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EXHIBIT 10.2
SPECIFIC CO-OPERATION AND DEVELOPMENT AGREEMENT
Dated: November 8, 2000
Between (3044016 NOVA SCOTIA COMPANY)
("OZ")
and
ERICSSON CANADA INC.
("ERICSSON")
1. BACKGROUND
1.1. This Specific Co-operation and Development Agreement ("SCDA")
is an agreement under the General Co-operation and Development
Agreement (the "GCDA") between an affiliate of ERICSSON,
ERICSSON Telecom AB, and an affiliate of OZ, OZ.COM, entered
into on November 1, 2000. Except to the extent inconsistent
with the terms of this SCDA, the terms set out in the GCDA
will form an integral part of this SCDA. It sets forth the
terms and conditions under which:
1.1.1. OZ would perform DEVELOPMENT WORK and render other
consulting services for ERICSSON. For purposes of
this SCDA, "DEVELOPMENT WORK" will include all
"DEVELOPMENT WORK", as contemplated by the GCDA,
consulting work, and similar services.
1.1.2. ERICSSON would offer assistance to OZ in performing
DEVELOPMENT WORK and other activities ("ERICSSON
SUPPORT WORK"). For purposes of this SCDA, the
DEVELOPMENT WORK and the ERICSSON SUPPORT WORK will
be collectively designated "WORK".
1.2. The terms capitalised and in bold face will have the meaning
set forth in this SCDA or the GCDA unless the context
obviously requires otherwise. If defined in both, the meaning
set forth in this SCDA will prevail.
1.3. The terms and conditions of this SCDA will apply to any WORK
performed by either party, unless otherwise agreed in writing.
General Purchasing Conditions of either party, even if
attached to any PURCHASE ORDER, will not apply to any WORK.
1.4. The term of this SCDA ("TERM") will be a period, beginning
upon its execution by the parties and terminating on a date
two years after a research and development facility is fully
operational as required by Section 3.3 below, unless extended
as set forth in Section 3.5.4 of this SCDA.
2. SENIOR REVIEW COMMITTEE
2.1. The Parties will set up a "SENIOR REVIEW COMMITTEE" to review
the DEVELOPMENT WORK and the ERICSSON SUPPORT WORK.
2.2. Each Party will nominate two members to be its representatives
on the SENIOR REVIEW COMMITTEE. Either Party may at any time
and from time to time change its
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representatives by written notice to the other. Any
representative may be represented by a substitute.
2.3. The SENIOR REVIEW COMMITTEE will be chaired by a chairperson
nominated by OZ.
2.4. The SENIOR REVIEW COMMITTEE will review the progress on the
DEVELOPMENT WORK and discuss OZ's future business "roadmap"
generally.
2.5. The SENIOR REVIEW COMMITTEE will meet at least quarterly at
reasonable times and places specified by OZ.
2.6. The SENIOR REVIEW COMMITTEE will:
2.6.1. Ensure the continuous adaptation of the details of
this SCDA in order to ensure the implementation of
its purpose.
2.6.2. Co-ordinate activities under this SCDA with
activities of their respective affiliated companies.
2.6.3. Co-ordinate activities under this SCDA with the
Microcell Group of Companies and any other third
parties who are participating with ERICSSON and OZ in
any DEVELOPMENT WORK.
2.6.4. Agree on case by case basis to a reasonable split of
revenues from sales and licensing of the results of
the DEVELOPMENT WORK contemplated by Section 3.1.2.
2.6.5. Generally, resolve all matters in relation to this
SCDA.
2.7. Meetings may be attended by a reasonable number of other
representatives as required to carry out the purpose of this
SCDA.
2.8. Minutes of meetings will be recorded by a secretary designated
by the chairperson. The secretary does not have to be a
representative and may be from outside the Parties'
organisations. Minutes will be circulated and deemed approved
if no objection is raised in the month following their
circulation to the Parties' representatives by email, fax or
hand.
2.9. The SENIOR REVIEW COMMITTEE may delegate its authority to
subcommittees formed for the purpose of any activity carried
out pursuant to this SCDA.
3. DEVELOPMENT WORK
3.1. The DEVELOPMENT WORK will consist of the development of:
3.1.1. the ERICSSON iPulse product or
3.1.2. work that does not fall within the purview of Section
3.1.1.
3.2. The DEVELOPMENT WORK to be performed will be identified by OZ
and submitted by OZ for review by the SENIOR REVIEW COMMITTEE,
which will confirm the applicable
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technical specifications, delivery dates, acceptance criteria,
estimated costs, and other relevant items. These items will be
determined by the SENIOR REVIEW COMMITTEE in good faith. The
parties will work in good faith to establish terms of
reference for DEVELOPMENT WORK within the budgetary objectives
for DEVELOPMENT WORK set forth in Section 3.4 and 3.5.
ERICSSON will not refuse a reasonable request by OZ to perform
DEVELOPMENT WORK contemplated by Section 3.1 although it is
understood that:
3.2.1. applications will be consistent with the core
strategies of each party;
3.2.2. no less than US$2,000,000 of the US$6,000,000 will be
used to develop the iPulse product mentioned in
Section 3.1.1 in a manner consistent with the
Specific Co-operation and Development Agreement
between Ericsson Telecom AB and OZ.COM for
communications and link dated February 4, 1999; .
3.3. Except as otherwise determined by the SENIOR REVIEW COMMITTEE,
the DEVELOPMENT WORK will be substantially performed at a
fully operational development centre to be established by OZ
in the Metropolitan Montreal area. It is understood that some
initial work on the iPulse product line will not be performed
in the Montreal area development centre and might be assigned
to an affiliate of OZ.
3.4. The prices for DEVELOPMENT WORK will generally be lump sum
prices determined by the SENIOR REVIEW COMMITTEE, it being
understood that the prices will generally be no higher than
the rates generally charged for similar work by similar
research and development facilities.
3.5. In consideration for the DEVELOPMENT WORK, ERICSSON will
advance to OZ a total of US$6,000,000 during the TERM as
follows:
3.5.1. The advances will be made in eight (8) equal
instalments of US$750,000, the first instalment
payable at closing and subsequently every three (3)
months, that is on the 8th day of February, May,
August and November, the final payment to be made on
August 8, 2002.
3.5.2. These advances will be applied by ERICSSON against
amounts due for DEVELOPMENT WORK.
3.5.3. If the amount due for DEVELOPMENT WORK in any quarter
is greater than US$750,000 ERICSSON will pay this
amount to OZ and the excess over US$750,000 will be
applied to reduce the advance payable in any
subsequent quarter.
3.5.4. If required, the TERM will be extended until all
advances have been applied to payments due for work
done, except that no advances will be made by
ERICSSON beyond the US$6,000,000 mentioned above.
This limitation on advances will not limit ERICSSON's
obligation to make payments for agreed DEVELOPMENT
WORK beyond the amount of the advances to which
ERICSSON has committed in this Section 3.5.4.
3.6. DEVELOPMENT WORK will be deemed "CONFIDENTIAL INFORMATION" for
purposes of Article 16 of the GDCA and the DEVELOPMENT WORK
and other activities under this SCDA will be covered by a "Non
Disclosure Agreement" between the affiliates of the parties
dated February 25, 1998.
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4. ERICSSON SUPPORT WORK
4.1. ERICSSON will, as set forth below, generally assist OZ in
performing the DEVELOPMENT WORK and establishing itself as a
leading supplier of what is generally known as "Third
Generation" ("3G") telecommunications technology by:
4.1.1. Giving OZ reasonable access to ERICSSON's "W-CDMA"
testing and integration laboratory at ERICSSON's
facility located at 8400 Decarie Boulevard, Town of
Mount Royal, Quebec ("3G LAB");
4.1.2. Making available to OZ up to 6,000 hours of
assistance of qualified experts for the purpose of
assisting OZ in the testing of the DEVELOPMENT WORK
and other of its 3G products and the co-ordination of
the DEVELOPMENT WORK and other OZ product strategies
with ERICSSON's product strategies generally.
4.2. OZ access to the 3G LAB will be in accordance with ERICSSON
standard rates, rules, terms and conditions of access
reasonably established by ERICSSON and communicated to OZ from
time to time via the SENIOR REVIEW COMMITTEE. The standard
access charge will not, however, be charged for the first 300
hours of this access.
5. NO SOLICITATION OF EMPLOYEES
During the TERM, neither party (the "RECRUITING PARTY") will, directly
or indirectly, (i) hire any employee of the other (the "EMPLOYER") or
(ii) otherwise recruit any such employee to become an employee of, or a
consultant to, the RECRUITING PARTY, without the other's express
written consent. This restriction will also apply to the recruiting of
persons who have been employees of the EMPLOYER who are normally
resident in Canada and who are temporarily on an expatriate contract
with a company within the EMPLOYER's group of companies. Any
contemplated hiring or recruiting affected by this clause will be
submitted to the SENIOR REVIEW COMMITTEE for review and approval.
6. INTELLECTUAL PROPERTY
6.1. In the case of DEVELOPMENT WORK contemplated by Section 3.1.1,
Intellectual property rights will be determined as set forth
in the GCDA.
6.2. In the case of DEVELOPMENT WORK contemplated by 3.1.2, the
rules set forth in the GCDA will be modified as follows:
6.2.1. Except as otherwise agreed by the SENIOR REVIEW
COMMITTEE, the deliverables from the DEVELOPMENT WORK
will include periodic consulting reports and showcase
applications, which will be pilot applications
demonstrating potential commercial uses of the Third
Generation platform being promoted by ERICSSON but
will not include any transfer of technology,
including any technology that may come into existence
as part of the DEVELOPMENT WORK. ERICSSON will own
the copyrights and rights of publication of any
consulting reports, the right to use and perform the
DEVELOPMENT WORK and any necessary license to OZ
technology required to enable ERICSSON'S use
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of the DEVELOPMENT WORK (on a royalty free basis
unless otherwise agreed by the SENIOR REVIEW
COMMITTEE).
6.2.2. Notwithstanding Article 4.7 of the GCDA (and unless
otherwise decided by the SENIOR REVIEW COMMITTEE), OZ
will retain all rights to industrial and intellectual
property rights including any patent rights, know
how, copyrights (except with respect to consulting
reports), design rights, rights to circuit patterns
in semiconductor products, technical documentation
and any other industrial and intellectual property
rights included therein which have been created by OZ
(or its affiliates or subcontractors) under this
SCDA, or have been acquired in connection with the
DEVELOPMENT WORK although ERICSSON will retain any
industrial and intellectual property rights inherent
in the ERICSSON SUPPORT WORK.
6.2.3. ERICSSON will assist in preparing and signing such
documents as may be necessary to enable OZ or OZ.COM,
to be registered as holder of patents or other
industrial and intellectual property rights.
Reasonable compensation will be paid for such
assistance.
6.2.4. Both parties will maintain ownership of any
background technology that they contribute to the
DEVELOPMENT WORK. These technology contributions in
will be reviewed by the SENIOR REVIEW Committee when
its draws up the specifications for DEVELOPMENT WORK
and periodically thereafter so that the Parties' may
delineate respective intellectual property rights in
good faith.
7. NOTICES
8. Except as otherwise determined by the SENIOR REVIEW COMMITTEE, notices
will be given as set forth in the GDCA to the persons indicated in
Schedule A.
9. DISPUTES
9.1. The Parties will use their best efforts to resolve any
disputes.
9.2. Any disputes will first be submitted to the SENIOR REVIEW
COMMITTEE for discussion and resolution. The SENIOR REVIEW
COMMITTEE will discuss the dispute in good faith appointing,
if deemed useful by any representative, experts (who may be
third-parties) to examine the relevant facts and to report to
the SENIOR REVIEW COMMITTEE.
9.3. If, in the opinion of any Party, the SENIOR REVIEW COMMITTEE
is unable to resolve a dispute in a fair and expeditious
manner, any representative may demand in writing the matter be
submitted to final and binding arbitration in accordance with
the rules set forth in the Quebec Code of Civil Procedure. The
arbitration will take place in Montreal and will be conducted
in English.
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10. CHOICE OF LAW
11. This SCDA will be governed by the law in effect in the Province of
Quebec. When the provisions of the GCDA are applied by reference in
accordance with Section 1.1, they will be interpreted in a manner
consistent with Swedish law.
ERICSSON CANADA INC. (3044016 NOVA SCOTIA COMPANY).
/s/ DAVID WILLIAMS, General Counsel /s/ GUNNAR THORODSSEN
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By: By:
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SCHEDULE A
NOTICES
Commercial matters
ERICSSON
Address: ERICSSON Canada Inc.
8400 Decarie Blvd.
Town of Mount Royal, Quebec
H4P 2N2 Canada
Attention: General Counsel
Telephone: _____________________
E-mail: ______________________
OZ
Name: Robert G. Quinn
Address: OZ.COM
Snorrabraut 54
105 Reykjavik
Iceland
Telephone: +354 535 0000
E-mail: [email protected]
Technical matters
ERICSSON
Address: _______________________
____________________________
____________________________
Attention: General Counsel
Telephone: _____________________
E-mail: ________________________
OZ
Name: Kjartan Emilsson
Address: OZ.COM
Snorrabraut 54
105 Reykjavik
Iceland
Telephone: +354 535 0000
E-mail: [email protected]
