<PAGE> 1
EXHIBIT 10.3*
VALUE ADDED DISTRIBUTION LICENSE AGREEMENT
between
ERICSSON RADIO SYSTEMS AB
and
OZ.COM
* Certain portions of this Exhibit have been omitted and filed separately under
an application for confidential treatment.
<PAGE> 2
THE VALUE ADDED DISTRIBUTOR LICENSE AGREEMENT ("Agreement) by
and between Ericsson Radio Systems AB (hereinafter "Owner"), a
Sweden corporation, having an address for purposes of this
Agreement at Torshamnsgatan 23, SE-164 80 Stockholm, Sweden, and
OZ.COM and its subsidiaries, (hereinafter "VAR"), a California
corporation, having an address for purposes of this Agreement at
Snorrabraut 54, IS-105 Reykjavik, Iceland:
WITNESSETH:
WHEREAS, VAR have co-developed certain computer programs for and
on behalf of Owner named iPulse (the "Code").
WHEREAS, Owner is the owner of certain results of the joint
development work and has been granted certain rights to
proprietary technology and solutions owned by VAR;
WHEREAS, VAR now desires (i) to market, sublicense and
distribute the Code directly to its customers and use the Code
in order to develop, market and to provide certain services
related to the Code and other computer software (hereinafter
defined as "Hosting Services") to its customers;
WHEREAS, VAR and Owner previously have entered into a Value
Added Reseller Agreement ("Old Agreement") dated February 25,
2000;
WHEREAS, this Agreement is intended to replace the Old Agreement
and all other licensing rights obtained by VAR in any other
agreement with Owner or any other company within the Ericsson
Group, with the express exemption of any rights that have been
granted for Canada in relation to the agreements made between,
Ericsson Canada Inc, Microcell Telecommunications Inc, and VAR
on [date]; and
WHEREAS, each party hereto represents that it is ready, willing,
and able to undertake the responsibilities and obligations set
forth in this Agreement, and that it possesses the rights,
resources, and capabilities to perform its responsibilities
under this Agreement;
NOW, THEREFORE, in consideration of the premises, and of the
obligations herein made and undertaken, the parties hereto do
hereby covenant and agree that the Old Agreement shall become
null and void and also agree as follows:
1 DEFINITIONS
For the purpose of this Agreement, the definitions set forth in
this Section shall apply to the respective capitalized terms:
"CODE" -- Computer programming code consisting of the Client
Code, Server Code and SDK, including source code (i.e.
human-readable), object code (i.e. machine-readable), and
associated procedural code, as more fully described in the
Development Agreements.
<PAGE> 3
"CLIENT CODE" -- A client software application to be used on a
personal computer, mobile phone or any other device, intended to
connect to Server Code, as more fully described in the
Development Agreements.
"DOCUMENTATION" -- The printed material relating to the Code,
including, without being limited to, the description of the
principles of operation.
"ENHANCEMENT" -- A change or addition to the Code or
Documentation, other than an Error Correction, that improves its
function, adds new function, or substantially enhances its
performance. Enhancements shall not include programs that have a
value and utility separate from the use of the Code and that, as
a practical matter, may be priced and offered separately from
the Code.
"ERICSSON GROUP" -- means Telefonaktiebolaget LM Ericsson and
any of its directly or indirectly controlled subsidiaries.
"ERROR" -- A defect in the Code or a mistake in the
Documentation that prevents the Code from functioning in
material conformity with the Specifications.
"ERROR CORRECTION" -- A change to the Code or the Documentation
that is in a form that allows its application to the Code or
inclusion in the Documentation to re-establish material
conformity with the Specifications. All Error Correction shall
be considered part of Code and Documentation for all purposes
under this Agreement.
"HOSTING SERVICE"-- A service offering whereby VAR provides
managed care and hosting services using the Server Code and/or
Products, remote monitoring of the Server Code and/or Products
and related consulting, customization, system integration,
support and maintenance services to its customers.
"PRODUCT(s)" -- Computer programs that are developed entirely by
VAR, including its third-party licensees and contractors and are
aimed to operate in connection with or without the Code as a
portion of its Hosting Service.
"SERVER CODE" -- A server software application allowing
connections with and between Client Code applications, as more
fully described in the Specifications attached hereto as Exhibit
A.
"SDK" -- A software developers kit further described in Exhibit
A.
2 VAR RESPONSIBILITIES
2.1 Development of Hosting Services. VAR shall use all reasonable
efforts to develop the Hosting Services. Upon completion of
development of the Hosting Services, VAR shall test and evaluate
the Hosting Services and assess their usefulness, performance,
and marketability.
<PAGE> 4
2.2 Marketing. If such assessment is positive, VAR shall use all
reasonable efforts to market the Hosting Services in accordance
with this Agreement. VAR shall use all reasonable efforts to
package Hosting Services that VAR determines to be commercially
reasonable offerings and to market the Client Code as set out in
this Agreement.
2.3 Cooperation and Marketing Efforts. VAR and Owner shall
continuously discuss how to approach the market and to use
market opportunities for the best benefit of both Parties.
However, the above shall not in any way restrict VAR's right to
offer and sell Hosting Services to any third party.
2.4 Responsibilities Toward Customers. Except as otherwise provided
in this Agreement, VAR shall assume all responsibility and
liability to its customers with respect to the Products and
shall assume all responsibility and liability for related
customer support and assistance.
2.5 Royalties. VAR shall pay royalties to Owner in accordance with
Section 4.
3 GRANT OF LICENSE
3.1 Owner hereby grants to VAR nonexclusive, perpetual and
irrevocable world-wide rights and license to:
a) to use, market and distribute the Client Code to
end-user customers and/or in cooperation with internet
companies to provide Hosting Services and for such
services to use, and operate the Server Code, for the
benefit of such end-user customers;
b) Use, and reproduce the Code and Documentation in object
code form or by using the SDK as VAR or with its
subcontractors, mPresence partners and its customers for
use in relation to mPresence services and for the
purposes of offering Hosting Services;
c) Use, reproduce, sublicense and distribute copies of the
Code (in object code form only) and Documentation to
VAR's subcontractors, Hosting Service partners and
customers in connection with the Hosting Services;
d) Use, The Code and Documentation in order to market,
promote and sell Hosting Services to VAR's customers and
for the benefit of end-users of such customers;
e) Use, reproduce, sublicense, market and sell copies of
the Code (in object code form only) and Documentation as
a Hosting Service or parts of a Hosting Service to
customers of VAR;
f) Use and display the trademarks, service marks, and logos
related to the Code and as specified in Ericsson's
Corporate Visual Language Manual and Exhibit B; and
<PAGE> 5
g) Use and copy the Code and Documentation thereof, for
marketing, training, and demonstration purposes with
respect to the Hosting Services.
Any further rights to extend or add to the Code will be dealt
with and agreed to by Owner on case-by-case bases.
4 ROYALTIES AND PAYMENTS
4.1 [***]
4.2 [***]
4.3 [***]
4.4 Audit. Upon Owner's request, at mutually agreeable times no more
frequently than twice annually, Owner or an agent or accounting
firm chosen by Owner shall be provided reasonable access during
normal business hours to the relevant records of VAR for
purposes of audit of royalties due. Records sufficient to verify
the revenue received and authorized end-user copies sold,
leased, or otherwise distributed or transferred shall be
maintained by VAR and made available for audit. Persons
conducting the audit shall be provided a reasonable opportunity
to interview any employees of VAR who have engaged in the
marketing of Products in order to corroborate the information
contained in such records.
5 AVAILABILITY OF ENHANCEMENTS AND PRODUCTS
5.1 Owner shall, to the extent developed or acquired by Owner and/or
jointly developed by Owner and VAR offer VAR Enhancements for
inclusion in the Code and Documentation as soon as they become
available at conditions and prices to be agreed between Owner
and VAR.
[***] These provisions have been omitted and filed separately under an
application for confidential treatment.
<PAGE> 6
5.2 VAR shall offer to license or sell Hosting Services to Owner on
terms to which the parties shall, in good faith, agree.
6 LIMITED WARRANTY AND LIMITATION OF LIABILITY
6.1 Ownership and Authority. To the extent and with limitations
produced by the Development Agreements, Owner warrants that it
is the owner of certain U.S. and international copyrights in the
Code and Documentation and that it has all rights necessary for
the grant of the right and license granted by this Agreement.
6.2 Disclaimer. As between the parties, VAR assumes responsibility
for determining the suitability of the Code, for its use in
Products, and for results obtained. Owner makes no warranty that
all Errors have been or can be eliminated from the Code or
Documentation, except as expressly stated above, and Owner shall
in no event be responsible for losses of any kind resulting from
the use of the Code or the Documentation in Products, including,
without limitation, any liability for business expense, machine
downtime, or damages caused to VAR or VAR's customers by any
deficiency, defect, error, or malfunction. EXCEPT AS
SPECIFICALLY SET FORH HEREIN, OWNER DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, ARISING OUT OF OR RELATING TO THE CODE OR
DOCUMENTATION OR ANY USE THEREOF, INCLUDING WITHOUT LIMITATION,
ANY WARRANTY WHATSOEVER AS TO THE FITNESS FOR A PARTICULAR USE
OF THE CODE OR DOCUMENTATION.
6.3 Limitation of Liability. In no event shall Owner be liable to
VAR or VAR's customers for any indirect, special, incidental, or
consequential damages, including lost profits.
7 OBLIGATION FOR EXPENSES
7.1 Owner shall have no obligation or requirement whatsoever to
reimburse VAR for any expenses or costs incurred by VAR in the
performance of, or otherwise by reason of, this Agreement. VAR's
incursion of costs or expenses under this Agreement is at its
sole risk and upon its independent business judgement that such
costs and expenses are appropriate.
8 MARKING OF PRODUCTS
8.1 All code and Documentation, including any Enhancements, shall be
marked with Owner's copyright notice. Copies of the Code offered
by VAR shall display Owner's copyright notice as set out in
Appendix B. VAR may mark the Code included in Product with its
own trademark and copyright notice as also set out in Exhibit B.
9 TERM OF AGREEMENT, TERMINATION
<PAGE> 7
9.1 Breach. Should either party commit a material breach in its
obligations hereunder, or should any of the representations of
either party prove to be untrue in any material respect, the
other party may, at its option, terminate this Agreement by 60
days' written notice to the other party. Such notice shall
identify and describe the default upon which termination is
based. The defaulting party shall have 30 days to cure such
default, which, if effected, shall prevent termination by virtue
of such default.
9.2 Survival. Notwithstanding any termination or expiration of this
Agreement, VAR shall retain the right to promote, market,
support, train, license and otherwise provide Hosting Services
based on the then current version of the Code as well as to
continue to support Authorized End-User Copies that have been
completed, marketed, and installed pursuant to the VAR License
prior to the effective date of termination, subject to continued
payment of applicable royalties to Owner.
9.3 Continuation of Payment. Owner shall continue to be entitled to
fees and charges set forth in Section 5 that have accrued or
shall accrue and become due and owing to Owner with respect to
Products for a period of 3 years next following the effective
date of this Agreement. At the end of such 3-year period,
providing all royalties due have been paid, all licenses granted
by Owner hereunder shall be deemed fully paid up and this
Agreement shall not hereafter by subject to termination of
Owner.
10 INDEMNIFICATION
10.1 Owner Indemnification. Owner agrees to, and does hereby,
indemnify and hold harmless VAR from any and all claims,
demands, or actions alleging that the Code or Documentation,
including any Enhancements, in the form delivered by Owner,
infringes or abridges any third-party rights in copyright, trade
secret, or other intellectual property rights.
10.2 VAR Indemnification. VAR agrees to, and does hereby, indemnify
and hold harmless Owner from any and all claims, demands, or
actions from or relating to Products, or use by customers of
Products, and based on or related to VAR's performance,
nonperformance, infringement of third-party intellectual
property rights, representations or statements made, or other
actions with respect to Products.
10.3 Conditions. The foregoing indemnities shall be contingent upon
the party seeking to enforce the indemnity against the other
party (1) giving written notice to the other party of any claim,
demand, or action for which indemnity is sought; (2) fully
cooperating in the defense or settlement of any such claim,
demand, or action; and (3) obtaining the prior written agreement
of the indemnifying party to any settlement of proposal of
settlement.
11 MISCELLANEOUS
11.1 No Assertion of Rights. It is expressly understood and agreed
that, as between Owner and VAR, all right, title, and interest
in and to the Code and Documentation, including any other
material furnished to VAR under this
<PAGE> 8
agreement vests solely and exclusively in the Owner, and VAR
shall neither derive nor assert any title or interest in or to
such materials except for the rights of use or licenses granted
under this Agreement.
11.2 Independent Contractor Status. VAR is an independent contractor
under this Agreement, and this Agreement shall not be construed
as to create a partnership, joint venture, or agency
relationship between the parties hereto. VAR shall have no
authority to enter into agreements of any kind on behalf of
Owner and shall not have the power or authority to bind or
obligate Owner in any manner to any third party.
11.3 No Conflict of Interest. VAR represents and warrants that it has
full power and authority to undertake the obligations set forth
in this Agreement and that it has not entered into any other
agreements that would render it incapable of satisfactorily
performing its obligations hereunder, or that would place it in
a position of conflict of interest or be inconsistent or in
conflict with its obligations hereunder.
11.4 No Assignment. VAR represents that it is acting on its own
behalf and is not acting as an agent for or on behalf of any
third party and further agrees that it may not assign its rights
or obligations under this Agreement without the prior written
consent of Owner, provided, however, that this license shall be
freely transferable to any purchaser substantially all of the
assets of, or a majority of the outstanding voting stock of,
VAR, or any company into which VAR is merged, whether or not VAR
is the surviving entity.
11.5 Notices. Any notices required or permitted to be sent shall be
delivered personally, by overnight delivery service (such as
Federal Express or DHL), or mailed certified mail, postage
prepaid, return receipt requested, to the party's at the address
noted above, unless by such notice a different address shall
have been designated. Such notice shall be deemed to have been
received upon actual delivery in the case of personal or
overnight delivery and within three (3) business days after such
mailing.
11.6 Governing Laws. All questions concerning the validity,
operation, interpretation, and construction of this Agreement
will be governed by and determined in accordance with the laws
of Sweden.
11.7 No Waiver. Neither party shall be mere lapse of time, without
giving notice or taking other action hereunder, be deemed to
have waived any breach by the other party of any of the
provisions of this Agreement. Further, the waiver by either
party of a particular breach of this Agreement by the other
shall not be construed or constitute a continuing waiver of such
breach or of other breached of the same or other provisions of
this Agreement.
11.8 Force Majeure. Neither party shall be in default if failure to
perform any obligation hereunder caused solely by supervening
conditions beyond that party's control, including acts of God,
civil commotion, strikes, labor disputes, and governmental
demands or requirements.
11.9 Entire understanding. The parties hereto acknowledge that each
has read this Agreement, understands it, and agrees to be bound
by its terms. This Agreement sets for the entire understanding
between the parties as to the
<PAGE> 9
subject matter hereof. This Agreement may be amended only by a
subsequent writing that specifically refers to this Agreement
and is signed by both parties, and no other act, document,
usage, or custom shall be deemed to amend this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respectively duly authorized representatives as set
forth below.
ERICSSON RADIO SYSTEMS AB OZ.COM
By: /s/ Lars Boman By: /s/ Skuli Mogensen
Title: VP & GM Title: CEO
-------------------------- --------------------------
Date: 2000/11/01 Date: 2000/11/01
--------------------------- ---------------------------
<PAGE> 10
Exhibit A
[consisting of two pages]
[***]
[***] These provisions have been omitted and filed separately under an
application for confidential treatment.
<PAGE> 11
Appendix B to VADLA
BRANDING POLICIES FOR iPULSE AND mPRESENCE
OZ.COM and Ericsson agree on the following branding rules for iPulse and
mPresence:
1) CLIENTS AND USER INTERFACES
When mPresence utilizes the iPulse client and user interfaces, it shall
comply with the SDK product branding rules set by the Link VC, i.e.,
placement of `Powered by iPulse' logo, and Ericsson and OZ.COM logos in
about box.
2) OZ.COM PRESS MATERIAL
Press Releases related to mPresence shall contain branding copy of
iPulse when applicable.
The branding copy should be visible and readable in regular font-size
within the main body of the release.
The Branding copy shall be: iPulse(TM) is co-developed by Ericsson and
OZ.COM.
Separately, the branding copy should appear in the legal (mouse-type)
copyright and trademark copy that follows at the end of the marketing
materials.
iPulse(TM) is a registered trademark LM Ericsson AB. iPulse is
co-developed by Ericsson and OZ.COM.
3) IPULSE PRESS MATERIAL FROM ERICSSON
Press Releases related to iPulse shall contain the agreed branding copy.
The branding copy should be visible and readable in regular font-size
within the main body of the release.
The Branding copy shall be: iPulse(TM) is co-developed by Ericsson and
OZ.COM.
Separately, the branding copy should appear in the legal (mouse-type)
copyright and trademark copy that follows at the end of the marketing
materials.
iPulse(TM) is a registered trademark LM Ericsson AB. iPulse is
co-developed by Ericsson and OZ.COM.
4) MARKETING MATERIAL FOR MPRESENCE AND IPULSE
In any marketing material that refers to iPulse, the branding copy
"iPulse(TM) is co-developed by Ericsson and OZ.COM" should follow as
close to the first instance the product name "iPulse" is referenced as
possible. This guideline is similarly adopted for the inclusion of (TM)
next to the product name.
The branding copy should be visible and easily readable within the main
body of the marketing material. And secondly the branding copy is again
repeated in the legal copyright and trademark copy.
<PAGE> 12
With the branding guidelines understood and agreed upon, neither Ericsson nor
OZ.COM should require rigorous review of marketing materials being published or
printed. However, as a courtesy, both companies should inform each other and
cooperate on reviewing materials that support the promotion of iPulse. This
exchange and communication should actively occur between the marketing
communications and product marketing functions of both Link VC and OZ.COM prior
to the publication of any marketing materials.
