregoing, either Party may assign all or part of its
rights and obligations to any successor in interest of all or substantially all
of the assets of its business.
21.3 Force Majeure. Neither Party shall be liable for delays in delivery or
performance when caused by any of the following which are beyond the actual
control of the delayed Party: (i) acts of God, (ii) acts of the public enemy,
(iii) acts or failure to act by the other Party, (iv) acts of civil or military
authority, (v) governmental priorities, strikes or other labor disturbances,
(vi) hurricanes, (vii) earthquakes, (viii) fires, (ix) floods, (x) epidemics,
(xi) embargoes, (xii) war, (xiii) riots, (xiv) delays in transportation, and
(xv) loss or damage to goods in transit.
-30-
<PAGE> 34
21.4 Choice of Law. The Parties hereto desire and agree that the laws of the
State of New York, exclusive of its conflict of laws provisions, will apply in
any dispute or controversy arising with respect to this Agreement.
21.5 Headings. All section headings, including those in the Appendices, are for
convenience purposes only and will in no way affect, or be used, in
interpretation of this Agreement.
21.6 Waiver. No failure, delay, relaxation or indulgence on the part of either
Party in exercising any power or right conferred upon such Party under the terms
of this Agreement will operate as a waiver of such power or right nor will any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right under this
Agreement.
21.7 Releases Void. Neither Party shall require waivers or releases of any
personal rights from representatives of the other in connection with visits to
its premises and both Parties agree that no such releases or waivers shall be
pleaded by them or third persons in any action or proceeding.
21.8 Power To Sign. Agere and Lucent warrant that their respective
representatives signing this Agreement have full power and proper authority to
sign this Agreement and so bind the Parties.
21.9 Severability. If any term, clause, or provision of this Agreement shall be
judged to be invalid, the validity of any other term, clause, or provision will
not be affected; and such invalid term, clause, or provision will be deemed
deleted from this Agreement.
21.10 Auditor. In the event the Parties should have need for the services of any
auditors to monitor or assess the financial activities of the JDC, then the
current auditors for each Party hereto will mutually agree upon the selection of
an auditor to audit the financial activities of the JDC.
ARTICLE 22.0 - DISPUTE RESOLUTION
22.1 It is the intent of the Parties to use their respective reasonable best
efforts to resolve expeditiously any dispute, controversy or claim between or
among them with respect to the matters covered hereby that may arise from time
to time on a mutually acceptable negotiated basis. In furtherance of the
foregoing, in the event of a dispute between the Parties, or individual members
of the Executive Board or Technical Board, or on any matter requiring the mutual
approval of their respective Executive Board members or each other, the issue
first will be escalated to the complete Executive Board for attempted resolution
within a reasonable period of time.
22.2 Either Party may initiate dispute resolution by notice to the other Party.
Such notice will be without prejudice to the invoking Party's rights to any
other remedy permitted hereunder.
-31-
<PAGE> 35
The Parties will use commercially reasonable efforts to arrange meetings or
telephone conferences, as needed, at mutually convenient times and places, to
facilitate negotiations between the Parties.
22.3 In the event that the Parties fail or are unable to resolve a dispute
between them after exhausting the resolution process of Section 22.1, the
Parties agree to attempt to further resolve the dispute pursuant to the
escalation provision set forth in Section 22.4 below.
22.4 (a) In furtherance of the foregoing, after exhausting the provisions of
Sections 22.1-22.3, any Party involved in a dispute, controversy or claim
hereunder may deliver a notice (an "Escalation Notice") demanding an in person
meeting involving representatives of the Parties at a senior level of management
of the Parties (or if the Parties agree, of the appropriate strategic business
unit or division within such entity). A copy of any such Escalation Notice shall
be given to the General Counsel, or like officer or official, of each Party
involved in the dispute, controversy or claim (which copy shall state that it is
an Escalation Notice pursuant to this Agreement). Any agenda, location or
procedures for such discussions or negotiations between the Parties may be
established by the Parties from time to time; provided, however, that the
Parties shall use their reasonable best efforts to meet within 30 days of the
Escalation Notice.
(b) If the Parties are not able to resolve the dispute, controversy or claim
through the escalation process referred to above, then the matter shall be
referred to mediation. The Parties shall retain a mediator to aid the Parties in
their discussions and negotiations by informally providing advice to the
Parties. Any opinion expressed by the mediator shall be strictly advisory and
shall not be binding on the Parties, nor shall any opinion expressed by the
mediator be admissible in any other proceeding. The mediator may be chosen from
a list of mediators previously selected by the Parties or by other agreement of
the Parties. Costs of the mediation shall be borne equally by the Parties
involved in the matter, except that each Party shall be responsible for its own
expenses. Mediation shall be a prerequisite to the commencement of any action by
either Party.
22.5 Court Actions
(a) In the event that any Party, after complying with the provisions set forth
in Sections 22.1-22.4 above, desires to commence an Action (as such term is
defined in the Separation and Distribution Agreement), such Party may submit the
dispute, controversy or claim (or such series of related disputes, controversies
or claims) to any court of competent jurisdiction.
(b) Unless otherwise agreed in writing, the Parties will continue to provide
service and honor all other commitments under this Agreement and each Ancillary
Agreement (as such term is defined in the Separation and Distribution Agreement)
during the course of dispute resolution pursuant to the provisions of this
Article with respect to all matters not subject to such dispute, controversy or
claim.
-32-
<PAGE> 36
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in duplicate originals by their duly authorized representatives on the
respective dates entered below.
LUCENT TECHNOLOGIES INC. AGERE SYSTEMS INC.
By: /s/ DANIEL P. MCCURDY By: /s/ MARK R. PINTO
---------------------------- -----------------------------
Daniel P. McCurdy Mark R. Pinto
President, Intellectual Property Business Platform Technology VP and CTO
Date: January 30, 2001 Date: January 30, 2001
---------------- ----------------
LUCENT TECHNOLOGIES INC.
On behalf of its Bell Laboratories Division
By: /s/ WILLIAM F. BRINKMAN
---------------------------------
William F. Brinkman
Vice President, Research
Date: January 30, 2001
----------------
THIS AGREEMENT DOES NOT BIND OR OBLIGATE ANY PARTY
IN ANY MANNER UNLESS DULY EXECUTED BY AUTHORIZED
REPRESENTATIVES OF ALL PARTIES
33