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Transition Services Agreement

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Exhibit 10.2

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF

THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION. TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (the " Agreement" ), dated as of September 12, 2007 (the " Effective Date" ), is by and between Intel Corporation , a Delaware corporation (the " Seller" ) and RadiSys Corporation , an Oregon corporation (the " Buyer" ). Seller and Buyer are sometimes referred to as the " Parties" and each individually as a " Party" . WHEREAS, Buyer and Seller have entered into the Asset Purchase Agreement and certain Acquisition Documents, dated as of September 7, 2007, pursuant to which Seller agreed to sell to Buyer, and Buyer agreed to acquire from Seller, the Transferred Assets, and Buyer agreed to assume the Assumed Liabilities; and

WHEREAS, during a transitional period following the Closing Date, Seller will perform Seller Transition Services, and Buyer will perform the Buyer Transition Services and certain other obligations with respect thereto, each as required by the terms of this Agreement, in order to transition the production, sale and support of the Products from Seller to Buyer and to facilitate the transactions contemplated by the Asset Purchase Agreement, and Buyer will compensate Seller for such services.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, the Parties hereto agree as follows:

1. Definitions . Capitalized terms used, but not defined, in this Agreement shall have the meanings ascribed to such terms in the Asset Purchase Agreement. The definitions set forth in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words " include" , " includes" and " including" shall be deemed to be followed by the phrase " without limitation." All references herein to Sections and Exhibits shall be deemed to be references to Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. Unless the context shall otherwise require, any reference to any contract, instrument, statute, rule or regulation is a reference to it as amended and supplemented from time to time (and, in the case of a statute, rule or regulation, to any successor provision). Any reference in this Agreement to a " day" or a number of " days" (without the explicit qualification of " Business" ) shall be interpreted as a reference to a calendar day or number of calendar days. The following terms, as used herein, have the following meanings:

1.1." Acquisition Documents" has the meaning set forth in the Asset Purchase Agreement. 1.2." Affiliate" has the meaning set forth in the Asset Purchase Agreement. 1.3." Applicable Law" has the meaning set forth in the Asset Purchase Agreement. 1.4." Asset Purchase Agreement" means the Asset Purchase Agreement entered into by the Seller and Buyer concurrently with this Agreement and effective as of the Closing Date.

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.

1.5." Assigned Matters" mean those modifications to Buyer' s Products that (a) do not use and are not based on or developed from Seller Confidential Information or Seller Proprietary Products; and (b) which are created solely and exclusively in the performance of the Transition Services during the Term of this Agreement; and (c) that are exclusively embodied in the Products; and (d) used exclusively in the Business; and (e) not embodied or used in or with any other current product or service or planned product or service of Seller or its Subsidiaries. 1.6." Business" has the meaning set forth in the Asset Purchase Agreement.

1.7." Business Day" has the meaning set forth in the Asset Purchase Agreement. 1.8." Buyer Matters" means all software, Buyer Confidential Information and other materials created solely by Buyer or supplied directly to Seller by Buyer and any copies of the foregoing, including, but not limited to, all inventions, works of authorship, discoveries, processes, techniques, methods, technical data, specifications, policies, plans, designs, coding, software, source code, object code, program materials, programming aids, tools, reports, data, information, drawings, formulae, algorithms, ideas, designs, concepts, know-how, documentation and other written materials, as well as the patents, patent applications, copyrights, copyright applications and other intellectual property rights attendant thereto.

1.9." Buyer Transition Services" means the sharing of certain information and the provision of certain services and support by Buyer to Seller for a limited period of time, all as more fully described in Exhibit 3 , which is attached hereto and incorporated herein by reference.

1.10." Changeover Date" means the date on which Buyer is able to perform supply chain management tasks on its own, including production asset management, Product repair services, order fulfillment services, manufacturing and support thereof, and inventory management services for the Products. With regard to the various product lines included among the Products (the " Product Lines" ), upon the completion of the changeover for each Product Line, Seller shall no longer be obligated to perform Seller Transition Services related to those transitioned Product Lines. For purposes of clarity, the Changeover Date occurs when the mutually agreed verification and validation of the product build for each Product Line has been completed.

1.11." Confidentiality Agreement" has the meaning set forth in the Asset Purchase Agreement. 1.12." Cost of Service" means the price for each Seller Transition Service that Buyer agrees to pay Seller as more fully described in Exhibits 1 and 2 .

1.13." Deliverable" means only those items specifically identified as deliverables in a statement of work agreed to in writing by Seller and Buyer (the " Statement of Work" ).


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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.

1.14." Dollars" has the meaning set forth in the Asset Purchase Agreement.

1.15." End of Phase 1" means ninety (90) days from the Closing Date or such earlier date as mutually agreed upon by the Parties. 1.16." End of Phase 2" means the earlier of (a) the date Seller completes the Seller Transition Services or (b) one hundred eighty (180) days from the Closing Date.

1.17." Engineering Services Agreement" means that separate Engineering Services Agreement under which Buyer will obtain from Seller certain engineering development service related to New Products pursuant to a mutually agreed upon development plan. The Engineering Services Agreement will be subject to the mutual agreement and consent of the Parties in accordance with the terms set forth in Exhibit 7 .

1.18." Equipment" has the meaning set forth in the Asset Purchase Agreement. 1.19." Fees" means (a) the fees associated with the Transition Services that Buyer agrees to pay Seller as more fully described in Section 6 and Exhibits 1 and 2 hereto, which shall include expenditures for required materials and supplies, reasonable travel and temporary living expenses; and (b) charges for licenses, royalties and third party services.

1.20." Finished Inventory" has the meaning set forth in the Asset Purchase Agreement. 1.21." Fiscal Month" means a month in accordance with Seller' s fiscal calendar which is set forth in Exhibit 4 hereto. 1.22." Intellectual Property Agreement" has the meaning set forth in the Asset Purchase Agreement. 1.23." Inventory" has the meaning set forth in the Asset Purchase Agreement. 1.24." Monthly Financial Report" means a monthly financial report submitted by either Party to the other Party in a form substantially similar to Exhibit 5 (which is attached hereto and incorporated herein by reference).

1.25." Net Proceeds" means the proceeds per Product after deducting the Phase 1 Product Prices or Phase 2 Product Prices, as appropriate, from the Net Revenue.

1.26." Net Revenue" means the Seller's Fiscal Month net revenue for the Products shipped by Seller on behalf of Buyer calculated by taking into account the sales volume, sales returns, adjustments, and costs of sale for the distribution and production of the Products, consistent with Seller' s past practices. For purposes of clarity, Net Revenue shall include any revenue for the Products shipped by Seller to distributors prior to the Closing Date to the extent such distributors have not notified Seller that such Products have been shipped by such distributors to their customers as of the Closing Date and does not include revenue associated with Products shipped by Seller to its end customers prior to the Closing Date.


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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.

1.27." New Products" has the meaning set forth in the Asset Purchase Agreement. 1.28." Person" has the meaning set forth in the Asset Purchase Agreement.

1.29." Phase 1" means the period commencing as of the Closing Date and expiring at the End of Phase 1, during which time Seller and Buyer shall perform certain transition obligations, as more fully described in this Agreement.

1.30." Phase 1 Product Prices" means the prices set forth on Exhibit 6 . 1.31." Phase 2" means the period commencing as of the End of Phase I and expiring at the End of Phase 2, during which time Seller and Buyer shall perform certain transition obligations, as more fully defined in this Agreement.

1.32." Phase 2 Product Prices" means the prices that will be jointly established by the Parties and set forth on Exhibit 6 . The Parties agree that the principal difference in pricing between Phase 1 Product Prices and Phase 2 Product Prices will be based on the treatment or burdening of Seller' s manufacturing costs and internally manufactured products and components. 1.33." Products" has the meaning set forth in the Asset Purchase Agreement.

1.34." Product Lines" means the various product lines included among the Products. 1.35." Seller Materials" means all Seller Deliverables, Seller Confidential Information, software and other materials created or supplied by Seller before or during the performance of the Services under this Agreement and any copies of the foregoing, including, but not limited to, all inventions, works of authorship, discoveries, processes, techniques, methods, technical data, specifications, policies, plans, designs, coding, software, source code, object code, program materials, programming aids, tools, reports, data, information, drawings, formulae, algorithms, ideas, designs, concepts, know-how, documentation and other written materials, as well as the patents, patent applications, copyrights, copyright applications and other intellectual property rights attendant thereto.

1.36." Seller Transition Services" means the sharing of certain information and the provision of certain services and support by Seller to Buyer for a limited period of time, all as more fully described in Exhibit 2 , which is attached hereto and incorporated herein by reference. For the avoidance of doubt, during Phase 1, Seller Transition Services will include the services specifically described in Exhibit 2 and those related services that were performed by Seller in its conduct of the Business at the Closing Date.

1.37." Subsidiary" has the meaning set forth in the Asset Purchase Agreement.


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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.

1.38." Taxes" has the meaning set forth in the Asset Purchase Agreement.

1.39." Term" means the effective period of this Agreement commencing with the Effective Date and ending on the End of Phase 2 unless earlier cancelled or terminated pursuant to the terms of this Agreement. This Agreement will be of no force and effect in the event the Closing of the transactions contemplated by the Asset Purchase Agreement does not occur. 1.40." Third Party Inventory" means certain raw materials, work-in-progress, parts, finished goods, supplies, returned materials, packaging materials and other inventories owned by third parties and used or held for use by such third parties exclusively for the benefit of Seller and related to Seller' s sale and support of the Products and New Products. 1.41." Trademarks" has the meaning set forth in the Asset Purchase Agreement. 1.42." Transition Services" means the Buyer Transition Services and Seller Transition Services. 1.43." Unfinished Inventory" has the meaning set forth in the Asset Purchase Agreement. 1.44." Warranty Services Agreement" has the meaning set forth in the Asset Purchase Agreement. 2. Transition .

2.1. Seller' s Obligations. Seller' s performance of the Seller Transition Services is subject to (a) the assignment to Buyer of the Assumed Contracts, and (b) the ongoing transactions contemplated by the Asset Purchase Agreement, i.e., the Seller may not be able to perform such services to the extent that the services have been transitioned to Buyer or Seller' s performance of such services is dependent on Seller being a party to an Assumed Contract that has been assigned to Buyer. Subject to the foregoing, Seller will perform or cause to be performed the Seller Transition Services set forth in Exhibit 2 to this Agreement for either the term for such services set forth in Exhibit 1 or for such other period as described in Section 2.4 hereto, in accordance with Seller' s standard practices as of the Closing Date and using at least commercially reasonable efforts. Seller Transition Services may be provided by Seller or a Seller Affiliate, at Seller' s sole discretion. In addition, Seller may, at its sole discretion, upon prior notice to Buyer, cause any Seller Transition Service it is required to provide hereunder to be provided, in whole or in part, by any third party contractor engaged by Seller; provided that Seller shall remain responsible for performance of any Seller Transition Services it causes to be provided by any such third party.


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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.

2.1.1 Seller will use commercially reasonable efforts to continue to manage, utilizing its standard processes and policies until such time as each item of Equipment that is included in the Transferred Assets is transferred to the Buyer, the Equipment that is (1) valued at Fifty Thousand Dollars ($50,000) original capitalized amount (as set forth on the Transferred Asset list attached to the Asset Purchase Agreement) or higher and (2) are transitioned to Buyer under this Agreement pursuant to the Asset Purchase Agreement. Seller will provide to Buyer at the End of Phase 2 a report regarding the transfer of such Equipment that Seller continued to manage pursuant to this Section 2.1.1 .

2.1.2 During the Term, Seller will not accept new customers (distributor or direct customer) and will instead refer direct customers and distributors to Buyer. In addition, Seller shall have no obligation under this Agreement to modify its practices with regard to shipping or invoicing documentation and/or labeling related to the Products. 2.1.3 During Phase 2, Seller will have no obligation to supply and sell Products or New Products to distributors and customers. During Phase 2, Seller will, using commercially reasonable efforts, supply and sell (at the Phase 2 Product Prices) the Products solely to Buyer for the period of time that is agreed upon by the Parties and set forth in mutually agreed upon schedules; provided, however, that in no event will such schedule extend beyond the End of Phase 2.

2.1.4 Upon the Changeover Date for each Product, Seller shall no longer be obligated to perform any of the Seller Transition Services related to that transitioned Product.

2.1.5 Prior to the End of Phase 2, Buyer shall be granted a right of first refusal to purchase additional equipment in accordance with the Asset Purchase Agreement. During Phase 2, Seller will prepare and provide to Buyer a list of additional equipment (the " Additional Equipment" ) each item of which is valued at Fifty Thousand Dollars ($50,000) original capitalized amount (as set forth on the Transferred Asset list attached to the Asset Purchase Agreement) or higher. At any time within thirty (30) days after receipt of the list of Additional Equipment, Buyer may, by giving written notice to Seller, elect to purchase all or any portion of the Additional Equipment as set forth in the Acquisition Agreement.

2.2.

Buyer' s Obligations. Buyer is responsible for the transition of the manufacture, sales and support of the Products and New Products from Seller to Buyer. Buyer also shall facilitate the efficient and timely delivery of all Buyer Transition Services and pay the Fees to Seller for Seller Transition Services pursuant to the terms and conditions of this Agreement. Buyer agrees to perform or cause to be performed the Buyer Transition Services set forth in Exhibit 3 to this Agreement for the Term, or for such other period as described in Section 2.4 hereto. Buyer


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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.


shall not interfere with Seller' s control and supervision of the personnel that Seller, in its sole discretion, chooses to assign to perform the Transition Services. Buyer shall return to Seller any and all assets utilized by Transferred Employees that are not expressly included as part of the Transferred Assets, including information technology equipment and laptops. In addition, Buyer shall perform any and all other actions not specifically performed by Seller under Exhibit 2 which must or should be performed during the Term for the transition of the sale and support of the Products and New Products from Seller to Buyer.

2.3. Transfer of Responsibility. During the Term and subject to Seller' s timely performance of its material obligations hereunder, Buyer shall use commercially reasonable efforts to assume the responsibility for the Transition Services as promptly as practicable, but in no event later than the dates set forth in this Agreement for the completion of the transition to Buyer of such services. Buyer shall use commercially reasonable efforts to assume the responsibility for the Products, including the manufacturing, sales and support of the Products by the Changeover Date, but in no event later than the End of Phase 2. Buyer' s inability to completely perform the manufacturing, sales and support of the Products or the design and development of the New Products by the End of Phase 2 shall not obligate Seller to continue performance under this Agreement after the End of Phase 2. Buyer shall assume responsibility for the design and development of the New Products as soon as practicable, but in no event later than the agreed upon schedule for transition of the design and development of the New Products as set forth in Exhibits 2 and 3 .

2.4. Service Duration; Early Termination. The Transition Services (and the obligations of each Party with respect thereto) shall commence as of the Effective Date and continue for the duration set forth for such Transition Service in Exhibits 1 , 2 and 3 , but no later than the End of Phase 2. The Parties agree that the duration of specific Transition Services may be shortened depending upon the needs of Buyer and its capability to provide such services internally or to procure them from other service providers. Accordingly, specific Transition Services shall be provided by Seller only until the earliest of: (a) the duration specified in Exhibit 1 or 2 , (b) the End of Phase 2; (c) the expiration of Seller' s rights under agreements with third parties that are necessary for Seller to provide such Transition Services hereunder; or (d) such time as specified in a written notice to Seller of Buyer' s early termination of such Transition Service, which shall be provided at least thirty (30) days in advance of the desired date of such termination. If any specific Transition Service is terminated prior to the stated duration pursuant to clause (c) or (d) above, the Parties shall promptly take all necessary actions to phase out such Transition Service, including cancellation of third party obligations and transfer of responsibility to Buyer for such services, and Buyer shall promptly assume the responsibilities for such services. Buyer shall reimburse Seller for any third party cancellation charges that Seller incurs by reason of any early termination by Buyer under subparagraph (d) above; provided that such cancellation charges will not be deemed to have been incurred as a result of Buyer' s exercise of its rights under subparagraph (d) above to the extent that such exercise is a direct result of Buyer' s obligation to phase out such Transition Service, including cancellation of third party obligations and assumption for such services.


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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.

2.5. License of Buyer' s Brand Name and Mark . As of the Closing Date, Buyer grants to Seller a non-exclusive, royalty-free, revocable, worldwide license to use Buyer's brand name or Trademark to mark any Product as required by and in accordance with the terms and conditions under this Agreement. Buyer also hereby grants to Seller a non-exclusive, royalty-free, revocable, worldwide license, under its Copyrights, to reproduce, display, perform, and distribute any and all instructions or accompanying documentation to the Buyer-provided trade name or Trademark in order for Seller to mark the Products in accordance with the terms and conditions of this Agreement. Buyer and Seller agree to maintain quality control standards that are at least as high as Seller' s quality control standards currently in place and utilized by Seller in connection with the manufacture and sale of the Products that are sold under Seller' s trade names or Trademarks as of the Closing Date. In addition, Buyer hereby grants to Seller a non-exclusive, royalty-free, revocable, worldwide Trademark license, to use and disclose any instructions or documentation to the extent necessary to mark the Products and New Products in accordance with the terms and conditions of this Agreement solely for such purpose and duration as agreed upon in writing by the Parties with regard to identified Buyer brand names or Trademarks. Buyer further grants to Seller the right to sublicense to Seller' s subcontractors, suppliers or distributors the rights described herein and granted to Seller for the sole purpose of marking the Products and New Products with Buyer' s brand name or marks as described herein.

2.6. No Acceptance of Any Purchase Orders Beyond the Term. During Phase 1, Seller may accept purchase orders from Seller's distributors, direct customers and Buyer. Seller shall not accept purchase orders from any party other than Buyer during Phase 2. For any existing orders that have delivery dates after the End of Phase 2, Seller will refer the direct customers or distributors to Buyer and suggest that they re-book such orders with Buyer (and shall not in any way impede such customers and distributors from doing so). If a direct customer or distributor re-books such orders, Buyer shall be solely responsible for such orders. Notwithstanding the foregoing, Seller shall not be, in any manner whatsoever, responsible if the direct customers or distributors fail to re-book such orders with Buyer.

2.7.

Additional Services. If Buyer notifies Seller that Buyer desires to obtain different or additional services or resources from Seller beyond those set forth in Exhibit 2 , the Parties shall negotiate mutually agreeable terms and conditions for such Services (the " Additional Services" ); provided, however, that this Section 2.7 shall not require Seller to provide any Additional Services absent any such agreement and the provision of Additional Services will remain at the sole discretion of Seller. If Seller and Buyer mutually agree upon the provision of any Additional Services, this Agreement and Exhibits, as applicable, shall be amended


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CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.


pursuant to Section 16.13 . Seller will be reimbursed by Buyer for the cost of any such Additional Services as calculated by Seller based upon Seller' s costs plus a fee of *** , and expenditures for reasonable travel and temporary living expenses related to such Additional Services. 2.8. Transition Services Provided Following Term; Term Extension. Except as otherwise agreed to by the Parties in writing, Seller is under no obligation, express or implied, to provide any of the Seller Transition Services after the End of Phase 2 unless, and solely to the extent that, Seller' s material failure in its performance of the Seller Transition Services directly and proximately causes a delay in the Changeover Date that requires the performance of Seller Transition Services after the End of Phase 2. In the event Buyer requests Seller to continue providing Transition Services after the end of the Term, Seller, in its sole discretion, shall determine whether and to what extent it is willing to provide any such services. If Seller and Buyer mutually agree to extend the Transition Services beyond the Term, this Agreement and the Exhibits hereto as applicable, shall be amended pursuant to Section 16.13 . The Parties acknowledge that Fees payable in respect of any Transition Services that Seller, in its sole discretion, agrees to provide after the end of the Term may be higher than those established during the Term for such extension. Buyer acknowledges and agrees that, following the end of the Term, Seller shall have no further responsibilities or obligations to Buyer under this Agreement. 2.9. Third Party Consents and Agreements Required to Perform the Transition Services. The Parties agree that Seller' s ability to provide certain Transition Services to Buyer may be conditioned upon Seller's ability to obtain, on reasonable terms, third party consents and agreements reasonably necessary for Seller to perform such Transition Services or to use certain third party software or hardware licensed to Seller. Seller shall use its commercially reasonable efforts, and Buyer shall reasonably cooperate with Seller, to obtain any Seller Contractual Consent; provided , however , that commercially reasonable efforts by Seller and its Subsidiaries shall not include (a) the payment of any amounts or provision of any other consideration by Seller or (b) the amendment of any provision of, or waiver of any rights under any Assumed Contract. Buyer shall promptly reimburse Seller for all such costs incurred in obtaining such consents and agreements. Notwithstanding the foregoing, Seller shall have no obligation to expend any funds to obtain such third party consents and shall not be in breach of its obligations hereunder in the event that Seller is unable to obtain such third party consents and agreements.

2.10. Government Permits Required to Perform the Transition Services. The Parties agree that Seller' s ability to provide certain Transition Services to Buyer may be conditioned upon Seller's ability to obtain, in a timely manner, Governmental Authority permits and approvals reasonably necessary for Seller to perform such Seller Transition Services. Buyer and Seller, and their relevant Subsidiaries, shall


9 *** CONFIDENTIAL MATERIALS REDACTED AND FILED SEPARATELY WITH THE COMMISSION.

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN FILED WITH THE COMMISSION.


cooperate with one another in taking any reasonable actions by or in respect of, or making any filings with, or obtaining any consents, approvals, authorizations from, Governmental Authorities as are necessary for the consummation of the transactions contemplated by this Agreement. Buyer shall promptly reimburse Seller for all such costs incurred in obtaining such Governmental Authority permits and approvals.

2.11. Staffing Required to Perform Transition Services. The provision of Seller Transition Services by Seller to Buyer is contingent upon the availability of qualified Seller staff to perform such services, including those personnel who may be hired by Buyer during the Term. As set forth above, it is the intent of the Parties to migrate Transition Services to Buyer as soon as practical, but in no event longer than the dates set forth in Exhibits 1 or 2 . If Seller staff performing
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