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EXHIBIT 2.1
MASTER SEPARATION AND DISTRIBUTION AGREEMENT
BETWEEN
MRV COMMUNICATIONS, INC.
AND
LUMINENT, INC.
EFFECTIVE AS OF
JULY 25, 2000
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TABLE OF CONTENTS
PAGE
----
ARTICLE I................................................................................... 2
SEPARATION.............................................................................. 2
1.1 Separation Date............................................................... 2
1.2 Closing of Transactions....................................................... 2
1.3 Exchange of Secretary's Certificates.......................................... 2
ARTICLE II.................................................................................. 2
DOCUMENTS AND ITEMS TO BE DELIVERED ON THE SEPARATION DATE.............................. 2
2.1 Documents to Be Delivered by MRV.............................................. 2
2.2 Documents to Be Delivered by Luminent......................................... 3
ARTICLE III................................................................................. 3
THE IPO AND ACTIONS PENDING THE IPO..................................................... 3
3.1 Transactions Prior to the IPO................................................. 3
3.2 Cooperation................................................................... 4
3.3 Conditions Precedent to Consummation of the IPO............................... 4
ARTICLE IV.................................................................................. 5
THE DISTRIBUTION........................................................................ 5
4.1 The Distribution.............................................................. 5
4.2 Actions Prior to the Distribution............................................. 5
4.3 Sole Discretion of MRV........................................................ 6
4.4 Conditions Precedent to Distribution.......................................... 6
4.5 Fractional Shares............................................................. 7
ARTICLE V................................................................................... 7
COVENANTS AND OTHER MATTERS............................................................. 7
5.1 Other Agreements.............................................................. 7
5.2 Further Instruments........................................................... 7
5.3 Additional Transitional Services Agreements................................... 8
5.4 Agreement for Exchange of Information......................................... 8
5.5 Auditors and Audits; Annual and Quarterly Statements and Accounting.......... 9
5.6 Consistency with Past Practices.............................................. 11
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TABLE OF CONTENTS
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5.7 Payment of Expenses.......................................................... 11
5.8 Foreign Subsidiaries......................................................... 11
5.9 Dispute Resolution........................................................... 11
5.10 Governmental Approvals....................................................... 12
5.11 No Representation or Warranty................................................ 12
5.12 Non-Solicitation of Employees................................................ 13
5.13 Employee Agreements; Definition............................................. 13
5.14 Cooperation in Obtaining New Agreements...................................... 15
5.15 Property Damage to Luminent Assets Prior to the Separation Date.............. 15
ARTICLE VI................................................................................. 15
MISCELLANEOUS.......................................................................... 15
6.1 Limitation of Liability...................................................... 15
6.2 Entire Agreement............................................................. 15
6.3 Governing Law................................................................ 16
6.4 Termination.................................................................. 16
6.5 Notices...................................................................... 16
6.6 Counterparts................................................................. 17
6.7 Binding Effect; Assignment................................................... 17
6.8 Severability................................................................. 17
6.9 Failure or Indulgence Not Waiver; Remedies Cumulative........................ 17
6.10 Amendment.................................................................... 17
6.11 Authority.................................................................... 17
6.12 Interpretation............................................................... 17
6.13 Conflicting Agreements....................................................... 18
ARTICLE VII................................................................................ 18
DEFINITIONS............................................................................ 18
7.1 Affiliated Company........................................................... 18
7.2 Governmental Approvals....................................................... 18
7.3 Governmental Authority....................................................... 18
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7.4 Information.................................................................. 18
7.5 IPO Closing Date............................................................. 18
7.6 Luminent Assets.............................................................. 18
7.7 Luminent Group............................................................... 18
7.8 Luminent's Auditors.......................................................... 18
7.9 Person....................................................................... 19
7.10 Record Date.................................................................. 19
7.11 Subsidiary................................................................... 19
7.12 MRV Group.................................................................... 19
7.13 MRV's Auditors............................................................... 19
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TABLE OF EXHIBITS
PAGE
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EXHIBIT A................................................................................... 22
CERTIFICATE OF SECRETARY OF MRV........................................................ 22
EXHIBIT B................................................................................... 23
CERTIFICATE OF SECRETARY OF LUMINENT................................................... 23
EXHIBIT C................................................................................... 24
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT............................................ 24
EXHIBIT D-1................................................................................. 25
MASTER TECHNOLOGY OWNERSHIP AND LICENSE AGREEMENT...................................... 25
EXHIBIT D-2................................................................................. 26
MASTER PATENT OWNERSHIP AND LICENSE AGREEMENT.......................................... 26
EXHIBIT D-3................................................................................. 27
MASTER TRADEMARK OWNERSHIP AND LICENSE AGREEMENT....................................... 27
EXHIBIT E................................................................................... 28
EMPLOYEE MATTERS AGREEMENT............................................................. 28
EXHIBIT F................................................................................... 29
TAX SHARING AGREEMENT.................................................................. 29
EXHIBIT G................................................................................... 30
MASTER TRANSITIONAL SERVICES AGREEMENT................................................. 30
EXHIBIT H................................................................................... 31
REAL ESTATE MATTERS AGREEMENT.......................................................... 31
EXHIBIT I................................................................................... 32
MASTER CONFIDENTIAL DISCLOSURE AGREEMENT............................................... 32
EXHIBIT J................................................................................... 33
INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT........................................ 33
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MASTER SEPARATION AND DISTRIBUTION AGREEMENT
This Master Separation and Distribution Agreement (this "Agreement") is
entered into as of July 25, 2000, between MRV Communications, Inc., ("MRV") a
Delaware corporation, and Luminent, Inc. ("Luminent"), a Delaware corporation.
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in Article VII hereof.
RECITALS
WHEREAS, MRV currently owns all of the issued and outstanding common
stock of Luminent;
WHEREAS, Luminent is engaged in the manufacture and sale of optical
components for use in advanced fiber optic communications systems, as described
in the IPO Registration Statement (the "Luminent Business");
WHEREAS, the Boards of Directors of MRV and Luminent have each
determined that it would be appropriate and desirable for MRV to contribute and
transfer to Luminent, and for Luminent to receive and assume, directly or
indirectly, assets and liabilities currently held by MRV and associated with the
Luminent Business (the "Separation");
WHEREAS, MRV and Luminent currently contemplate that, following the
contribution and assumption of assets and liabilities, Luminent will make an
initial public offering ("IPO") of an amount of its common stock pursuant to a
registration statement on Form S-1 pursuant to the Securities Act of 1933, as
amended (the "IPO Registration Statement"), that will reduce MRV's ownership of
Luminent to not less than 80.1%;
WHEREAS, MRV currently contemplates that, 6 to 12 months following such
IPO, MRV will distribute, pro rata, to the holders of its common stock, $0.001
par value, all of the shares of Luminent common stock owned by MRV (the
"Distribution");
WHEREAS, MRV and Luminent intend that the Separation and the
Distribution will qualify as a tax-free reorganization under Sections
368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended (the
"Code"), and that this Agreement is intended to be, and is hereby adopted as, a
plan of reorganization under Section 368 of the Code; and
WHEREAS, the parties intend in this Agreement, including the Exhibits
hereto, to set forth the principal arrangements between them regarding the
separation of the Luminent Business.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
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ARTICLE I
SEPARATION
1.1 Separation Date. Unless otherwise provided in this Agreement, or in any
agreement to be executed in connection with this Agreement, the effective time
and date of each transfer of property, assumption of liability, license,
undertaking, or agreement in connection with the Separation shall be 12:01 a.m.,
Pacific Time, September 8, 2000 or such other date as may be fixed by the Board
of Directors of MRV (the "Separation Date").
1.2 Closing of Transactions. Unless otherwise provided herein, the closing of
the transactions contemplated in Article II shall occur by the lodging of each
of the executed instruments of transfer, assumptions of liability, undertakings,
agreements, instruments or other documents executed or to be executed with
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP ("K&L"), ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to be held in escrow for delivery as provided in Section
1.3.
1.3 Exchange of Secretary's Certificates. Upon receipt of a certificate of the
Secretary or an Assistant Secretary of MRV in the form attached to this
Agreement as Exhibit A, K&L shall deliver to Luminent on behalf of MRV all of
the items required to be delivered by MRV hereunder pursuant to Section 2.1 and
each such item shall be deemed to be delivered to Luminent as of the Separation
Date upon delivery of such certificate. Upon receipt of a certificate of the
Secretary or an Assistant Secretary of Luminent in the form attached to this
Agreement as Exhibit B, K&L shall deliver to MRV on behalf of Luminent all of
the items required to be delivered by Luminent pursuant to Section 2.2 hereunder
and each such item shall be deemed to be delivered to MRV as of the Separation
Date upon receipt of such certificate.
ARTICLE II
DOCUMENTS AND ITEMS TO BE DELIVERED ON THE SEPARATION DATE
2.1 Documents to Be Delivered by MRV
On the Separation Date or such other date as agreed in connection with the
Non-US Plan (as defined in Section 5.8), MRV will deliver, or will cause its
appropriate Subsidiaries to deliver, to Luminent all of the following items and
agreements (collectively, together with all agreements and documents
contemplated by such agreements, the "Ancillary Agreements"):
(a) A duly executed General Assignment and Assumption Agreement (the
"Assignment Agreement") substantially in the form attached hereto as Exhibit C;
(b) A duly executed Master Technology Ownership and License Agreement
substantially in the form attached hereto as Exhibit D-1, a duly executed Master
Patent Ownership and License Agreement substantially in the form attached hereto
as Exhibit D-2 and a duly executed Master Trademark Ownership and License
Agreement substantially in the form attached as Exhibit D-3;
(c) A duly executed Employee Matters Agreement substantially in the form
attached hereto as Exhibit E;
(d) A duly executed Tax Sharing Agreement substantially in the form
attached hereto as Exhibit F;
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(e) A duly executed Master Transitional Services Agreement substantially
in the form attached hereto as Exhibit G;
(f) A duly executed Real Estate Matters Agreement substantially in the
form attached hereto as Exhibit H;
(g) A duly executed Master Confidential Disclosure Agreement
substantially in the form attached hereto as Exhibit I;
(h) A duly executed Indemnification and Insurance Matters Agreement
substantially in the form attached hereto as Exhibit J;
(i) Resignations of each person who is an officer or director of MRV or
its Subsidiaries, immediately prior to the Separation Date, and who will be
employees of Luminent from and after the Separation Date; and
(j) Such other agreements, documents or instruments as the parties may
agree are necessary or desirable in order to achieve the purposes hereof.
2.2 Documents to Be Delivered by Luminent. As of the Separation Date, Luminent
will deliver to MRV all of the following:
(a) In each case where Luminent is a party to any agreement or
instrument referred to in Section 2.1, a duly executed counterpart of such
agreement or instrument; and
(b) Resignations of each person who is an officer or director of
Luminent, immediately prior to the Separation Date, and who will be an employee
of MRV from and after the Separation Date.
ARTICLE III
THE IPO AND ACTIONS PENDING THE IPO
3.1 Transactions Prior to the IPO. Subject to the conditions specified in
Section 3.3, MRV and Luminent shall use their reasonable commercial efforts to
consummate the IPO. Such efforts shall include, but not necessarily be limited
to, those specified in this Section 3.1
(a) Registration Statement. Luminent shall file the IPO Registration
Statement, and such amendments or supplements thereto as may be necessary in
order to cause the same to become and remain effective as required by law or by
the managing underwriters for the IPO (the "Underwriters"), including, but not
limited to, filing such amendments to the IPO Registration Statement as may be
required by the underwriting agreement to be entered into between Luminent and
the Underwriters (the "Underwriting Agreement"), the Securities and Exchange
Commission (the "Commission") or federal, state or foreign securities laws. MRV
and Luminent shall also cooperate in preparing, filing with the Securities and
Exchange Commission and causing to become effective a registration statement
registering the common stock of Luminent under the Securities and Exchange Act
of 1934, as amended (the "Exchange Act"), and any registration statements or
amendments thereof which are required to reflect the establishment of, or
amendments to, any employee benefit and other plans necessary or appropriate in
connection with the IPO, the Separation, the Distribution or the other
transactions contemplated by this Agreement.
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(b) Underwriting Agreement. Luminent shall enter into the Underwriting
Agreement, in form and substance reasonably satisfactory to Luminent, and shall
comply with its obligations thereunder.
(c) Nasdaq Listing. Luminent shall prepare, file and use reasonable
commercial efforts to seek to make effective, an application for listing of the
common stock of Luminent issued in the IPO on the Nasdaq National Market
("Nasdaq"), subject to official notice of issuance.
3.2 Cooperation. Luminent shall consult with, and cooperate in all respects
with, MRV in connection with the pricing of the common stock of Luminent to be
offered in the IPO and shall, at MRV's direction, promptly take any and all
actions necessary or desirable to consummate the IPO as contemplated by the IPO
Registration Statement and the Underwriting Agreement.
3.3 Conditions Precedent to Consummation of the IPO. The IPO closing is
currently scheduled to occur on or before September 15, 2000 or such other date
as may be fixed by the Board of Directors of MRV (the "IPO Closing Date"). The
obligations of the parties to use their reasonable commercial efforts to
consummate the IPO shall be conditioned on the satisfaction of the following
conditions:
(a) Registration Statement. The IPO Registration Statement shall have
been filed and declared effective by the Commission, and there shall be no
stop-order in effect with respect thereto.
(b) Blue Sky. The actions and filings with regard to state securities
and blue sky laws of the United States (and any comparable laws under any
foreign jurisdictions) shall have been taken and, where applicable, have become
effective or been accepted.
(c) Nasdaq Listing. The common stock of Luminent to be issued in the IPO
shall have been accepted for listing on the Nasdaq, on official notice of
issuance.
(d) Underwriting Agreement. Luminent shall have entered into the
Underwriting Agreement and all conditions to the obligations of Luminent and the
Underwriters shall have been satisfied or waived.
(e) Common Stock Ownership. MRV shall be satisfied in its sole
discretion that it will own at least 80.1% of the outstanding common stock of
Luminent following the IPO. All other conditions to permit the Distribution to
qualify as a tax-free distribution to MRV, Luminent and MRV's stockholders
shall, to the extent applicable as of the time of the IPO, be satisfied. There
shall be no event or condition that is likely to cause any of such conditions
not to be satisfied as of the time of the Distribution or thereafter.
(f) No Legal Restraints. No order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Separation or the IPO or any of
the other transactions contemplated by this Agreement shall be in effect.
(g) Separation. The Separation shall have become effective by execution
of this Agreement and the Ancillary Agreements.
(h) Other Actions. Such other actions as the parties hereto may, based
upon the advice of counsel, reasonably request to be taken prior to the IPO in
order to assure the successful completion of the IPO shall have been taken.
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(i) No Termination. This Agreement shall not have been terminated.
ARTICLE IV
THE DISTRIBUTION
4.1 The Distribution.
(a) Delivery of Shares for Distribution. Subject to Section 4.4 hereof,
on or prior to the date the Distribution is effective (the "Distribution Date"),
MRV will deliver to the distribution agent (the "Distribution Agent") to be
appointed by MRV to distribute to the stockholders of MRV the shares of common
stock of Luminent held by MRV pursuant to the Distribution for the benefit of
holders of record of common stock of MRV on the Record Date, a single stock
certificate, endorsed by MRV, representing all of the outstanding shares of
common stock of Luminent then owned by MRV, and shall cause the transfer agent
for the shares of common stock of MRV to instruct the Distribution Agent to
distribute on the Distribution Date the appropriate number of such shares of
common stock of Luminent to each such holder or designated transferee or
transferees of such holder.
(b) Shares Received. Subject to Sections 4.4 and 4.5, each holder of
common stock of MRV on the Record Date (or such holder's designated transferee
or transferees) will be entitled to receive in the Distribution a number of
shares of common stock of Luminent equal to the number of shares of common stock
of MRV held by such holder on the Record Date multiplied by a fraction the
numerator of which is the number of shares of common stock of Luminent
beneficially owned by MRV on the Record Date and the denominator of which is the
number of shares of common stock of MRV outstanding on the Record Date.
(c) Obligation to Provide Information. Luminent and MRV, as the case may
be, will provide to the Distribution Agent all share certificates and any
information required in order to complete the Distribution on the basis
specified above.
4.2 Actions Prior to the Distribution.
(a) Information Statement. MRV and Luminent shall prepare and mail,
prior to the Distribution Date, to the holders of common stock of MRV, such
information concerning Luminent and the Distribution and such other matters as
MRV shall reasonably determine are necessary and as may be required by law. MRV
and Luminent will prepare, and Luminent will, to the extent required under
applicable law, file with the Commission any such documentation which MRV and
Luminent determine is necessary or desirable to effectuate the Distribution, and
MRV and Luminent shall each use its reasonable commercial efforts to obtain all
necessary approvals from the Commission with respect thereto as soon as
practicable.
(b) Blue Sky. MRV and Luminent shall take all such actions as may be
necessary or appropriate under the securities or blue sky laws of the United
States (and any comparable laws under any foreign jurisdiction) in connection
with the Distribution.
(c) Nasdaq Listing. Luminent shall prepare and file, and shall use its
reasonable commercial efforts to have approved, an application for the
additional listing of the common stock of Luminent to be distributed in the
Distribution on the Nasdaq, subject to official notice of distribution.
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(d) Conditions. MRV and Luminent shall take all reasonable steps
necessary and appropriate to cause the conditions set forth in Section 4.4 to be
satisfied and to effect the Distribution on the Distribution Date.
4.3 Sole Discretion of MRV. MRV currently intends, following the consummation of
the IPO, to complete the Distribution within 6 to 12 months following the IPO.
MRV shall, in its sole and absolute discretion, determine the date of the
consummation of the Distribution and all terms of the Distribution, including,
without limitation, the form, structure and terms of any transaction(s) and/or
offering(s) to effect the Distribution and the timing of and conditions to the
consummation of the Distribution. In addition, MRV may at any time and from time
to time until the completion of the Distribution, modify or change the terms of
the Distribution, including, without limitation, by accelerating or delaying the
timing of the consummation of all or part of the Distribution. Luminent shall
cooperate with MRV in all respects to accomplish the Distribution and shall, at
MRV's direction, promptly take any and all actions necessary or desirable to
effect the Distribution, including, without limitation, the registration under
the Securities Act of the common stock of Luminent on an appropriate
registration form or forms to be designated by MRV. MRV shall select any
investment banker(s) and manager(s) in connection with the Distribution, as well
as any financial printer, solicitation and/or exchange agent and outside counsel
for MRV; provided, however, that nothing herein shall prohibit Luminent from
engaging (at its own expense) its own financial, legal, accounting and other
advisors in connection with the Distribution.
4.4 Conditions Precedent to Distribution. The following are conditions that must
take place prior to the consummation of the Distribution. The conditions are for
the sole benefit of MRV and shall not give rise to or create any duty on the
part of MRV or the MRV Board of Directors to waive or not waive any such
condition.
(a) IRS Ruling. MRV shall have obtained a private letter ruling from the
Internal Revenue Service in form and substance satisfactory to MRV (in its sole
discretion), and such ruling shall remain in effect as of the Distribution Date,
to the effect that (i) the transfer by the MRV Group to the Luminent Group of
the property, subject to liabilities, held by MRV of the Luminent Business, and
Luminent's assumption of liabilities held by MRV related to the Luminent
Business, followed by the distribution by MRV of all of its Luminent stock to
the stockholders of MRV, will qualify as a reorganization under Sections
368(a)(1)(D) and 355 of the Code; (ii) no gain or loss will be recognized by MRV
on its transfer of property of the Luminent Business to Luminent; (iii) no gain
or loss will be recognized by Luminent on its receipt of property of the
Luminent Business from MRV; and (iv) no gain or loss will be recognized by (and
no amount will otherwise be included in the income of) the stockholders of MRV
upon their receipt of Luminent common stock pursuant to the Distribution.
(b) Government Approvals. Any material governmental approvals and
consents necessary to consummate the Distribution shall have been obtained and
be in full force and effect;
(c) No Legal Restraints. No order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Distribution shall be in effect
and no other event outside the control of MRV shall have occurred or failed to
occur that prevents the consummation of the Distribution; and
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(d) No Material Adverse Effect. No other events or developments shall
have occurred subsequent to the IPO Closing Date that, in the judgment of the
Board of Directors of MRV, would result in the Distribution having a material
adverse effect on MRV or on the stockholders of MRV.
4.5 Fractional Shares. As soon as practicable after the Distribution Date, MRV
shall direct the Distribution Agent to determine the number of whole shares and
fractional shares of common stock of Luminent allocable to each holder of record
or beneficial owner of common stock of MRV as of the Record Date, to aggregate
all such fractional shares and sell the whole shares obtained thereby at the
direction of MRV, in open market transactions, at then prevailing trading
prices, and to cause to be distributed to each such holder or for the benefit of
each such beneficial owner to which a fractional share shall be allocable such
holder's or owner's ratable share of the proceeds of such sale, after making
appropriate deductions of the amount required to be withheld for federal income
tax purposes and after deducting an amount equal to all brokerage charges,
commissions and transfer taxes attributed to such sale. MRV and the Distribution
Agent shall use their reasonable commercial efforts to aggregate the shares of
common stock of MRV that may be held by any beneficial owner thereof through
more than one account in determining the fractional share allocable to such
beneficial owner.
ARTICLE V
COVENANTS AND OTHER MATTERS
5.1 Other Agreements. MRV and Luminent agree to execute or cause to be executed
by the appropriate parties and deliver, as appropriate, such other agreements,
instruments and other documents as may be necessary or desirable in order to
effect the purposes of this Agreement and the Ancillary Agreements.
5.2 Further Instruments. At the request of Luminent, and without further
consideration, MRV will execute and deliver, and will cause its applicable
Subsidiaries to execute and deliver, to Luminent and its Subsidiaries such other
instruments of transfer, conveyance, assignment, substitution and confirmation
and take such action as Luminent may reasonably deem necessary or desirable in
order to more effectively transfer, convey and assign to Luminent and its
Subsidiaries and confirm Luminent's and its Subsidiaries' title to all of the
assets, rights and other things of value contemplated to be transferred to
Luminent and its Subsidiaries pursuant to this Agreement, the Ancillary
Agreements, and any documents referred to therein, to put Luminent and its
Subsidiaries in actual possession and operating control thereof and to permit
Luminent and its Subsidiaries to exercise all rights with respect thereto
(including, without limitation, rights under contracts and other arrangements as
to which the consent of any third party to the transfer thereof shall not have
previously been obtained). At the request of MRV and without further
consideration, Luminent will execute and deliver, and will cause its applicable
Subsidiaries to execute and deliver, to MRV and its Subsidiaries all
instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as MRV may reasonably deem necessary or
desirable in order to have Luminent fully and unconditionally assume and
discharge the liabilities contemplated to be assumed by Luminent under this
Agreement or any document in connection herewith and to relieve the MRV Group of
any liability or obligation with respect thereto and evidence the same to third
parties. Neither MRV nor Luminent shall be obligated, in connection with the
foregoing, to expend money other than reasonable out-of- pocket expenses,
attorneys' fees and recording or similar fees. Furthermore,
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each party, at the request of the other party hereto, shall execute and deliver
such other instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby.
5.3 Additional Transitional Services Agreements. MRV and its Subsidiaries and
Luminent and its Subsidiaries will enter into transitional services agreements
covering the provision of various transitional services, including financial,
accounting, real estate and site services, sales, customer support, human
resources, supply chain services and information technology services by MRV (and
its Subsidiaries) to Luminent (and its Subsidiaries) or, in certain
circumstances, vice versa. Such services will generally be provided for a fee
equal to the direct costs and indirect costs of providing such services plus
five percent (5%). The transitional services agreements will generally provide
for a term of one (1) year or less. However, some transitional services
agreements may be extended beyond the initial one (1) year term, in which case
the fee for such services shall, generally, remain as the direct costs and
indirect costs of providing such services plus ten percent (10%).
5.4 Agreement for Exchange of Information.
(a) Generally. Each of MRV and Luminent agrees to provide, or cause to
be provided, to each other, at any time before or after the Distribution Date,
as soon as reasonably practicable after written request therefor, any
Information in the possession or under the control of such party that the
requesting party reasonably needs (i) to comply with reporting, disclosure,
filing or other requirements imposed on the requesting party (including under
applicable securities laws) by a Governmental Authority having jurisdiction over
the requesting party, (ii) for use in any other judicial, regulatory,
administrative or other proceeding or in order to satisfy audit, accounting,
claims, regulatory, litigation or other similar requirements, (iii) to comply
with its obligations under this Agreement or any Ancillary Agreement or (iv) in
connection with the ongoing businesses of MRV or Luminent, as the case may be;
provided, however, that in the event that any party determines that any such
provision of Information could be commercially detrimental, violate any law or
agreement, or waive any attorney-client privilege, the parties shall take all
reasonable measures to permit the compliance with such obligations in a manner
that avoids any such harm or consequence.
(b) Internal Accounting Controls; Financial Information. After the
Separation Date, (i) each party shall maintain in effect at its own cost and
expense adequate systems and controls for its business to the extent necessary
to enable the other party to satisfy its reporting, accounting, audit and other
obligations, and (ii) each party shall provide, or cause to be provided, to the
other party and its Subsidiaries in such form as such requesting party shall
request, at no charge to the requesting party, all financial and other data and
information as the requesting party determines necessary or advisable in order
to prepare its financial statements and reports or filings with any Governmental
Authority.
(c) Ownership of Information. Any Information owned by a party that is
provided to a requesting party pursuant to this Section 5.4 shall be deemed to
remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.
(d) Record Retention. To facilitate the possible exchange of Information
pursuant to this Section 5.4 and other provisions of this Agreement after the
Distribution Date, each party agrees to use its reasonable commercial efforts to
retain all Information in its respective
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possession or control on the Distribution Date substantially in accordance with
the policies of MRV as in effect on the Separation Date. However, except as set
forth in the Tax Sharing Agreement, at any time after the Distribution Date,
each party may amend its respective record retention policies at such party's
discretion; provided, however, that if a party desires to effect the amendment
within three (3) years after the Distribution Date, the amending party must give
thirty (30) days prior written notice of such change in the policy to the other
party to this Agreement.
(i) No party will destroy, or permit any of its Subsidiaries to
destroy, any Information that exists on the Separation Date (other than
Information that is permitted to be destroyed under the current record retention
policies of MRV) and that falls under the categories listed in Section 5.4(a),
without first using its reasonable commercial efforts to notify the other party
of the proposed destruction and giving the other party the opportunity to take
possession of such Information prior to such destruction.
(e) Limitation of Liability. No party shall have any liability to any
other party in the event that any Information exchanged or provided pursuant to
this Section 5.4 is found to be inaccurate, in the absence of gross negligence
or willful misconduct by the party providing such Information. No party shall
have any liability to any other party if any Information is destroyed or lost
after reasonable commercial efforts by such party to comply with the provisions
of Section 5.4(d).
(f) Other Agreements Providing for Exchange of Information. The rights
and obligations granted under this Section 5.4 are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in this Agreement and any
Ancillary Agreement.
(g) Production of Witnesses; Records; Cooperation. After the
Distribution Date, except in the case of a legal or other proceeding by one
party against another party (which shall be governed by such discovery rules as
may be applicable under Section 5.9 or otherwise), each party hereto shall use
its reasonable commercial efforts to make available to each other party, upon
written request, the former, current and future directors, officers, employees,
other personnel and agents of such party as witnesses and any books, records or
other documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any legal, administrative or other proceeding in which the requesting party may
from time to time be involved, regardless of whether such legal, administrative
or other proceeding is a matter with respect to which indemnification may be
sought hereunder. The requesting party shall bear all costs and expenses in
connection therewith.
5.5 Auditors and Audits; Annual and Quarterly Statements and Accounting. Each
party agrees that, for so long as MRV is required in accordance with United
States generally accepted accounting principles to consolidate Luminent's
results of operations and financial position:
(a) Selection of Auditors. Luminent shall not select a different
accounting firm from that used by MRV to serve as its (and its Subsidiaries')
independent certified public accountants ("Luminent's Auditors") for purposes of
providing an opinion on its consolidated financial statements without MRV's
prior written consent (which shall not be unreasonably withheld).
15
(b) Date of Auditors' Opinion and Quarterly Reviews. Luminent shall use
its reasonable commercial efforts to enable the Luminent Auditors to complete
their audit such that they will date their opinion on Luminent's audited annual
financial statements on the same date that MRV's independent certified public
accountants ("MRV's Auditors") date their opinion on MRV's audited annual
financial statements, and to enable MRV to meet its timetable for the printing,
filing and public dissemination of MRV's annual financial statements. Luminent
shall use its reasonable commercial efforts to enable the Luminent Auditors to
complete their quarterly review procedures such that they will provide clearance
on Luminent's quarterly financial statements on the same date that MRV's
Auditors provide clearance on MRV's quarterly financial statements.
(c) Annual and Quarterly Financial Statements. Luminent shall provide to
MRV on a timely basis all Information that MRV reasonably requires to meet its
schedule for the preparation, printing, filing, and public dissemination of
MRV's annual and quarterly financial statements. Without limiting the generality
of the foregoing, Luminent will provide all required financial Information with
respect to Luminent and its Subsidiaries to Luminent's Auditors in a sufficient
and reasonable time and in sufficient detail to permit Luminent's Auditors to
take all steps and perform all reviews necessary to provide sufficient
assistance to MRV's Auditors with respect to financial Information to be
included or contained in MRV's annual and quarterly financial statements.
Similarly, MRV shall provide to Luminent on a timely basis all financial
Information that Luminent reasonably requires to meet its schedule for the
preparation, printing, filing, and public dissemination of Luminent's annual and
quarterly financial statements. Without limiting the generality of the
foregoing, MRV will provide all required financial Information with respect to
MRV and its Subsidiaries to MRV's Auditors in a sufficient and reasonable time
and in sufficient detail to permit MRV's Auditors to take all steps and perform
all reviews necessary to provide sufficient assistance to Luminent's Auditors
with respect to Information to be included or contained in Luminent's annual and
quarterly financial statements.
(d) Identity of Personnel Performing the Annual Audit and Quarterly
Reviews. Luminent shall authorize Luminent's Auditors to make available to MRV's
Auditors both the personnel who performed or will perform the annual audits and
quarterly reviews of Luminent and work papers related to the annual audits and
quarterly reviews of Luminent, in all cases within a reasonable time prior to
Luminent's Auditors' opinion date, so that MRV's Auditors are able to perform
the procedures they consider necessary to take responsibility for the work of
Luminent's Auditors as it relates to MRV's Auditors' report on MRV's financial
statements, all within sufficient time to enable MRV to meet its timetable for
the printing, filing and public dissemination of MRV's annual and quarterly
statements. Similarly, MRV shall authorize MRV's Auditors to make available to
Luminent's Auditors both the personnel who performed or will perform the annual
audits and quarterly reviews of MRV and work papers related to the annual audits
and quarterly reviews of MRV, in all cases within a reasonable time prior to
MRV's Auditors' opinion date, so that Luminent's Auditors are able to perform
the procedures they consider necessary to take responsibility for the work of
MRV's Auditors as it relates to Luminent's Auditors' report on Luminent's
statements, all within sufficient time to enable Luminent to meet its timetable
for the printing, filing and public dissemination of Luminent's annual and
quarterly financial statements.
(e) Access to Books and Records. Luminent shall provide MRV's internal
auditors and their designees access to Luminent's and its Subsidiaries' books
and records so that MRV
16
may conduct reasonable audits relating to the financial statements provided by
Luminent pursuant hereto as well as to the internal accounting controls and
operations of Luminent and its Subsidiaries. Similarly, MRV shall provide
Luminent's internal auditors and their designees access to MRV's and its
Subsidiaries' books and records so that Luminent may conduct reasonable audits
relating to the financial statements provided by MRV pursuant hereto as well as
to the internal accounting controls and operations of MRV and its Subsidiaries.
(f) Notice of Change in Accounting Principles. Luminent shall give MRV
as much prior notice as reasonably practical of any proposed determination of,
or any significant changes in, its accounting estimates or accounting principles
from those in effect on the Separation Date. Luminent will consult with MRV and,
if requested by MRV, Luminent will consult with MRV's independent public
accountants with respect thereto. MRV shall give Luminent as much prior notice
as reasonably practical of any proposed determination of, or any significant
changes in, its accounting estimates or accounting principles from those in
effect on the Separation Date.
(g) Conflict with Third-Party Agreements. Nothing in Sections 5.4 and
5.5 shall require Luminent to violate any agreement with any third party
regarding the confidentiality of confidential and proprietary information
relating to that third party or its business; provided, however, that in the
event that Luminent is required under Sections 5.4 and 5.5 to disclose any such
Information, Luminent shall use all commercially reasonable efforts to seek to
obtain such third party's consent to the disclosure of such information.
5.6 Consistency with Past Practices. At all times, MRV and Luminent will conduct
the Luminent Business before the Separation Date in the ordinary course,
consistent with past practices.
5.7 Payment of Expenses. Except as otherwise provided in this Agreement, the
Ancillary Agreements or any other agreement between the parties relating to the
Separation, the IPO or the Distribution, all costs and expenses of the parties
hereto in connection with the Separation, the IPO (including underwriting
discounts and commissions) and the Distribution and costs and expenses of the
parties hereto in connection with the Separation shall be allocated between
Luminent and MRV. Luminent and MRV shall each be responsible for their own
internal fees, costs and expenses incurred in connection with the Separation,
the IPO and the Distribution.
5.8 Foreign Subsidiaries. MRV and Luminent shall cause each of their foreign
subsidiaries to execute such local transfer agreements, assignments,
assumptions, novations and other documents as shall be necessary to carry out
the plan described in Exhibit K (the "Non-US Plan") hereto to effect the
purposes of this Agreement with respect to their respective operations outside
the United States.
5.9 Dispute Resolution.
(a) If a dispute, controversy or claim ("Dispute") arises between the
parties relating to the interpretation or performance of this Agreement or the
Ancillary Agreements, or the grounds for the termination hereof, appropriate
senior executives (e.g. director or V.P. level) of each party who shall have the
authority to resolve the matter shall meet to attempt in good faith to negotiate
a resolution of the Dispute prior to pursuing other available remedies. The
initial meeting between the appropriate senior executives shall be referred to
herein as the "Dispute Resolution Commencement Date." Discussions and
correspondence relating to trying to resolve such Dispute shall be treated as
confidential information developed for the purpose of settlement
17
and shall be exempt from discovery or production and shall not be admissible. If
the senior executives are unable to resolve the Dispute within thirty (30) days
from the Dispute Resolution Commencement Date, and either party wishes to pursue
its rights relating to such Dispute, then the Dispute will be mediated by a
mutually acceptable mediator appointed pursuant to the mediation rules of
JAMS/Endispute within thirty (30) days after written notice by one party to the
other demanding non-binding mediation. Neither party may unreasonably withhold
consent to the selection of a mediator or the location of the mediation. Both
parties will share the costs of the mediation equally, except that each party
shall bear its own costs and expenses, including attorney's fees, witness fees,
travel expenses, and preparation costs. The parties may also agree to replace
mediation with some other form of non-binding or binding ADR.
(b) Any Dispute which the parties cannot resolve through mediation
within ninety (90) days of the Dispute Resolution Commencement Date, unless
otherwise mutually agreed, shall be submitted to final and binding arbitration
under the then current Commercial Arbitration Rules of the American Arbitration
Association ("AAA"), by three (3) arbitrators in Los Angeles County, California.
Such arbitrators shall be selected by the mutual agreement of the parties or,
failing such agreement, shall be selected according to the aforesaid AAA rules.
The arbitrators will be instructed to prepare and deliver a written, reasoned
opinion stating their decision within thirty (30) days of the completion of the
arbitration. The prevailing party in such arbitration shall be entitled to
expenses, including costs and reasonable attorneys' and other professional fees,
incurred in connection with the arbitration (but excluding any costs and fees
associated with prior negotiation or mediation). The decision of the arbitrator
shall be final and non-appealable and may be enforced in any court of competent
jurisdiction. The use of any ADR procedures will not be construed under the
doctrine of laches, waiver or estoppel to adversely affect the rights of either
party.
(c) Any Dispute regarding the following is not required to be
negotiated, mediated or arbitrated prior to seeking relief from a court of
competent jurisdiction: breach of any obligation of confidentiality;
infringement, misappropriation, or misuse of any intellectual property right;
any other claim where interim relief from the court is sought to prevent serious
and irreparable injury to one of the parties or to others. However, the parties
to the Dispute shall make a good faith effort to negotiate and mediate such
Dispute, according to the above procedures, while such court action is pending.
(d) Continuity of Service and Performance. Unless otherwise agreed in
writing, the parties will continue to provide service and honor all other
commitments under this Agreement and each Ancillary Agreement during the course
of dispute resolution pursuant to the provisions of this Section 5.9 with
respect to all matters not subject to such dispute, controversy or claim.
5.10 Governmental Approvals. To the extent that the Separation requires any
Governmental Approvals, the parties will use their reasonable commercial efforts
to obtain any such Governmental Approvals.
5.11 No Representation or Warranty
MRV does not, in this Agreement or any other agreement, instrument or document
contemplated by this Agreement, make any representation as to, warranty of or
covenant with respect to:
(a) the value of any asset or thing of value to be transferred to
Luminent;
18
(b) the freedom from encumbrance of any asset or thing of value to be
transferred to Luminent;
(c) the absence of defenses or freedom from counterclaims with respect
to any claim to be transferred to Luminent; or (d) the legal sufficiency of any
assignment, document or instrument delivered hereunder to convey title to any
asset or thing of value upon its execution, delivery and filing.
Except as may expressly be set forth herein or in any Ancillary
Agreement, all assets to be transferred to Luminent shall be transferred "AS IS,
WHERE IS" and Luminent shall bear the economic and legal risk that any
conveyance shall prove to be insufficient to vest in Luminent good and
marketable title, free and clear of any lien, claim, equity or other
encumbrance.
5.12 Non-Solicitation of Employees. MRV and Luminent each agree not to solicit
or recruit, without the other party's express written consent, the other party's
employees for a period of two (2) years following the Distribution Date. To the
extent this prohibition is waived, any recruitment efforts by either MRV or
Luminent during the period of one (1) year after the Distribution Date shall be
coordinated with each party's Senior Vice President of Human Resources or his or
her designate and appropriate management. Notwithstanding the foregoing, this
prohibition on solicitation does not apply to actions taken by a party either:
(a) solely as a result of an employee's affirmative response to a general
recruitment effort carried out through a public solicitation or general
solicitation, or (b) as a result of an employee's initiative.
5.13 Employee Agreements; Definition. As used in this Section 5.13, "Employee
Agreement" means the Invention and Nondisclosure Agreement, the Non-Competition
and Non-Solicitation Agreement and corresponding agreements in foreign countries
executed by each MRV employee.
(a) Survival of MRV Employee Agreement Obligations and MRV's Common Law
Rights. The MRV Employee Agreements of all former MRV employees transferred to
Luminent as of the Distribution Date shall remain in full force and effect
according to their terms; provided, however, that none of the following acts
committed by former MRV employees within the scope of their Luminent employment
shall constitute a breach of such MRV Employee Agreements: (i) the use or
disclosure of Confidential Information (as that term is defined in the former
MRV employee's MRV Employee Agreement) for or on behalf of Luminent, if such
disclosure is consistent with the rights granted to Luminent and restrictions
imposed on Luminent under this Agreement, any Ancillary Agreement or any other
agreement between the parties; (ii) the disclosure and assignment to Luminent of
rights in proprietary developments authored or conceived by the former MRV
employee after the Separation Date and resulting from the use of, or based upon
intellectual property (whether patented or not) which is retained by MRV;
provided, however, that in no event shall such disclosure and assignment be
regarded as assigning the underlying intellectual property to Luminent; (iii)
the rendering of any services, directly or indirectly, to Luminent to the extent
such services are consistent with the assignment or license of rights granted to
Luminent and the restrictions imposed on Luminent under this Agreement, any
Ancillary Agreement or any other agreement between the parties; and (iv)
solicitation of the employees of one party by the other party prior to the
Distribution Date (so long as such solicitation does not violate Section 5.12
hereof). Further, MRV retains any rights it has under statute or common law with
respect to actions by its former employees to the extent such actions are
inconsistent with the rights granted to Luminent and restrictions imposed on
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Luminent under this Agreement, any Ancillary Agreement or any other agreement
between the parties.
(b) Assignment, Cooperation for Compliance and Enforcement.
(i) MRV retains all rights under the MRV Employee Agreements of
all former MRV employees necessary to permit MRV to protect the rights and
interests of MRV, but hereby transfers and assigns to Luminent its rights under
the MRV Employee Agreements of all former MRV employees to the extent required
to permit Luminent to enjoin, restrain, recover damages from or obtain specific
performance of the MRV Employee Agreements or obtain other remedies against any
employee who breaches his/her MRV Employee Agreement.
(ii) MRV and Luminent agree, at their own respective cost and
expense, to use their reasonable efforts to cooperate as follows: (A) Luminent
shall advise MRV of: (1) any violation(s) of the MRV Employee Agreement by
former MRV employees, and (2) any violation(s) of the Luminent Employee
Agreement which affect MRV's rights; and (B) MRV shall advise Luminent of any
violations of the MRV Employee Agreement by current or former MRV employees
which affect Luminent's rights; provided, however, that the foregoing
obligations shall only apply to violations which become known to an attorney
within the legal department of the party obligated to provide notice thereof.
(iii) MRV and Luminent each may separately enforce the MRV
Employee Agreements of former MRV employees to the extent necessary to
reasonably protect their respective interests, provided, however, that (i)
Luminent shall not commence any legal action relating thereto without first
consulting with MRV's General Counsel or his/her designee and (ii) MRV shall not
commence any legal action relating thereto against any former MRV employee who
is at the time an Luminent employee without first consulting with Luminent's
General Counsel or his/her designee. If either party, in seeking to enforce any
MRV Employee Agreement, notifies the other party that it requires, or desires,
such party to join in such action, then the other party shall do so. In
addition, if either party commences or becomes a party to any action to enforce
a MRV Employee Agreement of a former MRV employee, the other party shall,
whether or not it becomes a party to the action, cooperate with the other party
by making available its files and employees who have information or knowledge
relevant to the dispute, subject to appropriate measures to protect the
confidentiality of any proprietary or confidential information that may be
disclosed in the course of such cooperation or action and subject to any
relevant privacy laws and regulations. Any such action shall be conducted at the
expense of the party bringing the action and the parties shall agree on a case
by case basis on compensation, if any, of the other party for the value of the
time of such other party's employees as reasonably required in connection with
the action.
(iv) MRV and Luminent understand and acknowledge that matters
relating to the making, performance, enforcement, assignment and termination of
employee agreements are typically governed by the laws and regulations of the
national, federal, state or local governmental unit where an employee resides,
or where an employee's services are rendered, and that such laws and regulations
may supersede or limit the applicability or enforceability of this Section 5.13.
In such circumstances, MRV and Luminent agree to take action with respect to the
employee agreements that best accomplishes the parties' objectives as set forth
in this Section 5.13 and that is consistent with applicable law.
20
5.14 Cooperation in Obtaining New Agreements. MRV understands that, prior to the
Separation Date, Luminent has derived benefits under certain agreements and
relationships between MRV and third parties, which agreements and relationships
are not being assigned or transferred to Luminent in connection with the
Separation. Upon the request of Luminent, MRV agrees to make introductions of
appropriate Luminent personnel to MRV's contacts at such third parties, and
agrees to provide reasonable assistance to Luminent, at MRV's own expense, so
that Luminent may enter into agreements or relationships with such third parties
under substantially equivalent terms and conditions, including financial terms
and conditions, that apply to MRV. Such assistance may include, but is not
limited to, (a) requesting and encouraging such third parties to enter into such
agreements or relationships with Luminent, (b) attending meetings and
negotiating sessions with Luminent and such third parties, and (c) participating
in buying consortiums with Luminent. MRV also understands that certain
agreements between MRV and third parties which are being assigned to Luminent in
connection with the Separation may require the consent of the applicable third
party. MRV shall assist Luminent in seeking and obtaining the consent of such
third parties to such assignment. The parties expect that the activities
contemplated by this Section 5.14 will be substantially completed by the
Distribution Date, but in no event will MRV have any obligations hereunder after
the first anniversary of the Distribution Date.
5.15 Property Damage to Luminent Assets Prior to the Separation Date. In the
event of any property damage, other than ordinary wear and tear, to any Luminent
Assets held by MRV which occurs prior to the Separation Date, MRV shall repair
or otherwise address such damage in the ordinary course of business consistent
with past practices; provided, however, that nothing in this clause shall
restrict MRV from disposing of any Assets in the ordinary course of business
consistent with past practices.
ARTICLE VI
MISCELLANEOUS
6.1 Limitation of Liability. IN NO EVENT SHALL ANY MEMBER OF THE MRV GROUP OR
LUMINENT GROUP BE LIABLE TO ANY OTHER MEMBER OF THE MRV GROUP OR LUMINENT GROUP
FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST
PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE)
ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE
FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS
FOR LIABILITIES AS SET FORTH IN THE INDEMNIFICATION AND INSURANCE MATTERS
AGREEMENT.
6.2 Entire Agreement. This Agreement, the Ancillary Agreements and the Exhibits
and Schedules referenced or attached hereto and thereto, constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and shall supersede all prior written and oral and all contemporaneous
oral agreements and understandings with respect to the subject matter hereof and
thereof.
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6.3 Governing Law. This Agreement shall be construed in accordance with and all
Disputes hereunder shall be governed by the laws of the State of California,
excluding its conflict of law rules and the United Nations Convention on
Contracts for the International Sale of Goods. The Superior Court of Los Angeles
County and/or the United States District Court for the Southern District of
California shall have jurisdiction and venue over all Disputes between the
parties that are permitted to be brought in a court of law pursuant to Section
5.9 above.
6.4 Termination. This Agreement and all Ancillary Agreements may be terminated
and the Distribution abandoned at any time prior to the IPO Closing Date by and
in the sole discretion of MRV without the approval of Luminent. This Agreement
may be terminated at any time after the IPO Closing Date and before the
Distribution Date by mutual consent of MRV and Luminent. In the event of
termination pursuant to this Section 6.4, no party shall have any liability of
any kind to the other party.
6.5 Notices. Notices, offers, requests or other communications required or
permitted to be given by either party pursuant to the terms of this Agreement
shall be given in writing to the respective parties to the following addresses:
if to MRV :
MRV Communications, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to Luminent:
Luminent, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also be
sent by fax, confirmed by first class mail. All notices shall be deemed to have
been given and received on the earlier of actual delivery or three (3) days from
the date of postmark.
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6.6 Counterparts. This Agreement, including the Ancillary Agreement and the
Exhibits and Schedules hereto and thereto and the other documents referred to
herein or therein, may be executed in counterparts, each of which shall be
deemed to be an original but all of which shall constitute one and the same
agreement.
6.7 Binding Effect; Assignment. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives
and successors, and nothing in this Agreement, express or implied, is intended
to confer upon any other Person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. This Agreement may be enforced separately
by each member of the MRV Group and each member of the Luminent Group. Neither
party may assign this Agreement or any rights or obligations hereunder, without
the prior written consent of the other party, and any such assignment shall be
void; provided, however, either party may assign this Agreement to a successor
entity in conjunction with such party's reincorporation.
6.8 Severability. If any term or other provision of this Agreement or the
Exhibits or Schedules attached hereto is determined by a court, administrative
agency or arbitrator to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to either party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible.
6.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of either party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right. All rights and remedies existing under this Agreement or
the Exhibits or Schedules attached hereto are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
6.10 Amendment. No change or amendment will be made to this Agreement or the
Exhibits or Schedules attached hereto except by an instrument in writing signed
on behalf of each of the parties to such agreement.
6.11 Authority. Each of the parties hereto represents to the other that (a) it
has the corporate or other requisite power and authority to execute, deliver and
perform this Agreement, (b) the execution, delivery and performance of this
Agreement by it have been duly authorized by all necessary corporate or other
actions, (c) it has duly and validly executed and delivered this Agreement, and
(d) this Agreement is a legal, valid and binding obligation, enforceable against
it in accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles.
6.12 Interpretation. The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Any capitalized term used
23
in any Exhibit or Schedule but not otherwise defined therein, shall have the
meaning assigned to such term in this Agreement. When a reference is made in
this Agreement to an Article or a Section, Exhibit or Schedule, such reference
shall be to an Article or Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.
6.13 Conflicting Agreements. In the event of conflict between this Agreement and
any Ancillary Agreement or other agreement executed in connection herewith, the
provisions of such other agreement shall prevail.
ARTICLE VII
DEFINITIONS
7.1 Affiliated Company. "Affiliated Company" of any Person means any entity that
controls, is controlled by, or is under common control with such Person. As used
herein, "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such entity,
whether through ownership of voting securities or other interests, by contract
or otherwise.
7.2 Governmental Approvals. "Governmental Approvals" means any notices, reports
or other filings to be made, or any consents, registrations, approvals, permits
or authorizations to be obtained from, any Governmental Authority.
7.3 Governmental Authority. "Governmental Authority" shall mean any federal,
state, local, foreign or international court, government, department,
commission, board, bureau, agency, official or other regulatory, administrative
or governmental authority.
7.4 Information. "Information" means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
7.5 IPO Closing Date. "IPO Closing Date" has the meaning set forth in the
Section 3.3 hereof.
7.6 Luminent Assets. "Luminent Assets" has the meaning set forth in Section 1.2
of the Assignment Agreement.
7.7 Luminent Group
"Luminent Group" means Luminent, each Subsidiary and Affiliated Company of
Luminent immediately after the Separation Date or that is contemplated to be a
Subsidiary or Affiliated Company of Luminent pursuant to the Non-US Plan and
each Person that becomes a Subsidiary or Affiliate Company of Luminent after the
Separation Date.
7.8 Luminent's Auditors. "Luminent's Auditors" means Luminent's independent
certified public accountants.
24
7.9 Person. "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
7.10 Record Date. "Record Date" means the close of business on the date to be
determined by the Board of Directors of MRV as the record date for determining
the stockholders of MRV entitled to receive shares of common stock of Luminent
in the Distribution.
7.11 Subsidiary. "Subsidiary" of any Person means a corporation or other
organization whether incorporated or unincorporated of which at least a majority
of the securities or interests having by the terms thereof ordinary voting power
to elect at least a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries;
provided, however, that no Person that is not directly or indirectly
wholly-owned by any other Person shall be a Subsidiary of such other Person
unless such other Person controls, or has the right, power or ability to
control, that Person.
7.12 MRV Group. "MRV Group" means MRV, each Subsidiary and Affiliated Company of
MRV (other than any member of the Luminent Group) immediately after the
Separation Date, after giving effect to the Non-US Plan and each Person that
becomes a Subsidiary or Affiliate Company of MRV after the Separation Date.
7.13 MRV's Auditors. "MRV's Auditors" means MRV's independent certified public
accountants.
[REST OF PAGE INTENTIONALLY LEFT BLANK.]
25
WHEREFORE, the parties have signed this Master Separation and Distribution
Agreement effective as of the date first set forth above.
MRV COMMUNICATIONS, INC.,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chairman
and
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
LUMINENT, INC.,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Title: President / CEO
-----------------------------------
and
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Vice-President Finance / CEO
-----------------------------------
26
EXHIBITS
Exhibit A Certificate of Secretary of MRV
Exhibit B Certificate of Secretary of Luminent
Exhibit C General Assignment and Assumption Agreement
Exhibit D-1 Master Technology Ownership and License Agreement
Exhibit D-2 Master Patent Ownership and License Agreement
Exhibit D-3 Master Trademark Ownership and License Agreement
Exhibit E Employee Matters Agreement
Exhibit F Tax Sharing Agreement
Exhibit G Master Transitional Services Agreement
Exhibit H Real Estate Matters Agreement
Exhibit I Master Confidential Disclosure Agreement
Exhibit J Indemnification and Insurance Matters Agreement
27
EXHIBIT A
CERTIFICATE OF SECRETARY OF MRV
I, ____________________, Secretary of MRV Communications, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
"Company"), DO HEREBY CERTIFY that attached hereto are true and correct copies
of certain resolutions adopted in a telephone meeting of the MRV Communications,
Inc. Board of Directors on _________, 2000, which resolutions have not been
amended, modified, rescinded and remain in full force and effect on the date
hereof.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal of MRV
Communications, Inc. this __________________ day of ___________, 2000.
-----------------------------------
-----------------------, Secretary
28
EXHIBIT B
CERTIFICATE OF SECRETARY OF LUMINENT
I, ____________________, Secretary of Luminent, Inc., a corporation
organized and existing under the laws of the State of California (the
"Company"), DO HEREBY CERTIFY that attached hereto are true and correct copies
of certain resolutions adopted in a meeting of the Luminent, Inc. Board of
Directors on __________, 2000, which resolutions have not been amended,
modified, rescinded and remain in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal of
Luminent, Inc. this __________________ day of ___________, 2000.
-----------------------------------
-----------------------, Secretary
29
EXHIBIT C
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
30
EXHIBIT D-1
MASTER TECHNOLOGY OWNERSHIP AND LICENSE AGREEMENT
31
EXHIBIT D-2
MASTER PATENT OWNERSHIP AND LICENSE AGREEMENT
32
EXHIBIT D-3
MASTER TRADEMARK OWNERSHIP AND LICENSE AGREEMENT
33
EXHIBIT E
EMPLOYEE MATTERS AGREEMENT
34
EXHIBIT F
TAX SHARING AGREEMENT
35
EXHIBIT G
MASTER TRANSITIONAL SERVICES AGREEMENT
36
EXHIBIT H
REAL ESTATE MATTERS AGREEMENT
37
EXHIBIT I
MASTER CONFIDENTIAL DISCLOSURE AGREEMENT
38
EXHIBIT J
INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT