-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DDfXLy619RLVquCmD+ggVtrGjqk1ZnLLLCEHPNAk6djS1lyFJZNu1og5bm3aJ4bH KNzR8bs2j15+9RxbCDYI6Q== /in/edgar/work/20000918/0000950123-00-008646/0000950123-00-008646.txt : 20000923 0000950123-00-008646.hdr.sgml : 20000923 ACCESSION NUMBER: 0000950123-00-008646 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 14 FILED AS OF DATE: 20000918 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INRANGE TECHNOLOGIES CORP CENTRAL INDEX KEY: 0001114674 STANDARD INDUSTRIAL CLASSIFICATION: [3663 ] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-38592 FILM NUMBER: 724620 BUSINESS ADDRESS: STREET 1: 13000 MIDLANTIC DR CITY: LAUREL STATE: NJ ZIP: 08054 BUSINESS PHONE: 8562347900 S-1/A 1 y38692a5s-1a.txt INRANGE TECHNOLOGIES CORPORATION 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 18, 2000 REGISTRATION NO. 333-38592 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------------ AMENDMENT NO. 5 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ INRANGE TECHNOLOGIES CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 3663 06-0962862 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
------------------------ 13000 MIDLANTIC DRIVE MT. LAUREL, NEW JERSEY 08054 (856) 234-7900 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ GREGORY R. GRODHAUS PRESIDENT AND CHIEF EXECUTIVE OFFICER INRANGE TECHNOLOGIES CORPORATION 13000 MIDLANTIC DRIVE MT. LAUREL, NEW JERSEY 08054 (856) 234-7900 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ COPIES TO: STUART GELFOND, ESQ. MARK G. BORDEN, ESQ. FRIED, FRANK, HARRIS, SHRIVER & JACOBSON JEFFREY A. STEIN, ESQ. ONE NEW YORK PLAZA STUART R. NAYMAN, ESQ. NEW YORK, NEW YORK 10004-1980 HALE AND DORR LLP (212) 859-8000 405 LEXINGTON AVENUE NEW YORK, NEW YORK 10174 (212) 937-7200
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this registration statement becomes effective. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] --------------- If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] --------------- If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the registration statement for the same offering. [ ] --------------- If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ] ------------------------ CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- TITLE OF EACH PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2) FEE - --------------------------------------------------------------------------------------------------------------------- Class B Common Stock, $0.01 par value per share.................. 8,855,000 shares of Class B Common Stock $14.00 per share $123,970,000 $32,729(3) - --------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------
(1) Includes 1,155,000 shares of Class B Common Stock subject to an over-allotment option. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act. (3) Previously paid. ------------------------ THE REGISTRANT HEREBY AMENDS THE REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth expenses and costs payable by Inrange Technologies Corporation (other than underwriting discounts and commissions) expected to be incurred in connection with the issuance and distribution of the securities described in this registration statement. All amounts are estimated except for the Securities and Exchange Commission's registration fee and the National Association of Securities Dealers' filing fee.
AMOUNT ---------- Registration fee under Securities Act....................... $ 32,729 NASD filing fee............................................. 12,897 Nasdaq National Market fees................................. 69,375 Legal fees and expenses..................................... 950,000 Accounting fees and expenses................................ 475,000 Printing and engraving expenses............................. 429,000 Registrar and transfer agent fees........................... 10,000 Miscellaneous expenses...................................... 113,625 ---------- Total............................................. $2,092,626 ==========
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation law (the "DGCL") provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits and proceedings, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation -- a "derivative action"), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation's certificate of incorporation, bylaws, disinterested director vote, stockholder vote, agreement, or otherwise. Our bylaws and our certificates of incorporation require us to indemnify to the fullest extent authorized by the DGCL any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she is or was a director or officer of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. As permitted by Section 102(b)(7) of the DGCL, our certificate of incorporation eliminates the liability of a director to the corporation or its stockholders for monetary damages for such breach of fiduciary duty as a director, except for liabilities arising (a) from any breach of the director's duty of loyalty to the corporation or its stockholders; (b) from acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (c) under section 174 of the DGCL; or (d) from any transaction from which the director derived an improper personal benefit. II-1 3 We intend to obtain primary and excess insurance policies insuring our directors and officers and those of our subsidiaries against certain liabilities they may incur in their capacity as directors and officers. Under these policies, the insurer, on our behalf, may also pay amounts for which we have granted indemnification to the directors or officers. Additionally, the Underwriting Agreement filed as Exhibit 1.1 to this registration statement provides for indemnification by us of our underwriters, and persons who control them, under certain circumstances and by our underwriters of us and persons who control us, under certain circumstances. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. None. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (A) EXHIBITS The following documents are filed as exhibits to this registration statement:
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 1.1 Form of Underwriting Agreement. 3.2 Amended and Restated By-Laws of Inrange Technologies Corporation. 3.3 Amended and Restated Certificate of Incorporation of Inrange Technologies Corporation.** 4.1 Form of Inrange Technologies Corporation Class B common stock certificate. 5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson regarding the legality of the shares being registered.** 10.1 Tax Sharing Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.2 Management Services Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.3 Registration Rights Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.4 Trademark License Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.5 Reseller Agreement, dated October 29, 1999 between Inrange Technologies Corporation and Ancor Communications, Inc.++ 10.6 Technology License Agreement, dated September 24, 1998 between Inrange Technologies Corporation and Ancor Communications Inc.++ 10.7 Letter Agreement dated November 23, 1999 between Inrange Technologies Corporation and Ancor Communications Inc.++ 10.8 Inrange Technologies Corporation 2000 Stock Compensation Plan.** 10.9 Loan Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.10 Employees Matters Agreement, between Inrange Technologies Corporation and SPX Corporation. 16.1 Change in Principal Accountants. 21.1 List of Subsidiaries.** 23.1 Consent of Arthur Andersen LLP.** 23.2 Consent of Arthur Andersen LLP.** 23.3 Consent of Ernst & Young LLP.** 23.4 Consent of Fried, Frank, Harris, Shriver & Jacobson (included in Exhibit 5.1).** 23.5 Consent of David L. Chapman.**
II-2 4
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 23.6 Consent of Bruce J. Ryan.** 23.7 Consent of David Wright.** 24.1 Power of Attorney.** 27.1 Financial Data Schedule.**
- --------------- ** Previously filed. ++ Portions of these exhibits have been omitted pursuant to a request for confidential treatment. (B) FINANCIAL STATEMENT SCHEDULES Financial statement schedules have been omitted because they are not applicable or the required information is shown in the combined financial statements or notes thereto. ITEM 17. UNDERTAKINGS. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes: (1) To provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. (2) That for purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (3) That for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mount Laurel, State of New Jersey, on September 13, 2000. INRANGE TECHNOLOGIES CORPORATION By: /s/ GREGORY R. GRODHAUS ------------------------------------ Gregory R. Grodhaus President and Chief Executive Officer Pursuant to the requirements of the Securities Act, this Amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ GREGORY R. GRODHAUS Director, President and Chief Executive September 13, 2000 - --------------------------------------------------- Officer Gregory R. Grodhaus * Vice President, Chief Financial Officer September 13, 2000 - --------------------------------------------------- (Principal Financial and Accounting Jay Zager Officer) * Chairman of the Board September 13, 2000 - --------------------------------------------------- John B. Blystone * Director September 13, 2000 - --------------------------------------------------- Robert B. Foreman * Director September 13, 2000 - --------------------------------------------------- Christopher J. Kearney * Director September 13, 2000 - --------------------------------------------------- Lewis M. Kling * Director September 13, 2000 - --------------------------------------------------- Patrick J. O'Leary
*By: /s/ GREGORY R. GRODHAUS -------------------------------------------------- Gregory R. Grodhaus, attorney-in-fact II-4 6 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ------- ------------------- 1.1 Form of Underwriting Agreement. 3.2 Amended and Restated By-Laws of Inrange Technologies Corporation. 3.3 Amended and Restated Certificate of Incorporation of Inrange Technologies Corporation.** 4.1 Form of Inrange Technologies Corporation Class B common stock certificate. 5.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson regarding the legality of the shares being registered.** 10.1 Tax Sharing Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.2 Management Services Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.3 Registration Rights Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.4 Trademark License Agreement between Inrange Technologies Corporation and SPX Corporation. 10.5 Reseller Agreement, dated October 29, 1999 between Inrange Technologies Corporation and Ancor Communications, Inc.++ 10.6 Technology License Agreement, dated September 24, 1998 between Inrange Technologies Corporation and Ancor Communications Inc.++ 10.7 Letter Agreement dated November 23, 1999 between Inrange Technologies Corporation and Ancor Communications Inc.++ 10.8 Inrange Technologies Corporation 2000 Stock Compensation Plan.** 10.9 Loan Agreement, between Inrange Technologies Corporation and SPX Corporation. 10.10 Employee Matters Agreement, between Inrange Technologies Corporation and SPX Corporation. 16.1 Change in Principal Accountants. 21.1 List of Subsidiaries.** 23.1 Consent of Arthur Andersen LLP.** 23.2 Consent of Arthur Andersen LLP.** 23.3 Consent of Ernst & Young LLP.** 23.4 Consent of Fried, Frank, Harris, Shriver & Jacobson (included in Exhibit 5.1).** 23.5 Consent of David L. Chapman.** 23.6 Consent of Bruce J. Ryan.** 23.7 Consent of David Wright.** 24.1 Power of Attorney.** 27.1 Financial Data Schedule.**
- --------------- ** Previously filed ++ Portions of these exhibits have been omitted pursuant to a request for confidential treatment. EX-1.1 2 y38692a5ex1-1.txt FORM OF UNDERWRITING AGREEMENT 1 Exhibit 1.1 Inrange Technologies Corporation 7,700,000 Shares a/ Class B Common Stock ($0.01 par value) Underwriting Agreement New York, New York , 2000 Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. As Representatives of the several Underwriters, c/o Salomon Smith Barney Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: Inrange Technologies Corporation, a corporation organized under the laws of the State of Delaware (the "Company"), proposes to sell to the several underwriters named in Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are acting as representatives, 7,700,000 shares of Class B Common Stock, $0.01 par value (the "Class B Common Stock"), of the Company (said shares to be issued and sold by the Company being hereinafter called the "Underwritten Securities"). The Company also proposes to grant to the Underwriters an option to purchase up to 1,155,000 additional shares of Class B Common Stock to cover over-allotments (the "Option Securities"; the Option Securities, together with the Underwritten Securities, being hereinafter called the "Securities"). The Company is an indirect wholly owned subsidiary of SPX Corporation, a corporation organized under the laws of the State of Delaware ("SPX"). The Company has outstanding 75,633,333 shares of Class A Common Stock, $0.01 par value (the "Class A Common Stock" and, together with the Class B Common Stock, the "Common Stock"). To the extent there are no additional Underwriters listed on Schedule I other than you, the term Representatives as used herein shall mean you, as Underwriters, and the terms Representatives and Underwriters shall mean either the singular or plural as the context requires. Certain terms used herein are defined in Section 17 hereof. As part of the offering contemplated by this Agreement, Salomon Smith Barney Inc. has agreed to reserve out of the Securities set forth opposite its name on Schedule I to this - -------- a/ Plus an option to purchase from the Company, up to 1,155,000 additional Option Securities to cover over-allotments. 2 2 Agreement, up to 600,000 shares, for sale to the Company's officers and directors, other parties associated with the Company and certain suppliers, customers and other parties with which the Company has a business relationship (collectively, "Participants"), as set forth in the Prospectus under the heading "Underwriting" (the "Directed Share Program"). The Securities to be sold by Salomon Smith Barney Inc. pursuant to the Directed Share Program (the "Directed Shares") will be sold by Salomon Smith Barney Inc. pursuant to this Agreement at the public offering price. Any Directed Shares not orally confirmed for purchase by any Participants by the end of the business day immediately following the date on which this Agreement is executed will be offered to the public by Salomon Smith Barney Inc. as set forth in the Prospectus. 1. Representations and Warranties. The Company represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1. (a) The Company has prepared and filed with the Commission a registration statement (file number 333-38592) on Form S-1, including a related preliminary prospectus, for registration under the Act of the offering and sale of the Securities. The Company may have filed one or more amendments thereto, including a related preliminary prospectus, each of which has previously been furnished to you. The Company will next file with the Commission either (1) prior to the Effective Date of such registration statement, a further amendment to such registration statement (including the form of final prospectus) or (2) after the Effective Date of such registration statement, a final prospectus in accordance with Rules 430A and 424(b). In the case of clause (2), the Company has included in such registration statement, as amended at the Effective Date, all information (other than Rule 430A Information) required by the Act and the rules thereunder to be included in such registration statement and the Prospectus. As filed, such amendment and form of final prospectus, or such final prospectus, shall contain all Rule 430A Information, together with all other such required information, and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. (b) On the Effective Date, the Registration Statement did or will, and when the Prospectus is first filed (if required) in accordance with Rule 424(b) and on the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Closing Date (a "settlement date"), the Prospectus (and any supplements thereto) will, comply in all material respects with the applicable requirements of the Act and the rules thereunder; on the Effective Date and at the Execution Time, the Registration Statement did not or will not contain any untrue 3 3 statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement date, the Prospectus (together with any supplement thereto) will not, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement, or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto). (c) Each of the Company and its subsidiaries listed in Exhibit 21.1 to the Registration Statement (collectively, the "Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction in which it is chartered or organized with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Prospectus, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to be so qualified or to be in good standing would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (a "Material Adverse Effect"). (d) All the outstanding shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Prospectus, all outstanding shares of capital stock of the subsidiaries of the Company are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances, other than security interests under SPX's Amended and Restated Credit Agreement which will be released in accordance with their terms at the Closing. (e) The Company's authorized equity capitalization is as set forth in the Prospectus; the capital stock of the Company conforms in all material respects to the description thereof contained in the Prospectus; the outstanding shares of the Company's Class A Common Stock have been duly and validly authorized and issued and are fully 4 4 paid and nonassessable; the Securities have been duly and validly authorized, and, when issued and delivered to and paid for by the Underwriters pursuant to this Agreement, will be fully paid and nonassessable; the Securities are admitted and authorized for trading, subject to official notice of issuance and evidence of satisfactory distribution, on the Nasdaq National Market; the certificates for the Securities are in valid and sufficient form; the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Securities; and, except as set forth in the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding. (f) There is no franchise, contract or other document of a character required to be described in the Registration Statement or Prospectus, or to be filed as an exhibit to the Registration Statement, which is not described or filed as required. (g) This Agreement has been duly authorized, executed and delivered by the Company. (h) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus, will not be an "investment company" as defined in the Investment Company Act of 1940, as amended. (i) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except (i) such as have been obtained under the Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Prospectus or (ii) as would not have a Material Adverse Effect. (j) Neither the issue and sale of the Securities nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach or violation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or by-laws of the Company or any of its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its subsidiaries is a party or bound or to which its or their property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the 5 5 Company or any of its subsidiaries or any of its or their properties, except, in the case of (ii) or (iii), as would not have a Material Adverse Effect. (k) No holders of securities of the Company have rights to the registration of such securities under the Registration Statement. (l) The historical financial statements and schedules included in the Prospectus and the Registration Statement present fairly in all material respects the financial condition, results of operations and cash flows of the relevant entities as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The selected financial data set forth under the caption "Selected Financial Information" in the Prospectus and Registration Statement fairly present, on the basis stated in the Prospectus and the Registration Statement, the information included therein. The pro forma financial statements included in the Prospectus and the Registration Statement include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in the pro forma financial statements included in the Prospectus and the Registration Statement. The pro forma financial statements included in the Prospectus and the Registration Statement comply as to form in all material respects with the applicable accounting requirements of Regulation S-X under the Act and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements. (m) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the best knowledge of the Company, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby or (ii) could reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). (n) The Company and each of its subsidiaries owns or leases all such properties as are necessary to the conduct of its operations as presently conducted, except where the failure to own or lease such property would not have a Material Adverse Effect. (o) Neither the Company nor any of its subsidiaries is in violation or default of (i) any provision of its charter or bylaws, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, 6 6 condition, covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except, in the case of clauses (ii) and (iii), for any such violation or default which would not, in the aggregate, have a Material Adverse Effect. (p) Arthur Andersen LLP and Ernst & Young LLP, who have certified certain financial statements of the Company and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements and schedules included in the Prospectus, are independent public accountants with respect to the Company within the meaning of the Act and the applicable published rules and regulations thereunder. (q) No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or, to the Company's knowledge, is threatened or imminent. (r) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; all policies of insurance and fidelity or surety bonds insuring the Company or any of its subsidiaries or their respective businesses, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any such subsidiary has been refused any insurance coverage sought or applied for; and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business in a manner as would not have a Material Adverse Effect, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). (s) No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary's capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary's property or assets to the Company or any other subsidiary of the Company, except as described in or contemplated by the Prospectus. (t) The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign regulatory 7 7 authorities necessary to conduct their respective businesses, except where the failure to possess any such licenses, certificates, permits or authorizations would not, individually or in the aggregate, have a Material Adverse Effect; and neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, individually or in the aggregate, would have a Material Adverse Effect, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). (u) The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (v) The Company has not taken, directly or indirectly, any action that has constituted or that was designed to or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (w) The Company and its subsidiaries are (i) in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance with Environmental Laws, failure to receive required permits, licenses or other approvals, or liability would not, individually or in the aggregate, have a Material Adverse Effect, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). Except as set forth in the Prospectus, neither the Company nor any of the subsidiaries has been named as a "potentially responsible party" under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended. (x) The Company and its subsidiaries own, possess, license or have other rights to use, on reasonable terms, all patents, patent applications, trade and service marks, trade 8 8 and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the "Intellectual Property") necessary for the conduct of the Company's business as now conducted or as proposed in the Prospectus to be conducted. Except as set forth in the Prospectus or as would not have a Material Adverse Effect, (i) to the Company's knowledge, there are no rights of third parties to any such Intellectual Property; (ii) to the Company's knowledge, there is no material infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others challenging the Company's rights in or to any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (iv) there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (v) there is no pending or, to the Company's knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (vi) to the Company's knowledge, there is no U.S. patent or published U.S. patent application which contains claims that dominate or may dominate any Intellectual Property described in the Prospectus as being owned by or licensed to the Company or that interferes with the issued or pending claims of any such Intellectual Property; and (vii) there is no prior art of which the Company is aware that may render any U.S. patent held by the Company invalid or any U.S. patent application held by the Company unpatentable which has not been disclosed to the U.S. Patent and Trademark Office. (y) The Company has not offered, or caused the Underwriters to offer, Securities to any person pursuant to the Directed Share Program with the specific intent to unlawfully influence (i) a customer or supplier of the Company to alter the customer's or supplier's level or type of business with the Company, or (ii) a trade journalist or publication to write or publish favorable information about the Company or its products. Furthermore, the Company represents and warrants to Salomon Smith Barney Inc. that (i) the Registration Statement, the Prospectus and any preliminary prospectus comply, and any further amendments or supplements thereto will comply, with any applicable laws or regulations of foreign jurisdictions in which the Prospectus or any preliminary prospectus, as amended or supplemented, if applicable, are distributed in connection with the Directed Share Program, and that (ii) no authorization, approval, consent, license, order, registration or qualification of or with any government, governmental instrumentality or court, other than such as have been obtained, is necessary under the securities laws and regulations of foreign jurisdictions in which the Directed Shares are offered outside the United States. 9 9 Any certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter if such certificate specifically states that it is a representation and warranty. 2. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at a purchase price of $ per share, the amount of the Underwritten Securities set forth opposite such Underwriter's name in Schedule I hereto. (b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to 1,155,000 Option Securities at the same purchase price per share as the Underwriters shall pay for the Underwritten Securities. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Said option may be exercised in whole or in part at any time (but not more than once) on or before the 30th day after the date of the Prospectus upon written or facsimile notice by the Representatives to the Company setting forth the number of shares of the Option Securities as to which the several Underwriters are exercising the option and the settlement date. The number of Option Securities to be purchased by each Underwriter shall be the same percentage of the total number of shares of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as you in your absolute discretion shall make to eliminate any fractional shares. 3. Delivery and Payment. Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised on or before the third Business Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on , 2000, or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the "Closing Date"). Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct. 10 10 If the option provided for in Section 2(b) hereof is exercised after the third Business Day prior to the Closing Date, the Company will deliver the Option Securities (at the expense of the Company) to the Representatives, at 388 Greenwich Street, New York, New York, on the date specified by the Representatives (which shall be within three Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement for the Option Securities occurs after the Closing Date, the Company will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof. 4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Prospectus. 5. Agreements. The Company agrees with the several Underwriters that: (a) The Company will use its reasonable best efforts to cause the Registration Statement, if not effective at the Execution Time, and any amendment thereof, to become effective. Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement to the Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement to which you reasonably object. Subject to the foregoing sentence, if the Registration Statement has become or becomes effective pursuant to Rule 430A, or filing of the Prospectus is otherwise required under Rule 424(b), the Company will cause the Prospectus, properly completed in accordance with Rule 424(b), and any supplement thereto to be filed with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and, if requested to do so by the Representatives, will provide evidence satisfactory to the Representatives of such timely filing. The Company will promptly advise the Representatives (1) when the Registration Statement, if not effective at the Execution Time, shall have become effective, (2) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the Commission, (3) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed or become effective, (4) of any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to the Prospectus or for any additional information, (5) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement 11 11 or the institution or threatening of any proceeding for that purpose and (6) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the rules thereunder, the Company promptly will (1) notify the Representatives of any such event, (2) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement which will correct such statement or omission or effect such compliance; and (3) supply any supplemented Prospectus to you in such quantities as you may reasonably request. (c) As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (d) The Company will furnish to the Representatives and counsel for the Underwriters one signed copy of the Registration Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act, as many copies of the Prospectus and any supplement thereto as the Representatives may reasonably request. (e) The Company will arrange, if necessary, for the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits or subject it to taxes, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject. 12 12 (f) The Company will not, without the prior written consent of Salomon Smith Barney Inc., offer, sell, contract to sell, pledge, or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company) directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any other shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock; or publicly announce an intention to effect any such transaction, for a period of 180 days after the date of this Underwriting Agreement, provided, however, that the Company may (i) issue and sell Common Stock or any securities convertible into, or exercisable or exchangeable for, shares of Common Stock pursuant to any employee stock option plan, stock ownership plan or dividend reinvestment plan of the Company in effect at the Execution Time; provided that the Company will not accelerate the vesting of any stock options described in the Prospectus during the period of 180 days after this Underwriting Agreement; (ii) issue Common Stock issuable upon the conversion of securities or the exercise of warrants outstanding at the Execution Time; and (iii) issue and sell Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock to a third party in connection with (x) the Company's acquisition of the business or assets of a third party or (y) the formation of a joint venture or the establishment of a business relationship with a third party; provided that (I) the aggregate value of any securities issued pursuant to this clause (iii) shall not exceed $50 million and (II) the recipient of such securities enters into a lock-up letter substantially in the form of Exhibit A hereto. (g) The Company will not take, directly or indirectly, any action designed to or which has constituted or which might reasonably be expected to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities. (h) The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Prospectus, and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Preliminary Prospectus, the Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, 13 13 authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (iv) the reproduction and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the registration of the Securities under the Exchange Act and the listing of the Securities on the Nasdaq National Market; (vi) any registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such registration and qualification); (vii) any filings required to be made with the National Association of Securities Dealers, Inc. (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such filings); (viii) the transportation and other expenses incurred by or on behalf of Company representatives (but not the Underwriters and their representatives) in connection with presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Company's accountants and the fees and expenses of counsel (including local and special counsel) for the Company; and (x) all other costs and expenses incident to the performance by the Company of its obligations hereunder. (i) In connection with the Directed Share Program, the Company will instruct its transfer agent that the Directed Shares will be restricted to the extent required by the National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a period of three months following the date of the effectiveness of the Registration Statement. Salomon Smith Barney Inc. will notify the Company as to which Participants will need to be so restricted. The Company will direct the removal of such transfer restrictions upon the expiration of such period of time. (j) The Company will pay all fees and disbursements of counsel incurred by the Underwriters in connection with the Directed Share Program and stamp duties, similar taxes or duties or other taxes, if any, incurred by the Underwriters in connection with the Directed Share Program. Furthermore, the Company covenants with Salomon Smith Barney Inc. that the Company will comply with all applicable securities and other applicable laws, rules and regulations in each foreign jurisdiction in which the Directed Shares are offered in connection with the Directed Share Program. 6. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, the Closing Date and any settlement date 14 14 pursuant to Section 3 hereof, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) If the Registration Statement has not become effective prior to the Execution Time, unless the Representatives agree in writing to a later time, the Registration Statement will become effective not later than (i) 6:00 PM New York City time on the date of determination of the public offering price, if such determination occurred at or prior to 3:00 PM New York City time on such date or (ii) 9:30 AM on the Business Day following the day on which the public offering price was determined, if such determination occurred after 3:00 PM New York City time on such date; if filing of the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any such supplement, will be filed in the manner and within the time period required by Rule 424(b); and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened. (b) The Company shall have requested and caused Fried, Frank, Harris, Shriver & Jacobson, counsel for the Company, to have furnished to the Representatives their opinion, dated the Closing Date and addressed to the Representatives, substantially in the form of Exhibit B hereto. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the State of New York, the Delaware General Corporation Law or the Federal laws of the United States, to the extent specified in such opinion, upon the opinion of other counsel who are satisfactory to counsel for the Underwriters and (B) as to matters of fact, on certificates of responsible officers of the Company, SPX and public officials. References to the Prospectus in this paragraph (b) include any supplements thereto at the Closing Date. (c) The Representatives shall have received from Hale and Dorr LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Representatives, with respect to the issuance and sale of the Securities, the Registration Statement, the Prospectus (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (d) The Company shall have furnished to the Representatives a certificate of the Company, signed by the Chairman of the Board or the President and the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that: 15 15 (i) the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; (ii) to such person's knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the Company's knowledge, threatened; and (iii) since the date of the most recent financial statements included in the Prospectus (exclusive of any supplement thereto), there has been no material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). (e) The Company shall have requested and caused Arthur Andersen LLP to have furnished to the Representatives, at the Execution Time and at the Closing Date, letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance satisfactory to the Representatives, confirming that they are independent accountants within the meaning of the Act and the applicable rules and regulations adopted by the Commission thereunder and that they have performed a review of the unaudited interim financial information of the Company for the six-month period ended June 30, 2000, and as at June 30, 2000, in accordance with Statement on Auditing Standards No. 71 and stating in effect that: (i) in their opinion the audited financial statements and financial statement schedules included in the Registration Statement and the Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Act and the related rules and regulations adopted by the Commission; (ii) on the basis of a reading of the latest unaudited financial statements made available by the Company and its subsidiaries; their limited review, in accordance with standards established under Statement on Auditing Standards No. 71, of the unaudited interim financial information for the six-month period ended June 30, 2000, and as at June 30, 2000; carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the 16 16 comments set forth in such letter; a reading of the minutes of the meetings of the stockholders, directors and audit committee of the Company and the Subsidiaries; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries as to transactions and events subsequent to June 30, 2000, nothing came to their attention which caused them to believe that: (1) any unaudited financial statements included in the Registration Statement and the Prospectus do not comply as to form in all material respects with applicable accounting requirements of the Act and with the related rules and regulations adopted by the Commission with respect to registration statements on Form S-1; and said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Registration Statement and the Prospectus; (2) with respect to the period subsequent to June 30, 2000, there were any changes, at a specified date not more than five days prior to the date of the letter, in the long-term debt of the Company and its subsidiaries or capital stock of the Company or decreases in the stockholders' equity of the Company as compared with the amounts shown on the June 30, 2000 consolidated balance sheet included in the Registration Statement and the Prospectus, or for the period from July 1, 2000 to such specified date there were any decreases, as compared with the corresponding period in the preceding year in net revenues or income before income taxes or in total or per share amounts of net income of the Company and its subsidiaries, except in all instances for changes or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation is not deemed necessary by the Representatives; (3) the information included in the Registration Statement and Prospectus in response to Regulation S-K, Item 301 (Selected Financial Data), Item 302 (Supplementary Financial Information), Item 402 (Executive Compensation) and Item 503(d) (Ratio of Earnings to Fixed Charges) is not in conformity with the applicable disclosure requirements of Regulation S-K; and (iii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or 17 17 statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its subsidiaries) set forth in the Registration Statement and the Prospectus agrees with the accounting records of the Company and its subsidiaries, excluding any questions of legal interpretation. References to the Prospectus in this paragraph (e) include any supplement thereto at the date of the letter. (f) The Company shall have requested and caused Ernst & Young LLP to have furnished to the Representatives, at the Execution Time and at the Closing Date, letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance reasonably satisfactory to the Representatives. (g) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (e) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto). (h) Prior to the Closing Date, the Company shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request. (i) The Securities shall have been listed and admitted and authorized for trading on the Nasdaq National Market, and satisfactory evidence of such actions shall have been provided to the Representatives. (j) At the Execution Time, the Company shall have furnished to the Representatives a letter substantially in the form of Exhibit A hereto from SPX and from each executive officer and director of the Company and of SPX addressed to the Representatives. 18 18 If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancelation shall be given to the Company in writing or by telephone or facsimile confirmed in writing. The documents required to be delivered by this Section 6 shall be delivered at the office of Hale and Dorr LLP, counsel for the Underwriters, at 405 Lexington Avenue, New York, New York 10174, on the Closing Date. 7. Reimbursement of Underwriters' Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally through Salomon Smith Barney on demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. 8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as originally filed or in any amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representatives specifically for inclusion therein provided 19 19 further, that with respect to any untrue statement or omission of material fact made in any Preliminary Prospectus, the indemnity agreement contained in this Section 8(a) shall not inure to the benefit of any Underwriter from whom the person asserting any such loss, claim, damage or liability purchased the securities concerned, to the extent that any such loss, claim, damage or liability of such Underwriter occurs under the circumstance where it shall have been determined by a court of competent jurisdiction by final and nonappealable judgment that (w) the Company had previously furnished copies of the Prospectus to the Representatives, (x) delivery of the Prospectus was required by the Act to be made to such person, (y) the untrue statement or omission of a material fact contained in the Preliminary Prospectus was corrected in the Prospectus and (z) there was not sent or given to such person, at or prior to the written confirmation of the sale of such securities to such person, a copy of the Prospectus. This indemnity agreement will be in addition to any liability which the Company or SPX may otherwise have. (b) The Company agrees to indemnify and hold harmless Salomon Smith Barney Inc., the directors, officers, employees and agents of Salomon Smith Barney Inc. and each person, who controls Salomon Smith Barney Inc. within the meaning of either the Act or the Exchange Act ("Salomon Smith Barney Inc. Entities"), from and against any and all losses, claims, damages and liabilities to which they may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim), insofar as such losses, claims damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the prospectus wrapper material prepared by or with the consent of the Company for distribution in foreign jurisdictions in connection with the Directed Share Program attached to the Prospectus or any preliminary prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement therein, when considered in conjunction with the Prospectus or any applicable preliminary prospectus, not misleading; (ii) caused by the failure of any Participant to pay for and accept delivery of the securities which immediately following the Effective Date of the Registration Statement, were subject to a properly confirmed agreement to purchase; or (iii) related to, arising out of, or in connection with the Directed Share Program, provided that, the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of Salomon Smith Barney Inc. specifically for inclusion therein. (c) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of the Company's directors, each of the Company's officers who signs the Registration Statement, and each person who controls the Company within the meaning 20 20 of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Company acknowledges that the statements set forth in the last paragraph of the cover page regarding delivery of the Securities and, under the heading "Underwriting", (i) the list of Underwriters and their respective participation in the sale of the Securities, (ii) the sentences related to concessions and reallowances and (iii) the paragraphs related to stabilization, syndicate covering transactions and penalty bids in any Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus or the Prospectus. (d) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a), (b) or (c) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a), (b) or (c) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. Notwithstanding anything contained herein to the contrary, if indemnity may be sought pursuant to Section 8(b) hereof in respect of such action or proceeding, then in addition to such 21 21 separate firm for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one separate firm (in addition to any local counsel) for Salomon Smith Barney Inc., the directors, officers, employees and agents of Salomon Smith Barney Inc., and all persons, if any, who control Salomon Smith Barney Inc. within the meaning of either the Act or the Exchange Act for the defense of any losses, claims, damages and liabilities arising out of the Directed Share Program. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. An indemnifying party shall not be liable under this Section 8 to any indemnified party regarding any settlement or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to by such indemnifying party, which consent shall not be unreasonably withheld. (e) In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) contemplated by such paragraphs, the Company and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Underwriters on the other from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by the Company, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other 22 22 things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (e), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (e). 9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule I hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine, if necessary in order that the required changes in the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder. 10. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in the Company's Class B 23 23 Common Stock shall have been suspended by the Commission or the Nasdaq National Market or trading in securities generally on the New York Stock Exchange or the Nasdaq National Market shall have been suspended or limited or minimum prices shall have been established on such Exchange or the Nasdaq National Market, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Prospectus (exclusive of any supplement thereto). 11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement. 12. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telefaxed to the Salomon Smith Barney Inc. General Counsel (fax no.: (212) 816-7912) and confirmed to the General Counsel, Salomon Smith Barney Inc., at 388 Greenwich Street, New York, New York, 10013, Attention: General Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to [FACSIMILE NUMBER] and confirmed to it at , attention of the Legal Department. 13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder. 14. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York. 15. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement. 16. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof. 24 24 17. Definitions. The terms which follow, when used in this Agreement, shall have the meanings indicated. "Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. "Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City. "Commission" shall mean the Securities and Exchange Commission. "Effective Date" shall mean each date and time that the Registration Statement, any post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or become effective. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder. "Execution Time" shall mean the date and time that this Agreement is executed and delivered by the parties hereto. "Preliminary Prospectus" shall mean any preliminary prospectus referred to in paragraph 1(a) above and any preliminary prospectus included in the Registration Statement at the Effective Date that omits Rule 430A Information. "Prospectus" shall mean the prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time or, if no filing pursuant to Rule 424(b) is required, shall mean the form of final prospectus relating to the Securities included in the Registration Statement at the Effective Date. "Registration Statement" shall mean the registration statement referred to in paragraph 1(a) above, including exhibits and financial statements, as amended at the Execution Time (or, if not effective at the Execution Time, in the form in which it shall become effective) and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b) Registration Statement, as the case may be. Such term shall include any Rule 430A Information deemed to be included therein at the Effective Date as provided by Rule 430A. "Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act. 25 25 "Rule 430A Information" shall mean information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A. "Rule 462(b) Registration Statement" shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the registration statement referred to in Section 1(a) hereof. 26 26 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and the several Underwriters. Very truly yours, INRANGE Technologies Corporation By: ------------------------------------ Name: Title: The foregoing Agreement is hereby confirmed and accepted as of the date first above written. Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. By: Salomon Smith Barney Inc. By: ------------------------------- Name: Title: For themselves and the other several Underwriters named in Schedule I to the foregoing Agreement. 27 SCHEDULE I
NUMBER OF UNDERWRITTEN SECURITIES TO BE UNDERWRITERS PURCHASED Salomon Smith Barney Inc. . . . . . . . Bear, Stearns & Co. Inc. . . . . . . . Chase Securities Inc. . . . . . . . . ------------ Total . . . . . . . . . 7,700,000 =================
28 [FORM OF LOCK-UP AGREEMENT] EXHIBIT A [LETTERHEAD OF OFFICER, DIRECTOR OR MAJOR SHAREHOLDER OF CORPORATION] INRANGE Technologies Corporation Public Offering of Class B Common Stock , 2000 Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. As Representatives of the several Underwriters, c/o Salomon Smith Barney Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: This letter is being delivered to you in connection with the proposed Underwriting Agreement (the "Underwriting Agreement"), between INRANGE Technologies Corp, a Delaware corporation (the "Company"), and each of you as representatives of a group of Underwriters named therein, relating to an underwritten public offering of Class B Common Stock, $0.01 par value (the "Class B Common Stock"), of the Company. In order to induce you and the other Underwriters to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of Salomon Smith Barney Inc., offer, sell, contract to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned) directly or indirectly, including the filing (or participation in the filing of) a registration statement with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 180 days after the date of the Underwriting Agreement. [ADD FOR LOCK-UP PARTIES OTHER THAN SPX: The foregoing sentence shall not apply to (i) the pledge by the undersigned of shares of Class B Common Stock to a financial institution in connection with a bona fide financing transaction; or (ii) any transfer by the undersigned to (a) any affiliate of the undersigned, or (b) any member of the undersigned's immediate family, trusts solely or primarily for the benefit of the undersigned or the undersigned's family members, and partnerships, limited liability companies or other corporations in which the undersigned or 29 2 the undersigned's family members and/or trusts are the only partners or shareholders as the case may be, provided that, in the case of clauses (i) or (ii), any such pledgee or transferee shall agree in writing, prior to or contemporaneously with such pledge or transfer, to be bound by the provisions of this agreement to the same extent as the undersigned. For purposes of this agreement, "immediate family" means the undersigned's spouse, parents, children, stepchildren and grandchildren.] If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated. Yours very truly, [SIGNATURE OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER] [NAME AND ADDRESS OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER] 30 [FORM OF FRIED, FRANK, HARRIS, SHRIVER & JACOBSON OPINION] EXHIBIT B [FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LETTERHEAD] [Closing Date] Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. as representatives of the several Underwriters c/o Salomon Smith Barney Inc., 388 Greenwich Street, New York, New York 10013 Re: Inrange Technologies Corporation Ladies and Gentlemen: We are acting as special counsel to Inrange Technologies Corporation, a Delaware corporation (the "Company"), in connection with the underwritten public offering (the "Offering") of 7,700,000 shares (the "Shares") of the Company's Class B common stock, $0.01 par value per share (the "Common Stock"), pursuant to the Underwriting Agreement dated [ ] [ ], 2000, among the Company and the Underwriters named therein (the "Underwriting Agreement"). This opinion is being delivered pursuant to Section 6(b) of the Underwriting Agreement and simultaneously with the payment by the Underwriters to the Company for the Shares. Capitalized terms not defined herein shall have the meanings given to them in the Underwriting Agreement. With your permission, all assumptions and statements of reliance herein have been made without any independent investigation or verification on our part except to the extent otherwise expressly stated, and we express no opinion with respect to the subject matter or accuracy of such assumptions or items relied upon. In connection with this opinion, we have (i) investigated such questions of law, (ii) examined originals or certified, conformed or reproduction copies, of such agreements, instruments, documents and records of the Company and its subsidiaries, such certificates of public officials, officers or other representatives of the Company and its subsidiaries and other persons and such other documents and (iii) received such information from officers and representatives of the Company and its subsidiaries and others, in each case as we have deemed necessary or appropriate for the purposes of this opinion. We have examined, among other documents, an executed copy of the Underwriting Agreement. In all such examinations, we have assumed the legal capacity of all natural persons executing documents (other than the capacity of officers of the Company and its subsidiaries executing documents in such capacity), the genuineness of all signatures, the 31 Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. -2- September [ ], 2000 authenticity of original and certified documents, and the conformity to original or certified documents of all copies submitted to us as conformed or reproduction copies. As to various questions of fact relevant to the opinions expressed herein, we have relied upon, and assume the accuracy of, the representations and warranties contained in the Underwriting Agreement and certificates and oral or written statements and other information of or from public officials and officers and representatives of the Company and its subsidiaries and other persons, and assume compliance on the part of all parties to the Underwriting Agreement with their covenants and agreements contained therein. Insofar as statements herein are based upon our knowledge, such phrase means and is limited to the conscious awareness of facts or other information by lawyers in this firm who gave substantive attention to representation of the Company and its subsidiaries in connection with the Offering. To the extent it may be relevant to the opinions expressed herein, we have assumed that the parties to the Underwriting Agreement other than the Company have the power and authority to enter into and perform such agreement and to consummate the transactions contemplated thereby, that such agreement has been duly authorized, executed and delivered by, and constitutes the legal, valid and binding obligation of such parties enforceable against such parties in accordance with its terms, and that such parties will comply with all of their obligations under such agreement and all laws applicable thereto. Based upon the foregoing, and subject to the limitations, qualifications and assumptions set forth herein, we are of the opinion that: 1. The Company is an existing corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Prospectus; 2. The Company has an authorized capitalization as set forth in the Prospectus in the second paragraph under the caption "Description of Capital Stock"; all of the issued and outstanding shares of Common Stock have been duly authorized, validly issued and are fully paid and non-assessable; and the Shares will, upon issuance and delivery and payment therefor in the manner described in the Underwriting Agreement, be duly authorized, validly issued and fully paid and non-assessable; 3. The Securities are admitted and authorized for trading, subject to official notice of issuance and evidence of satisfactory distribution, on the Nasdaq National Market; 4. To our knowledge, the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Shares; and, to our knowledge, except as set forth in the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to 32 Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. -3- September [ ], 2000 convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding; 5. The Underwriting Agreement has been duly authorized, executed and delivered by the Company; 6. The issue and sale of the Shares by the Company and the compliance by the Company with all of the provisions of the Underwriting Agreement and the consummation of the transactions herein contemplated will not result in any violation of, or imposition of any lien, charge or encumbrance upon any property or assets of the Company or its subsidiaries pursuant to, the provisions of the Certificate of Incorporation (as amended and restated through the date hereof) or the Bylaws of the Company (as amended and restated through the date hereof), the Credit Agreement, dated as of October 6, 1998, as Amended and Restated as of February 10, 2000, as amended through the date hereof, among SPX Corporation, the Lenders Party thereto, Bank One, NA, as Documentation Agent and The Chase Manhattan Bank, as Administrative Agent and Chase Securities Inc. as Lead Arranger and Book Manager, or the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loans agreement or other agreement, which is filed as an exhibit to the Registration Statement, or any rule or regulation of the United States of America (other than the securities laws) or the States of New York or Delaware (as it relates to the General Corporation Law of the State of Delaware) or any order set forth on a schedule to this opinion of any court or governmental agency or body having jurisdiction over the Company or any of its properties; 7. To our knowledge, no holders of Common Stock have rights to the registration of such securities under the Registration Statement; 8. No material consent, approval, authorization or order of, registration or filing with, any such court or governmental agency or body of the United States of America or the States of New York or Delaware (as it relates to the General Corporation Law of the State of Delaware) applicable to the Company is required on the part of the Company for the issuance and sale of the Shares by the Company and the consummation by the Company of the transactions contemplated by the Underwriting Agreement, except for (i) the registration under the Act and under the Securities Exchange Act of 1934, as amended, of the Shares, (ii) as may be required by the National Association of Securities Dealers and the Nasdaq National Market and (iii) such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws or foreign laws in connection with the purchase and distribution of the Shares by the Underwriters; 9. The statements set forth in the Prospectus under the caption "Description of Capital Stock" and "United States Tax Consequences to Non-United States 33 Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. -4- September [ ], 2000 Holders" insofar as they purport to summarize legal matters, is accurate in all material respects; 10. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus will not be, an "investment company", as defined in the Investment Company Act; 11. The Registration Statement has become effective under the Act; any required filing of the Prospectus, and any supplements thereto, pursuant to Rule 424(b) have been made in the manner and within the time period required by Rule 424(b); to our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened; 12. The Registration Statement and the Prospectus (other than the financial statements, notes and schedules thereto and other financial information and data, as to which we express no opinion) appear to be responsive as to form in all material respects with the applicable requirements of the Act and the rules thereunder; 13. The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each of state listed on Exhibit A hereto; and 14. To our knowledge, there is no pending or threatened action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property of a character required to be disclosed in the Prospectus, and there is no contract or other document of a character required to be filed as an exhibit thereto, which is not filed as required. In the course of the preparation of the Registration Statement and the Prospectus, we participated in conferences with certain of the officers and representatives of, and the independent public accountants for, the Company, at which the Registration Statement and the Prospectus were discussed. Between the date of effectiveness of the Registration Statement and the date hereof, we held additional conferences with certain officers and representatives of, and the independent public accountants for, the Company, at which the contents of the Prospectus were discussed to a limited extent. Given the limitations inherent in the independent verification of factual matters and the character of determinations involved in the registration process, we are not passing upon or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus except as provided in paragraph 9 above. 34 Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. -5- September [ ], 2000 Subject to the foregoing and on the basis of the information we obtained in performance of the services referred to above, including information we obtained from officers and other representatives of, and the independent public accountants for, the Company, no facts have come to our attention that cause us to believe that the Registration Statement, at the time the Registration Statement became effective, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Prospectus, as of its date, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Also, subject to the foregoing, no facts have come to our attention in the course of proceedings described in the second sentence of this paragraph that cause us to believe that the Prospectus, as of the date and time of delivery of this opinion, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. We express no view or belief, however, with respect to the financial statements, notes and schedules thereto and other financial information and data included in or omitted from the Registration Statement or Prospectus. The opinions set forth above are subject to the following qualifications: (A) With respect to our opinion expressed in paragraph 1 above, we have relied solely upon a certificate or certificates of public officials or upon confirmation via facsimile of good standing as an existing corporation provided by CT Corporation, and with respect to our opinion in paragraph 13 above, we have relied solely upon a certificate or certificates of public officials or upon confirmation via facsimile of the due qualification and good standing of the Company as a foreign corporation in each of the jurisdictions listed on Exhibit A hereto. Our opinions as to good standing and due qualifications as a foreign corporation, as the case may be, are expressed as of the date and time set forth on such certificates or as of the time confirmation via facsimile is received and not as of the date and time hereof. (B) In paragraphs 6 and 8 above, our opinions are limited to our review of only those statutes, rules and regulations that, in our experience, are normally applicable to transactions of the type contemplated by the Underwriting Agreement. We express no opinion as to any violation, conflict, breach or default not ascertainable from the face of any agreement, instrument, judgment, order or decree, or arising under or based upon any cross default provision insofar as such violation relates to a default under any other agreement or such violation arises under or is based upon any covenant of a financial or numerical nature or which requires arithmetic computation. 35 Salomon Smith Barney Inc. Bear, Stearns & Co. Inc. Chase Securities Inc. -6- September [ ], 2000 The opinions expressed herein are limited to the federal laws of the United States of America, the laws of the State of New York and, to the extent relevant to the opinions expressed above, the Delaware General Corporation Law, each as currently in effect. The opinions expressed herein are given as of the date hereof, and we undertake no obligation to supplement this letter if any applicable laws change after the date hereof or if we become aware of any facts that might change the opinions expressed herein after the date hereof or for any other reason. The opinions expressed herein are solely for your benefit in connection with the Underwriting Agreement and may not be relied on in any manner or for any purpose by any other person or entity and may not be quoted in whole or in part without our prior written consent. Very truly yours, FRIED, FRANK, HARRIS, SHRIVER & JACOBSON By__________________________________________ Stuart H. Gelfond EX-3.2 3 y38692a5ex3-2.txt AMENDED AND RESTATED BY LAWS 1 Exhibit 3.2 AMENDED AND RESTATED BYLAWS OF INRANGE TECHNOLOGIES CORPORATION ARTICLE I Stockholders SECTION 1. Annual Meeting. The annual meeting of the stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as may be designated by the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may be properly brought before the meeting. SECTION 2. Special Meetings. Except as otherwise provided in the Certificate of Incorporation as amended and restated (the "Certificate of Incorporation"), a special meeting of the stockholders of the Corporation may be called at any time by the Board of Directors, or the Chairman of the Board. Any special meeting of the stockholders shall be held on such date, at such time and at such place within or without the State of Delaware as the Board of Directors or the officer calling the meeting may designate. At a special meeting of the stockholders, no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting. In addition, prior to the Trigger Date (as defined hereinafter), the Corporation shall call a special meeting of stockholders of the Corporation promptly upon request of the holders of a majority of the voting power of the then outstanding shares of Voting Stock. As used in these Bylaws "Trigger Date" means the date on which SPX and its affiliates cease to be the beneficial owner of an aggregate of at least a majority of the voting power of the then outstanding shares of Voting Stock. As used in these Bylaws, "Voting Stock" means the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. SECTION 3. Notice of Meetings. Except as otherwise provided in these Bylaws or by law, a written notice of each meeting of the stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of the Corporation entitled to vote at such meeting at his address as it appears on the records of the Corporation. The notice shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Any previously scheduled meeting of the stockholders may be postponed, and any special meeting of the stockholders may be canceled, by resolution of the Board of Directors upon public notice given prior to the date previously scheduled for such meeting of stockholders. 2 SECTION 4. Quorum. At any meeting of the stockholders, the holders of thirty-three and one third percent of the total outstanding shares of stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum of the stockholders for all purposes, unless the representation of a larger number of shares shall be required by law, by the Certificate of Incorporation, by these Bylaws or by the rules of the National Association of Securities Dealers or any national securities exchange on which equity of the Corporation is listed or quoted, in which case the representation of the number of shares so required shall constitute a quorum; provided that at any meeting of the stockholders at which the holders of any class of stock of the Corporation shall be entitled to vote separately as a class, the holders of thirty-three and one third percent of the total outstanding shares of such class, present in person or represented by proxy, shall constitute a quorum for purposes of such class vote unless the representation of a larger number of shares of such class shall be required by law, by the Certificate of Incorporation, by these Bylaws or by the rules of the National Association of Securities Dealers, or any national securities exchange on which equity of the Corporation is listed or quoted. SECTION 5. Adjourned Meetings. Whether or not a quorum shall be present in person or represented at any meeting of the stockholders, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by proxy and entitled to vote at such meeting may adjourn such meeting from time to time; provided, however, that if the holders of any class of stock of the Corporation are entitled to vote separately as a class upon any matter at such meeting, any adjournment of the meeting in respect of action by such class upon such matter shall be determined by the holders of a majority of the shares of such class present in person or represented by proxy and entitled to vote at such meeting. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted by them at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting. SECTION 6. Organization; Stockholder List. The Chairman of the Board or, in his absence, the President shall call all meetings of the stockholders to order, and shall act as Chairman of such meetings. In the absence of the Chairman of the Board and the President, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by proxy and entitled to vote at such meeting shall elect a Chairman. The Secretary of the Corporation shall act as Secretary of all meetings of the stockholders; but in the absence of the Secretary, the Chairman may appoint any person to act as Secretary of the meeting. It shall be the duty of the Secretary to prepare and make, at least ten days before every meeting of stockholders, a complete list of stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the -2- 3 number of shares registered in the name of each stockholder. Such list shall be open, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held, for the ten days next preceding the meeting, to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, and shall be produced and kept at the time and place of the meeting during the whole time thereof and subject to the inspection of any stockholder who may be present. SECTION 7. Voting. Except as otherwise provided in the Certificate of Incorporation or Bylaws, each stockholder shall be entitled to one vote for each share of the capital stock of the Corporation registered in the name of such stockholder upon the books of the Corporation. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. When directed by the presiding officer or upon the demand of any stockholder, the vote upon any matter before a meeting of stockholders shall be by ballot. Except as otherwise provided by law, by the rules of the National Association of Securities Dealers, or any national securities exchange on which equity of the Corporation is listed or quoted, or by the Certificate of Incorporation, directors shall be elected by a plurality of the votes cast at a meeting of stockholders by the stockholders entitled to vote in the election and, whenever any corporate action, other than the election of directors is to be taken, it shall be authorized by a majority of the votes cast at a meeting of stockholders by the stockholders entitled to vote thereon. Shares of the capital stock of the Corporation belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. SECTION 8. Notice of Stockholder Business and Nominations. (A) Annual Meetings of Stockholders. (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of the notice provided for in Section 3 of this Article I, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 8. (2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1) of this Section 8, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not -3- 4 later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (ii) the class and number of shares of the Corporation that are owned beneficially and of record by such stockholder and such beneficial owner. (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 8 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for election as director or specifying the size of the increased Board of Directors at least 100 days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 8 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation. (B) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this -4- 5 Section 8, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 8. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by paragraph (A)(2) of this Section 8 shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder's notice as described above. (C) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this Section 8 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 8. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 8 and, if any proposed nomination or business is not in compliance with this Section 8, to declare that such defective proposal or nomination shall be disregarded. (2) For purposes of this Section 8, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. (3) Notwithstanding the foregoing provisions of this Section 8, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Section 8 shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of preferred stock to elect directors under specified circumstances. SECTION 9. Inspectors. When required by law or directed by the presiding officer or upon the demand of any stockholder entitled to vote, but not otherwise, the polls shall be opened and closed, the proxies and ballots shall be received and taken in charge, and all questions touching the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided at any meeting of the stockholders by two or more Inspectors who may be appointed by the Board of Directors before the meeting, or if not so appointed, shall be appointed by the presiding officer at the meeting. If any person so appointed fails to appear or act, the vacancy may be filled by appointment in like manner. -5- 6 SECTION 10. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, as the case may be, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. ARTICLE II Board of Directors SECTION 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, who need not be stockholders of the Corporation. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. SECTION 2. Number and Term of Office. Subject to the rights of the holders of any class or series of preferred stock to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by a majority of the Board. The directors, other than those who may be elected by the holders of any class or series of preferred stock under specified circumstances, shall be divided, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as is reasonably possible, designated Class I, Class II and Class III, with the initial term of office of the Class I directors to expire at the 2001 annual meeting of stockholders, the initial term of office of the Class II directors to expire at the 2002 annual meeting of stockholders and the initial term of office of the Class III directors to expire at the 2003 annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the 2001 annual meeting, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of -6- 7 stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible. SECTION 3. Removal, Vacancies and Additional Directors. Subject to the rights of any class of preferred stock or series thereof to elect and remove additional directors under specified circumstances, any director may be removed from office only for cause, by the affirmative vote of the holders of at least 50% of the voting power of the then outstanding shares of Voting Stock, voting together as a single class. Cause for removal shall be deemed to exist only if the director whose removal is proposed (i) has been convicted in a court of competent jurisdiction of a felony, and such conduct or conviction results in material and demonstrable injury to the Corporation, (ii) has been adjudged by a court of competent jurisdiction to be mentally incompetent or (iii) has been adjudged by a court of competent jurisdiction to be liable for fraudulent or dishonest conduct, or gross abuse of authority or discretion, resulting in material and demonstrable injury to the Corporation, and, in each case, such conviction or adjudication has become final and nonappealable. Vacancies caused by any such removal and not filled by the stockholders at the meeting at which such removal shall have been made, or any vacancy caused by the death or resignation of any director or for any other reason, and any newly created directorship resulting from any increase in the authorized number of directors, may be filled by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, or by stockholders if such vacancy was caused by the removal of a director by the action of stockholders. Any director so elected shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director's successor shall have been duly elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director. When one or more directors shall resign effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as herein provided in connection with the filling of other vacancies. SECTION 4. Place of Meeting. The Board of Directors may hold its meetings in such place or places in the State of Delaware or outside the State of Delaware as the Board from time to time shall determine. SECTION 5. Regular Meetings. Regular meetings of the Board of Directors shall be held at such times and places as the Board from time to time by resolution shall determine. No notice shall be required for any regular meeting of the Board of Directors. SECTION 6. Special Meetings. Special meetings of the Board of Directors shall be held whenever called by direction of the Chairman of the Board, the President or by any two of the directors then in office. -7- 8 Notice of the day, hour and place of holding of each special meeting shall be given by telephone, electronic transmission, telegraph, facsimile or telex at least two hours before the meeting or by causing the same to be delivered personally or sent by certified, registered or overnight mail at least one day before the meeting to each director. Unless otherwise indicated in the notice thereof, any and all business other than an amendment of these Bylaws may be transacted at any special meeting, and an amendment of these Bylaws may be acted upon if the notice of the meeting shall have stated that the amendment of these Bylaws is one of the purposes of the meeting. At any meeting at which every director shall be present, even though without any notice, any business may be transacted, including the amendment of these Bylaws. SECTION 7. Quorum. Subject to the provisions of Section 3 of this Article II, a majority of the members of the Board of Directors in office shall constitute a quorum for the transaction of business and the vote of the majority of the directors present at any meeting of the Board of Directors at which a quorum is present shall be the act of the Board of Directors. If at any meeting of the Board there is less than a quorum present, a majority of those present may adjourn the meeting from time to time. SECTION 8. Organization. The Chairman of the Board or, in his absence, the President shall preside at all meetings of the Board of Directors. In the absence of the Chairman of the Board and the President at any meeting, a Chairman for the purposes of that meeting shall be elected from the directors present. The Secretary of the Corporation shall act as Secretary of all meetings of the directors; but in the absence of the Secretary, the Chairman or the President may appoint any person to act as Secretary of the meeting. SECTION 9. Committees. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided by resolution passed by a majority of the whole Board, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and the affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these Bylaws; and unless such resolution, these Bylaws, or the Certificate of Incorporation expressly -8- 9 so provide, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. SECTION 10. Conference Telephone Meetings. Unless otherwise restricted by the Certificate of Incorporation or by these Bylaws, the members of the Board of Directors or any committee designated by the Board, may participate in a meeting of the Board or such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting. Each party participating in such meeting shall be assumed to be able to hear and communicate with each other party. SECTION 11. Consent of Directors or Committee in Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or by these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board or committee, as the case may be. SECTION 12. Records. The Board of Directors shall cause to be kept a record containing the minutes of the proceedings of the meetings of the Board of Directors and of the stockholders, appropriate stock books and registers and such books of records and accounts as may be necessary for the proper conduct of the business of the Corporation. ARTICLE III Officers SECTION 1. Officers. The officers of the Corporation shall be a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary and a Treasurer, and such additional officers, if any, as shall be elected by the Board of Directors pursuant to the provisions of Section 8 of this Article III. The Chairman of the Board, the President, one or more Vice Presidents, the Secretary and the Treasurer shall be elected by the Board of Directors at its first meeting after each annual meeting of the stockholders. The failure to hold such election shall not of itself terminate the term of office of any officer. All officers shall hold office at the pleasure of the Board of Directors. Officers may, but need not, be directors. Any number of offices may be held by the same person. All officers, agents and employees shall be subject to removal, with or without cause, at any time by the Board of Directors. The removal of an officer without cause shall be without prejudice to his contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. All agents and employees other than officers elected by the Board of Directors shall also be subject to removal, with or without cause, at any time by the officers appointing them. -9- 10 Any vacancy caused by the death of any officer, his resignation, his removal, or otherwise, may be filled by the Board of Directors, and any officer so elected shall hold office at the pleasure of the Board of Directors. In addition to the powers and duties of the officers of the Corporation as set forth in these Bylaws, the officers shall have such authority and shall perform such duties as from time to time may be determined by the Board of Directors. SECTION 2. Powers and Duties of the Chairman of the Board. The Chairman of the Board shall preside at all meetings of the stockholders and at all meetings of the Board of Directors and shall have such other powers and perform such other duties as may from time to time be assigned to him by these Bylaws or by the Board of Directors. SECTION 3. Powers and Duties of the Chief Executive Officer. The Chief Executive Officer, subject to the provisions of these Bylaws and to the direction of the Board of Directors, shall have ultimate authority for decisions relating to the general management and control of the business and affairs of the Corporation. The Chief Executive Officer shall perform such other duties as may be assigned by the Board of Directors from time to time and shall, in the absence of the Chairman of the Board of Directors, preside at all meetings of the stockholders and the Board of Directors. SECTION 4. Powers and Duties of the President. The President shall have such powers and perform such duties as may from time to time be assigned to him by these Bylaws or by the Board of Directors or the Chief Executive Officer and in the absence of a Chief Executive Officer shall perform the Chief Executive Officer's duties if requested by the Board of Directors. SECTION 5. Powers and Duties of the Vice Presidents. Each Vice President shall perform all duties incident to the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned to him by these Bylaws or by the Board of Directors, the Chairman of the Board or the President or any other officer to whom the Vice President reports. SECTION 6. Powers and Duties of the Secretary. The Secretary shall keep the minutes of all meetings of the Board of Directors and the minutes of all meetings of the stockholders in books provided for that purpose; the Secretary shall attend to the giving or serving of all notices of the Corporation; the Secretary shall have custody of the corporate seal of the Corporation and shall affix the same to such documents and other papers as the Board of Directors, the Chairman of the Board or the President shall authorize and direct; he shall have charge of the stock certificate books, transfer books and stock ledgers and such other books and papers as the Board of Directors, the Chairman of the Board or the President shall direct, all of which shall at all reasonable times be open to the examination of any director, upon application, at the office of the Corporation during business hours; and he shall perform all duties incident to the office of Secretary and shall also have such other powers and shall perform such other duties -10- 11 as may from time to time be assigned to him by these Bylaws or the Board of Directors, the Chairman of the Board or the President. SECTION 7. Powers and Duties of the Treasurer. The Treasurer shall have custody of, and when proper shall pay out, disburse or otherwise dispose of, all funds and securities of the Corporation that may have come into his hands; he may endorse on behalf of the Corporation for collection checks, notes and other obligations and shall deposit the same to the credit of the Corporation in such bank or banks or depositary or depositories as the Board of Directors may designate; he shall sign all receipts and vouchers for payments made to the Corporation; he shall enter or cause to be entered regularly in the books of the Corporation kept for the purpose full and accurate accounts of all moneys received or paid or otherwise disposed of by him and whenever required by the Board of Directors or the President shall render statements of such accounts; he shall, at all reasonable times, exhibit his books and accounts to any director of the Corporation upon application at the office of the Corporation during business hours; and he shall perform all duties incident to the office of Treasurer and shall also have such other powers and shall perform such other duties as may from time to time be assigned to him by these Bylaws or by the Board of Directors, the Chairman of the Board or the President. SECTION 8. Additional Officers. The Board of Directors may from time to time elect such other officers (who may but need not be directors), including a Chief Operating Officer, Chief Financial Officer, Controller, Assistant Treasurers, Assistant Secretaries and Assistant Controllers, as the Board may deem advisable and such officers shall have such titles and such authority and shall perform such duties as may from time to time be assigned to them by the Board of Directors, the Chairman of the Board, the President or any other officer to whom the officer reports. The Board of Directors may from time to time by resolution delegate to any Assistant Treasurer or Assistant Treasurers any of the powers or duties herein assigned to the Treasurer; and may similarly delegate to any Assistant Secretary or Assistant Secretaries any of the powers or duties herein assigned to the Secretary. SECTION 9 Voting Upon Stocks. Unless otherwise ordered by the Board of Directors, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer or any Vice President shall have full power and authority on behalf of the Corporation to attend and to act and to vote, or in the name of the Corporation to execute proxies to vote, at any meetings of stockholders of any corporation in which the Corporation may hold stock, and at any such meetings shall possess and may exercise, in person or by proxy, any and all rights, powers and privileges incident to the ownership of such stock. The Board of Directors may from time to time, by resolution, confer like powers upon any other person or persons. SECTION 10 Compensation of Officers. The officers of the Corporation shall be entitled to receive such compensation for their services as shall from time to time be determined by the Board of Directors. -11- 12 ARTICLE IV Stock-Seal-Fiscal Year SECTION 1. Certificates For Shares of Stock. The certificates for shares of stock of the Corporation shall be in such form, not inconsistent with the Certificate of Incorporation, as shall be approved by the Board of Directors. All certificates shall be signed manually or in facsimile form, by the Chairman of the Board, the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall not be valid unless so signed. In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates had not ceased to be such officer or officers of the Corporation. All certificates for shares of stock shall be consecutively numbered as the same are issued. The name of the person owning the shares represented thereby with the number of such shares and the date of issue thereof shall be entered on the books of the Corporation. Except as hereinafter provided, all certificates surrendered to the Corporation for transfer shall be canceled, and no new certificates shall be issued until former certificates for the same number of shares have been surrendered and canceled. SECTION 2. Lost, Stolen or Destroyed Certificates. Whenever a person owning a certificate for shares of stock of the Corporation alleges that it has been lost, stolen or destroyed, he shall file in the office of the Corporation an affidavit setting forth, to the best of his knowledge and belief, the time, place and circumstances of the loss, theft or destruction, and, if required by the Board of Directors or any officer of the Corporation, a bond of indemnity or other indemnification sufficient in the opinion of the Board of Directors or any officer of the Corporation to indemnify the Corporation and its agents against any claim that may be made against it or them on account of the alleged loss, theft or destruction of any such certificate or the issuance of a new certificate in replacement therefor. Thereupon the Corporation may cause to be issued to such person a new certificate in replacement for the certificate alleged to have been lost, stolen or destroyed. SECTION 3. Transfer of Shares. Shares of stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof, in person or by his attorney duly authorized in writing, upon surrender and cancellation of certificates for the number of shares of stock to be transferred, except as provided in the preceding section. -12- 13 SECTION 4. Regulations. The Board of Directors shall have power and authority to make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation. SECTION 5. Dividends. Subject to the provisions of the Certificate of Incorporation, the Board of Directors shall have power to declare and pay dividends upon shares of stock of the Corporation, but only out of funds available for the payment of dividends as provided by law. Subject to the provisions of the Certificate of Incorporation, any dividends declared upon the stock of the Corporation shall be payable on such date or dates as the Board of Directors shall determine. If the date fixed for the payment of any dividend shall in any year fall upon a legal holiday, then the dividend payable on such date shall be paid on the next day not a legal holiday. SECTION 6. Corporate Seal. The Board of Directors shall provide a suitable seal, containing the name of the Corporation, which seal shall be kept in the custody of the Secretary. A duplicate of the seal may be kept and be used by any officer of the Corporation designated by the Board of Directors, the Chairman of the Board or the President. SECTION 7. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the thirty-first day of December of each year. ARTICLE V Miscellaneous Provisions SECTION 1. Checks, Notes, Etc. All checks, drafts, bills of exchange, acceptances, notes or other obligations or orders for the payment of money shall be signed and, if so required by the Board of Directors, countersigned by such officers of the Corporation and/or other persons as the Board of Directors from time to time shall designate. Checks, drafts, bills of exchange, acceptances, notes, obligations and orders for the payment of money made payable to the Corporation may be endorsed for deposit to the credit of the Corporation with a duly authorized depository by the Treasurer, or otherwise as the Board of Directors may from time to time, by resolution, determine. SECTION 2. Waivers of Notice. Whenever any notice whatever is required to be given by law, by the Certificate of Incorporation or by these Bylaws to any person or persons, a waiver thereof in writing or oral if permitted by law, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent thereto. The attendance of any stockholder at a meeting in person or by proxy, without protesting at the beginning of the meeting the lack of notice of such meeting, shall constitute a waiver of notice of such stockholder. -13- 14 SECTION 3. Offices Outside Delaware. Except as otherwise required by the laws of the State of Delaware, the Corporation may have an office or offices and keep its books, documents and papers outside the State of Delaware at such place or places as from time to time may be determined by the Board of Directors, the Chairman of the Board or the President. SECTION 4. Audits. The accounts, books and records of the Corporation shall be audited upon the conclusion of each fiscal year by an independent certified public accountant selected by the Board of Directors, and it shall be the duty of the Board of Directors to cause such audit to be done annually. SECTION 5. Resignations. Any director or any officer or assistant officer, whether elected or appointed, may resign at any time by giving written notice of such resignation to the Chairman, the President, or the Secretary, and such resignation shall be deemed to be effective as of the close of business on the date said notice is received or at such later time as is specified therein. No formal action shall be required of the Board of Directors or the stockholders to make any such resignation effective. SECTION 6. Indemnification of Directors, Officers and Employees. (A) Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter, a "proceeding"), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by the Corporation, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law (the "DGCL") as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974, as in effect from time to time, and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith (each, a "Loss"), and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that except as provided in paragraph (B) of this Section 6, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred in this Section 6 shall be a contract right and shall include the right to be paid by the -14- 15 Corporation the expenses incurred in defending any such proceeding in advance of its final disposition, such advances to be paid by the Corporation within 20 days after the receipt by the Corporation of a statement or statements from the claimant requesting such advance or advances from time to time; provided, however, that if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section 6 or otherwise. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification, and rights to have the Corporation pay the expenses incurred in defending any proceeding in advance of its final disposition, to any employee or agent of the Corporation to the fullest extent of the provisions of this Section 6 with respect to the indemnification and advancement of expenses of directors and officers of the Corporation. (B) If a claim under paragraph (A) of this Section 6 is not paid in full by the Corporation within 30 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standard of conduct that makes it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (C) The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Section 6 shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or otherwise. No repeal or modification of this Section 6 shall in any way diminish or adversely affect the rights of any director, officer, employee or agent of the Corporation hereunder in respect of any occurrence or matter arising prior to any such repeal or modification. (D) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any Loss, regardless whether the Corporation -15- 16 would have the power to indemnify such person against such Loss under the DGCL. (E) If any provision or provisions of this Section 6 shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (1) the validity, legality and enforceability of the remaining provisions of this Section 6 (including, without limitation, each portion of any paragraph of this Bylaw containing any such provision held to be invalid, illegal or unenforceable, that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (2) to the fullest extent possible, the provisions of this Section 6 (including, without limitation, each such portion of any paragraph of this Bylaw containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. ARTICLE VI Amendments These Bylaws and any amendment thereof may be altered, amended or repealed, or new Bylaws may be adopted, at any meeting of the Board of Directors; provided, however, that the Bylaws adopted by the Board of Directors may be amended or repealed at any meeting of the Board of Directors or at any meeting of the stockholders by holders of a majority of the voting power of the then outstanding shares of Voting Stock, provided in each case that the notice of such meeting shall have stated that the amendment of these Bylaws was one of the purposes of the meeting; provided, further, however, that, in the case of amendments or adoptions by stockholders, notwithstanding any other provisions of these Bylaws or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the capital stock of the Corporation required by law, the Certificate of Incorporation or these Bylaws, effective as of the Trigger Date, the affirmative vote of the holders of at least 80% of the voting power of all the then outstanding shares of stock entitled to vote generally for directors, voting together as a single class, shall be required to alter, amend or repeal any provision of these Bylaws or adopt any provision of these Bylaws inconsistent with any other provision of these Bylaws. -16- EX-4.1 4 y38692a5ex4-1.txt FORM OF CLASS B COMMON STOCK CERTIFICATE 1 Class B COMMON Class B COMMON - -------------- -------------- INRANGE(REGISTERED TRADEMARK) INRANGE TECHNOLOGIES CORPORATION INCORPORATED UNDER THE LAWS SEE REVERSE FOR CERTAIN DEFINITIONS OF THE STATE OF DELAWARE CUSIP 45769V 20 6 - ---------------------------------------------------------------------------- THIS CERTIFIES THAT IS THE RECORD HOLDER OF FULLY PAID AND NONASSESSABLE SHARES OF THE CLASS B COMMON STOCK, $0.01 PAR VALUE, OF - ----------------------INRANGE TECHNOLOGIES CORPORATION---------------------- (the "Corporation"), a Delaware corporation. The shares represented by this certificate are transferable only on the stock transfer books of the Corporation by the holder of record hereof or by the holder's duly authorized attorney or legal representative, upon surrender of this certificate properly endorsed. This certificate is not valid until countersigned and registered by the Corporation's transfer agent and registrar. IN WITNESS WHEREOF the Corporation has caused this certificate to be executed by the facsimile signatures of its duly authorized officers and has caused a facsimile of its corporate seal to be hereunto fixed. DATED: /s/ Kenneth H. Koch INRANGE TECHNOLOGIES /s/ Gregory R. Grodhaus SECRETARY CORPORATION PRESIDENT AND CHIEF CORPORATE SEAL EXECUTIVE OFFICER APPEARS HERE COUNTERSIGNED AND REGISTERED: EquiServe Trust Company, N.A. TRANSFER AGENT AND REGISTRAR BY AUTHORIZED SIGNATURE A statement of the rights, preferences, privileges and restrictions granted to or imposed upon the respective classes or series of shares and upon the holders thereof as established, from time to time, by the Articles of Incorporation of the Corporation and by any certificate of determination, and the number of shares constituting each class and series and the designations thereof, may be obtained by the holder hereof upon written request and without charge from the Secretary of the Corporation at its corporate headquarters. The following abbreviations, when used in the inscription on the face 2 of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM -as tenants in common UNIF GIFT MIN ACT- Custodian TEN ENT -as tenants by the entireties -------- -------- JT TEN -as joint tenants with right of (Cust) (Minor) survivorship and not as tenants under Uniform Gifts to Minors in common Act ------------------------ (State) UNIF TRF MIN ACT- Custodian (until age ) -------- ------- -------- (Cust) (Minor) (Minor) under Uniform Transfers to Minors Act ----------------- (State)
Additional abbreviations may also be used though not in the above list. FOR VALUE RECEIVED, HEREBY SELL, ASSIGN AND TRANSFER UNTO -------------- PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - ---------------------------------- [ ] - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ SHARES - ------------------------------------------------------------------------ OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT ATTORNEY 3 - ---------------------------------------------------------------------- TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES. DATED ------------------ X -------------------------------------------------------------- X -------------------------------------------------------------- NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. Signature(s) Guaranteed: By ------------------------------------------------------ THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANK, STOCKHOLDERS SAVINGS AND LOAN ASSOCIATION AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17AD-15. EX-10.1 5 y38692a5ex10-1.txt TAX SHARING AGREEMENT 1 Exhibit 10.1 TAX SHARING AGREEMENT BY SPX CORPORATION AND INRANGE TECHNOLOGIES CORPORATION 2 TABLE OF CONTENTS
PAGE ---- SECTION 1. Definition of Terms ............................................ 1 SECTION 2. Allocation of Income Tax Liabilities ........................... 6 2.1. Federal Income Tax ............................................... 6 2.2. Other Income Taxes ............................................... 7 2.3. Calculation of Income Tax Liability .............................. 7 2.4. Income Taxes from the Distribution ............................... 8 2.5. Income Tax Payments and Intercompany Billings .................... 9 SECTION 3. Preparation and Filing of Tax Returns ......................... 9 3.1. General .......................................................... 9 3.2. Pre-Deconsolidation Period and Straddle Period Tax Returns ....... 9 3.3. Post-Deconsolidation Period Tax Returns .......................... 10 3.4. Tax Accounting Practices ......................................... 10 3.5. Right to Review Tax Returns ...................................... 11 SECTION 4. Refunds, Carrybacks and Tax Benefits .......................... 11 4.1. Compensation for Use of INRANGE Consolidated Period Tax Items .... 11 4.2. Claims for Refund, Carrybacks, and Self-Audit Adjustments ........ 12 4.3. Adjustment of Tax Items ......................................... 14 4.4. Adjustments on Audit ............................................. 14 SECTION 5. Tax Payments and Intercompany Billings ........................ 15 5.1. Payment of Income Taxes With Respect to SPX Consolidated Returns.. 15 5.2. Payment of Income Tax Related to Adjustments ..................... 16 5.3. Compensation for use of INRANGE Consolidated Period Tax Items .... 17 5.4. Payment of Refunds and Other Tax Benefits ........................ 17 5.5. Payment for Carrybacks ........................................... 18 5.6. Payment for Adjustments on Audit ................................. 18 5.7. Right to Offset .................................................. 18 SECTION 6. Assistance and Cooperation .................................... 18 6.1. General .......................................................... 18 6.2. Tax Return Information; Calculation of Amounts Due ............... 19
-i- 3 SECTION 7. Tax Records ............................................... 20 7.2. Access to Tax Records ........................................ 20 SECTION 8. Control of Tax Contests ................................... 21 SECTION 9. Survival of Obligations ................................... 21 SECTION 10. Treatment of Payments; Tax Gross Up ...................... 21 10.1. Treatment of Indemnity and Tax Benefit Payments ............ 21 10.2. Tax Gross Up ................................................ 21 10.3. Interest Under This Agreement ............................... 22 SECTION 12. Disagreements ............................................ 22 SECTION 13. Late Payments ............................................ 23 SECTION 14. Expenses ................................................. 23 SECTION 15. Effect on Pre-existing Liabilities ....................... 23 SECTION 16. General Provisions ....................................... 23 16.1. Notices ...................................................... 23 16.2. Counterparts ................................................ 24 16.3. Binding Effect; Assignment .................................. 25 16.4. Severability ................................................ 25 16.5. Waiver ...................................................... 25 16.6. Amendment ................................................... 26 16.7. Interpretation .............................................. 26 16.8. Effective Time .............................................. 26 16.9. Governing Law ............................................... 26
-ii- 4 TAX SHARING AGREEMENT This Agreement is entered into as of September 18, 2000 by SPX Corporation, a Delaware corporation ("SPX"), and INRANGE Technologies Corporation, a Delaware corporation ("INRANGE"). Capitalized terms used in this Agreement are defined herein. Unless otherwise indicated, all "Section" references in this Agreement are to sections of this Agreement. RECITALS WHEREAS, INRANGE is currently a wholly-owned subsidiary of SPX; WHEREAS, SPX and INRANGE currently contemplate that INRANGE will make an initial public offering pursuant to the [Prospectus, dated , 2000, of INRANGE] of [ ] shares of its common stock (the "INITIAL PUBLIC OFFERING") that will reduce SPX's ownership of INRANGE to not less than 80%; and WHEREAS, the Companies desire to provide for and agree upon the allocation between the parties of liabilities for certain Income Taxes arising prior to, as a result of, and subsequent to a Deconsolidation, and to provide for and agree upon other matters relating to such Income Taxes; NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows: SECTION 1. DEFINITION OF TERMS. For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings: "ACCOUNTING FIRM" shall have the meaning provided in Section 12. "ADJUSTMENT REQUEST" means any formal or informal claim or request filed with any Tax Authority, or with any administrative agency or court, for the adjustment, refund, or credit of 5 Income Taxes, including (a) any amended Tax Return claiming adjustment to the Income Taxes as reported on the Tax Return, or if applicable, as previously adjusted, or (b) any claim for refund or credit of Income Taxes previously paid. "AFFILIATE" means any entity that directly or indirectly is "controlled" by the person or entity in question. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through ownership of voting securities, by contract or otherwise. Except as otherwise provided herein, the term Affiliate shall refer to Affiliates of a person as determined immediately after the Deconsolidation. "AGREEMENT" means this Tax Sharing Agreement. "CARRYBACK" means any net operating loss, net capital loss, tax credit or other similar Tax Item which may or must be carried from one Tax Period to an earlier Tax Period under the Code or other applicable Tax Law. "CARRYFORWARD" means any net operating loss, net capital loss, tax credit or other similar Tax Item which may or must be carried from one Tax Period to a later Tax Period under the Code or other applicable Tax Law. "CARRYBACK GROUP" shall have the meaning set forth in Section 4.2(c). "CODE" means the U.S. Internal Revenue Code of 1986, as amended from time to time, or any successor law. "COMPANY" means SPX or INRANGE. "CONSOLIDATED INCOME TAX RETURN" or "COMBINED INCOME TAX RETURN" means any Tax Return which is computed by reference to the assets and activities of members of the SPX Separate Group and the INRANGE Group. -2- 6 "CONSOLIDATED PERIOD" or "CONSOLIDATED PERIODS" means any Taxable Period or Periods beginning on or after, or including, the Initial Public Offering Closing Date in which INRANGE is a member of the SPX Group. "CURRENT PERIOD" means the Taxable Period which includes the Initial Public Offering Closing Date. "DECONSOLIDATION" means any event pursuant to which INRANGE ceases to be a member of the SPX Group. "DECONSOLIDATION DATE" means the day on which INRANGE ceases to be a member of the SPX Group, as determined under Treasury Regulation Section 1.1502-76(b). "FEDERAL INCOME TAX" means any Income Tax imposed by the United States government. "INCOME TAX" means all taxes imposed by any governmental entity or political subdivision thereof (i) based upon, measured by, or calculated with respect to, net income or net receipts, proceeds or profits or (ii) based upon, measured by, or calculated with respect to multiple bases (including, but not limited to, corporate franchise and occupation taxes) if such tax may be based upon, measured by, or calculated with respect to one or more bases described in clause (i) above; and, for purposes of both clauses (i) and (ii) above, including any fee, assessment, or other charge in the nature of or in lieu of any tax, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing. "INITIAL PUBLIC OFFERING" shall have the meaning set forth in the Recitals. "INITIAL PUBLIC OFFERING CLOSING DATE" means the date of the closing of the Initial Public Offering. "INTEREST RATE" means the base rate on corporate loans charged by Citibank, N.A., New York, New York from time to time, compounded on each March 31, June 30, September 30 and December 31. -3- 7 "INTERNAL REVENUE SERVICE" means the United States Internal Revenue Service or the United States Department of the Treasury, as the context requires. "INRANGE GROUP" means INRANGE and all corporations included in the INRANGE Federal Consolidated Return, or, during any Consolidated Period, that would be included in such Return if INRANGE were not included in the SPX Federal Consolidated Return. "INRANGE FEDERAL CONSOLIDATED RETURN" means any United States federal Tax Return or Returns in respect of periods after the Consolidated Period filed by INRANGE alone or by the affiliated group (as that term is defined in Code Section 1504) that includes INRANGE as the common parent. "MEASURING DATE" shall have the meaning set forth in Section 4.1. "OTHER GROUP" shall have the meaning set forth in Section 4.2(c). "OTHER GROUP CARRYBACK" shall have the meaning set forth in Section 4.2(c). "OTHER INCOME TAX" means any Income Tax imposed by any State of the United States or by any political subdivision of any such State or any any Income Tax imposed by any foreign country or any possession of the United States, or by any political subdivision of any foreign country or United States possession. "PAYMENT DATE" means (i) with respect to any SPX Federal Consolidated Return, the due date for any required installment of estimated taxes determined under Code Section 6655, the due date (determined without regard to extensions) for filing the return determined under Code Section 6072, and the date the return is filed, and (ii) with respect to any Consolidated or Combined Income Tax Return relating to any Other Income Tax, the corresponding dates determined under the applicable Tax Law. "POST-DECONSOLIDATION PERIOD" means any Tax Period beginning after the Deconsolidation Date, and, in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the Deconsolidation Date. -4- 8 "PRE-DECONSOLIDATION PERIOD" means any Tax Period ending on or before the Deconsolidation Date, and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Deconsolidation Date. "RESPONSIBLE COMPANY" means, with respect to any Tax Return, the Company having responsibility for preparing and filing such Tax Return under this Agreement. "SPX FEDERAL CONSOLIDATED RETURN" means any United States federal Consolidated Income Tax Return for the affiliated group (as that term is defined in Code Section 1504) that includes SPX as the common parent and that includes, during the Consolidated Periods, the INRANGE Group. "SPX GROUP" means all corporations included in the SPX Federal Consolidated Return. "SPX SEPARATE GROUP" shall mean the SPX Group other than members of the INRANGE Group. "STRADDLE PERIOD" means any Tax Period that begins on or before and ends after the Deconsolidation Date. "TAX AUTHORITY" means, with respect to any Income Tax, the governmental entity or political subdivision thereof that imposes such Income Tax, and the agency (if any) charged with the collection of such Income Tax for such entity or subdivision. "TAX BENEFIT" means any refund of, credit against, or other reduction in otherwise required Income Tax payments (including any reduction in estimated tax payments) and any interest in respect of the foregoing, net of the effect on otherwise required Income Tax payments of any associated or corresponding item of income or gain, or other increase in otherwise required Income Tax payments. "TAX CONTEST" means an audit, review, examination, or any other administrative or judicial proceeding with the purpose or effect of redetermining Income Taxes of any of the -5- 9 Companies or their Affiliates (including any administrative or judicial review of any claim for refund). "TAX ITEM" means, with respect to any Income Tax, any item of income, gain, loss, deduction, or credit. "TAX LAW" means the law of any governmental entity or political subdivision thereof relating to any Income Tax. "TAX PERIOD" or "TAXABLE PERIOD" means, with respect to any Income Tax, the period for which the Income Tax is reported as provided under the Code or other applicable Tax Law. "TAX RECORDS" means Tax Returns, Tax Return workpapers, documentation relating to any Tax Contests, and any other books of account or records required to be maintained under the Code or other applicable Tax Laws or under any record retention agreement with any Tax Authority. "TAX RETURN" means any report of Income Taxes due, any claims for refund of Income Taxes paid, any information return with respect to Income Taxes, or any other similar report, statement, declaration, or document required to be filed under the Code or other Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing. "TREASURY REGULATIONS" means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Period. SECTION 2. ALLOCATION OF INCOME TAX LIABILITIES. 2.1. FEDERAL INCOME TAX. Except as otherwise provided in this Agreement, Federal Income Tax liability shall be allocated as follows: (a) Consolidated Periods. For each Consolidated Period, INRANGE shall be liable for and pay to SPX an amount equal to Federal Income Tax determined under the "Stand Alone -6- 10 Method." Under this method INRANGE's liability for Income Tax for any Taxable Period is computed as if, since the Initial Public Offering Closing Date, INRANGE had (i) never been part of the SPX Group and (ii) filed a federal Consolidated Income Tax Return as parent of the INRANGE Group with each eligible member of the INRANGE Group; provided, however, that the provisions of Section 2.3(a) regarding special rules for application of the Stand Alone Method shall apply. SPX shall be liable for all Federal Income Tax for the Consolidated Period other than amounts for which INRANGE is liable pursuant to this Section 2.1(a). (b) Non-Consolidated Periods. INRANGE shall be responsible for all Federal Income Tax imposed on members of the INRANGE Group with respect to all periods which are not Consolidated Periods. SPX shall be responsible for all Federal Income Tax imposed on members of the SPX Separate Group with respect to all periods which are not Consolidated Periods. 2.2. OTHER INCOME TAXES. Except as otherwise provided in this Agreement, the liability for any Other Income Tax shall be allocated as follows: (a) Consolidated or Combined Income Tax Returns. INRANGE shall be liable for and pay to SPX any Other Income Tax with respect to any Consolidated or Combined Income Tax Return for such Income Taxes in an amount that is equal to the amount determined under the Stand Alone Method for the period covered by such Tax Return. SPX shall be liable for and pay any Other Income Tax with respect to any Consolidated or Combined Income Tax Return for such Income Taxes other than the amount for which INRANGE is liable pursuant to this Section 2.2. (b) Income Tax Returns which are not Consolidated or Combined Income Tax Returns. INRANGE shall be responsible for any Other Income Tax imposed on members of the INRANGE Group with respect to any Tax Return which is not a Consolidated or Combined Income Tax Return. SPX shall be responsible for any Other Income Tax imposed on members -7- 11 of the SPX Group with respect to any Tax Return which is not a Consolidated or Combined Income Tax Return. 2.3. CALCULATION OF INCOME TAX LIABILITY. (a) Stand Alone Method. The following rules shall apply for purposes of computing INRANGE's liability under the Stand Alone Method - (i) during Consolidated Periods all computations shall apply the separate tax liability adjustment principles of Treasury Regulation Section 1.1552-1(a)(2)(ii), or any successor provision thereto, as they would apply between (x) the SPX Separate Group and (y) the INRANGE Group, (ii) during Consolidated Periods all computations shall be made in conformity with the positions, elections and accounting methods used by SPX in preparing the Consolidated or Combined Income Tax Returns of the SPX Group; (iii) the highest marginal tax rate to which the INRANGE Group could be subject under applicable Tax Law shall be deemed to be the only Income Tax rate to which such group is subject under such law; and (iv) subject to (i) through (iii) above, all computations and other determinations shall be made in accordance with the laws and regulations applying to affiliated groups filing consolidated returns (including, in the case of any company that becomes or ceases to be a member of the SPX Group or the INRANGE Group, the laws and regulations applicable to a company that becomes or ceases to be a member of such Group), as well as all other relevant federal Income Tax laws and regulations (and similar rules shall apply in the case of Other Income Taxes in respect to Consolidated or Combined Income Tax Returns for such Taxes). (b) Allocation of Tax Items. (i) SPX shall allocate Tax Items for the Taxable Period in which a Deconsolidation occurs between the Pre-Deconsolidation Period of such Taxable Period and the Post-Deconsolidation Period of such Taxable Period in accordance with any permitted method under the consolidated return provisions of the Code and Treasury Regulations. -8- 12 (ii) SPX shall allocate Tax Items for the Current Period between the portion of such Period ending on the Initial Public Offering Closing Date and the portion of such Period beginning after the Initial Public Offering Closing Date of such Taxable Period in accordance with any method that would be permitted in the event of a Deconsolidation. 2.4. INCOME TAXES FROM THE DISTRIBUTION. Notwithstanding anything to the contrary contained herein, SPX shall be responsible for and pay any and all liability for any Income Taxes of INRANGE resulting from the distribution on May 19, 2000 by INRANGE of 1000 shares of the Class A Common Stock of General Signal Healthcare Management, Inc., a Delaware corporation, to General Signal Holdings Company, the sole stockholder of INRANGE. This shall include any Income Taxes resulting from any income or gain recognized under Treasury Regulation Sections 1.1502-13 or 1.1502-19 (or any corresponding provisions of other applicable Tax Laws) as a result of such distribution. 2.5. INCOME TAX PAYMENTS AND INTERCOMPANY BILLINGS. Each Company shall pay the Income Taxes allocated to it by this Section 2 either to the applicable Taxing Authority or to the other Company in accordance with Section 5. SECTION 3. PREPARATION AND FILING OF TAX RETURNS. 3.1. GENERAL. Except as otherwise provided in this Section 3, Tax Returns shall be prepared and filed when due (including extensions) by the person obligated to file such Tax Returns under the Code or applicable Tax Law. The Companies shall provide, and shall cause their Affiliates to provide, assistance and cooperate with one another in accordance with Section 6 with respect to the preparation and filing of Tax Returns, including providing information required to be provided in Section 6. 3.2. PRE-DECONSOLIDATION PERIOD AND STRADDLE PERIOD TAX RETURNS. -9- 13 SPX shall cause to be prepared and filed any Consolidated or Combined Income Tax Return required to be filed for Pre-Deconsolidation Periods or Straddle Periods. For each Tax Period or portion thereof for which INRANGE or a member of the INRANGE Group is included in a Tax Return described in the preceding sentence, INRANGE shall provide SPX with (i) a true and correct pro forma tax return for the INRANGE Group together with an accompanying computation of Tax liability of the INRANGE Group prepared in accordance with the Stand Alone Method, (ii) separate pro forma tax returns for each member of the INRANGE Group together with accompanying computations of the separate tax return Tax liabilities of each member of the INRANGE Group, (iii) a reconciliation of book income to federal taxable income for each member of the INRANGE Group, and (iv) any other information or documents reasonably requested by SPX. INRANGE hereby agrees to provide SPX with such returns and computations no later than the fifteenth day of the third month following the end of the period to which such returns and computations relate. Except as otherwise requested by SPX, INRANGE, in preparing the above mentioned pro forma tax returns for the INRANGE Group, shall not consider or give effect to any (i) net operating loss carryover or carryback, (ii) capital loss carryover or carryback, (iii) excess charitable deduction carryover, (iv) excess tax carryover or carryback or (v) other similar carryover or carryback items. 3.3. POST-DECONSOLIDATION PERIOD TAX RETURNS. Except as otherwise provided in Section 3.2 with respect to Tax Returns required to be filed for Straddle Periods: (1) All Tax Returns related to INRANGE or the INRANGE Group for Post-Deconsolidation Periods shall be prepared and filed (or caused to be prepared and filed) by INRANGE, -10- 14 (2) All Tax Returns related to SPX or the SPX Group, excluding for this purpose INRANGE or members of the INRANGE Group, for Post-Deconsolidation Periods shall be prepared and filed (or caused to be prepared and filed) by SPX. 3.4. TAX ACCOUNTING PRACTICES. Any Tax Return for any Pre-Deconsolidation Period or any Straddle Period, and any Tax Return for any Post-Deconsolidation Period to the extent items reported on such Tax Return might reasonably affect items reported on any Tax Return for any Pre-Deconsolidation Period or any Straddle Period, shall be prepared in accordance with past Income Tax accounting practices used with respect to the Tax Returns in question (unless such past practices are no longer permissible under the Code or other applicable Tax Law), and to the extent any items are not covered by past practices (or in the event such past practices are not longer permissible under the Code or other applicable Tax Law), in accordance with reasonable Income Tax accounting practice selected by the Responsible Company. 3.5. RIGHT TO REVIEW TAX RETURNS. The Responsible Company with respect to any Tax Return shall make such Tax Return and related Tax Records available for review by the other Company, if requested, to the extent (i) such Tax Return relates to Income Taxes for which the requesting party may be liable, (ii) such Tax Return relates to Income Taxes for which the requesting party may be liable in whole or in part for any additional Income Taxes owing as a result of adjustments to the amount of Income Taxes reported on such Tax Return, (iii) such Tax Return relates to Income Taxes for which the requesting party may have a claim for Tax Benefits under this Agreement, or (iv) the requesting party reasonably determines that it must inspect such Tax Return to confirm compliance with the terms of this Agreement. The Responsible Company shall use its reasonable best efforts to make such Tax Return and Tax Records available for review as required under this paragraph sufficiently in advance of the due date for filing such Tax Returns to provide the requesting party with a meaningful opportunity to analyze and comment on such -11- 15 Tax Returns and have such Tax Returns modified before filing, taking into account the person responsible for payment of the Income Tax (if any) reported on such Tax Return and the materiality of the amount of Income Tax liability with respect to such Tax Return. The Companies shall attempt in good faith to resolve any issues arising out of the review of such Tax Returns or Tax Records. SECTION 4. REFUNDS, CARRYBACKS AND TAX BENEFITS. 4.1. COMPENSATION FOR USE OF INRANGE CONSOLIDATED PERIOD TAX ITEMS. In the event that (i) the SPX Group realizes an actual Tax Benefit during any Consolidated Period as a result of the use by members of the SPX Separate Group of Tax Items of the INRANGE Group and (ii) the cumulative net amount of Income Tax borne by the INRANGE Group under Sections 2 and 4 is greater by the end of any Taxable Period (a "MEASURING DATE") than the amount of the INRANGE Group's cumulative Income Tax liability through the Measuring Date computed under the Stand Alone Method (provided, however, that for any Post-Deconsolidation Period such computation shall be made without regard to clauses (iii) and (iv) of Section 2.3(a)), then SPX will pay to INRANGE, in accordance with Section 5.3, an amount equal to the lesser of (x) the excess of the Tax Benefit actually realized by SPX referred to in clause (i) over the amount of any prior payments to INRANGE pursuant to this Section 4.1 in respect of that Tax Benefit and (y) the excess referred to in clause (ii). The cumulative amounts under the preceding sentence shall be computed beginning on the Initial Public Offering Closing Date. 4.2. CLAIMS FOR REFUND, CARRYBACKS, AND SELF-AUDIT ADJUSTMENTS. (a) Adjustment Requests Related to Consolidated or Combined Income Tax Returns. SPX shall, in its sole absolute discretion, prepare and file all Adjustment Requests with respect to any Consolidated or Combined Income Tax Return that included the INRANGE Group for a Pre-Deconsolidation Period. INRANGE shall provide to SPX all information required for the -12- 16 preparation and filing of such Adjustment Request in such form and detail as reasonably requested by SPX. (b) Payment of Refunds and other Tax Benefits. Subject to Section 4.2(c), any refunds or other Tax Benefits received by either Company (or any of its Affiliates) as a result of any Adjustment Request which are for the account of the other Company (or member of such other Company's Group) shall be paid by the Company receiving (or whose Affiliate received) such refund or Tax Benefit to such other Company in accordance with Section 5. (c) Ordering of and Payment for Carrybacks. (i) In the event that a member of the SPX Separate Group, on the one hand, and a member of the INRANGE Group, on the other hand, are each entitled to carryback a Tax Item to a Pre-Deconsolidation Period, the respective Tax Items shall be used under the rules of applicable Tax Law (which shall be, in the case of Carrybacks to such Tax Periods of the affiliated group of which SPX is the common parent, the rules contained in Treasury Regulation Section 1.1502-21). (ii) Any Income Tax refund or other Tax Benefit resulting from the Carryback of any member of the SPX Group or the INRANGE Group, as the case may be (the "CARRYBACK GROUP"), of any Tax Item arising after the Deconsolidation Date to a Pre-Deconsolidation Period shall be for the account of the Carryback Group (and in the event INRANGE Group is the Carryback Group, then upon receipt of the Income Tax refund or other Tax Benefit SPX shall pay to INRANGE the amount of such Income Tax refund or other Tax Benefit); provided, however, that if at the time of the use of the Carryback Tax Items of a member of the Carryback Group, a member of the SPX Group or the INRANGE Group, as the case may be (the "OTHER GROUP") possesses Carryback Tax Items which, but for the ordering rule set forth in (i) above, would have been available to be used (the "OTHER GROUP CARRYBACK") in lieu of the Carryback Group's Tax Items, then (but only to the extent of the Other Group Carryback) the Carryback -13- 17 Group shall not be entitled to payment of the amount of such Income Tax refund or Tax Benefit until the date on which a member of the Other Group claims the Other Group Carryback on a Tax Return. (iii) In the event the Carryback of Tax Items of a member of the SPX Group or the INRANGE Group, as the case may be, does not result in an Income Tax refund, due to an offsetting Income Tax adjustment to a member of the Other Group, then the Other Group shall promptly pay the amount of any decrease in Income Tax liability resulting from the Carryback claim, provided, however, that in the event the Other Group possesses Carryback Tax Items which, but for the ordering rules set forth in (i) above would have been available to be used in lieu of the Carryback Group's Tax Items, then (but only to the extent of the Other Group Carryback), the Other Group shall not be required to pay the amount of such decrease in Income Tax liability to the Carryback Group until the date on which a member of the Other Group claims the Other Group Carryback on a Tax Return. 4.3. ADJUSTMENT OF TAX ITEMS. In the event that the Carryback of Tax Items of the SPX Group or the INRANGE Group, as the case may be, or an Income Tax adjustment attributable to such Group under the terms of this Agreement, results in the disallowance or limitation of Tax Items claimed on the Tax Return as filed, the Carryback Group shall be responsible for any increase in Income Tax liability resulting from the disallowance or limitation of Income Tax attributes; provided, however, that in the event the disallowance or limitation of Income Tax attributes results in a Tax Benefit resulting from the use of such Income Tax attributes in another Tax Period, such Tax Benefit shall be deemed to be for the account of the Carryback Group for such purposes of this Agreement. 4.4. ADJUSTMENTS ON AUDIT. If, upon examination by any Tax Authority of any Tax Return including a member of the SPX Group or INRANGE Group for any Tax Period, any item of deduction, credit or expense is -14- 18 disallowed for which SPX is or may be liable for Income Taxes hereunder (or an item of income is required to be recognized on a Tax Return which was not reported on such Tax Return), in either such case resulting in a tax detriment suffered by the SPX Group, and such disallowance (or recognition) results in a Tax Benefit to the INRANGE Group (with respect to that Tax Period or another Tax Period), then INRANGE shall pay to SPX the amount of such Tax Benefit that is realized in the form of an actual reduction in Income Tax (which shall be computed by comparing the Income Tax which would have been owed by INRANGE but for the item giving rise to the Tax Benefit with the Income Tax owed by INRANGE taking such item into account); provided, however, that in no case will the amount that INRANGE is required to pay to SPX with respect to such Tax Benefit exceed the corresponding tax detriment to SPX (reduced by payments previously made by INRANGE to SPX with respect to such Tax Benefit). Any payment required to be made hereunder shall be made in accordance with Section 5.6. The provisions of this Section 4.4 shall apply mutatis mutandis where an item of deduction, credit or expense is disallowed for which INRANGE is or may be liable for Income Taxes hereunder (or any item of income is required to be recognized on a Tax Return which was not reported on such Tax Return), as they apply where the SPX Group suffers such a detriment. For avoidance of doubt, any payment required to be made by SPX to the INRANGE Group under this Section 4.4 shall, to the extent applicable, be deemed as an offset to amounts owing by INRANGE to SPX under Section 2.1 hereof. SECTION 5. TAX PAYMENTS AND INTERCOMPANY BILLINGS. 5.1. PAYMENT OF INCOME TAXES WITH RESPECT TO SPX CONSOLIDATED RETURNS. In the case of any Consolidated or Combined Income Tax Return - (a) Computation and Payment of Income Tax Due. At least ten business days prior to any Payment Date, SPX shall compute the amount of Income Tax required to be paid to the applicable Tax Authority (taking into account the requirements of Section 3.4 relating to -15- 19 consistent accounting practices) with respect to such Tax Return on such Payment Date and shall notify INRANGE in writing of the amount of Income Tax required to be paid on such Payment Date. SPX will pay such amount to the applicable Tax Authority on or before such Payment Date. (b) Computation and Payment of INRANGE Liability With Respect to Income Tax Due. Within 15 days following any Payment Date, INRANGE will pay to SPX the excess (if any) of (i) the amount of liability determined as of such Payment Date with respect to the applicable Tax Period allocable to INRANGE in a manner consistent with the provisions of Section 2, over (ii) the amount equal to the cumulative net payments with respect to such Tax Return prior to such Payment Date made by INRANGE or members of INRANGE Group. If the amount in clause (ii) above is greater than the amount in clause (i) above as of any Payment Date, then SPX shall pay such excess to INRANGE within 15 days following the Payment Date. (c) Interest on Intergroup Tax Allocation Payments. In the case of any payments to SPX required under paragraph (b) of this Section 5.1, INRANGE shall also pay to SPX an amount of interest computed at the Interest Rate on the amount of the payment required based on the number of days from the applicable Payment Date until the date of INRANGE's subsequent payment. In the case of any payments by SPX required under paragraph (b) of this Section 5.1, SPX shall also pay to INRANGE an amount of interest computed at the Interest Rate on the amount of the payment required based on the number of days from the applicable Payment Date until the date of SPX's subsequent payment of such amount to INRANGE. 5.2. PAYMENT OF INCOME TAX RELATED TO ADJUSTMENTS. -16- 20 (a) Adjustments Resulting in Underpayments. SPX shall pay to the applicable Tax Authority when due any additional Income Tax required to be paid as a result of any adjustment to the tax liability with respect to any Consolidated or Combined Income Tax Return. INRANGE shall pay to SPX an amount equal to the increase in the liability of INRANGE under Sections 2 and 4 as a result of any adjustment within 15 days from the date of receipt by INRANGE of a written notice and demand from SPX for payment of the amount due, describing in reasonable detail the particulars relating thereto, and, in the event any additional Income Tax was paid by SPX, evidence of payment and a statement detailing the Income Taxes paid. Any payments required under this Section 5.2(a) shall include interest computed at the Interest Rate based on the number of days from the date any additional Income Tax was paid by SPX to the date of the payment under this Section 5.2(a). (b) Adjustments Resulting in Overpayments. Within 15 days of receipt by SPX of any Tax Benefit or the reduction of the amounts owed by INRANGE to SPX under Sections 2 and 4 resulting from any adjustment to the tax liability with respect to any Consolidated or Combined Income Tax Return, SPX shall pay to INRANGE its share of any such Tax Benefit or the amount of such reduction, as determined in accordance with the principles of Sections 2 and 4. Any payments required under this Section 5.2(b) shall include interest computed at the Interest Rate based on the number of days from the date the Tax Benefit was received by SPX to the date of payment to INRANGE under this Section 5.2(b). 5.3. COMPENSATION FOR USE OF INRANGE CONSOLIDATED PERIOD TAX ITEMS. In the event SPX is required to pay INRANGE in accordance with Section 4.1, SPX shall pay INRANGE within 15 days from the due date (including any extensions) for the Tax Return filed with respect to such amount, including interest computed at the Interest Rate based on the number of days from such due date to the date SPX pays INRANGE. 5.4. PAYMENT OF REFUNDS AND OTHER TAX BENEFITS. -17- 21 (a) Except as otherwise provided in this Agreement, if a member of the SPX Group or the INRANGE Group, as the case may be, receives an Income Tax refund or other Tax Benefit with respect to Income Taxes for which a member of the other Group is liable hereunder, the Company receiving such Income Tax refund shall make a payment to the Company who is liable for such Income Taxes hereunder within 15 days following the receipt of the Income Tax refund in an amount equal to such Income Tax refund, plus interest on such amount computed at the Interest Rate based on the number of days from the date of receipt of the Income Tax refund to the date of payment under this Section 5.4. (b) In the event the SPX Group or the INRANGE Group, as the case may be, is reimbursed for its payment of an Income Tax liability of the other Group, the amount of such reimbursement shall be computed net of any Tax Benefit realized by the reimbursed Group as the result of payment of the other Group's Income Tax liability. 5.5. PAYMENT FOR CARRYBACKS. Each Company shall pay the other Company for Carrybacks in accordance with Section 4.2(c). Any such payment shall include interest at the Interest Rate based on the number of days from the date the Company is required to make the payment under Section 4.2(c) to the date the Company actually makes the payment. 5.6. PAYMENT FOR ADJUSTMENTS ON AUDIT. Any payment required under Section 4.4 shall be made within 15 days of the due date (including any extensions) of the Tax Return on which the Tax Benefit described in that section is claimed. Such payment shall include interest computed at the Interest Rate based on the number of days from such due date to the date the payment is made. 5.7. RIGHT TO OFFSET. Notwithstanding anything to the contrary contained herein, SPX or INRANGE, as applicable, may, in lieu of cash payment, offset any obligation owed to such Company by the -18- 22 other Company pursuant to this Agreement against any obligation owed by such Company to the other Company pursuant to this Agreement. SECTION 6. ASSISTANCE AND COOPERATION. 6.1. GENERAL. Each of the Companies shall cooperate (and cause their respective Affiliates to cooperate) with each other and with each other's agents, including accounting firms and legal counsel, regarding the application of all aspects of this Agreement in connection with Income Tax matters relating to the Companies and their Affiliates including (i) preparation and filing of Tax Returns, (ii) determining the liability for and amount of any Income Taxes due (including estimated Income Taxes) or the right to and amount of any refund of Income Taxes, (iii) examinations of Tax Returns, and (iv) any administrative or judicial proceeding in respect of Income Taxes assessed or proposed to be assessed. Such cooperation shall include (i) making all information and documents in their possession relating to the other Companies and their Affiliates available to such other Companies as provided in Section 7, (ii) the execution of any Tax Return which is required to be prepared and filed by one Company under this Agreement and which is required by law to be signed by another Company (or by its authorized representative), and (iii) providing notice to the other party of any pending or threatened Income Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware related to Income Taxes for which the other party is responsible. Each of the Companies shall also make available to each other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Companies or their respective Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Income Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Income Taxes. Any information or documents provided under this Section 6 shall be kept confidential by the Company receiving the -19- 23 information or documents, except as may otherwise be necessary in connection with the filing of Tax Returns or in connection with any administrative or judicial proceedings relating to Income Taxes. 6.2. TAX RETURN INFORMATION; CALCULATION OF AMOUNTS DUE. (a) Each Company will provide (and cause their respective Affiliates to provide) to each other Company information and documents relating to their respective Groups required by the other Companies to prepare Tax Returns. The Responsible Company shall determine a reasonable compliance schedule for such purpose in accordance with past practices. Any additional information or documents the Responsible Company requires to prepare such Tax Returns will be provided in accordance with past practices, if any, or as the Responsible Company reasonably requests and in sufficient time for the Responsible Company to timely file such Tax Returns. (b) SPX or INRANGE, as applicable, shall promptly provide (and cause their respective Affiliates to promptly provide) to the other Company upon such other Company's reasonable request all information and documents as such other Company deems reasonably necessary to compute the amount of any payment provided for under this Agreement. SECTION 7. TAX RECORDS. Each Company shall preserve and keep all Tax Records exclusively relating to the assets and activities of their respective Groups for Pre-Deconsolidation Tax Periods, and SPX shall preserve and keep all other Tax Records relating to Income Taxes of the SPX Group for Pre-Deconsolidation Tax Periods, for so long as the contents thereof may become material in the administration of any matter under the Code or other applicable Tax Law, but in any event until the later of (i) the expiration of any applicable statutes of limitation, as extended, and (ii) seven years after the filing of the Tax Returns to which such Tax Records relate. If, prior to the expiration of the applicable statute of limitation and such seven-year period, a Company -20- 24 reasonably determines that any Tax Records which it is required to preserve and keep under this Section 7 are no longer material in the administration of any matter under the Code or other applicable Tax Law, such Company may dispose of such records upon 90 days prior written notice to the other Company. Such notice shall include a list of the records to be disposed of describing in reasonable detail each file, book, or other record accumulation being disposed. The notified Company shall have the opportunity, at its cost and expense, to copy or remove, within such 90-day period, all or any part of such Tax Records. 7.2. ACCESS TO TAX RECORDS. The Companies shall, and shall cause their respective Affiliates to, make available to each other for inspection and copying during normal business hours upon reasonable notice all Tax Records in their possession to the extent reasonably requested by the other Company in connection with the preparation of Tax Returns, audits, litigation, or the resolution of items under this Agreement. SECTION 8. CONTROL OF TAX CONTESTS. Each Company shall have full responsibility and discretion in handling, settling or contesting any Tax Contest involving an Income Tax for which it is liable pursuant to Section 2 of this Agreement; provided, however, SPX shall have full responsibility and discretion in handling, settling or contesting any Tax Contest with respect to a Consolidated or Combined Income Tax Return of the SPX Group. SECTION 9. SURVIVAL OF OBLIGATIONS. The representations, warranties, covenants and agreements set forth in this Agreement shall be unconditional and absolute and shall remain in effect without limitation as to time. SECTION 10. TREATMENT OF PAYMENTS; TAX GROSS UP. 10.1. TREATMENT OF INDEMNITY AND TAX BENEFIT PAYMENTS. -21- 25 In the absence of any change in tax treatment under the Code or other applicable Tax Law, any Income Tax indemnity payments or Tax Benefit payments made by a Company under Section 5 shall be reported for Income Tax purposes by the payor and the recipient as distributions or capital contributions, as appropriate, occurring immediately before the Deconsolidation on the Deconsolidation Date, but only to the extent the payment does not relate to a Tax allocated to the payor in accordance with Treasury Regulation Section 1.1502-33(d) (or under corresponding principles of other applicable Tax Laws). 10.2. TAX GROSS UP. If notwithstanding the manner in which Income Tax indemnity payments and Tax Benefit payments were reported, there is an adjustment to the Income Tax liability of a Company as a result of its receipt of a payment pursuant to this Agreement, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes), shall equal the amount of the payment which the Company receiving such payment would otherwise be entitled to receive pursuant to this Agreement. 10.3. INTEREST UNDER THIS AGREEMENT. Anything herein to the contrary notwithstanding, to the extent one Company ("indemnitor") makes a payment of interest to another Company ("indemnitee") under this Agreement with respect to the period from the date that the indemnitee made a payment of Income Tax to a Tax Authority to the date that the indemnitor reimbursed the indemnitee for such Income Tax payment, or with respect to the period from the date that the indemnitor received a Tax Benefit to the date indemnitor paid the indemnitee with respect to such Tax Benefit, the interest payment shall be treated as interest expense to the indemnitor (deductible to the extent provided by law) and as interest income by the indemnitee (includible in income to the extent provided by law). The amount of the payment shall not be adjusted under Section 10.2 to -22- 26 take into account any associated Tax Benefit to the indemnitor or increase in Income Tax to the indemnitee. SECTION 12. DISAGREEMENTS. If after good faith negotiations the parties cannot agree on the application of this Agreement to any matter, then the matter will be referred to an accounting firm acceptable to each of the parties (the "ACCOUNTING FIRM"). The Accounting Firm shall furnish written notice to the parties of its resolution of any such disagreement as soon as practical, but in any event no later than 45 days after its acceptance of the matter for resolution. Any such resolution by the Accounting Firm will be conclusive and binding on all parties to this Agreement. In accordance with Section 14, each party shall pay its own fees and expenses (including the fees and expenses of its representatives) incurred in connection with the referral of the matter to the Accounting Firm. All fees and expenses of the Accounting Firm in connection with such referral shall be shared equally by the parties affected by the matter. SECTION 13. LATE PAYMENTS. Any amount owed by one party to another party under this Agreement which is not paid when due shall bear interest at the Interest Rate plus two percent, compounded on each March 31, June 30, September 30 and December 31, from the due date of the payment to the date paid. To the extent interest required to be paid under this Section 13 duplicates interest required to be paid under any other provision of this Agreement, interest shall be computed at the higher of the interest rate provided under this Section 13 or the interest rate provided under such other provision. SECTION 14. EXPENSES. Except as provided in Section 13, each Company and its Affiliates shall bear their own expenses incurred in connection with preparation of Tax Returns, Tax Contests, and other matters related to Income Taxes under the provisions of this Agreement. -23- 27 SECTION 15. EFFECT ON PRE-EXISTING LIABILITIES. This Agreement shall not effect the liabilities of any member of the SPX Group existing on or prior to the Initial Public Offering Closing Date under any tax sharing agreement, tax indemnification agreement, or other similar agreement. SECTION 16. GENERAL PROVISIONS. 16.1. NOTICES. All notices and other communications hereunder shall be in writing and shall be delivered in person, by telecopy, by express or overnight mail delivered by a nationally recognized air courier (delivery charges prepaid), or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties as follows: (a) If to SPX, to: SPX Corporation 700 Terrace Point Drive P.O. Box 3301 Muskegan, Michigan 49443 Attention: Christopher J. Kearney, Esq. (b) If to INRANGE, to: INRANGE Technologies Corporation 13000 Midlantic Drive Mt. Laurel, New Jersey 08054 Attention: Kenneth H. Koch, Esq. -24- 28 or to such other address as the party to whom notice is given may have previously furnished to the others in writing in the manner set forth above. Any notice or communication delivered in person shall be deemed effective on delivery or when delivery is refused. Any notice or communication sent by telecopy or by air courier shall be deemed effective on the first business day at the place at which such notice or communication is received following the day on which such notice or communication was sent. 16.2. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement. The Agreement may be delivered by facsimile transmission of a signed copy thereof. 16.3. BINDING EFFECT; ASSIGNMENT. This Agreement and all of the provisions hereof shall be binding upon the parties hereto and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Except with respect to a merger of either party, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by either party hereto without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed; provided, however, that SPX and INRANGE may assign their respective rights, interests, duties, liabilities and obligations under this Agreement to any of their respective subsidiaries, but such assignment shall not relieve SPX or INRANGE, as the assignee, of its obligations hereunder. 16.4. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. -25- 29 16.5. WAIVER. The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to enforce such term, but such waiver shall be effective only if it is in writing signed by the party against which such waiver is to be asserted. Unless otherwise expressly provided in this Agreement, no delay or omission on the part of any party in exercising any right or privilege under this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right or privilege under this Agreement operate as a waiver of any other right or privilege under this Agreement nor shall any single or partial exercise of any right or privilege preclude any other or further exercise thereof or the exercise of any other right or privilege under this Agreement. No failure by either party to take any action or assert any right or privilege hereunder shall be deemed to be a waiver of such right or privilege in the event of the continuation or repetition of the circumstances giving rise to such right unless expressly waived in writing by the party against whom the existence of such waiver is asserted. 16.6. AMENDMENT. This Agreement may not be amended or modified in any respect except by a written agreement signed by both of the parties hereto. 16.7. INTERPRETATION. The headings contained in this Agreement and in the table or contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. 16.8. EFFECTIVE TIME. This Agreement shall become effective upon the Initial Public Offering Closing Date. 16.9. GOVERNING LAW. -26- 30 This Agreement shall be governed by, and construed in accordance with, the domestic laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. -27- 31 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by the respective officers as of the date set forth above. SPX CORPORATION By: /s/ Christopher J. Kearney ___________________________ Name: Christopher J. Kearney Title: Vice President and General Counsel INRANGE TECHNOLOGIES CORPORATION By: /s/ Kenneth H. Koch _________________________ Name: Kenneth H. Koch Title: Vice President and General Counsel EX-10.2 6 y38692a5ex10-2.txt MANAGEMENT SERVICES AGREEMENT 1 Exhibit 10.2 MANAGEMENT SERVICES AGREEMENT This Management Services Agreement (this "Agreement") is made as of September 18, 2000 by and between SPX Corporation, a Delaware corporation ("SPX"), and Inrange Technologies Corporation, a Delaware corporation (the "Company"). Notwithstanding the execution date hereof, this Agreement shall become effective upon the date of the closing of the Initial Public Offering (as defined below). RECITALS WHEREAS, the Company is issuing shares of its Class B Common Stock to the public in an offering registered under the Securities Act of 1933, as amended; WHEREAS, SPX has heretofore directly or indirectly provided certain administrative, financial, management and other services to the Company; WHEREAS, on the terms and subject to the conditions set forth herein, the Company desires to retain SPX as an independent contractor to provide, directly or indirectly, certain of those services to the Company after the Initial Public Offering; and WHEREAS, on the terms and subject to the conditions set forth herein, SPX desires to provide, directly or indirectly, such services to the Company. ACCORDINGLY, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described: "Agreement" has the meaning ascribed thereto in the preamble hereto, as such agreement may be amended and supplemented from time to time in accordance with its terms. "Class A Common Stock" means the Company's Class A Common Stock, $.01 par value per share. "Class B Common Stock" means the Company's Class B Common Stock, $.01 par 2 value per share. "Initial Public Offering" means the initial public offering by the Company of shares of the Class B Common Stock as contemplated by a registration statement on Form S-1, as supplemented and amended from time to time. "Outsourced Service" has the meaning ascribed thereto in Section 2.03. "Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (and any department or agency thereof) or other entity. "Service Charges" has the meaning ascribed thereto in Section 3.01(c). "Services" has the meaning ascribed thereto in Section 2.01. "SPX Entities" means SPX and its Subsidiaries and "SPX Entity" shall mean any of the SPX Entities. "Subsidiary" means, as to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof; provided, however, that any reference in this Agreement to a Subsidiary or Subsidiaries of SPX shall not include the Company. Section 1.02. Internal References. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement and references to the parties shall mean the parties to this Agreement. ARTICLE II PURCHASE AND SALE OF SERVICES Section 2.01. Purchase And Sale Of Services. On the terms and subject to the conditions set forth in this Agreement and in consideration of the Service Charges described below, SPX agrees to provide to the Company, and the Company agrees to purchase from SPX, the services described in Schedule I (the "Services"). At its option, SPX may cause any Service it is required to provide hereunder to be provided by any SPX Entity. Unless otherwise specifically agreed by SPX and the Company, the Services to be provided by SPX hereunder shall be substantially similar in scope, quality and nature to those provided to the Company prior to the Initial Public Offering and shall be performed - 2 - 3 by the same personnel or other personnel who perform the same or similar services; provided, however, that the selection of personnel to perform the Services shall be at the sole discretion of SPX; and provided, further, that, except as expressly provided in this Agreement, SPX shall not be required to materially increase the volume, scope or quality of the Services provided to the Company beyond that which has been provided to the Company prior to the Initial Public Offering. Section 2.02. Additional Services. In addition to the Services to be provided by SPX pursuant to Section 2.01, if requested by the Company, and to the extent that SPX and the Company may mutually agree in writing, SPX shall provide additional services (including services not provided by SPX to the Company prior to the Initial Public Offering) to the Company. The scope of any such services, as well as the term, costs and other terms and conditions applicable to such services, shall be as mutually agreed by SPX and the Company. Nothing herein shall create any obligation on the part of SPX to provide any additional services. Section 2.03. Services Performed By Third Parties. At its option, SPX may cause any Service it is required to provide hereunder to be provided by any third party that is providing, or may from time to time provide, the same or similar services for any SPX Entity (an "Outsourced Service"). SPX will not be responsible for the performance of any Services it causes to be so provided as long as SPX reasonably selects the provider of such Services. SPX will assign its rights to enforce any claims against such provider to the Company or enforce such claims itself. Section 2.04. Impracticability And Force Majeure. SPX shall not be required to provide any Service to the extent the performance of such Service becomes impracticable as a result of a cause or causes outside the control of SPX or to the extent the provision of such Service would require SPX to violate any applicable laws, rules or regulations or become subject to any additional rules or regulations. SPX shall have no obligation to perform or cause the Services to be performed if its failure to do so is caused by or results from any act of God, governmental action, natural disaster, strike, failure of essential equipment or any other cause or circumstance beyond the control of SPX or, if applicable, third party providers of services to SPX (an "Event of Force Majeure"). SPX will notify the Company of any Event of Force Majeure affecting its Services to the Company. SPX agrees that following any Event of Force Majeure and until such Services are restored, the Company shall have no obligation to pay for the Services affected thereby. SPX agrees to use its commercially reasonable best efforts to restore such Services following any Event of Force Majeure. ARTICLE III SERVICE CHARGES - 3 - 4 Section 3.01. Service Charges. (a) The charge for each Service provided to the Company hereunder directly by SPX or any SPX Entity shall be equal to all fully loaded costs incurred by SPX or any SPX Entity in providing such Service, as allocated by SPX to other subsidiaries of SPX. Such costs shall include, but are not limited to, an allocation, as reasonably determined by SPX in good faith, of overhead costs, personnel costs (e.g., compensation and fringe benefits ), travel, office costs, and incentive compensation costs associated with functions performing such Services consistent with SPX's fully loaded cost accounting practices. (b) The charge for each Outsourced Service provided to the Company hereunder shall be equal to all costs incurred by SPX or any SPX Entity in providing such Outsourced Service, including, without limitation, any third-party costs and expenses incurred by SPX or any SPX Entity on behalf of the Company. If SPX incurs third-party costs or expenses on behalf of the Company as well as any SPX Entity, SPX will allocate any such costs or expenses in good faith between the Company and the various SPX Entities on behalf of which such costs or expenses were incurred as SPX shall determine in the exercise of its reasonable judgment. SPX shall make copies of such books and records available to the Company upon request and with reasonable notice. (c) The parties intend that the Service charges referred to in paragraphs (a) and (b) above (collectively, the "Service Charges") will allow SPX and any SPX Entity to recover the fully allocated costs of providing the Services and Outsourced Services hereunder plus all out-of-pocket, third-party costs, charges and expenses, but without any profit to SPX or any SPX Entity. Section 3.02. Invoicing And Settlement Of Costs. (a) SPX shall invoice the Company for all Service Charges for each calendar month within thirty (30) days following the end of such month, provided that any failure by SPX to provide an invoice within such time period shall not relieve the Company of its obligation to pay an invoice received after such date. All invoices shall reflect in reasonable detail a description of the Service performed. (b) Subject to Section 3.02(c) below, the Company shall pay within thirty (30) days following its receipt of any invoice from SPX pursuant to paragraph (a), without set-off, all amounts invoiced by SPX during the preceding calendar month. If the Company fails to pay any monthly payment within thirty (30) days following its receipt of any invoice from SPX pursuant to paragraph (a), the Company shall - 4 - 5 pay, in addition to the amount indicated in such invoice, interest on such amount at the greater of (x) the prime interest rate as published in the Wall Street Journal plus 1% per annum or (y) the highest rate of interest SPX is paying under its largest financing arrangement in effect at such time, in each case compounded monthly for the period such amount remains unpaid. (c) In the event of a dispute as to the propriety of the amount invoiced, the Company shall pay all undisputed amounts, but shall be entitled to withhold payment of any amount in dispute (and shall not be obligated to pay interest on the amount so withheld) and shall endeavor to notify SPX within ten (10) business days from receipt of any disputed invoice of the disputed amount and the reasons each such charge is disputed by the Company, provided that the failure to so notify SPX within such time period shall not prevent the Company from disputing such invoice. SPX shall provide to the Company, or shall cause its Subsidiaries to so provide, records relating to the disputed amount so as to enable the parties to resolve the dispute. The parties shall use reasonable efforts to resolve any such dispute promptly. (d) Notwithstanding the foregoing, any invoice or payment not disputed in writing by either party within thirty (30) days of such invoice or payment, as the case may be, shall be considered final and no longer subject to adjustment. ARTICLE IV STANDARDS OF CARE; LIMITATION OF LIABILITY Section 4.01. Standards Of Care. SPX shall provide or cause each SPX Entity providing services to provide each of the Services to the Company with similar care as it exercises in the conduct of its own activities. Section 4.02. Sole Remedy; No Warranties. No SPX Entity shall be liable to the Company for any claims, damages or expenses whatsoever relating to the Services provided pursuant to this Agreement, except for such entity's willful misconduct or gross negligence, and, in the case of such willful misconduct or gross negligence, the sole and exclusive remedy of the Company shall be to require reperformance of the Services or to terminate this Agreement as to one or more Services as provided in Section 5.01(c). The parties expressly agree that no warranty shall be implied under this Agreement, whether warranties of utility or fitness for any particular purpose or of merchantability or of any other type and that no warranties of any sort are made herein. ARTICLE V TERM AND TERMINATION - 5 - 6 Section 5.01. Term. (a) This Agreement shall commence on the date of the closing of the Initial Public Offering, and shall automatically terminate on the date that SPX owns shares of common stock of the Company representing less than 50% of the aggregate amount of the outstanding shares of Class A Common Stock and Class B Common Stock, such termination to be effective upon the date that is the later of (1) the end of the fiscal year in which such event occurs and (2) six months from the date such event occurs. (b) The Company may terminate this Agreement with respect to any one or more of the Services effective upon that date that is the later of (1) the end of the fiscal year in which the notice of termination is given and (2) six months from the date notice of termination is given. (c) Either party may terminate this Agreement with respect to any one or more of the Services if (i) the other party shall have failed to perform any of its material obligations under this Agreement relating to any such Service or Services, (ii) the aggrieved party has notified the other party in writing of such failure, and (iii) such failure shall have continued for a period of 30 days after receipt by the other party of notice of such failure. Section 5.02. Effect Of Termination. Other than as required by law, upon the termination of any Service pursuant to Section 5.01, SPX will have no further obligation to provide the terminated Service (or any Service, in the case of termination of this Agreement) and the Company will have no obligation to pay any fees relating to such Service or make any other payments hereunder; provided that notwithstanding such termination, (i) the Company shall remain liable to SPX for fees owed and payable in respect of any Service provided prior to the effective date of the termination and (ii) the provisions of Articles III, IV, V and VI shall survive any such termination. ARTICLE VI MISCELLANEOUS Section 6.01. The Company as Sole Beneficiary. The Company acknowledges that the Services shall be provided only with respect to the business of the Company and its Subsidiaries as currently operated and as currently projected to be operated or as mutually agreed by the parties hereto. The Company represents and agrees that the Company will use the Services only in accordance with all applicable federal, state and local laws and regulations, and in accordance with past practices. SPX reserves the right to take all actions, including termination of any particular Service, that SPX reasonably believes to be necessary to assure compliance with applicable laws and regulations and - 6 - 7 such actions will not constitute a breach of this Agreement. SPX will notify the Company promptly of any decision to terminate such Services and the reasons for any such termination of such Services. Section 6.02. Entire Agreement. This Agreement (including the Schedule constituting a part of this Agreement) and any other writing signed by the parties that specifically references this Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. Section 6.03. Information. Subject to applicable law and privileges, each party hereto covenants and agrees to provide the other party with all information regarding itself and transactions under this Agreement that the other party reasonably believes are required to perform its obligations under this Agreement and to comply with all applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, securities laws and regulations. Section 6.04. Confidentiality. Each of SPX and the Company agree to keep confidential and not disclose, and shall cause their respective subsidiaries and affiliates to keep confidential and not disclose, to any party or use for any purpose (other than the performance of this Agreement), any proprietary or other confidential information of the other party which is received pursuant to this Agreement ("Confidential Information"); provided, however, that the parties acknowledge that the Company will file a form of this Agreement as an exhibit to the registration statement relating to the Initial Public Offering. For purposes of this Agreement, Confidential Information of a party does not include, and a party and a party's Subsidiaries and affiliates will have no obligations under this provision with respect to, any information of the other party or any Subsidiary or affiliate of the other party (the other party and Subsidiaries and affiliates of the other party being referred to as the "receiving party") which: (i) is already known to the receiving party from a source other than the disclosing party as evidenced by competent proof thereof; (ii) is or becomes publicly known through no wrongful act of the receiving party (in which event the receiving party's obligations under this Agreement in respect thereto shall terminate on the date such information enters the public domain); (iii) is rightfully received by the receiving party from a third party without violation of any obligations of confidentiality owed by the third party to the disclosing party; - 7 - 8 (iv) is disclosed by the disclosing party to a third party without restrictions on the third party's right to use or disclose such information; (v) is independently developed by employees or consultants of the receiving party without use of or reference to the disclosing party's Confidential Information; or (vi) is approved for release by written authorization of the disclosing party. Section 6.05. Protective Arrangements. In the event that any party hereto (or any of its Subsidiaries) either determines on the advice of its counsel that it is required to disclose any information pursuant to applicable law (including requirements of the Securities and Exchange Commission) or receives any demand under lawful process or from any governmental department, commission, board, bureau, agency or official to disclose or provide information of any other party hereto (or any of its Subsidiaries) that is subject to the confidentiality provisions hereof, such party shall notify the other party prior to disclosing or providing such information and shall cooperate at the expense of the requesting party in seeking any reasonable protective arrangements requested by such other party. Subject to the foregoing, the party that received such request may thereafter disclose or provide information to the extent required by such law (including requirements of the Securities and Exchange Commission) (as so advised by counsel) or by lawful process or such governmental department, commission, board, bureau, agency or official. Section 6.06. Notices. Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing will be duly given upon delivery, if delivered by hand, facsimile transmission, intercompany mail, or mail, to the following addresses: If to SPX: SPX Corporation 700 Terrace Point Drive P.O. Box 3301 Muskegon, Michigan 49443 Attn:Christopher J. Kearney, Esq. If to the Company: Inrange Technologies Corporation 13000 Midlantic Drive Mt. Laurel, New Jersey 08054 - 8 - 9 Attn:Kenneth H. Koch, Esq. or to such other addresses or telecopy numbers as may be specified by like notice to the other parties. Section 6.07. Governing Law. This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Delaware. Section 6.08. Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each party shall be construed and enforced accordingly. Section 6.09. Amendment. This Agreement may only be amended by a written agreement executed by both parties hereto. Section 6.10. Counterparts. This Agreement may be executed in separate counterparts. Section 6.11. Arbitration. Any controversy or claim arising hereunder that cannot be resolved by the parties themselves, shall be settled by arbitration in Muskegon, Michigan or such other location as the parties may mutually agree, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Any award rendered thereon shall be in writing and shall be final and binding on the parties and judgment may be entered thereon in any court of competent jurisdiction. Each party shall bear its own costs and expenses in connection with the arbitration and the costs and expenses of the arbitrators shall be borne as determined by the arbitrator. - 9 - 10 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers or agents as of the day and year first written above. SPX CORPORATION By: /s/ Christopher J. Kearney __________________________ Name: Christopher J. Kearney Title: Vice President and General Counsel INRANGE TECHNOLOGIES CORPORATION By: /s/ Kenneth H. Koch _______________________ Name: Kenneth H. Koch Title: Vice President and General Counsel - 10 - EX-10.3 7 y38692a5ex10-3.txt REGISTRATION RIGHTS AGREEMENT 1 Exhibit 10.3 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made as of September 18, 2000, by and between Inrange Technologies Corporation, a Delaware corporation (the "Company") and General Signal Holdings Company, a Delaware corporation ("SPX"). Notwithstanding the execution date hereof, this Agreement shall become effective upon the date of the closing of the Initial Public Offering (as defined below). WHEREAS, the Company desires to become a public company in order to access the public capital markets, facilitate making acquisitions, and attract employees; WHEREAS, in order to become a public company, the Company will effect an initial public offering of Class B Common Stock, after which the Company's parent, SPX, will own 100% of the issued and outstanding Class A Common Stock, representing 90.8% of the issued and outstanding Common Stock; and WHEREAS, as a condition to its agreement to effect the IPO, SPX requires that the Company grant it registration rights with respect to its shares of Common Stock. ACCORDINGLY, the parties hereto agree as follows: 1. Definitions. As used herein, unless the context otherwise requires, the following terms have the following respective meanings: "Board" shall mean the Board of Directors of the Company. "Certificate of Incorporation" means the Amended and Restated Certificate of Incorporation of the Company, as it may be amended or restated hereafter from time to time. "Commission" means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Class A Common Stock" means the Class A Common Stock, par value $0.01 per share of the Company. "Class B Common Stock" means the Class B Common Stock, par value $0.01 per share of the Company. "Common Stock" means the Class A Common Stock and the Class B Common Stock, now or hereafter authorized to be issued, and any and all securities of any kind whatsoever of the Company issued or issuable in respect of such Common Stock which may be issued on or after the date hereof in respect of, in exchange for, or upon 2 conversion of shares of Common Stock pursuant to a merger, consolidation, stock split, stock dividend, recapitalization of the Company or otherwise. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Exchange Act shall include a reference to the comparable section, if any, of any such similar Federal statute. "Initial Public Offering" means the initial public offering by the Company of shares of Class B Common Stock as contemplated by a registration statement on Form S-1, as supplemented and amended from time to time. "Initiating Holder" means SPX in its capacity as the Holder which initiates a request for a Demand Registration pursuant to Section 2 or a registration pursuant to Section 4; provided, however, that if SPX shall have transferred any of its Registrable Securities, the "Initiating Holder" shall mean, in the foregoing capacity, either (1) SPX or (2) Holders who in the aggregate are Holders of greater than 50% of the Registrable Securities. "Holder" means any Person holding Registrable Securities. "Law" means any federal, state, local or foreign law, statute, rule or regulation. "Litigation" means any action, suit, proceeding, investigation, inquiry or audit. "Person" means a corporation, an association, a partnership, an organization, a business, a trust, an individual, or any other entity or organization, including a government or political subdivision or an instrumentality or agency thereof. "Registrable Securities" means (i) any shares of Common Stock owned by SPX or any of its affiliates, whether prior or subsequent to the effectiveness of this Agreement and (ii) any Common Stock issued with respect to the Common Stock referred to in clause (i) by way of a stock dividend, stock split or reverse stock split or in connection with a combination of shares, recapitalization, merger, consolidation or otherwise. For purposes of this Agreement, a person will be deemed to be a Holder of Registrable Securities whenever such person has the right to acquire directly or indirectly such Registrable Securities (upon conversion or exercise of any securities or otherwise but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such person shall not be required to convert or exercise such security (or otherwise acquire such Registrable Securities) to participate in - 2 - 3 any registered offering hereunder prior to the closing of such offering. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities (a) when a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (b) when such securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration of them under the Securities Act, or (c) when such securities shall have been sold to the public as permitted by, and in compliance with Rule 144 of the Securities Act. Any certificate evidencing the Registrable Securities shall bear a legend stating that the securities have not been registered under the Securities Act and setting forth or referring to the restrictions on transferability and sale of the securities. "Registration Expenses" means all expenses incident to the registration and disposition of the Registrable Securities pursuant to Section 2, Section 3 or Section 4 hereof, including, without limitation, all registration, filing and applicable national securities exchange or NASDAQ (as defined below) fees, all fees and expenses of complying with state securities or blue sky Laws (including fees and disbursements of counsel to the underwriters or the Initiating Holder in connection with "blue sky" qualification of the Registrable Securities and determination of their eligibility for investment under the Laws of the various jurisdictions), all word processing, duplicating and printing expenses, all messenger and delivery expenses, the transportation and other expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Registrable Securities, the fees and disbursements of counsel for the Company and of any independent public accountants who have audited or reviewed financial statements included in the registration statement, including the expenses of "cold comfort" letters or any special audits required by, or incident to, such registration, all fees and disbursements of underwriters (other than underwriting discounts and commissions) and the fees and expenses of counsel to the Initiating Holder (the "Holder's Counsel"); provided, however, that Selling Expenses are excluded from the definition of Registration Expenses. "Securities Act" means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. References to a particular section of the Securities Act shall include a reference to the comparable section, if any, of any such similar Federal statute. "Selling Expenses" means all underwriting discounts, selling commissions and transfer taxes applicable to the securities registered by the Holders. "Transfer" means, as to any shares of Common Stock, to sell or in any other way directly or indirectly transfer, assign, pledge, encumber or otherwise dispose of, and - 3 - 4 the terms "a Transfer," "Transferee" and "Transferred" shall have meanings correlative to the foregoing. 2. Requested Registration. (a) Request for Registration. Any Initiating Holder may at any time following the Initial Public Offering request the Company to effect, and the Company shall be required to use its best efforts to effect, a registration under the Securities Act of all, or such portion set forth in the request, of the Initiating Holder's Registrable Securities pursuant to this Section 2(a) (each, together with a request made pursuant to Section 4(a), a "Demand Registration"). In the event that the Company shall receive from an Initiating Holder a written request that the Company effect a Demand Registration with respect to such Initiating Holder's Registrable Securities, the Company shall: (i) promptly, and in any event within 10 days after receipt of such request, give written notice of the proposed Demand Registration to all other Holders; and (ii) promptly use its best efforts to effect such Demand Registration (including, without limitation, appropriate qualification under applicable blue sky or other state securities Laws and appropriate compliance with applicable regulations under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate the sale and distribution of the Registrable Securities as are specified in such request, together with the Registrable Securities of any Holders joining in such request as are specified in one or more written requests received by the Company no later than 15 days prior to the effective date of the registration statement; provided, however, that the Company shall not be obligated to take any action to effect any such Demand Registration pursuant to this Section 2: (A) During the period beginning on the date a registration statement is filed by the Company to effect a Demand Registration and ending on the earlier of (x) the date 90 days immediately following the effective date of such registration statement and (y) the date such registration statement is withdrawn; (B) During the 90-day period following the receipt by the Initiating Holder of a certificate signed by the President of the Company stating that the Board has determined in good faith that effecting such Demand Registration would be materially detrimental to the Company; provided, however, that, the Company will use its best efforts to limit the duration of such period to the extent practicable; and provided, further that the requested registration will not count for purpose of the requests for Demand Registrations to which the Holders are entitled under this Agreement; and - 4 - 5 provided, further, that the Company may exercise its rights under this Section 2(a)(ii)(B) or under Section 4(b)(ii) collectively only one time in any twelve-month period; (C) After the Company has effected four registrations pursuant to this Section 2(a), all of which registrations have become effective in accordance with, and otherwise met the requirements for Demand Registrations set forth in, Section 2(b); or (D) Unless the amount of Registrable Securities which has an anticipated aggregate offering price of at least $5,000,000 (provided that if such Demand Registration covers the balance of the Registrable Securities owned by the Initiating Holder, then this clause (D) shall not be applicable). Subject to the foregoing clauses (A) through (D), the Company shall file a registration statement covering the Registrable Securities requested to be registered as soon as practicable after receipt of the request or requests of an Initiating Holder. No securities other than Registrable Securities shall be included among the securities covered by such registration unless the holder or holders of a majority of the Registrable Securities shall have consented to the inclusion therein of such other securities. (b) Effective Registration Statement. A registration shall not constitute a Demand Registration (i) until it has become effective and remains continuously effective for a period of not less than 180 days or such shorter period which will terminate when all Registrable Securities covered by such registration statement have been sold (but not before the expiration of the period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable), (ii) if, after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to the Holders whose securities are covered by such registration statement and has not thereafter become effective, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived. (c) Underwriting. If the Initiating Holder so elects, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering with underwriters selected by the Initiating Holder, and the Company shall so advise the Holders (if then known, as part of the notice given pursuant to Section 2(a)(i)). In such event, the right of any other Holder to registration pursuant to this Section 2 shall be conditioned upon such Holder's participation in the underwriting arrangements required by this Section 2 prior to the earlier of (x) the printing of any preliminary prospectus relating to such registration or (y) the date requested by the Company, and the inclusion of such person's Registrable Securities in the underwriting to the extent requested shall be limited to the extent provided herein. - 5 - 6 The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Initiating Holder. Notwithstanding any other provision of this Section 2, if at any time prior to the execution of the underwriting agreement, the managing underwriter advises the Initiating Holder in writing that in order to sell the Registrable Securities requested to be included in the registration statement in the underwritten offering within a price range acceptable to the Initiating Holder there must be a limitation on the number of shares to be underwritten, then the Company shall so advise all Holders, and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be allocated among all Holders thereof in proportion, as nearly as practicable, to the respective amounts of Registrable Securities owned by such Holders (unless otherwise agreed to by the Holders). No Registrable Securities excluded from the underwriting by reason of the underwriter's limitation shall be included in such registration. If, as a result of the proration provisions set forth in the previous sentence, any Holder is not entitled to include all Registrable Securities previously requested to be included in such registration, such Holder may elect to withdraw its request to include Registrable Securities in such registration or may reduce the number requested to be included; provided that such request must be made in writing prior to the earlier of (x) the printing of any preliminary prospectus relating to such registration or (y) the date requested by the Company. If the managing underwriter advises the Initiating Holder that the Registrable Securities covered by the registration statement cannot be sold in an orderly manner in the underwritten offering within a price range acceptable to the Initiating Holder, then the Initiating Holder shall have the right to notify the Company in writing that it has determined that the registration statement be abandoned or withdrawn, in which event the Company shall abandon or withdraw such registration statement and such registration statement shall not count for purpose of the requests for Demand Registrations to which the Holders are entitled under this Agreement. If any Holder disapproves of the terms of the underwriting, such person may elect to withdraw therefrom, by written notice to the Company, the managing underwriter and the Initiating Holder prior to the earlier of (x) the printing of any preliminary prospectus relating to such registration and (y) the date requested by the Company, and the Registrable Securities so withdrawn shall also be withdrawn from registration. 3. Company Registration. (a) Notice of Registration. If at any time or from time to time following the Initial Public Offering the Company shall determine to register any of its securities, either for its own account or the account of a security holder or holders that has registration rights granted in compliance with Section 5, other than (1) a registration on - 6 - 7 Form S-8 (or successor form) relating solely to employee benefit plans or (2) a registration on Form S-4 (or successor form) relating solely to a transaction pursuant to Rule 145 under the Securities Act, the Company shall: (i) promptly give to each Holder written notice thereof at least 10 days before the anticipated filing date; and (ii) include in such registration (and effect any related qualification under blue sky Laws and other compliance with applicable Law), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within 20 days after receipt of such written notice from the Company, by any Holder. (b) Underwriting. If the registration of which the Company gives notice is for an underwritten public offering registered under the Securities Act, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 3(a)(i). In such event, the right of any Holder to register securities pursuant to this Section 3 shall be conditioned upon such Holder's participation in such underwriting prior to the earlier of (x) the printing of any preliminary prospectus relating to such registration and (y) the date requested by the Company, and the inclusion of such person's Registrable Securities in the underwriting to the extent requested shall be limited to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and any other holders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company. Notwithstanding any other provision of this Section 3, if at any time prior to the execution of the underwriting agreement, the managing underwriter advises the Company in writing that in order to sell the Registrable Securities requested to be included in the registration statement in the underwritten offering within a price range acceptable to the Company there must be a limitation on the number of shares to be underwritten, then the Company shall so advise all Holders who have requested to include securities in such underwriting and the Company shall include in such registration, (i) first, all of the securities the Company proposes to sell for its own account, (ii) thereafter, the Registrable Securities requested to be included in such registration pursuant to Section 3(a), allocated, if less can be included than requested, pro rata among the Holders based on the number of Registrable Securities owned by such Holder, and (iii) third (but only if all of the Registrable Securities requested to be included by each Holder thereof in the registration are included), the other securities requested to be included in such registration, allocated pro rata based on the number of securities requested to be included in such registration. If any Holder or other holder disapproves of the terms of any such underwriting, it may elect to withdraw therefrom by written notice to the Company and the managing underwriter prior to the earlier of (x) the printing of any preliminary prospectus relating to such - 7 - 8 registration and (y) the date requested by the Company, and the Registrable Securities so withdrawn shall also be withdrawn from registration. No registration effected under this Section 3 shall relieve the Company of its obligation to effect any registration upon request under Section 2 or Section 4. (c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. 4. Registration on Form S-3. (a) If following the Initial Public Offering an Initiating Holder shall request that the Company file a registration statement on Form S-3 (or any successor form) for a public offering of Registrable Securities, and the Company is a registrant entitled to use Form S-3 (or any successor form) to register the Registrable Securities for such an offering, the Company shall use its best efforts to cause such Registrable Securities to be registered for the offering on such form and to cause such Registrable Securities to be qualified in such jurisdictions as the Initiating Holder shall reasonably request; provided, however, that the Company shall not be required to effect more than two registrations requested by Holders in any 12-month period. The provisions of Section 2(c) and 3(a) shall be applicable to each registration initiated under this Section 4. A registration effected pursuant to this Section 4 shall not be counted as a Demand Registration for purposes of Section 2. The Company agrees to use its best efforts to comply with the requirements of Form S-3 at all times. (b) Notwithstanding the foregoing, the Company shall not be obligated to take any action pursuant to this Section 4: (i) During the period beginning on the date a registration statement is filed by the Company to effect a Demand Registration and ending on the earlier of (x) the date 90 days immediately following the effective date of such registration statement and (y) the date such registration statement is withdrawn, or (ii) During the 90-day period following the receipt by the Initiating Holder of a certificate signed by the President of the Company stating that the Board has determined in good faith that effecting such Demand Registration would be materially detrimental to the Company; provided, however, that, the Company will use its best efforts to limit the duration of such period to the extent practicable; and provided, further that the requested registration will not count for purpose of the requests for Demand Registrations to which the Holders are entitled under this Agreement; and provided, further, that the Company may exercise its rights under this Section 4(b)(ii) or under Section 2(a)(ii)(B) collectively only one time in any twelve-month period. - 8 - 9 5. Limitations on Subsequent Registration Rights. The Company hereby represents and warrants that there are no agreements currently in effect, and there will be no agreements in effect at the time of the Initial Public Offering, other than this Agreement, granting any holder or prospective holder of any securities of the Company registration rights with respect to any securities of the Company. From and after the Initial Public Offering, the Company shall not enter into any agreement granting any holder or prospective holder of any securities of the Company registration rights with respect to any securities of the Company unless approved in writing by a majority of the Holders. 6. Expenses of Registration. All Registration Expenses for any registration made pursuant to this Agreement shall be borne by the Company. Unless otherwise agreed to among the Holders, all Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the Holders of such securities pro rata based on the proportion that the number of shares registered by each Holder bears to the total number of shares included in such registration. 7. Registration Procedures. Whenever any Holders of Registrable Securities shall have requested that any Registrable Securities be registered pursuant to this Agreement, the Company shall use its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method of disposition thereof, and in connection therewith, at its expense, the Company shall, as expeditiously as possible: (a) Prepare and file with the Commission, as promptly as practicable, a registration statement with respect to such securities and use its best efforts to cause such registration statement to become and remain continuously effective for at least 180 days or until the distribution described in the registration statement has been completed (but not before the expiration of the period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if applicable); provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company shall furnish copies thereof to the Holder's Counsel and, in an underwritten offering, to counsel for the underwriters a reasonable period of time prior thereto and reasonably consider the comments of such counsel. The Company shall not be deemed to have used its best efforts to cause the registration statement to remain effective during the applicable period if it voluntarily takes any action (other than an action required under applicable Laws) that would result in the Holders participating in such registration not being able to dispose of the Registrable Securities during their respective contemplated periods of distribution in accordance with the contemplated methods of disposition. A registration pursuant to Section 2 or Section 4 shall be effected pursuant to Rule 415 (or any similar provision then in force) under the Securities Act if the manner of distribution contemplated by the - 9 - 10 Holders participating in such registration shall include an offering on a delayed or continuous basis. (b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement. (c) As soon as reasonably possible, furnish to the Holders participating in such registration and to any underwriters of the securities being registered such number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such Holder or underwriter may reasonably request in order to facilitate the public offering of such securities. The Company consents to the use by each Holder participating in such registration of each prospectus and each amendment thereof and supplement thereto in connection with the distribution, in accordance with this Agreement, of the Registrable Securities owned by the Holder. The Company shall furnish to each Holder participating in such registration drafts of the registration statement and the prospectus and each amendment thereof or supplement thereto for its timely review prior to the filing thereof with the Commission. If any registration statement refers to any Holder participating in such registration by name or otherwise as the holder of any securities of the Company but such reference is not required by the Securities Act, then the Holder shall have the right to require the deletion of such reference. If any registration statement refers to any Holder by name or otherwise as the holder of any securities of the Company and if, in its good faith judgment, such Holder is or might be deemed to be a controlling person of the Company, such Holder will have the right to require the insertion therein of language, in form and substance reasonably satisfactory to such Holder and presented to the Company in writing, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the Company's securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Company. (d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky Laws of such jurisdictions as shall be reasonably requested by the Holders participating in such registration and to continue such registration or qualification in effect for so long as such registration statement remains in effect, and do any and all other acts and things which may be reasonably necessary or advisable to enable any such Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any - 10 - 11 such states or jurisdictions unless the Company is already qualified to do business or subject to service in such jurisdiction and except as may be required by the Securities Act. (e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement that is customary for the managing underwriter, reasonably satisfactory in form and substance to the Initiating Holder, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement, provided that such underwriting agreement shall not provide for indemnification or contribution obligations on the part of the Holders greater than the obligations set forth in Section 8. (f) Promptly notify each Holder participating in such registration at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the discovery or happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, as promptly as practicable thereafter, prepare and file with the Commission an amendment or supplement to the registration statement or the prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company shall further advise each Holder participating in such registration in writing, promptly after the occurrence of any of the following, (i) of the filing of the registration statement or any prospectus, or any amendment thereof or supplement thereto, with the Commission, (ii) the effectiveness of the registration statement and any post-effective amendment thereto, (iii) the receipt by the Company of any communication from the Commission with respect to the registration statement or the prospectus, or any amendment thereof or supplement thereto, including, without limitation, any stop order suspending the effectiveness thereof, any comments with respect thereto and any requests for amendments or supplements, and (iv) the receipt by the Company of any notification with respect to the suspension of the qualification of Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company shall deliver promptly to the Holder's Counsel and to each underwriter, if any, participating in the offering of the Registrable Securities, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to (and allow the Holder's Counsel and any underwriters counsel to participate in) discussions with the Commission or its staff with respect to such registration statement. - 11 - 12 (g) From and after the date of any registration pursuant to Section 2, Section 3 or Section 4, use its best efforts to cause the Registrable Securities being registered to be listed on a national securities exchange or to be included in the NASDAQ/National Market System or the NASDAQ/Small Cap Market, if the listing or inclusion of the Common Stock is permitted under the rules of such national securities exchange or the NASD, as the case may be. (h) In the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Common Stock included in such registration statement for sale in any jurisdiction, use its best efforts promptly to obtain the withdrawal of such order. (i) Deliver to the Holders participating in such registration and, in the case of an underwritten public offering, to each underwriter and to each Holders of Registrable Securities being sold in the registration (A) a comfort letter from independent public accountants covering the financial statements included in the registration and covering such matters of the type customarily covered by cold comfort letters as the Initiating Holder reasonably requests, and (B) an opinion of the Company's and any other counsel reasonably requested by the Initiating Holder in customary form and covering such matters of the type customarily covered by opinions of counsel as the Initiating Holder reasonably requests. (j) Make available to the Holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months beginning with the first full calendar month after the effective date of such registration statement, which earnings statement will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder, and promptly furnish to each seller of Registrable Securities a copy of any amendment or supplement to such registration statement or prospectus. (k) Use its best efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such other federal or state governmental agencies or authorities as may be necessary in the opinion of counsel to the Company or the Holder's Counsel to consummate the disposition of such Registrable Securities. (l) Make available its employees and personnel and otherwise provide reasonable assistance to the underwriters (including by participating in meetings, drafting sessions, due diligence sessions and customary road shows, including electronic road shows and similar methods of marketing the Registrable Securities electronically) in their marketing of Registrable Securities. 8. Indemnification; Contribution. - 12 - 13 (a) The Company will indemnify, to the fullest extent permitted by Law, each Holder, each of its officers, directors, employees, partners (and the partners thereof, collectively, "Partners"), agents, affiliates and advisors and each person controlling such Holder within the meaning of Section 15 of the Securities Act, and each underwriter, if any, and each person who controls any underwriter within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any Litigation, commenced or threatened, arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus (including any summary prospectus or preliminary prospectus), offering circular or other document, or any amendment or supplement thereto, incident to any such registration, (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading or (iii) any violation by the Company of any Law applicable to the Company or relating to action required of or inaction by the Company in connection with such registration, and the Company will reimburse each such Holder and each other person entitled to be indemnified under this Section 8(a) for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder, controlling person or underwriter and stated to be specifically for use therein. (b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other Holder, each of its officers, directors, employees, Partners, agents, affiliates and advisors and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus (including any summary prospectus or preliminary prospectus), offering circular or other document, or any amendment or supplement thereto, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and will reimburse the Company and each other person entitled to be indemnified under this Section 8(b), for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, - 13 - 14 liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder and stated to be specifically for use therein. Notwithstanding the foregoing, the liability of each Holder under this Section 8(b) shall be limited in an amount equal to the public offering price (net of expenses and underwriting discounts and commissions) of the securities sold by such Holder in the offering giving rise to such liability. (c) Each party entitled to indemnification under this Section 8 (the "Indemnified Party") (i) shall give written notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought and (ii) shall permit the Indemnifying Party to assume the defense of any such claim or any Litigation resulting therefrom; provided that counsel for the Indemnifying Party who shall conduct the defense of such claim or Litigation shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense; provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 8 unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action; and provided, further, that the Indemnifying Party shall not assume the defense for matters as to which the Indemnified Party reasonably believes there may be a conflict of interest or separate and different defenses. No Indemnifying Party, in the defense of any such claim or Litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or Litigation or as to which the Indemnified Party has to admit to any fault or culpability. No Indemnified Party, in the defense of any such claim or Litigation, shall, except with the consent of each Indemnifying Party, consent to entry of any judgment or enter into any settlement unless such Indemnified Party does not intend to seek indemnification with respect to such claim or Litigation against such Indemnifying Party hereunder. (d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party and shall survive the Transfer of securities. (e) If the indemnification provided for in this Section 8 from the Indemnifying Party is unavailable to an Indemnified Party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the Indemnifying - 14 - 15 Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Party, on the other, in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations, or (ii) if the allocation provided by clause (i) above is not permitted by applicable Law or if the allocation provided in this clause (ii) provides a greater amount to the Indemnified Party than clause (i) above, in such proportion as shall be appropriate to reflect not only the relative fault but also the relative benefits received by the Indemnifying Party and the Indemnified Party from the offering of the securities covered by such registration statements as well as any other equitable considerations. The relative faults of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any fees, charges or expenses (including fees, disbursements and other charges of legal counsel) reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(e) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 8(e), a Holder shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holder in the offering to which such registration statement relates exceeds the amount of any damages that such Holder has otherwise been required to pay. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person. No person shall be obligated to contribute hereunder any amounts in payment for any settlement of any action or claim effected without such person's consent, which consent shall not be unreasonably withheld or delayed. 9. Other Indemnification. Indemnification and contribution similar to that specified in Section 8 (with appropriate modifications) will be given by the Company and the Holders participating in a registered offering with respect to any required registration or other qualification of securities under any federal, state or blue sky Law or regulation of any governmental authority other than the Securities Act. The indemnification agreements contained in Section 8 and this Section 9 will be in addition to, and will not - 15 - 16 be superseded by, any other rights to indemnification or contribution which any indemnified party may have pursuant to Law or contract. 10. Indemnification Payments. The indemnification and contribution required by Section 8 will be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred; provided, however, that if an Indemnified Party is adjudged to be not entitled to such payments in a final non-appealable judgment of a court of competent jurisdiction, it shall promptly return such payments to the Indemnifying Party. 11. Information by Holder and Company. The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders, the Registrable Securities held by them and the distribution proposed by such Holder or Holders as the Company may reasonably request in writing and as shall be required in connection with any registration being effected pursuant to Section 2, Section 3 or Section 4. The Company shall make available for inspection by each Holder participating in the registration, each underwriter of Registrable Securities owned by such Holder and their respective accountants, counsel and other representatives all financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary to enable them to exercise their due diligence responsibilities in connection with each registration of Registrable Securities owned by such Holder, and shall cause the Company's officers, directors and employees to supply all information reasonably requested by any such person in connection with such registration; provided that records and documents which the Company determines, in good faith, after consultation with counsel for the Company and the Holder's Counsel or counsel for the underwriter, as the case may be, to be confidential and which it notifies such persons are confidential shall not be disclosed to them, except in each case to the extent that (i) the disclosure of such records or documents or the information contained therein is reasonably necessary to avoid or correct a misstatement or omission in the registration statement or is otherwise required by applicable securities Laws, (ii) the release of such records or documents is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) the Holder's Counsel reasonably determines that such disclosure is required in order to satisfy a due diligence obligation, in which case such information shall be released pursuant to a customary confidentiality agreement, or (iv) the information in such records or documents has been made generally available to the public or is required to be filed with, or made available as supplemental information to, the Commission. Each Holder shall, upon learning that disclosure of any such records or documents is sought in a court of competent jurisdiction, give notice to the Company, and allow the Company, at the Company's expense, to undertake appropriate action and to prevent disclosure of any such records or documents deemed confidential. - 16 - 17 12. Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Restricted Securities to the public without registration after such time as a public market exists for the Common Stock, the Company agrees to use its best efforts to: (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date that the Company becomes subject to the reporting requirements of the Securities Act or the Exchange Act; (b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and (c) so long as any Holder owns any Registrable Securities, to furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after 90 days after the effective date of the Initial Public Offering for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration. 13. Certificates without Legends. In connection with the offering of any Registrable Securities registered pursuant to this Agreement, the Company will promptly after the sale of such Registrable Securities (a) facilitate the timely preparation and delivery to the Holders and the underwriters, if any, participating in such offering of certificates, without a legend relating to restrictions on Transfer under the Securities Act, representing ownership of such Registrable Securities being sold in such denominations and registered in such names as requested by such Holders or such underwriters and (b) instruct any transfer agent and registrar of such Registrable Securities to release any stop transfer orders with respect to any such Registrable Securities. 14. Standoff Agreement. The Company hereby agrees that if it shall previously have received a request for registration pursuant to Section 2 or Section 4 hereof, and if such previous registration shall not have been withdrawn or abandoned, (i) the Company shall not effect any public or private offer, sale or distribution of its securities, file any registration statement with respect to its equity securities under the Securities Act, or effect any registration of any of its equity securities under the Securities Act (other than a registration on Form S-8 or any successor or similar form which is then in effect), whether or not for sale for its own account, until a period of 90 days (or such shorter - 17 - 18 period as the Initiating Holder shall be advised by the managing underwriter) shall have elapsed from the effective date of such previous registration, and the Company shall so provide in any registration rights agreements hereafter entered into with respect to any of its securities; and (ii) the Company shall use its best efforts to cause each holder of its equity securities purchased from the Company at any time after the date of this Agreement in any transaction other than a sale registered under the Securities Act to agree not to effect any public sale or distribution of any such securities during such period, including a sale pursuant to Rule 144 under the Securities Act. 15. Notice. All notices and other communications hereunder shall be in writing and, unless any notice, instruction, direction or demand under the terms of this Agreement required to be in writing will be duly given upon delivery, if delivered by hand, facsimile transmission, intercompany mail, or mail, to the following addresses: If to SPX: SPX Corporation 700 Terrace Point Drive P.O. Box 3301 Muskegon, Michigan 49443 Attn:Christopher J. Kearney, Esq. If to the Company: Inrange Technologies Corporation 13000 Midlantic Drive Mt. Laurel, New Jersey 08054 Attn:Kenneth H. Koch, Esq. 16. Assignment; Third Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by the Company. A Holder may, at its election, at any time or from time to time, assign its rights under this Agreement, in whole or in part, to any purchaser of shares of Common Stock held by it. 17. Remedies. The parties hereto agree that money damages or other remedy at Law would not be sufficient or adequate remedy for any breach or violation of, or a default under, this Agreement by them and that, in addition to all other remedies available to them, each of them shall be entitled to an injunction restraining such breach, violation or default or threatened breach, violation or default and to any other equitable relief, including, without limitation, specific performance, without bond or other security being - 18 - 19 required. In any action or proceeding brought to enforce any provision of this Agreement (including the indemnification provisions thereof), the successful party shall be entitled to recover reasonable attorneys' fees in addition to its costs and expenses and any other available remedy. 18. No Inconsistent Agreements. The Company will not, on or after the date of this Agreement, enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Company has not previously entered into any agreement with respect to its securities granting any registration rights to any Person other than the registration rights granted pursuant to this Agreement. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with any other agreements to which the Company is a party or by which it is bound. The Company further agrees that if any other registration rights agreement entered into after the date of this Agreement with respect to any of its securities contains terms which are more favorable to, or less restrictive on, the other party thereto than the terms and conditions contained in this Agreement are (insofar as they are applicable) to the Holders, then the terms and conditions of this Agreement shall immediately be deemed to have been amended without further action by the Company or the Holders so that the Holders shall be entitled to the benefit of any such more favorable or less restrictive terms or conditions. 19. Descriptive Headings. The descriptive headings of the several sections and paragraphs of this Agreement are inserted for reference only and shall not control or otherwise affect the meaning hereof. 20. Governing Law. This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Delaware. 21. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. 22. Invalidity of Provision. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction. If any restriction or provision of this Agreement is held unreasonable, unlawful or unenforceable in any respect, such restriction or provision shall be interpreted, revised or applied in a manner that renders it lawful and enforceable to the fullest extent possible under Law. 23. Further Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and things and shall execute and deliver all other - 19 - 20 agreements, certificates, instruments, and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 24. Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof. 25. Merger, Consolidation, Exchange, Etc. In the event, directly or indirectly, (i) the Company shall merge with or into, or consolidate with, or consummate a share exchange with, any other person, or (ii) any person shall merge with or into, or consolidate, the Company and the Company shall be the surviving corporation of such merger or consolidation, and, in connection with such merger or consolidation, all or part of the Registrable Securities shall be changed into or exchanged for stock or other securities of any other person, then, in each such case, proper provision shall be made so that such other person shall be bound by the provisions of this Agreement and the term "Company" shall thereafter be deemed to refer to such other person. 26. Amendment. This agreement may only be amended by a written agreement executed by the Company and the Holders of a majority of the outstanding Registrable Securities; provided, however, that no such amendment shall treat Holders differently unless any Holders who are adversely affected by such different treatment shall agree in writing to such amendment. - 20 - 21 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective officers thereunto duly authorized. INRANGE TECHNOLOGIES CORPORATION By: /s/ Kenneth H. Koch ________________________________ Name: Kenneth H. Koch Title: Vice President and General Counsel GENERAL SIGNAL HOLDING CORPORATION By: /s/ Christopher J. Kearney ________________________________ Name: Christopher J. Kearney Title: Vice President - 21 - EX-10.4 8 y38692a5ex10-4.txt TRADEMARK LICENSE AGREEMENT 1 Exhibit 10.4 TRADEMARK LICENSE AGREEMENT This Trademark License Agreement (this "Agreement") is made as of September 18, 2000, by and between Inrange Technologies Corporation, a Delaware corporation (the "Company") and SPX Corporation, a Delaware corporation ("SPX"). WHEREAS, SPX is the owner of the trademark and tradename SPX and registrations and applications therefor in the forms set forth on Schedule A attached hereto (the "LICENSED TRADEMARK(s)"). WHEREAS, the Company designs, manufactures, markets and services networking and switching products for storage networks, data networks and telecommunications networks and services related to such products (the "COMPANY BUSINESS"). WHEREAS, the Company has been an indirect wholly owned subsidiary of SPX; WHEREAS, the Company is issuing shares of Class B Common Stock to the public in an offering registered under the Securities Act of 1933, as amended, as contemplated by a registration statement on Form S-1, as supplemented and amended from time to time (the "IPO"); and WHEREAS, following the IPO, the Company desires to continue to use the LICENSED TRADEMARK(s) in connection with the COMPANY BUSINESS for one year and SPX is willing to grant to the Company the right to use the LICENSED TRADEMARK(s) for one year on or in connection with the COMPANY BUSINESS, such use subject to the terms and conditions of this Agreement. NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties, intending to be legally bound, hereto agree as follows: ARTICLE 1 - GRANT OF LICENSE 1.1 SPX hereby grants to the Company, and the Company hereby accepts, a non-exclusive, worldwide, royalty-free license to use the LICENSED TRADEMARK(s) solely in connection with the COMPANY BUSINESS, subject to the limitations set forth in this Agreement. 1.2 The grant of license in Section 1.1 above includes the right by the Company to grant sublicenses within the scope of such license to the Company's wholly owned subsidiaries, but only for so long as each remains a wholly owned subsidiary. 2 1.3 Except as provided in this Article, all licenses granted herein shall be nontransferable and nonassignable without the prior written consent of SPX. ARTICLE 2- OWNERSHIP AND USE OF THE LICENSED TRADEMARKS 2.1 The Company acknowledges that SPX owns the LICENSED TRADEMARK(s) and all rights therein and that nothing in this Agreement shall give the Company any right, title or interest in or to the LICENSED TRADEMARK(s) other than pursuant to the license granted hereby. 2.2 The Company agrees that it will do nothing inconsistent with SPX's ownership of the LICENSED TRADEMARK(s) and shall not claim adversely to SPX, or assist any third party in attempting to claim adversely to SPX, with regards to such ownership. The Company agrees that it will not challenge the title of SPX to the LICENSED TRADEMARK(s), oppose any registration thereof, or challenge the validity of this Agreement or the licenses granted herein. Furthermore, the Company will not register, nor attempt to register, any trade name or trademark which, in whole or in part, incorporates or is confusingly similar to the LICENSED TRADEMARK(s). 2.3 Without the prior written approval of SPX, the Company is not authorized to use the LICENSED TRADEMARK(s) in connection with any business activity unrelated to the COMPANY BUSINESS. 2.4 Notwithstanding the license granted herein and any of the provisions hereof, no rights or licenses are granted to the Company with respect to any other trademark, service mark, and/or trade name not listed on Schedule A hereto. 2.5 The Company agrees to assist SPX in recording this Agreement with appropriate government authorities where such recording is required by law or regulation or where such recording is permitted or desired by SPX. 2.6 All costs associated with recording this Agreement, the license granted herein and registering, maintaining, or renewing LICENSED TRADEMARK(S) exclusively used by the Company shall be borne by the Company. All costs associated with registering, maintaining or renewing any LICENSED TRADEMARK(S) also used by SPX shall be borne by SPX. ARTICLE 3- QUALITY PROVISIONS 3.1 The Company agrees that the nature and quality of all products sampled, sold, or otherwise disposed of by the Company and covered by the LICENSED -2- 3 TRADEMARK(s) shall conform to the standards set by and under the control of SPX (hereinafter, "QUALITY STANDARD"). Such QUALITY STANDARD shall be reasonable, shall be no greater than the quality standards imposed by the Company's customers in general, and shall be at least equal in quality to the products (in the aggregate) sold by the Company prior to the date hereof. 3.2 The Company shall, upon SPX's reasonable request, supply samples of any products sampled, sold, or otherwise disposed of by the Company that include the LICENSED TRADEMARK(s) to SPX. Alternatively, SPX may request the Company to assure that such products conform to the QUALITY STANDARD and, to this end, the Company shall permit reasonable inspection during business hours by an authorized representative of SPX of the Company's facilities to inspect the Company's operations, methods of manufacture, materials used, storage and packing areas, and the like, associated with the manufacture of products that include the LICENSED TRADEMARK(s). Any inspections conducted by SPX to ensure that the QUALITY STANDARD provided herein has been satisfied shall be at the expense of SPX. 3.3 The Company shall deliver to SPX, upon SPX's request and without charge to SPX, representative samples of labels, containers, advertisements, catalogs, letterhead, and the like, containing the name SPX to enable SPX to ensure that such name is used only in a manner set forth on Schedule A. 3.4 SPX shall have the right to impose on the Company, as necessary, other specifications or requirements not provided for under this Article to maintain control over the COMPANY BUSINESS to ensure the requisite QUALITY STANDARD with respect to products manufactured by the Company that include the LICENSED TRADEMARK(s). ARTICLE 4- DURATION OF LICENSE AND TERMINATION 4.1 This Agreement and the license granted herein shall be effective as of the closing of the IPO, and shall terminate upon the earlier of (i) one year following the date thereof and (ii) termination pursuant to this Article 4. 4.2 In the event that the Company breaches any provision of this Agreement, including but not limited to failure by the Company to comply with the QUALITY STANDARD established under Article 3, SPX shall have the right to terminate the license granted if (i) it has given written notice to the Company of such breach and (ii) such breach shall be continuing one month from the date of such notice. 4.3 SPX shall have the right to immediately terminate this Agreement, or any or all licenses granted herein, upon written notice to the Company in the event of a -3- 4 winding-up, sale, consolidation or merger where the Company is not the survivor, or any sequestration by governmental authority of the Company. 4.4 Upon the termination of this Agreement, the Company agrees to (i) promptly discontinue all use of LICENSED TRADEMARK(s) and/or any similar trade name which contain "SPX" as a part thereof and (ii) promptly take all steps to refrain from using the LICENSED TRADEMARK(s) in advertising, commercial registers, directories, internet and web-sites, telephone listings, and all other similar listings. ARTICLE 5 - PROTECTION 5.1 The Company shall promptly notify SPX of any and all infringements, imitations, simulations or other illegal use or misuse of the LICENSED TRADEMARK(s) which come to the Company's attention. As the sole owner of the LICENSED TRADEMARK(s), SPX shall determine whether to take any action to prevent the infringement, imitation, simulation or other illegal use or misuse of the LICENSED TRADEMARK(s). If SPX elects not to take such action, the Company may take such action at the Company's expense if it has received SPX's prior written approval to take such action. In this event, SPX shall, at the Company's expense, cooperate in such action with the Company including, without limitation, joining as a party. Any money recovered by way of damages or otherwise with respect to such action shall be kept by the party which bore the costs of such action; or, in any case where the parties have shared the costs, such money shall be shared in proportion to the costs borne by each party. 5.2 The Company shall render SPX all reasonable assistance in connection with any matter pertaining to the protection, enforcement or infringement of LICENSED TRADEMARK(s) used by the Company, whether in the courts, administrative or quasi-judicial agencies, or otherwise. ARTICLE 6- NEW TRADEMARKS 6.1 Should the Company desire to develop a trademark using the name "SPX" in any form other than the LICENSED TRADEMARKS, it must first consult with and obtain the written approval of SPX, which may be withheld in its sole discretion. Such newly developed trademarks will be registered in the name of SPX, and will be deemed to be LICENSED TRADEMARK(s) licensed to the Company hereunder and will be subject to all of the terms and conditions of this Agreement. Such approval will not be contingent upon the payment of any fee or royalties to SPX; however, the cost of obtaining and maintaining such new trademarks shall be borne solely by the Company. -4- 5 ARTICLE 7-INDEMNIFICATION 7.1 The Company agrees to indemnify and hold harmless SPX and its directors, officers and employees from any and all claims for damage or injury to persons or property or for loss of life or limb whereby SPX has been found liable to any third party under any product liability, tort liability or similar action arising out of or in connection with the use by the Company of the LICENSED TRADEMARK(s). 7.2 SPX agrees to indemnify and hold harmless the Company and its directors, officers and employees from any and all claims of a third party arising out of or in connection with any claim that the Company's use of the LICENSED TRADEMARK(s) violates the rights of such third party to such LICENSED TRADEMARK(s). ARTICLE 8- MISCELLANEOUS 8.1 Entire Agreement. This Agreement (including the Schedule constituting a part of this Agreement) and any other writing signed by the parties that specifically references this Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 8.2 Assignability. This Agreement may not be assigned nor transferred by the Company without the prior consent of SPX. 8.3 Extension of Rights. All rights and obligations incurred hereunder by SPX or the Company shall extend to and be binding upon their respective domestic and international divisions, subsidiaries, other controlled companies, affiliates and related entities. 8.4 Waiver. The waiver by SPX of a breach of any provision contained herein shall be in writing and shall in no way be construed as a waiver of any subsequent breach of such provision or the waiver of the provision itself. 8.5 Injunctive Relief. The Company acknowledges that monetary relief would not be an adequate remedy for a breach or threatened breach by the Company of the provisions of this Agreement and that SPX shall be entitled to the enforcement of this Agreement by injunction, specific performance or other equitable relief, without prejudice to any other rights and remedies that SPX may have. -5- 6 8.6 Disclaimer of Agency, Partnership and Joint Venture. Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the parties hereto or constitute or be deemed to constitute any party the agent or employee of the other party for any purpose whatsoever and neither party shall have authority or power to bind the other or to contract in the name of, or create a liability against, the other in any way or for any purpose. 8.7 Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each party shall be construed and enforced accordingly. 8.8 Notices. Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing will be duly given upon delivery, if delivered by hand, facsimile transmission, intercompany mail, or mail, to the following addresses: If to SPX: SPX Corporation 700 Terrace Point Drive P.O. Box 3301 Muskegon, Michigan 49443 Attn:Christopher J. Kearney, Esq. If to the Company: Inrange Technologies Corporation 13000 Midlantic Drive Mt. Laurel, New Jersey 08054 Attn:Kenneth H. Koch, Esq. or to such other addresses or telecopy numbers as may be specified by like notice to the other parties. 8.9 Governing Law. This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Delaware. 8.10. Arbitration. Any controversy or claim arising hereunder that cannot be resolved by the parties themselves, shall be settled by arbitration in Muskegon, Michigan or such other location as the parties may mutually agree, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Any award -6- 7 rendered thereon shall be in writing and shall be final and binding on the parties and judgment may be entered thereon in any court of competent jurisdiction. Each party shall bear its own costs and expenses in connection with the arbitration and the costs and expenses of the arbitrators shall be borne as determined by the arbitrator. -7- 8 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers or agents as of the day and year first above written. SPX CORPORATION By: /s/ Christopher J. Kearney ----------------------------- Name: Christopher J. Kearney Title: Vice President and General Counsel INRANGE TECHNOLOGIES CORPORATION By: /s/ Kenneth H. Koch ------------------------------ Name: Kenneth H. Koch Title: Vice President and General Counsel -8- EX-10.5 9 y38692a5ex10-5.txt RESELLER AGREEMENT 1 Exhibit 10.5 RESELLER AGREEMENT THIS AGREEMENT is entered into this 29 day of OCT, 1999, by and between INRANGE TECHNOLOGIES CORPORATION, a Delaware corporation, located at 13000 Midlantic Drive, Mt Laurel, New Jersey ("Inrange"), and ANCOR COMMUNICATIONS, INC., a Minnesota corporation, located at 6321 Bury Drive Suite 13, Eden Prairie, Minnesota 55343 ("Purchaser"). BACKGROUND WHEREAS, Inrange is engaged in the design, manufacture, sale and servicing of switching, cable management and diagnostic systems and products for controlling and testing data communications, data processing, and telecommunications networks; and WHEREAS, Purchaser is a manufacturer, supplier and marketer of technical devices which incorporate switching, cable management and diagnostic systems and products; and WHEREAS, Inrange and Purchaser are parties to a Technology License Agreement dated September 24, 1998 (the "Technology License Agreement") under which Purchaser has granted to Inrange a license with respect to Purchaser's ASICs and Ancor Technology (each, as defined in the Technology License Agreement); and WHEREAS, Inrange is in the process of developing Class 2/3 Native Fiber Channel 64 and 128 port switches (known as FC/9000-64 and FC/9000-128 and containing the features set forth on Exhibit A) which incorporate Purchaser's ASICs and Ancor Technology (the "Designated Inrange Products"); and WHEREAS, Inrange and Purchaser desire to establish, pursuant to this Agreement, a mutually beneficial relationship through which Purchaser will purchase Designated Inrange Products for disposition through third parties that will sell the Designated Inrange Products under private label to end-users (collectively, "OEMs"); NOW, THEREFORE, in consideration of the mutual covenants and agreements stated below, the parties intending to be legally bound agree as follows: ARTICLE I OEM RIGHTS 1.1 Appointment. Subject to the terms and conditions of this Agreement, and for the term of this Agreement, Inrange hereby appoints Purchaser as a non-exclusive worldwide reseller of the Designated Inrange Products to OEMs. Pursuant to such appointment, subject only to compliance by Purchaser with the terms and conditions of this Agreement, Purchaser shall have the non-exclusive right during the term of this Agreement to sell, lease, market or otherwise dispose of Designated Inrange Products purchased from Inrange hereunder, but only to OEMs and only under 2 the private label of the OEM (such products are referred to as "Third-Party Private Label Products") or, on a case-by-case basis subject to prior approval by Inrange, the private label of Purchaser (such products are referred to as "Ancor Private Label Products"). Notwithstanding anything to the contrary contained herein, Purchaser shall not sell, directly or indirectly, nor deliver, any Designated Inrange Product in or to any country where such a sale or delivery by Purchaser would be prohibited by virtue of any applicable law, regulation or agency ruling. 1.2 Non-Exclusivity. Purchaser acknowledges that its appointment hereunder as a reseller for the Designated Inrange Products is non-exclusive. Inrange reserves the right to appoint additional sales representatives, value added resellers, systems integrators, distributors or OEMs for the Designated Inrange Products, and for any other products manufactured or distributed by Inrange, and Inrange reserves the right, at any time, to sell any of the Designated Inrange Products directly in each case without thereby incurring any commission or other obligation to Purchaser of any type or nature, except as provided in the Technology License Agreement. 1.3 [Intentionally Omitted.] 1.4 Independent Purchaser Status. Purchaser is authorized to sell Designated Inrange Products in such manner, at such prices and upon such terms as Purchaser shall determine. Purchaser is an independent purchaser and reseller of Designated Inrange Products. Purchaser shall not be considered an agent or legal representative of Inrange for any purpose, and neither Purchaser nor any director, officer, agent or employee of Purchaser, shall be, or be considered, an employee or agent of Inrange for any purpose whatsoever. Purchaser is not granted and shall not exercise any right or authority to assume or create any obligation or responsibility on behalf of or in the name of Inrange, including without limitation contractual obligations and obligations based on warranties or guarantees. 1.5 Operations and Expenses. Except as provided herein, the detailed operations of Purchaser under this Agreement are subject to the sole control and management of Purchaser. Purchaser shall be responsible for all its own expenses and employees. Purchaser shall provide, at its own expense, such office space and facilities, and hire and train such personnel, as may be required to carry out its obligations under this Agreement, Purchaser agrees that it shall incur no expense chargeable to Inrange, except as may be specifically authorized in advance in writing in each case by Inrange. 1.6 Effect on Technology License Agreement. Inrange will not be required to pay royalties under the Technology License Agreement for Inrange's sales of Designated Inrange Products to Purchaser under this Agreement; however, Inrange's sale of Designated Inrange Products to Purchaser under this Agreement will be included in the calculation of Inrange's Minimum Market Share under Section 3.4 of the Technology License Agreement. In addition, any Designated Inrange Products that Purchaser manufactures or has manufactured under the rights set forth in Section 6.5 will also be included in the calculation of Inrange's Minimum Market Share under Section 3.4 of the Technology License Agreement. Notwithstanding anything to the contrary in this Agreement, the parties acknowledge and agree that this Agreement, and the parties respective rights and obligation hereunder, do not and will not modify in any way each party's ownership of and other 2 3 rights granted in and to the Inrange Technology, Ancor Technology and Developed Technology (as those terms are defined in the Technology License Agreement), as expressly set forth in the Technology License Agreement 1.7 Promotional Materials and Product Manuals. Purchaser shall have the right to create and distribute promotional materials and product manuals for the Designated Inrange Products sold pursuant to this Agreement. As part of that process, Purchaser may modify the promotional materials and product manuals provided by Inrange pursuant to Sections 4.1 and 4.2; however, such modified materials may only be used in connection with Designated Inrange Products sold pursuant to this Agreement. Inrange shall retain all rights, including copyrights, in the materials it provides to Purchaser. Also, Purchaser shall be responsible for any modifications to Inrange's materials. ARTICLE II TERMS AND CONDITIONS OF SALE 2.1 Third-Party Private Label Products. If Ancor desires to purchase a Party Private Label Product, it must (i) forecast that it will purchase a minimum of * per year of the particular Third-Party Private Label Product, (ii) advise Inrange of the particular Third-Party Private Label Product customization requirements (including the Federal Paint Number for the color to be used), (iii) afford Inrange lead-time to prepare the new private label customization, and (iv) pay Inrange a customization preparation fee. The customization preparation fee for standard lead-time (meaning 90 days or such longer time designated by Inrange for special color orders) is *. The customization preparation fee for expedited lead-time is *. The initial customization preparation fee shall be paid at the time that the particular private label customization is first requested. Thereafter, Ancor shall only be required to pay an additional customization preparation fee for the Third-Party Private Label Product if Ancor requests changes in the customization requirements in that Third-Party Private Label Product. Such additional customization preparation fee shall be paid at the time that the changes are first requested. Private label customization shall include only the following features: (a) replacement of the Inrange logo in its customary placement with the private label, (b) replacement of the Inrange corporate name in its customary placement with the customer's name, (c) one designated color paint for the switch cabinet, (d) generic model/serial number label, (e) certification/approval agency labels, and (f) accessory kit composed of two loopback plugs. 2.2 Ancor Private Label Products. Ancor Private Label Products will not be subject to customization lead-time or any customization preparation fee. All Ancor Private Label Products will include the private label customization features described in Section 2.1 and will be a single color, to be designated by Ancor. 2.3 Firm Purchase Orders. All orders for Designated Inrange Products placed by Purchaser hereunder shall be evidenced by the Purchaser's firm purchase order and shall be subject to all of the provisions set forth in this Agreement. By placing each order, the Purchaser confirms its agreement with and acceptance of all such terms and conditions. In the event of any discrepancy between the provisions set forth herein, on the one hand, and any purchase order, order confirmation, * Confidential treatment requested with respect to this information. 3 4 or other communication between the parties, whether or not acknowledged by the other party, on the other hand, the provisions hereof shall prevail. In addition, any additional terms contained in any purchase order, order confirmation or other communication between the parties, whether or not acknowledged by the other party, shall not be binding on either party unless such additional terms are expressly accepted in writing by both parties. No order for any Designated Inrange Product placed by Purchaser hereunder shall be binding on Inrange unless, and until, accepted by Inrange. Within five (5) business days after the receipt of a Purchaser's purchase order hereunder, Inrange shall either provide a written acknowledgement of acceptance of the purchase order or written objections to the purchase order. If Inrange fails to provide any such written acknowledgment or objection within five (5) business days of its receipt of any Purchaser's purchase order hereunder, the purchase order shall be deemed to be rejected by Inrange and of no further force and effect. Purchase orders shall provide details sufficient to identify the customer, the applicable customized features, and the shipping instructions. 2.4 Prices. The prices charged to Purchaser for the Designated Inrange Products shall be as set forth in Schedule 2.4 hereof; the parties shall mutually agree upon an amendment to said Schedule which will finalize the pricing for the FC/9000-128 products. Such prices shall remain firm for the term of this Agreement. The prices set forth in Schedule 2.4 are predicated on Release 1 of the Designated Inrange Products being generally available for distribution on or before * and Release 2 of the Designated Inrange Products being generally available for distribution on or before * (each, a "General Availability Date"). For each full month prior to its General Availability Date that a Designated Inrange Product is made generally available for purchase, the price for such Designated Inrange Product under this Agreement will be subject to a discount of *% This discount will only apply during the 12-month period commencing upon the applicable accelerated General Availability Date. Notwithstanding the foregoing, Ancor may request concessions in the prices for a Third-Party Private Label Product if Ancor's volume for that Third-Party Private Label Product exceeds * chassis in a 12-month period. If Ancor is entitled to and does request a concession in prices as described above, the parties shall negotiate in good faith to reach a revised price based on the applicable volume. 2.5 Payment Terms. All prices are expressed, and shall be payable, in United States Dollars. Payment terms shall be net thirty (30) days from the date of invoice. Inrange shall issue invoices upon shipment. To the extent Purchaser shall fail to make payments as specified in this Agreement, or if for any other bona fide reason Inrange deems itself to be insecure as to payment, Inrange may demand that Purchaser make full or partial payment in advance, open for Inrange's benefit irrevocable documentary letters of credit, obtain for Inrange's benefit bank guaranties, provide current financial statements for Purchaser, and/or provide other satisfactory security or guaranties that invoices will be promptly paid when due. All Designated Inrange Products sold hereunder shall be invoiced to Purchaser, and Purchaser shall be responsible for invoicing its customer. Inrange reserves the right to charge interest at one and one half percent (1.5%) per month on any unpaid balance owing by Purchaser from the date on which the unpaid balance was due to Inrange. 2.6 Delivery/Shipment. * Confidential treatment requested with respect to this information. 4 5 2.6.1 Shipment Schedules. Inrange will ship Designated Inrange Products to Purchaser or to Purchaser's OEM, as indicated in the purchase order. Initial orders of Third-Party Private Label Products (including initial orders after a change in customization requirements) will be shipped within * . Other orders of Third-Party Private Label Products will be shipped within * . All orders of Ancor Private Label Products will be shipped within * . 2.6.2 U.S. Domestic. For all orders for shipment of Designated Inrange Products hereunder to destinations within the U.S. 48 contiguous states, all prices are stated, and all Designated Inrange Products purchased by Purchaser from Inrange hereunder shall be shipped, F.O.B. [Factory]. All transportation, insurance and handling charges for Designated Inrange Products so shipped shall be borne by Purchaser. 2.6.3 International. For all orders for shipment of Designated Inrange Products by Inrange hereunder from the U.S. to a destination outside the U.S. 48 contiguous states, shipping tents shall be Ex works (Factory). For all shipments from the U.S. to foreign destinations, title to all Designated Inrange Products shall pass outside the U.S. Customs territory. 2.7 Cancellation of Ordered Products. All Designated Inrange Products ordered hereunder are considered customized products. After Purchaser has received notice from Inrange of acceptance of an order but prior to the originally scheduled shipment date, Purchaser will be able to cancel, reduce, reconfigure or reschedule the order without the prior written consent of Inrange; provided, however, that Purchaser shall not do so unreasonably and that any such action shall be subject to the payment requirements set forth in this Section. Purchaser shall not have the right to take any such action after the order has been shipped. If, during the period beginning * and ending * prior to the original shipment date, Purchaser cancels an order, reduces an order by more than *% or reschedules an order for shipment more than * after the original shipment date, Purchaser shall pay a charge equal to *% of the purchase price for the affected Designated Inrange Products. If, during the period beginning * and ending one day prior to the original shipment date, Ancor cancels an order, reduces an order by more than * or reschedules an order for shipment more than * after the original shipment date, Ancor shall pay a charge equal to *% of the purchase price for the affected Designated Inrange Products. If, during the period beginning * and ending one day prior to the original shipment date, Ancor reduces an order up to *%, reconfigures an order, or reschedules an order for shipment * or less after the original shipment date, Ancor shall pay a charge equal to *% of the purchase price for the affected Designated Inrange Product. Except as provided above, Ancor shall not be required to pay any additional charge in connection with a cancellation, reduction, reconfiguration or reschedule of an order. 2.8 Warranties. 2.8.1 All sales to Purchaser shall be subject to Inrange's warranty attached as Schedule 2.8 hereto. Except for permitted modifications to the Software as described in Sections 2.16 and 2.17, Purchaser agrees that it shall not in any way alter the Designated Inrange Products (nor the parts or components thereof) without the prior written authorization of Inrange, nor make any warranty or representation other than those contained in Inrange's warranty. Any warranty given * Confidential treatment requested with respect to this information. 5 6 by Purchaser with respect to Designated Inrange Products that have been altered without prior authorization of Inrange or any such additional warranty or representation shall be void. Claims by Purchaser in regard to any defect in any Designated Inrange Product shall be made pursuant to claims procedures set forth in the warranty and this Agreement. 2.8.2 Inrange further warrants that it shall convey good title to all Designated Inrange Products sold to Purchaser, free of all security interests, liens and encumbrances, but subject to any licenses for third-party software included in the Designated Inrange Products. 2.9 Disclaimer of Warranties. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES WHATSOEVER, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE. 2.10 Limitation of Liability. 2.10.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER (OR SHALL INRANGE BE LIABLE TO ANY PURCHASER OR END USER OF ANY DESIGNATED INRANGE PRODUCT) FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR CONTINGENT DAMAGES WHATSOEVER, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, INJURIES TO PROPERTY, LOSS OF USE OF ANY DESIGNATED INRANGE PRODUCT OR ANY ASSOCIATED EQUIPMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED THAT THE POSSIBILITY OF SUCH LOSS, AND WHETHER THE CLAIM IS FOR BREACH OR REPUDIATION OR CONTRACT, TORT, BREACH OF WARRANTY, NEGLIGENCE, OR OTHERWISE. 2.10.2 EXCEPT FOR INDEMNIFICATION CLAIMS UNDER SECTION 2.18, INRANGE'S AND PURCHASER'S LIABILITY UNDER, FOR BREACH OF, OR ARISING OUT OF THESE TERMS AND CONDITIONS OR SALE AND/OR SALE OR USE OF A DESIGNATED INRANGE PRODUCT SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE PRICE OF THE AFFECTED DESIGNATED INRANGE PRODUCT. THE ESSENTIAL PURPOSE OF THIS SECTION 2.10 IS TO LIMIT THE POTENTIAL LIABILITY OF THE PARTIES ARISING OUT OF THESE TERMS AND CONDITIONS OF SALE, THE PURCHASE AND SALE OF DESIGNATED INRANGE PRODUCTS HEREUNDER, AND ARE DESIGNATED INRANGE PRODUCTS SOLD HEREUNDER. 2.11 Liability Insurance. Each party shall maintain in effect appropriate liability (including product liability) insurance policies with a recognized carrier providing for coverage of not less than two million U.S. Dollars ($2,000,000). Upon written request, Purchaser shall provide to Inrange a certificate of insurance evidencing the above coverage. 2.12 Claims Procedure. Any claim against Inrange for shortages in or damages to any Designated Inrange Product shipped to Purchaser shall be made in accordance with Inrange's 6 7 standard procedures and other written instructions conveyed to Purchaser by Inrange from time to time. Any other claims against Inrange arising out of Designated Inrange Products sold to Purchaser shall be made within ninety (90) days after Purchaser first knows or has reason to know of such claim. All such claims shall be submitted to Inrange in writing and shall set forth in full the details, basis, and amount of such claim against Inrange. Failure by Purchaser to provide proper documentation to support an insurance claim that then results in total or partial denial of coverage shall render Purchaser liable to Inrange for all amounts unpaid. 2.13 Product Modification or Discontinuance. Inrange will include Purchaser in its engineering change order ("ECO") process with respect to the Designated Inrange Products; however, Purchaser will not have any approval rights with respect to Inrange's ECO process. Inrange may at any time make changes in any Designated Inrange Product (whether in design, material, the addition of improvements, or otherwise) and may discontinue the manufacture of any Designated Inrange Product, all in its sole discretion, without incurring any obligation of any kind as a result thereof. Inrange shall notify Purchaser with as much advance notice as possible of changes to form, fit or function which affect the Designated Inrange Products or the private label customization features. Purchaser may request a delay in the implementation of a change to form, fit or function in response to specific requirements from a customer, and Inrange shall use reasonable efforts to accommodate such request; provided, however, in no circumstance will Inrange be required to support any version of a Designated Inrange Product other than the then-current version, the two immediately preceding software versions, and the one immediately preceding hardware version. Inrange shall notify Purchaser six (6) months in advance of its discontinuance of the manufacture of any of the Designated Inrange Products, and shall use reasonable efforts to support any discontinued Designated Inrange Products for three (3) years after the sale. Purchaser may request an extension of the support period in response to specific requirements from a customer, and Inrange shall use reasonable efforts to accommodate such request; provided, however, in no circumstance will Inrange be required to support any version of a Designated Inrange Product other than the then-current version, the two immediately preceding software versions, and the one immediately preceding hardware version. Purchaser will include Inrange in its ECO process with respect to the Designated Inrange Products; however, Inrange will not have any approval rights with respect to Purchaser's ECO process. Purchaser shall notify Inrange with as much advance notice as possible of changes to form, fit or function which affect the Designated Inrange Products or the private label customization features. Within five (5) business days of Inrange's receipt of a requested change from Purchaser, Inrange will respond to Purchaser with a projected cut-in date. 2.14 Offsets. Any credits, allowances, or other amounts payable or creditable to Purchaser by Inrange shall be subject to offset for any claims or other amounts owed by Purchaser to Inrange pursuant to the provisions hereof or otherwise. 2.15 Security. As security for payment and performance of all of Purchaser's obligations and liabilities to Inrange under this Agreement, Purchaser grants to Inrange a security interest in all of the Designated Inrange Products acquired by Purchaser pursuant to this Agreement, and in all proceeds of any such Designated Inrange Products. Upon request by Inrange, Purchaser agrees to 7 8 execute and deliver to Inrange any and all financing statements or other instruments or documents reasonably necessary in order to establish, perfect, or maintain such security interests. 2.16 Software License. Designated Inrange Products delivered by Inrange hereunder may contain or require the use of separable Software (the "Software"), which is defined herein to include (i) computer programs consisting of hard-wired logic instructions and/or instruction sequences in machine-readable code, contained on a magnetic tape, diskette, semiconductor device or other memory device or system memory which provides basic logic, operating instructions and user-related application instructions and (ii) documentation used to describe, maintain and use the programs. Inrange and Purchaser acknowledge and agree that such Software includes Ancor Technology, Inrange Technology and Developed Technology, which technologies are owned by Inrange and/or Purchaser as stated in the Technology License Agreement. Notwithstanding any other provisions of this Agreement and/or reference to "sale" of Designated Inrange Products in this Agreement or Inrange's terms and conditions, the title to, and ownership of, the Software shall remain in Inrange; provided, however, that Inrange's and Purchaser's respective rights with respect to all Ancor Technology, Inrange Technology and Developed Technology (even if included in the Software) shall be as stated in the Technology License Agreement notwithstanding Inrange's ownership of the compilation of all such technologies as embodied in the Software. Inrange hereby grants to Purchaser a personal, non-exclusive, non-assignable license to distribute and sublicense to Purchaser's OEMs and their end users the object code for the Software for use solely in connection with the Designated Inrange Products sold pursuant to this Agreement and subject to Inrange's standard software license terms (which terms shall not apply to any Ancor Technology or Developed Technology except as those technologies are embodied in the Software). Inrange further grants to Purchaser a personal, non-exclusive, non-assignable license to use, modify, create derivative works from, port, integrate and translate the source code for the Software for use solely in connection with the Designated Inrange Products sold pursuant to this Agreement and subject to reasonable restrictions imposed by Inrange for protection of its source code. Inrange further grants to Purchaser's OEMs the right to modify the source code for the Software as required to perform private label customization (i.e. change of logo and name) of the Software solely in connection with the sale of Designated Inrange Products pursuant to this Agreement and subject to reasonable restrictions imposed by Inrange for protection of its source code. On a case-by-case basis, at Purchaser's request, Inrange will consider extending to Purchaser the right to sublicense Purchaser's OEM to use, modify, and create derivative works from the source code for the Software for use solely in connection with the Designated Inrange Products sold pursuant to this Agreement. The grant of such right to sublicense shall be subject to reasonable restrictions imposed by Inrange for protection of its source code. Notwithstanding the foregoing, the parties acknowledge and agree that the Software may include certain third-party software and that Purchaser's rights with respect to the source code for the Software will not extend to any such third-party software. Inrange will not be responsible for any errors arising from the content of those portions of the Software modified by Purchaser or any errors in compilation arising from Purchaser's modification of the Software. Purchaser will pay to Inrange, in addition to any other fees payable 8 9 under this Agreement, the cost of any license fees or charges related to any third-party software included in the Software if Purchaser elects to have Inrange deliver to Purchaser such third-party software as part of the Software. All rights, including copyrights, in the Software shall be retained by Inrange (subject to Purchaser's ownership rights in and to the Ancor Technology and Developed Technology embodied in the Software), and Purchaser shall not have any right to copy or use the Software (whether modified or unmodified) except as provided in this Agreement. Notwithstanding anything to the contrary herein, Purchaser's rights to use, modify, distribute and create derivative works of the Ancor Technology and Developed Technology, as stated in the Technology License Agreement, shall not be restricted or prohibited in any way by this Agreement, even if such Ancor Technology and Developed Technology is also embodied in the Software; however, Purchaser's actions with respect to the Software itself shall be in accordance with this Agreement If Purchaser's OEMs or their end user need support for modifications, integration, interface or new features, Purchaser may request that Inrange provide such support for a mutually acceptable NRE charge. Inrange will use its reasonable efforts to accept reasonable requests by Purchaser for customer customization requirements. Purchaser agrees further to enter into sub-license agreements with its OEMs and to cause its OEMs to enter into sub-license agreements with their end users, which, at a minimum, provide that (a) OEM or end user will keep confidential and protect the Software and associated documentation from unauthorized disclosure; (b) any reproduction of the Software shall be solely for backup or archival purposes; (c) except as authorized in this Section 2.16, OEM or end user will not modify or attempt to modify the Software without the written consent of Inrange; (d) no transfer of title to the Software to OEM or end user shall be deemed to have occurred by virtue of such sub-license; and (e) the end user will use the Software solely in connection with the Designated Inrange Products sold pursuant to this Agreement and for its internal business purposes. 2.17 Modification of Inrange's Java/Browser Control Software. As part of the license to the Software described in Section 2.16, Inrange grants to Purchaser a license to modify that portion of Inrange's Java/Browser Control Software (the "JBC Software") which is based on Purchaser's source code and included in the Designated Inrange Products, but solely for the purpose of (i) replacing Inrange logos and name references with the logos and name references of Purchaser or Purchaser's OEMs, as applicable, and revising pictures and diagrams to conform to the private label customization features of the Designated Inrange Products or (ii) modifying and creating derivative works of the Ancor Technology and Developed Technology embodied in the JBC Software solely for use in connection with Designated Inrange Products sold pursuant to this Agreement. Purchaser will furnish the modified JBC Software files to Inrange, and Inrange will produce the modified JBC Software for shipment with the Designated Inrange Products. Inrange's obligation with respect to the JBC Software will be limited to error-free compilation of the unmodified Inrange portion. Inrange will not be responsible for any errors arising from the content of those portions of the JBC Software modified by Purchaser or any errors in compilation arising from Purchaser's modification of the JBC Software. Purchaser will pay to Inrange, in addition to any other fees payable under this Agreement, the cost of any license fees or charges related to any third-party software included in the 9 10 JBC Software if Purchaser elects to have Inrange deliver to Purchaser such third-party software as part of the JBC Software. All rights, including copyrights, in the JBC Software shall be retained by Inrange (subject to purchaser's ownership rights in and to the Ancor Technology and Developed Technology embodied in the JBC Software), and Purchaser shall not have any right to copy or use the JBC Software (whether modified or unmodified) except as provided in this Agreement. Notwithstanding anything to the contrary herein, Purchaser's rights to use, modify, distribute and create derivative works of the Ancor Technology and Developed Technology, as stated in the Technology License Agreement, shall not be restricted or prohibited in any way by this Agreement, even if such Ancor Technology and Developed Technology is also embodied in the JBC Software; however. Purchaser's actions with respect to the JBC Software itself shall be in accordance with this Agreement. 2.18 Indemnification. 2.18.1 Inrange shall defend, indemnify and hold harmless Purchaser its officers, directors, employees, successors, and assigns, against any losses, damages, or expenses of whatever form or nature, including attorneys' fees and other costs of legal defense that they, or any of them, may sustain or incur as a result of any third party suit, proceeding, claim or other legal action (collectively. "Third Party Action") insofar as such Third Party Action is based on a claim that a Designated Inrange Product or its use, manufacture (as provided in Section 6.5), import or sale as permitted hereunder, constitutes an infringement of any issued United States patent or copyright. The foregoing indemnification obligation of Inrange shall be subject to (i) Purchaser promptly notifying Inrange of any such Third Party Action and furnishing Inrange a complete copy of each communication, notice or other action relating to the alleged infringement. (ii) Inrange being given authority, information and reasonable assistance necessary to settle, compromise or litigate such Third Party Action, and (iii) no settlement of any Third Party Action being made without the express permission of Inrange. If the Designated Inrange Product is held in any such Third Party Action to infringe and the use of the Designated Inrange Product is enjoined, or in the case of a settlement as described above, Inrange shall, at its own expense, either procure for Purchaser a right to continue using the Designated Inrange Product or replace same with a noninfringing Designated Inrange Product, or modify same to make it noninfringing, or, if Inrange cannot reasonably accomplish one of the foregoing remedies, refund the depreciated value of the Designated Inrange Product and accept the return of same. 2.18.2 Inrange shall not be obligated to defend or be liable for costs and damages if infringement as described in this Section arises out of (i) compliance with Purchaser's specifications, (ii) incorporation of any Ancor Technology in the Designated Inrange Product, (iii) any combination or use of the Designated Inrange Product with materials or technology not furnished by Inrange if such infringement would have been avoided by use of the Designated Inrange Product alone, (iv) a modification of the Designated Inrange Product after delivery by Inrange if the infringement would have been avoided without such modification, or (v) other fault or action of Purchaser. In any of these cases, Purchaser will indemnify and defend Inrange on the basis described in the preceding 10 11 subsection. Inrange may decline to make further shipments to Purchaser under this Agreement if infringement caused by any such action of Purchaser has been alleged or has occurred. 2.18.3 The foregoing states the entire liability of Inrange for patent, copyright, or other intellectual property infringement by The Designated Inrange Products furnished hereunder. The obligations under this Section shall survive the termination of this Agreement for any reason. ARTICLE III OBLIGATIONS OF PURCHASER 3.1 Sales Promotion. Purchaser shall use its best efforts, consistent with its business plan, to promote the sale of the Designated Inrange Products to all potential customers and will cooperate with users of the Designated Inrange Products. For that purpose, Purchaser shall conduct the following activities: 3.1.1 Forecast and Market Analysis: Purchaser shall provide Inrange with: (a) a rolling 12-month forecast of sales, to be received by Inrange no later than the last day of each calendar quarter; (b) immediate notice of any material changes in Purchaser's quarterly forecast of sales; and (c) updates on any material developments in the business and marketing conditions in the industry which could reasonably be expected to affect the sale of Designated Inrange Products to customers and prospective customers. 3.2 Promotional Materials. Purchaser shall maintain an adequate inventory of promotional materials and shall use such materials in an efficient and effective manner to promote the sale of the Designated Inrange Products in the Territory. Any modifications to Inrange promotional materials shall be subject to Section 1.7. 3.3 Product Manuals. Purchaser shall create and maintain an adequate inventory of product manuals and shall include a product manual with each sale of a Designated Inrange Product. Any modifications to Inrange product manuals shall be subject to Section 1.7. 3.4 Sales Policies. Purchaser shall, at all times, conduct business in the manner that will reflect favorably upon the Designated Inrange Products and Inrange. Purchaser shall not make any false or misleading representations concerning the Designated Inrange Products, or make any representations concerning the Designated Inrange Products' specifications, features, capabilities and applicable manufacturer warranties which are not consistent with those set forth in the product descriptions or promotional materials delivered by Inrange to Purchaser hereunder. 11 12 3.5 Support. Unless otherwise agreed in writing by Inrange, Purchaser shall, at its expense, provide all customer service, installation and maintenance services, and technical support of the Designated Inrange Products sold by it. Inrange will only provide direct support to Purchaser's customers, on a special-request basis, subject to Inrange's reasonable acceptance of such request and to terms reasonably acceptable to Inrange. 3.6 Governmental Approvals and Compliance. Purchaser shall, at its expense, obtain all registrations, licenses and permits required to perform its obligations, pay all taxes and fees due in connection therewith, and comply with any and all applicable laws, regulations, and orders. Purchaser shall furnish Inrange with such documentation as Inrange may request to confirm Purchaser's compliance with this Section 3.6 and agrees that it shall not engage in any course of conduct that, in Inrange's reasonable belief, would cause Inrange to be in violation of the laws of any jurisdiction. Any breach of the provisions of this Section 3.6 shall be deemed a material breach of this Agreement. 3.7 [Intentionally Omitted.] 3.8 Questionable Payments. Purchaser certifies that neither it, nor any of its directors, officers, employees, or agents is an official, agent, or employee of any government or governmental agency or political party or a candidate for any political office on the date of this Agreement. Purchaser shall promptly notify Inrange of the occurrence of any event that would or may result in an exception to the foregoing representation. Purchaser shall not, directly or indirectly, in the name of, on behalf of, or for the benefit of Inrange offer, promise or authorize to pay, or pay, any compensation, or give anything of value to, any official, agent or employee of any government or governmental agency, or to any political party or officer, employee, or agent thereof. Any breach of the provisions of this Section 3.8 shall be deemed a material breach of this Agreement and, if such breach is not susceptible to a cure, shall entitle Inrange to terminate this Agreement effective immediately on notice to Purchaser. 3.9 Exclusivity. Purchaser acknowledges and agrees (i) that the Designated Inrange Products under this Agreement fall within the scope of "Inrange Products" described in Section 2.2 of the Technology License Agreement and (ii) that Purchaser's breach of Section 2.2 of the Technology License Agreement with respect to a Designated Inrange Product shall be deemed to be a material breach of this Agreement. This Section is not intended to impose additional restrictions on the distribution of Designated Inrange Products beyond those otherwise set forth in this Agreement. 3.10 Competitive Fibre Channel Switch. Inrange shall give Purchaser written notice of Inrange's intention to offer for sale any fibre channel switch that is competitive with the Designated Inrange Product at least twelve (12) months prior to Inrange's first offer of such switch for sale. Purchaser shall give Inrange written notice of Purchaser's intention to offer for sale any fibre channel switch that is competitive with the Designated Inrange Product at lease twelve (12) months prior to Purchaser's first offer of such switch for sale. 12 13 3.11 Indemnification. Purchaser shall indemnity, defend, and hold harmless Inrange, its officers, directors, employees, successors, and assigns, against any losses, damages, or expenses of whatever form or nature, including attorneys' fees and costs of legal defense, that they, or any of them may sustain or incur as a result of any third parry suit, proceeding, claim or other legal action (collectively, "Third Party Action") insofar as such Third Party Action is based on a claim (a) that Purchaser has breached this Agreement, (b) that Purchaser has made any representations or warranties with respect to the Designated Inrange Products that are inconsistent with or in addition to Inranges' standard warranties on the Designated Inrange Products, (c) of any defect arising from or related to the intention of Purchasers' ASICs in or with the Designated Inrange Products caused by Purchaser, or (d) caused by a modification of the Designated Inrange Product after delivery by Inrange. The foregoing Indemnification obligation of Purchaser shall be subject to (1) Inrange promptly notifying Purchaser of any such Third Parry Action and furnishing Purchaser a copy of each communication, notice or other action relating to the claim, (2) Purchaser being given authority, information, and reasonable assistance necessary to settle, compromise or litigate such Third Party Action, and (3) no settlement of any Third Party Action being made without the express written permission of Purchaser. 3.12 Spares. Purchaser shall maintain an inventory of spares sufficient to fulfill its support obligations under this Agreement. 3.13 Use of Parts and Components. Purchaser shall not sell or use any parts or components of a Designated Inrange Product except in connection with the sale of a Designated Inrange Product pursuant to this Agreement. ARTICLE IV OBLIGATIONS OF INRANGE 4.1 Promotional Materials. Inrange shall provide Purchaser with electronic versions of certain promotional materials as designated by Inrange for the Designated Inrange Products in "Framemaker" programing format to enable Purchaser to modify these materials to conform to the private label customization features provided for in this Agreement. Any modifications to the materials provided by Inrange shall be subject to Section 1.7. 4.2 Product Manuals. Inrange shall provide Purchaser with electronic versions of product manuals for the Designated Inrange Products in "Framemaker" programing format to enable Purchaser to modify these manuals to conform to the private label customization features provided for in this Agreement. Any modifications to the manuals provided by Inrange shall be subject to Section 1.7. 4.3 [Intentionally Omitted.] 4.4 Assistance. Inrange shall provide Purchaser with reasonable access to third level telephonic assistance by Inrange's technical personnel. Such telephone assistance shall be available 13 14 directly during normal business hours and by pager 24 hours per day, seven days per week. Such telephone assistance shall be requested by Purchaser only after it has reasonably attempted all other means to remedy the customer problem. Such telephone assistance and any necessary follow-up assistance shall be provided in accordance with Schedule 4.4 and shall be without charge to Purchaser except as may be otherwise mutually agreed. Inrange may provide on-site support on terms mutually agreed by the parties. Inrange shall have no obligation to provide assistance to Purchaser's customers or to end users unless mutually agreed by the parties based on a specific request by Purchaser. 4.5 Training. Inrange will provide, and Purchaser will cause its personnel to attend, such technical, sales and service training sessions with respect to the Designated Inrange Products as the parties deem necessary to enable Purchaser to effectively market, sell and support the Designated Inrange Products; provided, however, Inrange, in its sole discretion, will determine the reasonableness of the number of training sessions during any 12-month period (but in no case will the number of training sessions during any 12-month period be fewer than three sessions. Such training will be provided for no fewer than * Purchaser personnel and no more than * Purchaser personnel at any one time. Such training will be provided at Inrange's designated training site, at times mutually agreeable to the parties, without charge to Purchaser. At Purchaser's request, Inrange will provide such training at Purchaser's designated training site, at times mutually agreeable to the parties, but in such case Purchaser will reimburse Inrange for the actual travel and living expenses of Inrange personnel delivering the training as well as incidental expenses associated with the training. If Purchaser requests training in addition to the training described in the first paragraph of this Section, Inrange will provide such training at Inrange's designated training site, at times mutually agreeable to the parties, at Inrange's then-current rate (currently, * per student). Each such additional training class is subject to a minimum fee equivalent to the cost of * students, and the maximum class size for such additional training classes will be * students. At Purchaser's request, Inrange will provide such additional training classes at Purchaser's designated site, at times mutually agreeable to the parties, but in such case, in addition to the additional training charges payable by Purchaser, Purchaser will also reimburse Inrange for the actual travel and living expenses of Inrange personnel delivering the training, as well as incidental expenses associated with the training. 4.6 [Intentionally Omitted.] 4.7 Extended Warranty. Inrange will make available an extended warranty for Designated Inrange Products (providing for factory repair service at Inrange's factory) on terms and at the prices set forth in Schedule 2.4. 4.8 Out-Of-Warranty Factory Repair Service. Inrange will make available factory repair service for Designated Inrange Products that are no longer covered by the warranty at Inrange's factory at rates equal to *% of the Designated Inrange Product prices set forth in Section 2.4. *Confidential treatment requested with respect to this information. 14 15 4.9 No Additional Obligations. Except for the foregoing obligations, and the repair or replacement obligations set forth in its warranty, Inrange shall have no other support, maintenance or repair obligations. 4.10 Spares. Inrange will make available to Purchaser, for maintenance purposes, a reasonable number of spare Designated Inrange Products for a period of three (3) years after the date of the last sale of the Designated Inrange Product by Inrange. Purchaser may request an extension of this three-year period in response to specific requirements from its customers, and Inrange shall use reasonable efforts to accommodate such customer requirements; provided, however, in no circumstance will Inrange be required to support any version of a Designated Inrange Product other than the then-current version, the two immediately preceding software versions, and the one immediately preceding hardware version. 4.11 Software Updates. Inrange will provide to Purchaser any and all updates to and/or new releases of Software for the Designated Inrange Products within 60 days of the completion of Inrange's Beta test Such updates and/or new releases shall be subject to the licenses set forth in Section 2.16. ARTICLE V CONFIDENTIAL INFORMATION AND PROPRIETARY RIGHTS 5.1 Confidential Information: All Confidential Information (as defined in Section 5.2 below) shall be deemed confidential and proprietary to the party disclosing such information hereunder. Each party may use the Confidential Information of the other party during the term of this Agreement only as permitted or required for the receiving party's performance hereunder. The receiving party shall not disclose or provide any Confidential Information to any third party, other than as permitted or required for the receiving party's performance hereunder, and shall take reasonable measures to prevent any unauthorized disclosure by its employees, agents, contractors or consultants during the term hereof including appropriate individual nondisclosure agreements. The foregoing duty shall survive any termination or expiration of this Agreement for a period of five (5) years. 5.2 Definition. As used in this Agreement, the term "Confidential Information" shall mean (a) all information designated by a party as confidential in which is disclosed by Purchaser to Inrange, or is disclosed by Inrange to Purchaser, (b) all information embodied in the Designated Inrange Product, regardless of the form in which it is disclosed, (c) the source code for the Software, and (d) any information relating to know-how, markets, customers, products, patents, inventions, procedures, methods, designs, strategies, plans, development efforts, assets, liabilities, prices, costs, revenues, profits, organization, employees, agents, resellers or business in general, or, the algorithms, programs, user interfaces and organization of the disclosing parties's products. Notwithstanding anything to the contrary in this Article V, nothing herein shall affect the confidentiality obligations of the parties under the Technology License Agreement. Without limiting the generality of the foregoing, this Article V shall not impose any additional confidentiality 15 16 obligations on the parties with respect to the Ancor Technology or Developed Technology other than those stated in the Technology License Agreement. 5.3 Exclusions. The following shall not be considered Confidential Information for purposes of this Article V: (a) information which is or becomes in the public domain through no fault or act of the receiving party; (b) information which was independently developed by the receiving party without the use of or reliance on the disclosing parties' Confidential Information; (c) information which was provided to the receiving party by a third party under no duty of confidentiality to the disclosing party; or (d) information which is required to be disclosed by law, provided, however, prompt prior notice thereof shall be given to the party whose Confidential Information is involved. 5.4 [Intentionally Omitted] 5.5 Trademark and Tradenames. Neither party shall directly or indirectly use any of the other party's trademarks, trade names or part thereof, or any mark or name confusingly similar thereto, as part of its corporate or business name or in any other manner, except that (a) Purchaser may identify itself as an authorized purchaser of Inrange, and (b) on Inrange's written consent the Purchaser may use Inrange's trademarks relating to the Designated Inrange Products for display purposes in connection with solicitation of orders for Designated Inrange Products from OEMs and in any other manner previously approved by Inrange in writing. All resulting use of such trademarks shall inure solely to the benefit of the party that owns such trademarks. In addition, neither party shall register any of the other party's trademarks or any mark or name closely resembling them, unless requested to do so by the other party in writing. 5.6 Protection of Proprietary Rights. Each party agrees to cooperate with and assist the other party at the other party's expense, in the protection of trademarks, patents, or copyrights owned by or licensed to the other party and shall inform the other party immediately of any infringements or other improper action with respect to such trademarks, patents, or copyrights that shall come to the attention of the first party. ARTICLE VI TERM AND TERMINATION 6.1 Term and Renewal. Unless terminated as provided in Section 6.2 below, this Agreement shall continue in full force and effect for an initial three (3) year term and shall renew thereafter for additional one (1) year terms upon the mutual agreement of the parties. 6.2 Termination. This Agreement may be terminated prior to expiration of the initial or any renewal term, as provided in Section 6.1 above, by prior written notice to the other party, as follows: 6.2.1 By either party, in the event the other party is in material breach of this Agreement and has failed, within thirty (30) days after receipt of written notice thereof from the non- 16 17 breaching party, (i) to cure such breach or (ii) to diligently pursue corrective action with respect to any material breach that cannot be reasonably cured within such 30-day period. 6.2.2 By either party, effective immediately, if the other party should become the subject of any voluntary or involuntary bankruptcy, receivership, or other insolvency proceedings or make an assignment or other arrangement for the benefit of its creditors, and such action is not discharged or terminated within ninety (90) days. 6.2.3 By Inrange, effective immediately, if Purchaser should sell, assign, delegate or transfer any of its rights and obligations under this Agreement without having obtained Inrange's prior written consent thereto, or if there should occur any material change in the control of Purchaser or if the Purchaser merges or otherwise combines with an entity that manufactures, offers for sale, or sells any product that is directly competitive with any Inrange product. 6.2.4 By Inrange, effective immediately, in accordance with provisions of Section 3.8 hereof. 6.2.5 By Purchaser, in the event that Inrange should fail to supply Designated Inrange Products that conform to Inrange's product specifications and should fail to remedy or work-around such quality deficiency within thirty (30) days after receiving written demand therefor, unless such quality deficiency cannot reasonably be remedied or worked-around within thirty (30) days, in which case the cure period shall be extended as long as Inrange diligently pursues such remedy or work-around. 6.3 Rights of Parties on Termination or Expiration. The following provisions shall apply on the termination or expiration of this Agreement. 6.3.1 Inrange will complete all orders for Designated Inrange Products which (i) have been accepted by Inrange prior to the effective date of termination or expiration, but for which delivery has not yet been made, or (ii) are submitted by Purchaser (and accepted by Inrange) within six (6) months after the effective date of termination or expiration based on a contractual obligation between Purchaser and its customer which exists as of the effective date of termination or expiration. Inrange shall have a right to review and verify any contractual obligation between Purchaser and its customer which is the basis for an order under this Section. Termination or expiration shall not relieve the parties of their obligations under Sections 1.4, 1.5, 1.6, 1.7, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.12, 2.13, 2.14, 2.15, 2.16, 2.17, 2.18, 3.5, 3.6, 3.8, 3.11, 3.13, 6.3, 6.4, 6.5, 6.6 and Articles V and VII hereof. 6.3.2 Except as provided in Section 6.3.1, Purchaser shall cease all sales activities on behalf of Inrange. 6.3.3 Purchaser will have a continuing right to use Inrange's Confidential Information to fulfill Purchaser's support obligations with respect to Designated Inrange Products purchased under this Agreement. 17 18 6.3.4 All indebtedness of Purchaser to Inrange shall become immediately due and payable without further notice or demand, which is expressly waived, and Inrange shall be entitled to reimbursement for any reasonable attorneys' fees that it may incur in collecting or enforcing payment of such obligations. 6.3.5 Except as required for continued performance under Section 6.3.1, Purchaser shall remove from its property and immediately discontinue all use, directly or indirectly, of trademarks, designs, and markings owned or controlled, now or hereafter, by Inrange, or of any word, title expression, trademark, design, or marking that, in the opinion of Inrange, is confusingly similar thereto. Purchaser shall further certify in writing to Inrange that Purchaser has completely terminated its use of any and all such trademarks, designs, or markings, or any other word, title or expression similar thereto that appeared in or on any devices or other materials used in conjunction with Purchaser's business. 6.4 Remedy. Under no circumstance shall either party be liable to the other by reason of termination or non-renewal of this Agreement for compensation, reimbursement or damages for (a) loss of prospective compensation; (b) goodwill or loss thereof; or (c) expenditures, investments, leases or any type of commitment made in connection with the business of such party or in reliance on the existence of this Agreement. 6.5 Limited Right to Manufacture. Purchaser shall have the non-exclusive, nontransferable, worldwide right, during the period of time required for Purchaser to fulfill its contractual obligations existing on the date of the Trigger Event (as defined below), to manufacture or have manufactured the Designated Inrange Products solely for the purpose of Purchaser disposing of such Designated Inrange Products to OEMs wider private label upon the occurrence of any of the following events (each, a "Trigger Event"), provided that Purchaser is not then in breach of this Agreement, provided that the Trigger Event does not arise from or relate to any defects arising from or relating to the integration of Purchaser's ASICs in or with the Designated Inrange Products resulting from Purchaser's or the ASIC's supplier's actions, and provided that Purchaser manufactures the Designated Inrange Products in accordance with Inrange's specifications: (a) (i) the entry of an order for relief in a proceeding in bankruptcy (other than Chapter 11 of Title 11 of the U.S. Code, as the same may be amended) in which Inrange is the named debtor; (ii) Inrange's making of an assignment for the benefit of Inrange's creditors; (iii) the appointment of a receiver for Inrange; (iv) the filing of (1) any bankruptcy proceeding against Inrange, other than Chapter 11 of Title 11 of the U.S. Code, (2) any proceeding for an assignment for the benefit of Inrange's creditors or (3) any proceeding for appointment of a receiver or custodian of the assets and property of Inrange, which proceeding shall be consented to or acquiesced to be by Inrange or has not been discharged or terminated within ninety (90) days; (v) the rejection by Inrange or any trustee of Inrange of the Reseller Agreement pursuant to 11 U.S.C. #365; or (vi) following the filing of a proceeding under Chapter 11 of Title 11 of the U.S. Code, a failure by Inrange or its trustee to perform its obligations under the Reseller Agreement; (b) Inrange ceases to operate as a business for a period of thirty (30) days; (c) Inrange has materially breached this Agreement, and has failed to cure such breach within thirty (30) days after its receipt of written notice thereof from Purchaser or, if such 18 19 breach is not susceptible of cure within such period, has failed to commence such cure within such period; (d) Failure by Inrange to deliver at least 80% of the delivery quantities of conforming Designated Inrange Products for which Inrange has acknowledged acceptance of orders and provided a delivery date during any sixty (60) day period, which has not been cured within sixty (60) days after written notice thereof from Purchaser to Inrange; (e) The effective date of the discontinuance of the manufacture of a Designated Inrange Product pursuant to Section 2.13 (provided that the limited right to manufacture shall apply only to the discontinued Designated Inrange Product); or (f) Failure by Inrange to repair or replace defective Designated Inrange Products within the warranty period specified in Schedule 2.8, which has not been cured within thirty (30) days after written notice thereof from Purchaser to Inrange. In the event that Purchaser gains the limited right to manufacture as set forth in this Section, Inrange shall not have any obligations with respect to the Designated Inrange Products manufactured by Purchaser (including but not limited to any obligations to provide assistance, warranties, warranty service, or updates); provided, however, notwithstanding the foregoing, Inrange's indemnification obligation under Section 2.18 shall continue. The right granted under this Section will be terminated if Inrange demonstrates to Purchaser's reasonable satisfaction that it has cured the reasons for the Trigger Event and is able to fully perform the terms of this Agreement and has made Purchaser whole for all expenses Purchaser has incurred due to the event(s) and the implementation of the right granted under this Section. The right granted under this Section covers Designated Inrange Products in existence at the time it becomes effective and does not permit Purchaser to use Inrange's Confidential Information to develop new products. 6.6 Escrow. Within sixty (60) days alter execution of this Agreement, Inrange and Purchaser and Purchaser's designated independent escrow agent will execute a three party escrow agreement, consistent with the terms of Section 6.5, providing for the release of deposit materials in escrow to Purchaser upon the occurrence of a Trigger Event. Within sixty (60) days after Inrange's first sale of a Designated Inrange Product to Purchaser pursuant to this Agreement, Inrange will deliver to the escrow agent all Inrange Confidential Information required for the manufacture of the Designated Inrange Product. Inrange shall update such escrow account from time to time during the term of this Agreement, but no less than once in every six (6) month period, in order to keep such account current. Purchaser shall pay all costs, fees and charges of the escrow agent. Purchaser will use Inrange Confidential Information released by the escrow agent only in connection with its right under Section 6.5 and will return all such Inrange Confidential Information to Inrange upon the expiration or termination of such right. Notwithstanding the foregoing, if Purchaser transfers any of the Inrange Confidential Information to a third party in order to have the Designated Inrange Product manufactured as contemplated in Section 6.5, then (a) only such Inrange Confidential Information as is necessary to manufacture the Designated Inrange Product may be transferred and (b) such third party shall execute a written nondisclosure agreement that is at least as protective of Inrange's rights in such transferred Inrange Confidential Information as is provided 19 20 under this Agreement. Upon any release of the deposit materials in escrow to Purchaser pursuant to such escrow agreement, Inrange shall have no further obligation to maintain or update the escrow account. Further, upon the expiration or termination of Purchaser's right to purchase Designated Inrange Products pursuant to this Agreement, the escrow agreement shall be terminated and all deposit materials in escrow shall be returned to Inrange. ARTICLE VII GENERAL PROVISIONS 7.1 Entire Agreement. This Agreement, including the Schedules hereto, represents the entire agreement between the parties as to the purchase and sale of Designated Inrange Products by Purchaser and supersedes all prior discussions, agreements and understandings of every kind and nature between them pertaining to the subject matter hereof. Notwithstanding the foregoing, this Agreement does not supercede or modify in any manner the Technology License Agreement. No modification of this Agreement will be effective unless in writing and signed by both parties. 7.2 Notices. All notices under this Agreement shall be in English and shall be in writing and given by facsimile transmission (confirmed by overnight courier with certified receipt) addressed to the parties at the addresses set forth below: If to Inrange: Inrange Technology Corp. Attention: Nick Hannon 13000 Midlantic Drive Mr. Laurel, NJ 08054 Fax: (856) 231-6960 with copy to: Ms. Jean Santoro 13000 Midlantic Drive Mt. Laurel, NJ 08054 Fax:(856) 439-3005 If to Purchaser: Ancor Communications, Inc. 6321 Bury Drive, Suite 13 Eden Prairie, MN 55346 Attention: Kim Anderson Fax: (612) 932-4037 or, in each case, to such other person or address of which either party may advise the other in writing. Notices will be deemed given when sent. 7.3 Force Majeure. Neither party shall be in default hereunder by reason of any failure to delay in the performance of any obligation under this Agreement which such failure or delay 20 21 arises out of any cause beyond the reasonable control and without the fault or negligence of such party. Such causes shall include, without limitation, storms, floods, other acts of nature, fires, explosions, riots, wars or civil disturbances, strikes or other labor unrest embargoes and other governmental actions or regulations which would prohibit either party from ordering or furnish Products or from performing any other aspect of the obligations hereunder, delays in transportation, and inability to obtain necessary labor, supplies or manufacturing facilities. 7.4 Severability. The illegality or unenforceability of any provision of this Agreement shall not affect the validity and enforceability of any legal or enforceable provisions hereof. 7.5 Survival of Terms. Termination or expiration of this Agreement for any reason shall not release either party from any liabilities or obligations set forth in this Agreement which (a) the parties have expressly agreed shall survive any such termination or expiration, or (b) remain to be performed or by their nature would be intended to be applicable following any such termination or expiration. 7.6 Non-assignment. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the business interests of the parties hereto. Neither party shall have the right to assign or otherwise transfer its rights and obligations under this Agreement except with the prior written consent of the other party, whose consent shall not be unreasonably withheld, except that no consent shall be required for Inrange to assign or otherwise transfer its rights and/or obligations under this Agreement to one or more of Inrange's affiliates (i.e., an entity that controls, is controlled by, or is under common control with Inrange). Any prohibited assignment shall be null and void. 7.7 Announcements. The terms and conditions of this Agreement are confidential and, except to the extent that such disclosure is required by law, neither party shall disclose the terms and conditions of this Agreement to any third party without the prior written consent of the other party. Any press release or announcement containing any reference to the other party must be approved, in writing, by the referenced party prior to publication or release. 7.8 Waivers. Any failure of either party to comply with any obligation, covenant or agreement herein may be waived in writing by the other party, but such waiver or failure to insist upon strict compliance of such obligation, covenant or agreement shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. 7.9 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. 7.10 Applicable Law. This Agreement shall be interpreted in accordance with and governed by the laws of the State of New Jersey. IN WITNESS WHEREOF, the parties have caused this instrument to be executed by their duly authorized officers, as of the day and year first above written. 21 22 INRANGE TECHNOLOGIES CORPORATION By: /s/ Greg R. Grodhaus ------------------------------------ Name: Greg R. Grodhaus ---------------------------------- Title: President --------------------------------- ANCOR COMMUNICATIONS, INC. By: /s/ Cal Nelson ------------------------------------ Name: CAL NELSON ---------------------------------- Title: PRESIDENT --------------------------------- 22 EX-10.6 10 y38692a5ex10-6.txt TECHNOLOGY LICENSE AGREEMENT 1 Exhibit 10.6 TECHNOLOGY LICENSE AGREEMENT THIS TECHNOLOGY LICENSE AGREEMENT is entered into as of this 24th day of September, 1998 (the "Effective Date"), between Ancor Communications, Incorporated, a Minnesota corporation having its principal place of business at 6130 Blue Circle Drive, Minnetonka, Minnesota 55343 ("Ancor"), and INRANGE Technologies Corporation, a Delaware corporation having its principal place of business at 13000 Midlantic Drive, Mt. Laurel, New Jersey 08054 ("Inrange"). WHEREAS, Ancor has developed certain fibre channel technology including ASICs, ASICs-related circuit design, boards, firmware and software, for use in the storage area network markets; WHEREAS, Inrange desires to obtain rights under Ancor's technology to incorporate such technology into Inrange products for resale into the large data center connectivity and storage area network market; WHEREAS, Ancor desires to provide certain design and engineering services to Inrange to modify and design four boards, all on the terms and conditions set forth herein; WHEREAS, Ancor has granted to Inrange certain warrants to purchase an aggregate of 750,000 shares of Common Stock of Ancor, pursuant to a Warrant Agreement dated of even date herewith; and NOW, THEREFORE, in consideration of the premises contained in this Agreement, the parties agree as follows: 1. DEFINITIONS 1.1 As used herein, the following capitalized terms shall have the meanings indicated in this Section 1.1: (a) "Ancor Products" shall mean the ASICs and the Software. (b) "Ancor Technology" shall mean (i) U.S. Patent No. 4,821,034, issued April 11, 1989, and any other patents or patent applications covering the manufacture, use or sale of the Ancor Products and other Ancor products, (ii) the Software, the design and layout of the ASICs and their circuits (whether on the Boards or otherwise), and all other Ancor products, and all know-how, copyrights, patents, trade secrets and other proprietary rights necessary for the manufacture, use or sale of the Software, ASICs and their circuits (whether on the Boards or otherwise), and all other Ancor products, and (iii) all upgrades, corrections, modifications, improvements, additions to and derivatives works of the Software, the design and layout of the ASICs and their circuits (whether on the Boards or otherwise), and all other Ancor products, and all know-how, copyrights, patents, trade secrets and other proprietary rights related to such 2 upgrades, corrections, modifications, improvements, additions to and derivative works, which are developed by or for Ancor, but (iv) in all cases, excluding all Developed Technology and all Inrange Technology that is included in, or used in the manufacture, use or sale of, the Software, ASICs and their circuits, or the Boards. The Ancor Technology is more particularly described on Exhibit 1 hereto, and the parties expressly acknowledge that the Ancor Technology shall include Ancor's existing ATM fibre channel tunneling and bridge technology, and all upgrades, corrections, modifications, improvements, additions to or derivative works thereof that are independently (i.e., without development funds by Inrange) created by or for Ancor. (c) "ASICs" shall mean Ancor's S-4.X and B-4.X series of Fibre Channel Switch chips meeting the Description set forth on Exhibit 2, and any upgrades, corrections, modifications, improvements, additions to or derivative works thereof, including any redesigns thereof pursuant to Section 4.4 below. The parties expressly acknowledge and agree that the term ASICS does not include Ancor's S-16.X series of Fibre Channel Switch ASICs or any other current or future products unless expressly agreed by the parties in writing. (d) "Beta Level" shall mean that the Boards incorporate all of the Ancor-provided operational functions set forth in the Descriptions. The Ancor-provided portion of the design shall be stable and bug-free enough to support field testing at a designated Inrange customer site to evaluate operation under "real world" conditions. The FC/9000 Boards must also be able to complete self-test. The CD/9000 Board must also be able to power-on and provide the functionality of the Fibre Channel portion of the Board. (e) "Boards" shall mean those four printed circuit boards to be designed by Ancor and Inrange, on behalf of Inrange, pursuant to this Agreement, which incorporate the ASICs and/or the Ancor Technology, and which meet the Descriptions set forth on Exhibit 3, including all upgrades, corrections, modifications, improvements, additions to or redesigns thereof as contemplated hereunder. (f) "Developed Technology" shall mean all upgrades, corrections, modifications, improvements, additions to, derivative works or redesigns of the Software, ASICs and their circuits, and the Boards, and all know-how, copyrights, patents, trade secrets and other proprietary rights related to such upgrades, corrections, modifications, improvements, additions to, derivative works or redesigns which are developed by Ancor (whether alone or in conjunction with Inrange or any third party) directly as a result of development efforts funded by Inrange hereunder. (g) "Descriptions" shall mean the descriptions of Ancor Products and the Boards as set forth in Exhibits 2 and 3, respectively, as such descriptions may be amended from time to time pursuant to the terms of this Agreement. (h) "Inrange Market" shall mean the high end data center networking and data center storage area network markets for the IBM and IBM-compatible MVS, VM and TPF -2- 3 environments and any next generation of such environments. The parties expressly acknowledge and agree that the Inrange Market excludes UNIX and Windows NT storage area network markets. (i) "Inrange Products" shall mean any of Inrange's fibre channel connectivity products that incorporate the Ancor Products, Ancor Technology or Developed Technology. (j) "Inrange Technology" shall mean all designs, software, firmware and other technology, and all upgrades, corrections, modifications, improvements, additions to and derivative works thereof, and all related know-how, copyrights, patents, trade secrets and other proprietary rights, that Inrange owns or licenses as of the Effective Date or independently (i.e., without Ancor's or its agents' material assistance hereunder) creates or acquires thereafter, and which are included in or used in the manufacture, use or sale of the Software, ASICs and their circuits, the Boards, or the Inrange Products. (k) "Software" shall mean the computer software (including firmware) developed by Ancor and incorporated into or associated with any of the ASICs and all upgrades, corrections, modifications, improvements, additions to and derivative works thereof. The parties acknowledge that portions of the Software may be embedded as firmware. (l) "Source Code" shall mean the Software in human readable form, including programmers' comments, data files and structure, programming tools not commercially available, technical specifications, flowcharts and logic diagrams, schematics, annotations and documentation reasonably required or necessary to enable an independent third-party programmer with a high level of programming skill, to create a revised version of the object code version. (m) "VHDL Simulation" shall mean VHDL design simulation for the integration of Ancor and Inrange systems technologies to ensure interoperability and performance. 2. TECHNOLOGY LICENSE 2.1 Grant of License. Subject to the terms and conditions of this Agreement, Ancor hereby grants to Inrange a worldwide license, under the Ancor Technology to (a) use, import, sell and offer for sale, but (subject to Section 5.1, 5.2 and 5.3 below) not make or have made, the ASICs solely for incorporation into the Boards or the Inrange Products; (b) make, have made, use, import, sell and offer for sale the Boards and Inrange Products; (c) use, reproduce and distribute the Software, in object code format only, solely in connection with the Boards and the Inrange Products; and (d) design, manufacture, market, sell, lease, service and sublicense Inrange Products. In addition, Inrange shall have the right to modify and use the Source Code to the Software included in the Boards for the purposes of Inrange's development of custom features. The license granted hereunder expressly excludes the rights to modify, reengineer, reverse -3- 4 engineer (except as provided in Section 2.7(b)) or redesign the ASICs, and to sell or distribute the ASICs at the chip level. Notwithstanding the foregoing, the parties acknowledge that Inrange may sell the Boards in the Inrange Market separately as after-market solutions for use with then-installed Inrange products. 2.2 Covenant, Retained Rights of Ancor. Ancor agrees not to sell, lease, license or distribute, or authorize or permit any third party to sell, lease, license or distribute, for use in the Inrange Market (a) the ASICs (i.e., at the chip-level), (b) the ASICs and Software (i.e., at the component level), or (c) any other Ancor products (i.e., at the board or box level) that will be front-ended or configured for the purpose of providing essentially the same high-redundancy and scale as is provided in the Inrange Products. An example of front-ending is McData's ES-4000 use of Brocade's Silkworm Fibre Channel switches. The parties acknowledge and agree that the foregoing does not limit in any way Ancor's right to sell, lease, license and distribute (a) to any third party for use in the Inrange Market, Ancor's current and future products (i.e., at the board or box level, but excluding the Boards) that will not be front-ended or configured for the purpose of providing essentially the same high-redundancy and scale as is provided in the Inrange Products, and (b) the ASICs, Software and any current or future Ancor products (i.e., at the board or box level, but excluding the Boards) to any third party for use in any market other than the Inrange Market. Subject to this Section 2.2, Ancor retains all rights not expressly granted to Inrange hereunder, including without limitation, the right to sell, lease, license and distribute the Ancor Products (whether on a chip, component, board or box level, but excluding the Boards), on a worldwide basis in all markets other than the Inrange Market. The parties shall negotiate in good faith a reduction of the royalty rate provided for in Section 3.3 if a final unappealable judgment from a court of competent jurisdiction prohibits Ancor from fulfilling its obligations under this Section 2.2 which reduction shall be effective from the date Ancor does not fulfill its obligations. 2.3 Sublicenses. The rights granted to Inrange under Section 2.1 may not be sublicensed, transferred or assigned to any third party except with the prior written consent of Ancor; which may not be unreasonably withheld, provided that Inrange may sublicense its rights hereunder without such consent to any affiliate of Inrange. As used herein, the term "affiliate" means any corporation or business entity that controls, is controlled by or is under common control with Inrange, with "control" meaning beneficial ownership of 50% or more of the voting stock of, or a 50% or greater interest in the income of, such corporation or other business entity, or the maximum ownership permitted by law or administrative practice. 2.4 Distribution in Inrange Market. Inrange shall have the right to distribute the Inrange Products through its direct sales force, OEM manufacturers, systems integrators, distributors and the like; provided that (a) any OEM, systems integrator or distribution agreement shall contain terms consistent with the terms hereof; and (b) Inrange shall use good faith efforts to enforce such agreements against such OEMs, system integrators, distributors and the like. 2.5 Distribution of Software. Any and all distribution of the Software hereunder shall be pursuant to the terms of Ancor's standard shrinkwrap end-user license agreement. Any -4- 5 references herein to the "sale" of the Inrange Products shall mean to include, with respect to the Software, only the licensing of that Software, in object code format, pursuant to the terms of such license agreement. 2.6 Rights to S-16 Products. The parties agree to include the S-16.X series of Fibre Channel Switch chips as an ASIC subject to this Agreement, subject to (a) payment by Inrange of a non-refundable license fee of $4 million and (b) renegotiation of royalties payable hereunder for both the S-4.X and S-16.X series of ASICs, to be negotiated in good faith by the parties within thirty (30) days after Inrange notifies Ancor in writing of its desire to include the S-16.X series. 2.7 Licensee Obligations. (a) Best Efforts. Inrange shall use its best efforts, consistent with its business plan, to further the promotion, marketing, and distribution of the Inrange Products. (b) Reverse Engineering. Except to the extent that Inrange has rights to Source Code, Inrange shall not reverse engineer, decompile or disassemble the Software (including without limitation any portions thereof that are embedded as firmware) and shall not knowingly allow any other person to do so. 2.8 Prices to OEMs, Distributors. Inrange shall, in its sole discretion, determine the prices to be paid by third parties for the Inrange Products. 2.9 OEM Agreement. The parties shall use their best efforts to negotiate and execute, within thirty (30) days of the Effective Date, an OEM agreement the terms of which shall include (a) the appointment of Inrange as a nonexclusive worldwide OEM distributor of Ancor's standard products; (b) pricing for such products on a most-favored customer basis with respect to other OEM distributors purchasing similar volumes of such products, and (c) other customary and reasonable terms to be mutually agreed by the parties. 3. LICENSE FEE AND ROYALTIES 3.1 License Fee. In consideration of the rights granted hereunder, Inrange shall pay to Ancor a license fee of $* million, payable as follows: $* million on the date this Agreement becomes effective as provided in Section 5.3 below, $* million on or before December 15, 1998 and $* mi1lion on or before March 31, 1999. Such license fee shall be non-creditable and nonrefundable. 3.2 Prepaid Royalties. Inrange shall pay to Ancor, on or before March 31, 1999, $* million in prepaid royalties. In consideration of such prepayment, Inrange shall be entitled to a dollar for dollar credit of $* against royalties which accrue under Section 3.3. The unused balance of such prepaid royalties shall be refunded to Inrange in the following events: (a) *Confidential treatment requested with respect to this information. -5- 6 the occurrence of any of the conditions set forth in Section 5.3; (b) the acquisition or merger of Ancor with, or the sale of all of its assets to, any Inrange competitor, or (c) the failure of the ASICs to meet the Descriptions, which failure is not remedied within ninety (90) days written notice thereof from Inrange or if such failure is not susceptible of cure within such period, the failure of Ancor to commence implementation of a mutually agreed plan to remedy such failure within such period. If the prepaid royalties are refunded to Inrange on or before December 31, 1999, pursuant to this Section 3.2, the full royalties set forth in Section 3.3 below shall apply to sales of Inrange Products which occur after the date of the event giving rise to the refund. If the refund occurs on or after January 1, 2000, the royalty payable by Inrange on Inrange Products pursuant to Section 3.3 below shall be discounted in an amount equal to * of the refunded prepaid royalty multiplied by the number of years elapsing be the date of payment of the prepaid royalty (March 31, 1999) and the date of the event giving rise to the refund. The discount shall be applied, on a dollar for dollar basis, to royalties accrued by Inrange commencing upon said date, until such the total discount amount exhausted. 3.3 Royalties to Ancor. (a) Subject to Sections 3.2 and 3.4, Inrange shall pay Ancor the following royalties for each Inrange Product sold, licensed, leased, distributed or otherwise transferred by or on behalf of Inrange to any third party:
Product Royalty ------- ------- FC/9000 * CD/9000 * Broadband * All other Inrange Products *
Such royalty shall accrue on the date of sale, license, lease, distribution or other transfer of such Inrange Product to such third party, and shall be payable on a calendar quarterly basis, within 30 days of the end of the quarter in which such royalty obligation accrued. Notwithstanding the generality of the foregoing, no royalty obligation shall accrue upon the transfer of Inrange Products to customers for the purpose of maintenance and repair if the transfer of the Inrange Products is not revenue generating. Along with each such royalty payment, Inrange shall provide a report showing the model/type and number of units of Inrange Products (and the corresponding number of user ports, if applicable) sold, licensed, leased, distributed or otherwise transferred during such quarter. The above royalty rates may be renegotiated in good faith based on market pricing, competitive pressures or Inrange's sales volume. (b) Should Ancor, during the term of this Agreement, grant to any independent third party selling fibre channel connectivity products a license of Ancor Technology on terms which, when viewed in their entirety (including, without limitation, initial license fees, royalty rates charged and minimum annual royalties due) are more favorable than the terms granted to Inrange * Confidential treatment requested with respect to this information. -6- 7 hereunder, then Ancor shall promptly provide to Inrange a correct and complete summary of such more favorable terms. (c) Inrange shall be entitled, upon written request within ninety (90) days after receipt of such summary from Ancor, to have the royalty terms in this Agreement replaced with the more favorable terms, and the parties will effect an appropriate amendment to this Agreement which shall be effective as of the date Ancor receives such request from Inrange. Such amendment shall not affect any transactions by the parties hereunder prior to its effective date. In no case shall this provision be construed to impose any obligation on Ancor to repay to Inrange any royalties previously paid pursuant to this Agreement or any antecedent license agreement concerning the Ancor Technology. 3.4 Limitation on Exclusivity. The anticipate that, by December 31,2000, Inrange Products shall have attained at least * market share (the "Minimum Market Share"). Thereafter, the Minimum Market Share for each year this Agreement is in effect will be mutually agreed to by the parties by December 31 of the prior year (i.e., the Minimum Market Share for 2001 will be agreed to by December 31, 2000). If the parties fail to agree whether the actual market share attained by Inrange Products for a particular year meets the Minimum Market Share for such year, then each party will select one (1) independent nationally recognized market analyst within forty-five (45) days of the end of such year to determine and certify whether the applicable Minimum Market Share was met during the prior year. If the two analysts do not agree, then they shall appoint a third analyst, and the conclusion of two of the three analysts shall control. If two of the analysts determine that the Minimum Market Share was not met in a particular year, they shall also be required to deliver, by the end of the first quarter of the next calendar year, a written report setting forth in detail the reasons for the failure and make recommendations so Inrange may attain the Minimum Market Share by the end of the second fiscal quarter following delivery of such report. Inrange shall adopt a specific, mutually agreeable plan based on the analysts' recommendations so as to achieve the Minimum Market Share in the next year. The costs of the analysts shall be borne equally by the parties. If Inrange does not meet the Minimum Market Share by the end of the second fiscal quarter following delivery of the report in any particular calendar year, then Ancor may, at its option terminate the covenant set forth in Section 2.2. Notwithstanding the foregoing, Ancor may not exercise this option referred to in the preceding sentence if the analysts conclude that the failure of Inrange to meet the Minimum Market Share in a particular calendar year is principally due to any factor within the reasonable control of Ancor, including, without limitation, problems with ASICs' supplier(s) or defects in ASIC and Board designs. 3.5 Audit Rights. Inrange shall keep adequate and complete books and records related to the sales of the Inrange Products for a period of no less than five (5) years following completion of the fiscal year in which the sale of the Inrange Product occurred. Such books and records shall include all information necessary to verify the total amount and computation of the sales of such Products. Upon request, but no more than once per calendar year, Inrange shall provide Ancor's independent auditors with access, during regular business hours and upon * Confidential treatment requested with respect to this information. -7- 8 reasonable prior notice, and subject to the undertakings contained in this Agreement, to Inrange's books and records relating to the Inrange Products solely for the purpose of verifying the accuracy of the calculations hereunder. If such audit shows any underpayment or overpayment, a correcting payment or refund, together with interest at the current prime lending rate established by leading New York banks as published in The Wall Street Journal, shall be made within thirty (30) days of completion of such audit and submission of the results thereof, with details of the calculations included therein. The costs of such audit shall be borne by Ancor; provided that Inrange shall reimburse Ancor its actual out-of-pocket expenses of such audit, if such audit reveals any underpayment of amounts owing hereunder of more than ten percent (10%) for any period covered by such audit. 3.6 Tax Withholding. If any taxes are imposed as a result of this Agreement or the performance of the parties hereunder, such taxes shall be borne and paid by the party required to do so under applicable law or treaty. If law or regulations in any country require that taxes be withheld, Inrange will (a) deduct those taxes from the applicable royalty payment, (b) timely pay the taxes to the proper taxing authority, and (c) furnish Ancor with a certificate of the relevant tax authorities within such country, in a form issued by such tax authorities and reasonably acceptable to the U.S. Internal Revenue Service, documenting payment of such taxes. 4. DEVELOPMENT OF BOARDS, TECHNICAL ASSISTANCE AND TRAINING 4.1 Development. Ancor agrees to design and develop, on behalf of Inrange, the four (4) Boards in accordance with the Descriptions and the development program set forth on Exhibit 4, including the project development schedule established as part of the development program. The parties agree to fully cooperate in developing the Boards, and to provide all reasonably necessary information and resources so that the contemplated development program, along with its schedule, may be met; provided that if such schedule is not met due to the fault of a party, the other party shall not be deemed to be in default of this provision. Each party shall designate an individual to coordinate communications between the parties with respect to development and technical assistance activities hereunder. 4.2 Cost of Development. In consideration of such design and development services hereunder, Inrange agrees to pay Ancor $* in development fees for the first three (3) Boards listed on Exhibit 3, payable as follows: $* or each of the three (3) Boards upon each of the following events: (1) start of the functional requirements document therefor, (2) completion of the Beta Level design of the applicable Board as agreed by Inrange, such agreement not to be unreasonably withheld, and (3) final release by Inrange of the applicable Board. Inrange also agrees to pay Ancor for development of the Internet Protocol or Tunneling Board for Inrange's broadband products at a rate of $* per staff month (i.e., 180 hours), not to exceed $* Ancor's responsibility in providing assistance is limited to the Fibre Channel portion of the Board and layout, and does not include changes to the ASICs for this Board. Such payments shall be non-creditable and non-refundable. *Confidential treatment requested with respect to this information. -8- 9 4.3 Additional Development. Upon Inrange's request, Ancor shall provide reasonable development services, in addition to those development services provided under Section 4.1, for development of additional boards incorporating the ASICs, subject to availability of appropriate engineering personnel and mutual agreement on the scope of such development services, at the rate of $* per staff month. 4.4 ASIC Redesign. If, during the term of this Agreement, the ASICs become obsolete, Inrange may notify Ancor of such obsolescence and the parties shall negotiate in good faith to determine what changes, if any, need to be made to the ASICs and how the costs of such development should be allocated between them. Ancor shall provide to Inrange within fourteen (14) days (or such longer period as the parties may agree) of Inrange's notice a proposed development plan for such change and the parties shall negotiate a mutually agreed final development plan within fourteen (14) days (or such longer period as the parties may agree) of Inrange's receipt of Ancor's submittal. For the purpose of the preceding sentence, "obsolete" shall mean that the ASICs have become, for any reason, incapable of providing the features contracted for in this Agreement, in accordance with the Descriptions, and/or remaining current with industry standards (applicable only to the Inrange Market) and competitive products in the Inrange Market, on a going-forward basis. The parties also understand that market changes may necessitate changes to the ASICs. If the necessary non-recurring engineering required for such development affects or responds to all markets for the ASICs, Ancor shall bear the major portion of the costs of such non-recurring engineering, and if the necessary non-recurring engineering primarily affects or responds to the Inrange Market, Inrange shall bear the major portion of costs for such non-recurring engineering. Notwithstanding the foregoing, Ancor shall bear the costs of assuring backward compatibility of any redesign of the ASICs. Notwithstanding any ASIC redesign hereunder, during the term of this Agreement, Ancor covenants, at its cost, to maintain the functionality of the ASICs, as set forth in the Description for the ASICs and to support then current fibre channel standards for all Class 1, 2 and 3 of fibre channel connectivity. Within fourteen (14) days (or such longer period as the parties may agree) of the date of Inrange's notice of noncompliance, Ancor shall produce an action plan acceptable to Inrange for the correction of an ASIC redesign that is not backward compatible or fails to conform to the Descriptions or the then current fibre channel standards. 4.5 Technology Transfer and Technical Assistance. Ancor shall not be required hereunder to produce or provide detailed documentation for the ASICs, but will work with Inrange to transfer necessary Ancor Technology relating to applying the ASICs to the Boards in a timely manner. Such transfer shall be accomplished by allowing Inrange engineers to monitor the Board design process and to attend design reviews for the Boards, and providing to Inrange pertinent technical information and/or documentation as reasonably required to successfully complete the transfer. Inrange shall allocate* to monitor the Board design process, attend such design reviews for the Boards and participate in the training to be provided pursuant to Section 4.6. Ancor and Inrange shall also engage in joint VHDL Simulation to enable Inrange to complete systems integration of the ASICs into the Inrange Products, and shall use their best efforts to resolve integration issues. In addition, Ancor will make available to *Confidential treatment requested with respect to this information. -9- 10 Inrange an engineer to provide "Application Engineer" Level assistance on Inrange Products that incorporate the ASICs on a dedicated full time basis, for* during the development of such Inrange Products or completion of the Boards, whichever is longer,* , and thereafter, on an as-needed part time basis, at a rate of * per staff month (i.e., 180 hours). Ancor further agrees to make available sufficient technical resources to perform timely (i.e., within five days unless otherwise agreed by both parties) and effective technical support to correct design defects and perform bug fixes on the Boards. 4.6 Training. Ancor shall provide reasonable training and documentation, at*, in the use of the object code of the Software to Inrange's technical staff, and in the use of the Ancor Products generally, to Inrange's sales and support personnel; provided, however, that Inrange shall bear the travel and living expenses of such personnel. The parties agree that such training shall follow the "train the trainer" model. 4.7 Sales and Marketing Support. Ancor shall provide Inrange with limited sales and marketing support as reasonably requested by Inrange, including visits to Inrange customers, participation by Ancor in one sales meeting per year and in one Inrange Customer Advisory Council meeting per year; provided, however, that Inrange shall bear the travel and living expenses of such personnel. 5. PURCHASE AND SUPPLY OF ASICS 5.1 Purchase from Ancor's Third Party Manufacturer. Inrange acknowledges that the ASICs are manufactured for Ancor by a third party foundry, LSI Logic ("LSI"), and that Inrange shall purchase all ASICs directly from LSI or its distributors pursuant to written purchase orders submitted by Inrange directly to LSI or its distributors. Ancor agrees to authorize LSI and its distributors, in writing, to supply the ASICs directly to Inrange solely for incorporation into the Inrange Products and resale into the Inrange Market. If Inrange cannot agree to terms with LSI, then Ancor shall supply ASICs to Inrange pursuant to written purchase orders, at Ancor's cost plus administrative expenses of * which administrative expenses shall be capped at * per calendar year. 5.2 Continuing Supply, Price and Quality of ASICs. Notwithstanding Section 14.6, Ancor agrees that if LSI or its distributors do not provide ASICs in the quantities or at the price agreed with Inrange, or provide ASICs that do not meet the performance warranties agreed with Inrange (as set forth in Exhibits 1, 2 and 3 hereof), Inrange shall so notify Ancor in writing and Ancor shall use its best efforts to remedy such failures within forty-five (45) days of such notice to Ancor, including if the parties deem appropriate after good faith negotiations, locating and qualifying a second manufacturer for the ASICs and porting the necessary Ancor Technology to such second manufacturer. The parties shall mutually agree on how the costs of such technology porting shall be borne. *Confidential treatment requested with respect to this information. -10- 11 5.3 Technology Escrow. As conditions precedent to the effectiveness of this Agreement and Inrange's obligation to make payments hereunder: (a) the parties shall execute, with Data Securities International, Inc. ("DSI"), as escrow agent, a Preferred Escrow Agreement in the form attached hereto as Exhibit 6 (the "Escrow Agreement"); (b) Ancor shall deliver to DSI the deposit materials in accordance with Sections 1.1 and 1.2 of the Escrow Agreement; and (c) the deposit materials shall have been verified by Inrange, and inspected and accepted by DSI pursuant to Sections 1.3 and 1.4 of the Escrow Agreement. Such escrowed technology shall include, without limitation, the Ancor Technology for the manufacture and modification of the ASICs and the Source Code for the Boards. Ancor shall update such escrow account from time to time during the term of this Agreement, but no less than once in every six (6) month period, in order to keep such account current. Inrange shall bear the costs and expenses of such escrow account. Such escrow agreement shall provide Inrange with access to the Ancor Technology in the following events: (a) (i) the entry of an order for relief in a proceeding in bankruptcy (other than Chapter 11 of Title 11 of the U.S. Code, as the same may be amended) in which Ancor is the named debtor; (ii) Ancor's making of an assignment for the benefit of Ancor's creditors, (iii) the appointment of a receiver for Ancor; (iv) the filing of (1) any bankruptcy proceeding against Ancor, other than Chapter 11 of Title 11 of the U.S. Code, (2) any proceeding for an assignment for the benefit of Ancor's creditors or (3) any proceeding for appointment of a receiver or custodian of the assets and property of Ancor, which proceeding shall be consented to or acquiesced to by Ancor or has not been discharged or terminated within ninety (90) days; (v) the rejection by Ancor or any trustee of Ancor of the Technology License agreement pursuant to 11 U.S.C. ss.365; or (vi) following the filing of a proceeding under Chapter 11 of Title 11 of the United States Code, the failure by Ancor or its trustee to perform its obligations under the Technology License Agreement; (b) Ancor ceases to operate as a business for a period of thirty (30) days; (c) Any Change of Control (as defined herein) of Ancor by or with CNT, Cornet, McData, IBM, Brocade or EMC or their respective successors or assigns. The term "Change of Control" shall mean. either (i) the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act as amended (the "Exchange Act")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of Ancor or (B) the combined voting power of the then outstanding voting securities of Ancor entitled to vote generally in the election of directors; or (ii) -11- 12 consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of Ancor. (d) Any Change of Control of Ancor that is not approved by a majority of the Continuing Directors (as defined herein). The term "Continuing Directors" shall mean those individuals who are members of Ancor's Board of Directors on the date hereof and any individual who subsequently becomes a member of Ancor's Board of Directors, if such individual's nomination for election or election to Ancor's Board of Directors is approved by a vote of at least a majority of the Continuing Directors; provided that no individual shall be considered a Continuing Director if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-1 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of any entity or person other than the Ancor Board of Directors (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest. (e) Ancor or any successor thereto has materially breached this Agreement, and has failed to cure such breach within thirty (30) days written notice hereof from Inrange or, if such breach is not susceptible of cure within such period, has failed to commence such cure within such period; or (f) LSI (or any successor foundry for the ASICs) or Ancor fails to supply the ASICs in the quantities subject to purchase orders accepted by LSI (or any successor foundry) or Ancor, as applicable, pursuant to the supply arrangement between LSI (or any successor foundry), or Ancor and Inrange, as contemplated under Section 5.1 for a period of thirty (30), or access to such ASICs is materially disrupted for a period of thirty (30) days; provided that Ancor has not created a plan to cure such failure within thirty (30) days that is reasonably acceptable to Inrange. If Inrange is entitled to access such Ancor Technology, Inrange shall have the nonexclusive, nontransferable and non-sublicenseable (except as expressly provided below) right, pursuant to such escrow agreement, to design, modify, use and create derivative works of the Ancor Technology solely for the purposes of (1) manufacturing or having manufactured the ASICs solely for incorporation into the Boards or the Inrange Products; (2) modifying the ASICs as contemplated in Section 4.4; (3) modifying the Boards or Inrange Products; (4) using, reproducing and distributing the Software (in object code format only) in connection with the Boards and the Inrange Products; (5) designing, manufacturing, marketing, selling, leasing, -12- 13 servicing and sublicensing Inrange Products, and for no other purpose, and Inrange shall continue to pay royalties with respect to the Inrange Products pursuant to Section 3.3. In addition, Ancor agrees to provide reasonable assistance to Inrange, to the extent that Ancor has engineering staff then available, to achieve an orderly transition from ASIC to technology utilization. Notwithstanding the foregoing, if Inrange is required to transfer any of the Ancor Technology to a third party in order to have the ASICs manufactured as contemplated above, then (a) only such Ancor Technology as is necessary to manufacture the ASICs may be transferred, and (b) such third party shall execute a written nondisclosure agreement that is as least as protective of Ancor's rights in such transferred Ancor Technology as is provided hereunder. Upon any release of the deposit materials in escrow to Inrange pursuant to such escrow agreement: (1) Ancor shall have no further obligation to maintain or update the escrow account; (2) Ancor's obligations under Sections 4.3, 4.4, 4.5, 4.6 and 4.7 shall only continue for a period of two years following the release of the materials in escrow, provided, however, Ancor's obligation to redesign ASICs under Section 4.4 shall be limited to*; and (3) Ancor's obligations under Section 5.2 shall terminate, provided, however, if Inrange thereafter proposes to locate and qualify a second manufacturer for the ASICs and port the necessary Ancor Technology to such second manufacturer (collectively, a "Second Sourcing"), (i) Ancor will participate and provide technical assistance with respect to such Second Sourcing only to the extent mutually agreed by the parties after good faith negotiations and (ii) Inrange shall be entitled to a discount of * off the royalties payable to Ancor under Section 3.3 until such time as Inrange has recovered, through such discounts, the costs of the Second Sourcing (excluding any costs borne by Ancor), which costs shall be documented by Inrange to Ancor within a reasonable period of time after such costs are incurred. 6. EXPORT CONTROL AND OTHER GOVERNMENTAL APPROVALS 6.1 Import Documentation. If applicable, Inrange shall be responsible for obtaining all licenses and permits required to import the Ancor Products into a particular country in accordance with applicable laws or regulations of such country. 6.2 Export Regulations. If applicable, Inrange shall supply Ancor on a timely basis with all necessary information and documentation requested by governmental authorities for export of the applicable Products in accordance with U.S. export control laws or regulations. 6.3 Written Assurance. If applicable, Inrange hereby assures Ancor that: (a) Inrange shall not reexport, directly or indirectly, the Products or the product of any Products to any country to which such reexport is not permitted under a general license established under the United States Export Administration Regulations unless and until Ancor shall have applied for and obtained, at the request and expense of Inrange, an individual validated license from the Office of Export Administration, United States Department of Commerce for such reexport. *Confidential treatment requested with respect to the information. -13- 14 (b) Inrange's undertaking in subsection (a) of this Section shall apply to all sales of Products occurring after the termination of this Agreement. 6.4 Compliance with Laws. Inrange shall comply with all applicable laws affecting this Agreement and its performance hereunder and, without limiting the generality of the foregoing, shall maintain all registrations with governmental agencies, commercial registries, chambers of commerce, or other offices which may be required under local law in order to enable it lawfully to conduct its business and perform its obligations under this Agreement. In addition, Inrange acknowledges that Ancor is subject to certain United States laws, including but not limited to the Foreign Corrupt Practices Act, which apply to activities carried out on its behalf outside the United States and agrees to neither take nor omit to take any action if such act or omission, as the case may be, might cause Ancor to be in violation of any such law. Upon written notice from Ancor, Inrange shall provide such information as Ancor shall reasonably consider necessary to verify compliance by Inrange with the provisions of this Section 6.4. 7. CONFIDENTIALITY 7.1 Confidential Information; Term. All Confidential Information (as defined in Section 7.2 below) shall be deemed confidential and proprietary to the party disclosing such information hereunder. Each party may use the Confidential Information of the other party during the term of this Agreement only as permitted or required for the receiving party's performance hereunder. The receiving party shall not disclose or provide any Confidential Information to any third party and shall take reasonable measures to prevent any unauthorized disclosure by its employees, agents, contractors or consultants during the term hereof including appropriate individual nondisclosure agreements. The foregoing duty shall survive any termination or expiration of this Agreement for a period of five (5) years. 7.2 Definition. As used in this Agreement, the term "Confidential Information" shall mean all information (a) designated by a party as confidential and which is disclosed by Ancor to Inrange, or is disclosed by Inrange to Ancor; (b) is embodied in the Ancor Products or Inrange Products, regardless of the form in which it is disclosed; (c) the Source Code, or (d) any information relating to markets, customers, products, patents, inventions, procedures, methods, designs, strategies, plans, development efforts, assets, liabilities, prices, costs, revenues, profits, organization, employees, agents, resellers or business in general, or, the algorithms, programs, user interfaces and organization of the disclosing party's Products. 7.3 Exclusions. The following shall not be considered Confidential Information for purposes of this Article 7: (a) Information which is or becomes in the public domain through no fault or act of the receiving party; -14- 15 (b) Information which was independently developed by the receiving party without the use of or reliance on the disclosing party's Confidential Information; (c) Information which was provided to receiving party by a third party under no duty of confidentiality to the disclosing party; or (d) Information which is required to be disclosed by law, provided, however, prompt prior notice thereof shall be given to the party whose Confidential Information is involved. 8. REPRESENTATIONS, WARRANTIES AND COVENANTS 8.1 Representations, Warranties and Covenants of Inrange. Inrange hereby represents and warrants to Ancor that: (a) It is a corporation duly organized, validly existing and in good standing under the laws of the state and country of its incorporation and has the corporate power to own its assets and properties and to carry on its business as now being and heretofore conducted; (b) It is duly authorized to execute and deliver this Agreement and to perform its obligations and hereunder; (c) The execution, delivery and performance of this Agreement have been duly authorized, do not violate its certificate of incorporation, bylaws or similar governing instruments or applicable law and do not, and with the passage of time will not, materially conflict with or constitute a breach under any other agreement, judgment or instrument to which it is a party or by which it is bound; (d) To the best of Inrange's knowledge (without having conducted any intellectual property search), the Inrange Products do not, and the Ancor Products to the extent modified by Inrange (or its agents or sublicensees) and their use as permitted or contemplated hereunder shall not infringe upon any third party intellectual property rights, including without limitation any patent, copyright, mask work registration or trade secret. 8.2 Representations, Warranties and Covenants of Ancor. Ancor hereby represents and warrants to Inrange that: (a) It is a corporation duly organized, validly existing and in good standing under the laws of the state and country of its incorporation and has the corporate power to own its assets and properties and to carry on its business as now being and heretofore conducted; -15- 16 (b) Ancor is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder; (c) The execution, delivery and performance of this Agreement have been duly authorized, do not violate its Articles of Incorporation or bylaws or applicable law and do not, and with the passage of time will not, materially conflict with or constitute a breach under any other agreement, judgment or instrument to which it is a party or by which it is bound; (d) To the best of Ancor's knowledge (without having conducted any intellectual property search), the Ancor Products (except to the extent modified by Inrange or its agents or sublicensees) and their use as permitted or contemplated hereunder, do not and shall not infringe upon any third party intellectual property rights, including without limitation any patent, copyright, mask work registration or trade secret; (e) Ancor has the right to grant the licenses granted herein, and (f) The design of the Ancor Products and portions of the Boards to be designed by Ancor as contemplated hereunder, will meet the Descriptions; Inrange's sole remedy and Ancor's exclusive liability for any breach of this warranty shall be for Ancor to redesign the Ancor Products and/or the Boards to correct such non-conformance, at no expense to Inrange. 8.3 Warranty Disclaimers and Limitations. EXCEPT AS SET FORTH IN SECTION 8.2 ABOVE, ANCOR MAKES NO WARRANTIES TO INRANGE OR ITS CUSTOMERS WITH RESPECT TO THE ANCOR TECHNOLOGY, THE ANCOR PRODUCTS OR THE BOARDS, EXPRESS OR IMPLIED, AND SPECIFICALLY, WITHOUT LIMITATION, ANCOR DISCLAIMS ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS SET FORTH ABOVE, ANCOR NEITHER ASSUMES NOR AUTHORIZES ANY PERSON TO ASSUME ANY LIABILITY OR WARRANTY IN CONNECTION WITH THE ANCOR PRODUCTS AND BOARDS. ANCOR DOES NOT WARRANT THAT THE USE OR OPERATION OF THE ANCOR PRODUCTS AND BOARDS WILL BE UNINTERRUPTED OR ERROR-FREE. 9. OWNERSHIP OF INTELLECTUAL PROPERTY 9.1 Ownership of Ancor Technology. Inrange acknowledges that Ancor shall retain the entire right, title and interest in and to the Ancor Technology (and all proprietary rights therein, including, without limitation, all patents, copyrights and trade secrets). Inrange shall do or cause to be done all matters and things as may reasonably and lawfully be required to secure to Ancor the full right of ownership, use and enjoyment thereof in and for all countries. Upon request of Ancor, all of Inrange's agents, servants, representatives and employees performing -16- 17 work pursuant to or related to this Agreement shall be required to confirm that all right, title and interest therein remain in Ancor. 9.2 Ownership of Inrange Technology. Ancor acknowledges that Inrange shall retain the entire, right, title and interest in and to all Inrange Technology (and all proprietary rights therein, including, without limitation, all patents, copyrights and trade secrets). Ancor shall do or cause to be done all matters and things as may reasonably and lawfully be required to secure to Inrange the full right of ownership, use and enjoyment thereof in and for all countries. Upon request of Inrange, all of Ancor's agents, servants, representatives and employees performing work pursuant to or related to this Agreement shall be required to confirm that all right, title and interest therein remain in Inrange. 9.3 Developed Technology. All Developed Technology (and all proprietary rights therein, including, without limitation, all patents, copyrights and trade secrets) shall be jointly owned by the parties, and each party shall be free to use such Developed Technology without any accounting to the other party during the term of this Agreement and thereafter. 9.4 Registration and Protection. The parties agree that they shall cooperate reasonably and in good faith to jointly decide the manner in which their joint interests in the Developed Technology shall be perfected and enforced. Specifically, the parties shall jointly decide: (i) the subject matter for which patent applications and applications for copyright registrations will be prepared; (ii) the resources to be utilized in the preparation and prosecution of such applications; (iii) the parties' rights to review and/or approve such applications and other papers prior to filling in, or submission to, the United States Patent and Trademark Office and/or with the Registrar of Copyrights; (iv) the allocation of expenses incurred in the preparation, prosecution and maintenance of patent applications, patents, and copyright registrations and the like; (v) matters regarding the enforcement, through litigation, licensing or otherwise of the technology against third parties; or (vi) as mutually agree otherwise by the parties. Should a party choose not to or fail to participate in securing or protecting an element of such Developed Technology, the other party may secure or protect its claims to such technology and shall be entitled to reap the benefit of its efforts without accounting to the other party, including without limitation retaining the full amount of any settlement or damage award from a third party. 9.5 Ownership and Use of Boards. The parties acknowledge and agree that Inrange shall own all right, title and interest into the embodiment of the Boards, subject to Ancor's ownership of the Ancor Technology included therein, all of which is licensed to Inrange pursuant to Section 2.1 (and, if applicable, Section 5.3) hereof. Thus, the parties agree that Ancor shall not be entitled to make, have made, import, sell and offer for sale the Boards to any third party during the term of this Agreement and thereafter, as such Boards contain Inrange Technology that is owned by Inrange. Further, Inrange shall not be entitled to make, have made, import, sell and offer for sale the Boards during the term of this Agreement and thereafter, except as expressly permitted, and only during the term of, the license to the Ancor Technology granted to Inrange pursuant to Section 2.1 (and, if applicable, Section 5.3) hereof. -17- 18 10. TRADEMARKS 10.1 Use of Trademarks. Ancor hereby grants to Inrange a nonexclusive, nontransferable, and royalty-free license to use Ancor's Trademarks set forth on Exhibit 5 ("Ancor Trademarks), solely in connection with the distribution, promotion, advertising and maintenance of the Inrange Products. All such Ancor Trademarks shall be used by Inrange in accordance with Ancor's standards, specifications and instructions communicated to the licensee, but in no event beyond the term of the license as provided in this Agreement. Ancor may inspect and monitor Inrange's activities to ensure that such use of the Ancor Trademarks is in accordance with such standards, specifications and instructions. Inrange is not granted any right, title or interest in such Ancor Trademarks other than the foregoing limited license, and Inrange shall not use any of Ancor's trademarks as part of its corporate or trade name or permit any third party to do so. Inrange shall not adopt, use or register any words, phrases or symbols which are identical to or confusingly similar to any of the Ancor Trademarks. 10.2 Registration. Ancor shall use its best efforts to register the Ancor Trademarks, when and if it determines, in its sole discretion, that registration is necessary or useful to the successful distribution of the Inrange Products. Ancor shall be the sole party to initiate any such registration and shall bear all the expenses thereof. 10.3 Markings. The licensee shall not remove or alter any of Ancor's trade names, trademarks, copyright notices, serial numbers, labels, tags or other identifying marks, symbols or legends affixed to, any of Ancor Products, documentation or containers or packages. 11. INDEMNIFICATION 11.1 Indemnification by Ancor. Ancor hereby agrees to indemnify, defend and hold Inrange harmless from any third party suit, claim or other legal action ("Legal Action") including any reasonable costs or legal fees thereby incurred by Inrange that alleges the use of the Ancor Technology infringes any patent, copyright, or trade secret. If Ancor Technology is found to infringe any such third party intellectual property right in such a Legal Action, at Ancor's sole discretion and expense, Ancor shall (a) obtain a license from such third party for the benefit of Inrange and its customers; or (b) replace or modify the foregoing so that it is no longer infringing. 11.2 Limitation. The foregoing indemnification obligations of Ancor shall not extend to, and Ancor shall have no liability for, (i) any combination or use of the Ancor Technology with materials or technology not furnished by Ancor if such infringement would have been avoided by use of the Ancor Technology alone, and (ii) any modification of the Ancor Technology by any party other than Ancor if the infringement would have been avoided without such modification. -18- 19 11.3 Indemnification by Inrange. Inrange hereby agrees to indemnify, defend and hold Ancor harmless from any Legal Action including any reasonable costs or legal fees thereby incurred by Ancor, (a) that alleges the manufacture, use or sale of the Inrange Products (other than the Ancor Technology contained therein), Ancor Products (to the extent modified by Inrange or its agents or sublicensees), or any of them, infringe any patent, copyright, or trade secret; or (b) that arises or results from the marketing, distribution, maintenance and support of the Inrange Products by Inrange (including, without limitation, any warranties or representations made by Inrange or any of its subdistributors or agents with respect to such Products or in connection with such activities of Inrange or any of its subdistributors or agents) or any unfair business practice of Inrange or any of its subdistributors or agents, except to the extent Ancor is required to indemnify Inrange pursuant to Section 11.1 above. 11.4 Indemnification Procedures. The indemnified party shall give written notice of any Legal Action promptly after its first actual knowledge thereof, and any failure to give such prompt notice to the indemnifying party shall terminate the indemnifying party's duty of indemnification hereunder if such failure to notify promptly materially prejudices the indemnifying party's ability to defend. The indemnifying party shall have sole and exclusive control of the defense of any Legal Action, including the choice and direction of any legal counsel. The indemnified party may not settle or compromise any Legal Action without the written consent of the indemnifying party. 11.5 Sole Obligation. THE FOREGOING STATES THE SOLE OBLIGATION AND THE EXCLUSIVE LIABILITY OF THE PARTIES FOR ANY INFRINGEMENT OR CLAIMS OF INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT. 12. TERM AND TERMINATION 12.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue until the fifth anniversary hereof, and shall thereafter automatically renew for additional one year terms unless either party gives ninety (90) days' notice to the other party of its intent not to renew. 12.2 Termination. Notwithstanding Section 12.1, this Agreement may be terminated prior to the expiration hereof as follows: (a) Either party hereto may terminate this Agreement at any time upon written notice to the other party if a petition of any type as to the other party's bankruptcy is filed (which petition is not dismissed within ninety (90) days), is declared bankrupt, makes an assignment for the benefit of creditors, goes into liquidation or receivership; (b) Either party may, at its option, terminate this Agreement upon written notice to the other party if the other party is in material breach of this Agreement and has, within -19- 20 thirty (30) days of receipt of written notice thereof from the first party, (i) failed to cure such breach, or (ii) failed to diligently pursue corrective action with respect to any such material breach that cannot be reasonably cured within thirty (30) days; or (c) Ancor may, at its option, terminate this Agreement upon written notice to Inrange if the escrow agreement described in Section 5.3 is terminated due to Inrange's uncured material breach of the license grant and/or confidentiality provisions of such escrow agreement, provided that such provisions contain terms identical to the license terms in Section 5.3 and the confidentiality terms in Section 7. 12.3 Rights and Obligations on Expiration or Termination of this Agreement. In the event of the expiration or termination of this Agreement for any reason, the parties shall have the following rights and obligations: (a) Except as expressly provided in this Section 12.3, expiration or termination of this Agreement shall not affect any rights and liabilities of the parties that accrue prior to expiration or termination hereof; (b) Each party shall return to the other or destroy, at the other party's instruction, all Confidential Information of the other party, including advertising matter; subject to each party's right to retain specific Confidential Information that is required for the exercise of rights hereunder that survive such expiration or termination (e.g., Inrange's right to continue to use the Ancor Technology if its license panted pursuant to Section 2.1 is not terminated). (c) Except if this Agreement is terminated by Ancor pursuant to Section 12.2 hereof, (i) Ancor shall continue to authorize LSI and its distributor, or such other foundry as shall at the time be manufacturing ASICs, in writing, or shall itself supply Inrange (as provided in Section 5.1), ASICs directly to Inrange for its use as provided in Section 2.1 above, (ii) Inrange's licenses granted pursuant to Section 2.1 (along with the restrictions in Section 2.3, 2.4, 2.5 and 2.7) and 10.1 hereof shall continue (until such time as an event described in paragraph (f) below occurs), (iii) the parties' respective rights and obligations under Sections 2.2 and 3.4 shall continue until the later of (A) the second anniversary of the effective date of such expiration or termination or (B) the seventh anniversary of the Effective Date (or until such time as an event described in paragraph (f) below occurs in which case such rights and obligations shall immediately terminate), and (iv) unless Inrange has the right to obtain a release of escrow pursuant to escrow agreement described in Section 5.3 prior to the date of termination, such escrow agreement shall continue until such time as an event described in paragraph (f) below occurs. (d) If this Agreement is terminated by Ancor pursuant to Section 12.2 hereof, (i) Inrange shall have no right to continue to obtain ASICs hereunder, (ii) Inrange's license to the Ancor Technology and Ancor Trademarks granted in Section 2.1 and 10.1 hereof shall immediately terminate, and (iii) Inrange's license to the Ancor Technology pursuant to the -20- 21 escrow agreement described in Section 5.3 shall immediately terminate and the parties shall immediately terminate such escrow agreement (if it has not been previously terminated); provided, however, Inrange shall have the right to obtain ASICs and to use the Ancor Technology to support Inrange Products transferred by or on behalf of Inrange to any third party prior to the termination. (e) Any expiration or termination of this Agreement (i) shall not terminate Inrange's obligation to pay royalties as provided in Section 3.3, (ii) shall terminate Ancor's obligation to update the escrow account as described in Section 5.3, and (iii) shall terminate Ancor's obligations under Section 4.4. (f) If, after expiration or termination of this Agreement, Inrange retains the licenses granted in Section 2.1 and 10.1 hereof, and the right to continue to obtain ASICs as described in paragraph (c) above, all such licenses and rights shall be terminable at any time thereafter by Ancor upon with written notice to Inrange if: (i) a petition of any type as to Inrange's bankruptcy is filed (which petition is not dismissed within ninety (90) days), Inrange is declared bankrupt, makes an assignment for the benefit of creditors, goes into liquidation or receivership; (ii) Inrange is in material breach of its surviving obligations under this Agreement (e.g., obligation to pay royalties, confidentiality restrictions in Section 7 hereof, restrictions placed on use of Ancor Technology as provided in Sections 2.3, 2.4, 2.5 and 2.7(b)) and has, within thirty (30) days of receipt of written notice thereof from Ancor, (y) failed to cure such breach, or (z) failed to diligently pursue corrective action with respect to any such material breach that cannot be reasonably cured within thirty (30) days; or (iii) the escrow agreement described in Section 5.3 is terminated due to Inrange's uncured material breach of the license grant and/or confidentiality provisions of such escrow agreement, provided that such provisions contain terms identical to the license terms in Section 5.3 and the confidentiality terms in Section 7. 12.4 Surviving Obligations. Termination or expiration of this Agreement shall not relieve either party of its rights or obligations under Sections 2.7(b), 3.5, 3.6, 5.3, 12.3 and Articles 6, 7, 8, 9, 11, 13 and 14 hereof. 13. DISPUTE RESOLUTION -21- 22 13.1 Dispute Resolution. A party must not start court proceedings (except proceedings seeking interlocutory relief) in respect of a dispute arising out of or in connection with this Agreement (in this Section a "Dispute") unless it has complied with this Section: (a) A party claiming that a Dispute has arisen must notify the other party in writing. (b) Within seven days after a notice is given under Section 13.1(a), the chief executive, managing director or general manager ("Managers") of each party must meet for the purpose of attempting to resolve the Dispute within a further seven (7) day period. (c) If the Managers of each party are unable to meet or to resolve the Dispute within the further seven (7) day period, each party must then nominate in writing to the other party a representative authorized to settle the Dispute on its behalf. (d) Each party must ensure that within a period of twenty (20) days immediately following the date on which the nomination notice is given under Section 13.1(c) (or longer period agreed between the parties) its representative uses his or her reasonable endeavors, with the other representative: (i) to resolve the Dispute; or (ii) to agree on: (a) a process to resolve all or at least part of the Dispute without court proceedings (e.g., mediation, arbitration, conciliation, executive appraisal or independent expert determination); (b) the selection and payment of any third party to be engaged by the parties for, and the involvement of any dispute resolution organization in, the process; (c) any procedural rules; (d) the timetable, including any exchange or relevant information and documents; and (e) the place where any meetings will be held. (e) The role of any third party will be to assist in negotiating a resolution of the Dispute. A decision of any third party is not binding on a party unless that party's representative has so agreed in writing. (f) Any information or documents disclosed by a representative under this Section: -22- 23 (i) must be kept confidential; and (ii) may not be used except to attempt to settle the Dispute. (g) Each party must bear its own costs of resolving a Dispute under this Section and the parties must bear equally the cost of any third party (e.g., mediator, arbitrator) engaged. (h) Pending the resolution of any Dispute that is subject to the dispute resolution process described in this Section 13.1, each party will continue to perform all of its obligations under this Agreement without prejudice to any final resolution of the Dispute. (i) In the event that a Dispute cannot be settled in accordance with the foregoing procedure, the parties shall be free to pursue any and all remedies available to them. 13.2 Governing Law. This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of Minnesota, excluding its choice of law rules. 14. MISCELLANEOUS 14.1 Relationship. This Agreement does not make either party the employee, agent or legal representative of the other for any purpose whatsoever. Neither party is granted any right nor authority to assume or to create any obligation or responsibility, express or implied, on behalf of or in the name of the other party. Each party is acting as an independent contractor. 14.2 Assignment. Neither party shall have the right to assign or otherwise transfer its rights and obligations under the Agreement except with the prior written consent of the other party, whose consent shall not be unreasonably withheld, except that no consent shall be required in the case of a merger, acquisition, or sale of all or substantially all of the assets of such party provided that such successor is bound by all of the predecessor's rights and obligations hereunder. Ancor hereby consents to the proposed acquisition, merger or consolidation of Inrange and/or its parent, General Signal Corporation, by or with SPX Corporation or any of its affiliates. This Agreement shall inure to the benefit of the parties hereto and their respective permitted assignees. Any prohibited assignment shall be null and void. 14.3 Notices. Notices permitted or required to be given hereunder shall be deemed sufficient if given by (a) registered or certified mail, postage prepaid, return receipt requested, (b) private courier service, or (c) facsimile addressed to the respective addresses of the parties as first above written or at such other addresses as the respective parties may designate by like notice from time to time. Notices so given shall be effective upon (1) receipt by the party to which notice is given, or (2) on the fifth (5th) day following mailing, whichever occurs first. -23- 24 14.4 Entire Agreement. This Agreement and the Warrant Agreement, including the Exhibits hereto and thereto which are incorporated herein and therein, constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all proposals, oral or written, and all negotiations, conversations and discussions between the parties. 14.5 Amendment. This Agreement may not be modified, amended, rescinded, canceled or waived, in whole or in part, except by written amendment signed by both parties hereto. 14.6 Force Majeure. If the performance of this Agreement or any obligation hereunder (other than the payment of monies due and owing hereunder) is prevented, restricted or interfered with by reason of any event or condition other than a shortage of money beyond the reasonable control of such party (including without limitation acts of State or governmental action, riots, war, prolonged shortage of energy, epidemics, fire, flood, hurricane, typhoon, earthquake, lightning and explosion, or any refusal or failure of any governmental authority to grant any export license legally required), the party so affected shall be excused from such performance, only for so long as and to the extent that such a force prevents, restricts or interferes with the party's performance and provided that the party affected gives notice thereof to the other party and uses diligent efforts to remedy such event or conditions. 14.7 Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement. 14.8 Publicity. This Agreement is confidential, and no party shall issue press releases or engage in other types of publicity of any nature dealing with the commercial or legal details of this Agreement without the other party's prior written approval, which approval shall not be unreasonably withheld. However, approval of such disclosure shall be deemed to be given to the extent such disclosure is required to comply with governmental rules, regulations or other governmental requirements. In such event, the publishing party shall furnish a copy of such disclosure to the other party. 14.9 Severability. If any provision of this Agreement is found unenforceable under any the laws or regulations applicable thereto, such provision terms shall be deemed stricken from this Agreement, but such invalidity or unenforceability shall not invalidate any of the other provisions of this Agreement. 14.10 Counterparts. This Agreement may be executed in two or more counterparts, and each such counterpart shall be deemed an original hereof. 14.11 Waiver. No failure by either party to take any action or assert any right hereunder shall be deemed to be a waiver of such right in the event of the continuation or repetition of the circumstances giving rise to such right -24- 25 14.12 Limitation of Liability. NEITHER PARTY SHALL HAVE ANY LIABILITY OF ANY KIND HEREUNDER FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSSES OR DAMAGES, EVEN IF A PARTY SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE BY THE OTHER PARTY OR ANY THIRD PARTY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY DAMAGES IN EXCESS OF THE AGGREGATE AMOUNTS ACTUALLY PAID TO ANCOR BY INRANGE UNDER THIS AGREEMENT. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives below. ANCOR COMMUNICATIONS, INRANGE TECHNOLOGIES INCORPORATED CORPORATION By /s/ Calvin G. Nelson By /s/ Robert Coackley ----------------------------- ---------------------------------- Title PRESIDENT Title President -------------------------- ------------------------------- Exhibits: Exhibit 1 - Ancor Technology Exhibit 2 - Specifications for ASICs Exhibit 3 - Specifications for Boards Exhibit 4 - Development Program Exhibit 5 - Ancor Trademarks Exhibit 6 - Form of Preferred Escrow Agreement -25- EX-10.7 11 y38692a5ex10-7.txt LETTER AGREEMENT 1 Exhibit 10.7 [Letterhead of Ancor Communications, Inc.] Date: November 23, 1999 To: Nick Hannon Front Cal Nelson Subject: Amendment to the Technology License Agreement Ref: Section 4.3 Additional Development The design and development services requested of Ancor Communications by INRANGE Technologies has expanded from the requirements defined in the Technology Agreement dated September 29, 1998. The new development requirements are delineated in revision 1.07 of the Functional Requirements Document dated November 18, 1999. This FRD document is attached. As a result, the development fees identified in section 4.2 of the Technology Agreement has increased from the original $* to $*. The development cost estimate increase is derived from discussions between Cal Nelson, Cliff Oberholtzer, Jean Santoro, and Jayne Fitzgerald in December 1998; documents reviewed in Minneapolis between Cal Nelson, Thomas Raeuchle, Harry Paul, and Cliff Oberholtzer on March 25, 1999; as well as discussions with Nick Hannon in September 1999. The breakdown is: Additional Ancor Development o Hot Swap (items 2 and 7) = * Staff months o CD/9000 Ethernet (item 10) = * Staff months o FC/9000 Spares Path hardware (item 8) = * Staff months o Contingent additional INRANGE funding = * Staff months o Total under Section 4.3 = * Staff Months Reduced Ancor Development (Credit) o Credit for Bill Hughes work at Ancor = * Staff months, (work between February and August of 1999) o Credit for not doing FC/9000 Class One Multistage development = * Staff months o Total credit = * Staff months Net Funding Requirement from INRANGE to Ancor = * Months at $* per staff month = $* This change to the development fees was reviewed and agreed to by you during our discussions in September 1999. *Confidential treatment requested with respect to the information. 2 We recommend this addition to the fees be paid in three installments as with the original cost of development. A payment of $* is now due and payable before year-end. The remaining $* is payable; $* upon on completion of the Beta level design, and $* upon final release. These milestones have been previously defined in the Technology Agreement. On behalf of INRANGE Technologies and Ancor Communications we agree to all of the above as well as agree that Revision 1.07 of the Functional Requirements Document dated November 18, 1999 shall be the basis for all discussion and going forward. Ancor Communications INRANGE Technologies /s/ Cal Nelson /s/ Greg Grodhaus - ------------------------- -------------------------- Cal Nelson GREG GRODHAUS Pres/CEO 11/29/99 EX-10.9 12 y38692a5ex10-9.txt LOAN AGREEMENT 1 Exhibit 10.9 LOAN AGREEMENT This Loan Agreement (this "Agreement") is executed as of the 18th day of September, 2000 by and between SPX Corporation, a Delaware corporation ("SPX"), and Inrange Technologies Corporation, a Delaware corporation (the "Company"). Notwithstanding the execution date hereof, this Agreement shall become effective upon the date of the closing of the Initial Public Offering (as defined below). ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described: "Agreement" has the meaning ascribed thereto in the preamble hereto, as such agreement may be amended and supplemented from time to time in accordance with its terms. "Class A Common Stock" means the Company's Class A Common Stock, $.01 par value per share. "Class B Common Stock" means the Company's Class B Common Stock, $.01 par value per share. "Excess Cash" means any cash and cash equivalents in excess of $15 million or such higher amount reasonably agreed to by the parties as necessary for the operation of the Company's business. "Initial Public Offering" means the initial public offering by the Company of shares of the Class B Common Stock as contemplated by a registration statement on Form S-1, as supplemented and amended from time to time. "Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (and any department or agency thereof) or other entity. "SPX Credit Agreement" means the Credit Agreement, dated as of October 6, 1998, as amended and restated as of February 10, 2000 and as it may be further amended from time to time, among SPX and the Lenders Party thereto, Bank One, N.A., as 2 Documentation Agent and The Chase Manhattan Bank as Administrative Agent, and any replacements or refinancings of such agreement or, if otherwise, at any time, the loan agreement pursuant to which SPX has the largest revolving credit facility at such time. "Subsidiary" means, as to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof; provided, however, that any reference in this Agreement to a Subsidiary or Subsidiaries of SPX shall not include the Company. Section 1.02. Internal References. Unless the context indicates otherwise, references to Articles, Sections and paragraphs shall refer to the corresponding articles, sections and paragraphs in this Agreement and references to the parties shall mean the parties to this Agreement. ARTICLE II THE LOANS AND THE SERVICES Section 2.01. Loan at the Closing of the Initial Public Offering. Immediately following the closing (the "Closing") of the Initial Public Offering, the Company shall lend to SPX all of the net proceeds of the Initial Public Offering in excess of $15 million, less the amount of the Company's cash on hand at the Closing, after repayment to SPX of amounts borrowed by the Company for acquisitions as described in the Company's Registration Statement on Form S-1, as amended. Section 2.02. Daily Cash Management. For so long as SPX performs cash management services for each of its Subsidiaries, including sweeps of all of the cash of SPX's Subsidiaries, SPX shall provide cash management services to the Company consistent with the services provided to its Subsidiaries, including sweeping to SPX all of the Company's Excess Cash at such times as SPX sweeps cash of SPX's Subsidiaries; provided, however, that no sweeping or loan hereunder will be made if such loan would result in a violation of law or subject the Company to any additional regulation. The Company agrees to permit SPX to sweep its Excess Cash on a daily basis or as otherwise performed for its Subsidiaries and that the amount of Excess Cash so swept shall be considered a loan from the Company to SPX. Section 2.03. Interest Rate. SPX shall be required to pay interest on all amounts loaned and deemed loaned by the Company to SPX pursuant to this Agreement from the date such amounts are loaned or deemed to have been loaned to the date paid in full (with the amount outstanding on any given day deemed to be the average amount outstanding at 2 3 all times during such day), quarterly in arrears on each March 31, June 30, September 30 and December 31, at a per annum rate equal to the weighted average daily interest that SPX paid for Revolving Loans (as defined in the SPX Credit Agreement) in the fiscal quarter prior to the fiscal quarter for which interest is being paid; provided, however that interest paid for loans made prior to October 1, 2000 shall bear interest at a per annum rate of 8.5% until October 1, 2000, when such loans shall begin bearing interest at the weighted average daily interest rate that SPX paid for Revolving Loans in the fiscal quarter ended September 30, 2000. Interest payable pursuant to this Section shall, at SPX's option, be payable by increasing the amount due under this Agreement, rather than by payment in cash. Five business days after the beginning of each fiscal quarter, SPX shall deliver to the Company a certificate stating the weighted average daily interest rate that SPX paid for Revolving Loans in the prior fiscal quarter and providing any information relating to the calculation of such interest rate that is reasonably requested by the Company. Section 2.04. Demand by the Company. Within two business days of the Company's written request, SPX shall repay any and all outstanding amounts loaned or deemed loaned under this Agreement, together with unpaid interest thereon to the date of such request. Section 2.05. Prepayment by SPX. Any or all amounts due under this Agreement, together with unpaid interest thereon to the date of repayment may be prepaid by SPX at any time without premium or penalty. Section 2.06. Computation of Outstanding Loans. Within two business days of (x) the end of each of SPX's fiscal quarters and (y) the Company's request, SPX shall provide the Company with a calculation setting forth the total amount that SPX owed the Company under this Agreement on the date of such request. Section 2.07 Services. The cash management services to be provided by SPX to the Company pursuant to this Agreement shall include, but not be limited to, processing lock box receipts, funding and processing payments cleared through accounts payable, payroll, wire transfers and other payments requested by the Company. The services provided under this Section 2.07 shall be deemed to be "Services" provided pursuant to the Management Services Agreement between SPX and the Company, and shall be subject to all of the terms of such agreement; provided, however, that, such Services shall terminate upon the earlier to occur of (x) a termination of such Services in accordance with the terms of the Management Services Agreement and (y) the termination of this Agreement pursuant to Section 3.01 hereof. 3 4 ARTICLE III TERM AND TERMINATION Section 3.01. Term. This Agreement shall commence on the closing of the Initial Public Offering and shall automatically terminate on the earlier to occur of (x) the date that SPX owns shares of common stock of the Company representing less than 50% of the aggregate amount of the outstanding shares of Class A Common Stock and Class B Common Stock and (y) the occurrence of an Event of Default (as defined in the SPX Credit Agreement) under the SPX Credit Agreement. Section 3.02 Effect of Termination. Upon the termination of this Agreement, (x) SPX shall not have the right to sweep, and the Company shall not have any obligation to loan to SPX, any additional amounts under this Agreement and (y) all amounts due under this Agreement shall become immediately due and payable and shall thereafter bear interest at the rate in effect at the time plus 2%, per year; provided, however, that nothing contained in this Agreement shall be deemed to establish or require the payment of a rate of interest in excess of the amount legally enforceable. In the event that the rate of interest so required to be paid exceeds the maximum rate legally enforceable, whether as a result of acceleration of maturity or otherwise, the rate of interest so required to be paid shall be automatically reduced to the maximum rate legally enforceable, and any excess paid over such maximum enforceable rate shall be automatically credited on account of the principal hereof. ARTICLE IV PAYMENT Section 4.01. Payment. All payments of amounts owed under this Agreement shall be made in lawful money of the United States of America in same day funds to the account of the Company at such place as shall be designated in writing by the Company for such purpose. Section 4.02. Payment on a non-Business Day. Whenever any payment under this Agreement shall be stated to be due on a day which is not a business day in Delaware, Michigan or New York, such payment shall be made on the next succeeding business day and such extension of time shall be included in the computation of the payment of interest on amounts due under this Agreement. ARTICLE V MISCELLANEOUS 4 5 Section 5.01. Entire Agreement. This Agreement, the Management Services Agreement between SPX and the Company and any other writing signed by the parties that specifically references this Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. Section 5.02. Notices. Any notice, instruction, direction or demand under the terms of this Agreement required to be in writing will be duly given upon delivery, if delivered by hand, facsimile transmission, intercompany mail, or mail, to the following addresses: If to SPX: SPX Corporation 700 Terrace Point Drive P.O. Box 3301 Muskegon, Michigan 49443 Attn: Christopher J. Kearney, Esq. If to the Company: Inrange Technologies Corporation 13000 Midlantic Drive Mt. Laurel, New Jersey 08054 Attn: Kenneth H. Koch, Esq. or to such other addresses or telecopy numbers as may be specified by like notice to the other parties. Section 5.03. Governing Law. This Agreement shall be governed by, and shall be construed and enforced in accordance with, the internal laws of the state of New York, without regard to principles of conflicts of law. Section 5.04. Jurisdiction. SPX hereby (i) irrevocably submits to the non-exclusive jurisdiction of any court sitting in the State of Delaware, the State of Michigan or the State of New York over any suit, action or proceeding arising out of or relating to this Agreement; (ii) irrevocably agrees that all claims in respect of any suit, action or proceeding may be heard and determined in such court; and (iii) irrevocably waives, to 5 6 the fullest extent permitted by law, any objection which it may have or hereafter have to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. SPX agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in any other manner provided by law. Nothing in this section shall affect the right of the Company or any of its assignees to serve process in any manner permitted by law or limit the rights of the Company or any of its assignees to bring proceedings against SPX in the courts of any other jurisdiction. Section 5.05. Severability. If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each party shall be construed and enforced accordingly. Section 5.06. Amendment. This Agreement may only be amended by a written agreement executed by both parties hereto. Section 5.07. Counterparts. This Agreement may be executed in separate counterparts. Section 5.08 Assignment. SPX may assign its rights and obligations including the right to receive loans under this Agreement to any of its wholly-owned Subsidiaries; provided, however, that, notwithstanding such assignment, SPX shall continue to remain liable under this Agreement. Section 5.09 No Impairment. No provision of this Agreement shall alter or impair the obligation of SPX, which is absolute and unconditional, to pay the amounts due under this Agreement at the place, at the respective times, and in the currency herein prescribed. Section 5.10 Expenses. SPX shall pay all costs and expenses, including reasonable attorneys' fees incurred in the collection of amounts due under and enforcement of this Agreement. 6 7 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers or agents as of the day and year first written above. SPX CORPORATION By: /s/ Christopher J. Kearney -------------------------------------- Name: Christopher J. Kearney Title: Vice President and General Counsel INRANGE TECHNOLOGIES CORPORATION By: /s/ Kenneth H. Koch -------------------------------------- Name: Kenneth H. Koch Title: Vice President and General Counsel 7 EX-10.10 13 y38692a5ex10-10.txt EMPLOYEE MATTERS AGREEMENT 1 EXHIBIT 10.10 EMPLOYEE MATTERS AGREEMENT This EMPLOYEE MATTERS AGREEMENT is made as of September 18, 2000 (the "Employee Matters Agreement"), by and between SPX Corporation ("SPX") and Inrange Technologies Corporation ("Inrange") (each of SPX and Inrange, a "Party," and, collectively, the "Parties"). RECITALS WHEREAS, Inrange is issuing shares of its Class B common stock, par value $0.01 per share, to the public in an Initial Public Offering; and WHEREAS, by entering into this Employee Matters Agreement, the Parties intend to set forth obligations and responsibilities of each of them relating to the compensation and employee benefits of the Inrange Employees after the closing of the Initial Public Offering; NOW, THEREFORE, in consideration of the covenants and agreements set forth below, the Parties agree as follows: 1. DEFINITIONS. As used in this Employee Matters Agreement, the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described: (a) "Initial Public Offering" shall mean the initial public offering by the Company of shares of its Class B common stock, par value $.01 per share, as contemplated by a registration statement on Form S-1, as supplemented and amended from time to time. (b) "SPX Benefit Arrangements" shall mean any and all pension, supplemental pension, accidental death and dismemberment, life and health insurance and benefits (including medical, dental, vision, life insurance, hospitalization, prescription drug, behavioral health and short- and long-term disability), savings, salary, bonus, deferred compensation, incentive compensation, holiday, vacation, severance pay, salary continuation, tuition reimbursement, service award, company car, scholarship, relocation, patent award, fringe benefit and other plans, programs, policies, agreements and arrangements, in each case (i) sponsored and maintained by SPX or one of its subsidiaries (other than Inrange and its subsidiaries) and (ii) providing or having any liability to provide compensation or benefits of any kind to the Inrange Employees (including, but not limited to, any "employee benefit plan" (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended)). 2 (c) "Inrange Employees" shall mean all persons who are current and former employees of Inrange. 2. CONTINUATION OF INRANGE EMPLOYEES IN INRANGE BENEFIT ARRANGEMENTS (a) Except as provided in Sections 2(b) and 2(c) hereof, after the closing of the Initial Public Offering, the Inrange Employees shall continue to participate in the SPX Benefit Arrangements in which they participated as of the closing of the Initial Public Offering; provided, however, that SPX may amend, modify or terminate such SPX Benefit Arrangement with respect to the participation of some or all of the Inrange Employees therein so long as such action (x) applies to all similarly situated employees of SPX who participate therein and (y) is permitted under the terms of such SPX Benefit Arrangement. (b) SPX shall cause the Inrange Employees to cease to participate in SPX's employee stock purchase plan and EVA incentive compensation plan not later than the closing of the Initial Public Offering. (c) The Parties acknowledge and agree that, unless SPX shall determine otherwise, the Inrange Employees will not receive equity awards under any SPX equity incentive plan after the closing of the Initial Public Offering. (d) The Parties acknowledge and agree that (i) Inrange shall bear all liabilities in respect of the SPX Benefit Arrangements, and (ii) SPX shall have no obligations in respect of the SPX Benefit Arrangements other than (x) the obligations set forth in this Employee Matters Agreement and (y) the administrative services to be provided by SPX in respect thereof under the Management Services Agreement between the Parties. (e) Nothing in this Employee Matters Agreement shall prohibit Inrange from establishing such other compensation or employee benefit plans, programs, policies, agreements and arrangements as it deems necessary and appropriate to provide compensation and employee benefits to the Inrange Employees; provided, that, if Inrange does so establish any such other compensation or employee benefit plan, program, policy, agreement or arrangement which replaces an SPX Benefit Arrangement (in whole or in part), SPX shall have the right, in its sole discretion, upon 60 days' notice to Inrange, to reduce such SPX Benefit Arrangement to the extent of such replacement. 3. COOPERATION. (a) Each of the Parties shall reasonably cooperate with each other in carrying out the terms of this Employee Matters Agreement with the purpose of effectuating the -2- 3 intent hereof, and each Party shall take such actions as may be reasonably requested by the other Party relating hereto. (b) Each of the Parties shall provide to the other Party, upon such other Party's reasonable request, information in such Party's possession which relates to the SPX Benefit Arrangements, including, without limitation, annual reports on Form 5500, actuarial valuations and materials relating to nondiscrimination and coverage. 4. EFFECTIVENESS. This Employee Matters Agreement shall become effective upon the closing of the Initial Public Offering. 5. INCORPORATION BY REFERENCE. Article VI of the Management Services Agreement is incorporated by reference into this Employee Matters Agreement. 6. TERMINATION. The matters contemplated by this Employee Matters Agreement, for purposes of the termination thereof, shall be deemed "Services" for purposes of the application of Section 5.01 of the Management Services Agreement between the Parties and may be terminated as set forth therein. IN WITNESS WHEREOF, the Parties hereto have executed this Employee Matters Agreement, effective upon the closing of the Initial Public Offering. INRANGE TECHNOLOGIES SPX CORPORATION CORPORATION /s/ Christopher J. Kearney /s/ Kenneth H. Koch - ------------------------------ ------------------------------ By: Christopher J. Kearney By: Kenneth H. Koch - ------------------------------ ------------------------------ Title: Vice President and Title: Vice President and General Counsel General Counsel - ------------------------------ ------------------------------ -3- EX-16.1 14 y38692a5ex16-1.txt CHANGE IN PRINCIPAL ACCOUNTANTS 1 [ERNST & YOUNG LETTERHEAD] Exhibit 16.1 September 11, 2000 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 Gentlemen: We have read the section titled "Changes in Principal Accountants" in the Form S-1 amendment No. 4, No. 333-38592, of Inrange Technologies Corporation and are in agreement with the statements contained in the first paragraph of such section on page 75 therein. We have no basis to agree or disagree with other statements of the registrant contained therein. /s/ Ernst & Young LLP -----END PRIVACY-ENHANCED MESSAGE-----