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Exhibit 10.53
COOPERATIVE RESEARCH AGREEMENT
BETWEEN
BEACON TELCO L.P.,
(hereinafter "Contractor")
AND
Verilink Corporation (hereinafter "Participant")
Contractor and Participant being hereinafter referred to individually
as a "Party" and jointly referred to as the "Parties"
BACKGROUND
This Agreement is for the implementation of a research and development project
intended to create marketable optical networking products for the
telecommunications access market with modular, extendable architectures, with
software to be developed hereunder (the "Project") and which involves the
Parties (as defined above), and the shared access to and use of the Boston
University Photonics Center (the "BU Photonics Center") as well as certain
personnel of the Trustees of Boston University (the "University") assigned to
the BU Photonics Center, pursuant to a separate agreement between Participant
and the University (the "Premises License and Service Agreement"). The overall
goal of the Project is the development of an optical networking prototype
product for the telecommunications access market of a type to be defined as part
of Phase 0 of the PACE(TM) Phase Description and Deliverable Milestone Document
relating to developing the specifications of the Developed Prototype Product(s)
and the milestones for the work described in Appendix A-1 of this Agreement (the
"Developed Prototype Product(s)") that will leverage commercially available
off-the-shelf hardware components in order to facilitate time to market. To
facilitate that effort, Participant employees, contractors and consultants who
are engaged by Participant and designated to work on the Project (the
"Participant's Developers") and members of Contractor's work force identified in
accordance with this Agreement (the "Contractor's Developers") will work
together cooperatively and jointly under Participant's management at the BU
Photonics Center in connection with Participant's pursuit and achievement of the
preceding objectives. However, any personnel of the BU Photonics Center that in
any way participate in this Project shall be supplied to Participant solely
pursuant to the terms and conditions of the Premises License and Services
Agreement, shall be designated and assigned only by the University, and shall
remain employees of only the University.
This overall Project is intended to represent a cooperative initiative.
Accordingly, agreements that will be entered into in connection with this
Project and which will bear the same Effective Date (the "Project Agreements")
consist of the following: (a) this Agreement, which shall be deemed to include
the PACE(TM) Phase Description and Deliverable Milestone Document
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relating to developing the specifications of the Developed Prototype Product(s)
and the milestones for the work described in Appendix A-1 of this Agreement (b)
a Premises License and Services Agreement between Participant, Contractor and
the University providing Participant at the University's sole discretion, with
certain non-exclusive rights of access to and use of the identified space in the
BU Photonics Center as well as access to certain of its personnel, only for
purposes of the development and testing (and not, for example, the manufacturing
or commercialization) of the Developed Prototype Product(s) and (c) A Warrant
and Stockholder's Agreement, all dated October 13, 2000. However, each of these
agreements shall exist separate and apart from each other, and termination of
any agreement(s) shall not result in termination of any other of these
agreements except to the extent expressly set forth herein or therein.
ARTICLE I. DEFINITIONS
"Agreement" means this Cooperative Research Agreement, as amended from time to
time. Words such as "herein," "hereinafter," "hereof," "hereto," and "hereunder"
shall refer to this Agreement as a whole, unless the context otherwise requires.
"Background Intellectual Property" means patents or copyrights owned by either
Party to this Agreement which were in existence prior to this Agreement or are
first conceived and/or first produced or reduced to practice outside this
Agreement and which would be of use to the Parties in conducting the work under
this Agreement. In the case of inventions in those identified items, the
inventions must have been conceived outside of this Agreement, whether or not
first actually produced or reduced to practice under this Agreement to qualify
as Background Intellectual Property. Licensing of Background Intellectual
Property, if agreed to by the Parties, shall be the subject of separate
licensing agreements between the Parties; provided, however, that any Background
Intellectual Property of Contractor which is necessary for the Participant to
use in the performance of its obligations under this Agreement shall be deemed
to have been licensed to Participant on a royalty-free, nonexclusive basis but
solely for use in performing its research and development activities
hereunder... To the extent that a license(s) to Contractor's Background
Intellectual Property, and/or to Boston University Intellectual Property would
be necessary at law with respect to the use, sale, manufacturing or
commercialization of the Developed Prototype Product(s) by Participant after
conclusion of this Agreement, the Parties will negotiate a mutually agreed
license for such Background Intellectual Property. Background Intellectual
Property and Boston University Intellectual Property are not Subject Inventions
for ownership and rights of use purposes.
"Boston University Intellectual Property" shall have the meaning given such term
in the Premises License and Services Agreement between Participant and the
University.
"Confidential Information" means information such as, but not limited to, (i)
trade secrets, ideas, concepts, know-how, algorithms, designs, formulae,
inventions (whether or not patentable), customer lists, product or marketing
information, or (ii) commercial or financial information which is privileged or
confidential, once it is marked as Confidential Information, or otherwise
clearly designated as proprietary, confidential, or secret in accordance with
the provisions of
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Article VIII of this Agreement. Confidential Information shall in any event be
deemed to include this Agreement, per Article IX of this Agreement.
"Developed Prototype Product" means the prototype to be developed hereunder,
based upon the specifications to be defined as part of Phase 0 of the PACE(TM)
Phase Description and Deliverable Milestone Document relating to such Product,
but excluding any Generated Information, Subject Inventions, Mask Works,
Intellectual Property, and Background Intellectual Property content to the
extent owned by Contractor, Beacon Photonics, Inc., Beacon Photonics, L.P. or
Trustees of Boston University, including but not limited to Boston University
Intellectual Property.
"Generated Information" means all information, however characterized, originally
developed or created by either Party in the performance of or otherwise in
connection with this Agreement, including but not limited to, the source and
object code of any software developed hereunder but excluding any Confidential
Information or Background Intellectual Property, Boston University Intellectual
Property, or content, of any Party who did not generate it.
"Intellectual Property" means patents, pending patent applications, copyrights,
Mask Works, Confidential Information, and other forms of comparable property
rights protected by Federal Law, state law, and foreign counterparts.
"Mask Work" means a series of related images, however fixed or encoded, having
or representing the predetermined, three-dimensional pattern of metallic,
insulating or semiconductor material present or removed from the layers of a
semiconductor chip product; and in which series the relation of the images to
one another is that each image has the pattern of the surface of one form of the
semiconductor chip product.
"PACE(TM)" means Product And Cycle Time Excellence Product development
methodology developed by Pittiglio Rabin Todd & McGrath (PRTM) utilizing a
phased approach to product development. Each sequential phase focuses on key
activities culminating in a group of deliverables which are presented and
approved at a milestone review prior to moving to the next sequential phase.
"Subject Invention" means any invention(s) of the Contractor or Participant,
both first conceived and actually reduced to practice (as defined under the
United States patent laws), in the performance of work under this Agreement, but
excluding any Background Intellectual Property and Boston University
Intellectual Property content.
ARTICLE II. STATEMENT OF PROJECT OBJECTIVE
The Statement of Project Objective describes the work to be performed hereunder
and is attached to and made a part of this Agreement as Appendix A.
All work of Contractor, Participant, Participant's Developers and any of
Contractor's Developer's in connection with the Project shall be performed in a
workmanlike and professional manner by persons having a level of skill in the
area commensurate with the requirements of the scope of
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work to be performed. However, Participant acknowledges and agrees that to the
extent Participant receives or obtains access to or input and/or guidance from
Contractor or personnel at the BU Photonics Center in connection with this
Project, it shall be provided by such entities and accepted by Participant on an
AS-IS basis only.
ARTICLE III. FUNDING & COSTS
A. Participant will reimburse Contractor for all incremental costs incurred by
Contractor as a result of and throughout the Term of this Agreement in
accordance with the terms and conditions hereof. An estimate of Contractor's
projected incremental costs for each milestone will be provided to the
Participant at the initiation of each milestone for approval by Participant (a
"Milestone Budget"). Contractor shall be entitled, but not obligated, to suspend
its performance hereunder until such approval is received, which approval shall
not be unreasonably withheld. For purposes of this provision, Contractor's
incremental costs shall be deemed to include Contractor's incremental
out-of-pocket costs and expenses such as travel and living expenses solely for
purposes of this Project; provided that (I) all travel or living expenses may be
incurred only in accordance with Participant's Travel Expense Reimbursement
Policy a copy of which shall be provided to Contractor on the Effective Date, as
amended from time to time by Participant for its own business operations, and
(ii) any other individual incremental expenditures in excess of $10,000
individually, or in excess of the Milestone Budget in the aggregate shall
require the prior written approval of Participant shall also be obligated to pay
Contractor whatever incremental costs are incurred by it in connection with this
Project, as defined in and pursuant to the terms and conditions of the Premises
License and Service Agreement.
B. Contractor will not charge Participant for Participant's use of existing
facilities utilized, existing equipment utilized, or for any time or services of
Contractor's Developers. However, this does not include extended time allocation
by Contractor engineers and technicians, which, if required, will be subject to
approval by and, upon such approval paid for by, Participant. The terms and
conditions to govern Participant's access to and use of the BU Photonics Center
and non-Contractor personnel at that Center, shall be governed solely by the
terms and conditions of the Premises License and Services Agreement. In any
event, however, any and all input, services and assistance provided to
Participant by any and all personnel shall be provided on an as-available and
AS-IS basis only.
C. At the end of Milestone 3 Participant will perform an informed analysis, on a
best efforts basis, to assess the reasonably foreseeable costs and expenses of
completing the Milestones 4 & 5 (which will include a good faith estimate to be
provided by Contractor of the incremental costs for which Contractor will be
entitled to be reimbursed by Participant per the preceding Paragraph A) and
establish a budget therefore (the "Completion Budget"). Upon establishment of
the Completion Budget, both Parties agree to use all reasonable efforts to
perform all activities in a manner sufficient to successfully complete
Milestones 4 and 5 within the Completion Budget. If despite such efforts,
however, Milestones 4 and 5 remain incomplete after Completion Budget for these
Milestones have been exceeded by 50% percent, Contractor shall not be obligated
to continue or complete the Project unless Participant elects to do so provided,
however, that it is at
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no cost or expense to Contractor and that Participant continues to reimburse
Contractor for incremental costs pursuant to the requirements of this Agreement.
In the event that Participant ceases performance in accordance with the
provisions of this Agreement, Participant shall promptly render to Contractor, a
pro rata portion of the Bonus Amount referenced in Article IV based upon the
extent to which the Milestones referenced in Exhibit A have been completed.
D. Subject to the provisions of Paragraph C above, Participant shall notify
Contractor if, as and when the actual costs have exceeded the Completion Budget
by 50%, as determined by Participant based upon Participant's sole but good
faith assessment. Termination of this Agreement by either Party as a result,
must be pursuant to the provisions of Article XXV. All invoices for
reimbursement of incremental costs incurred shall detail the Project-related
purpose of the expense and out-of-pocket reimbursable expenses incurred by
Contractor (and the University) during the period covered, which shall be passed
through at actual cost without upcharge or markup of any kind. Participant shall
promptly review Contractor's invoices and approve for payment all amounts
properly do under this Agreement, and shall pay all such amounts within thirty
(30) days of Participant's receipt and approval of the invoice. Participant
shall approve or disapprove each invoice within five (5) business days of its
receipt by Participant. Disapproval of any invoice shall be in writing,
specifying what portions thereof are disapproved and the reasons therefore; any
portion of the invoice that is not disapproved shall be paid on time. Interest
shall be assessed against any and all amounts not paid when due at the rate of
12% per annum, or the highest rate permissible by law, whichever is less.
Interest will not be charged with respect to any amounts which are the subject
of a bona fide dispute.
E. The effective date of this Agreement shall be the date on which this
Agreement and all Project Agreements identified in the Background Article
referenced above have been fully executed and are deemed to be effective by
their own respective terms (the "Effective Date"). The Parties will cooperate
with each other and use their respective reasonable efforts to complete the work
to be performed under this Agreement within eighteen (18) months from the
Effective Date.
ARTICLE IV. CERTAIN BONUS PAYMENTS
On execution of this Agreement, and in partial consideration for assistance
which has already been provided by Contractor (which shall nonetheless be deemed
to have been provided pursuant to the terms and conditions of this Agreement)
Contractor shall be entitled to receive and Participant shall be obligated to
pay Contractor, the first bonus payment in an amount of Three Million Five
Hundred Sixty Two Thousand and Five Hundred Dollars ($3,562,500) ("Bonus Payment
1"), where W equals the U.S. Dollar price of one share of Participant Common
Stock as valued, on the date of signing this Agreement, which Bonus Payment
shall be deemed to be fully vested. HOWEVER, Contractor has agreed to defer
receipt of the full amount of this Bonus Payment 1 until, and Participant shall
accordingly deliver the Bonus Payment 1 to Contractor, one (1) year after the
date of this Agreement, or prior thereto upon termination of this Agreement if
that is to occur earlier.
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Subject to the provisions of Article III and this Article IV, upon and subject
to completion of Milestone 5 as set forth in Appendix A-1, Participant will
deliver to Contractor a second bonus payment (or a pro rata portion of such
payment per Article XXV) as follows:
(Y x 1,500,000) - (Z x 1,500,000) = Bonus Amount 2
Where, Y = $ 4.75; and Z = I) zero when the market value of Participant's common
stock is $ 4.75 or greater, or ii) $ 4.75 minus the market price, when the
market price of Participant's common stock is less than $ 4.75
Both bonus payments will be made in the form of either: 1) a Promissory Note in
the form attached hereto as Appendix B (the "Bonus Note"), payable in cash or at
Participant's sole election, in Participant's common stock with a balloon
maturity in five years, or at Participant's option, 2) Participant's common
stock equating to the Bonus Amount. Contractor may, at its option, use all or
part of the Bonus Note as payment toward the Strike Price at the time of
exercise of the Warrants.
ARTICLE V. PERSONAL PROPERTY AND FACILITY ACCESS
A. The terms and conditions to govern Participant's access to and use of the BU
Photonics Center and services shall be as set forth solely in the separate
Premises License and Services Agreement among Participant, Contractor and the
University. Accordingly, to the extent of any inconsistencies or conflicts
between express provisions of this Agreement and the such Premises License and
Services Agreement as they relate, directly or indirectly to the BU Photonics
Center, the terms and conditions of the Premises License and Services Agreement
shall govern.
B. To the extent that any equipment and/or tangible property will need to be
purchased for this Project, such equipment and property shall be owned
exclusively by the Party who purchased the same, unless such Party has been
reimbursed for such equipment and/or tangible property by the other Party, in
which case such equipment and/or tangible property shall be owned by the
reimbursing Party. However, to the extent that any equipment or property is
purchased solely by Participant and/or jointly with Contractor and becomes a
fixture of the BU Photonics Center, Participant agrees to sell its ownership
interest in the same on a depreciated cost basis consistent with industry
practice, to Contractor's designee which shall be deemed to be the University,
and which shall therefore be pursuant to the terms and conditions of the
Premises License and Services Agreement.
ARTICLE VI. DISCLAIMER AND REPRESENTATIONS
A. EACH PARTY REPRESENTS TO THE OTHER PARTY THAT IT IS AUTHORIZED TO ENTER INTO
THIS AGREEMENT AND TO UNDERTAKE THE OBLIGATIONS SET FORTH THEREIN, AND WILL NOT
BE IN BREACH OF ANY AGREEMENT OR COMMITMENT WITH ANY THIRD PARTY BY DOING SO.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH WITHIN THIS ARTICLE VI, NO EXPRESS
WARRANTIES
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HAVE BEEN MADE BY EITHER PARTY TO THIS AGREEMENT, AND ANY WARRANTIES THAT COULD
BE IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF NON-INFRINGEMENT, OR AS
TO THE CONDITIONS OR ADEQUACY OF THE BU PHOTONICS CENTER, THE CONDITIONS OR
SUITABILITY OF THE EQUIPMENT OR SOFTWARE THAT MAY BE AVAILABLE, ANY SERVICES OR
ASSISTANCE TO BE SUPPLIED, COMPLIANCE OF THE DEVELOPED PROTOTYPE PRODUCT(S) WITH
ANY APPLICABLE SPECIFICATION, FREEDOM FROM DEFECTS, ERRORS, VIRUSES OR OTHER
DISABLING DEVICES, OR AS TO ANY INTELLECTUAL PROPERTY OR PROTOTYPE MADE, OR
DEVELOPED UNDER THIS AGREEMENT, OR THE OWNERSHIP,MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF THE RESEARCH OR ANY DEVELOPED PROTOTYPE PRODUCT(S), ARE
HEREBY EXPRESSLY DISCLAIMED BY BOTH PARTIES.
B. Contractor represents that the Contractor official executing this Agreement
on Contractor's behalf has the requisite authority to do so.
C. Participant represents that it has the requisite power and authority to enter
into this Agreement and that the Participant official executing this Agreement
has the requisite authority to do so.
ARTICLE VII. LIMITATIONS OF LIABILITY
Except for and to the extent of, but only to the extent of, any liability
resulting from any grossly negligent or willful and wanton acts or omissions of
Contractor resulting in any personal injury (including death) or damage to
tangible personal property of any third party, Contractor shall not be liable to
Participant or to any third party for any damages, costs and expenses, however
characterized, and including attorney's fees, arising out of or otherwise
resulting directly or indirectly from, Participant's performance or any failure
to perform its obligations under this Agreement, the making, using or selling of
the Developed Prototype Product(s) and/or any product based upon or otherwise
arising out of the Developed Prototype Product(s), as well as any process or
service by or on behalf of the Participant, its assignees, licensees, or any
third party(s), whether or not derived from the work performed under this
Agreement. In no event shall Beacon Photonics, Inc., Beacon Photonics L.P.,
Globalvest Management Company, L.P. or the University be liable to Participant
or to any third party, in contract, tort or in equity and regardless of whatever
form of action or theory of law, for any claims, suits, allegations of damages,
however characterized, which may in any way arise out of this Agreement. The
sole and exclusive liability of the University and of Beacon Photonics, Inc.
with respect to any matters directly or indirectly related to this Project,
shall be as expressly set forth and limited in the Premises License and Services
Agreement. Accordingly, and with the limited exception of the personal injury
claims as referenced above, Participant agrees to defend Contractor, including
its employees, contractors, consultants, officers and directors from and against
any and all suits, claims and allegations arising out of the foregoing,
including but not limited to, any and all intellectual property infringement
and/or misappropriation claims and agrees to indemnify and hereby holds them
jointly and severally harmless from and against any and all judgements,
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settlements and damages, whether or not awarded and however characterized,
arising out of the foregoing.
EXCEPT WITH RESPECT TO THE PERSONAL INJURY CLAIMS REFERENCED ABOVE AND ANY
BREACH BY CONTRACTOR OF ITS WARRANTIES UNDER ARTICLE VI ABOVE AS WELL AS ANY
BREACH OF ITS OBLIGATIONS UNDER ARTICLE VIII, BUT SUBJECT TO THE PROVISIONS OF
ARTICLE VII, CONTRACTOR SHALL HAVE NO LIABILITY TO PARTICIPANT OR TO ANY THIRD
PARTY, IN CONTRACT, TORT, AND/OR ANY OTHER THEORY OF LAW, AND IRRESPECTIVE OF
FAULT OR NEGLIGENCE, FOR ANY DAMAGES SUFFERED BY THE PARTICIPANT OR ANY THIRD
PARTY WHICH, DIRECTLY OR INDIRECTLY, WERE CAUSED BY OR ARE OTHERWISE
ATTRIBUTABLE TO, CONTRACTOR IN CONNECTION WITH THIS PROJECT OR AGREEMENT.
Contractor's sole and exclusive responsibility with respect to this Project
shall be to perform whatever services it provides hereunder in accordance with
the express requirements of the last paragraph of Article II, failing which
Participant's sole and exclusive remedy shall be for Contractor to re-perform
the service which failed to meet the required standard, without charge to
Participant. With the same exceptions noted above, and with the further
exception of Participant's express obligations under this Article VII,
Participant's liability to Contractor hereunder shall not exceed in U.S.
Dollars, the combined value of (i) the stock issued or issuable to Contractor
pursuant to the warrants which are the subject of the Warrant and Stockholder's
Agreement referenced in this Agreement as of the Effective Date of this
Agreement, or the date on which the Developed Prototype Product(s) is first
announced as being publicly available, whichever is greater, and (ii) the Bonus
Payments payable under Article IV hereof. With the foregoing stated exceptions,
in no event shall either Party be liable for any special, indirect,
consequential, incidental or exemplary damages, including but not limited to,
any manner of economic loss or damage, and regardless of whether the applicable
Party was advised of the possibility of such damages. IN NO EVENT SHALL THE
UNIVERSITY, BEACON PHOTONICS, INC., BEACON PHOTONICS, L.P. OR GLOBALVEST
MANAGEMENT COMPANY, L.P. HAVE ANY LIABILITY WHATSOEVER TO PARTICIPANT OR TO ANY
THIRD PARTY FOR DAMAGES SUFFERED AND/OR ARISING OUT OF THIS AGREEMENT,
REGARDLESS OF THE APPLICABLE THEORY OF LAW OR RECOVERY, AND REGARDLESS OF
WHETHER SUCH DAMAGES CONSITUTE DIRECT, INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR EXEMPLARY DAMAGES. PARTICIPANT'S SOLE AND EXCLUSIVE REMEDY AND
RECOURSE SHALL BE AS TO CONTRACTOR ALONE AND ON THE BASIS SET FORTH HEREIN.
ARTICLE VIII. OBLIGATIONS AS TO CONFIDENTIAL INFORMATION
A. Confidential Information may be disclosed orally, electronically, visually or
in a written or other tangible form. However, neither Party shall be obligated
to treat the other Party's Confidential Information in accordance with this
Article unless and until such information is disclosed to the recipient Party in
accordance with the requirements of this Paragraph. Specifically, Confidential
Information disclosed in tangible form shall be conspicuously labeled
"Confidential" or with words of similar import; if disclosed in intangible form,
the disclosing
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Party shall advise the recipient Party of the confidential nature of the
information at the time of such disclosure and shall provide the recipient Party
with written confirmation of the specific information disclosed and its
confidential nature, within 10 business days of each such disclosure. Once
Confidential Information has been disclosed to the recipient Party in this
manner, the recipient Party shall be obligated to treat it in accordance with
the requirements of this Agreement; any subsequent disclosures of the same
information to the recipient Party need not be in accordance with the
administrative requirements of this Agreement in order to qualify as
Confidential Information of the other Party. Information received by either
Party from the other Party prior to such information being identified as
Confidential Information in accordance with these requirements must be treated
as the Confidential Information of the other Party after such information is
identified as Confidential Information in accordance with this Paragraph unless,
prior to such information being identified as Confidential Information, the same
has entered the public domain. However, notwithstanding the foregoing, each
Party shall use reasonable efforts to keep confidential all information it
receives or to which it otherwise obtains access in connection with the Project,
and to consult with the other Party before disclosing information which the
recipient Party should reasonably understand is Confidential Information due to
the nature of the specific information and/or the circumstances surrounding the
recipient Party's access to such information. Each Party agrees not to use
Confidential Information provided by the other Party for any purpose other than
that set forth in this Agreement, nor disclose such Confidential Information
(which shall include any notes, extracts, analyses or materials which would
disclose such Confidential Information) to anyone without written approval of
the providing Party other than (i) the other Party, or (ii) the other Party's
employees or agents having a need to know such Confidential Information for the
sole purpose of performing the recipient Party's express obligations hereunder,
provided that each such employee has executed an agreement with its employer
prior to receipt of any Confidential Information which obligates it to treat the
same in a manner consistent with the requirements of this provision. Any and all
manner of notes, extracts, analyses or materials which are prepared by each or
any Party, whether or not at the site of the Contractor's facilities, and which
embody any of the other Party's Confidential Information, shall be treated in
accordance with its obligations with respect to that same Party's Confidential
Information.
B. Confidential Information in tangible form shall be returned to the disclosing
Party or destroyed with a certificate of destruction submitted to the disclosing
Party, upon request by the disclosing Party, during the term of this Agreement
or upon termination or expiration of this Agreement. However, the recipient
Party shall always be entitled to (i) retain copies of such Confidential
Information in connection with any license of any Background Intellectual
Property that may be licensed to such Party hereunder, or (ii) maintain a single
copy of such Confidential Information in the locked files of its in-house or
outside legal counsel, for the sole purpose of monitoring its obligations with
respect to such Confidential Information.
C. All Confidential Information disclosed in accordance with Article VIII shall
be protected by the recipient Party as the other Party's proprietary and
Confidential Information except to the extent, but only to the extent that any
portion of such Confidential Information: (i) becomes publicly known due to no
act or omission attributable to the recipient Party constituting a breach of
this Agreement; (ii) comes into recipient Party's possession from a third party
without an obligation of confidentiality on the recipient Party, provided that
the third party had the right to
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disclose it to the recipient Party and on such basis (iii) is independently
developed by employees or agents of the recipient Party who did not have access
to nor in any way benefit from the other Party's Confidential Information, (iv)
is intentionally released by the disclosing Party to a third party without
restriction, or (v) is released for disclosure with the written consent of the
disclosing Party., Before releasing Confidential Information in response to any
legal or regulatory requirement compelling such disclosure, the recipient Party
shall first notify the disclosing Party reasonably in advance of such disclosure
in order to allow the disclosing Party to seek and obtain a protective order
with respect to such Information; any Confidential Information disclosed
pursuant to any such order or directive shall nonetheless continue to be deemed
to be Confidential Information.
D. Notwithstanding the foregoing, to the extent but only to the extent that
Confidential Information of either Party falls within any of the foregoing
exemptions, the recipient Party shall not be entitled to use such information if
it is the subject of any patent, copyright, mask work or other such intellectual
property right, unless and to the extent that the recipient Party has otherwise
been granted an express license under this Agreement with respect to any
Background Intellectual Property which may include such Confidential
Information.
E. In no case shall either Party provide the other Party's Confidential
Information to any third party person or entity, whether or not for commercial
purposes. However, Participant acknowledges that while the University, Beacon
Photonics, Inc., Beacon Photonics, L.P. and Globalvest Management Company, L.P.
are third parties with respect to this Agreement in every respect, certain of
these entities will likely have access to Participant's Confidential Information
through no act of Contractor as a result of Participant's own use of the BU
Photonics Center pursuant to the Premises License and Services Agreement and the
interaction of Participant's own personnel with the personnel of such entities.
In the event that Contractor authorizes Participant in a separate writing to
provide Contractor's Confidential Information to a third party in connection
with any decision by Participant to commercialize the Developed Prototype
Product, it shall be pursuant to terms and conditions which are acceptable to
Contractor. In any event, Contractor reserves the right to require that its
Confidential Information be disclosed to any such third party pursuant to an
agreement between Contractor and such third party, or pursuant to an agreement
between Participant and such third party which expressly permits Contractor to
enforce its provisions directly against such third party.
ARTICLE IX. OBLIGATIONS AS TO CONFIDENTIAL INFORMATION
A. Each Party shall mark its Confidential Information, in accordance with the
requirements of Article VIII, any and all Generated Information that it
produces. To the extent that any Generated Information is produced by personnel
of both Parties, it shall be labeled as the Confidential Information of both
Parties.
B. For a period of 3 years from the date that a given item of Confidential
Information is first disclosed to the recipient Party, the recipient Party
agrees not to disclose such Information to any third party, and not to use that
information for any purpose whatsoever, subject to the provisions of Article
VIII E. above; provided that the restrictions on disclosure and use of
Confidential
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Information herein with respect to any Confidential Information that constitutes
a trade secret of the disclosing Party under applicable law shall continue for
so long as such information retains its status as trade secret information of
the disclosing Party.
C. In any event, the terms and conditions of this Agreement shall be deemed to
be the Confidential Information of both Parties, and neither Party may disclose
the existence or terms of this Agreement without the express, prior written
consent of the other Party. For the avoidance of doubt, each Party's performance
of their respective obligations concerning this Project shall be subject to
these restrictions as well as the provisions of Article VIII, rather than an
exception thereto, unless and to the extent otherwise expressly agreed in
writing and on a case by case basis.
ARTICLE X. EXPORT CONTROL
THE RESPECTIVE PARTIES UNDERSTAND THAT ANY GENERATED INFORMATION OR INTELLECTUAL
PROPERTY TO WHICH EITHER PARTY HAS TITLE PURSUANT TO THE TERMS OF THIS AGREEMENT
AND RESULTING FROM THE PERFORMANCE OF THIS AGREEMENT MAY BE SUBJECT TO EXPORT
CONTROL LAWS AND THAT THE OWNER(S) OF SUCH GENERATED INFORMATION AND
INTELLECTUAL PROPERTY ALONE ARE RESPONSIBLE FOR THEIR OWN RESPECTIVE COMPLIANCE
WITH SUCH LAWS. HOWEVER, NOTWITHSTANDING THE FOREGOING, PARTICIPANT ALONE SHALL
BE RESPONSIBLE FOR COMPLYING WITH ANY AND ALL SUCH LAWS, REGARDLESS OF
OWNERSHIP, TO THE EXTENT APPLICABLE AND NECESSARY IN ORDER TO EXERCISE ITS
EXCLUSIVE LICENSE GRANTS HEREUNDER.
ARTICLE XI. REPORTS
The Parties agree to provide the following deliverables to Participant:
1. Reports required by the PACE(TM) Phase Description and Deliverable
Milestone Document; and
2. Reports required by Article XIV hereof; and
3. A final report, to include a list of Subject Inventions, subject to the
restrictions of Article VIII and Article IX; and
4. Other topical/periodic reports subject to Article VIII and Article IX
where the nature of research and magnitude or dollar justify the same.
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ARTICLE XII. PRE-PUBLICATION REVIEW
A. The Parties anticipate that some of Contractor's Developers assigned to the
Project may wish to publish technical developments and/or research findings
generated in the course of this Agreement. On the other hand, the Parties
recognize that a principal objective of this Agreement is to provide business
advantages to Participant. In order to reconcile publication and business
concerns, the Parties agree to a review procedure as follows:
1. Contractor or Contractor's Developers ("Submitter") shall submit to the
Participant, in advance, proposed written and oral publications
pertaining to work under the Agreement. Proposed oral publications
shall be submitted to Participant in the form of a written presentation
synopsis and a written abstract.
2. Participant shall provide a written response to the Submitter within
thirty (30) days, either objecting or not objecting to the proposed
publication. Submitter shall consider all objections of Participant and
shall not unreasonably refuse to incorporate the suggestions and meet
the objections of Participant. The proposed publication shall be deemed
not objectionable, unless the proposed publication contains
Confidential Information, Background Intellectual Property of
Participant or material that would create potential statutory bars to
filing the United States or corresponding foreign patent applications,
in which case express written permission shall be required for
publication.
B. The Parties agree that neither will use the name of the other Party or its
employees in any promotional activity, such as advertisements, with reference to
any product or service resulting from this Agreement, without prior written
approval of the other Party in each instance, which approval shall not be
unreasonably withheld.
ARTICLE XIII. GENERATED INFORMATION & COPYRIGHTS
Each Party shall have exclusive ownership in and to Generated Information that
it creates under this Agreement, including the resulting copyright to such
original work, unless and to the extent expressly agreed otherwise on a case by
case basis in writing. Accordingly, each Party's right to use its Generated
Information, as defined, shall be subject to the following provisions
A. Each Party agrees to place applicable copyright and other notices, as
appropriate for the protection of copyright and mask work rights, in human
readable form onto all physical media, and in digitally encoded form in the
header of machine readable information recorded on such media such that the
notice will appear in human readable form when the digital data is off loaded or
the data is accessed for display or printout.
B. Notwithstanding each Party's exclusive ownership of all Generated Information
it creates, Participant shall have the exclusive right to use all Generated
Information to commercialize the Developed Prototype Product(s) as an optical
networking product within, and for use in, the telecommunications access market
segments agreed to by the Parties in writing within 60 days of the Effective
Date of this Agreement ("Field A") and Contractor shall have the non-exclusive
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right to use such Generated Information outside Field A (Field B), provided
however, that Contractor shall make Generated Information owned by Contractor
available to Participant only to the extent it applies to Field A and only for
Participant's use in Field A, but Contractor shall be entitled to make market
related Generated Information available to service providers in both Fields.
ARTICLE XIV. REPORTING SUBJECT INVENTIONS
A. The Parties agree to disclose to each other through their respective Project
Managers and maintain in confidence, each and every Subject Invention, whether
or not patentable, protectable under the Patent Act, or otherwise reduced to
practice. For the avoidance of doubt, the Parties shall be obligated to promptly
disclose, in writing and on a confidential basis, inventive ideas conceived in
connection with this Project.
B. These disclosures, to the extent known, shall be enabling to the extent
required under 35 USC 112. The disclosure shall also identify any known actual
or potential statutory bars (i.e. any disclosure of the invention without
restrictions as to disclosure or use imposed upon the recipient, any offer to
sell, and any public use of the invention). The Parties further agree to
promptly disclose to each other, each and any subsequently known event(s) which
is already or may later become, a statutory bar to obtaining patent protection
on any given Subject Invention(s) anywhere in the world. All invention
disclosures shall be marked as confidential,
ARTICLE XV.
TITLE TO INVENTIONS & THE DEVELOPED PROTOTYPE PRODUCTS
A. Subject Inventions shall be owned jointly by the Parties if they constitute
joint inventions of such Parties. To the extent that either Party is the sole
inventor of any Subject Invention(s), that Party alone shall, as between the
Parties, be the sole owner thereof. However, and notwithstanding ownership of
any given Subject Invention, to the extent that any Subject Invention is based
on or otherwise arose out of access to any Party's Confidential Information,
each Party's right to use the Subject Invention, including the right to pursue
patent protection thereon, shall be subject to its non-disclosure obligations
with respect to the other Party's Confidential Information. Subject to the
foregoing, and with respect to all Subject Inventions owned solely by Contractor
or jointly with Participant, Contractor, agrees to grant Participant the
exclusive, transferable, unrestricted and fully paid-up (subject, however, to
the remaining portions of this Paragraph A as they apply to additional license
terms and conditions that may be required in order for Participant to exercise
any such license and which may contain restrictions and monetary obligations)
right and license to use the Subject Inventions solely for the commercial
exploitation of the Developed Prototype Product(s) as an optical networking
product within, and for use in, Field A; and in partial consideration for such
grant, Participant hereby grants to Contractor the non-exclusive, transferable,
unrestricted and fully paid-up right and license to use Subject Inventions owned
solely by Participant or jointly with Contractor, in all areas and for all
purposes outside of Field A (Field B). For purposes of Contractor's license with
respect to Participant's sole Subject Inventions, such license shall apply only
to those Subject Inventions which relate to, or which otherwise arose out of
Participant's access to, Contractor's
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Confidential Information, Contractor's Background Intellectual Property, and/or
any Boston University Intellectual Property. It is agreed, however, that
Participant's exercise of its license grant, as well as its right to use Subject
Inventions which were conceived and reduced to practice solely by Participant,
shall be subject to the Parties reaching agreement as to the terms and
conditions to govern any license grant to Participant under any applicable
Background Intellectual Property Rights owned or licensed by Contractor, and/or
any Intellectual Property Rights owned or licensed by Beacon Photonics, Inc.,
Beacon Photonics, L.P. or the University, to the extent that such Intellectual
Property is embodied in, or a license would otherwise be required at law in
order to use any Subject Inventions pursuant to such license grant without
infringing any Intellectual Property rights of Contractor, Beacon Photonics
Inc., Beacon Photonics, L.P. or the University.
B. Notwithstanding anything to the contrary set forth in this Article XV or
elsewhere in this Agreement, all Developed Prototype Product(s) developed
hereunder, are the sole property of Participant and as between the Parties to
this Agreement, Participant has the sole and exclusive right to make, use,
manufacture and otherwise commercialize such Developed Prototype Product(s) in
any market throughout the world, including, without limitation, Field A and
Field B, subject to obtaining whatever licenses are required under this
Agreement and at law with respect to any Subject Inventions, Generated
Information and which were not expressly granted by Contractor under this
Agreement with respect to Field B, as well as any licenses required with respect
to any Background Intellectual Property of Contractor, the Beacon Photonics,
Inc., Beacon Photonics, L.P., Boston University Intellectual Property and any
third party Intellectual Property Contractor covenants and agrees that whatever
ownership rights it may have at law with respect to the Developed Prototype
Products are expressly waived and Contractor agrees not to make, use,
manufacture or otherwise commercialize the Developed Prototype Product(s) in any
market in the world, including, without limitation, Field B. Participant
acknowledges and agrees, however, that no provision of this Agreement shall be
deemed to restrict Contractor from developing, alone or with the cooperation of
any third parties, any manner of telecommunications products, whether or not
they compete with the Developed Prototype Products, so long as Contractor does
not use Participant's Confidential Information or any Generated Information or
Subject Inventions owned solely by Participant that Contractor was not licensed
hereunder to use.
ARTICLE XVI. FILING PATENT APPLICATIONS
A. The Parties agree that each Party shall be entitled to pursue, at its own
respective cost and expense, patent protection on any Subject Inventions of
which it is the sole inventor except to the extent that doing so would disclose
any Confidential Information of the other Party. In such event, that other
Party's prior permission shall be required, absent which the inventing Party
shall be obligated to modify the patent application to remove any such
Confidential Information content. With respect to Subject Inventions which
constitute joint inventions, the inventing Parties shall determine, on a case by
case basis, whether or not and to what extent patent protection will be pursued,
if at all, it being understood that any co-inventor Party wishing not to pursue
such protection in the interests of preserving the confidentiality of its
Confidential Information shall be entitled to make the final decision. Subject
to the preceding provision, the
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costs and expenses of pursuing and maintaining patent protection in the U.S. by
co-inventor Parties shall be shared equally in every respect; to the extent that
the co-inventor Parties are not in agreement regarding the extent to which
foreign patent protection should be pursued, the co-inventor Party desirous of
pursuing such protection may do so on its own, and at its own cost and expense.
In such event, the other co-inventor Party who desired not to pursue such
protection shall have no rights with respect to any resulting foreign patent(s)
unless and until it reimburses the other co-inventor for its share of the
out-of-pocket expenses incurred in pursuing such protection. With respect to
Subject Inventions where the sole inventor Party does not itself wish to pursue
patent protection but is willing to do so in the interests of any other Party,
all costs and expense incurred in connection with the pursuit and maintenance of
such protection shall be borne solely by the non-inventor Party desiring such
protection. In any event, any Party's decision to practice a Subject Invention
shall be at its own risk, cost and expense.
B. Consistent with the provisions of this Agreement as they relate to
Participant's exclusive rights with respect to Field A and Contractor's
non-exclusive rights with respective to Field B, Contractor (regardless of
ownership), shall not be entitled to authorize any third party to in any manner
use or practice, directly or indirectly, any Generated Information or Subject
Invention respectively, within Field A for a period of _1__ year from expiration
or termination of this Agreement at which time, all exclusive rights shall
terminate.
ARTICLE XVIII. ASSIGNMENT OF PERSONNEL
A. Personnel assigned by either Party to participate in the research to be
performed under this Agreement shall at all times remain the employees of the
assigning Party for any and all purposes, regardless of whatever assistance such
personnel may provide to the other Party.
B. Except to the extent expressly set forth in Article III above, each Party
shall bear any and all costs and expenses with regard to its own personnel who
participate in this Project. In this regard, both Parties acknowledge and agree,
however, that the intent of this Project is for Participant to hire, and
Participant agrees to promptly hire, however many qualified individuals are
necessary in order for all Milestones to be met in accordance with the
requirements of this Agreement, it being understood and agreed that Contractor's
obligation hereunder is only to provide guidance to Participant's employees in
order to facilitate their successful achievement and completion of all
Milestones.
C. Participant may request the removal of any Contractor Developer(s) who is not
qualified to perform the work envisioned by this Agreement. Upon such request,
Contractor shall use reasonable efforts to promptly replace such Contractor
Developer(s) with substitute Contractor Developer(s) having appropriate skills
and training. Participant acknowledges that Contractor cannot guarantee the
availability of any specific personnel for any specific period of time, but
Contractor agrees to use reasonable efforts to maintain continuity with respect
to personnel assigned to this project to the extent within Contractor's
reasonable control.
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ARTICLE XIX. FORCE MAJEURE
No failure or omission by Contractor or Participant in the performance of any
obligation under this Agreement shall be deemed a breach of this Agreement or
create any liability if the same shall arise from any cause or causes beyond the
control of Contractor or Participant, including but not limited to the
following, which, for the purpose of this Agreement, shall be regarded as beyond
the control of the Party in question: Acts of God, fire, storm, flood,
earthquake, accident, acts of the public enemy, war, rebellion, insurrection,
riot, sabotage, invasion, quarantine, restriction, transportation embargoes, or
failures or delays in transportation.
ARTICLE XX. ASSIGNMENT OF THE AGREEMENT
This Agreement may not be delegated, transferred or assigned directly,
indirectly or by operation of law by either Party or any subsequent permitted
assignee or transferee thereof without the prior written consent of the other
Party, which may be given or withheld in that other Party's discretion.
Notwithstanding the foregoing, this Agreement may be assigned by the Contractor
to the University without Participant's consent, so long as all other Project
Agreements to which Contractor is a party are also simultaneously assigned by
Contractor to the University at the time of its assignment of this Agreement.
Contractor agrees to provide Participant with advance written notice of any such
transfer or assignment by Contractor to the University. Contractor shall have no
further responsibilities except for the confidentiality, use and/or
non-disclosure obligations of this Agreement. This Agreement shall not be
assignable by Participant without Contractor's express prior written consent,
which shall not be unreasonably withheld. This Agreement shall be binding upon
and inure to the benefit of the Parties, and their respective permitted
successors and assigns.
ARTICLE XXI. RECORDS AND ACCOUNTING
The Contractor shall keep its usual and customary records and documentation for
purposes of substantiating any expenses submitted in any invoice for
reimbursement or payment by Participant under Article III, which records shall
be made available on an individual record basis within 15 business days after
Contractor's receipt of Participant's written request or dispute of any charge.
In addition, these records shall be made available for audit at Contractor's
offices only, and on a confidential basis by an independent auditor selected by
Participant and acceptable to Contractor, not more than once every 12 months
during the term of this Agreement and for a period of one year after the earlier
to occur of (a) completion of the work contemplated hereby; or (b) expiration or
termination of this Agreement. The costs and expenses of conducting any such
audit shall be borne solely by Participant, and shall be conducted during
Contractor's normal business hours and work day (excluding Contractor's observed
holidays) in a manner which is not unreasonably disruptive to Contractor's
business or employees.
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ARTICLE XXII. NOTICES
A. Any communications required by this Agreement, if given by personal delivery
or by postage prepaid first class U.S. Mail addressed to the Party to receive
the communication, shall be deemed made as of the day of receipt of such
communication by the addressee, or on the date given if by verified facsimile.
Address changes shall be given in accordance with this Article and shall be
effective thereafter. All such communications, to be considered effective, shall
include specific reference to this Agreement.
B. The addresses, telephone numbers and facsimile numbers for the Parties are as
follows:
If to Participant:
Verilink Corporation
950 Explorer Blvd.
Huntsville, AL 35806,
Attention: Ronald G. Sibold, Vice President and Chief
Financial Officer
Fax: (256) 774-2425
with a courtesy copy to:
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E, 16th Floor,
Atlanta, Georgia 30303
Attention: Eliot Robinson
Fax: 404-572-6999
If to Contractor:
Beacon Telco, L.P.
C/o Beacon Photonics, Inc., its General Partner
8 St. Mary Street, Suite 910
Boston, MA 02115
Attention: Alok Prasad, President
Fax: (617) 358-1536
with a courtesy copy to:
Bingham Dana LLP
150 Federal Street
Boston, MA 02110,
Attention: Jack Concannon
Fax: 617-951-8736
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Boston University
Office of the General Counsel
125 Bay State Road
Boston, Massachusetts 02215
Attn: General Counsel
Fax: (617) 353-5529
ARTICLE XXIII. DISPUTES
The Parties shall attempt to jointly resolve all disputes from this Agreement.
If the Parties are unable to jointly resolve dispute within a reasonable period
of time, they agree to follow the following dispute resolution process:
A. Negotiations. Any dispute or question related to this Agreement shall first
be submitted for resolution through good-faith negotiations between the chief
executive officers of Participant and Contractor. If after a reasonable period
of negotiations, either Party concludes that the Parties cannot resolve the
dispute or question through negotiations, the Party may request pursuit of the
following resolution procedures.
B. Mediation. Any dispute or question relating to this Agreement that has been
the subject of good-faith negotiation, as provided above, but remains unresolved
shall next be subject to mediation (unless mediation is waived by agreement of
both Participant and Contractor). The mediation shall be conducted by one
mediator who shall be selected jointly by the Parties within ten (10) days after
either Party requests mediation by written notice to the other. If the Parties
cannot agree on a mediator, each Party shall select a mediator within five (5)
days after the Parties' failure to agree upon a mediator. The two mediators so
selected shall select a third mediator, who shall conduct the mediation. The
mediation shall be non-binding and shall commence within ten (10) days after the
selection of the mediator. The mediation shall occur in at a geographical
location that is acceptable and convenient for both Parties. Each of the Parties
shall attend the mediation through one or more persons that has authority to
settle the dispute or question on behalf of the Party.
All expenses of the mediator shall be shared equally by the Parties. All other
expenses of a Party in connection with the mediation shall be borne by that
Party. The mediation shall continue until the earliest of the following:
(i) The dispute(s) is (are) settled or the question(s) is (are) determined, as
the case may be;
(ii) The mediator declares by written notice to both Parties that the Parties
are at an impasse and not all disputes can be resolved or not all questions can
be determined as the case may be; and
(iii) The date which is the sixty-first (61st) day after the date of the
appointment of the mediator, unless both Parties agree to extend that date.
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C. Arbitration. Upon termination of mediation (or upon the failure of
negotiations, if mediation has been waived in writing by all Parties), any
unresolved disputes or questions may be submitted to arbitration in accordance
with the following:
1. The arbitration shall be conducted in accordance with the
Rules for the Resolution of Commercial Disputes of the American
Arbitration Association. The arbitration shall be concluded in the
Commonwealth of Massachusetts.
2. Either Party may invoke arbitration by serving written
notice on the other Party within thirty (30) days of the termination of
the mediation (or within thirty (30) days from when mediation is
waived). The notice shall include a list of arbitrator candidates. If
the Parties do not agree to one of those arbitrators, within ten (10)
days after the notice is given, each Party shall thereafter select one
disinterested representative. The two disinterested representatives
shall then seek in good faith to select a single arbitrator. If after
reasonable good faith efforts the two disinterested representatives
cannot do so, each representative shall select an arbitrator, and those
two arbitrators shall select a third arbitrator (the "neutral
arbitrator"), who shall alone conduct the arbitration.
3. The neutral arbitrator alone shall establish all procedures
for the arbitration, to the extent not specified by applicable law or
the Rules for the Resolution of Commercial Disputes of the American
Arbitration Association. Each Party shall be responsible for payment of
all fees and expenses (including travel, lodging and other expenses of
attending any arbitration hearing) of the arbitrator selected by it and
of its own attorneys or other advisors or appointed representatives.
The expenses and fees of the neutral arbitrator, and of the arbitration
itself (as opposed to the fees or expenses of an arbitrator selected by
a Party) shall be shared equally by the Parties.
4. To the extent permitted by law, the Parties agree that
grounds for vacating, modifying or correcting an award of the
arbitrator shall include a manifestly incorrect determination of
material fact by the arbitrator if such determination would have
resulted in a materially different outcome in the arbitration.
Except as provided in this and the preceding subparagraph,
the award of the arbitrator shall be final.
5. The arbitrator must base his or her decision and/or award
solely on the applicable law governing this Agreement and any
applicable Federal Law. The arbitrator may not award any punitive,
consequential or tort damages, or attorneys' fees or costs or expenses.
However, any award in arbitration may grant specific performance or
other equitable remedy if the arbitrators so determine.
In the event of a dispute, both Parties shall continue work on the Project
unless mutually agreed otherwise or unless the dispute concerns material issues
which have an impact upon the Project in which event, Contractor shall be
entitled to suspend its performance until the issue or dispute is resolved.
Neither a request or demand for negotiations, mediation or arbitration, nor
pendency of any such proceedings, shall forestall any pending notice of
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termination or toll any period for cure of a breach, nor shall the same preclude
a Party from terminating this Agreement pursuant to its terms. Neither mediation
nor arbitration may be invoked, and neither proceeding may consider, any dispute
as to any decision by a Party to withhold its consent or approval as to any
matters as to which a specific provision of this Agreement requires such consent
or approval, unless consent or approval is not to be unreasonably withheld by
the terms of this Agreement. In connection with a third-party claim, it may be
that indemnification or other recourse can be claimed under this Agreement, or
that the other Party to this Agreement must or may be made a Party to the
third-party claim, or that other action is appropriate. In such case the
indemnification, other recourse, or other action may be pursued in connection
with the proceeding in which the third-party claim is pending without need for
any of the above procedures.
ARTICLE XXIV. ENTIRE AGREEMENT AND MODIFICATIONS
A. It is expressly understood and agreed that this Agreement with its
Appendices, which are attached hereto and incorporated herein by reference,
contains the entire agreement between the Parties with respect to the subject
matter hereof and that all prior representations or agreements relating hereto,
other than documents expressly referred to herein, are thus superseded in
totality by this Agreement.
B. Any agreement to change any terms or conditions of this Agreement or the
Appendices shall be valid only if the change is made in writing and executed by
the Parties hereto.
ARTICLE XXV. TERMINATION
A. Unless terminated sooner per the remaining provisions of this Article, the
Term of this Agreement shall be for a term of eighteen (18) months from the
Effective Date and may be extended by the Parties on the basis set forth in
Paragraph D. below.
B. Either Party may terminate this Agreement for cause only in the event of any
breach of a material provision of this Agreement by the other Party which, for
purposes of this provision, shall be deemed to include any breach by Participant
of any provision of the Warrant and Stockholder's Agreement or the Premises
License and Services Agreement. Termination by the Party not in breach may not
occur, however, unless and until that Party provides the Party in breach with a
written notice (a "Default Notice") detailing the nature and extent of the
breach and 30 days during which to cure the breach. In the event that the breach
is not cured within the required period, the Party not in breach shall be
entitled to terminate this Agreement by giving the Party in breach written
notice of termination (a "Termination Notice") without liability or penalty;
provided that, as a condition precedent of Contractor's right to terminate for
cause under this section, Contractor shall be required to execute and deliver to
Participant, along with Contractor's Termination Notice hereunder, Contractor's
irrevocable written waiver of any unvested portion of the Warrant. Termination
by either Party with cause shall have no bearing upon Contractor's right to
receive the entire amount of the first Bonus Payment and a pro-rata
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portion of the remaining Bonus Amount referenced in Article IV of this Agreement
to the extent that any Milestones were completed prior to Contractor's
Termination Notice.
C. The Participant may terminate this Agreement without cause at any time on
thirty (30) days written notice to the Contractor. In the event that Participant
terminates in accordance with this provision of this Agreement, Participant
shall promptly render to Contractor, the full amount of the first Bonus Payment
and a pro rata portion of the Bonus Amount referenced in Article IV based upon
the extent to which the Milestones referenced in Appendix A-1 have been
completed. After two years from the date of signing the Contractor may terminate
this Agreement without cause on 30 days written notice.
D. This Agreement is intended to co-exist with the Premises License and Service
Agreement, with the term of the Premises License and Services Agreement to
ultimately govern the term of this Agreement. Hence, and notwithstanding the
provisions of Paragraph A above, should the Premises License and Service
Agreement terminate, for whatever reason, prior to expiration of the intended 18
month term of this Agreement, this Agreement will terminate simultaneously.
E. Each Party shall assign and identify in writing a Project Manager prior to
the start of the Agreement. Either Party may change its Project Manager by
providing written notification to the other Party. Each Project Manager shall be
responsible for coordinating all matters relating to this Agreement, the
Statement of Project Objective, and all other related matters between the
Parties. All communications between the Parties relating to this Agreement shall
take place between the Project Managers.
F. Project Managers for this Agreement are as follows:
For Contractor:
--------------------------------------
For Participant:
--------------------------------------
ARTICLE XXVI. GOVERNING LAW
To the extent that there is no applicable U.S. Federal law, this Agreement and
performance thereunder shall be governed by the law of the Commonwealth of
Massachusetts, without reference to that state's conflict of laws provisions.
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IN WITNESS WHEREOF, the Parties hereto execute this Agreement as of the
respective dates set forth below.
FOR CONTRACTOR:
By: /s/ Alok Prasad
------------------------------------------
Name: Alok Prasad
------------------------------------------
Title: President
------------------------------------------
Date: October 13, 2000
------------------------------------------
FOR PARTICIPANT:
By: /s/ Graham G. Pattison
------------------------------------------
Name: Graham G. Pattison
------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
Date: October 13, 2000
------------------------------------------
LIST OF ATTACHMENTS
APPENDIX A STATEMENT OF PROJECT OBJECTIVE
APPENDIX A-1 MILESTONES
APPENDIX B FORM OF BONUS NOTE
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APPENDIX A
STATEMENT OF PROJECT OBJECTIVE
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APPENDIX A-1
MILESTONES
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APPENDIX B
FORM OF BONUS NOTE
PROMISSORY NOTE
_______________, 200__
FOR VALUE RECEIVED, the undersigned VERILINK CORPORATION with an address at 950
Explorer Boulevard, Huntsville, AL 35806 (hereinafter referred to as "Maker"),
promises to pay to the order of _______________________________________________,
with an address at
____________________________________________________________________
(hereinafter referred to as "Payee", Payee and any and all other holders of this
Note being hereinafter referred to as "Holder") the principal sum of
___________________________________________________ AND NO/100 DOLLARS
($________________________), together with interest as provided in this Note, at
the above-referenced address of Payee or such other place as any Holder hereof
may designate in writing, as follows:
From and after the date hereof, until maturity or default as
hereinafter provided, interest shall accrue at an annual rate equal to ______
percent (__ %) per annum. The entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon shall be due and payable
in full, on the fifth anniversary of the date hereof, _________, 200__.
Notwithstanding any provisions in this Note the total liability for
payments legally regarded as interest shall not exceed the maximum limits
imposed by the Laws of the Commonwealth of Massachusetts in effect on the date
hereof, and any payment of same in excess of the amount allowed thereby shall,
as of the date of such payment, automatically be deemed to have been applied to
the payment of the principal indebtedness evidenced hereby, or, if same has been
fully repaid, shall be deemed to be held by Holder as security for all remaining
indebtedness of Maker to Holder and shall be repaid to Maker upon demand after
all of such indebtedness has been fully repaid. Any notation or record of Holder
with respect to such required application that is inconsistent with the
provisions of this paragraph shall be disregarded for all purposes and shall not
be binding upon either Maker or Holder.
All sums payable under this Note shall be paid in either legal tender,
for public and private purposes, of the United States of America at the time of
such payment, or, at the sole option of Maker, in shares of common stock of
Maker valued as set forth below. In addition, at the sole option of Holder, all
or a portion of this Note may be used to pay all or any portion of the "Strike
Price" payable by Holder to Maker under that certain Warrant and Stockholder's
Agreement dated ___________, 2000 between Maker and Holder (the "Warrant") by
surrender of this Note, together with the Warrant and delivery of the Notice of
Exercise (in the form attached to the Warrant), duly executed, at the principal
office of the Company during the exercise period specified in the Warrant. Upon
Holder's election to use part of this Note to pay any portion of the "Strike
Price" due under the Warrant, unless this Note has been fully used for such
purpose or has been paid in full, a new Note representing the remaining balance
of the Note based on the
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portion of the Note not used to pay the "Strike Price" due under the Warrant
shall also be issued to the Holder within thirty (30) days of delivery of the
Note in payment of any portion of the "Strike Price" due under the Warrant.
This Note may, at Maker's sole option, be paid in shares of common
stock of Maker, with the number of shares of Maker's common stock to be issued
therefore to be computed based upon the Current Market Price at the time of
payment equal to the principal and interest then due under the Note. For
purposes of this Note, the term "Current Market Price" shall mean (x) if such
Maker common stock is listed or admitted for trading on any national securities
exchange, the last sale price of such common stock, regular way, or the average
of the closing bid and asked prices thereof if no such sale occurred, in each
case as officially reported in the principal securities exchange on which such
securities is listed, or (y) if not reported as described in clause (x) the
average of the closing bid and asked prices of such common stock in the
over-the-counter market as shown by the Nasdaq National Market, or any similar
system of automated dissemination of quotations of securities prices then in
common use, if so quoted, as reported by any member firm of the New York Stock
Exchange selected by Maker, or (z) if not quoted as described in (y), the
average of the closing bid and asked prices for such security as reported by the
National Quotation Bureau Incorporated or any similar successor organization, as
reported by any member firm of the New York Stock Exchange selected by Maker. If
such common stock is quoted on a national securities or central market system in
lieu of a market or quotation system described above, the closing price shall be
determined in the manner set forth in clause (x) of the preceding sentence if
actual transactions are reported and in the manner set forth in clause (y) of
the preceding sentence if bid and asked prices are reported but actual
transactions are not. If none of clauses (x), (y) or (z) applies, the Current
Market Price shall be the fair market value most recently determined by the
Maker's Board of Directors in good faith.
Upon any default or event of default hereunder, which default or event
of default is not cured within ten (10) days after written notice thereof from
Holder to Maker, then, at the option of Holder, and upon written notice to
Maker, the entire principal amount outstanding hereunder, together with all
accrued interest, shall at once become due and payable. Failure to exercise such
option shall not constitute a waiver of the right to exercise such option if
Maker is in default hereunder. Time is of the essence of this Note.
Maker shall have the right to prepay this Note in whole or in part, in
cash or in Participant's Common Stock, at any time, without penalty and without
the payment of any unearned interest. All partial prepayments shall be applied
against principal. Neither this Note nor any of Holder's rights or benefits
hereunder may be transferred, assigned or delegated, directly, indirectly or by
operation of law, to any third party without the prior written consent of Maker,
except that this Note may be transferred or assigned to any permitted assignee
or transferee of the Warrant, in whole or in part pro rata as to any portion of
the Warrant so assigned.
From time to time, without affecting the obligation of Maker or the
heirs, legal representatives, successors or assigns of Maker to pay the
outstanding principal balance of this Note and observe the covenants of Maker
contained herein, without affecting the guaranty of any person, corporation,
partnership or other entity for payment of the outstanding principal balance of
this Note, without giving notice to or obtaining the consent of Maker, the
heirs, legal
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representatives, successors or assigns of Maker or guarantors, and without
liability on the part of Holder, Holder may, at the option of Holder, extend the
time for payment of said outstanding principal balance, interest or any part
thereof, reduce the payments thereon, release anyone liable on any of said
outstanding principal balance, accept a renewal of this Note, modify the terms
and time of payment of said outstanding principal balance or join in any
extension or subordination agreement, and agree in writing with Maker to modify
the rate of interest or period of amortization of this Note or change the amount
of the installments, if any, payable hereunder. No one or more of such actions
shall constitute a novation.
Presentment for payment, protest and notice of demand, notice of
dishonor and demand, are hereby waived by Maker and all sureties, guarantors and
endorsers hereof. Maker further waives any and all homestead and exemption
rights under the laws and constitutions of the United States of America, the
State of ____________ and any other State. This Note shall be the joint and
several obligation of Maker and all sureties, guarantors and endorsers, and
shall be binding upon them and their heirs, legal representatives, successors
and assigns.
Upon default, if this Note is collected by or through an attorney at
law, Maker agrees to pay Holder all costs of collection including reasonable
attorneys fees and all court costs. This Note shall be governed and construed in
accordance with the laws of the State of _____________.
IN WITNESS WHEREOF, Maker has executed this Note under seal, as of the
date first above written.
VERILINK CORPORATION
By: (Seal)
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Name:
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Title:
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