EXHIBIT 10.69
SETTLEMENT AGREEMENT
This Settlement Agreement ("Settlement Agreement") is effective as of
September 13, 2004 (the "Effective Date"), by and among Proxim Corporation, a
Delaware corporation, and Proxim Wireless Networks, Inc., a Delaware
corporation, formerly known as Proxim, Inc., and their Subsidiaries
(collectively, "Proxim"), with their principal place of business at 000 Xxxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, and Symbol Technologies, Inc., a Delaware
corporation, and its Subsidiaries (collectively, "Symbol"), with its principal
place of business at Xxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxx 00000.
WHEREAS, on or about March 8, 2001, Proxim sued Symbol and other entities
in the United States District Court for the District of Delaware in the action
Proxim v. 3Com et al., C.A. No. 01-155-SLR (the "3Com Action") asserting claims
for alleged infringement of three Proxim patents; on May 1, 2001, Symbol
counterclaimed in the 3Com Action, asserting, inter alia, claims for alleged
infringement of Symbol's US Patents 5,029,183 (the "'183 Patent"), 5,103,461
(the "'461 Patent"), 5,479,441 (the "'441 Patent") and 5,668,803 (the "'803
Patent"); Proxim successfully moved to sever Symbol's foregoing infringement
counterclaims in the 3Com Action; Proxim later dismissed with prejudice its
claims in the 3Com Action; and
WHEREAS, on December 4, 2001, in light of the severance of Symbol's
infringement counterclaims, Symbol filed a complaint in the United States
District Court for the District of Delaware, bearing C.A. No. 01-801-SLR ("the
Delaware Action") asserting claims for alleged infringement of the '183 Patent,
the '461 Patent, the '441 Patent and the '803 Patent; Symbol subsequently
disclaimed the '803 Patent and dismissed it from the Delaware Action; and
WHEREAS, on or about December 18, 2001, Proxim answered the complaint in
the Delaware Action, and counterclaimed, asserting claims for alleged
infringement of US Patent
5,231,634 (the "'634 Patent") (which had not been asserted in the 3Com Action),
false marking, unfair competition under the Xxxxxx Act and under state law, and
tortious interference with actual and prospective contractual relations;
Proxim's counterclaims in the Delaware Action were dismissed before trial,
except for Proxim's infringement counterclaim, which proceeded to trial on
September 16, 2003; on September 29, 2003, a jury rendered a verdict in Symbol's
favor with respect to Proxim's claim of infringement of the '634 Patent, and
Proxim's infringement claim was thereafter dismissed; and
WHEREAS, following a trial held from September 8 through September 12,
2003 on Symbol's claims of infringement, a jury rendered a verdict in Symbol's
favor, finding that Proxim's OpenAir and 802.11 products infringed the '183
Patent and the '441 Patent, finding that Symbol is entitled to damages for past
infringement based upon a six percent (6%) royalty rate, and finding that
Proxim's OpenAir and 802.11 products do not infringe the `461 Patent; and
WHEREAS, on July 28, 2004, the Court issued an Order in the Delaware
Action requiring Proxim to pay $22,865,447 in damages, and awarding Symbol
prejudgment interest in the amount of $3,052,192; on August 4, 2004, a Judgment
was entered consistent with the Court's Order awarding damages and interest to
Symbol (the "Judgment"); and
WHEREAS, to avoid the time and expense of further litigation, and in
compromise of the disputed claims set forth herein, Symbol and Proxim now desire
to resolve the claims brought against one another by final settlement and
compromise.
NOW, THEREFORE, in consideration of the following rights and obligations
granted and undertaken by the parties and for other good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged, the
parties agree as follows:
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I. Definitions.
"Patent Assignment Agreements" shall mean those certain Patent Assignment
Agreements to be entered into concurrently by the parties in the form set
forth in Attachments C and D to this Settlement Agreement.
"Patent Cross License Agreement" shall mean that certain Patent Cross
License Agreement to be entered into concurrently by the parties in the
form set forth in Attachment B to this Settlement Agreement.
"Subsidiary" of a party hereto shall mean a corporation, company or other
entity: (a) more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of directors
or other managing authority) are, now or hereafter, owned or controlled,
directly or indirectly, by a party hereto, but such corporation, company
or other entity shall be deemed to be a Subsidiary only so long as such
ownership or control exists; or (b) which does not have outstanding shares
or securities, as may be the case in a partnership, joint venture or
unincorporated association, but more than fifty percent (50%) of whose
ownership interest representing the right to make the decisions for such
corporation, company or other entity is now or hereafter, owned or
controlled, directly or indirectly, by a party hereto, but such
corporation, company or other entity shall be deemed to be a Subsidiary
only so long as such ownership or control exists.
Any terms not defined herein, which have been defined in Section 1
(Definitions) of the Patent Cross License Agreement, shall have the same
meaning as that ascribed in the Patent Cross License Agreement.
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II. Discontinuance.
a. Within three (3) court days after the Effective Date, Symbol and
Proxim shall cause their respective counsel to execute and file a
Stipulation and Order discontinuing all pending and further
proceedings in the Delaware Action in the form attached hereto as
Attachment A-1, and cooperate in proceeding with any and all other
or additional procedures needed to effectuate the discontinuance of
all pending proceedings in the Delaware Action. Upon filing the
Stipulation and Order, neither Symbol nor its Subsidiaries shall
take any action whatsoever against Proxim, its Subsidiaries, or its
or their successors or assigns arising from, included in or relating
to the Delaware Action, and shall not seek any relief of any kind as
against Proxim, its Subsidiaries, or its or their successors or
assigns arising from, included in or relating to the Delaware
Action, except as expressly provided in this Settlement Agreement.
The parties acknowledge and agree that this Settlement Agreement is
enforceable according to its terms with respect to discontinuance of
pending and further proceedings in the Delaware Action.
b. Each of the parties shall cause their respective counsel to file a
satisfaction of judgment in the Delaware Action, in the form
attached hereto as Attachment A-2.
c. This Settlement Agreement is for settlement purposes and shall not
constitute an admission or concession of any claims or defenses.
Each party's obligations with respect to the Delaware Action, and
satisfaction of the Judgment, are expressly set forth in this
Settlement Agreement, the Patent Cross License Agreement, and the
Patent Assignment Agreement and neither party shall have any other
obligations
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or liability to the other party in connection with the Delaware
Action or the Judgment.
III. Lump Sum Payments to Symbol.
a. In consideration of the release granted to Proxim under Section 3.1
of the Patent Cross License Agreement with respect to products sold
prior to October 1, 2003, and in full satisfaction of the Judgment,
Proxim agrees to make lump sum payments to Symbol totaling
twenty-two million dollars (US $22,000,000) as follows: eight (8)
payments of two million five hundred thousand dollars (US
$2,500,000), followed by two (2) payments of one million dollars (US
$1,000,000). The first payment shall be made no later than September
30, 2004. The nine (9) subsequent payments shall be made no later
than December 31, 2004; March 31, 2005; June 30, 2005; September 30,
2005; December 30, 2005; March 31, 2006; June 30, 2006; September
29, 2006 and December 29, 2006, respectively.
b. As a royalty payment for Proxim Licensed Products (as defined in the
Patent Cross License Agreement) sold after October 1, 2003 and prior
to the Effective Date, and in consideration of the release granted
to Proxim for such Licensed Products under Section 3.1 of the Patent
Cross License Agreement, Proxim agrees to make lump sum payments to
Symbol totaling seven hundred fifty thousand dollars (US $750,000)
as follows: a first payment of five hundred thousand dollars (US
$500,000) no later than September 29, 2006 (accompanying the ninth
payment under Section III(a) above) and a second payment of two
hundred fifty
5
thousand dollars (US $250,000) no later than December 29, 2006
(accompanying the tenth payment under Section III(a) above).
c. The payments under Sections III (a) and (b) above shall be made by
electronic fund transfer to the Chase Manhattan Bank, 000 Xxxxx
Xxxxxxx Xxxx, Xxxxxxxx, XX 00000, Account Name: Symbol Technologies,
Inc. Account Routing No. 000000000, Account No. 209339071, or such
other account as Symbol may specify by written notice to Proxim
reasonably in advance of a payment.
d. In the event that any payment set forth in the paragraphs III (a) or
(b) is not made on or before its due date (a "Missed Payment"),
Symbol may give written notice to Proxim of such Missed Payment. If
Proxim fails to pay the Missed Payment within thirty (30) days of
such written notice, Proxim shall pay immediately an amount of
twenty-five million, nine hundred seventeen thousand, six hundred,
sixty-nine dollars (US $25,917,669) minus lump sum payments
previously paid pursuant to Section III (a) or (b) hereof (the "Net
Amount Due"), plus interest on the Net Amount Due calculated at the
annual average 3-month U.S. T-xxxx rate for the period from August
4, 2004 (the date of entry of the Judgment in the Delaware Action)
to the date of this payment. Such payment shall be in lieu of, and
not in addition to, any further payments under Sections III(a) and
III(b) of this Settlement Agreement.
IV. Patent Cross License Agreement and Assignment of Intellectual Property.
a. Concurrently with this Settlement Agreement, Proxim and Symbol shall
execute and deliver the Patent Cross License Agreement attached to
this Agreement, identified as Attachment B, Patent Cross License
Agreement.
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b. Concurrently with this Settlement Agreement, the parties shall
execute and deliver the Patent Assignment Agreements attached to
this Settlement Agreement as Attachments C and D, under which Proxim
shall transfer title to the patents and patent applications listed
in Schedule A of each of the Patent Assignment Agreements ("Assigned
Patents"). Symbol agrees that it shall take title to the Assigned
Patents subject to any existing nonexclusive licenses that have been
granted by Proxim. Proxim represents that it has identified to
Symbol all of its patents and patent applications that claim
priority to the Assigned Patents. It is understood, however, that
the Assigned Patents only include those patents and patent
applications expressly listed on Schedule A of the Patent Assignment
Agreements and that Proxim shall retain ownership of U.S. Patents
5,804,060 and 6,075,812 and all other Proxim patents and patent
applications that are not listed on Schedule A of the Patent
Assignment Agreements. Upon the request of Symbol with respect to a
particular entity, Proxim will use reasonable efforts to confirm
whether or not the entity has been licensed under the Assigned
Patents. It is understood that U.S. Patent Application 09/457,624
(the "'624 Application") listed on Schedule A of the Patent
Assignment Agreements may have been unavoidably or unintentionally
abandoned. In the event that the '624 Application has been abandoned
and cannot be revived, then Proxim agrees to assign to Symbol
ownership of either U.S. patent application 10/155,794 (the "'794
CIP"), which is a continuation-in-part of the '624 Application, or a
continuation of the '794 CIP, with the right for Symbol to pursue
patent claims directed solely at subject matter that is fully
disclosed in, and entitled to the priority date of, the
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'624 Application ("'624 Priority Claims"). In such event, Proxim
shall have the right to retain ownership of either the '794 CIP or a
continuation of the '794 CIP to pursue patent claims that are not
'624 Priority Claims. Neither party makes any representations or
warranties except as expressly set forth herein, in the Patent Cross
License Agreement, and in the Patent Assignment Agreements, and each
party specifically disclaims any implied warranties of any kind.
c. Proxim shall execute any further documents and provide any further
information, at Symbol's request and expense, reasonably required
for Symbol to secure, protect and enforce its rights to the Assigned
Patents as set forth in the Patent Assignment Agreements.
d. In the event of a conflict between the terms of the Patent Cross
License Agreement and this Settlement Agreement, the terms of the
Patent Cross License Agreement shall control. In the event of a
conflict between the terms of the Patent Assignment Agreements and
this Settlement Agreement, the terms of the Patent Assignment
Agreements shall control.
V. Disputes Under this Agreement.
a. If a dispute arises out of this Settlement Agreement, or the
interpretation, breach, termination or validity thereof, each of the
parties agrees to first request a meeting of senior management of
the parties in a written notice that references this paragraph. That
meeting shall occur at a mutually agreeable time within forty-five
(45) days of any such written notice.
b. Neither party shall assert any claim of laches, waiver, estoppel or
the like based on the time elapsed by following this procedure.
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c. If the dispute is unresolved in whole or in part, the parties will
submit the unresolved dispute to binding arbitration under the
Patent Arbitration Rules of the American Arbitration Association
("AAA") in effect as of the Effective Date of this Agreement if the
dispute concerns matters solely of patent law; if it does not, the
Commercial Arbitration Rules of the AAA in effect as of the
Effective Date of this Agreement. The arbitrator shall be an
attorney experienced with patent licensing and patent litigation
settlements. Any remedy granted by the arbitrator shall be limited
to that available at law and equity. The arbitrator shall have the
authority to award attorneys' fees, if appropriate. Any award may be
entered in any court having jurisdiction thereof. The parties agree
that any arbitration pursuant to this Section 8.9 shall be conducted
in Washington, D.C. unless otherwise mutually agreed. The parties,
their representatives, other participants and arbitrators shall hold
the existence, content and result of arbitration in confidence,
except as otherwise required or advisable in connection with
securities filings or otherwise required by law.
d. This Settlement Agreement and matters connected with the performance
thereof shall be construed, interpreted, applied and governed in all
respects in accordance with the laws of the United States of America
and the State of New York, without reference to conflict of laws
principles.
e. This Section V. shall not be construed as restricting or limiting
either party's ability to immediately assert a license or other
defense in any litigation or other proceeding against such party,
such party's Subsidiaries, or its or their products or
9
the resellers, distributors or customers of such products,
regardless of jurisdiction or venue.
f. Confidentiality. The parties agree that all provisions, terms, and
conditions of this Settlement Agreement are and will remain
confidential, and they shall not disclose such terms under any
circumstances to any person not a party hereto, except: (i) to
Subsidiaries of the parties; (ii) with the prior written consent of
the other party; (iii) to the extent such disclosure may be required
or advisable in connection with securities filings or judicial
proceedings or otherwise by applicable law, which may include filing
a copy of this Settlement Agreement with the SEC in connection with
securities filings; (iv) as may be required to a party's auditors,
insurers, bankers, legal counsel and other legal and financial
advisors; (v) to a third party in connection with a potential merger
or acquisition by, of or with the party, or any other potential
change of control of a party; (vi) to a party's customers and
suppliers with respect to the products and patents for which a party
is licensed or has a covenant; and (vii) Symbol may disclose to
prospective licensees under the `183 and `441 patents, that Symbol
has granted a license to Proxim for consideration valued by Symbol
at an amount no less than a six percent (6%) royalty.
Notwithstanding the foregoing, the parties in any case may state
that the Delaware Action has been settled and that certain rights
and obligations have been exchanged between the parties and each
party may issue a press release relating to this Settlement
Agreement subject to prior written approval by the other party to
the Settlement Agreement, such approval not to be unreasonably
withheld. In any event, each party's SEC filings and press release
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may state, at such party's option, any or all of the following
information and any other information required or advisable under
applicable law or regulation: Proxim will make payments to Symbol
totaling at least twenty-two million seven hundred fifty thousand
dollars (US $22,750,000); Symbol has granted a license to Proxim
under certain Symbol patents; the consideration provided by Proxim
is valued by Symbol at an amount no less than a royalty rate of six
percent (6%); and that such consideration includes a running royalty
of two percent (2%) of net revenues for licensed products, the
assignment of certain Proxim patents and patent applications to
Symbol and a grant of a license to certain Proxim patents to Symbol.
VI. Miscellaneous.
a. Entire Agreement. This Agreement together with the Patent Cross License
Agreement and the Patent Assignment Agreements represent the only
agreement of the parties with respect to the Delaware Action and matters
set forth herein and supersedes any and all prior oral and written
statements with respect thereto. This Settlement Agreement may be altered
or amended only by a writing signed by officers of both parties.
b. Counterparts. This Agreement may be executed in two or more
counterparts, each of which is deemed an original, but all of which
together constitute one and the same instrument.
c. Headings. The headings of sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.
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d. Assignability. Except as otherwise set forth herein, this Settlement
Agreement and any rights or obligations hereunder shall not be assignable
by contract, merger, application of law or otherwise except that this
Agreement may be assigned by either party in connection with a sale of all
or substantially all of the assets of the party (by merger, sale of stock,
sale of assets or otherwise) to which this Settlement Agreement relates,
except in the case of such assignment the rights and obligations under the
Patent Cross License Agreement shall be as specified in the Patent Cross
License Agreement. Subject to the foregoing, this Settlement Agreement
shall inure to the benefit of the successors and permitted assigns of the
parties.
e. Notices. Notices and other communications shall be sent by facsimile or
by registered or certified mail to the following addresses:
For Proxim: For Symbol:
Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxx
Xx.Vice President, Administration Sr.Vice President, General Counsel,
and General Counsel and Secretary
Proxim Corporation Symbol Technologies, Inc
000 Xxxxxxx Xxxxx One Symbol Plaza
Sunnyvale, CA 94085 Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
With a copy to: With a copy to:
Xxxxxx X. Day Xxxx X. Xxxxxxxxx
Xxxxxx Xxxxxxx Xxxxxxxx Xxxxx & Xxxxxxx L.L.P.
& Xxxxxx 000 Xxxxx Xxxxxx
000 Xxxx Xxxx Xxxx Xxx Xxxx, XX 00000
Xxxx Xxxx, XX 00000 Tel: (000) 000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
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Such notices shall be deemed to have been served when received by
addressee or, if delivery is not accomplished by reason of some fault of
the addressee, when tendered for delivery. Either party may give written
notice of a change of address and, after notice of such change has been
received, any notice or request shall thereafter be given to such party as
above provided at such changed address.
f. The parties agree that they shall bear their own costs and attorneys'
fees relating to the Delaware Action, including expert fees and court
costs, provided, however, that Symbol retains, and does not waive, its
right to seek indemnification from Intersil, Inc. and Choice-Intersil
Microsystems, Inc. of such fees and costs.
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IN WITNESS WHEREOF, the parties have themselves, by their duly authorized
representative, caused this Agreement to be executed as of the Effective Date:
PROXIM CORPORATION SYMBOL TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxx
----------------------- ---------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxx
Title: President and COO Title: Sr. Vice President, General Counsel
and Secretary
PROXIM WIRELESS NETWORKS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
SIGNATURE PAGE TO SETTLEMENT AGREEMENT
ATTACHMENT A-1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
SYMBOL TECHNOLOGIES, INC., )
)
Plaintiff, )
)
v. )
) C.A. No.01-801-SLR
PROXIM INCORPORATED, )
)
Defendant. )
STIPULATION AND ORDER
WHEREAS, Plaintiff Symbol Technologies, Inc. ("Symbol") and Defendant
Proxim Incorporated ("Proxim") have resolved this action pursuant to a
settlement agreement.
Symbol and Proxim hereby stipulate, subject to the approval of the Court,
that all pending motions are withdrawn and all further proceedings in this
action be discontinued with prejudice.
XXXXXXXX XXXXXXXX POTTER XXXXXXXX & XXXXXXX LLP
& XXXXXXXXXXX, P.A.
By: ____________________________
By: ____________________________
Xxxxx X. Xxxxxxxx (#2504) Xxxxxxx X. Xxxxxxx (#2246)
Xxxxx X. Xxxxxxx (#2903) Xxxxx X. Xxxxx (#3983)
000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000 0000 Xxxxx Xxxxxx Xxxxxx
(000) 000-0000 Xxxxxxxxxx, XX 00000
(000) 000-0000
Attorneys for Plaintiff
Attorneys for Defendant
IT IS SO ORDERED this ____ day of _______________, 2004.
_____________________________
United States District Judge
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
SYMBOL TECHNOLOGIES, INC. )
)
Plaintiff, )
)
v. ) C. A. No. 01-801-SLR
)
PROXIM INCORPORATED )
)
Defendant )
SATISFACTION OF JUDGMENT
Plaintiff Symbol Technologies, Inc. ("Symbol") and Defendant Proxim
Incorporated ("Proxim") hereby stipulate and agree that, judgment having been
entered in favor of Symbol and against Proxim on Xxxxxx 0, 0000 (X.X. 353), and
provision for payment by and on behalf of Proxim and receipt by Symbol pursuant
to a settlement agreement by and between the parties, the record shall reflect
that the judgment has been satisfied.
XXXXXXXX XXXXXXXX & POTTER XXXXXXXX & XXXXXXX LLP
XXXXXXXXXXX, P.A.
By: __________________________ By: __________________________
Xxxxx X. Xxxxxxxx (#2504) Xxxxxxx X. Xxxxxxx (#2246)
Xxxxx X. Xxxxxxx (#2903) Xxxxx X. Xxxxx (#3983)
000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000 0000 Xxxxx Xxxxxx Xxxxxx
(000) 000-0000 Xxxxxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
Attorneys for Plaintiff Attorneys for Defendant
IT IS SO ORDERED this ____ day of __________________________2004.
_______________________________________
United States District Judge
ATTACHMENT B TO SETTLEMENT AGREEMENT TO BETWEEN PROXIM AND SYMBOL
PATENT CROSS LICENSE AGREEMENT
This Patent Cross License Agreement ("Agreement") dated September 13, 2004
("Effective Date") by and between Proxim Corporation, a Delaware corporation,
and Proxim Wireless Networks, Inc., a Delaware corporation, formerly known as
Proxim, Inc., (collectively "Proxim"), with their principal place of business at
000 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000, and Symbol Technologies, Inc., a
Delaware corporation ("Symbol"), with its principal place of business at Xxx
Xxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxx 00000.
Each of the parties (as "Grantee") desires to acquire certain licenses and
covenants under patents of the other party (as "Grantor"). In consideration of
the promises and mutual covenants herein contained, Proxim and Symbol agree as
follows:
SECTION 1. DEFINITIONS
"Assert" means to initiate or pursue an action of any nature before any legal,
judicial, arbitration, administrative, executive or other type of body or
tribunal that has or claims to have authority to adjudicate such action in whole
or in part. Examples of such body or tribunal include, without limitation,
United States State and Federal Courts, the United States International Trade
Commission and any foreign counterparts of any of the foregoing.
"Authorized Copy (Copies)" means a software program copied from a Master Copy by
a third party under written authorization to such third party to make copies of
such Master Copy for its own use or for further Distribution (by transmission or
other distribution means).
"Covenant Period" means a period commencing upon the Effective Date and ending
five (5) years after the Effective Date.
"Distribute" means lease, sell, or otherwise transfer.
"Existing Products" means products that, as of a given date, either (i) have
been sold or offered for sale by a given entity or its Subsidiary, or (ii) are
under development by an entity or any of its Subsidiaries as of the given date
and are sold or offered for sale within twelve (12) months after the given date.
B - 1
"Follow On Products" means products that are error corrections, bug fixes,
extensions, new releases, new versions, and follow-on products of the same type
and nature as Existing Products.
"Master Copy" means a software program distributed by Grantee to a third party
with written authorization to such third party to make copies of such software
program for its own use or for further Distribution (by transmission or other
distribution means).
"Net Product Revenues" means the portion of gross revenues recognized by Proxim
that are attributable to the sale of Licensed Products net of returns, credits,
rebates, allowances, commodity taxes, value added taxes, sales taxes,
commissions, customs, duties and packing and shipping charges. Net Product
Revenues specifically excludes revenues recognized by Proxim for maintenance and
warranty services, software upgrades and error corrections, consulting,
non-recurring engineering and other charges that are not attributable to the
sale of Licensed Products.
"Networking Product" means any product that provides as its primary function any
OSI layer 1 (physical), OSI layer 2 (datalink) or other networking layer
functionality for any type of network (including local (LAN), storage area
network (SAN), wide (WAN), metropolitan (MAN) or personal (PAN) area networks)
via any medium or media whatsoever, and via any protocol or protocols
whatsoever, including without limitation Ethernet, Fast Ethernet, Gigabit
Ethernet, 10 Gigabit Ethernet, 802.11, 802.13, cable, DSL, satellite, GPRS,
802.16a, 802.20, Bluetooth, EDGE, Ultrawideband and the like.
"Patents" means all patents worldwide, including utility models and typeface
design patents (but not including any other design patents or registrations) and
all applications for any of the foregoing, including without limitation
continuations, continuations-in-part, reexaminations, extensions, and any
patents reissuing on any of the foregoing.
"Performance of Business Processes" means advising, servicing, or operating all
or part of an enterprise or organization.
"Proxim Licensed Products" means all Networking Products Distributed, or offered
for distribution, by Proxim or its Subsidiaries as its own product (including
products of Proxim's design on a private label basis for third parties), or
offered by Proxim or its Subsidiaries for lease, sale, or other transfer
B - 2
as its own product; that would, in the absence of the license granted hereunder,
infringe one or more Valid Claims of the Symbol Licensed Patents in the country
of manufacture or sale; provided, however, that if Proxim excludes products from
royalties by reason of the country of manufacture and sale, Proxim shall be
required to retain records under Section 4.3 documenting the country of
manufacture and sale of such products. Notwithstanding the foregoing, Proxim
Licensed Products do not include integrated circuit devices sold on a standalone
basis that are either designed or marketed for incorporation into third party
products.
"Proxim Licensed Patents" means all Patents that:
(a) are owned by Proxim as of the Effective Date; and
(b) under which patents or the applications therefor Proxim or any of its
Subsidiaries has as of the Effective Date the right to grant licenses to
any third party of or within the scope granted herein without such grant
or the exercise of rights thereunder resulting in the payment of royalties
or other consideration by Proxim or its Subsidiaries to third parties
(except for payments among Proxim and its Subsidiaries, and payments to
third parties for inventions made by said third parties while employed by
Grantor or any of its Subsidiaries).
Proxim Licensed Patents include said patent applications owned by Proxim as of
the Effective Date and continuations, continuations-in-part of said
applications, reexaminations, extensions, and any patents reissuing on any of
the aforesaid patents.
Proxim Licensed Patents include patents and patent applications for all
inventions that have been described in a written report (including in electronic
form) as of the Effective Date in accordance with Proxim's standard invention
reporting policy, including but not limited to, invention disclosure type
documents.
"Settlement Agreement" means that certain Settlement Agreement between the
parties being entered into concurrently herewith.
"Subsidiary" of a party hereto or of a third party means a corporation, company
or other entity:
(a) more than fifty percent (50%) of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, now or hereafter, owned or controlled, directly
or indirectly,
B - 3
by a party hereto or such third party, but such corporation, company or
other entity shall be deemed to be a Subsidiary only so long as such
ownership or control exists; or
(b) which does not have outstanding shares or securities, as may be the case
in a partnership, joint venture or unincorporated association, but more
than fifty percent (50%) of whose ownership interest representing the
right to make the decisions for such corporation, company or other entity
is now or hereafter, owned or controlled, directly or indirectly, by a
party hereto or such third party, but such corporation, company or other
entity shall be deemed to be a Subsidiary only so long as such ownership
or control exists.
"Symbol Licensed Patents" means US Patents 5,029,183 and 5,479,441 and all
Patents worldwide taking priority therefrom.
"Symbol Grantback Patents" means all Patents and patent applications assigned by
Proxim to Symbol pursuant to the Settlement Agreement (including, without
limitation, U.S. Patent No. 6,473,449 and U.S. Patent Application No.
09/457,624) and all Patents worldwide taking priority therefrom.
"Symbol Licensed Products" means all products Distributed or offered for
distribution by Symbol or its Subsidiaries as its own product (including
products of Symbol's design on a private label basis for third parties), or
offered by Symbol or its Subsidiaries for lease, sale, or other transfer as its
own product; provided, however, that Symbol Licensed Products do not include
integrated circuit devices sold on a standalone basis that are either designed
or marketed for incorporation into third party products.
"Valid Claim" means a claim of an issued Symbol Licensed Patent that has not
been held invalid or unenforceable by a final decision or decree of a court or
other governmental agency of competent jurisdiction.
"Warburg Entities" means Warburg Pincus LLC, its Subsidiaries, officers,
directors and employees.
SECTION 2. GRANTS OF RIGHTS
2.1.1 Proxim, as Grantor, on behalf of itself and its Subsidiaries grants to
Symbol, as Grantee, a royalty-free nonexclusive and worldwide license under
Proxim Licensed Patents:
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(a) to make (including the right to use any apparatus and practice any method
in making), use, import, offer for sale, lease, sell and/or otherwise
transfer Symbol Licensed Products;
(b) to have Symbol Licensed Products made by another manufacturer for the use,
importation, offer for sale, lease, sale and/or other transfer by Symbol
or its Subsidiaries only when the conditions set forth in Section 2.2 are
met; and
(c) to use any apparatus and practice any method in connection with the
Performance of Business Processes for itself or third parties.
2.1.2 Symbol, as Grantor, on behalf of itself and its Subsidiaries grants to
Proxim, as Grantee, a royalty bearing nonexclusive and worldwide license under
Symbol Licensed Patents:
(a) to make (including the right to use any apparatus and practice any method
in making), use, import, offer for sale, lease, sell and/or otherwise
transfer Proxim Licensed Products;
(b) to have Proxim Licensed Products made by another manufacturer for the use,
importation, offer for sale, lease, sale and/or other transfer by Proxim
or its Subsidiaries only when the conditions set forth in Section 2.2 are
met; and
(c) to use any apparatus and practice any method in connection with the
Performance of Business Processes for itself or third parties.
2.2 The license granted in Section 2.1.1(b), 2.1.2(b) and 2.15(b) to Grantee to
have products made by another manufacturer:
(a) shall only apply to products made for sale back to Grantee or its
Subsidiaries; and
(b) shall only apply to Grantee Licensed Products and/or portions thereof for
which the specifications were furnished by Grantee (either solely or
jointly with one or more third parties) or for Grantee or for which the
designs are owned or licensed by Grantee; and
(c) shall not apply to any products in the form manufactured or marketed by
said other manufacturer prior to Grantee's furnishing of said
specifications.
Unless Grantee informs Grantor to the contrary, Grantee shall be deemed to have
authorized said other manufacturer to make Grantee's Licensed Products under the
license granted to Grantee in this section when the conditions specified in this
Section
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2.2 are fulfilled. In response to a written request identifying a product and a
manufacturer, Grantee shall in a timely manner inform Grantor whether or not
particular products are manufactured pursuant to the license granted in Section
2.1.1(b), 2.1.2(b) or 2.15(b).
2.3 Except as expressly provided herein, no license or immunity is granted under
this Agreement by either party, either directly or by implication, estoppel or
otherwise to any third parties acquiring Licensed Products from either party for
the combination of such acquired Licensed Products with other items or for the
use of such combination, except where there is no substantial use of such
Licensed Products other than in such combination or through such method of use.
2.4 Subject to Section 2.5, the licenses granted herein shall include the right
of Grantee to grant sublicenses to its Subsidiaries existing on or after the
Effective Date, which sublicenses may include the right of sublicensed
Subsidiaries to sublicense other Subsidiaries of said party. No sublicense shall
be broader in any respect at any time during the life of this Agreement than the
license held at that time by the party that granted the sublicense.
2.5 A sublicense granted to a Subsidiary shall terminate on the earlier of:
(a) the date such Subsidiary ceases to be a Subsidiary; and
(b) the date of termination or expiration of the license of the party or
Subsidiary that granted the sublicense.
If a Subsidiary ceases to be a Subsidiary and holds any patents under which a
party hereto is licensed, such license shall continue for the term defined
herein.
2.6 The Grantee's Licensed Products do not include products manufactured by a
Grantee as a foundry or contract manufacturer for a third party where such third
party provides the detailed specifications for such products (without
participation in development by Grantee or its Subsidiaries) and the Grantee
manufactures such products in accordance with such specifications for sale back
to such third party. This Section 2.6 shall not be construed as restricting
Licensed Products from including engineering changes and customizations made by
Grantee for a third party.
2.7 If, subsequent to the Effective Date, a party (the "Transferring Party")
either: (i) transfers a product line to a third party without transferring a
Subsidiary to said third
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party; or (ii) spins off a Subsidiary (either by disposing of it to a third
party or in some other manner reducing ownership or control so that the spun-off
entity is no longer a Subsidiary); and if such transfer or spin off includes at
least one marketable product line and tangible assets having a net value of at
least twenty million US dollars ($20,000,000.00), then after written request to
the other party hereto jointly by the Transferring Party and either: (i) such
third party in the case of a transfer; or (ii) such ex-Subsidiary in the case of
a spin off; and where, in either case, such request is within sixty (60) days
following the transfer or spin off, the other party hereto shall grant a license
under the same terms as the license granted to the Transferring Party herein
under the Grantor's Licensed Patents and, if applicable, the Grantor's Grantback
Patents for the field of such product to such third party or such ex-Subsidiary,
(the "Recipient") provided that:
(a) such field shall not be defined more broadly than the scope of the license
granted herein to the Transferring Party, nor more broadly than necessary
to cover the Existing Products of the Transferring Party being transferred
or spun off, and Follow On Products to those Existing Products;
(b) the license shall not apply to any Existing Products of any third party
transferee;
(c) the license granted shall be limited in the twelve (12) months immediately
following such transfer or spin off to a volume of licensed products
having gross revenue attributable to such licensed products up to a
maximum revenue cap equal to no more than the gross revenue attributable
to such products by said party and its Subsidiaries in the twelve (12)
months preceding such transfer or spin off plus twenty percent (20%); and
shall be limited, in each of the successive twelve-month periods following
such transfer or spin off, to a volume of licensed products having gross
revenue attributable to such licensed products up to a maximum revenue cap
equal to no more than the maximum revenue cap for the prior twelve (12)
months plus twenty percent (20%);
(d) this Section 2.7, Section 3, and Section 4 shall be omitted from the
license granted to the Recipient; and
(e) the license granted to the Recipient shall terminate if the license
granted to the Transferring Party terminates or is terminated for any
reason.
Notwithstanding the foregoing provisions of this Section 2.7, the assignment of
this Agreement or a Change of Control of a party (as defined under Section 5)
shall not be considered to be
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a transfer of a product or a spin off of a Subsidiary under this Section 2.7,
and shall be governed by Sections 5 and 8.1.
2.8 For purposes of this Agreement, an Authorized Copy shall be deemed to have
been Distributed by the Grantee that Distributed the Master Copy from which the
Authorized Copy was copied, provided such Authorized Copy is used or Distributed
under a brand name of Grantee.
2.9 Where a third party uses an apparatus or practices a method in Performance
of Business Process, and such third party is acting on behalf of, and as
subcontractor to, a Grantee in connection with a contract that obligates the
Grantee to provide such Performance of a Business Process for a Grantee
customer, such use or practice shall be deemed to have been performed by
Grantee.
2.10 If a Grantee or any of its Subsidiaries purchases a product of a third
party (including, without limitation, integrated circuits, boards, hardware
assemblies, subsystems and the like) for use as part of a board, subsystem or
system product ("System Level Product") that qualifies as a Licensed Product of
Grantee or any of its Subsidiaries (other than with respect to the third party
product(s) used therein), then the Grantor and its Subsidiaries hereby agree not
to Assert any claim of infringement of any Licensed Patents against (i) such
Grantee or any of its Subsidiaries for the manufacture, use, import, offer for
sale and/or sale of the respective third party product as part of such System
Level Product; or (ii) any distributor (direct or indirect), reseller (direct or
indirect) or customer (direct or indirect) of Grantee or any of its Subsidiaries
with respect to the System Level Product for the use, import, offer for sale
and/or sale of the respective third party product as a part of such System Level
Product. It is expressly acknowledged and agreed, however, that each party
reserves the right to bring a suit for patent infringement against the
respective third party supplier with respect to any units other than those sold
to the Grantee or its Subsidiaries for use as part of its System Level Products.
2.11 Each party and its Subsidiaries agrees that it shall not Assert any claim
against the other party or any of its Subsidiaries for contributory
infringement, inducement of infringement or other indirect infringement of any
Patents licensed or subject to a covenant to the other party or any of its
Subsidiaries under this Agreement, where such claim would be based in any part
or in any way upon (a) any activity that is
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licensed or subject to a covenant under this Agreement, or (b) the provision of
instructions or reference designs related to the Networking Products of such
other party or its Subsidiaries. The parties agree that the foregoing sentence
does not, and shall not, in any way limit the rights of either party or its
Subsidiaries to assert claims of direct or indirect infringement against third
parties.
2.12 During the Covenant Period, each party and each of its Subsidiaries hereby
agrees not to Assert any claim alleging infringement by any of the other party's
or its Subsidiaries' products within the scope of the licenses and covenants set
forth in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10 and 2.11
above, except that for purposes of such covenant the Grantor's Licensed Patents
shall include all Patents of Grantor and its Subsidiaries, the Grantee's
Licensed Products shall include all products of Grantee and its Subsidiaries,
and the covenant shall be royalty free for both parties and their Subsidiaries.
Each party agrees that no damages or liabilities shall accrue for any activities
conducted within the scope of the covenants set forth in this Section 2.12
during the Covenant Period and each party and its Subsidiaries irrevocably
releases, acquits and forever discharges the other party, its Subsidiaries and
its and their respective employees, officers, directors, agents,
representatives, and its and their manufacturers (direct or indirect),
distributors (direct or indirect), resellers (direct or indirect) and customers
(direct or indirect) from any and all claims or liabilities of any kind and
nature, at law, in equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed within the scope of the covenants set
forth in this Section 2.12.
2.13 If either party or any of its Subsidiaries assigns (directly or by
operation of law) ownership of any rights under any Patents to a third party not
bound by the foregoing covenants set forth in Sections 2.10, 2.11 and 2.12, then
effective immediately prior to such assignment, such party and its Subsidiaries
agree that the other party and its Subsidiaries shall have a nonexclusive,
nontransferable license, without right of sublicense, under such assigned
Patents of the same terms, scope and duration as that intended by the above
covenants. If a party or any of its Subsidiaries transfers a product line or
spins off a Subsidiary as described in Section 2.7 or assigns this Agreement
under Section 5 or 8.1, then the covenants in Sections 2.10, 2.11 and 2.12 shall
apply to the respective transferee or assignee with respect to the transferred
or assigned products (including both Existing
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Products and Follow On Products) in the same manner as described in Sections 2.7
and 5 with respect to Licensed Products.
2.14 For a period of two (2) years following the Covenant Period (the
"Transition Period"), each party and its Subsidiaries shall follow the
procedures below before Asserting any claim of Patent infringement that would
have been within the scope of the covenant set forth in Section 2.12 during the
Covenant Period:
(a) The party that desires to Assert such claim shall first notify the other
party in writing of the nature of the dispute, specifying such dispute in
reasonable detail;
(b) A member of the executive management team of each party will meet in
person within twenty one (21) days of the delivery of such written notice
and attempt to resolve such dispute in good faith;
(c) In the event that the executives are unable to resolve such dispute, then
the parties shall submit such dispute to non-binding mediation within
twenty one (21) days. The parties will share equally in the costs for the
mediation; and
(d) The party that desires to Assert such claim shall only do so after
attempting to resolve such dispute through escalation and mediation as
described above.
2.15 Symbol, as Grantor, on behalf of itself and its Subsidiaries grants to
Proxim, as Grantee, a non-terminable, royalty free nonexclusive and worldwide
license under Symbol Grantback Patents:
(a) to make (including the right to use any apparatus and practice any method
in making), use, import, offer for sale, lease, sell and/or otherwise
transfer any and all products;
(b) to have any and all products made by another manufacturer for the use,
importation, offer for sale, lease, sale and/or other transfer by Proxim
or its Subsidiaries only when the conditions set forth in Section 2.2 are
met;
(c) to use any apparatus and practice any method in connection with the
Performance of Business Processes for itself or third parties; and
(d) to grant sublicenses to third parties for products based on designs
substantially developed by or for Proxim or its Subsidiaries and licensed
by Proxim or its Subsidiaries to such third party (including without
limitation designs licensed prior to the Effective Date) where Proxim or
its Subsidiaries provide software or other components used in such
products.
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The license set forth in this Section 2.15 (and any sublicenses granted
hereunder) shall be subject to the terms set forth in Sections 2.2, 2.3, 2.4,
2.5, 2.6, 2.7, 2.8, 2.9, 2.10 and 2.11, except that the Grantee Licensed
Products shall include all products Distributed by Grantee (including, without
limitation, third party products that Grantee Distributes on an OEM or private
label basis under its own brand name), and the Grantor Licensed Patents shall be
limited to the Symbol Grantback Patents.
SECTION 3. RELEASES
3.1 Each party (as "Releasor") on behalf of itself and its Subsidiaries which
are Subsidiaries on the Effective Date, irrevocably releases, acquits and
forever discharges the other party, its Subsidiaries which are Subsidiaries on
the Effective Date and its and their respective employees, officers, directors,
agents, representatives, and its and their manufacturers (direct or indirect),
distributors (direct or indirect), resellers (direct or indirect) and customers
(direct or indirect) from any and all claims or liabilities of any kind and
nature, at law, in equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (i) arising from, included in or relating
to the Delaware Action (as defined in the Settlement Agreement), and (ii) for
any and all claims of infringement of Patents (whether direct, contributory or
by inducement, and whether or not willful) by the manufacture, having
manufactured, use, sale, offer for sale or import of the such other party's and
its Subsidiaries' products prior to the Effective Date. This release does not
release Proxim from its obligation to make payments as expressly provided in
Section IV of the Settlement Agreement.
3.2 The release contained herein shall not apply to any person other than the
persons named in this Section 3.
3.3 The licenses and covenants set forth in this Agreement shall constitute a
full and complete defense to any Assertion within the scope of such licenses or
covenants.
SECTION 4. PAYMENT
4.1 Except as otherwise set forth in Section 4.2 below, in consideration of the
license granted in Section 2.1.2 above, Proxim shall pay Symbol a royalty of two
percent (2%) of the Net Product Revenue of Proxim Licensed Products, for all
Proxim Licensed Products Distributed from the Effective Date through June 29,
2009. No royalties shall accrue after June 29, 2009. The parties acknowledge,
solely for the purposes of this
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Agreement, that the consideration provided by Proxim for the Symbol Licensed
Patents is valued by Symbol to amount to no less than six percent (6%) of the
Net Product Revenue of Proxim Licensed Products, and that Proxim has paid
partial consideration toward the value of the licenses granted hereunder by way
of transfer to Symbol of valuable patent rights, and the remainder of such value
for the licenses granted hereunder by way of the two percent (2%) running
royalty provided herein and by way of the license granted by Proxim to Symbol
herein.
4.2 In the event that Proxim receives written notice of a Missed Payment
pursuant to Section III(d) of the Settlement Agreement and fails to cure within
thirty (30) days thereafter, the royalty rate for Proxim Licensed Products
Distributed after the date of the notice of Missed Payment until the date of
payment of the amounts that become due under Section III(d) of the Settlement
Agreement shall increase from two percent (2%) to five percent (5%). After the
required amounts are paid under Section III(d) of the Settlement Agreement, the
royalty rate shall revert to two percent (2%) for all Licensed Products
Distributed after the date of such payment.
4.3 Proxim shall pay Symbol within forty five (45) days of the end of each
calendar quarter the royalties specified in Sections 4.1 and/or 4.2 hereof, as
applicable, for Proxim Licensed Products Distributed in the preceding calendar
quarter. Royalties for the period October 1, 2003 through the Effective Date
shall be paid in accordance with the Settlement Agreement and no royalties shall
be due under this Agreement for products Distributed prior to the Effective
Date. Proxim shall deliver with each payment a royalty report providing the
total Net Product Revenue and royalties due for the respective calendar quarter.
Symbol shall keep such report confidential and shall only use such report for
the purpose of confirming payments hereunder.
4.4 Symbol shall have the right, at its own expense and at a time during normal
business hours and reasonably agreeable to Proxim (or its Subsidiaries, as
applicable) (but not more than once in any twelve (12) month period), to cause a
third party independent auditor reasonably acceptable to Proxim (or its
Subsidiaries, as applicable) to inspect and audit the books and records of
Proxim and its Subsidiaries in order to verify the royalties paid under this
Agreement. All audits under this Section 4.4 shall be limited to records for
royalties accruing no more than three (3) years prior to the time such audit is
conducted. The auditor shall be required to execute a
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confidentiality agreement reasonably acceptable to Proxim and shall only
disclose to Symbol whether Proxim has complied with its royalty obligations and,
if not, the amount due. The audit shall be conducted at the expense of Symbol,
but if any such audit reveals an underpayment of royalties by Proxim of seven
and one half percent (7 1/2%) or more for any period, then Proxim shall promptly
reimburse Symbol for the costs of the audit. Proxim shall pay any additional
undisputed royalties determined to be owed within forty five (45) days of
request, in addition to interest calculated at the annual average 3-month U.S.
T-xxxx rate for the period from the due date to the date of payment (or the
maximum rate permitted by law, whichever is less) of any delinquent amount. Any
disputed amounts will be subject to arbitration under Section 8.9 below.
SECTION 5. TERM OF AGREEMENT; ACQUISITION OF A PARTY
5.1 The term of the licenses granted under this Agreement shall be from the
Effective Date until the expiration of the last to expire of the Licensed
Patents, unless earlier terminated under the provisions of this Agreement.
In the event of a material breach by Proxim of its royalty payment
obligation under Section 4 of this Agreement, Symbol may provide written notice
of such breach to Proxim. Within forty five (45) days after such written notice
from Symbol, Proxim may cure such breach or pay disputed amounts into escrow
pending resolution of the dispute under Section 8.9 below. If Proxim has
materially breached such payment obligation and does not cure or pay disputed
amounts into escrow within such forty five (45) day cure period, then Symbol may
terminate the license granted to Proxim under the Symbol Licensed Patents upon
written notice to Proxim at any time prior to such breach being cured. In the
event of such termination, all other rights and obligations of the parties shall
remain in full force and effect. Except as expressly set forth above, the rights
and licenses set forth in this Agreement shall be irrevocable and non-terminable
for any reason.
5.2 As used herein, "Change of Control" means that a party (the "Acquired
Party")(i) is acquired by a third party who Distributes Networking Products,
becoming a Subsidiary of or merging into such third party, except to the extent
that the holders of
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voting power of such party immediately prior to such transaction continue to
hold at least fifty percent (50%) of the voting power of the resulting entity
after such transaction; or (ii) assigns all or substantially all of the business
or assets to a third party, except to the extent that the holders of voting
power of such party immediately prior to such transaction continue to hold at
least fifty percent (50%) of the voting power of the assignee after such
transaction. Notwithstanding the foregoing, the purchase of stock of a party by
financial investors (including any of the Warburg Entities) who are not in the
business of Distributing Networking Products shall not constitute a Change of
Control. In addition, in the event that Proxim assigns or otherwise transfers
all or substantially all of its business or assets relating to its wireless
local area network (LAN) products, Proxim shall have the right to assign this
Agreement in connection with such transfer and to treat such transfer as a
Change of Control for purposes of this Agreement.
5.3 In the event of a Change of Control:
(a) the Acquired Party shall promptly give notice of such acquisition to the
other party; and
(b) the license granted to the Acquired Party under the Grantor's Licensed
Patents and all sublicenses to the Grantor's Licensed Patents (if any)
granted to the Acquired Party's remaining Subsidiaries shall automatically
become limited to only Existing Products of the Acquired Party at the time
of such Change of Control and Follow On Products thereto and shall not
extend to the Existing Products or Follow On Products of any third party
acquirer; and
(c) the license granted to the Acquired Party under the Symbol Grantback
Patents, if applicable, and all sublicenses to the Symbol Grantback
Patents (if any) granted pursuant to the terms of Section 2.15 herein
shall remain in effect without modification;
(d) the licenses and covenants granted by each of the parties under this
Agreement shall be limited solely to those Patents owned by each party and
its Subsidiaries prior to the date of such acquisition and shall not
extend to any Patents of the acquirer.
5.4 In no event may Proxim transfer the license and covenants granted herein to
any of the following entities: PSC Inc.; HHP, Inc.; HHP-NC, Inc.; Metrologic
Instruments Corp.; and Intermec Technologies Corp. and their respective
Subsidiaries (each, a "Restricted Company"); provided, however, that this
Section 5.4 shall terminate with respect to a Restricted Company and its
Subsidiaries if the respective entity is subject to a merger, acquisition or
other transaction(s) in which the holders of voting power of such entity
immediately prior to such transaction(s) do not continue to hold more than fifty
percent
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(50%) of the voting power of the resulting entity after such transaction(s).
SECTION 6. COMMUNICATION
6.1 Notices and other communications shall be sent by facsimile or by registered
or certified mail to the following addresses:
For Proxim: For Symbol:
Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxx
Xx. Vice President, Sr. Vice President,
Administration and General Counsel, and
General Counsel Secretary
Proxim Corporation Symbol Technologies, Inc
000 Xxxxxxx Xxxxx One Symbol Plaza
Sunnyvale, CA 94085 Xxxxxxxxxx, XX 00000
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
With a copy to: With a copy to:
Xxxxxx X. Day Xxxx X. Xxxxxxxxx
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxx L.L.P.
Xxxxxxxx & Xxxxxx 000 Xxxxx Xxxxxx
000 Xxxx Xxxx Xxxx Xxx Xxxx, XX 00000
Xxxx Xxxx, XX 00000 Tel: (000) 000-0000
Tel: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
Such notices shall be deemed to have been served when received by addressee or,
if delivery is not accomplished by reason of some fault of the addressee, when
tendered for delivery. Either party may give written notice of a change of
address and, after notice of such change has been received, any notice or
request shall thereafter be given to such party as above provided at such
changed address.
SECTION 7. [INTENTIONALLY OMITTED]
SECTION 8. MISCELLANEOUS
8.1 Neither party shall assign any of its rights or delegate any of its
obligations under this Agreement. Any attempt to do so, by operation of law or
otherwise, shall be void; provided, however, that each party shall have the
right to assign this Agreement in connection with (i) a reorganization to its
legal successor, provided that after the reorganization, the successor and its
Subsidiaries will have essentially the same assets as
B - 15
such party and its Subsidiaries had prior to the reorganization; or (ii) the
sale or transfer of all or substantially all of its business or assets, whether
by sale, merger, operation of law, or otherwise in connection with a Change of
Control subject to Section 5 above. Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the parties and their
permitted successors and assigns.
8.2 Neither party shall use or refer to this Agreement or any of its provisions
in any promotional activity.
8.3 Each party represents and warrants that it has the full right and power to
grant the license and release set forth in Sections 2 and 3. Each party (as a
Grantor) further represents and warrants that prior to the Effective Date, it
has informed the other party of any Patent originating from inventions made by
employees of Grantor or its Subsidiaries, which Patent is or was owned by
Grantor or its Subsidiaries as of the Effective Date, and which patent, owing to
prior arrangements with third parties, does not qualify as a Licensed Patent of
Grantor under which licenses are granted in Section 2. Symbol represents,
warrants and covenants that it (i) owns the Symbol Licensed Patents and has the
right to grant licenses and covenants under such Symbol Licensed Patents of the
full scope set forth herein; and (ii) neither it nor any of its Subsidiaries has
assigned or otherwise transferred to any other person or entity any rights to
any causes of action, damages or other remedies, or any Patents, claims,
counterclaims or defenses, relating to the Delaware Action. Proxim represents,
warrants and covenants that it (i) owns the Proxim Licensed Patents and has the
right to grant licenses and covenants under such Proxim Licensed Patents of the
full scope set forth herein; and (ii) neither it nor any of its Subsidiaries has
assigned or otherwise transferred to any other person or entity any rights to
any causes of action, damages or other remedies, or any Patents, claims,
counterclaims or defenses, relating to the Delaware Action. Neither party makes
any other representation or warranty, express or implied, nor shall either party
have any liability in respect of any infringement of patents or other rights of
third parties due to the other party's operation under the license herein
granted.
Proxim represents and warrants that it has disclosed to Symbol all family
members world-wide of all related intellectual property that it is aware of
concerning or relating to the inventions of U.S. Patent No. 6,473,449 and U.S.
Patent Application No. 09/457,624, including but not limited to all
B - 16
continuations, continuations-in-part, divisionals; reexaminations and reissue
applications and patents.
8.4 Nothing contained in this Agreement shall be construed as conferring any
rights by implication, estoppel or otherwise, under any non-patent intellectual
property right, or any patents or patent applications, other than as expressly
set forth in this Agreement. Neither party is required hereunder to furnish or
disclose to the other any technical or other information except as specifically
provided herein.
8.5 Neither party shall have any obligation hereunder to institute any action or
suit against third parties for infringement of any of its Patents or to defend
any action or suit brought by a third party which challenges or concerns the
validity of any of its Patents. Neither party shall have any right to institute
any action or suit against third parties for infringement of any of the other
party's Patents. Neither party, nor any of its Subsidiaries, is required to file
any patent application, or to secure any patent or patent rights, or to maintain
any patent in force.
8.6 Each party shall, upon a request from the other party sufficiently
identifying any patent or patent application, inform the other party as to the
extent to which said patent or patent application is subject to the licenses,
covenants and other rights granted hereunder.
8.7 This Agreement shall not be binding upon the parties until it has been
signed hereinbelow by or on behalf of each party. No amendment or modification
hereof shall be valid or binding upon the parties unless made in writing and
signed as aforesaid, except that either party may amend its address in Section
6.1 by written notice to the other party.
8.8 If any section of this Agreement is found by competent authority to be
invalid, illegal or unenforceable in any respect for any reason, the parties
shall negotiate in good faith a valid, legal and enforceable substitute
provision that most nearly reflects the original intent of the parties and the
remainder of this Agreement shall continue in effect.
8.9 If a dispute arises out of this Agreement, or the interpretation, breach,
termination or validity thereof, each of the parties agrees to first request a
meeting of senior management of the parties in a written notice that references
this paragraph. That meeting shall occur at a mutually
B - 17
agreeable time within forty-five (45) days of any such written notice. Neither
party shall assert any claim of laches, waiver, estoppel or the like based on
the time elapsed by following this procedure. If the dispute is unresolved in
whole or in part, the parties will submit the unresolved dispute to binding
arbitration under the Patent Arbitration Rules of the American Arbitration
Association ("AAA") in effect as of the Effective Date of this Agreement if the
dispute concerns matters solely of patent law; if it does not, the Commercial
Arbitration Rules of the AAA in effect as of the Effective Date of this
Agreement. The arbitrator shall be selected from attorneys experienced with
respect to patent licensing and patent litigation settlements. Any remedy
granted by the arbitrator shall be limited to that available at law and equity.
The arbitrator shall have the authority to award attorneys' fees, if
appropriate. Any award may be entered in any court having jurisdiction thereof.
This Settlement Agreement and matters connected with the performance thereof
shall be construed, interpreted, applied and governed in all respects in
accordance with the laws of the United States of America and the State of New
York, without reference to conflict of laws principles. This Section 8.9 shall
not be construed as restricting or limiting either party's ability to
immediately assert a license or other defense in any litigation or other
proceeding against such party, such party's Subsidiaries, or its or their
products or the resellers, distributors or customers of such products,
regardless of jurisdiction or venue. The parties agree that any arbitration
pursuant to this Section 8.9 shall be conducted in Washington, D.C. or another
mutually agreed location. The parties, their representatives, other participants
and arbitrators shall hold the existence, content and result of arbitration in
confidence, except as otherwise required or advisable in connection with
securities filings or otherwise required by law.
8.10 The headings of sections are inserted for convenience of reference only and
are not intended to be a part of or to affect the meaning or interpretation of
this Agreement.
8.11 Each party acknowledges that all licenses and covenants granted by it under
or pursuant to this Agreement are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the United States Bankruptcy Code (the "Bankruptcy
Code"), licenses of rights to "intellectual property" as defined under Section
101(56) of the Bankruptcy Code. Each party acknowledges that if such party, as a
debtor in possession or a trustee-in-bankruptcy in a case under the Bankruptcy
Code, rejects this Agreement, the other party may elect to retain its rights
under this Agreement
B - 18
as provided in Section 365(n) of the Bankruptcy Code. Each party irrevocably
waives all arguments and defenses arising under 11 U.S.C. 365(c)(1) or successor
provisions to the effect that applicable law excuses the party, other than the
debtor, from accepting performance from or rendering performance to an entity
other than the debtor or debtor in possession as a basis for opposing assumption
of the Agreements by the other party in a case under Chapter 11 of the
Bankruptcy Code to the extent that such consent is required under 11 U.S.C.
Section 365(c)(1) or any successor statute, provided that any Change of Control
resulting from such proceeding shall be subject to Section 5.3.
8.12 The parties agree that all provisions, terms, and conditions of this
Agreement are and will remain confidential, and they shall not disclose such
terms under any circumstances to any person not a party hereto, except: (i) to
Subsidiaries of the parties; (ii) with the prior written consent of the other
party; (iii) to the extent such disclosure may be required or advisable in
connection with securities filings or judicial proceedings or otherwise by
applicable law, which may include filing a copy of this Agreement with the SEC
in connection with securities filings; (iv) as may be required to a party's
auditors, insurers, bankers, legal counsel and other legal and financial
advisors; (v) to a third party in connection with a potential merger or
acquisition by, of or with the party, or any other potential change of control
of a party; (vi) to a party's customers and suppliers with respect to the
products and patents for which a party is licensed or has a covenant; and (vii)
Symbol may disclose to prospective licensees under the `183 and `441 patents,
that Symbol has granted a license to Proxim for consideration valued by Symbol
at an amount no less than a six percent (6%) royalty. Notwithstanding the
foregoing, the parties in any case may state that the Delaware Action has been
settled and that certain rights and obligations have been exchanged between the
parties and each party may issue a press release relating to this Agreement
subject to prior written approval by the other party to the Agreement, such
approval not to be unreasonably withheld. In any event, each party's SEC filings
and press release may state, at such party's option, any or all of the following
information and any other information required or advisable under applicable law
or regulation: Proxim will make payments to Symbol totaling at least twenty-two
million seven hundred fifty thousand dollars (US $22,750,000); Symbol has
granted a license to Proxim under certain Symbol Patents; the consideration
provided by Proxim is valued by Symbol at an amount no less than a royalty rate
of six percent (6%); and such consideration includes a running royalty of two
B - 19
percent (2%) of net revenues for Licensed Products, the assignment of certain
Proxim patents and patent applications to Symbol and a grant of a license to
certain Proxim Patents to Symbol.
8.13 Entire Agreement. This Agreement, together with the Settlement Agreement
and the Patent Assignment Agreement, represent the only agreement of the parties
with respect to the Delaware Action and matters set forth herein and supersedes
any and all prior oral and written statements with respect thereto. This
Agreement may be altered or amended only by a writing signed by officers of both
parties.
8.14 Counterparts. This Agreement may be executed in two or more counterparts,
each of which is deemed an original, but all of which together constitute one
and the same instrument.
8.15 Marking. At the reasonable request of the other party, Proxim and Symbol
hereby agree to place upon each of the respective Proxim Licensed Products and
Symbol Licensed Products, appropriate patent notices consistent with the
reasonable practices of each party.
B - 20
IN WITNESS WHEREOF, the parties have themselves, by their duly authorized
representative, caused this Agreement to be executed as of the Effective Date:
Agreed to: Agreed to:
SYMBOL TECHNOLOGIES, INC. PROXIM, CORP.
By: /s/ Xxxxx X. Xxxx By: Xxxxx X. Xxxxx
--------------------------- ------------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxxx
Title: Sr. Vice President, Title: President and COO
General Counsel and
Secretary
Date: September 13, 2004 Date: September 13, 2004
PROXIM WIRELESS NETWORKS, INC.
By:/s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and CEO
Date: September 13, 2004
ATTACHMENT C
PATENT ASSIGNMENT
WHEREAS, Proxim Corporation of 000 Xxxxxxx Xxxxx, Xxxxxxxxx Xxxxxxxxxx
00000, hereinafter referred to as "Assignor," is the sole owner of United States
Patent No. 6,473,449, issued October 29, 2002 ("the '449 Patent") for
HIGH-DATA-RATE WIRELESS LOCAL-AREA NETWORK;
and
WHEREAS, Symbol Technologies, Inc. of Holtsville, New York, hereinafter
referred to as "Assignee," whose post office address is Xxx Xxxxxx Xxxxx,
Xxxxxxxxxx Xxx Xxxx, 00000 is desirous of acquiring the entire right, title and
interest in the patents and patent applications listed in Schedule A hereto
("Assigned Patents"); and
NOW, THEREFORE, BE IT KNOWN THAT, in consideration of the mutual promises
and obligations of the Assignor and Assignee contained in the Settlement
Agreement dated September 13, 2004, and other good and valuable consideration,
the receipt of which is hereby acknowledged, Assignor irrevocably assigns,
transfers and conveys unto Assignee, its successors and assigns, the entire
right, title and interest in and to the Assigned Patents including, but not
limited to, the sole and exclusive right to bring suit for past and future
infringement of the Assigned Patents (and to collect any and all damages for
such infringement), the sole and exclusive right to prosecute any pending
application for patent that is included in the Assigned Patents, and the sole
and exclusive right to initiate and prosecute any reissue and reexamination
proceedings relating to the Assigned Patents, the same to be held and enjoyed by
the Assignee, its successors and assigns, for its own use and behalf, to have
and to hold the same to the full end of the term or terms for which the Assigned
Patents are granted, as fully and entirely as the same would have been held by
Assignor had this assignment not been made; and
ASSIGNOR REPRESENTS THAT it is the exclusive owner of all right, title and
interest, in the Assigned Patents and Assignor has the right and full power to
enter into this assignment; and
ASSIGNOR REPRESENTS THAT the Assigned Patents and rights assigned hereby
are free of any liens or security interests; and
ASSIGNOR REPRESENTS THAT it has not received any written notice of any
claims, pending or threatened, with respect to Assignor's ownership of the
Assigned Patents and Assignor is not subject to any agreement, judgment or court
order that conflicts with the terms of this Agreement; and
Assignor shall, upon the reasonable request of Assignee, execute and
deliver without further compensation, any and all other instruments in writing,
further applications, papers, affidavits, powers of attorney, assignments, and
other documents which are reasonably required or necessary to more effectively
carry out the provisions of this Assignment, including, but not limited to,
instructing its patent counsel to transfer all prosecution files for the
Assigned Patents; and
Assignor does hereby authorize and request the Commissioner of Patents and
Trademarks to issue any United States Patent issuing from the Assigned Patents
to said Symbol Technologies, Inc. as the assignee of the entire right title and
interest in the Assigned Patents; and
this Patent Assignment shall be governed by and construed in accordance
with the laws of the state of New York without giving effect to the principles
of conflicts of laws thereof.
Executed this 13th day of September, 2004.
/s/ Xxxxx X. Xxxxx
-----------------------------------
Proxim Corporation
Name: Xxxxx X. Xxxxx
Title: President & COO
State of California )
ss:
County of Santa Xxxxx)
Before me personally appeared said Xxxxx X. Xxxxx
and acknowledged the foregoing instrument to be his free act
and deed this 13 day of September, 2004.
/s/ X. Xxxxxxx
-------------------------------
Seal (Notary Public)
SCHEDULE A
United States Letters Patent No. 6,473,449, issued October 29, 2002
Japanese Letter Patent No. 3532556
Patent Application in China, No. 01136147.6
Patent Application in Malaysia, No. PI20014245
ATTACHMENT D
PATENT ASSIGNMENT
WHEREAS Proxim Corporation of 000 Xxxxxxx Xxxxx, Xxxxxxxxx Xxxxxxxxxx
00000, hereinafter referred to as "Assignor," is the sole owner of an
application for United States Letters Patent, Application Number 09/457,624,
which was filed on December 8, 1999 ("the '624 Application") for a
FLEXIBLE WIRELESS LAN ARCHITECTURE BASED ON WIRELESS COMMUNICATION SERVER;
and
WHEREAS, Symbol Technologies, Inc. of Holtsville New York,
hereinafter referred to as "Assignee," whose post office address is Xxx Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxx Xxxx, 00000 is desirous of acquiring the entire right,
title and interest in the patents and patent applications listed on Schedule A
hereto ("Assigned Applications"); and
NOW, THEREFORE, BE IT KNOWN THAT, in consideration of the mutual promises
and obligations of the Assignor and Assignee contained in the Settlement
Agreement dated September 13, 2004, and other good and valuable consideration,
the receipt of which is hereby acknowledged, Assignor, by these presents
irrevocably assigns, transfers and conveys unto Assignee, its successors and
assigns, the entire right, title and interest in and to the Assigned
Applications including, but not limited to, the sole and exclusive right to
bring suit for past and future infringement of any patent issued from any of the
Assigned Applications (and to collect any and all damages for such
infringement), and the sole and exclusive right to prosecute any pending
application for patent that is included in the Assigned Applications, and the
sole and exclusive right to initiate and prosecute any reissue and reexamination
proceedings relating to the Assigned Applications, the same to be held and
enjoyed by Assignee, its successors and assigns, for its own use and behalf, to
have and to hold the same to the full end of the term or terms for which any
Letters Patent issuing from the Assigned Applications is granted, as fully and
entirely as the same would have been held by Assignor had this assignment not
been made; and
ASSIGNOR REPRESENTS THAT it is the exclusive owner of all right, title and
interest, in the Assigned Applications and Assignor has the right and full power
to enter into this assignment; and
ASSIGNOR REPRESENTS THAT the Assigned Applications and rights assigned
hereby are free of any liens or security interests; and
ASSIGNOR REPRESENTS THAT it has not received any written notice of any
claims, pending or threatened, with respect to Assignor's ownership of the
Assigned Applications and Assignor is not subject to any agreement, judgment or
court order that conflicts with the terms of this Agreement; and
Assignor shall, upon the reasonable request of Assignee, execute and
deliver without further compensation, any and all other instruments in writing,
further applications, papers, affidavits, powers of attorney, assignments, and
other documents which are reasonably required or necessary to more effectively
carry out the provisions of this Assignment, including, but not limited to,
instructing its patent counsel to transfer all prosecution files for the
Assigned Applications; and
Assignor does hereby authorize and request the Commissioner of Patents and
Trademarks to issue any United States Patent issuing from the Assigned
Applications to said Symbol Technologies, Inc. as the assignee of the entire
right title and interest in the Assigned Application; and
this Patent Assignment shall be governed by and construed in accordance
with the laws of the state of New York without giving effect to the principles
of conflicts of laws thereof.
Executed this 13th day of September, 2004.
/s/ Xxxxx X. Duffy_
-------------------------------------
Proxim Corporation
Name: Xxxxx X. Xxxxx
Title: President & COO
State of California )
ss:
County of Santa Xxxxx )
Before me personally appeared said Xxxxx X. Xxxxx
and acknowledged the foregoing instrument to be his free act
and deed this 13 day of September, 2004.
/s/ X. Xxxxxxx
----------------------------------
Seal (Notary Public)
Schedule A
United States Patent Application No. 09/457,624, filed on December 8, 1999
EP Application No. 00983998.6
CA Application No. 2,393,719
JP Application No. 2001-543041
