Services Agreement

SERVICES AGREEMENT


THIS SERVICES AGREEMENT (this "Agreement") is entered into as of March 31, 1998 (the "Effective Date"), by and between AIRONET WIRELESS COMMUNICATIONS, INC. ("Aironet"), a Delaware corporation, and TELXON CORPORATION, a Delaware corporation ("Telxon").


BACKGROUND


WHEREAS, as Aironet's principal stockholder, Telxon has heretofore provided certain administrative, financial, management and other services to Aironet;


WHEREAS, simultaneously with the execution of this Agreement, Aironet is selling shares of its common stock to investors in a private sale (the "Offering"); and


WHEREAS, in connection with the Offering, Telxon will in general cease providing services to Aironet; however, Aironet desires to retain Telxon, and Telxon desires to act, as an independent contractor to continue to provide certain services to Aironet on the terms and subject to the conditions set forth herein.


AGREEMENT


NOW, THEREFORE, in consideration of the foregoing and the agreements made herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Telxon and Aironet hereby agree as follows:


1. SERVICES.


1.1 SALE AND PURCHASE. During the Term (defined herein), Telxon will provide to (or procure for) Aironet, and Aironet will purchase from (or acquire through) Telxon, the services, employee benefits and insurance described in Schedules I and II attached hereto ("Services"). At Aironet's request, Telxon will provide Services directly to Aironet's subsidiaries.


1.2 QUALITY. The Services shall be substantially similar in scope to those provided by Telxon to Aironet prior to the Effective Date, and Telxon shall use reasonable efforts to ensure that the nature and quality of the Services provided to Aironet hereunder shall be undifferentiated from the nature and quality of the Services that Telxon provides to itself and its subsidiaries. Without limiting the generality of the foregoing, Telxon shall use reasonable efforts to ensure that the nature and quality of Services provided to Aironet employees under the Telxon Plans (defined herein), either by Telxon directly or through administrators under contract, shall be undifferentiated from the nature and quality of the Services provided to Telxon employees.


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2. EMPLOYEE BENEFIT PLANS.


2.1 PARTICIPATION. During the Term, eligible Aironet employees will continue to participate in Telxon's employee welfare and benefit plans identified in the Schedules (defined herein) ("Telxon Plans").


2.2 COOPERATION. Aironet agrees to cooperate with Telxon in the administration and coordination of and compliance with regulatory and administrative requirements associated with the Telxon Plans, including, but not limited to: sharing payroll data for determination of highly compensated employees; providing census information (including accrued benefits) for purposes of performing discrimination tests; providing actuarial reports for purposes of determining the funded status of any plan; review and coordination of insurance and other independent third-party contracts; and providing for review of all summary plan descriptions, requests for determination letters, insurance contracts, Forms 5500, financial statement disclosures and plan documents.


2.3 DELEGATION. Aironet hereby delegates to Telxon final, binding and exclusive authority, responsibility and discretion to interpret and construe the provisions of the Telxon Plans in which Aironet employees participate. Telxon may further delegate such authority to plan administrators, including the authority to:


(a) provide administrative and other services;


(b) reach factually supported conclusions regarding
claims, consistent with terms of the Telxon Plans; and


(c) make a full and fair review of each claim denial
or other decision relating to the provision of benefits provided or
arranged for under the Telxon Plans, in accordance with the
requirements of the Employee Retirement Income and Security Act
("ERISA"), where applicable.


3. FEES AND PAYMENT.


3.1 FEES AND COSTS. Schedules I and II (collectively, the "Schedules") set forth the prices that Aironet will pay to Telxon for certain Services, and whether the costs associated with other Services (including any contributions to benefit plans, premiums for insurance and third-party expenses paid by Telxon in connection with the Services) will be passed-through to Aironet or charged to Aironet employees through payroll deductions. In addition, Aironet shall reimburse Telxon in accordance with past practices for Telxon's expenses and costs related to (i) participation by Aironet employees in any Telxon Plans, (ii) coverage of Aironet's property, officers and directors under Telxon's liability, property and casualty, and fiduciary insurance policies and (iii) other third party costs and expenses incurred by Telxon in connection with the provision of the Services to Aironet and its employees. Costs which are passed through to Aironet will be equal to the third-party costs and expenses incurred by Telxon on Aironet's behalf. If Telxon incurs costs or expenses on behalf of both Aironet and businesses operated by Telxon, Telxon will allocate such costs and expenses in good faith, in accordance with generally accepted accounting principles, if applicable,


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among Aironet and the various other businesses. Aironet will pay the amounts incurred in connection with Telxon's performing services for Aironet's subsidiaries. The amounts payable by Aironet to Telxon hereunder, regardless of whether they are fixed fees, passed-through costs, reimbursement of costs incurred, deductions from payroll or otherwise, are referred to as "Service Fees."


3.2 INVOICING AND SETTLEMENT OF FEES.


(a) Telxon will invoice Aironet for all Service Fees due and
payable for the prior month then ended, and Aironet will pay such
invoices within thirty (30) days after its receipt thereof.


(b) At Aironet's election: (i) Aironet will fund and administer all
wage and salary payments to Aironet employees, and all medical,
retirement and other benefits and claims payable to or on behalf of
Aironet employees and their dependents ("Employee Payments"); or (ii)
Telxon will administer Employee Payments and Aironet will establish
accounts against which Telxon may draw to make Employee Payments.


4. LIABILITY.


4.1 LIMITATION OF LIABILITY. Telxon, its subsidiaries and, to the extent permitted by law, the Telxon Plans, and their respective directors, officers, agents, and employees (each, a "Telxon Indemnified Person") shall have no liability, direct or indirect, to Aironet or its employees for or in connection with any Services performed by any Telxon Indemnified Person pursuant to this Agreement, other than Telxon's liability for breach of this Agreement and other than liability for damages caused to Aironet or its employees by a Telxon Indemnified Person's gross negligence or willful misconduct. Aironet acknowledges and agrees that the scope and availability of coverage for Aironet, its property, directors, officers and employees under the Telxon Plans and under Telxon's insurance policies may from time to time differ from that which was available prior to or at the Effective Date.


4.2 INDEMNIFICATION. Aironet agrees to indemnify, defend and hold harmless each Telxon Indemnified Person from and against any and all damages, and to reimburse each Telxon Indemnified Person for all reasonable ...