AMENDMENT TO THE MICROELECTRONICS PURCHASE AGREEMENT
This Amendment effective as of JULY 17, 2002 to the Microelectronics Purchase
Agreement by and between Agere Systems Inc. ("Agere" or "Seller") and Lucent
Technologies Inc. ("Lucent" or "Buyer") dated as of February 1, 2001 (the
"Agreement").
WHEREAS, for their mutual benefit Buyer and Seller desire to amend and
supplement the terms and conditions of the Agreement as provided hereunder;
NOW, THEREFORE, the parties agree as follows:
1. AMENDMENT TO TERM OF AGREEMENT:
Section 1 of the Agreement, "Term," is deleted and replaced in its entirety to
read as follows:
1. TERM OF THE AGREEMENT
The term of this Agreement shall commence on the Effective Date and
shall expire on September 30, 2006, unless earlier terminated in
accordance with the provisions hereof (the "Term"). The Term will
automatically extend for additional one (1) year periods unless
either party gives at least three (3) months' written notice prior to
the then-effective expiration date of its intention not to extend
this Agreement. The rights and obligations of the parties which by
their nature would continue beyond the termination, cancellation, or
expiration of this Agreement, shall survive such termination,
cancellation or expiration.
2. AMENDMENT TO MINIMUM PURCHASE COMMITMENT:
Section 3 of the Agreement, "Minimum Purchase Commitment" is deleted and
replaced in its entirety to read as follows:
3. PURCHASE COMMITMENTS:
A. 2002 Annual Commitment
1. For the period from February 1, 2001 through January 31, 2002 (the
"Initial Period"), the parties agree that (i) regardless of any other
commitment expressed as to such period, Buyer's actual purchases
during the Initial Period shall be deemed sufficient to satisfy its
commitment for it, and (ii) the provisions of Attachments B and C to
the Agreement, including without limitation, the most favored
customer pricing and related audit provisions, shall not apply to
purchases and sales made during the Initial Period.
AGERE/LUCENT PROPRIETARY
2. Notwithstanding anything contained herein to the contrary, Buyer
agrees that its purchases of Existing Products for the period that
commenced on October 1, 2001 and continues through September 30,
2002, will be the greater of (ii) $250,000,000 and (ii) ninety
percent of its requirements for such Existing Products (the "2002
Annual Commitment"). As used herein, "Existing Products" means
microelectronics and optoelectronics products (custom or standard) of
the kind currently being purchased by Lucent from Agere, and any next
generation or successor products thereto.
3. The 2002 Annual Commitment will be deemed to have been met only if
the dollar value of orders for Existing Products issued by Buyer and
accepted by Seller, and paid for by Lucent during Fiscal Year 2002,
equals the greater of (i) $250,000,000 and (ii) ninety percent of its
requirements. Payments for purchases by Lucent Affiliates and Buyer
Subcontractors will also count toward meeting the 2002 Annual
Commitment and Purchase Requirements (specified below). The terms and
conditions of the Agreement will be continue to be extended to such
Affiliates and Buyer Subcontractors, as provided in Section 2 of the
Agreement, with any limitations on liability applying on a prorated
basis.
4. The ninety percent purchase requirement in Section A.2 above
applies to both Lucent's aggregate requirements for Existing Products
and individual Existing Product code requirements (i.e., Lucent must
purchase from Agere at least (i) ninety percent of its total Existing
Product requirements, and (ii) ninety percent of its requirements for
any individual Existing Product code), provided that Agere is
competitive, with respect to price, interval and technological merit.
"Competitive with respect to price" will be deemed satisfied if
Agere's quoted price falls within +/- 5% of the average price of
three credible competitive quotes. "Competitive with respect to
interval" will be deemed satisfied if Agere meets Lucent's requested
interval period, or if it is as good as the interval offered by three
credible competitive quotes. "Competitive with respect to
technological merit" will be deemed satisfied if Agere's products
substantially meet Lucent's specifications on quality, features,
form, and functionality.
B. Purchase Requirements:
1. For each of the three fiscal years (Fiscal Year) commencing
October 1, 2003, October 1, 2004 and October 1, 2005, Lucent agrees
to purchase from Agere at least ninety percent (90%) of its
requirements for Existing Products during each Fiscal Year (on both
an aggregate and a comcode basis, and provided Agere is competitive,
with respect to price, interval and technological merit, all as per
Section 3.A.4 above).
AGERE/LUCENT PROPRIETARY
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2. Effective as of the date of this Amendment, Lucent shall furnish
Agere with all Lucent requests for quotations ("RFQs") covering
Existing Products and New Products, and any proposals for joint
development or joint research efforts with third parties that may
lead to development or production of New Products, ("Proposals"). In
connection with RFQs covering New Products, and Proposals, Lucent
shall (a) award Agere at least a sixty percent (60%) share of the
business covered by any RFQ bid on by Agere, provided that Agere is
competitive, with respect to price, interval and technological merit,
as defined in Section 3.A.4 above or (b) proceed first with Agere in
good faith as to such Proposal, provided Agere is competitive in
terms of applicable criteria established by Lucent. For purposes of
this Section 3.B.2, "New Products" means standard or custom
microelectronics and optoelectronics products (excluding Existing
Products) within Agere's served available market during the Term.
3. Agere shall have the right during the Term of the Agreement, at
its own expense, to examine Lucent's records, at reasonable times in
a reasonable manner, in order to verify that Lucent has complied with
the provisions of Section 3.B (the "Purchase Requirements").
4. The parties agree that Attachment B of the Agreement is deleted in
its entirety.
5. "Fiscal Year" means the twelve months' period commencing on each
October 1st and ending September 30th of the following calendar year.
C. Disputes
Notwithstanding anything contained in the Agreement to the contrary,
in the event of any claimed breach of any provision of the Agreement,
as amended and supplemented hereby, the parties agree to meet to
discuss the appropriate compensation due to the claimant, and to
employ the dispute resolution procedures in Section 31 of the
Agreement if requested by either party. Agere and Lucent agree that
with respect to any disputes concerning the 2002 Annual Commitment or
Purchase Requirements, the profit margin on any Product will be
deemed to be twenty percent.
AGERE/LUCENT PROPRIETARY
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3. INTELLECTUAL PROPERTY
Lucent and Agere also agree to enter into a Letter Agreement, dated the date
hereof, covering certain intellectual property matters, substantially in the
form attached hereto as Attachment 1.
4. ACCESS AND SUPPORT WITH ELECTRICAL MANUFACTURING SYSTEMS PARTNERS
(EMS):
Lucent agrees to use reasonable commercial efforts to cause EMS to grant more
business than it currently has with Agere. This includes joint visits with
Lucent to the EMS.
5. REAL ESTATE:
Lucent agrees to allow Agere to vacate all or a portion of any Lucent facility
with an immediate corresponding reduction in rent.
6. MODIFICATION TO SECTION 13:
Section 13 of the Agreement, "Rescheduling and Termination of Orders," is
modified by adding the following sentence to the third paragraph:
Agere agrees to continue to extend the flexibility with respect to
rescheduling offered under Section 13 of the Agreement, subject to
the following:
In the event of termination of any Order after reschedule(s)
requested by Buyer, any liability for such termination charges will
be determined using the original acknowledged delivery date rather
than the rescheduled delivery date.
7. AMENDMENT TO ATTACHMENT C:
Attachment C of the Agreement is deleted and replaced to read in its entirety as
set forth in Exhibit A to this Amendment.
8. EFFECT OF AMENDMENT
Except as expressly modified by this Amendment, the terms and conditions of the
Agreement remain in full force and effect. Unless defined otherwise herein,
initial case
AGERE/LUCENT PROPRIETARY
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capitalized terms have the meanings ascribed to them in the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year above written.
ACCEPTED AND AGREED:
LUCENT TECHNOLOGIES INC. AGERE SYSTEMS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------- -------------------------
Name: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President Title: Executive Vice President
and Chief Financial and Chief Financial
Officer Officer
Date: July 17, 2002 Date: July 17, 2002
--------------------------------- ------------------------
AGERE/LUCENT PROPRIETARY
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EXHIBIT A
REVISED ATTACHMENT C
Contract No. HO32010023
Attachment C
PRICING PROCESS
Orders will be invoiced based on price in effect at time of shipment or
withdrawal from consignment whichever is applicable.
Price revisions shall be handled as follows:
Once a year at a time mutually agreed to by the parties, pricing shall be
renegotiated. Price revisions shall be based on Buyer's estimated annual
forecast. Buyer's forecast is provided for planning purposes only and shall not
be construed as a commitment.
Notwithstanding the annual negotiations, Seller or Buyer may request a decrease
in price for any Product at any time and Seller may request an increase in price
with sixty (60) days written notice.
Any revision in prices based on the above procedures shall be mutually agreed to
by the parties.
Agere shall not be required to offer pricing negotiated with Lucent (including
the Favored Customer Pricing below) to any Buyer Subcontractor that is also an
Agere distributor or VAR.
Provided Lucent meets the 2002 Annual Commitment and Purchase Requirements set
forth in this Agreement, the price to Buyer for each Standard Product (as
determined by the comcode) during a Fiscal Year will be no less favorable to
Buyer than the price Seller charges to its other customers in the same country
(other than Seller distributors or VARs, or Seller internal customers, either
directly or through their contract manufacturers; and special pricing associated
with one time product promotional sales and special inventory clearances) which
purchase the same or greater quantities of the same Products (i.e. a product
with the same comcode) at similar times and with similar delivery schedules
during such Fiscal Year, under substantially similar terms and conditions
("Favored Customer Pricing"). "Purchase Requirements" refers to Lucent's
obligations under Section 3.B of the Agreement.
AGERE/LUCENT PROPRIETARY
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For purposes of the foregoing paragraph, the term "other customers" shall
exclude Affiliates of Agere, distributors, resellers, sales agents, federal,
state, municipal and other governmental entities. Further, the following sales
shall not be considered in any price comparisons: market entry sales,
promotional offers or the provision of laboratory, trial, test and demonstration
Product.
Buyer shall have the right, no more than once a Fiscal Year during the term of
this Agreement or one Fiscal Year thereafter, at its own expense, to examine the
applicable books and records of Seller in order to verify that Buyer has
received Most Favored Pricing pursuant to the terms of this Agreement, and
prompt adjustment shall be made to compensate for any errors or omissions
disclosed by such audit. Any such audit shall be conducted by an independent
certified public accountant firm chosen by Buyer (other than on a contingent fee
basis) and approved by Seller, and shall be conducted during regular business
hours at Seller's offices and in such a manner as not to interfere with Seller's
normal business activities. Any audits shall cover only the most recent previous
Fiscal Year period. If Buyer request an audit, Buyer shall make available to
Seller the records and reports pertaining to such audit prepared by the
independent auditor(s) that conducted such audit.
AGERE/LUCENT PROPRIETARY
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ATTACHMENT 1
July 17, 2002
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Intellectual Property Business & Law
Agere Systems
▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Re: INTELLECTUAL PROPERTY MATTERS
Dear ▇▇▇▇▇:
This is to confirm that in previous communications, Agere Systems
Inc. ("Agere") and Lucent Technologies Inc. ("Lucent") have agreed as follows:
1. Lucent will transfer the following United States patents and patent
applications to Agere, as well as foreign counterparts thereto,
pursuant to a patent assignment, a form of which is attached hereto
as Exhibit 1:
Heismann 5,361,270
Polarization modulation
Benesty 1-7-7-11 5,828,756
Echo cancellation
▇▇▇▇▇▇ 4,835,737
Method and apparatus for controlled removal and insertion of circuit modules
▇▇▇▇▇ 1-4 Application
Coding of audio signals
▇▇▇▇▇ 2-2-6 Application
Representing masked thresholds
▇▇▇▇▇ 3-4 Application
Coding
▇▇▇▇▇▇ 1 Application
Coder bit allocation
AGERE/LUCENT PROPRIETARY
Kroon 7-9 6,366,888
Multi-rate coding
Elko 4,802,227
Noise reduction (automotive area)
Gupta 1-1-1-1 5,430,713
Frequency hopping
Juang 25 Application
Coding and transmission with time diversity
▇▇▇▇▇▇▇ 6,225,134
Cuthbert 6,248,485
▇▇▇▇▇▇▇▇ 5,751,739
Van Nee 6,175,550
Agere and Lucent agree that Lucent retains an exclusive right to
sublicense the ▇▇▇▇▇▇▇▇ patent for present and future wireless
applications, other than wireless LAN applications, that utilize
unequal error protection such as 3G. Lucent will have a non-exclusive
right to sublicense the ▇▇▇▇▇▇▇▇ patent for wireless LAN
applications.
2. Lucent hereby assigns to Agere the following patent license
agreements, including all rights, duties and obligations thereof, to
the full extent it has a right to do so:
- Antec Patent License Agreement dated February 1, 2000.
- U.S. Robotics Patent License Agreement dated October 1,
1993. Agere will assign to Lucent the same agreement on or
before December 31, 2005.
- Lucent will assign to Agere of the right to receive
royalties under the Patent License Agreement between
Sumitomo and AT&T dated June 23, 1979 with respect to the
following grant areas: Film Devices, Lasers, Optical
Couplers, Optical Modulators, Semiconductive Apparatus,
and Wired Circuit Units.
AGERE/LUCENT PROPRIETARY
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3. Lucent hereby waives all obligations of Agere with respect to the $20
million which is payable to Lucent by Agere as a settlement of
payments owed under certain license agreements on account of credits
earned by third parties for purchases of product from Agere.
4. All transfers and assignments that are the subject of this letter
shall be carried out within ten (10) days of the date of this letter.
5. All other terms and conditions of the agreements between Lucent and
Agere shall remain unchanged.
Please indicate your confirmation of the foregoing by signing and
dating this Letter in the space provided below. Kindly return an executed copy
to me at my address set out above.
Regards,
D. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Accepted and Agreed to by:
AGERE SYSTEMS
-------------------------------
Signature
-------------------------------
Title
-------------------------------
Date
AGERE/LUCENT PROPRIETARY
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Exhibit 1
PATENT ASSIGNMENT
THIS PATENT ASSIGNMENT (this "Assignment"), effective as of __, 2002
(the "Effective Date"), is by and between Lucent Technologies Inc., a Delaware
corporation, with offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, ("ASSIGNOR") and Agere Systems Guardian Corp., a
Delaware corporation, with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America ("Agere Systems Guardian").
RECITALS
WHEREAS, ASSIGNOR presently owns or controls certain patents, patent
applications, and invention submissions listed in the attached Appendix A
(hereinafter "TRANSFERRED PATENTS") and; WHEREAS, in furtherance of the
foregoing separation, ASSIGNOR desires to transfer, assign, convey, deliver and
vest all of its interests and rights in TRANSFERRED PATENTS for all countries,
jurisdictions and political entities of the world, to and in Agere Systems
Guardian;
NOW, THEREFORE, in consideration of the promises and for other good
and valid consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ASSIGNOR, subject to existing rights and licenses of third parties,
does hereby assign, convey, transfer and deliver, and agrees to assign, convey,
transfer and deliver to Agere Systems Guardian, its successors, assigns and
legal representatives or nominees, ASSIGNOR's entire right, title and interest,
for all countries, jurisdictions and political entities of the world, along with
the right to ▇▇▇ for past infringement, to all TRANSFERRED PATENTS listed on
Appendix A, and corresponding counterpart foreign patents and patent
applications, with respect to which, and to the extent to which, ASSIGNOR now
has or hereafter acquires the right to so assign, convey, transfer and deliver.
ASSIGNOR agrees that, upon request it will, at any time without
charge to Agere Systems Guardian, but at Agere Systems Guardian's expense,
furnish all necessary documentation relating to or supporting chain of title,
sign all papers, take all rightful oaths, and do all acts which may be
necessary, desirable or convenient for vesting title to TRANSFERRED PATENTS in
Agere Systems Guardian, its successors, assigns and legal representatives or
nominees; including but not limited to any acts which may be necessary,
desirable or convenient for claiming said rights and for securing and
maintaining patents for said inventions in any and all countries and for vesting
title thereto in Agere Systems Guardian and its respective successors, assigns
and legal representatives or nominees.
Notwithstanding the foregoing, ASSIGNOR and Agere Systems Guardian
agree that ASSIGNOR shall retain an exclusive right to sublicense the ▇▇▇▇▇▇▇▇
patent for
AGERE/LUCENT PROPRIETARY
present and future wireless applications, other than wireless LAN
applications, that utilize unequal error protection. ASSIGNOR will have a
non-exclusive right to sublicense the ▇▇▇▇▇▇▇▇ patent for wireless LAN
applications.
IN WITNESS WHEREOF, the parties have caused this PATENT ASSIGNMENT to be
executed by their duly authorized representatives as of the Effective Date.
LUCENT TECHNOLOGIES INC.
By:
---------------------------
▇.▇. ▇▇▇▇▇▇▇
President, Intellectual Property Business
AGERE SYSTEMS GUARDIAN CORP.
By:
---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
AGERE/LUCENT PROPRIETARY
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APPENDIX A
TRANSFERRED PATENTS
Heismann 5,361,270
Polarization modulation
Benesty 1-7-7-11 5,828,756
Echo cancellation
▇▇▇▇▇▇ 4,835,737
Method and apparatus for controlled removal and insertion of circuit modules
▇▇▇▇▇ 1-4 Application
Coding of audio signals
▇▇▇▇▇ 2-2-6 Application
Representing masked thresholds
▇▇▇▇▇ 3-4 Application
Coding
▇▇▇▇▇▇ 1 Application
Coder bit allocation
Kroon 7-9 6,366,888
Multi-rate coding
Elko 4,802,227
Noise reduction (automotive area)
Gupta 1-1-1-1 5,430,713
Frequency hopping
Juang 25 Application
Coding and transmission with time diversity
Mersner 6,225,134
Cuthbert 6,248,485
▇▇▇▇▇▇▇▇ 5,751,739
Van Nee 6,175,550
AGERE/LUCENT PROPRIETARY
13