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property until the set price was paid in full. The third-party
customers were prohibited from assigning their rights under the
purchase agreement without the consent of petitioner.
Northern Telecom Finance Corporation (subsidiary) is a
wholly owned subsidiary of petitioner. In some situations, after
entering into a purchase agreement, petitioner and a third-party
customer entered into an agreement with the subsidiary titled
Assignment and Delegation. Each assignment and delegation
agreement contains a choice of jurisdiction clause that subjects
the agreement to the laws of New York, Tennessee, or Texas.
In each assignment and delegation agreement, the third-party
customer assigned to the subsidiary the customer’s rights under
the purchase agreement to receive title in the telephone system,
the license in the computer software, and the rights to patent
protection. The assignment and delegation agreements also gave
the third-party customers the option to elect interim funding, in
which the subsidiary would pay the set price to petitioner. If
interim funding was not elected, the third-party customer
retained the responsibility of paying the set price to petitioner
and the subsidiary was to reimburse the third-party customer at a
later date.
Concurrent with the creation of each assignment and
delegation agreement, the third-party customer and the subsidiary
entered into a lease agreement, whereby the customer leased the
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Last modified: May 25, 2011