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Exhibit 10.9
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GENERAL CO-OPERATION AND DEVELOPMENT AGREEMENT
between
ERICSSON TELECOM AB
and
▇▇.▇▇▇
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TABLE OF CONTENTS
1. Background 3
2. Definitions 3
3. Cooperation objectives 4
4. Ownership, licenses and market rights 5
5. Escrow 8
6. Marketing and branding 9
7. Development and test of a solution 9
8. Development conditions 9
9. Infringements 15
10. Damage to person or property 15
11. Duty of notification 15
12. Termination 16
13. Insurance 17
14. Assignment 17
15. Access to Information 17
16. Use and confidentiality 18
17. Training, installation, maintenance and support 18
18. Announcements 19
19. Term 19
20. General provisions 19
APPENDICES
Appendix 1 Technology Definitions
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This General Co-operation and Development Agreement is made between
Ericsson Telecom AB ("Ericsson"), registration number 556261-3258, a limited
liability company duly incorporated under the laws of Sweden and having its
principal place of business at Telefonplan, ▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
and
▇▇.▇▇▇ ("OZ"), U.S. tax identification number ▇▇-▇▇▇▇▇▇▇, a corporation duly
incorporated under the laws of California and having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, U.S.A.
Ericsson and OZ are hereinafter also referred to as individually the "Party" or
collectively the "Parties".
1. BACKGROUND
1.1 Ericsson is primarily engaged in the business of developing, marketing
and sale of products, systems and services for public and private
communication, including Datacom Networks and IP Services.
1.2 OZ is primarily engaged in the business of development and design of
advanced internet technologies and a world leader within multi-user
Internet applications.
1.3 The Parties have agreed to create a long-term strategic partnership
and to cooperate in the area of Internet based technologies,
applications and services including but not limited to development,
testing, integration, marketing, sales, distribution, support and
maintenance of solutions based on relevant technologies and services
such as publishing or knowledge transfer from each Party. This
Agreement sets forth the general terms and conditions for such
co-operation.
1.4 The Parties' co-operation shall, unless otherwise specifically agreed,
be on a non-exclusive basis and participation shall be based on
individual evaluation by each Party of expected benefits and
commercial viability.
1.5 The Parties will initially concentrate the Development Work on
Solutions for LINK, Communities and Customer Support, followed by
Distance Learning, as defined in Appendix 1, Section B. The general
application technologies to be used in the Solutions are defined in
Appendix 1, Section A.
2. DEFINITIONS
2.1 "Agreement" shall mean this General Co-operation and Development
Agreement
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2.2 "Development Work" means any development undertaking or any other
project executed by OZ for Ericsson under any Specific Co-operation
and Development Agreement.
2.3 "OZ Application Technology" means such OZ and third-party proprietary
technology as is further defined in ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇.
2.4 "Purchase Order" means a written request for Development Work.
2.5 "Solution(s)" means the products and/or services that result from a
Development Work.
3. COOPERATION OBJECTIVES
3.1 This General Co-operation and Development Agreement sets forth the
general terms and conditions that will be applicable to the future
co-operation between the Parties in the area of internet based
technologies and applications, unless otherwise agreed in writing.
3.2 When the parties agree to co-operate in the design, programming,
development, production, marketing, sales and distribution of specific
products and/or services under the general terms of this Agreement, the
specific terms and conditions therefor shall be set out in a Specific
Co-operation and Development Agreement.
3.3 A Specific Co-operation and Development Agreement and a Purchase Order
may include, but not be limited to, the following specific terms and
conditions:
a) Detailed description of the targeted Solution and objectives
b) Each Party's contribution and responsibility
c) Project team members and contact persons
d) Time table
e) Technical specification and documentation
f) Business model
g) Fees and other compensation
h) Distribution of costs, expenses and revenues
i) Support and services
j) Marketing and advertising
k) Warranties
l) Term
m) Any other relevant provision
3.4 In case of any discrepancy between this Agreement and a Specific
Co-operation and Development Agreement the terms of the latter shall
prevail.
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4 OWNERSHIP, LICENSE AND MARKET RIGHTS
Ownership to Background IPR
4.1 Each Party will remain the owner of any know-how, patent, copyright, design
right, right to circuit patterns in semiconductor products, technical
document and any other industrial and intellectual property rights owned by
that Party prior to the signing of this Agreement, unless otherwise agreed.
License of OZ Application Technology
4.2 OZ will under Specific Co-operation and Development Agreements perform
Development Work for the purpose of creating Solutions. The Solutions will
or may include the OZ Application Technology, which shall be provided to
Ericsson in object code form unless otherwise agreed. OZ hereby grants to
Ericsson a fully paid-up, perpetual, non-exclusive, world-wide license to
a) use, modify (or have modified) and make extracts from the OZ
Application Technology for the purpose of use, maintenance, sale and
other distribution of the Solutions;
b) incorporate or merge the OZ Application Technology or modifications
thereof or extracts therefrom into any equipment or other software for
the purpose set out in a) above;
c) sublicense the OZ Application Technology as part of Solutions to
customers;
d) make as many copies of the OZ Application Technology as are required
for exercise of the licenses granted in this Subarticle 4.2; and
e) sublicense the above in c) and d) stated rights to Ericsson market
channels (whether in the form of agent, distributor or similar entity)
designated by Ericsson to be a market channel for Solutions.
4.3 Right of First Refusal
During the term of this Agreement or as long as Ericsson owns shares of
OZ's preferred and/or common stock representing five percent (5%) or more
in the aggregate of the issued and outstanding shares of OZ, whichever is
longer, OZ shall give written notice to Ericsson of all the relevant terms
and conditions of any proposal to enter into any transaction involving a
sale or license (exclusive or non-exclusive) of any related OZ Application
Technology in the areas of LINK, Communities, Customer Support and Distance
Learning for the Telecommunication Sector or with any prime competitor of
Ericsson. If OZ gives such a notice to Ericsson, then for thirty (30) days
following receipt of the notice, Ericsson shall have the option to enter
into the proposed transaction on the terms and conditions set forth in the
notice. In the event
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Ericsson elects to enter into the proposed transaction, Ericsson shall
give written notice to OZ of its decision. In the event Ericsson does
not elect to enter into the proposed transaction or fails to give notice
of its decision within the specified period, OZ may enter into the
proposed transaction in accordance with the terms and conditions set
forth in the notice. This process shall be repeated if OZ proposes to
enter into the proposed transaction on terms more favorable to the third
party than those first offered to Ericsson hereunder, except that the
subsequent option period(s) shall then be only fifteen (15) days.
4.4 OZ may also, on a case-by-case basis and on terms to be agreed upon in
separate License Agreement(s), grant to Ericsson the rights set out in
4.2 above regarding the OZ Application Technologies for the purpose of
developing (or having developed) Ericsson branded applications and
products that are not competing with current or planned OZ products.
4.5 All rights granted to Ericsson above in Subarticles 4.2 and 4.4 are
also granted any other Ericsson company (whether wholly or majority
owned or controlled by Ericsson or the parent company of Ericsson,
Telefonaktiebolaget LM Ericsson).
Ownership and license to LINK
4.6 Subject to payment by Ericsson to OZ of the license fee set out below
an exclusive, non-restricted, perpetual, non-revocable, world-wide
license to test, use, modify, make extract from, sub-license and
otherwise distribute the existing developments results, in whatever form
or media, of LINK (as defined in Appendix 1) shall be granted to
Ericsson as from the execution of this GCDA.
4.6.1 The license fee for LINK shall be an aggregate of USD 1.500.000, which
shall be paid:
(a) USD 500.000 at the execution of this GCDA,
(b) USD 500.000 upon the delivery of version 1 of the LINK and
acceptance thereof by Ericsson, and
(c) USD 500.000 when Ericsson has received binding orders equivalent to
100.000 customer licensees of LINK.
4.6.2 The Parties anticipate that LINK shall be further developed into a
Solution on terms to be set out in a Specific Co-operation and
Development Agreement. However, the Parties agree that OZ shall have a
perpetual, non-exclusive right to use and modify the existing results of
LINK as well as the LINK-Solution and to distribute an OZ branded
version of LINK directly to its end-user customers and to host such
version of the LINK-Solution as a complimentary service to the LINK
offering of Ericsson without any charge by Ericsson.
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Ownership of Results from Development Work
4.7 Subject to its obligation to make the payments set forth in Subarticle
8.16.3, as soon as they appear, Ericsson shall be entitled to the full
right of ownership (and right to use) all the results of the Development
Work, and eventually the Solutions, whatever form they have. The ownership
of results include the right to industrial and intellectual property
rights including any patent rights, copyrights, rights to photographs,
design rights, rights to circuit patterns in semiconductor products,
technical documentation and any other industrial and intellectual property
rights included therein which have been produced by OZ (or its
subcontractors) for Ericsson, or have been acquired on Ericsson's behalf
in connection with the Development Work.
4.8 Cross-License
Subject to any OZ's obligation to make agreed payments of royalties or
profit shares to Ericsson, as stated below, Ericsson hereby grants to OZ a
non-exclusive license to use, modify (or have modified) and make extracts
from the results of each Development Work for the purpose of making, using,
selling and sublicensing for applications that are not competitive with any
Ericsson product or planned Ericsson product, or are targeted to the
Telecommunications Sector. In consideration for each such license, OZ shall
pay to Ericsson royalties or profit sharing payments on terms to which the
Parties shall, in good faith, agree.
4.9 Assistance in Registration of Industrial and Intellectual Property Rights
OZ undertakes to assist in preparing and signing such documents as may be
necessary to enable Ericsson's parent company, Telefonaktiebolaget LM
Ericsson, to be registered as holder of patents or other industrial and
intellectual property rights. Reasonable compensation shall be paid for
such assistance.
As regards inventions and innovations that have come into existence as part
of the Development Work, OZ undertakes to enter into such agreements with
its employees - or other personnel that OZ has hired for the Development
Work - as are necessary to allow patents or other industrial and
intellectual property rights to be assigned to Ericsson or to
Telefonaktiebolaget LM Ericsson without other compensation than stipulated
and agreed in relation to the Development Work except for the bonus to the
inventing employee according to Ericsson or OZ patent reward program -
whichever is more favourable to the employee.
4.10 Modification and Assignment
Ericsson may not modify photographs or artistic works in such way as to
infringe the literary or artistic integrity of the artist or photographer.
OZ undertakes to ensure that the artist or photographer waives all rights
to be mentioned as creator or photographer or be mentioned as source, and
OZ
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furthermore undertakes to have entered into such agreements with its
employees - or other personnel that OZ has hired for the Development Work -
as are necessary to allow Ericsson to acquire the rights that are
mentioned in this Subarticle.
5. ESCROW
OZ agrees to deliver, within four (4) weeks from signing of this Agreement,
a sealed package containing the relevant source code and related
documentation for the OZ Application Technology for deposition with an
agreed Escrow Agent in accordance with the terms and conditions of a
separate Escrow Agreement. OZ shall, from time to time, deposit with the
Escrow Agent any and all updates and upgrades and related documentation in
accordance with said agreement.
Ericsson will be entitled to request release and delivery of the deposited
source code if one or more of the following circumstances (the "Events of
Release") have occurred:
a) if Ericsson is entitled to terminate this Agreement pursuant to
Subarticle 12.1
b) if OZ is in material breach of the maintenance and support obligations
applicable under this Agreement or any Specific Cooperation and
Development Agreement or discontinues to generally make available
maintenance and support for the OZ Application Technology; or
c) timely completion of the Development Work is essentially prevented due
to a circumstance referred to in Article 21.2 (Force Majeure) for a
period exceeding three (3) months.
The source code shall be released and delivered to Ericsson in accordance
with the terms and conditions of the Escrow Agreement.
Upon the source code being released to Ericsson pursuant to the Escrow
Agreement, Ericsson is automatically granted, free of charge, a
non-exclusive, irrevocable, non-transferable license to use, copy,
sublicense, modify and develop the source code and the OZ Application
Technology for the purpose of supporting customers of the Solutions,
maintaining the Solutions or completing Development Work in progress.
Upon the delivery of the source code to Ericsson, OZ undertakes, at the
request and expense of Ericsson, to provide Ericsson with reasonable
support in order to enable Ericsson to successfully use the source code for
the purposes stated in this Agreement and relevant Specific Co-operation
and Development Agreements.
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8.9 Quality assurance system
OZ undertakes to commit reasonable commercial efforts to establish and
maintain a quality assurance system conforming with the requirements
set out in ISO (International Organisation for Standardisation) 9000
and any other applicable quality assurance system within Ericsson for
the relevant Development Work, if not otherwise agreed to in a
Specific Co-operation and Development Agreement.
8.10 Deliveries
Development Work shall be performed in accordance with the timetable
specified in the Specific Co-operation and Development Agreement. In
the case the Development Work is subdivided in specific phases
according to an implementation plan, OZ shall obtain permission to
continue its work before starting on a new phase. The Parties will
endeavour to implement processes that will permit OZ to maintain
project momentum and to efficiently utilise its development staff
without undue delays pending permission to continue its work.
8.11 Development Work reports
When the Development Work has been completed, or if approval is to be
given after a specific phase in accordance with an implementation
plan, a report of the final result or the interim result of each phase
in question shall be submitted to Ericsson for approval.
8.12 Approval
8.12.1 Approval procedure
Ericsson shall as soon as possible, but not later than fifteen (15)
working days following receipt of the report on the final or interim
result, as set forth in Subarticle 8.11, approve or reject the result
in writing, in which case Ericsson shall notify OZ of any deviations
from the specifications given in the Specific Co-operation and
Development Agreement which have caused rejection.
If Ericsson has not rejected the result in a written notice to OZ
within fifteen (15) working days following receipt of the relevant
report in accordance with Subarticle 8.11, the result shall be
considered as approved.
At Ericsson's request OZ shall assist with demonstration of the result
on-site, or at Ericsson's expense (including travel expenses), at a
location other than the development location.
8.12.2 Deviations from specifications
In the event there are deviations from specifications in accordance
with Subarticle 8.12.1 above, the responsible Party shall be obliged
to undertake the necessary corrective measures immediately and at its
own risk and
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expense. In case the deviation has caused rejection of reported final
or interim results, OZ shall without undue delay submit a report on
the final or interim result to Ericsson for a new evaluation and
possible approval in accordance with Subarticle 8.12.1. Minor
deviations from the specification may not be a cause for rejection of
the result.
8.13 Delays in delivery
Ericsson shall, in the event of a delay in delivery under Ericsson's
control, promptly and as soon as the delay is identified, notify OZ
thereof and provide OZ with a revised time table including a list of
any and all actions to remedy the delay. When a delay in delivery has
been caused by Ericsson, Ericsson shall pay to OZ all actual
project-related damages caused by the delay up to a maximum amount of
two (2) month's cost of the relevant Development Work. OZ shall use
its best efforts to mitigate the project-related damages caused by the
delay.
OZ shall, in the event of a delay in delivery under OZ' control,
promptly and as soon as the delay is identified, notify Ericsson
thereof and provide Ericsson with a revised time table including a
list of any and all actions to remedy the delay. When a delay in
delivery has been caused entirely by OZ and has continued for eight
(8) weeks, Ericsson shall be entitled, regardless of the time-limit
referred to in Article 8.23, to cancel the Development Work, wholly or
in part, in which case the Development Work report and related
documents shall be handed over in accordance with Article 8.23 below.
8.14 Guarantees
OZ guarantees that its contribution to the Development Work will be
executed with a high degree of care and in a professional manner. To
the extent defects or shortcomings are the result of OZ's conduct, OZ
undertakes, at its own expense and without delay, to rectify any
defects or shortcomings in the results of the Development Work in
relation to the agreed specifications and defects or shortcomings in
documents produced upon such Development Work. OZ's liability in this
respect shall, however, only extend to defects of which notification
is given within twelve (12) months from first customer commercial
installation.
8.15 Remuneration
8.15.1 Revenues and costs from the sales and licensing of Solutions
incorporating OZ Application Technology, will be shared as defined in
each Specific Co-operation and Development Agreement.
8.15.2 Instead of or in addition to the revenue sharing set out in Subarticle
8.15.1 above, Development Work may be paid for based on fixed prices
or on a current account. The Specific Co-operation and Development
Agreement shall specify whether the Development Work is to be executed
at a fixed price or on a current account.
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8.15.3 If the Development Work is delayed due to non-provision of a resource
which Ericsson is under a contractual obligation to provide, and if
this is not rectified following a written demand to that effect by OZ,
OZ shall be entitled to compensation for extra expenses. OZ shall,
however, take the necessary steps to keep such expenses to a minimum.
8.15.4 If Ericsson is obliged by law or regulation or by order from relevant
authority to pay taxes, social security and/or other expense in
relation to an agreed or executed payment, such payments shall be
reduced by the amount of expense which Ericsson is obliged to pay in
relation thereto. OZ shall be obliged to repay the amount of executed
payments corresponding to such reductions immediately on demand.
8.15.5 Fixed prices
Payment to OZ at a fixed price shall represent the total price,
including any fees, travelling expenses, allowances, disbursement etc.
and the fixed price shall be specified in the Purchase Order.
8.15.6 Current accounts
When payment to OZ shall be made on a current account, the price and
costs for fees, travelling expenses, allowances and disbursements
shall be specified and agreed in advance.
Any Development Work payable on a current account shall be limited by
Ericsson in the Specific Co-operation and Development Agreement to a
maximum amount ("Maximum Amount") which must not be exceeded without
Ericsson's prior written permission. The Maximum Amount shall include
all payments to OZ in accordance with Subarticle 8.15.7 through 8.15.9
below except additional overtime requested by Ericsson and unexpected
travel expenses.
OZ shall be able to confirm the reported hours of its work by means of
time records and unexpected travel expenses in an adequate manner.
8.15.7 Fees
Fees shall be specified as fixed daily or hourly fees.
OZ's fees shall include salaries and salary-related costs, taxes,
overtime, allowances and travelling expenses to the place where the
Development Work is mainly to be executed. However, where an agreement
has been concluded to that effect, overtime compensation shall be
payable for overtime work explicitly requested by Ericsson.
8.15.8 Travelling Expenses and Allowances
For travelling to places other than the place where the Development
Work is mainly to be executed, travelling expenses and allowances
shall, if approved
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in writing by Ericsson, be payable in accordance with the traveling
compensation regulations of Ericsson. Ericsson shall provide OZ with
such regulations at the commencement of the Development Work and they
shall be subject to change during the balance of the term of this
Agreement. Such changes will be effective upon receipt by OZ of notice
thereof. Compensation for travelling time shall, however, not be
payable.
8.15.9 Compensation for other expenses
OZ shall receive compensation for verified disbursements agreed to in
advance.
8.16 Invoicing and payment
8.16.1 Fixed price invoices
Development Work at a fixed price shall be invoiced as agreed in a
payment plan. If no such payment plan has been agreed upon, an invoice
may be forwarded earliest on submission for approval of the report on
the final or interim result.
Invoices shall contain the following particulars:
- reference to a Specific Co-operation and Development Agreement
and Purchase Order;
- OZ's name/company and address; and
- specification of the work performed.
8.16.2 Current account invoices
Unless a specific payment plan has been agreed upon, Development Work
on a current account shall be invoiced monthly in arrears.
Invoices shall contain the following particulars:
- reference to a Specific Co-operation and Development Agreement;
- OZ's name/company and address;
- specification of the work performed;
- time consumed (hours/days) and hourly or daily fee in respect of
each of OZ's personnel taking part in Development Work.
8.16.3 Payments
Payment shall be made not later than sixty (60) days after receipt of
each invoice. Invoicing shall be made according to the Specific
Co-operation and Development Agreement.
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9. INFRINGEMENTS
9.1 OZ represents and warrants that it has all rights and licenses necessary to
grant the rights and licenses set out herein and in any Specific
Co-operation and Development Agreement and that the use of the results
developed, procured or supplied in the Development Work for Ericsson shall
not constitute an infringement of any patents or any other industrial and
intellectual property rights belonging to OZ or any third party.
9.2 OZ shall indemnify and hold Ericsson harmless with respect to all
liabilities or losses, including, without limitation, reasonable attorneys'
fees arising out of any proved claim, lawsuit or judgement from third
parties in respect of any breach of the representation and warranty in
Subarticle 9.1.
9.3 Ericsson shall indemnify, defend and hold OZ harmless with respect to all
liabilities or losses, including, without limitation, reasonable attorneys'
fees arising out of any proved claim, lawsuit or judgement from third
parties based on a claim that the specifications provided by Ericsson (as
opposed to the manner of implementation) of any product developed under
this Agreement or any Specific Co-operation and Development Agreement
infringes the patents or any other industrial or intellectual property
right belonging to any third party.
9.4 Each Party shall notify the other Party without delay if such a claim is
made and, provided that the other Party agrees to reimburse the notifying
Party for any reasonable costs and expenses arising as a direct result
thereof, fully co-operate in the defence of such claim. All settlements
between the defending Party and third parties concerning such claims shall
be approved by the other Party where such approval may not be reasonably
withheld.
10 DAMAGE TO PERSON OR PROPERTY
Each Party will be liable for any damage to person or property caused to
the other by wilfulness or gross negligence during the Development Work.
If damage for which compensation is payable has occurred, the damaged Party
shall take steps to limit the damage, provided always that such steps do
not involve unreasonable expense or are unreasonably burdensome.
11 DUTY OF NOTIFICATION
OZ shall notify Ericsson without delay and in writing if any of the
following events is likely to occur, or has already occurred:
- material changes in the conditions of ownership with respect to OZ or
that part of OZ's business which is engaged in the Development Work;
- OZ's bankruptcy, suspension of payments, composition proceedings or
liquidation;
- infringement of a third party's rights; or
- defects or shortcomings in a specification.
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This duty of notification does not entail any discharge from liability
from any other effects herein described.
12 TERMINATION
12.1 Ericsson shall be entitled to terminate this Agreement and/or any
Specific Co-operation and Development Agreement forthwith if:
a) if any agreement is concluded under which OZ's business, or
part thereof, is transferred to a company which is in
competition with Ericsson where OZ loses its ability to
control or fulfil its obligations under this Agreement and or
any Specific Co-operation and Development Agreement:
b) timely completion of the Development Work is essentially
prevented due to a circumstance referred to in Subarticle
21.2 (Force Majeure) for a period exceeding three (3) months;
or
c) OZ becomes insolvent or a petition under any laws of or
relating to bankruptcy, insolvency, reorganisation or relief
of debtors will be filed by OZ or if OZ executes an assignment
for the benefit of creditors, or if a receiver, custodian,
liquidator or trustee is appointed for OZ, or if OZ seeks or
requests any such appointment, or if OZ takes any corporate
action to authorise any of the foregoing actions, or if any
case, proceeding or other action against OZ is commenced and
not dismissed within ninety (90) days seeking to have an order
entered against it as a debtor under any law of or relating to
bankruptcy, insolvency, reorganisation or relief of debtors or
seeking appointment of a receiver, trustee, custodian or
similar official for it or for any substantial part of its
property.
If Ericsson terminates a Specific Co-operation and Development
Agreement for the reasons stipulated in Subarticle 12.1 b) or c)
above, OZ shall still be entitled to receive royalties and/or profit
sharing payments in proportion to the value added by OZ to the
Development Work prior to termination. The Parties agree that such
value added shall be calculated as follows: (A) one-third of the
agreed upon royalty or profit sharing percentage, plus (B) (x)
two-thirds of the agreed upon royalty or profit sharing percentage
times (y) a fraction, the numerator of which is the aggregate amount
of payments made or due up to and including the date of termination
and the denominator of which is the Maximum Amount in the case of a
current account Development Work or the agreed fixed price.
12.2 OZ shall be entitled to terminate a Specific Co-operation and
Development Agreement forthwith if Ericsson develops a product
directly competing with the Solution defined under the said agreement.
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If OZ terminates a Specific Co-operation and Development Agreement for
this reason or Ericsson terminates a Specific Co-operation and
Development Agreement for any other reason than stated in 12.1 and
12.3, OZ shall, at its option, (i) be entitled to payment of all
amounts due up to and including the date of termination, provided
Ericsson receives all results of the Development Work or (ii) retain
all rights in the industrial and intellectual property rights in
connection with the Development Work under such agreement.
12.3 Either Party shall be entitled to cancel any agreement concluded
hereunder, wholly or in part, if the other Party commits a material
breach of such agreement and neglects to remedy the same within thirty
(30) days of receipt of a written demand to that effect (including a
description of the alleged breach of agreement);
12.4 If OZ terminates any agreement concluded hereunder for the reason
stated in Subarticle 12.3, OZ shall, at its option, (i) be entitled to
payment of all amounts due up to and including the date of
termination, provided that Ericsson receives all results of the
Development Work or (ii) retain all rights in the industrial and
intellectual property rights in connection with the Development Work
under such agreement.
12.5 If Ericsson terminates any agreement concluded hereunder for the
reason stated in Subarticle 12.3, payment shall be made of all amounts
due up to and including the date of termination and OZ shall be
obliged, immediately and without further compensation, to report on
the Development Work to which the cancellation relates and to deliver
to Ericsson all the documents prepared in connection with the
Development Work.
13 INSURANCE
OZ shall maintain sufficient insurance for any liability arising out
of the Development Work and out of acts or omissions for which OZ is
responsible hereunder. The minimum amount for such insurance shall be
ten million (10,000,000) SEK.
OZ shall upon request by Ericsson be able to present a certificate of
insurance.
14 ASSIGNMENT
Neither Party shall be entitled without the written consent of the
other Party to assign its rights or obligations under this Agreement,
which consent shall not be unreasonably withheld. Ericsson shall,
however, be entitled to assign its rights to another company within
the Ericsson group of companies.
15 ACCESS TO INFORMATION
During the term of this Agreement, each Party will upon request
furnish the other Party with such information and material as is
reasonably necessary for the purpose of evaluating whether to enter
into or review a project or contract.
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All such information and material received by a Party from the other will
be subject to the provisions concerning use and confidentiality as set
forth in Article 16 below, and will be promptly returned if the Parties do
not enter into the contemplated agreement.
16 USE AND CONFIDENTIALITY
16.1 All information and material disclosed by one Party to the other during
the term of this Agreement, including the terms and conditions of this
Agreement and all further discussions between the Parties with respect
hereto (hereinafter the "Confidential Information"), shall be used solely
for the purposes of this Agreement and will be treated on a confidential
basis, subject to appropriate disclosure as may be required by applicable
law or judicial process.
16.2 Confidential Information received by a Party shall not be disclosed
directly or indirectly to any other person, corporation or entity for any
purpose whatsoever, nor shall it be used or copied except for the purposes
of this Agreement. Confidential Information may, however, be disclosed to
such employees, subcontractors and professional advisors of the receiving
Party who reasonably require the information for a purpose permitted
herein and who have a secrecy obligation to the receiving Party not less
strict than set out in this Article 16.
16.3 The obligations under Subarticles 16.1 and 16.2 shall not apply to such
information that the receiving party can prove, with substantial evidence:
(a) is now or which (through no act of failure on the part of the
receiving Party) becomes generally available to the public;
(b) is supplied by a third party who the receiving Party in good faith
believes is free to make such disclosure without restriction;
(c) is disclosed by the disclosing Party to third parties generally
without restriction on disclosure; or
(d) is independently developed by the receiving Party without use of any
confidential information from the other Party.
16.4 The obligations of this Article 16 shall survive the expiration or
termination of this Agreement for a period of five (5) years.
17 TRAINING, INSTALLATION, MAINTENANCE AND SUPPORT
Ericsson will use its existing support channels and maintenance procedures
for first and second line support and maintenance. OZ will establish its
own third line support complying with written Ericsson support and
maintenance standards and processes.
OZ shall provide Ericsson with training as specified in each SCDA.
17
18 ANNOUNCEMENTS
All announcements to news media or third parties pertaining to this
Agreement or any Specific Co-operation and Development Agreement will be
subject to review and approval of Ericsson before any public disclosure. If
either Party believes on advice of counsel that the making of a statement,
public announcement or disclosure in Securities and Exchange Commissions
filings is necessary to comply with the requirements of any law,
governmental order or regulation, it shall give the other Party prior
notice of such advice and its intention to make such statement, public
announcement or disclosure, and a text of such statement or announcement.
Notwithstanding any other provision of this Agreement, if either party
determines that any agreement between the Parties is sufficiently material
to such party as to require inclusion as an exhibit to Securities and
Exchange Commission filings, such Party (a) shall notify the other Party of
such determination, (b) shall consult with the other Party as to those
terms and provisions deemed to be particularly confidential or sensitive,
(c) shall use all reasonable efforts to obtain confidential treatment of
these confidential or sensitive terms and provisions and (d) may include
such agreement or agreements as an exhibit to such filings, redacting such
portions thereof as to which confidential treatment is obtained.
19 TERM
19.1 This Agreement shall be effective from the date of its execution until
December 31, 2001. Unless terminated by either Party's written notice, the
term of the Agreement shall be extended one (1) year at the time.
Notwithstanding the aforementioned, the terms and conditions of this
Agreement shall remain in force as long as a Specific Co-operation and
Development Agreement is in force between the Parties.
19.2 In the event of termination, the Parties shall co-operate in an orderly
fashion with a view toward protecting any proprietary or confidential
information they may have exchanged as well as to dissolve any projects
which may have to be discontinued due to termination of this Agreement.
20 GENERAL PROVISIONS
20.1 Relationship between the Parties.
The relationship of the Parties is that of independent contractors. Neither
Party may act as an agent for or make a commitment on behalf of the other.
20.2 Force Majeure
If fulfilment of either of the Parties' obligations under this Agreement or
any Specific Co-operation and Development Agreement is prevented by
unforeseen circumstances beyond their control, such as fire, explosion,
acts of God, war, embargo, intervention of any governmental authority,
major industrial disputes, mobilisation, requisitions, currency
restrictions, rebellions or riots, shortage of motor fuel, general shortage
of means of transport,
18
20(22)
commodities and energy, or defects and delays in deliveries from a supplier due
to any of the aforementioned circumstances, this shall constitute a ground for
discharge from liability for delays in approval or delivery and for relevant
liquidated damages and other damages, provided that the Party suffering the
delay immediately notifies the other Party of such delay.
20.3 Expenses
Each Party will cover its own costs and expenses incurred in the
negotiation and preparation of this Agreement and the Specific Co-operation
and Development Agreements.
20.4 Further documents
Each Party agrees to execute, deliver and/or file any and all further
instruments that the other Party may reasonably deem necessary to carry out
the purposes of this Agreement.
20.5 Notices
All notices between the Parties shall be in writing and given by mall,
telefax, e-mail or express courier service to the recipient Party's address
set forth below, until a Party provides written notice of a change of such
address. Notices shall be deemed received in the ordinary course of the
method of transmittal.
Ericsson OZ
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice Title: Financial Controller
President
Address: ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Address: 54 Snorrabraut
▇▇▇▇▇ ▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
Fax: ▇▇ (▇▇▇) ▇▇▇ ▇▇▇▇ Fax: ▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇.▇▇▇▇▇@▇▇▇.▇▇▇ E-mail: ▇▇▇▇@▇▇.▇▇▇
20.6 Governing Law
This Agreement shall be governed by and interpreted under the substantive
laws of Sweden, excluding its rules on conflicts of law.
20.7 Arbitration
Any dispute arising under this Agreement, which the Parties cannot resolve
through the efforts of their good officers working together, shall be
finally settled by arbitration by a panel of three (3) arbitrators in
accordance with the
19
21(22)
Rules of Arbitration of the Stockholm Chamber of Commerce then in
effect. The place of arbitration shall be Stockholm but the Parties
agree to request the arbitrators to consider alternating hearings
between Stockholm, Sweden and Reykjavik, Iceland. The language of the
proceedings shall be English.
Any court or authority of competent jurisdiction may enforce the
resulting award.
20.8 Mutual Efforts
This Agreement has been prepared and drafted through the mutual
efforts of the Parties.
20.9 Amendments
This Agreement may be modified or amended only by a written instrument
duly signed by the Parties.
20.10 Entire Agreement
This Agreement, together with any applicable Specific Co-operation and
Development Agreement, is the complete and exclusive agreement of the
Parties regarding its subject matter, and shall supersede any previous
communications, representations, negotiations, or agreements between
the Parties, whether oral or written.
20.11 Severability
If any provision of this Agreement is held illegal or unenforceable by
any court of competent jurisdiction, such provision shall be deemed
separable from the remaining provisions of this Agreement and shall
not affect or impair the validity or enforceability of the remaining
provisions of this Agreement.
20.12 Language
All correspondence under this Agreement shall be given or made in the
English language unless the Parties agree otherwise.
20.13 Non-Waiver
A waiver by either Party of any breach of any provision of this
Agreement by the other Party shall not be construed as a continuing
waiver of other breaches of the same or other provisions hereof by
such other Party.
20.14 Warranties
OZ warrants that it has sufficient right and interest to grant the
rights and licenses granted in this Agreement and in any Specific
Co-operation and Development Agreement.
20
22(22)
Notwithstanding anything to the contrary in this Agreement, OZ
warrants that the entering into year 2000 will not lead to
detraction of functionality or performance of the Solutions. In
case of breach of this warranty, OZ shall immediately remedy the
breach and indemnify and hold Ericsson harmless.
20.15 General Limitation of Liability
Notwithstanding anything contained in this Agreement to the
contrary, neither Party shall be liable to the other on account
of a breach of any provision of this Agreement for any loss of
revenue, profits or business opportunity or similar consequential
or indirect damages.
20.16 Headings
The headings of the Articles are for convenience only and shall
not affect their interpretation.
The Parties have caused this Agreement to be executed in two (2) identical
originals as of the date written below
ERICSSON TELECOM AB ▇▇.▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- --------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President Chief Executive Officer
▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇, ▇▇▇▇ ▇/▇/▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------- -----------------------------
Date and place Date and place
21
Appendix 1 to GCDA
TECHNOLOGY DEFINITIONS
A. Application Technology Definitions
1. LINK client application and server side components excluding the user
interface ("LINK") -- provided by OZ, Ericsson and third party.
2. LINK client application user interface -- provided by OZ; This is the
specific design and look and feel of the client application.
3. Specific Applications -- provided by OZ, Ericsson and third parties (see
section B).
4. OZ Application Technology -- provided by OZ (see section C). This consists
of existing core technology from OZ, as well as upgrades and possible
additions to it.
5. Ericsson Products & Technology -- provided by Ericsson. This consists of
products such as IP@service, IPTC, etc.
6. Infrastructure Products & Technology -- provided by Ericsson.
B. Solutions
Following are the initially targeted applications, involving some or all of
above technologies and products:
LINK
A client-server application merging secure Internet messaging, message
routing, IP telephony and traditional phone systems in one simple and easy
to use application.
Through a plug-in architecture, both the client-and server-side
functionality can be extended by Ericsson, OZ or third parties. The LINK
back-end can also, through an API, be accessed by applications other than
LINK.
For the first release, planned for June '99, the focus is on time to
market, reliability and security rather than a full-fledged service
offering. The released back-end client products shall have been fully
tested, productified and ready to be taken into commercial use by a
customer.
22
For the second version, planned release 6 months after the release of
version 1, tight integration with IP telephony and other telco services is
added, as well as sophisticated user customizable routing functionality.
For the third version, client software is released for other platforms,
e.g. speech technology interface, handheld devices, etc.
Communities
Services allowing the definition of user subsets according to arbitrary
grouping criteria, within which specific services that only make sense in
the context of a group of users can be deployed. Specific services include
conferencing and transactions. Communities typically make use of both LINK-
and Web-technology.
To create "LINK-aware" Web content, developer tools are needed. Such are
planned to be available by October '99.
Customer Support
Services to route customers through call centers and/or expert systems
using artificial agents as initial user interface.
Ericsson and OZ will work together on Customer Support up until the first
customer is obtained, then the specific Customer Support cooperation will
be reviewed.
Distance Learning (including Training)
Services to provide shared communication spaces as well as visualisation of
learning material in virtual class rooms.
C. OZ Application Technology
The OZ Application Technology is based on a hierarchy of components, ranging
from low-level modules to high-level application building-blocks. Set out below
is a high-level listing of the current OZ Application Technologies. A more
detailed description of the listed items can be found in the handout document
"Technical Due Diligence, Reykjavik, Iceland, September 29th - 30th, 1998",
delivered to Ericsson during the Technical Due Diligence session, September
29th, 1998. In three serial-numbered copies, registered at Ericsson as document
no. ETX/DN/C-99-006.
Multi-user Server
A scaleable implementation of a reliable multicast network over IP. Also
implements a framework for server side services.
User Service
A server side service implementing a lookup and authentication of users.
Registry Service
A server-side service implementing a distributed registry of information.
23
3
Object System
Client- and server-side components that implement a distributed object
database that permits to alter and share a dynamical state between many
clients. Includes a basic set of objects to implement shared spaces.
World Editor
An administration tool to browse ad change an object system database.
CPIUM
A client-side framework to distribute, install, layout and connect
individual client-side OZ components, as well as 3rd-party components to
create an application that can interchangeably by stand-alone or Web-based.
Agents
Client- and server-side components to create and operate intelligent
software agents. Consist of an authoring tool to create knowledge bases,
an agent server to run the agent logic and various input/output interfaces.
OZ Intelligence Engine
An Artificial intelligence (AI) engine controlling the logic of the Agents
running in the Agents Server application.
Chat
Client- and server-side components to initiate and manage communication
channels between 2 or more users. These include components to conduct text
and audio conversations.
Whiteboard
A client component that implements a simple shared whiteboard.
Audio conferencing
Client side H.323 based audio conferencing components. Based on a H.323
stack from Ericsson, with limited admittance of usage.
Sound Engine
A client-side genaric audio mixer.
Audio Chat
Peer-to-peer audio communication based on codecs such as GSM and Voxware.
Media Filters
A set of media conversion components that convert various input media types
into internal data types. These include amongst others components to input
streamed media types from RealNetworks, such RealAudio and RealVideo.
LINK back-end
The distributed server part of the LINK solution.
LINK client
The client part of the LINK solution.
24
1(3)
Amendment Number 1
to
General Co-operation and Development Agreement
by and between
Ericsson Telecom AB and ▇▇.▇▇▇
This Amendment Number 1 to General Co-operation and Development Agreement
(this "Amendment") is made by and between Ericsson Telecom AB ("Ericsson")
and ▇▇.▇▇▇ ("OZ") as of September, 24th 1999, in reference to that certain
General Co-operation and Development Agreement (the "Agreement") made and
entered to by Ericsson and ▇▇.▇▇▇ as of February 4, 1999. Unless the
context otherwise requires, capitalized terms shall have the meanings
ascribed to them in the Agreement.
1 BACKGROUND
1.1 IPulse
The Agreement and the Specific Co-operation and Development Agreement made
and entered into by the Parties as of February 4, 1999 describe, among
other things, the ownership and development of LINK. A version of LINK has
been introduced to the market by Ericsson and OZ under the tradename
"iPulse".
1.2 Intentions
OZ intends to market and distribute an OZ branded version of the iPulse
client software to customers outside of the Telecommunications sector and
to provide services to, and operate an iPulse server solution for the
benefit of, customers. OZ will offer services to all iPulse end-user
customers through a Global Cluster. The Parties wish to amend the Agreement
in order to conform and clarify OZ's rights and obligations in regard to
the marketing and distribution of its version of the iPulse client and the
provision of additional services related hereto.
2 AMENDMENTS
2.1 A new Section 2.6 shall be added to the Agreement as follows:
"'iPulse' means LINK and the LINK Solution."
2.2 Section 4.6.2 of the Agreement shall be replaced by the following:
"The Development Work in relation to iPulse has been made and will continue
to be made as set out in the Purchase Orders issued by Ericsson according
to the specific Co-operation and Development Agreement.
25
2(3)
The parties hereby agrees that OZ has the perpetual, irrevocable and
non-exclusive right, free of any charge by Ericsson, to modify, use, market
and distribute an OZ branded version of the iPulse client software to
end-user customers and/or in cooperation with internet companies to provide
services to, and use, modify and operate an iPulse server solution, for the
benefit of such end-user customers, always provided that;
a) OZ does not offer services that compete with products resulting from
the Development Work,
b) if OZ receives any revenues from or because of the operation of its
iPulse server solution, parties will negotiate a reasonable license
fee to be paid to Ericsson.
c) any such iPulse server solution or iPulse client software shall, as
with Ericsson's customers, display that iPulse is jointly developed
between Ericsson and OZ, even if the service or software is provided
under another trademark or tradename than iPulse,
d) the use of Ericsson's registered trademark iPulse or any other of
Ericsson's trademarks by OZ shall only be made as, from time to time,
directed by Ericsson, and
e) any such server solution shall be of a quality corresponding to the
quality offered by Ericsson's customers.
The above license does not include any right for OZ to develop a version of
the iPulse server software that is not compatible with the iPulse server
solution resulting from the Development Work, if not otherwise is agreed in
writing by Ericsson on each specific occasion and the Parties have agreed
on a road-map for any such developments. OZ will not develop an iPulse
server solution that directly or indirectly competes with the iPulse server
solution resulting from the Development Work.
If an internet company with which OZ co-operates to provide iPulse services
as set out above wishes to co-brand iPulse with OZ and Ericsson, then such
co-branding will be permitted provided the use of Ericsson and any of its
trademarks or tradenames are made in accordance with the instructions of
Ericsson.
The iPulse client and server solution marketed by Ericsson will include
connectivity features that enables licensed iPulse clients and servers to
connect to a single iPulse registry and services (Global Cluster) operated
by OZ.
The General License Agreement (GLA) to license the iPulse client and server
technology to Ericsson customers shall be presented to Ericsson customers
with terms expressing ▇▇.▇▇▇'s right and obligation under such agreement to
provide and operate the Global Cluster registry and services. Ericsson will
use its reasonable endeavours to conclude the GLA
26
3(3)
on such terms. The terms of the GLA terms regarding ▇▇.▇▇▇ will read or
have the same meaning as;
"The Licensed Software includes connectivity features
that enable Licensee's customers to connect to a single
iPulse registry and services operated by ▇▇.▇▇▇. These
services are optional to both Licensee and its
customers. ▇▇.▇▇▇ will have the sole responsibility
under this Agreement to operate a Global Services
Network that provides iPulse end-users access to a Find
User Service, that enables iPulse end-users to locate
other iPulse end-users situated outside of the
Licensee's iPulse system. Other services may be agreed
to on case to case bases. Further details of the verity
and terms of the ▇▇.▇▇▇ Global Services Network services
available to iPulse end-users will be defined in a
separate Agreement between ▇▇.▇▇▇ and Licensee."
Ericsson will include information regarding OZ in press announcements
regarding licensing or sale of iPulse solutions to its customers, provided
that Ericsson's customers agree to this. OZ will include information
regarding Ericsson in press announcements regarding licensing or sale of
iPulse to its customers, provided that OZ's customers agree to this.
A Value Added Reseller License Agreement will be made between OZ and
Ericsson to establish the right for OZ to sublicense iPulse server
solution directly to customers on terms to be defined.
2.3 Section 4.8 shall be amended by replacing "Subject" at the beginning of
this Section with the following:
"Except as provided in Section 4.6.2 and subject"
3 NO FURTHER AMENDMENTS
All other terms of the Agreement remain unchanged.
The Parties have caused this Amendment to be executed in two (2) original
counterparts as of the date first written above.
ERICSSON TELECOM AB ▇▇.▇▇▇
/s/ [SIG] /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer
▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Oct. 21, 1999
--------------------------------- ---------------------------------
Date and place Date and place