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Lucent to Buy $3 Billion of Agere Products

Optical components developer Agere Systems Inc. said that Lucent Technologies intends to buy about $3 billion of its products over the next three years.

Agere, a spinoff of Lucent, said in a SEC filing on Thursday that Lucent will purchase through Jan. 31, 2002, at least $800 million worth of Agere products. Lucent will then spend at least $1 billion during each one year period ending Jan. 31, 2003 and Jan. 31, 2004. In addition, under certain circumstances, if Lucent does not meet its minimum yearly purchase commitment for either of the first two years of this agreement, Lucent may carry over a portion of the yearly purchase commitment to the following year of the agreement.

For the period February 1, 2001 through June 30, 2001 Lucent purchased $242 million under this agreement, the SEC filing said.

In connection with the spinoff, Agere and Lucent also entered into an Interim Service and Systems Replication Agreement to provide each other on a transitional basis with various data processing services, telecommunications services and corporate support services, including: accounting, financial management, information systems management, tax, payroll, legal, human resources administration, procurement and other general support. This agreement also provides for the replication and transfer of designated computer systems used for administrative support or used in Agere's or Lucent's other businesses. The costs associated with this agreement amounted to $36 million and $68 million for the three and nine months ended June 30, 2001, respectively.

In the quarter ended June 30, Agere sold Lucent $113 million worth of products, down from $251 million in the year-ago period, according to the SEC filing. Agere also said Lucent bought $518 million in the nine-month period ending June 30, down from $707 million in the previous fiscal year's nine-month period.



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